2010 national grid - malaysiastock.biz maintains the system that delivers electricity supply from...
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2010 National GridSystem Operations Department
HYDRO
Power Station
THERMAL
500 kV Over Head Line
275 kV Over Head Line
132 kV Over Head Line
66 kV Over Head Line
132 kV Cable
Ir. hj huSSIN bIN OThmaNVice president
operaTioNSreview – diSTribuTioN
The Network Operations Section plans, designs, constructs, operates andmaintains the system that delivers electricity supply fromTNBgridnetworkto our customers. The Electricity Retail Section markets and sells electricity,connects new supply, provides counter services, collects revenues, operatesCallManagementCentres(TNBCareLine15454),handlescustomerenquiries/complaints andnurtures strong customer andgovernment relationships.
In June 2010, there was a change of guard when Hj Hussin Othman tookover the helm of Distribution Division as Vice President (Distribution) fromDato’ Ir. Azman Bin Mohd who is currently the Chief Operation Officer/Executive Director of TNB. Hj Hussin Othman continues to proactively alignand focusDistributionDivision’s resources towardsachievingthe fourmajorbusinessgoalsoftheDivision,namely,reducingDistributionlosses,ensuringsupply reliability, enhancing customer relationships and improving revenueassurance. These goals are pursued in furtherance of the Division’s role torealiseTNB’saspirationstobecomeoneofthebestperformingcompaniesintheRegionby2010underour Service Excellence (SE10/10) Initiative.
The mISSION Of dISTrIbuTION dIVISION cOVerS TWO ImpOrTaNT buSINeSS fuNcTIONS IN The delIVery Of elecTrIcITy TO cONSumerS IN peNINSular malaySIa: (1) upSTream dISTrIbuTION NeTWOrk OperaTIONS aNd (2) dOWNSTream elecTrIcITy reTaIl OperaTIONS.
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operaTioNaL Summary
Distribution Division supplies electricity to ourcustomers by connecting them to our DistributionNetworkatvoltagesof33kV,22kV,11kVand415Vand to TNB’s Transmission Network at 275 kV and132 kV. During Financial Year 2009/10, the Divisionhas signed up 252,053 new customers to increaseour total Peninsular Malaysia customer base to 7.4millioncustomers.Duringthesameperiod,Peninsularsalesofelectricity(inunits)alsogrewby8.8%to89.5TWh.
To improve our service delivery to our ever growingcustomer base, the Division has upgraded three (3)Area Offices namely Nibong Tebal, Jasin and KualaSelangorduring the yearunder reviewbringing totalTNBAreaOfficesto45whilemaintainingthenumberof Kedai Tenaga outlets at 135. We also enhancedour communication channelswith our customers, byupgrading our Call Management Centre (CareLine15454) and launching the first phase of our newOne-Stop Enquiry Centre (1-300-88-5454) to serveKlangValleyCustomers.
highLighTS oF aChievemeNTS
DistributionDivision’smainachievementsthroughoutFinancial Year 2009/2010are:
• Received new MS ISO 9001:2008 CertificationfromSIRIMwith zeroNon-ConformityReports.
• Average Collection Period (ACP) has improvedfrom22.5 to21.6days.
• Reduction in Distribution Losses from 7.48% to7.29%.
• CollectionofTOEback-billingamounted toRM45million.
• TheconfermentofSGAM2010 ICTAward for theIntroduction of Mobile Field Force Automation(MFFA) at 4 States.
• SustainedhighCustomer Satisfaction Index scoreof 7.0.
• Launched Customer 1st Programme (CIPD) toimprove skills of frontline customer service staff.
• Introductionof SMSReminderonBilling Status.
• Appointment of CROs at 42 Kedai Tenagaoutlets.
operaTioNaL improvemeNT
Customer Satisfaction index Survey (CSi)
The Customer Satisfaction study for FY2009/10survey was conducted by an international researchhousefromApriltoJuly2010involving8,619samples.The findings of the study are grouped under thefollowing twoheadings:
1. The conventionalCSI
2. TheTRIM Index
The Conventional CSi
TheconventionalCSI studywasbasedona setof40questions drawn from 12 TNB service categories forrating by the samples. The service categories are:Connection/Upgrade, Breakdown Services, ShutdownServices, Quality of Supply, Kedai Tenaga Services,Safety&Advisory,CMCServices,RestorationServices,Meter Reading-Billing-Payment, Complaint Handling,EnquiryManagement andStreet Lighting Services.
TheCSIscoresforFY2009/10underthisstudyagainstscoresof theprevious years are as follows:
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7.07.16.86.96.7
CSI Scores
Chart 1:National ScoresofCSI over the years
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The Trim index
TheTRIM Index isapatentedapproachwhichmeansmeasures,monitorsandmanages,basedonresponsesto the following fourquestions:
1. How would you assess the overall performanceof TNB services? (Overall Satisfaction)
2. Would you continue using TNB services if thereare other providers offering similar services?(Corporate Trust)
3. Would you recommend the services of TNB toyour friendsandacquaintances,givenwhatyouknew about other utility companies? (Value tosociety)
4. How would you rate the advantage of dealingwith TNB, given what you knew about otherutility companies? (Comparison to the industry)
Unlike the method deployed for CSI, TRIM Index isderived from responses to the above four questions.It is therefore possible to obtain benchmarking interms of the top percentile of a basket of universalutilities from over 60 countries. No benchmarking ispossible for the CSI as the service categories of TNBcompared tootherutilitiesmaydiffer.
TNB’s achievements based on the TRIM Index overthepast years are as follows:
The TNB TRIM Index performance improved from ascaleof70 in2007/08 to72 in2009/10;whichputsTNB in the top 33% of the Global Utilities Normmeasured inover 60 countries.
SmS reminder to customers on billing status
SMS Reminder is part of the initiatives to increaseelectricitybillcollectionandreducetotaloutstandingdebts. This initiative is intended to inform TNBcustomers on their current electricity bill withinseven (7) days of the payment due date. For thosecustomers who had not received the electricity bill,the bill information in the SMS could be used as areference for them to make payments at any KedaiTenagaoutlet or selectedpayment agencies.
Initially, in its pilot stage, only customers in fiveareas were involved, namely TNB Petaling Jaya, TNBSubang Jaya, TNB Bangi, TNB Klang dan TNB ShahAlam. After the official launch on 3 August 2010,SMS Reminder service was expanded to all areas inPeninsular Malaysia. The main targets are thosecustomers who are late in making payments andwith mobile phone number registered in theenhanced-Customer Information Billing System (e-CIBS).
As at 31 August 2010, a total of 195,223 SMSmessageshadbeen sent to the selected customers.
CuSTomer reLaTioNS maNagemeNT
Customer 1st programme for distribution (C1pd)
In our continuous effort to meet the objectives ofService Excellence or excellent customer service inDistributionDivision,C1PD–Customer1stProgrammefor Distribution was introduced. Five Kedai Tenaganamely Kedai Tenaga Cheras, Jalan Klang Lama,Kepong, Subang Jaya and Pelabuhan Klang wereselectedforthispilotprogrammewhichwaslaunchedbyTNBPresident/CEO,Dato’SriCheKhalibMohamadNohon19April 2010.
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7270
63
69
Global UtilitiesNorm
85 - Top 10%
66 - Top 33%
59 - Average58
60
62
64
66
68
70
72
Chart 2: TNBTRIM Index
132 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Themain objective of this programme is to enhancethe service quality of counter staff by focusing ondelivering excellent service to win the hearts andminds of customers. This culture of Customer 1st orcustomer focusmustbe adoptedas awork culture.
Under this programme, the principle of ServiceStandardsandPractices(SSP)mustbeobservedbyallcounter staff. The core features of the SSP are theBasic Courtesy Principles that must be practised byall counter staff with an open and honest attitudeand to provide the best possible service to delightthe customers.
Hence, with this hospitable excellent service cultureadopted, TNB strives to become a customer-centricorganisation which focuses on providing excellentservice in tandem with a World Class CustomerService andWorldClassOrganisation.
interaction with Customers
TNB has invested significantly in building goodwillwith the Large Power and Prime Customers. Highlevel dialogues are held regularly between TNBmanagement, industry leaders and associations suchas Federation of Manufacturers Malaysia (FMM),Federation of Malaysian Foundries and EngineeringIndustries Association (FOMFEIA), Real Estate andHousing Developers Association (REHDA). It alsoincludesgovernmentagencies suchas theMalaysianIndustrial Development Authority (MIDA) which isresponsible for investments inflows.
For FY2009/2010, 17 dialogue sessions were heldduring which issues discussed ranged from supplyreliability to overloading, vandalism at electricalinstallations to metering, power quality, energyefficiency and tariff.
As the manufacturing sector has remained as TNB’sbiggest customers in terms of kWh usage andmonetary value, these dialogues are beneficial as itgives them the channel to meet with TNBmanagement in order to resolve their electricitysupply anddemandproblems.
appointment of Customer relations officer (Cro) at kedai Tenaga outlets
In our continuous effort to further improve ourservices at Kedai Tenagaoutlets, 42CROshavebeenappointed in all TNB district offices nationwide. Theselectedpersonnelaretrainedspecificallytoenhancecustomer interactions at the retail front whileprojecting theCustomer1st service culture.
TheCROs’main responsibilities are as follows:
• Providing immediate assistance to all walk-incustomerswherenecessary.
• Projectinganddelivering theCustomer1st serviceculture andattributes to all TNB customers.
• Providing exceptional value-added services andassistance to customerswhere applicable.
• Providingimmediateservicerecoveryresponseonemergency cases at TNB retail outlets.
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e-application
e-ApplicationrealisesTNB’scommitmentinoptimisingtheutilisationof IT system in itsbusinessoperationswith the customers. It represents our effort as thefirst GLC to introduce an online service applicationsystem to the customers. Launched in August 2008,the system has to date registered almost 35,000individual andgroupusers. Thenumber of usershasincreased 27 folds from 1088 in FY2008/2009 to29,028 in FY2009/2010.
The main benefit of using e-Application lies in itsreal-time application status monitoring, onlineelectricalcontractorselectionandotheronlinerelatedinformation. Going forward, we are in the midst ofimproving the e-Application system facilities such aspayment of deposit and connection charges, projectstatus monitoring and also other online applicationsincluding TNB street lightings, Change of Tenancy(COT) and Large Power Customer (LPC) applications.All these new facilities are targeted to be ready inFY2010/2011.
billing and account related enquiries
one Stop enquiry Centre (oSeC) – 1 300 88 5454TheOneStopEnquiryCentre(OSEC),asinglepointofcontact, is established to respond to customers’enquiriesandfeedbacksonTNB’sbillingandaccountrelatedmatters.
Currently, OSEC only caters for customers in KlangValley. Enquiries on billing and account relatedmatters for the whole of Peninsular Malaysia isexpected to be fully operational by early 2011.Customers may also contact OSEC for enquiriesrelated toother services, suchas:
• Statementof account
• Electricity tariff
• Modesof payment
• Estimatedbills
• Special readings
• Disconnectionand reconnectionof supply
• Processes on new supply, change of tenancy(COT), closing of account, refund of deposit,upgrading of supply, change of meter andothers.
Customersmaydial1300 88 5454 andTNB’s trainedcustomer service agents will respond to enquiries orfeedback.
Call Charges:
1. Fixed line callswill be chargedas local calls
2. Cell phone calls are subjected to charges byserviceproviders
Alternatively, customers may submit their feedbacksonline at TNB website www.tnb.com.my and click‘Talk-to-Us’.
operation hours:8.00 a.m to 5.00 p.m, Monday to Friday (excludingpublicholidays).
Call back assist FacilityThis facility is an additional option which enablescustomers to be called back when waiting time totalk to TNB agents exceeds a stipulated time frame.ThisensuresTNBpaysattentionandgivespriority toall our customers.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
FY10FY09FY08
29,028
1,088221
Chart 3: TNBe-ApplicationUsage
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Care programme
The Corporate Account Relationship Enhancement(CARE)Programmewasdeveloped inDecember2007to forge a better relationship with TNB’s corporatecustomers.
CAREProgrammeadopts the conceptof ‘one contactpoint’, where a special executive (CARE Manager)fromtheCustomerService&MarketingDepartment,is appointed to manage a corporate account. TheCARE Manager is responsible to create continuousinteractions between TNB and their respectivecorporate customers in order to obtain feedbacks onTNB services.
ThemainobjectivesofCAREProgrammeare:
• To foster closer two-way relationship betweenTNB and corporate accounts and at the sametime to give better service to corporatecustomers.
• To get feedback from corporate accounts onTNB’s services, to monitor and to take effectiveactions in order to fulfill the customers’ needs.
• TopromoteTNB’sbulkpayment scheme.
For the purpose of implementation, the Programmehas identified customers from the following 8segments:
• Bank/Financial Institutions
• BusinessComplexes
• Utilities
• Fast FoodChains
• Telecommunications
• Hotels
• Transportations
• Petroleum
During FY2009/10, the following initiatives werecarriedoutunder theProgramme:
Continuous interaction to enhance relationshipswasachieved through two-way communication betweenCARE Managers and their respective corporatecustomers via phone-ins, walk-ins, e-mails, formal/informalmeetings, get together and visits.
The CARE Managers are ready to offer solutions toany issue or concern addressed by the customers.Frequentvisitsweremade tocustomers’premises togauge thegrowingconcernsand issues. These issuesor concerns are closely monitored through a specialapplication that enables complaints or queries bemanaged effectively through a particular contactperson.
Through this effort, TNB is able to understandcustomers’ needs and concerns better in order toeffectivelyhandleandresolveissues.Thisachievementisattributedtothecontinuoussupportandassistancefromall TNB state, regionanddistrict offices.
CARE Group Email – Corporate customers are givenspecial attention and latest information is madeavailable through specially designed CARE GroupE-maildevelopedtoexpediteupdatingofinformationeffectively.
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AnnualEvents–Twoeventsweresuccessfulorganisedunder the CARE Programme on 17 December 2008and 12 November 2009. It involved luncheons andvisits to TNB premises and Control Centre. Themainobjective is to further enhance the relationship withthe customersand toprovideexposure to customerson TNB products and services. These events alsoserved as the occasion to acknowledge loyalcustomers.
Talks/Briefings on TNB Products& Services – Specialtalks/briefingswereconducted tocustomers inorderto increase their awareness on services rendered byTNB. Briefings by Subject Matter Experts (SME) onenergy efficiency (EE) and power quality (PQ) werearrangedforthecorporatecustomerstoeducateandincrease the level of understanding on certainissues.
Courses & Talks for CARE Managers – To promotecontinuous improvement, courses and talks wereconducted for our CARE Managers. This is to buildgreater professionalism and excellence in providingservice toour customers.
Future Plan – In line with the growing number ofcustomers and higher expectations, the CAREProgramme may undergo further expansion andstrengtheningofitsservices.TheCAREManagerswillcontinue to provide significantly towards improvingcustomer service, thus enhancing the image of thecompany.
over voLTage iNFormaTioN SySTem (oviS)
OVIShasbeendeveloped toassist stationsandstateoffices to prepare, record and to take necessaryactions on all over voltage cases. This is in line withTNB’s focus to improve customer service with thelatest technology.
All over voltage data and its causes are recorded inOVIS.Reportingprocesses,statusupdatesandfollow-up actions, approvals for payment of compensationfor all over voltage cases will be reported andmonitored systematically online. This will ensure allnecessary feedbacks on over voltage complaints willbe conveyed to customers in a more efficient andeffective manner. The development of this newsystem will assist stations, states and AssetManagement Department to take the necessaryactions and preventive measures on over voltageincidents.
poSiTioNiNg TNb For gLobaL CompeTiTiveNeSS
The Malaysian Industrial Development Authority(MIDA) is the government's principal agency for thepromotionof themanufacturingandservices sectorsinMalaysia.MIDAassistscompanieswhich intendtoinvest in the manufacturing and services sectors, aswell as facilitates the implementation of theirprojects. To further enhance MIDA's role in assistinginvestors, a senior TNB representative was stationedat MIDA's headquarters in Kuala Lumpur to advise
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investorsonTNBpoliciesandprocedureswithregardstoelectricitysupply requirements.OthergovernmentrepresentativesincludeofficialsfromtheDepartmentof Labour, ImmigrationDepartment,RoyalMalaysianCustoms, Department of Environment, and TelekomMalaysiaBerhad.
In line with the government’s move to a neweconomic model, the emphasis will be to attractquality investments in knowledge and technology-intensive projects. Green technology includingrenewable energy has been identified as a growthareabythegovernment.Effortswillalsobeintensifiedto target and attract industries in which Malaysiahasastrongfoundationaswellasnewgrowthareassuch as automotive, aerospace, renewable energy,machinery andequipment andmedical equipment.
To sustain the levels of investment inflows into themanufacturing as well as the services sectors, theGovernmentwould continue to respond to local andglobal challenges to maintain the country’scompetitiveness. In this regard, the government willensure that the investment environment remainsconducive and competitive particularly in terms ofdeliverysystem,costofdoingbusiness,infrastructure,provision of tax incentives as well as availability ofskilled and knowledgeworkforce.
TariFF
Tariff rates as approved by the government duringthe revision on 1 March 2009 will continue to beused, in line with the government’s prevailingobjectiveofenabling lowincomeconsumerstoenjoyinexpensive electricity and at the same timepromoting energy savings to thegeneral consumers.The consumers can still enjoy all the governmentapproved incentives and discounts. During thefinancial year, TNB has given out RM60.4 million asdiscounts to selected privileged customers likegovernment schools and institutions of higherlearning, welfare centres and places of worship. Inaddition, a staggering RM380 million* was grantedas discounts for the Special Industrial Tariff schemeas atAugust2010. (*unauditedfigures)
Duringthefinancialyear, thegovernmentdecidedtocontinue with the special rebate for electricity billswith a consumption amount of RM20 and belowuntil December 2010. As at August 2010, thegovernment has paid RM123.3 million or RM10.3million per month for all qualified consumers. On amonthly average, 951,000 customers have beenenjoying thegovernment's rebate scheme.
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remoTe meTer readiNg (rmr)
Since its inception, Remote Meter Reading (RMR)technology has been extended to more than 70% ofLarge Power Customers (LPCs). It aims at improvingmeter reading processes and reducing non-technicallosses.
As at 31 August 2010, total customers fitted withRMR facility are 46,799 with 4,131 units for HighVoltage/Medium Voltage (HV/MV) and 42,668 unitsfor LowVoltage (LV) LPC.
Since the installation of the RMR facility, TNB hassuccessfullycarriedoutmonthlyauto-billingprocessesand enhanced its capability to detect irregularities(IR) at customers’metering installations.
TheobjectivesofRMRfacilityPhase2forLowVoltageLargePowerCustomer (LV LPC) are as follows:-
– To improvemeter readingprocesses
– To improvebillingdata integrity
– To reducehumanerrors
– To reduce Non-Technical Losses throughirregularities (IR) detection
With successful implementation of RMR project for71% of LPCs, online monitoring and scanning forpossible electricity fraud cases are becoming moreeffective andhas servedas adeterrent.
RMR system also improves losses computationthrough timely meter readings, minimises humanerror readings and enables faster and accurate loadprofile analysis.
Some of the current enhanced-Customer Information Billing System (e-CIBS) modules are also beingreviewed to enable better revenue assurance.Examples of e-CIBS modules reviewed are Landlord/TenantModule andAutoPayModule.
Chart 4: TNB installationof RMR
46,600
46,650
46,700
46,750
46,800
46,850
Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10
Total RMR Installed
Nos
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diSTribuTioN regioNaL CoNTroL CeNTreS
Distribution Division’s Control Centre hasbeen upgraded and expanded. Four regionalcontrol centreshavebeen setupnamely:
i. Metro Regional Control Centre (MRCC),locatedat TNBHeadquarters
ii. SouthernRegionalControlCentre (SRCC),locatedat TNBHeadquarters
iii. NorthernRegionalControlCentre(NRCC),located at TNB Seberang Perai, SeberangJaya, Penang
iv. Eastern Regional Control Centre (ERCC),located at TNB Seberang Perai, SeberangJaya, Penang
impLemeNTaTioN oF mobiLe FieLd ForCe auTomaTioN
TNBhas implementedaMobileFieldForceAutomation(MFFA)system.This isan online mobile system used to dispatch, schedule, supervise and reportoperationalactivitiesinthelowvoltagesystem.Italsoimprovescommunicationbetween call centre and field crews through control center, provide vehicletracking facility and instant updated information on supply restoration. Thissystem enhances TNB’s services to the customers besides increasing itsproductivity andefficientuseoffieldwork resources.
This system has been fully implemented in Selangor, Kuala Lumpur, Penangand Southern Johor. It will be fully implemented throughout PeninsularMalaysiaby2013.
Thesuccessof thissystemgainedrecognitionacrossthe IT industry forwhichit was awarded the prestigious “SGAM 2010 ICT Award – Enterprise MobileApplications Excellence Award” at the 21 annual conference, organised byShare Guide Association of Malaysia (SGAM). SGAM is an association of ICTapplication users which shares technology and experience to encourage theexpansionof the industry inMalaysia.
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TNB launched a guidebook entitled, ‘Voltage SagsSolutions for Industrial Customers’. This book hasbecome the reference material in Malaysia andabroad.
LoSSeS reduCTioN iNiTiaTiveS
TNB system losses include Technical Losses (TL) andNon Technical Losses (NTL) (i.e. Theft of Electricity(TOE) andCommercial).
TeChNiCaL LoSSeS
Technical losses are one of TNBmain concerns. Eventhoughtechnicallossesinourdistributionsystemareinevitable,theCompanyhasput invariousstrategiesto ensure that the losses are maintained at itsoptimum level. The initiatives started at theequipment specification stage. Lines, cables andtransformers specifications are adopting industrypractices for technical losses level. At the planningand design stage, technical losses consideration ispart and parcel of the planning and design criteria.For example the loading of feeders is set to be notmore than 50% and voltage regulation is the keyguide to planning the system. Similarly technicallosses criteria are also embedded in theoperationofthesystem.Toensureoptimumefficiencyisattained,operational stage monitoring and corrective actionsmustbetaken.Themonitoringisdoneatourcontrolcenters where all medium voltage feeders loadingare monitored online. Our substations and lowvoltage feeders are monitored annually by installingloadprofile recorder.
The continuous corrective actions carried out are asfollows:
i. Shifting of loads between feeders to optimisefeeder loading
ii. System development projects to commissionnewmediumvoltage feeders
iii. System development projects to commissionnewdistribution substations
These control centers are equipped with SCADAsystemthatenablesTNBtoperformonlinemonitoringof system conditions and operations. The controlareas have been expanded and cover all 33 kV and11 kV systems except for the systems in NorthernJohorand11kVsysteminKelantanandTerengganu,whichareexpectedtobeimplementedbytheendof2011.
SCADA system improves the restoration timewhenever interruptions of supply occur. The projectto equip all primary stations which include MainIntakeSub-StationsandMainDistributionSubstationscommencedin2006.Atotalof553additionalprimarystationshavebeen equippedwith SCADA system fortheperiodof Financial Year 2009/2010.
power QuaLiTy (pQ) iNiTiaTiveS
In Financial Year 2009/2010, TNB implementedseveral programmes to improve the understandingandmanagementofpowerquality(PQ).Theobjectiveof the awareness programme is to enhance theknowledgeofTNBstaffandcustomersonPQrelatedmatters. This year, five training programmes and aseminarwereconductedforTNBindustrialcustomersand four training programmes were conducted in-house for TNB staff. These training programmesprovide basic knowledge on PQ definition, standardsandPQ solutions to solve PQproblems.
The objective of the programme is to enhance themonitoring and reporting of PQ disturbances inPeninsular Malaysia. The monthly reporting of PQdisturbances and complaints is now done onlineusingintranetfacility.Allcustomercomplaintsrelatedto PQ is reported by TNB staff using the PQMSWebsystem.All actions takenwere also documented andmonthly reportsonPQaregenerated from the samesystem.
TNB is also currently in the process of producing anew guidebook on PQ, entitled 'A Guidebook onManaging Power System Harmonics’. This book willprovide guideline to customers on measures tomanage harmonic related problems. Earlier, in 2007,
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iv. Installation of capacitor banks at substationsandalso at lowvoltage lines
v. Increase transformer capacity or reducetransformer capacity to ensure their optimumoperational efficiency level
vi. Distributionsubstationloadprofilingtoenhancesystemperformance
The demand growth is the main challenge inmanaging technical losses as there are directlyproportionaltodemandgrowth.Hencethecorrectiveactions listedaboveare continuousanddynamic.
NoN TeChNiCaL LoSSeS aNd TheFT oF eLeCTriCiTy (Toe)
Various initiatives have been put to place to curbTOE cases.Among those initiatives are as follows:
• Coordinated TOE joint raids with EnforcementAuthorities resulted in more difficult cases beingdetected especially in theBlackAreas.
• More meter installations are protected either byshiftingmeterpanelsoutsidecustomers’premisesor equipping meter installation with additionalmeter guards.
• Embarkonmoreeffectiveanti-TOEmeterfeaturesto deter TOE and fraud scanning software usingartificial intelligence technology to improve hitrate. Examples of anti TOE meter features usedare SecureMeter Box,Meter Cage, Test TerminalBlock(TTB)withprotectorandTTBinstalledinsidemeter panel, outdoor meter. Fraud scanningsoftware was jointly developed by RMD, TNBResearch(TNBR)andUNITEN.TNBisalsoexpectedto install meters with blinking signals for anti-TOEsystemwithneutralcurrent transformer (CT)and Smart Meter under Advanced MeteringInfrastructure (AMI).
• More aggressive communication plan for Anti-TOE campaign includes introduction to usage ofTNB CareLine 1-5454 for TOE, fliers, posters,briefings to customers, associations andstakeholders in formal gathering and seminars.
AnantiTOEvideowas initiated in June2010andwill be finalised by November 2010. It will beshown to the public at Kedai Tenaga outlets andTNBCollectionCenters.
maNagemeNT & eNgiNeeriNg audiT 2008 (m&e audiT 2008)
The Energy Commission requires TNB to appoint areputable Auditor to conduct a “Management &Engineering (M&E) Audit” on its business operationsonce every four years to fulfill Condition18of TNB’sLicense. For the review of Distribution’s Operationsfor the year 2004 to 2008, the Energy Commissionhas appo in ted a conso r t ium compr i s ingPricewaterhouseCoopers (PwC) and Australian PowerandWater (APW) to conduct thisAudit in 2008/09.
As a testimony to theDivision’s efforts for continualimprovement, the PwC-APW Consortium recordedvery favourable comments on the Division’s currentbusinesspractices and concluded in theirM&EAuditreport that many of the engineering systems andprocesses implemented by Distribution Division areBest Practice orNear Best Practice whenbenchmarkedagainst other global electric utilities. Amongst theBest Practices citedby PwC-APWare:
(a) High Voltage (HV) and Medium Voltage (MV)Meter Testing Laboratory
(b) Safety andEnvironment
(c) Condition-Based Monitoring based on failuremodes effects and criticality analysis
(d) Assessmenton the level of technical losses
(e) Theuseofperiodcontracts(with20%tolerance)for procurement of main Distr ibut ionequipment
(f) TNBOutageManagement System (TOMS)
(g) Customer Feedback System (SMP – SistemMaklumbalas Pelanggan)
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SeSb haS alSO SeT a TargeT TO achIeVe 95% elecTrIfIcaTION cOVerage by year 2012 TO eNable mOre peOple Of Sabah TO eNjOy The beNefITS Of elecTrIcITy Supply.
operaTioNSreview – Sabah eLeCTriCiTy SdN. bhd.
overview oF SeSb perFormaNCe
• The sale of electricity in Sabah for FY2010marksa historical achievement of RM1.029 billioncompared to RM954 million recorded last year,indicating an increase of RM105 million. Totalunits sold for FY2010 was 4.051 GWh comparedwith3.723GWh in FY2009.
• Total reported operating expenditure for FY2010amounted to RM1,192 million compared toRM1,135.20 million for FY2009 (net of subsidy).SESBreceivedsubstantialdieselandmediumfuelsubsidies from the Malaysian Government andtheamount is presentednet of total subsidy.
• Total operating expenditure was at RM1,192million and total operating loss was at RM62.17million. Totalfinance costs and foreignexchangelosses for FY2010 amounted to RM72.07 millioncomparedtoRM74.60millioninFY2009.CostPerUnit (CPU) SESBas at 31August2010was31.02centper kWh.
• ThehighestMaximumDemandrecordedforFY2010was 772.8 MW while total installed capacity forSabahis1,265.05MW(SESB533.47MW(inclusivecanopygenset80MW)and IPP731.58MW).
• In FY2010 the Federal Government has grantedSESB RM419 million to implement initiatives toachieve SAIDI 700 minutes by December 2010.SAIDI trending shows a significant improvementsince2005as shownbelow:-
proSpeCT
Thedemandforelectricity inSabahisexpectedtobewithin the projected growth of 7% per year until2011.On theotherhand,powerdemand isexpectedto toucharound1,500MWby year 2020.
SESB’s medium and long term plan for electricitygeneration is to focus more towards reducingdependency on oil as the main fuel. SESB needs todiversify its fuel to guarantee security of supply. Theplan to increase long term generation capacity willsee an increase in hydro power sources as the keycomponent intheGenerationMix.Amongstthe longtermplannedpowerplants are as follows:-
• Construction of 100 MW Power Station by IPPSPR–Year 2013
• Construction of 300 MW IPP Kimanis PowerStation–Year 2014
• Construction of 150 MW Upper Padas HydroPower Station–Year 2017
• Construction of 150 MW Liwagu HEP PowerStation–Year 2018
0450900
13501800225027003150360040504500
05 06 07 08 09 10
3996 4030
1987 1856
2867
577
Trending shows a significant improvement
Calendar year 2005 2006 2007 2008 2009 2010(YTD)
Saidi 3996 4030 1987 1856 2867 577
YTD–Year ToDate
142 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
SESB’s short term plan for transmission development wouldfocusmoreonreinforcementoftheexistingsystemtoimprovestabilityandreliabilityofsupplybesidesmeetingtheexpectedincrease in electricity demand in Sabah. The long term planfor transmission development will depend on the locationsdansourcesofgenerationtobeidentified.Theimplementationofthe integrated275kVringnetwork(includingupgradingof132kVnetwork in theEastCoastofSabahto275kVandtheestablishment of 275 kV Southern East-West Link) as thebackbone of the transmission network system in Sabah willbe given special focus this year and is expected to beinterconnected to neighbouring Sarawak and Brunei in thefuture.
SESB has also set a target to achieve 95% electrificationcoverage by year 2012 to enable more people of Sabah toenjoy the benefits of electricity supply and this is part ofSESB’s contribution to the socio-economic development ofSabah.
SESB will focus on Key Performance Indicators for FY2011 toachieve SESB’s four (4) Strategic Themes namely EnhanceFinancial Sustainability, Delight the Customers, ImproveSystemPerformanceand ImproveProductivity. Therearenine(9) Strategic Objectives under the said four (4) StrategicThemes under the Balanced Score Card framework asfollows:
5-year business plan Fy2011 – 2015 and annual operation plan Fy2011
The SESB management conducted a session to review the5-Year Business Plan FY2011 – 2015 and Annual OperationsPlan for FY2011on9-10April2010atBeringgisBeachResort,Kinarut, Sabah. Participants of the review session comprisedManagementCommitteeofSESB,HeadsofDepartmentsfromTNB Headquarters, selected Executives and members of thelocalUnion.
The Key Performance Indicators for ‘Operation Plan 2011’were drawn up following the review and analysis on theperformance of ‘Operations Plan FY2010’ as well as the ‘KeyPerformance Indicators’ FY2010. Results of the findings fromthe said revieware:
• Identify the gap between the achievements of businessand operational activities and the targets for the purposeof taking correctivemeasures so that the said targets canbe achieved.
• Develop strategic themes and strategic objectives asdefinedby TNB.
• EachdivisioninSESBisrequiredtodeveloptheirrespective5-Year Business Plans and Annual Operation Plans basedon SESB’s strategic objectives.
• Use ‘SWOT Analysis’, PEST Analysis’ and ‘Porter’s Five Forces of Competiton’ toidentifySESB’sstrategicplansforFY2011to FY2015.
• Additional initiatives/activities tobe introduced to furtherstrengthen operational activities and to expedite and orlaunch the implementationof the said activities.
• To modify the title of road map from ‘SESB 20-yearStrategic Roadmap’ to ‘Strategic Transformation ActionRoadmap 2026 (STAR 2026) FY2007-FY2026 for brandingpurposes. This would serve to stimulate the employees inensuringthattheirdailyactivities is inalignmentwiththestrategic objectives as outlined in the saidRoadmap.
SeSb STraTegiC ThemeS & obJeCTiveS
eSTabLiSh FiNaNCiaLSuSTaiNabiLiTyF1 EnhanceBusiness SustainabilityF2ReduceRevenue Leakages
deLighT TheCuSTomerS
C1 ImproveCustomer SatisfactionC2Enhance Stakeholder Satisfaction
improve SySTemperFormaNCe
IP1 Enhance Supply Security&ReliabilityIP2 Enhance Supply SystemDevelopmentIP3Benchmark& ImproveProcesses
improve produCTiviTyLG1DevelopHighly CompetentWorkforceLG2Enhance Organisational Productivity
143TENAGA NASIONAL BERHADANNUAL REPORT 2010
operaTioNSreview – Sabah eLeCTriCiTy SdN. bhd.(CoNT’d)
SeSb 20-year STraTegiC road map-STar 2026
overSeaS iNveSTmeNTS
geographiCaL eXpaNSioN(ServiCeS)
202220122011201020092008200706 2026
buSiNeSS TraNSFormaTioN period
SeSb 5-year buSiNeSS pLaN
LEGEND:Dx=Distribution S1=Strecth Target
AKP700
PSIAwareness
5SAwareness
SEMS2Star
CSI52%
ROA(1.38%)
LossesGTD:17.56%
Dx:12%
ACP66days
SAIDIGTD:2,717Dx: 1,850S1: 1,500
AKP750
PSI (ISO)Accrdt’n
5S for11 Stations
SEMS3Star (50%of
SESB)
CSI60%
ROA(0.1%)
LossesGTD:16%Dx:10%
ACP42days
SAIDIGTD:1,500Dx: 1,320S1: 800
IntroduceOSHAS18001&
EMS14001
AKP780
PSI (ISO)Certified
5S for25%Stations
SEMS3Star (50%)4 Star (50%)
CSI65%
ROA1.0%
LossesGTD:15%
Dx:9%
ACP38days
SAIDIGTD:1,000
Dx: 800S1: 500
OSHAS18001&EMS14001
SJ PatauPatau
AKP>800
PSI (ISO)Certified
5S for50%Stations
SEMS4Star (100%)
CSI70%
ROA2.0%
LossesGTD:14%
Dx:8%
ACP34days
SAIDIGTD:700Dx: 500S1: 120
OSHAS18001&EMS14001
SJ Sandakan&Tawau
AKP>800
PSI (ISO)Certified
5S for75%Stations
SEMS5Star (50%)
CSI75%
ROA2.5%
LossesGTD:13%
Dx:8%
ACP<32days
SAIDIGTD:350Dx: 240S1: 120
OSHAS18001&EMS14001
SJMelawa&TenomPangi
AKIPM
PSI (ISO)Certified
5S for allSESBStations
SEMS5Star
CSI>80%
ROA3.0%
LossesGTD:12%
Dx:7%
ACP<30days
SAIDIGTD:<240
Dx: 120
OSHAS18001&EMS14001
InternationalAccreditation
SeSb Tiger ServiCeeXCeLLeNCe 2012
144 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
operaTioNSreview – eNTerpriSe maNagemeNT
TNB’s core generation, transmission and distribution divisions are strongly supported by a multitude of other divisions thatbring into play their core strengths to ensure TNB operates as a dynamic,well-run enterprise. TNB’sGroup FinanceDivision isresponsible for strategising theGroup’soverallfinancialmanagement.Aside fromundertakingconventionalfinancial functionssuchasfinancial andmanagement reporting, taxation, budgeting, corporatefinance and treasury operations, this division alsoundertakes the financial planning, business development, enterprise wide risk management and investor relations aspects ofourbusiness.TheGroup’sCorporateAffairsDivisionrenderssupportthroughtheprovisionofcorporatesecretarialandcorporateadvisory services, legal and litigation management services, regulatory and relations management, as well as corporatecommunications. CorporateAffairs is also responsible for ensuring TNB’s commitment to providing educational andwelfare todeserving students is properly channelled throughYayasanTenagaNasional.
TNB’s Planning Division comprises departments responsible for strategic planning, system planning and development, as wellas energy procurement activities. These departments collaborate to formulate and implement TNB’s long-term strategies, ensurea reliablenational supplyaswellasmanageenergyprocurementactivities includingPPAactivities.TNB’sProcurementDivisioncomplements theseactivitiesby formulatingeffectiveprocurementpoliciesand implementingstrategic supply chain initiativesthat enhance procurement activities. Last but not least, TNB’s Corporate Services Division is tasked with managing and securingall TNB’s properties and assets as well as providing logistics and other support services. By undertaking focused activities inspecific strategic areas, eachof thesedivisionshelps ensure the smooth runningof TNB’s enterprisemanagementoperations.
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Apartfromtheconventionalfinancefunctionsof financial and management reporting,taxation, budgeting, corporate finance andtreasury operations, the Division is alsoresponsible for financial planning, businessd e ve l opmen t , e n t e r p r i s e -w ide r i s kmanagement and investor relations.
Withthisobjective inmind, theroleofGroupFinance Division has significantly shifted toinclude the following:
• To play an active role in identifying,assisting and tracking value creationopportunities.
• To actively pursue cost managementactivities as part of TNB’s efforts to keepcost atmanageable levels.
• To explore new business opportunitieslocally andabroad.
• To assist other business units to make informed business decisionsrelating tofinancial and commercial relatedmatters.
• To improve human resource competency within the division viacontinuous trainingand staff development.
• To institutionalise an enterprise wide risk management frameworkwithin TNBGroup.
highLighTS oF key aChievemeNTS
• Effective debt liability management emphasising on reducing foreigncurrencydebt andminimising cost of borrowing.
• Reviewingof strategicassetallocationofTNB’sRetirementBenefitTrustFund (RBTF).
• Strategic taxplanning.
• Prudentmanagementof capital and revenueexpenditures.
• Activelypursuingbusinessopportunities inenergyrelatedindustriesabroadinaccordancewithguidelinessetby the InvestmentPolicy&Strategy.
mOhamed rafIque merIcaN bIN mOhd WahIduddIN merIcaNchief financial Officer/ Vice president, group finance
fINaNcIal year 2010 marked The fINal year Of TNb’S jOurNey IN The fIrST phaSe Of ITS 20-year STraTegIc plaN (fy2006-2010) TO achIeVe SerVIce excelleNce IN The delIVery Of Our SerVIceS. The grOup fINaNce dIVISION haS alSO beeN INVOlVed IN The purSuIT Of excelleNce by acTIVely playINg The ceNTral rOle Of ImprOVINg aNd eNhaNcINg The fINaNcIal maNagemeNT WIThIN TNb grOup.
146 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
• Improving the performance and competitivenessof subsidiaries through active investmentmanagement.
• Effective and proactive investor relationsmanagement.
• RestoringTNB’s credit rating to ‘AAA’ status.
eFFeCTive debT LiabiLiTy & CapiTaL maNagemeNT
As theGroup’s cashposition remains strongandourcash reserves were sufficient to finance capitalexpenditure and debt repayment obligations for theyear, TNB’s financial position continued to improve.As part of our efforts in reducing TNB’s exposure toforeigncurrencyvolatility,foreigndenominatedloanswere further reduced via an opportunistic purchaseofUSDBondsinOctober2009amountingtoUSD22.5million.
To further reduce our gearing, TNB is planning toretiresomeofourRinggitdenominatedbondsand iscurrentlymonitoringandanalysingtheimpactofthisexercise, taking into account the premium payablefor buyingback thesebonds.
review oF aSSeT aLLoCaTioN For The rbTF
During the year under review, one of the initiativesundertaken by the Treasury Unit was to review andre-evaluate strategic asset allocation of TNB’s RBTFto achieve the objective of providing consistentreturns on a long-term basis. In view of the above,TNB has carried out an asset allocation study takingintoconsiderationkeyrisksandreturnstobeadoptedinattainingthisgoal.StatementofInvestmentPolicywhich sets out the policies that will guide theinvestment of funds of TNB’s RBTF has also beenestablished.
STraTegiC TaX pLaNNiNg
TohelpTNBachieve itscostmanagementobjectives,the Tax Unit has been actively requesting andobtaining tax incentives for qualifying projects in
particular for green technology projects such as theBiomass Project. In addition, the Tax Unit has beenextensivelyinvolvedinthediscussionontheproposedRenewableEnergyActwhichwillbe implementedbytheGovernmentandproposingfurthertaxincentivesin Budget 2011 for the green technology industrywiththeaimtoreducethecostofRenewableEnergy(RE) infrastructure to encourage increased energygeneration and consumption from RE sources. ByworkingtogetherwiththeDivisionsandsubsidiaries,the Tax Unit has also successfully obtained customduty and sales tax exemptions on importation ofequipment for major projects from the relevantauthorities which have helped achieve cost savingsand tax efficiencies for theGroup.
eXpLoriNg aNd SeCuriNg New buSiNeSS opporTuNiTieS LoCaLLy aNd abroad
Heading for a new stage of growth in TNB’s 20 yearStrategicPlan (FY2011-2015), theGroupcontinues tofocus its efforts in strengthening its earnings baselocally,andinemergingcountrieswhichareexpectedto see continuousgrowth.
During the year under review, Group Finance incollaboration with and led by TNB Divisions andsubsidiaries succeeded in making inroads in thefollowing local projects:
1. On9June2010,TNECreceivedaLetterofAward(LoA) from Universiti Kebangsaan Malaysia(UKM) for the UKM DCP Loop 2 EPC Projectwhich comprised an Engineering, Procurementand Construction (EPC) of the District CoolingPlant (DCP) plant building, and operation andmaintenance during the 24 months DefectLiability Period (DLP).
2. In August 2010, the Government granted TNBonabuild-own-operatebasistheopportunitytodevelop one (1) unit of 1,000 MW coal-firedpower plant at the present site of the 2,100MWSultanAzlanShahPowerStation,Manjung,Perak Darul Ridzuan using supercriticaltechnology.
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3. For the Jengka 10 MWe Biomass Power ProjectinPahangledbytheGenerationDivision,TNBisatthetenderevaluationstageoftheEPCcontractand selectionof banks forfinancingpurposes.
TNB’sinvolvementintheinternationalarenaincludedthe following:
1. TNB’s investment in Saudi Arabia, the ShuaibahIWPP has successfully achieved its ProjectCommercialOperationDate(COD)on14January2010 and Project Completion on 18 August2010. The plant has been dispatching its fullcapacity (900MWand880,000m3/daypotablewater) since 25 July 2009. Summary of keymilestonedates are as follows:
group/plant achieved date
CODGroup1 7May2009
CODGroup2 26 June2009
CODGroup3 25 July 2009
TheShuaibahExpansion,involvingtheexpansionof Shuaibah IWPP’s water output by 150,000m3/day, achieved its Commercial Operation on17November2009.
2. TNBhasmadeconsiderableprogressinexploringnew businesses in the Middle East and NorthAfrica (MENA) region. Currently, TNB has beenpre-qualified to participate in the bidding for a2x750MWpower plant project inDairut, Egyptwhilstatthesametimepursuinganotherpowerproject located there. In Saudi Arabia, TNBcontinues to concentrate on expanding ourbusinesses in IPP/IWPP field having been pre-qualified for the 1600-1900 MW Al-Qurayyahpowerplantproject.
3. TNB is also pursuing a mine mouth powerproject of 2x300 MW in South Sumatra. Thepreparationforthesubmissionofthetenderbidtogether with our Consortium partners iscurrently in progress, while waiting for theRequest for Proposal (RFP) to be issued byPerusahaan ListrikNegara (PLN).
4. On 25 January 2010, a Memorandum ofUnderstanding (MoU) was signed between TNBandPublicElectricityCorporation(PEC),Republicof Yemen for future collaboration in the powerindustry fields of generation, transmission anddistribution, including in areas of training andconsultancy& services.
TNB’s investment f ramework encompassescomprehensive evaluation and structuring ofinvestments to ensure commensurate returns andmanageable risks. Moving ahead, TNB is lookingforward to collaborate with major players in theindustry to broaden business opportunities andenhance our investment prospects in the longerterm.
iNveSTmeNT maNagemeNT
TheroleoftheInvestmentManagementDepartmentis to ensure that all long-term investments bringpositivevaluestotheGroupasawhole.Theobjectiveis achieved by closely monitoring, financially andoperationally, all TNB investments including long-term investments of subsidiaries and associatescomprising core and other related businesses. TheDepartment has set strategic directions for each
Figure1:Overviewof Shuaibah3 IWPP
148 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
subsid iary and cont inuously monitors theimplementationof these strategic plans and ensuresthat the subsidiaries are on track to achieve theirobjectives.
TNb energy Services Sdn. bhd.
TNB Energy Services Sdn. Bhd. (TNBES) is a whollyowned subsidiary of TNB. TNBES specialises inproviding quality and reliable energy solutions andservices to its customers by offering a completepackage for energy related services (includingengineering, procurement and consultancy) for:-
1. Development, operations and maintenance ofRenewable Energy related projects (wind/solarhybrid, biomass andminihydro);
2. Power Quality Audit Monitoring, Testing &Mitigation; and
3. Energy Efficiency Audit, Implementation andMitigation
operationsSince itsformationin1997,TNBEShasbeeninvolvedinvariousRenewableEnergy relatedprojects suchasthe following:-
1. Renewable Energy (Biomass) – Engineering,Procurement and Contracting of 2 MW LandfillGas Power Station in Puchong, Selangor inpartnership with other developers as well asoperations andmaintenance services.
2. RenewableEnergy(MiniHydro)–Rehabilitation,OperationsandMaintenanceofTNBMiniHydroStations for TNB.
3. Renewable Energy (Wind/Solar Hybrid) powerstations for supply of up to 300 kWper stationat various locations, including Langkawi CableCarMiddleStationforLADA,islandsoffMersing,Johor for Kementerian Kemajuan Luarbandardan Wilayah (KKLW), Orang Asli Settlements inPeninsular Malaysia for KKLW, Pulau Kapas forTerengganu State owned PERMINT and PulauPerhentian (wind/solar), off Terengganu forKKLW, remote areas in Sabah for KKLW andmaintenanceservicesforallsolarhybridstationsunder TNB.
4. Power Quality, Energy Efficiency and PowerFactor – System Administrator for TNB’s PowerQualityMonitoringSystemandconductedPowerQuality Audit and Mitigation on TNB’s majorcustomers.
prospectsFor Renewable Energy, the impetus for futuredevelopment and growth is expected from theincreased number of Renewable Energy projectsresulting from theGovernment’s Feed In Tariff (F.I.T)introducedtopromoteRenewableEnergyprogrammes.Other related services include the rehabilitation ofTNB mini hydro stations and the development ofmicro hydros in Sabah and Sarawak. The GreenTechnology Financing Scheme amounting to RM1.5billion launched by theGovernment in January 2010to promote green technology and to help financepotentialprojectswouldfurtherprovidenewbusinessopportunities to TNBES.
Currently, TNBES is undertaking the supply anddeliveryofsolarhybridsystemtoruralschoolsunderthe Ministry of Education. Other projects on streaminclude TNB’s own 5 MW Solar Showcase which isexpected to begin soon and the Supply and Deliveryof Solar Hybrid stations to Orang Asli Settlements(Phase 3) under the Ministry of Rural Development.With the support of the Government in introducingthe necessary regulatory structure, awareness andfinancialplanforthegrowthofgreenandRenewableEnergygeneration,TNBESisontracktoplayalastingrole indevelopingRenewable Energy.
TNb engineering Corporation Sdn. bhd.
TNB Engineering Corporation Sdn. Bhd. (TNEC) wasestablished in October 1993 as a wholly-ownedsubsidiary of TNB. TNEC is the leading provider ofDistrict Cooling Systems (DCS) with Thermal EnergyStorage (TES) in Malaysia, specialising in projectdevelopment, Engineering Procurement andConstruction (EPC) as well as comprehensiveoperations andmaintenance.
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The projectAbraj Cooling LLC (Abraj), a joint-venture companybetween TNEC (49%) and Al Samah Electrical, Air-Conditioning & Refrigeration Co. (Al Samah) of AbuDhabi (51%) was established in 2008. Abraj’s mainspecialises in DCS, providing services in DCS plantconstruction, as well as plant operation &maintenance. TNEC and Abraj complement eachother in undertaking projects in AbuDhabi. The firsttwo projects undertaken by Abraj and TNEC-AbuDhabi have contributed RM70 million and RM105million in revenue to TNEC for the financial year2009and2010 respectively.
operationsThe Building Material City (BMC) Project is a mixed-use integrated project developed by Manazel RealEstatePJSC (Manazel). Thedevelopment is located intheMusaffaharea, in theoutskirtofAbuDhabi. TheProject will see the development of 11 officebuildings, 17 residential buildings, a 4-star hotel anda shopping & exhibition centre. Total plot area isestimated at 230,560 m2. The District Cooling Plantprojectcommenced in June2008and isscheduledtobecompleted instages,withthefinalstagetargetedtobehandedover in February2011.
The latest project secured by TNEC is a 20 yearsconcession with Malaysia Airports Holdings Berhad(MAHB)fortheconstructionofa20,000RTDCSplantand the supply of cooling energy to KLIA-2 (the newLow Cost Carrier Terminal). The fast-track project isscheduled to be completed in April 2012. With thecompletion of KLIA-2 project, TNEC may emerge asthebiggest cooling energyprovider inMalaysia.
prospectsAt present, TNEC has five DCS plants in operationunder the BOO and BOT scheme. The concessionperiod for these plants ranges from 10 to 20 years.TNEC has identified the following strategies tomultiplyitspresentrevenuelevelbymorethanthreetimeswithinthenextfiveyears,namely,mergerandacquisition of other DCS plant owners, includingtaking over of existing DCS plants and exploringplant expansion projects, strategic partnership with
property developers and facility managers, positionthe expert DCS service provider with Governmentdepartments with huge cooling energy consumptionand overseas business expansion in the Middle EastandASEANRegion
Tenaga Switchgear Sdn. bhd.
TenagaSwitchgearSdn.Bhd.(“TSG”)wasincorporatedin October 1994. Being a 60% owned subsidiary ofTNB, TSG was established inline with TNB's drive todiversify into manufacturing of High VoltageSwitchgear. TSG manufactures high quality GasInsulated Switchgears, Gas Circuit Breakers andDisconnectors.
operationsSince its inception, TSG has also been involved inturnkey construction of high and medium voltagesubstations for bothGas Insulated andConventionalSwitchgear.TSGsuccessfullycommissionednumeroussubstations while at the same time providingsubstationmaintenanceandswitchgearrefurbishmentas part of value added activities to its clients. Basedon current factory facility, TSG’s annual productioncapacity is estimated at 50 bays of Gas InsulatedSwitchgear (GIS), 300 units of Gas Circuit Breakers(GCB) and 500 units of Disconnector. TSG productsare accredited internationally with Type TestCertificateforconformitytoIECstandardsandsafety.Indeliveringitscommitmenttoqualitymanagement,safety and reliability, TSG has applied qualitymanagementsystemin itsoperationandmanifestedit through ISO 9001:2008 certification. TSG is alsocertified with the latest ISO 14001 EnvironmentalSystemasaprooftoitscommitmenttoenvironmentalmanagement in achieving a foothold in thecompetitive global high voltage power equipmentmarket.
prospectsIn the internationalmarket, TSG has secured 3maincontracts to supply of 145 kV GCB to Pakistan. Arecent contract was successfully delivered toHyderabad Electricity System Company (HESCO) inJanuary2010andthecompany isnowstrengtheningits position by participating in more open tenders.
150 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
To date, more than 70 units of GCB have beeninstalled in Pakistan. TSG is also actively involved inthe Indonesian market whereby it had securedservices contract from Perusahaan Listrik Negara(PLN) in January 2010 and is expected to expand itsbusiness in the country in the years ahead.
university Tenaga Nasional (uNiTeN)
AwhollyowneduniversityofTNB,UNITENfocusesinthe field of engineering, information technology andbusiness studies. Being one of the first privateuniversities established in the country, UNITEN hasgrownsignificantly in the last12yearsandcurrentlycaters to the educational and research activities of8,729 students. Out of this number, 629 arepostgraduate students while the remaining areundergraduate students.
Besides national accreditation, most of theprogrammes offered by UNITEN are also accreditedbyprofessionalbodieslocallyandinternationally.Theprogrammes are recognised by other countries andto date UNITEN has attracted students from morethan 30 countries worldwide. UNITEN has also beenconferred several awards in quality management,notably the Prime Minister’s Award for IndustryExcellence(AKIPM)2009andInternationalAsiaPacificQualityAward2009.
operationsResearch isoneof thekeyagendaofUNITENand itscommitment in promoting research activities isevident from the number of research undertakenthat continues to increase year after year. Totalamount of external research grant received byUNITEN for FY2010wasRM3.8millionanda total of671 publications have been published by theUniversity. The quality and excellence of UNITEN’sstudents and graduates has been proven by therecognitionsandawardswoninvariouscompetitionsatnationalandinternationallevels.UNITENgraduatesare also highly sought after and employed byreputable national and international companies. Theemployability rate of UNITEN graduates for FY2010stood at 78%, higher than the Malaysian nationalaverage.
prospectsUNITEN is moving to expand its business andexploringnewbusinessopportunitiesbycollaboratingwith other higher education institutions in offeringacademic programmes as well as exploring andexchangingideasintheinternationalarena.Currently,the University is collaborating with TERI University,India, Hanze University Groningen, Netherland andESIGELEC, France by carrying out activities such asstaff exchange, students exchange and researchcollaboration programmes. This will provide themeans for UNITEN to broaden its horizon and helpset its footprint in the international arena.
ouTLook aNd The way Forward
While recognising that FY2010 marked animprovement for the Group’s financial position asthe overall Malaysian economy has turned aroundand recovered from the impactof theglobal crisis inFY2009,theGroupisawareofthechallengesthat lieahead. As we move forward, Malaysia’s economy isexpected to further expandbyanaveragegrowthof6% in the following years, contributed by theGovernment ’ s e f for t under the EconomicTransformationProgramme (ETP) to turn thecountryinto a high income nation. The spill over effects tothe economy will provide a positive outcomeparticularly to TNB, as electricity demand is foreseento continue its rising trend and provide a boost totheGroup’s revenue.
The Group will continue to pursue our costmanagement initiatives in FY2011 to enhance itsearnings. This is challenging given that coal pricesare expected to increase in the near future while atthe same time demand for electricity continue togrow and is expected to be met through higherelectricity generation from the coal fired powerplants.
As the Group enters the 2nd phase of TNB’s 20-yearStrategic Plan of achieving global expansion, theGroupFinanceDivisionwillcontinuetoplayaleadingrole in ensuring that TNB achieve its strategicobjectives.
151TENAGA NASIONAL BERHADANNUAL REPORT 2010
puaN adelINa bINTI ISkaNdarVice president
operaTioNSreview – CorporaTe aFFairS
Corporate Affairs Division has outlined broadstrategic objectives for the division’s businessplans and activities for the next 5 years. Thestrategic objectives aim to achieve thefollowing:
• maintain TNBas an integrated entity
• provide high security & reliability ofsupply
• maintain TNB’s position as a premierutility company
• projectprominentimagetoallstakeholdersinCustomer SatisfactionandCSR
• remainfinancially soundand viable
These strategic objectives have been drawnup to serve as a basis for all departmentswithin the divis ion in preparing thedepartmentalKey Performance Index (KPI).
a VITal challeNge IS TO eNSure aNd SuSTaIN excelleNT relaTIONS beTWeeN TNb aNd all ITS STakehOlderS TO maINTaIN The releVaNcy Of TNb IN The INduSTry VIS-a-VIS IN aNy pOlIcy chaNge. heNce cOrpOraTe affaIrS dIVISION haS TO maTch, cOmplemeNT aNd fulfIll The requIremeNTS Of TNb aS The cOmpaNy grOWS aNd VeNTureS INTO NeW areaS.
For Financial Year 2009/2010, Corporate Affairs has marked variousachievements in its operations and corporateperformance.
• Awards–CertificateofMeritNACRAonAnnual Report.
• As a role model to initiate CSR activities such as Community LeaderOutreach Program (CLOP), Baiti Jannati and Promoting IntelligentNurturingTalent andAdvocatingResponsibility (PINTAR).
• Ulu PangsunHydro StationConservationProject.
• NewsTube&ElectronicCommunications.
• Certificationof 5S–byMalaysianProductivityCentre (MPC).
• Housingof corporate art collection inGaleri Tenaga.
• Commendabledivision scoreof 660points for 1st AKPparticipation.
• Sports Excellence viaMalaysiaHockey League (MHL).
• Direct media buying services/placement – savings up to 50% fromannual budget.
• Contribute to Pusat Kanser Nasional (MAKNA) through sponsoring aMobileCancer ScreeningProgramme.
152 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
operaTioNaL perFormaNCe
In supporting TNB’s ‘Service Excellence’ by 2010,departments within the division namely Regulatory& Relations Management (RRM), Office of theCompanySecretary(Cosec),LegalServicesDepartment(LSD), CorporateCommunicationsDepartment (CCD),YayasanTenagaNasional (YTN) andSupport ServicesManagement (SSM) have improved and enhancedtheir quality of services.
Company Secretary Office has significantly exceededexpectations in compliance to the Regulatory andGovernment requirements.
Toenhancerelationsandnetworkingwithgovernmentbodies, regulators and other stakeholders, RRM hasconducted various programmes including seminars,visits, dialogue sessions as well as organisingnumerous social activities.
The Regulatory Satisfaction Index (RSI) survey wascarried out between February to June 2010 andinvolved TNB Generation (all power stations),Transmission (regional) and Distribution (all stateHeadquarters). The objective is to evaluate TNBrelationshipswithGovernmentbodiesand regulators.
Based on the results, RSI survey marked 73% of therecipients satisfied with the relationships built,meanwhile 52% of them scaled TNB relationshipsbetween7-8ona scale of 1-10.
Inanotherefforttoimproveoperationalperformance,RRM has used Electronic Document ManagementSystem(EDMS)tomaintainarepositoryofregulatoryrelated data which can be easily assessable to allrelevantparties.
For the lastfinancial year, RRMhasuploaded:
a) answers to Parliament questions from 2006 till2010 – The answers are divided into severaltopics for easy reference
b) listsofgovernmentdepartmentsand regulatorybodies
c) nineteen license requirements – includingreportingdetails.
LSDachievedgreatmilestoneonthenumberof legalassignmentreferredtoexternal lawyerswithonly10beingreferredcomparedwithpreviousFinancialYear2008/09.
Directmediabuyingservices/placementwasanotherachievement for CCD in savings of up to 50% fromtheDivision’s annual budget.
Another department within the division which hasplayed a significant role in fulfilling TNB’s corporatesocial responsibility through education and welfarecontribution is YayasanTenagaNasional.
With various debt and loan collection mechanismsapplied, YTN has successfully collected 79.89% ofstudy loans.
Since 1993, YTN has sponsored 10,517 studentsthrough scholarships and convertible loans. InFinancial Year 2009/2010, YTN offered educationscholarshipsandloansto2,244academicallyexcellentstudents;tofurthertheirstudiesatlocalandoverseasuniversities. This is its largest contribution inproducing professional workforce for TNB as well asfor thenation.
10 9 8 7 6 5 4 3 2 1
16
29
63
48
2618
11
2 0 1
No. of Respondent
0
10
20
30
40
50
60
70 We asked the question:“Overall, how would you rate TNB relationship with your department?”
52% of them rated our relationship between 7-8 on a scale of 1-10
Overall satisfaction = 72%
Chart 3: TNBe-ApplicationUsage
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In fulfilling its social responsibilities, YTN hascooperatedwith theWelfareDepartment to identifyseveral Community Service Centres. The sponsorshipis in the formofspecial teachingaids/equipment fortheir learning. The children in these CommunityService Centres consist of children who havinglearning difficulties and physically disabled childrenwhoneed special teachingaids andequipments.
operaTioNaL improvemeNT
During financial year 2009/2010, LSD conductedBrainstorming/Dialogue Session with DistributionDivision on legal issues with a view to improvecustomer service.
The Brainstorming/Dialogue Session were held inseveralstatesinPeninsularMalaysiabyRegulatory&Legal Documentation Unit of LSD with executivesand non-executives of Distribution Division on legalissues relating to land matters, trespassing andacquisition of land for the construction of TNB’sinstallations,rechargeablejoborder,housingloanforTNB’s staff and supply matters which involveddistributionoperational business activities.
The turnout for the 5th Annual Legal Forum 2010turnout was tremendously positive with 80participants from various divisions and TNB’ssubsidiaries.ThemainobjectiveoftheLegalforumisto educate the participants on the legal implicationson specific issues that effect TNB.
Meanwhile, Legal Bulletin continues to increase thelevelof legalawarenessandreducebreachof lawsbyTNBstaffwhenperforming theirdaily routine tasks.
TheLitigationUnitofLSDhascontinuouslyconductedmeetings with Distribution Division in all states toupdatethestatusof litigationcasesoftherespectiveStates. The forum is alsomeant to create awarenessof the importance of better handling of theiroperations and consumers to prevent/reduce claimsagainst TNB.
In the year under review, CCD co-ordinated theofficial visit of our Prime Minister, Dato’ Sri Mohd.NajibTunAbdulRazaktoTNBon31October2009inconjunction with LLN/TNB’s 60th Anniversary. Thevisit was a morale booster to the 2,500 staff whoturnedup togreethim.
CCD constantly worked with several media houses tohelppublicise theGroup’s commitment to reliable andsufficient electricity supply, solar energy and windturbine for rural electrification as well as greentechnology. The initiative was also aimed at easingapparent trepidations over approaching securityconcerns regarding Nuclear Energy and GreenTechnology. Collaborations with various print andelectronicmediawerealsofacilitatedtohighlightTNB’scontinuous efforts to provide green technology asobservedinSultanAzlanShahPowerStationinManjungascoalfiredpowerplantusingcleancoal technology.
As part of CCD’s initiatives to promote energyefficiency and safety, a total of 23 billboards, 1unipoleand1flyoverbillboardshavebeencompletelyinstalled in various locationsof PeninsularMalaysia.
In addition, Majalah 3 programme of TV3 haddedicatedonehourcoverageonTNBandhighlightingthe dangers and vulnerabilities involved in thegenerationand transmissionof electricity.
CCD has facilitated visits to TNB by several workinggroups anddelegations such asKargozar Institute ofPublic Relations, Tehran, Iran; Electricity of Vietnam(EVN); Muscat Electricity Distribution Co. (MEDC)Oman; Kenya Rural Electricity Authority; Ministry ofLabour, Youth Employment & Sports Development,Tanzania andBhutanPowerCorporation.
Stakeholder & relationship management
RRM has reached out to major regulators andstakeholders in Electricity Supply Industry (ESI) andwithinthecompany.Thisisinlinewiththeinitiativeslaid out in the White Book of Putrajaya Committeeon GLS high performance on managing regulatoryrelationship to create greater impact in the businessvalue chain.
TNB has always maintained good and cordialinterpersonal and professional relationship with theMinistry of Energy, Green Technology and Water(KeTTHA),EC,EPU,UKASandotherimportantFederalMinistries andAgencies. Relationshipswith decision-makers,legislators,andstakeholderssuchasMinistersand Members of Parliament and even members ofthe ruling Monarchs have been enhanced. RRM hasalso established new frontiers by making inroads inotherstakeholdercirclessuchasstrategic legislativesissue champions, opinion leaders, think tanks andstrategic resourceplanners.
Beside managing relationship, RRM has alsoparticipated in some content management of theissues raised normally in Parliament sessions andmedia such as public acceptance on nuclear public,Manjung 4 interest and the still-contested LahadDatupowerplant.
Internally, RRM has strived to educate internalstakeholders especially key divisions of Generation,Transmission and Distribution (GTD) and keydepartmentsbesidesbridging thegaps in thegroup-wide understanding and practice of regulatorymanagement.
The future beckons intensified collaboration andfacilitation of operational (G-T-D divisions) andcorporateenterpriseinitiativesincludingnewbusinessdevelopment. Challenges that need to be addressedprofessionally include ensuring frontline regulators-stakeholders customer service satisfaction andproviding leadership in coordinating contentmanagementonbehalf of theManagement.
Moving ahead, a guidebook will be developed toprovide a proper and coordinated management ofstakeholders. This will ensure a more systematic,approach in documenting and managing ourstakeholder. RRM will also embark on introducing astakeholder matrix for all relevant divisions anddepartments.
YTNcontinuesitssupporttoTheMinistryofEducationby funding a Centre for Special Education (PusatPendidikan Khas) in Putrajaya for special children togain basic education there. For Financial Year2009/2010, YTN has contributed RM160,000. At thiscentre, these special children will be able to getindividualorgroupsupport ineducation,health,andwelfare.
Thesespecialchildrenarecategorisedinthreegroups– hearing impaired, visual impaired and learningdifficulties. With the cooperation of the SpecialEducation Department, Ministry of Education, TNBhasmanagedtobringitselfclosertothecommunity;particularly children with special needs by providingfacilities that would help them improve themselvestowards abetter quality of life.
155TENAGA NASIONAL BERHADANNUAL REPORT 2010
daTIN rOSlINa bINTI zaINalVice president
operaTioNSreview – pLaNNiNg
highLighTS oF aChievemeNTS:
• TNb 5-year STraTegIc plaN fOr fy2011-2015
• ppa mONITOrINg aNd re-NegOTIaTION
• fIrmINg up The NexT 1,000 mW cOal-fIred pOWer plaNT IN maNjuNg
• TarIff reVIeW
• meSI reVIeW
• eNergy pOlIcy fOrmulaTION
diviSioNaL goaLS
The Planning Division comprises three core departments namely StrategicPlanning Department, System Planning and Development Department andEnergy Procurement Department. The three departments coordinatecohesively to achieve the followinggoals:
• To ensure formulation and subsequent implementation of TNB’s longtermstrategicplanarealignedtowards its longtermvision,missionandstrategic objectives.
• To ensure sufficient, reliable and economic power supply to meet thenation’s electricity demand requirement.
• To ensure activities related to energyprocurement includingnegotiationand management of the Power Purchase Agreements (PPA) with thepower producers and cross border interconnections are administeredeffectively, professionally andadhere to theprovisionsof thePPA.
156 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
buSiNeSS review
development of TNb 5-year Strategic plan for Fy2011-2015
In line with its pursuit of Geographical Expansion,TNB’s 5-Year Strategic Plan for FY2011-2015 hasbeen formulated and developed by cross divisionalteams ledbyPlanningDivision.Theplan laysoutthestrategic objectives, key initiatives and key actionplans for TNB to achieve its Geographical Expansionobjectives. ThePlanhas four strategic themes:-
• grow profitable business – TNB seeks to build asustainable business by optimising costs ofelectricity business in Peninsular Malaysia andSabah. In addition, we will also capitalise onoverseasbusinessopportunities.
• delight the customers – TNB strives to furtherimprove communication and engagement withour customers and other stakeholders. TNB alsostrives to be the primary driver of Green EnergyinMalaysia.
• enhance operational excellence – TNB continuesto sustain world class status in power supplyreliability and security whilst enhancing ouroperational excellence encompassing all aspectsof our business operations. TNB will also deploylatest proven technologies including nuclear andsmart grid.
• enhance human Capital development and productivity – TNB aims to enhance our humancapitalcompetenciesandcapabilitiestoundertakefuture challenges and equip our workforce forgeographical expansion. TNB shall strives toachievehighmanpowerproductivity.
Figure1– TNBKey Strategies for FY2011-2015
TENKEY STRATEGIES TOMOVETNBTOTHENEXT LEVELOFACHIEVEMENTKey strategies cascaded fromOperational Strategies
GEOGRAPHICAL EXPANSIONFY2011-2015
ValueCreation CustomerCentricity World Standard TalentedPeople
PLATTSAWARDS–1ST RANKINGELECTRICITYUTILITY
ROA=6-7% T&D Losses=6-7% NonRegulatedRevenue>RM5Billion,UOR<4% SAIDI < 50min/customer/year SystemMinutes<1min/deliverypoint/year
GrowprofitableBusiness Delight theCustomers EnhanceOperationalExcellence
EnhanceHumanCapitalDevelopment&Productivity
1. ExpandGlobalBusinessMarkets
2. InstitutionaliseBaseTariff& FCPT forPeninsular&Sabah
3. ReduceT&D Losses
4. Optimisepower supplyinfrastructuredevelopment
5. EnhanceCustomerCentricity
6. PrimaryDriver ofGreenEnergy inMalaysia
7. Engage&EducateStakeholders
8. SustainWorldClassReliability&Securityof Supply– Deploy latest proven
technology includingNuclear
9. Streamline InvestmentVehicles andProcessesforOverseas Expansion
10. Enhancehumancapital development&competency
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management of major Strategic issues
• power purchase agreement PlanningDivisioncontinuesitseffortstoworkcloselywith
the IPPs to ensure full compliance with the terms andconditionsunder thePPAand to ensurehighpowerplantreliability. TNB is committed to assist the Ministry ofEnergy,GreenTechnologyandWater in theGovernment’sefforttorenegotiatethePPAswiththe Independent Power Producers (IPP). The negotiation is currently led by theMinistry of Energy,GreenTechnologyandWater.
• Tariff review: base and Fuel Cost pass Through Planning Division led a cross–divisional tariff team in
engaging the relevant Government agencies in a tariffreviewexercise.Thisexercisefocusedonbasetariffreview,gas price adjustment and Feed in Tariff (FiT). The finaltariffadjustmentpackageisexpectedtobeannouncedbytheGovernmentinconcurrencewiththereviewofthegasprice to the power sector. This is in line with theGovernment’s decision in March 2009 that any gas priceadjustment must be in concurrence with electricity tariffreview taking into accountprevailing coal prices.
The PEMANDU Subsidy Lab recommended that a periodicelectricity tariff adjustment be implemented in line withthe Government intention to gradually reduce subsidy inthepriceof gas to thepower sector.
Support of meSi enhancement initiatives
The Malaysian Electricity Supply Industry (MESI) has shown arelatively stable and good performance in the past and thishasgreatlybenefittedthecustomers.This isevidentfromthewidespread access, good quality service, ample reservemargins, and stable and affordable end-user tariffs.Commendableimprovementinreliabilityandefficiencyoftheelectricity supply have been demonstrated whilst electricitytariff has remained competitive for the businesses andindustriesascomparedtothoseintheneighbouringcountriesnotably Thailand, Singapore and thePhilippines.
Currentlytheelectricitysupplyindustryfacesmajorchallengesvis-à-vis the absence of an effective fuel cost pass throughmechanism, limited natural gas supply at the prevailingsubsidisedprice,excessgenerationcapacityandfastdepletingdomestic fossil fuel resources.
Inordertoensuresustainablegrowthoffutureeconomy,TNBfully supports the Government in its efforts to reform theMESI through initiatives such as the New National EnergyPolicy, Subsidy Reduction Plan (which includes fuel cost passthrough mechanism) and the MESI reform as well as otherrelated areas of the New Economic Model (NEM), EconomicTransformation Programme (ETP) and GovernmentTransformationProgramme (GTP).
Fuel Supply Security
• Nuclear Electricity demand is expected to grow continuously at
3.2%annually (CAGR) from15,072MW in2010 to20,669MWin2020.Inordertomeetthisdemandgrowth,nuclearhas been identified as a generation option in the future.Nuclear power plants are ideal to complement the moretraditional generation options notably conventional gasand coal-fired power plants, due to the following factors;economicsofnuclearpowerplant,limitedPeninsulahydrocapacity, high cost of renewable energy resources, fastdepleting fossil fuel resources and low carbonemission.
Nuclear isbecomingan increasinglyattractiveoptiongiventhedwindlingsupplyofdomesticnaturalgas coupledwiththe increasing reliance on fully imported coal supply. Inaddition, nuclear power generation is perceived as “greenenergy” since it has minimal emission compared totraditional sources of power generation, thus supportingthe lowcarboneconomyaspirationof theGovernment.
Underpinning the nuclear power generation is TNB’scollaboration with KEPCO, Korea on a Pre-Feasibility Studyon Nuclear Power Development. The areas of focus arepublic acceptance, regulatory requirements, safety andhealth considerations, technology identification and siteselection. Planning Division is responsible for the systemstudy and techno-economic evaluation of nuclear as agenerationoption.
Atthenationallevel,PlanningDivisionisamemberoftheNational Steering Committee on Nuclear PowerDevelopment forMalaysia.
• Natural gas and LNg Supply In view of the depleting domestic natural gas supply and
theanticipatedincreaseinelectricitydemand,TNBcontinues
158 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
toworkcloselywithPETRONAStoensurethereliabilityandadequacyofgassupplytothepowersectoraremaintained.This is crucial as fuel supply security is an integralcomponentofenergy supply securityand reliability.
TNB is currently collaborating with PETRONAS to renewthe Gas Supply Agreement (GSA) which is expiring in2014. In addition, TNB has also initiated talks withPETRONAS for plans in the near future for the supply ofLiquefied Natural Gas (LNG) as an alternative fuel supplyto thepower sector.
• high efficiency Coal plant with Low Carbon emission TNBhasbeenselectedbytheEnergyCommissiontobuild
a1,000MWcoal-firedplantatManjungwhichissettobecommissioned in 2015, to replace the energy slated to beimported fromBakun, Sarawak.
Manjung,Perakhasbeenproposedas the location for thenext 1,000 MW due to its site readiness, lowesttransmission reinforcement costs and optimal locationfrom a system security perspective. TNB has commencedwork on the project and is optimistic to meet the March2015 deadline. This plant will be the first super criticalcoal-fired power plant in Peninsular Malaysia, boastinghigher efficiency and reduction of carbon dioxide,particulates, nitrogenoxideand sulfur oxide emissions.
• Long Term generation Fuel mix Study The long term Generation Fuel Mix Study has been
completedby thePlanningDivisionwiththeassistanceofexternal consultants. The objective of the study was toderivesustainableandviablegenerationfuelmixscenariosfor the Peninsula power sector, taking into considerationthemajorinfluencingfactorsvis-à-viseconomics(includingfuturefuelpricetrend),availabilityoffuel,energysecurityandenvironment.
primary driver of green energy initiatives in malaysia
TNB strongly believes in the need to balance corporateresponsibility alongside growth and productivity. In tandemwith the Government’s aspirations towards a low carboneconomy, TNB adopts business strategies and activities toensure prudent practices that will sustain and enhance theenvironment and natural resources for the future. Thefollowingare TNB’smajor green initiatives:
• DevelopingtheGreenEnergyPolicytoguideandcoordinateoverall efforts in Green Energy including operation,initiatives and roledefinitionof entities in TNB.
• Greeninitiativessuchasefficiencyenhancementtopowerplants, use of green substations, advanced networktechnologies, building efficiency, energy efficiency &demand sidemanagement andpaperless office.
• Encouraging low carbon generation technologies – TNBplans todeploynuclearandRE technologies in the future.These include theNuclear Power Plant (NPP) in 2021, thepioneer 5 MW solar photovoltaic (PV) plant in Putrajaya,10 MW biomass plant in Jengka, Pahang, mini-hydros,solar hybrids, and bio-gas. In addition, TNB has signedRenewableEnergyPowerPurchaseAgreements (REPPA) topurchase RE energy under Small Renewable EnergyProgramme (SREP).
• Funding forGreen Energy Initiatives – TNB to commit fora green fund targeted forGreenEnergy efforts.
• Energy Efficiency (EE) andDemandManagement/DemandSide Management (DM/DSM) – this include the Time ofDay Tariff, Sunday and Off Peak Tariff Rider Scheme andThermal Energy Storage tariff incentive, communicationand awareness programme with FOMCA as well as EEbulbsdistribution to thepublic.
• TNBalsoconductsenergyefficiencyauditserviceandpilotresearchprojects on relevantgreen initiatives.
• TNB is currently carrying out a study on the possibleimplementation of smart grids in selected sites in KualaLumpur, Johor and Penang. This essentially involves theapplicationofcommunicationsandICTtechnologytoupgradethe current electric power grid so that it may operate moreefficiently,reliablyandsafelywhileofferingadditionalservicestoconsumerstoreducecostandCO
2emissions.
proSpeCT
With the expected improvement in the regional economiesand increasing electricity demand, the coming years will bechallenging in view of increased customer expectations, fastdepleting domestic energy resources, volatile fuel prices,technologyinnovation,environmentalconcernsandregulatorychallenges in MESI. Nevertheless, with a vision to emerge asa global player, Planning Division strives to strategise andintensify efforts in collaboration with other divisions toachieve TNB’s 20-year StrategicVision.
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prOcuremeNT dIVISION haS a VITal rOle IN eNSurINg effecTIVe fOrmulaTION Of pOlIcy aNd ImplemeNTaTION Of STraTegIc Supply chaIN INITIaTIVeS. ThIS IS TO eNhaNce The OVerall prOcuremeNT effecTIVeNeSS Of cOre dIVISIONS IN SOurcINg aNd acquISITION Of gOOdS aNd SerVIceS WhIch IS aN eSSeNTIal elemeNT TO The effIcIeNcy aNd effecTIVeNeSS Of TNb buSINeSS.
diviSioN goaLS
Over theyears, the roleofProcurementDivisionhasevolved fromasupportservicefunctiontoastrategicroleaspartoftheefforttodefineandmanagethe long term group-wide procurement strategy. Generally, the Division isresponsible for formulating procurement policies, providing procurement-relatedadvisoryanddevelopingnewsupplychainstrategies.Ithasalsobeenentrusted to provide excellent corporate support and services to the corebusinessdivisions.TheDivisionisalsoresponsibleforstrategicallymanagingTNB’s key suppliers through structured Supplier Relationship Management,with the ultimate aimof developing a stable and competitive supplier basefor theorganisation.
As part of the GLC Transformation Programme promoted by the PutrajayaCommittee on GLC High Performance (PCG), The Red Book – ProcurementGuidelines and Best Practices was required to be adopted. TNB embracedthis transformation initiative and implemented the TNB ProcurementTransformation Plan by recognising procurement as a key lever to supportsignificant value creation. With strong procurement functions, TNB hasachieved the followingbenefits congruentwith theRedBookobjectives:
• Shorten the cycle timeof procurementprocess
• Enhance transparency andgovernance
• Increase the valueaddand strategic relevanceof procurement functions
Ir. NOr azmI bIN ramlIchief procurement Officer
160 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
• Better managed suppliers and vendors, resultingin long term security of supply of higher qualityproducts at competitiveprices and
• Support national developmental objectives,including vendordevelopment.
Procurement Division also supports the TNB 20-YearStrategic Plan which is in its second phase namely‘Geographical Expansion’ by 2015 through aProcurementDivision5-yearBusinessPlanwhichhasincluded a challenging target of being recognised asone of the top five leaders in supply chainmanagement within the region in line with theDivision’s visionandmission.
TheDivision ismade up of five departments namelySourcing Controller Department, Shared PurchasingDepartment, Strategic Supplier ManagementDepartment, Best Practice and Policies DepartmentandHumanResourceManagement&AdministrationDepartment.
highLighTS oF aChievemeNTS:
• Significant ProcurementValueCreation achieved intheFinancialYearamounting toRM329million.
• Completion of the Procurement TransformationPlan implementation.
• ImplementationofValueManagement initiativestooptimisehigh-valueprocurement.
• Nationwide Procurement Community 2010Roadshows organised to disseminate the TNBProcurement Policy and Procedures, procurementbest practices and strategies.
• Recognition of high performing vendors throughpresentation of awards for their excellentperformance.
operaTioNaL Summary
Duringtheperiodunderreview,ProcurementDivisioncontinued to implement initiatives intended toenhanceprocurementefficiencyandtowardsmeetingtheobjectives and targets set.
• T N b p r o c u r e m e n t T r a n s f o r m a t i o n p l a n achievement review
FY2009-2010 marked the completion of the TNBProcurement Transformation Plan, which wasdevelopedaspartoftheoverallGLCTransformationProgramme. TNB has made considerableachievements and progress to-date in enhancing
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theeffectivenessandefficiencyofitsprocurementpractice and will continue identifying andimplementing new procurement initiativestowards achieving sustainable value creation.
Somehighlightsoftheachievementsmadeduringthe implementation (2006-2010) are as follows:
• Review and upgrading of procurementfunction – Following a major company-widerestructuring in early 2008, the functions andresponsibilitiesoftheProcurementDepartmentwere expanded and elevated to that of aProcurement Division headed by the ChiefProcurement Officer who reports directly tothe President/Chief Executive Officer. Thenew centre-led procurement structure wasorganised to leverage on procurement spend,provide centralised policies and sourcingstrategies, and allowing for decentralisedexecutionandoperationsat thebusinessunitlevel . When effectively managed thiscollaborative structure accelerates businessunit support, ensures compliance and directlypromotesgreater spendundermanagement.
• The overall value creation of RM793 millionwas achieved through various initiativesimplemented.
• Establishment of TNB Procurement Code ofConduct–Employees,EmployeesSecondedtoTNB, Directors and Suppliers/Contractorsincluding their employees and directors, shalladhere to the Code at all times. The Code
focusesonthreekeytenetsofethicalconduct,namely:
1. Zero toleranceon corruption;
2. No conflict of interest; and
3. Honest and accurate representation ofcapabilities.
• Initiativesonprocurementprocessimprovementshadresultedintherevisionandstandardisationof 37 procedures and 7 work instructions aspart of the corporate process standardisationand improvement exercise, guided by the ISOframework.
• General Conditions of Contracts for variousworks, supply and services have beenstandardised based on best practices andinternational benchmarks. These standardisedConditions are applied to various scopes ofworks, supply and services. By standardisingthe Conditions for each type of scope, notonly can TNB effectively manage possiblecontractual risks but the Company also hasthe benefit of better project implementationandmanagementandcomprehensivecontractenforcementby thebusinessunits.
• Implementation of IT systems to support andenhance effectiveness of procurementfunctions,suchasOn-LineVendorRegistrationandTender Information System.
• LeveloflocalcontentforprocurementthroughVendor Development Programme wasmonitoredregularlysincethe implementationof the Procurement Transformation Plan.Initiatives to increase the local content wereimplemented resulting in average localcontent level of 72% in FY09/10.
• procurement value Creation achievement Significant procurement value creation of RM329
million was achieved in FY09/10. Similar to theprevious year, the achievement of the valuecreation was mainly through three key leversnamely e-Bidding, application of tax exemptionandnegotiations.Otherleversutilisedcontributingtothevaluecreationwerepurchaseconsolidationand valuemanagement initiatives.
162 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Recognisingthesignificantcontributiontosavingsfrom e-Bidding and the significant potentialavailable,guidelinesone-Biddingimplementationwas developed to provide information andprocedures on e-Bidding process to the businessunits. The guidelines are expected to furtherpromotetheadoptionandutilisationofe-Biddingin thebusinessunits.
• value management ValueManagement is a structuredandanalytical
process which seeks to achieve value for moneyby providing all the necessary functions at thelowest total cost consistent with the requiredlevels of quality and performance. Introduced inearly 2009, various ValueManagement trainings,workshopsandeventswerecarriedoutinFY09/10and a number of capital projects had undergonevalue management analyses and recordedpotential savings for TNB.
In Malaysia, all public service projects andprogrammescostingoverRM50millionunderthe10th Malaysian Plan (10 MP) are required toundergo Value Management analysis to ensurethey provide value for money. This requirementwasofficially endorsedby the EconomicPlanningUnit (EPU) in the PrimeMinister’sDepartment ina2009circular“GuidelinesfortheImplementationof Value Management” for Government projects.Following Malaysia Airports Holdings Berhad(MAHB), TNB is the secondGLC in this country toembark on the Value Management initiative. ATNB Value Management Framework wasdeveloped to address the Value Managementimplementation covering tenders valued morethan RM10 million and the setting up of theValue Management Committee coordinated bytheProcurementDivision.
• procurement Community 2010 roadshows A dissemination programme called Procurement
Community 2010 was conducted at four regionsand Sabah Electricity Sdn. Bhd. The objectives ofthis programme were to disseminate the TNBProcurementPolicyandProcedures,bestpracticesand other procurement strategies, to act as oneof the customer feedback channels for internalcustomers and to provide a platform for
information sharing on procurement activitiesand projects of the Procurement Division to theotherbusinessunits in TNBGroup.
• procurement referral group A committee called Procurement Referral Group
was established to provide a formal interactionplatformamongprocurementpractitionerswithinTNB.Theobjectivesof thecommitteeare,amongothers, to act as one of the customer feedbackchannels for internal customers and to discuss,oversee and review progress of strategicprocurement and improvement initiativesimplemented by Procurement Division and otherdivisions’ procurementdepartments.
• TNb vendor day TNB successfully organised a Vendor Day in May
2010aspartofitsSupplierRelationManagementprogramme. The objectives of the event were toprovide a communication platform between TNBand its Vendor/Supplier/Contractor, to brief andupdate the Vendor/Supplier/Contractor on newpolicies and procedures and to provide exposureandpromotetheVendorsproductsandcapabilitiesthrough thegivingoutof awards.
The event is crucial in order to enhance theSupplier Relationship Management initiative bycontinuously improving the relationship. Thiswillindirectly ensure the Vendors produce productsand services that complywithTNB’s specificationand quality. During the event, in recognition oftheircontinuoussupporttoTNB,selectedVendorswere rewarded for their achievements. Thewinners are as listed in Table1.
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No. Category recipient
1 Excellent ExporterVendor2010 forVendorDevelopment Programme
SalutaryAvenueManufacturing ServicesSdn. Bhd.
2 Most PromisingVendor2010 forVendorDevelopment Programme
IndkomEngineeringSdn. Bhd.
3 BestVendor5S&AutonomousMaintenance2010 Novabrite Lighting Sdn.Bhd.
4 Best Supplier 2010 forDistributionDivision LeaderCable IndustryBerhad
5 BestContractor 2010 for TransmissionDivision Ramusa EngineeringSdn. Bhd.
6 Best Safety Practitioner2010 for TransmissionDivision
Transpro Sdn. Bhd.
7 TNB2010SpecialAward forOriginal EquipmentManufacturer
MitsubishiHeavyIndustries Ltd.
8 Best Service Provider 2010 forCorporate Services SAKargo Sdn. Bhd.
Table 1: List of Award recipients during TNB Vendor Day
• TNb Strategic Supplier management The Procurement Division has been assigned the
responsibility to develop strong and resilientBumiputeraCommercialandIndustrialCommunity(BCIC), which is a Government aspiration asstipulated in the Red Book. This responsibility iscarried out through the implementation of theBumiputera Vendor Development Programme.Besides nurturing and developing Bumiputeracompanies,TNBalsostrategicallymanageselectedkey suppliers through Supplier RelationshipManagement activities with the ultimate aim ofdeveloping stable and competitive supplier basefor the organisation. A framework for StrategicSupplier Relationship Management has beendeveloped and identifies two (2) main categoriesofSuppliersandContractorswhichare:-
• Bumiputera Vendors currently developedunderBVDP.
• Strategic Suppliers/Contractors which refersto20%oftotalSuppliers/Contractorsofwhichcontribute to 80% of TNBs procurementspendingandwhich suppliesmedium tohightechnologyproducts and services.
maJor key perFormaNCe iNdiCaTorS (kpi)
In line with TNB’s goal of achieving Service Excellenceby the year 2010, Procurement Division continued tomakeexcellentstridesforward,surpassinganumberofitsKeyPerformance Indicators (KPIs).MajorKPIssetforProcurementDivisionandtheirrespectiveachievementsduring theperiodunder reviewareas follows:
• procurement value Creation achieved from procurement plan implementation
For the FY09/10, significant procurement valuecreation of RM329 million was achieved,surpassing its target of RM140million.
164 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
• procurement Lead Time This KPI measures the procurement lead time by
comparingthenumberoftendersawardedwithinthe specified times, against the total number oftenders awarded. As ofAugust 2010, 92%of 482tenders (with a minimum value of RM500,000each) were awarded within the specified time,exceeding its target of 85%.
• Completion of procurement Transformation plan execution
Progressof theProcurementTransformationPlanis measured by measuring its actual activitiescompleted against the planned activities. As theperiodof the transformationplanhas ended, theprogressachieved isat91%,exceedingthe targetset at 85%.
iNTerNaTioNaL NeTworkiNg
TNB continues to be an activemember in theHeadsof ASEAN Power Utilities/Authorities (HAPUA)grouping and the Procurement Division contributesdirectly as Leader of Project No. 4 and Project No. 8of theWorkingGroupNo.5ofHAPUA.TNB is in the2nd year of membership in the Asia Pacific UtilitiesGroup (APUG), an international grouping of utilitiesin the region, and has participated in 2 APUGConferences and Steering Committee meetings andhas networked directly with exemplary members togain insight into successful procurement strategiesandpractises.
Procurement Division organised and hosted the AsiaPacificUtilitiesGroup(APUG)ConferenceandSteeringCommittee Meeting on 25 and 26 November 2009.More than 30 participants representing 13 APUGutility companies from Australia, New Zealand,Macau, India and Hong Kong attended this event.Amongst matters discussed were the APUG SupplierManagement System, factory assessments, carbonmeasurement andbenchmarkingactivities.
ChaLLeNgeS aNd proSpeCTS
As TNB has just completed the procurementtransformation plan and is now embarking on thenext 5-year business plan within the TNB 20-yearStrategic Plan road map, the main challenge is stillrelated to elevating the procurement function fromthe transactional and operational level to the higherstrategicleveltomeettheeverincreasingexpectationsof stakeholders. Innovative supply-chain strategiesand tools identified must be implemented andinstitutionalisedthroughouttheTNBGroup,breakingthroughbarrierstoacceptanceofexistingusergroupsand entrenched systems and processes, to meet theexpectations and targets set.
To position ourselves for the future, ProcurementDivision has charted its 5-year business plan for2010-2015. Theplanoutlines the strategyandmajorinitiatives to be undertaken by the Division insupporting corporate objectives. Among others, oneinitiative identified is the holistic implementation ofthe ICT Supply Chain Management Framework. Thisframework is intended to provide the ProcurementDivision with the technological ability to implementbest practice procurement processes, analyses andstandardisation to create value opportunities andsustain efficiency, transparency and consistency. TheSCM Framework includes modules on electronictender, electronic contract management system,Supplier-Buyer Service Portal, Spend Analytics andCentral SupplierDatabase.
Another important focusarea is theenhancementofTNB procurement expertise and capabilities throughprofessional certification, procurement skill grouptrainings, advanced procurement skills trainings anddevelopment programmes with internationalrecognitionorinfluence.Theseeffortswouldproducecapable and competent procurement personnel inthe global arena to support the TNB ‘GeographicalExpansion’ initiatives.
ProcurementDivision has recognised the importanceof Green Procurement in the quest for a sustainableand green environment. Pursuant to this, thechallenge will be to develop a Green Procurementstrategy which is relevant and applicable to TNB asthemajorpowerutility in theMalaysianenvironment.
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operaTioNSreview – CorporaTe ServiCeS
aS a SuppOrTINg dIVISION TO The cOre buSINeSS Of TNb, cSd IS cOmmITTed TO prOVIde aN effIcIeNT aNd effecTIVe SerVIceS TO eNSure TNb cONTINueS TO excel aNd meeTS ITS ObjecTIVeS.
md. jaIlaNI bIN abaSSenior general manager
CSD provides support services to TNB Group in the areas it specialisesnamely security services & intelligence, land procurement and wayleave,project management, consultancy in asset development and procurement,asset management, consultancy in architectural related works, buildingmaintenance, fleet management, freight management, customs clearance,mobilegensetservices,printingservices,archive,managementoftelephone,mail & canteen in TNB HQ. These services are provided through its coredepartments namely Security & Intelligence, Property Services, LogisticsServices, Land & Wayleave Management and also its Support Servicesdepartment.
To support TNB strategic plan for this year and the next 5 years (2011 to2015), i.eGeographicalExpansion,CSDwill continuouslyprovideanddeliveritsservices to its internalandexternalcustomers, in linewithTNB’smissionandvision.Hence the focusof thisDivision is to continueall initiatives thatdrive andadd value to theCompany.
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highLighTS oF aChievemeNTS:
Below are some of the achievements highlighted bythe core and support services departments of theDivision:
• Security Services & intelligence department (SSid)
– Reducing reported intrusion cases by 55%compared to FY2008/09.
– Successful completion of 20 Assets CCTVProjects in Selangor, installation of CCTV atKedai Tenaga Zon Selatan, Zon Utara, ZonTimur andZonTengah for ISMSProject.
– Successfullyconductedthe implementationofSecurity Guidelines on Critical Installationsbetween Asset Owners and re levantenforcement agencies.
– A paper on Investigation Powers for TNBAuxiliary Police for selected offences underthe Penal Code has been endorsed by theLegal and Prosecution Division of PDRM andawaiting approval from the InspectorGeneralof Police (IGP).
– Continuousparticipation in jointNationalandState Task Forces between re levantenforcement agencies/GLCs e.g. Ops Lusuh toweed out unscrupulous scrap dealers dealingin stolenTNB items.
– Participated in TNB Emergency Response Drillas a core support department.
– The Intelligence & Investigation Unit ofSecurity Services and Intelligence Department (SSID) had successfully conducted 200 jointoperations with SEAL TNBD on theft ofelectricity at premises throughout PeninsularMalaysia. A total of 20 customers who werefactory owners were arrested for offencesunder the MACC Act 2009 which involvedoffering corrupt payments to TNB officers soas not to proceed with action against thetheft of electricity committed by theperpetrators. In addition, the Units, had alsosuccessfully busted syndicates involved in thetheft of transformers at TNB substations. 20criminalswere arrestedduring FY2009/2010.
– SSID provided security support for projectimplementation through Ops Mancing II, OpsC.A.R (Sg Terentang), Ops Guar Nangka/Chuping, Ops Menara No 4 Ulu Melaka, OpsRoboh in Pasir Mas, Kelantan, Ops RobohfromPMU275kVGelangPatahtoPMUBukitBatu, Johor.
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• Logistics Services department (LSd)
– Highest achievement in savings through taxexemption amounted to more than RM35million.
– Increase of value creation and savings to TNBthrough da i ly operat ions of f re ightmanagement, fleet management and gen setservices.
– Review of panel workshops performance andappointmentofnewpanelworkshops.
– Review of schedule rate and for inlandtransportation.
– Consolidation of TNB vehicle data to matchwith ERMS, EWRMandphysical record.
• Support Services department
– ElectronicArchiving (E-Archive) to cover.
– Corporate Geospatial Information System(CGIS).
– Implementation of var ious CustomerRelationship Management activities, resultingin an improvementofCSI rating.
– ConductedEmployeeEngagementProgrammeto CSD staff by facilitating talks on SOCSO,Zakat, EPF, Income Tax and wasiat andorganising Team building for SupportServices.
– Conducted JointCouncilmeetingwithUnionsaschannelforthestafftovoiceoutgrievancesthrough Unions representatives and to fostergood relationship between management oftheDivisionandUnions.
– Conducted WIT-ICC Convention for CorporateServicesDivision.
– ConductedAKPWorkshop andCSI Retreat forcommitteemembers.
• Land & wayleave management department (Lwmd)
– LWMD succeeded in securing approval fromvariousstategovernmentstocategorizeTNB’sinfrastructure project as public purpose. TNBis thus granted the Company the right toapply Section 3 (1)(a) of the Land AcquisitionAct 1960 which would help to shorten thetimeline inprocuring land.
– ReductioninlandprocurementcostbygettingnominallandpremiumforTNB’sinfrastructureprojects from the states of Johor, Selangor &Negeri Sembilan.
– Develop and maintain good rapport withvarious government agencies in order toexpedite theprocurementof land.
• property Services department (pSd)
– Value creation from idle assets management– payment collection amounted to RM25million in FY2010.
– Rental andmiscellaneous income received forFY2010 is RM13million.
– A total of 600 titles received for FY2010.
– Achievementinsavingofenergyconsumptionat TNBproperties.
– Participation in the recertification of TNB PSIproject and cert i f icat ion for MS ISO9001:2008.
– Valueofprojectscompletionforofficebuildingand store worth RM13 million implementedin FY2010.
– Enhancement of Property Information System(PIS) to capturequit rentdata/record.
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operaTioNaL Summary
In line with TNB’s vision and mission, CSD gives itssupport by ensuring all TNB installations/assets aresecured and safely guarded especially TNB assetswhich have been gazetted as National CriticalInfrastructure. Hence, the Security Services and Intelligence Department (SSID) which have beenentrusted, not only in protecting TNB’s but alsonationalassets fromthreatsand intrusionshasbeenproactive by undertaking strict compliance andconformance measures, adopting and implementingnecessary legislation and also by effectively sharinginformationatthebilateral,regionalandmultilaterallevelsinordertofulfildemandsbyTNB’sstakeholdersand shareholdersdemand.
diviSioNaL goaLS/obJeCTiveS
Inorder for TNB toachieve its “Service Excellenceby2010” and “Geographical Expansion” for the next 5years (2011-2015) of the Strategic Plan, CSD willcontinuously provide excellent and cost effectiveservicestoitsinternalandexternalcustomers,inlinewith TNB’s vision and mission. In this regard, CSD’score operational focus and objectives, apart fromsupporting TNB’s strategic plan, is also to giveassurance and confidence to TNB stakeholders andshareholders on the security and safety of TNBassets/installations from any threats and intrutionswhich to ensureuninterruptedpower supply and forrelated projects, CSD also supports the procurementof landandwayleavetofacilitatetheconstructionofthe Transmission, Distribution and Generationprojectstoenablemorestableandeffectiveelectricitysupply.
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The role and importance of SSID in safeguardingTNB’s assets in particular and the nation’s economicfront in general against sabotage, subversion andespionagebyundesirableelementsisverycriticalandthese issuesshouldbediscussednotonlywithinTNBbutalsowithotherrelevantenforcementagencies. Inthis respect, SSID has always worked closely withenforcement agencies to maintain orderly approachin fac ing these chal lenges effect ively andcomprehensively.
Withthevastchangesintechnologyandthediversityof security, SSID today is truly on the verge of acatalyticchange in itsprofile,achangethatpromisesto transform its image from a primarily industrialsecurity services to amulti-faceted specialist securityagency on the forefront of the national securityscenario.
The Land & Wayleave Management Department’s (LWMD) core operational focus is towards assistingthe Division in supporting TNB’s vision and missionandprovidesservicesinprocuringLandandWayleavefor TNB.
LWMDcomprisesfive (5)mainUnits:-
• Transmission ServicesUnit
• Distribution ServicesUnit
• Generation ServicesUnit
• Geomatics&Technical ServicesUnit
• Planning&Support ServicesUnit
In order to achieve the target, LMWD has alwaysstrive to improve the time taken toprocure landandwayleavetofacilitatetheconstructionofDistribution,Transmission and Generation projects so that TNBcan manage the business of electricity supply moreefficiently tomeet current and futuredemands.
TheSecurity Services & Intelligence Department (SSID)consistsof four (4)units,namelyOperation,Planning& Crisis Management, Investigation & Intelligenceand Support Services, with a total strength of 961personnel comprising of 33 executives and 928 non-executives. With limited manpower and resources,SSID needs to provide security protection to over athousand TNB installations across the length andbreadth of the country. Besides security coverage,SSIDpersonnel,undertheInvestigation&IntelligenceUnit, is also given the responsibility to investigatecrime related cases involvingTNBassets.
Apart from securing TNB’s sensitive industrialundertakingssuchaspowerinstallations,transmissionpower lines, critical substations and more, it hadrecently assisted SEAL TNBD in cases of electricitypowertheft.AsoneoftheimportantsupportsservicesforTNB,SSIDisalsobeingincreasinglycalledupontoperform importantdutiesbeyond its charter.
ToenableSSIDpersonneltoperformanddelivertheirtasks effectively and efficiently in core securityservices, continuous training and development isbeing adequately programmed throughout the yearfortheirknowledgeadvancementandalsotoimprovetheir skills and competencies in the field of securityand relatedmatters.
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• Management of corporate pool vehicles anddrivers;
• ProvideGeneratorsetservicesforFederalTerritory(Kelana Jaya base), eastern region (MuadzamShah & Gong Badak bases) and northern region(Chain Ferrybase);
• General services including feeder-pillar repairandcarpentrywork;
• Freight services for importation of materials onFOB terms, temporary export for repair andservicing;
• Application of Customs duty and sales taxexemption for TNB contract belowRM50million;
• Customsclearanceandpaymentof customsdutyand sales tax;
• Inland transportation for both general cargo andheavy lift; and
• ManagementofCelcompackage.
Support Services Department (SSD) consists of three(3) units namely Human Resource & Administration,Performance & Planning, and Finance. Eachdepartment plays a different role in supporting theDivision in achieving its goals and objectives. Inaddition, the different services rendered by thedepartments means the need to fulfil the variedexpectations and requirements of different sets ofcustomers.
As the support services for theDivision,HRA plays amajorroleinrecruitingnewstaffforCSD.Inaddition,the HRA also continuously monitor staff’s trainingand development to ensure that it is adequatelyprogrammedthroughouttheyearfortheirknowledgeadvancement and also to improve their skills andcompetencies in their respectivefields.
Currently, TNB is facing difficulties in procuring landfor projects due to objections by Land Owners, thePublic, NGO’s, and Politicians etc. Moving forwards,LWMDhad put up suggestion to review themethodforprocuring land for Transmission linesbyapplyingLandAcquisitionAct1960insteadofElectricitySupplyAct 1990.
The Property Services Department (PSD)comprisesfive(5) units that provides property support services tothe core business of TNB, in the form of propertyplanning and development, project management,propertymanagement andpropertymaintenance.
PSD direction/target is to enhance TNB’s asset valuethroughexcellentpropertydevelopment,managementandmaintenance.
To achieve the target set, PSD looks forward forefficiency in Property Management that coversmaximising the utilisation of TNB’s assets and togenerate revenues from TNB idle assets. PSD willstrive to maintain, improve and enhance thereliability,qualityandtimelinessofservices renderedto its clients.
Logistics Services Department (LSD)plays the roleofaone stop integrated centre that coordinates andprovidescosteffectiveandtimelylogisticsservicestoTNB’s corebusinessunits. The roles and functionsofthedepartment canbe categorisedas follows:
• Monitor the performance of panelworkshops forrepair and maintenance of TNB’s commercialvehicles;
• RepairandmaintenanceforKlangValley(BangsarWorkshop), Northern region (Malim Nawarworkshop) and Eastern region (Gong Badakworkshop) for TNB’shydraulic operated vehicles;
• Manageprocurementofnewvehiclesanddisposalof vehicles;
• Centralise management of TNB’s vehicles e.ginsurance, registration, road-tax etc.;
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commission existing 300 kw gen set onto lorry. Inaddition,LSDalsoagreedtoinstall2unitsofmobilesload bank. Apart from the services indicated, LSDis also committed to implement the followingsupport:-
1. UndertaketotransportnewGasTurbineSystemfrom Kobe, Japan weighing more than 600tonnestoSJTuankuJaafar,PortDicksoninclusiveof shuntingworkswithin the station.
2. Commencement of TNBT Asset MaintenanceStore removalprojects forEasternandSouthernregion.
3. Undertake to transport 2 units of Boiler FeedPumpBarrelsandCartridgesweighing20tonnesfrom SJ Sultan Azlan Shah, Manjung to Weir,UnitedKingdomusingair freight.
4. Purchaseof3unitsCamryand3unitsofProtonExora.
5. Purchaseof 1unit primemover.
6. Installationof 2units of 4x2pick-up vehicles.
In order to provide its personnel with a bettercoverage of networking, LSD has agreed to installWAN and LAN for gen set bases at Muadzam Shah,GongBadakandChain Ferry.
operaTioNaL improvemeNTS
Toensureconstantimprovementinitsdailyoperation,CSD has init iated various programmes forimplementation in the Division. These includedadopting a Human Resource Policy and devising aHuman Resource Plan namely redeployment ofsecuritypersonnel,manninglevelprocess,outsourcingof mail services, centralisation of Finance function,training plan, safety & health, career development,etc. Apart from that, the implementation of severalinitiatives also helped to improve the efficiency ofeach department daily operational activities. Theseincluded monitoring of monthly KPIs reports and
Planning & Performance Department (P&P),isbasicallyresponsible for project monitoring, planning for theDivision’sKPIs,CoordinatingofBPA,reporting,Qualitymanagement, PSI andRiskmanagement.
Finance on the other hand, focuses more on OPEXandCAPEXBudgeting, Asset Tagging, Budget control– Ops Trim X and preparation of budget forDivision.
maJor proJeCTS
The implementation of Integrated SecurityManagement System (ISMS) has been entrusted toSSID since FY2006/2007 with budget allocation ofRM10 million per year. Since ISMS brings acombination of different security solutions into oneControl System, this system apparently taking acrucial part to become the second layer of detectioninensuringthesafetyofTNBassetsfromthreatsandintruders.
Over the 3 years since its first installation, variousprojectsunderISMShadbeencompletedsuccessfully.Asaresult,SSIDhasbeenrequestedbyGTDtoinstallthe ISMSsystematselectedTNBpremises,especiallyat TNB’s chain of Kedai Tenaga which is critical andprone to robbery.Apart from the ISMSprojects, SSIDhasalsopurchasedadditional35unitsofmotorcycleand 18 units of Proton Saga for its Response TeamsUnit.
PSD is responsible for the management andmonitoring of TNB offices buildings, stores andrenovation works. As at FY2009/2010, PSD hassuccessfullymonitored51projectsofwhich90%wascompletedaccording to schedule.
Since requests for Mobile Gen Set services isincreasing tremendously, LSD has made the decisionto purchase another 2 units 800 kw (1000 kva) ofMobileGenSetstomeetitscustomer’srequirements.Apart from the gen sets, LSD has also purchased 3units of 4x4 vehicles and 1 unit of lorry, mount and
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measures, adopting and implementing necessarylegislationandalsoeffectivelysharing informationatthe bilateral, regional and multilateral levels as wellas educating its personnel on the new technology ofsecuritymechanism.SSIDworkscloselywithenforcementagencies to maintain an orderly approach to facethesechallengeseffectivelyandcomprehensivelyandtaking the initiatives to educate and give awarenessto the community on the impact of the threats andintrusions.
Another challenges faced by the Division is thesmooth implementation of the decision to centraliselandprocurementmanagement atCSD.
LWMD faces challenges in obtaining wayleave forTransmissionLinesprojectsduetoincreaseinconcernof the landowners about their rights and theinterference in championing the issues on behalf ofthe landowners.
Not withstanding that, effort has been made byLMWDtogetapprovalfromvariousstategovernmentstouseappropriatesectionintheLandAcquisitionAct1960 for smooth landprocurementprocess.
Biannual Risk Management Review, evaluating theadequacy of the process audit, monitoring thecompliance of Service Level Agreement and analysecustomer feedback and establishment of StrategicSupplier Relation Management Framework. Inaddition, the Division had also implemented staffaward and recognition programmes, empowered allHODsandHOUsand conductededucation, dialoguesand training programmes to enhance quality and asa feedback mechanism with suppliers. Efforts werealso being made to foster relationships withRegulators namely the Land Offices, Puspakom,Customs, PDRM, Local Authorities etc so that theworkprocesseswill be smoother.
key perFormaNCe iNdiCaTorS (kpiS)
CSDmeasuresthequalityof itsproductsandservicesthrough various methods, i.e. feedback from thecustomers, benchmarking, auditing and through KPIapplication. Through the Business Plan process, KPIsare identified to measure the level of the Division’sperformanceintheareacoveringFinancial,Customer,Internal Process and Learning & Growth. Major KPIsare as follows:-
– Repair&MaintenanceofAssets.
– Managingbreachof security onTNBassets.
– Valuecreation(RM)–fromFleet,FreightandGenSetManagement& IdleAssets.
– Compliance to system security (breach).
– Projectmanagement.
– Wayleave& landprocurementmanagement.
ChaLLeNgeS aNd proSpeCTS
With limited manpower and resources, it is achallenge for SSID to provide security protection tothousandsofTNB installationsacross thecountry.AsoneoftheimportantsupportservicesforTNB,SSIDisincreasingly being called upon to perform importantduties beyond its charter. Hence, SSID proactivelyundertakes strict compliance and conformance
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humaNCapiTaLdeveLopmeNT
Back in 2005, when TNB introduced the 20-year strategic plan which laiddown the path that guided the organisation towards achieving its visionof becoming amongst the leading corporations in energy and relatedbusinessesglobally,GroupHRDivisionhadformulatedtheTNBHRMasterPlan 2005-2010 which outlined long term HR strategies that formed thefoundation and set the direction towards achieving the followingobjectives:
• A competent anddedicatedworkforce
• A leadership pipeline of capable and talented leaders to fill keyleadershippositions
• Aperformancedrivenwork culture
• Aharmonious industrial relations climate
• An employee value proposition which attracts and retains theworkforce
• An increase inbusinessproductivity
IN Our cOmmITmeNT TO delIVer buSINeSS reSulTS ThrOugh humaN capITal, grOup hr dIVISION haS alIgNed ITS fOcuS TOWardS OrcheSTraTINg humaN capITal TaleNT aNd cOmpeTeNcIeS TO realISe The full pOTeNTIal Of The WOrkfOrce aNd emphaSISe ON lONg Term humaN capITal STraTegIeS TO SuppOrT The buSINeSS aSpIraTIONS Of The cOmpaNy.
daTO’ muhammad razIf bIN abdul rahmaNVice president
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Fast forward to 2010, we have come full circle inrealising the goals that we set out to achieve in theHR Master Plan. Among the key initiatives whichhave been successfully implemented include theintroductionofacomprehensiveTalentManagementframework, the alignment of HR developmentprogrammes to suit business needs and continuousenhancement of the Performance ManagementSystem.
We are now gearing up towards embarking on thenext phase of the 20-year strategic plan and GroupHR Division as a strategic business partner is well-equipped and ready to face the challenges which lieahead inordertosupport thebusinessaspirationsofthe company.
TaLeNT deveLopmeNT aNd SuCCeSSioN pLaNNiNg
TNBhas succeeded indesigningand implementingacomprehensive Talent Management framework toidentify and groom new talents from within theorganisation and to oversee their development aswell as to identify and recommend potentialsuccessors for Key Leadership Positions (KLPs) in theorganisation.Currently, thereare215KeyLeadershipPositions (KLPs) and potential successors have beennominated for all these positions while the talentpool strength stands at 338.
StructureddevelopmentprogrammessuchasProGem(Programme for General Managers) and ProSem(Programme for Senior Managers) are conducted aspartoftheefforttodevelopleadershipcompetenciesof talentpool candidates.
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humaNCapiTaLdeveLopmeNT (CoNT’d)
OtherplatformsusedfortalentdevelopmentincludesKhazanah’s GLC C-Suite Accelerated DevelopmentProgramme(ADP),GLCCross-AssignmentProgrammeand Government-GLC Cross Fertilisation Programme.Internally,TNBhasrecentlyintroducedInter-DivisionalCross Assignment Programme with the objectives ofbuilding high performing business and technicalleaders with broad understanding of cross divisionalfunctions as well as to allow transfer of knowledgeandexpertise amongDivisions.
The Specialist Career Path Scheme continues todevelop and retain technical expertise in TNB. Thisscheme provides an alternative career path foremployees to enhance their career interests throughtechnical/professional career paths. There arecurrently 3 specialists and 23 technical experts intheir respective areas of specialisation under thisscheme.
CapaCiTy buiLdiNg
TNB puts a strong emphasis on ensuring continuouslearning and development for its employees. Duringthe period under review, RM87 million was spent tocaterfortrainingexpensesandasaresult80%ofTNBemployees attended a minimum of 3 training daysrequired to be completed by all employees everyyear.
Among the learningdevelopment programmeswhicharemadeavailable for employees include:
• ExecutiveDevelopment Programmes (EDP)
• Long term development programmes includingamong others Program Eksekutif Pelatih (PEP),Program Pendidikan Kemahiran Ketukangan (PPKK),Program Pendidikan Kadet Juruteknik (PPKJ), andProgram Pendidikan Pembantu Tadbir (PPPT)
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• Mandatory Training Programmes for all levels of non-executives (technical and support services)
• PublicManagementandTechnicalProgrammes/Seminars/Conferences/Workshops conducted locally andoverseas
Most of the training programmes are held at TNB’s owntraining arm, TNB Integrated Learning Solution Sdn. Bhd. –ILSAS.Sincebecomingawholly-ownedsubsidiaryinSeptember2008, ILSAS has been actively conducting training andconsultancy services locally and internationally. For the fiscalyear ending 31 August 2010, ILSAS conducted 918developmental training programmes & competency trainingprogrammes (technical & non-technical) involving 18,269trainingmandays. In addition, 2,104employeeswere trainedunder longtermdevelopmentprogrammessuchasPEP,PPKK,PPKJ and PPKE. These development programmes are well-designed to ensure that employees will gain in terms ofincreased level of competencies and expertise as well asprofessionalism.
On the local front, under the 2nd Economic Stimulus Packagefrom the Ministry of Finance, ILSAS was granted RM10.9million to train 1,409 Malaysian youth in various technicaltraining programmes such as Chargeman, Welder, WiremanandCable Jointing. Collaborationwas also formedwith othertrainingproviders such as InstitutKemahiranMara (IKM) andTAFE College, Seremban. Furthermore, ILSAS has formedpartnerships with Institut Latihan Perindustrian (ILP) andInstitut Kemahiran Belia Negara (IKBN) to produce moreskilled, competent workforce for TNB and the country underthe development programme PPKK, also known asapprenticeship programme. In supporting the industry atlarge, 230 participants were trained by ILSAS under thecompetencyandaccreditedprogrammebyEnergyCommissionMalaysiawhichwereChargeman(lowandhighvoltage),cablejointingand substationoperation.
In support of TNB’s plans to utilise nuclear power in thefuture, ILSAShasalsoorganisedaNuclearColloquiumentitledGreen, Clean & Safe in June 2010. The colloquium wasofficiated by the President/Chief Executive Officer andattended by more than 300 invited guests and participantsfromvarious TNBdivisions.
proCeSS improvemeNT
TheonlinePerformanceManagementSystemhasbeenfurtherenhanced to be more user-friendly and its usage has beenextended to include new group of employees from the Non-Executive Assistant Supervisor level. With this new inclusion,approximately 8,500 employees are now users of theCompetency Based Performance Management System(CbPMS).
TheEnterpriseHumanResourceManagementSystem(EHRMS)Project Phase 3b was also carried out this year with furtherenhancements to the Employee Self Service (ESS) platformwhere new modules such as Employee Profile Maintenance,Claims Application and Processing, Online Job Application(Internal Recruitment) and Manager Self Service wereintroducedand implemented successfully.
OtherHRprocesses suchas external recruitmentand internalpromotions have been made more efficient through the useof InformationTechnologywhichhasalsomadetheprocessesmore transparent and traceable.
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CorporaTeSoCiaLreSpoNSibiLiTy
This obligation extends beyond the statutoryobligation to comply with legislation and seesorganisations voluntarily taking further steps toimprove the quality of life for employees and theirfamilies as well as for the local community andsociety at large.
AsoneoftheNation’sleadingGLCs,TNBiscommittedtoundertakeCSRbestpracticesthatimpactpositivelyon all stakeholders, either employees, customers,partners or the communities and the environment itoperatesin.Inaddition,itsCSRactivitiesaimtomeetthe nation-building agenda. The far reaching impact
of TNB’s CSR policy was acknowledged by theGovernment and was used as a benchmark for thepilot studyonCSR for its SilverBook initiative.
As the leading power utility, TNB’s integral role todeliver electricity to the public efficiently and at thelowest rate possible is by far the single mostimportant CSR activity it has undertaken. TheCompany recognises the need and relevance of theGovernment policy for the country’s ongoingdevelopment.Thus,thevariousinitiativesundertakento deliver safe, reliable and secure electricity tocustomers are a testament to its commitment to
cOrpOraTe SOcIal reSpONSIbIlITy IS a cONcepT Whereby OrgaNISaTIONS cONSIder The INTereSTS Of SOcIeTy by TakINg reSpONSIbIlITy fOr The ImpacT Of TheIr acTIVITIeS ON cuSTOmerS, SupplIerS, emplOyeeS, SharehOlderS, cOmmuNITIeS aNd OTher STakehOlderS, aS Well aS The eNVIrONmeNT.
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ensure society will gain and benefit from thesedevelopments. With this in mind, TNB stronglysupports government driven policies and initiativessuchas thoseenshrined in the9thMalaysiaPlanandit aims to continue powering the country’s vision ofbecominga fullydevelopednationby the year2020.
The need to support the Government has beentranslatedintotheCompany’sbattlecryof“PoweringtheNation”,whichsetsthetoneforitsCSRactivities.During the period under review, TNB continued toforge ahead with its CSR initiatives in the variousareas, touching the lives of many while at the sametime creating sustainable values in its relentlesspursuit of business excellence.
poweriNg CommuNiTieS
In line with its philosophy of giving back to thecommunity,TNBprovidesphilanthropicassistance tothe deserving and needy as well as implementsprogrammes that create community wellness andenhancequality of life.
baiti Jannati programme
Baiti Jannati programme which means ‘My Home,My Heaven’ (‘Rumahku Syurgaku’) is one of TNB’sCSR initiatives to help the hardcore poor andunderprivileged peninsula-wide by repairingdilapidated houses into decent and comfortabledwellings.
Under the Rumahku Syurgaku guidelines, recipientsaccorded priority are senior citizens, single parents,the underprivileged and the disabled. Cooperationfromlocalresidents,NGOsandregisteredcontractorsis an important criterion for the successfulimplementationof this programme.
Since its introduction in 2008, 58 houses have beenrepaired at a total cost of RM780,000. Besidesrepairing the houses, TNB also provides basicamenities such as electricity, water and propersanitation as well as furniture, basic food stuff andeducational support for the recipients’ children.
electricity Safety awareness Seminar
ElectricitySafetyAwarenessSeminar isaprogrammedesigned to disseminate information and promoteawareness on electricity safety amongst schoolteachers andmembersof thepublic. In addition, theseminar also aims at reducing electricity-relatedaccidents and preventing incidents that may disruptpower supply.
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CorporaTeSoCiaLreSpoNSibiLiTy (CoNT’d)
Due to their role as educators, school teachers werethe targetgroup for this seminar.Thecontentof theseminarincludescautioningthepubliconthedangerof tampering with electrical appliances and givingadviceonthecorrectwayofhandlingelectricalitems.The seminar is held in close cooperation with StateEducationDepartments.
The programme was conducted through half dayseminars with three main modules that provideinformation related to basic electricity safety, safetymeasures for domestic electrical installations; andsafety measures at or near TNB’s electricityinstallations. For FY2010, 2,072 teachers hadbenefitted from this programme.
Community Leaders outreach programme (CLop)
Community Leaders Outreach Programme or betterknown as CLOP is one of TNB’s CSR programmesinspired by the President/Chief Executive Officer inearly 2005 to enhance the existing platform tocommunicate with customers and the localcommunity. Its main objective is to obtain feedbackon the quality of services delivered and to relayinformation on company policies and services tocommunity leaders and the community at large.
The programme acts as a forum where TNBmanagements engage directly with communityleaders,headsoflocalgovernmentsandstakeholderson services, complaints, enquiries and suggestions.Theseformsoffeedbackareusedasatooltoimproveservices.
In conjunction with the programme, TNB alsoorganises exhibitions to disseminate informationabout the company, its products, services andactivities. In FY2010, TNB spent RM320,000 toorganise this programme at 20 locations throughoutthepeninsula.
rural electrification programme
The programme focuses on enhancing quality of lifethrough the provision of electricity supply in remoteand rural areas. This is done through the Rural AreaElectricity Supply programmeaswell as SolarHybridelectrification projects. Both are in line with theGovernment’s initiatives in identifying and utilisingrenewable energy for alternative sources. Thirteen(13) rural electrification projects had been awardedforimplementationundertheAkaunAmanahIndustriBekalan Elektrik (AAIBE) fund for FY2010. Three (3)projects were completed and 10 more are expectedtobe completedbyDecember2010.
business Tithes
As part of its CSR activities, TNB pays business tithetoreligiousauthoritiestoallstateswhereitoperates.The distribution of tithe in each of the States isbased on the number of poor households in each ofthose States provided by the Economic PlanningUnit.
180 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
• CEO LuncheonTalk
• “Flood Forecasting & Warning System (FFWS) forTropical Region” Seminar
• PERODUAECO-CHALLENGE2010–Champion
• “KemMotivasi Perdana FELDA2010”
• “Bakti SiswaPerdana2009”
• Smart Program2010
• Biodiesel ResearchProgramme
yayasan Tenaga Nasional
YTN was founded in 1993 as a channel for TNB tocontributetothepublicthroughvariousprogrammes.YTN,asarepresentativeofTNBhasthusfarplayedasignificant role in fulfilling its corporate socialresponsibility through educational and welfarecontributions.
Scholarships and Loans
Since 1993, YTN has spent RM608 million to sponsor10,517 students through scholarships and convertibleloans. In FY2010, YTN offered education scholarshipsand loans to 2,244 academically excellent students,amounting to RM42 million to further their studies atlocal and overseas universities. This is its largestcontribution to date aimed at producing professionalworkforce forTNBaswellas for thenation.
YTN has also sponsored RM1.5 million in the yearunder review for educational programmes andwelfare contributions.
Sponsorship To government and Ngos
Each year, TNB extends assistance in cash and kindto supportwelfareand social programmesorganisedby theGovernment andNGOs. For FY2010, TNBwasthe title sponsor for SUKMAXIII.
galeri Tenaga
Galeri Tenaga was founded in 2005 to house itscorporate collection in adedicated space.
ItexhibitssomeofthebestcollectionsofMalaysiansartworks in the country. In all, there are more than70majorworksofartatthegallerywhich isopentothepublic.ThegalleryisatestamentofTNB’ssupportforMalaysianart.
poweriNg eduCaTioN
TNB believes that education can turn dreams intoreality. The Company has a very strong tradition inproducing world-class scholars and researchersthrough its education and scholarship programmes.Among the many beneficiaries are current businessleaders in the countrywhowere TNB scholars.
universiti Tenaga Nasional
Toencourageknowledge sharing,UNITENopened itsdoors tomembersof thepublic via several talks andactivities suchas:
• Robogamez2009
• UNITENTunMahathir 6th Lecture Series
• LectureByDrRajendraK. Pachauri
• MultiProg’10
CorporaTeSoCiaLreSpoNSibiLiTy (CoNT’d)
CorporaTeSoCiaLreSpoNSibiLiTy (CoNT’d)
“program pemangkin generasi Cemerlang”
The “Program Pemangkin Generasi Cemerlang” forthe 2010 financial year involved 100 school childrenfrom low income families in the rural areas whohave excelled academically.
They were selected from 4 states namely Kelantan,Terengganu, Sabah and Sarawak to participate in aneducational programme to visit places of interest ininKualaLumpursuchasKLTower,MalaysiaAirForceMuseum, Universiti Tenaga Nasional (UNITEN),National Police Museum and Yayasan KepimpinanPerdana, Putrajaya.
The objective of the programme was to expose thestudentsandmotivate themtoperformwell in theirstudies. TNBallocatedRM280,000 for this purpose.
“program kem remaja bestari”
Introducedin2001,“ProgramKemRemajaBestari” isa schoolholiday camp for the childrenof TNB’s staffand students from less privileged families ororphans.
It aims to provide guidance and motivate thesechildrenwhowill be sitting for their UPSR, PMR andSPMexaminations.
Atotalof1,300schoolchildrenattendedthesecampsthatwereheldsimultaneouslyatfourzones–North,South, East and Central of Peninsular Malaysia. TNBhad set aside an annual allocation of RM500,000 forthis purpose.
Centre for Special Education (Pusat PendidikanKhas)YTNcontinuesitssupporttotheMinistryofEducationby funding a Centre for Special Education (PusatPendidikan Khas) in Putrajaya for special children togainbasic education.
For FY2010, YTN contributed RM160,000. At thiscentre, the special children who are categorised intothreegroups–hearing impaired,visual impairedandlearning difficulties will be able to get individual orgroup support in education, health, andwelfare.
With the cooperation of the Special EducationDepartment,MinistryofEducation,TNBhasmanagedto bring itself closer to the community; particularlychildren with special needs by providing facilitiesthatwouldhelpthemimprovethemselvestowardsabetter quality life.
pusat kanser Nasional (makNa)
Other contributions provided by YTN in the yearunder review include a RM200,000 contribution toPusat KanserNasional (MAKNA) to sponsor aMobileCancer ScreeningProgramme.
The aid is in the form of subsidies for ruralcommunities to get services through this mobilescreening for early cancerdetection.
With this programme, the public, particularly thosein the rural areas who cannot afford this facility areable to detect cancer cases early so that earlytreatment or precaution can be taken. This projectcovers thewholenation; including rural areas.
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The activities consists of the following three (3)modules:
• Motivational andTeamBuildingProgramme
• Educational Support Programme
• Capability andCapacityBuilding
Amongprogrammesorganisedwere:
• Career talks, seminars, religious programme andvisits
• Tuitions forEnglish,MathematicsandScience forUPSR
• Providing exercise tools by sponsoring “BukuSoalan UPSR” published by NST/Berita Harian tothe schools
• Teachers development and parental involvementprogramme
TNB also organised hockey clinics for the students,which is in line with the PINTAR goals of nurturingtalent amongst children. TNB allocates more thanRM500,000annually to support this programme.
poweriNg buSiNeSS eXCeLLeNCe
TNB believes that aligning CSR initiatives with itsbusiness strategieswill bring long term returns.Onegood initiative is the support it renders to localmanufacturers and contractors through the VendorDevelopment Programme. Consistently maintaininghigh standards of its businesses and operations byensuring adequate, safe, reliable and continuousdeliveryofpowersupply,providingexcellentcustomerserviceandinculcatingaworkcultureofhighintegrityare among TNB’s many commitments in poweringbusiness excellence.
Community Service Centres
YTN, in cooperation with the Welfare Department,carry out basic learning for children with learningdifficulties and physical disabilities in selectedCommunity Service Centres. A total of RM100,000was allocated for 10 selected Community ServiceCentres.Thesponsoredamount is for theacquisitionof special teachingaidsor learning equipments.
institut Jantung Negara Foundation
YTNalsocontributesRM250,000annually since2007to the Institut JantungNegaraFoundation topay forthe cost of treatment for heart patientswho qualifyandmeet the set criteria.
The list of patients were recommended by IJN andendorsedby theHealthMinistryMalaysia.
The patients are children aged 18 years old andbelow. Thebeneficiaries to date are 34 childrenwhoarenowable to live andenjoynormal life.
piNTar proJeCT
PINTAR, an acronym for “Promoting Intelligence,Nurturing Talent & Advocating Responsibility”, is acollaborativesocialresponsibilityprogrammeinitiatedby Khazanah Nasional Berhad to foster academicexcellence particularly among rural school children.The programme involves the sponsorship of morethan 160 primary and secondary schools in thecountrybygovernment-linked companies (GLC).
AsaGLC,TNBhaspledged its support to thePINTARProgramme by adopting 27 primary schoolsnationwide.Toensurethesuccessfulimplementationof this programme, TNBassignedone officer in eachstate to be its liaison officer and mentor to theadopted schools. As many as 2,573 Year 6 studentsof TNB’s adopted schools have benefitted from thisprogrammeunderwhichvariousactivitieshavebeenlinedup towards theiracademic improvement in theUjianPencapaian SekolahRendah (UPSR).
183TENAGA NASIONAL BERHADANNUAL REPORT 2010
CorporaTeSoCiaLreSpoNSibiLiTy (CoNT’d)
TNb bumiputera vendor development programme
TNB has established its Bumiputera VendorDevelopment Programme (BVDP) since 1993 and todatehasdeveloped260 companieswith theaveragevalue of contract awarded of RM400 million a year.Theprogrammewhichstartedwithonecategoryhasnow expanded to four major categories namelyUsahawan, Preferred Vendor/Supplier, PanelContractors and Rakan Niaga Strategik. Besidesnurturing the vendors through the implementationof comprehensive development initiatives, TNB hasalso opened the opportunity to selected vendors inleveragingonTNBbrandnameandjoiningTNBinitsbusiness expansionglobally.
This is a clear testimony of TNB’s commitment insupporting the National agenda in establishinginnovative, reliable, competitive and competentBumiputera vendors in manufacturing, works andservices sectors, in line with the Procurement BestPractices inestablishingBumiputeraCommercialandIndustrial Community (BCIC).
rural Street Lighting programme
Under the Rural Street Lighting programme, theDistribution Division embarked on Phase V of theprogramme awarded by the Ministry of Rural andRegional Development (or KKLW – KementerianKemajuan Luar Bandar dan Wilayah) under a12-month contractwhich startedon1 July2010andexpiringon31 June2011. In addition to theexisting129,254 units of 150W streetlight under Phases I toIV,another7,851streetlightshavebeenapprovedbyKKLW for installation under Phase V with a totalcontract sum of RM4 million. To date, a total of129,254unitsruralstreetlightinghavebeeninstalledthroughout PeninsularMalaysia.
rural School electrification programme
This programme was initiated by the Ministry ofEducation (MOE) to ensure all schools in the ruralareas are able to enjoy similar electricity supply astheurbanschools.On15March2010,MOEawardeda12-monthcontracttoTNBEnergyServicestosupplyelectricity to 38 schools throughout Peninsular
Malaysia.Thecontractwhichwillexpireon14March2011 has a value of RM98 million. This projectinvolved two methods of supply system namely thegrid connection system and solar hybrid system.TNBES has awarded TNB the supply of electricity bygrid connection. Nineteen (19) schools will beconnectedwithgridconnectionsystemwhileanother19 schools by solarhybrid system.
renewal energy (re) development
TNB lends its full support to theGovernment’sSmallRenewable Energy Programme (SREP) by helpingdevelopers of potential SREP projects in identifyingsuitable points of interconnection with the TNBdistribution network, as well as conduct technicalstudies for the project. TNB also entered into longtermREPowerPurchaseAgreements(REPPA)withREproponents.
AsofAugust2010,TNBhassigned18REPPAstotaling98.5 MW. To date TNB is in the process of finalisingnegotiation to conclude 20 REPPAs totaling 150.67MW with other SREP developers using biogas,biomass, mini hydro, municipal solid waste, landfillgas and solar as RE resources.
poweriNg a greeN NaTioN
‘Tree-for-a-Tree’ and river cleaning
TNB cares for the environment and has takeninitiatives to encourage staff to be more sensitivetowards addressing pollution and global warmingissues. Hence, there’s strong participation from stafftopreservetheenvironmentthroughtreeplantinginthe ‘Tree-for-a-Tree’ programme. Through thisactivity,hundredsoftreeswereplantedtosymbolicallyreplace some of the trees that were felled in theimplementationof transmissionprojects.
Apart fromplanting trees, some departmentswithintheDivisionhascollaboratedwithNon-GovernmentalOrganisations (NGOs) to carry out river cleaningactivities to arrest further dumping of waste intorivers.
184 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
bird sanctuary
As part of TNB’s effort to conserve the nation’sheritage for future generations, the ash pond inSultanSalahuddinAbdulAzizpowerstationhasbeenidentifiedasasanctuaryformigratorybirdsstoppingover en-route fromSiberia toAustralia.
The power station received recognitions from EastAsean Australasian Shorebird network for theconservations of migratory shorebirds and theirhabitats. This bird sanctuary was visited every yearby many dignitaries and VIPs. Bird watchers,photographers and bloggers also visited to the birdsanctuary annually.
ulu pangsun Station Conservation project
TheUluPangsunMiniHydroStationisan iconinthehistorical context of the growth of the electricitysupply industry in thecountry.Built in1927, it is thesecondoldesthydro station inMalaysia and thefirstin Selangor Darul Ehsan. Although it had ceasedoperationssince2001,thebuildingsandinfrastructureweredesignedtoblendinwiththeenvironment.TheUlu Pangsun Lower Station has special features andpotential to be developed for CSR activities. Theseinclude developing a Resource Centre on hydroelectricity, an environment research centre, eco-tourism activities and team building. Meanwhile,TNBResearchregularlyconductsworkshopsonnaturestudies for students and the public at the UpperStation.
Firefly Conservation project
A project to conserve the unique firefly colony atKampung Kuantan, Kuala Selangor was jointlyundertaken by TNB and the Selangor StateGovernment for five years starting from 2006. Inaddition to research activities conducted by TNBResearch Sdn. Bhd., the Company upgraded thecentrebyproviding informationboardsonfirefliesatthe mini theatre and jetty area. Prior to this, theCompany had completed the building of fourpavilions, a mini theatre and public address systemin the existing building; upgrading the jetty, accessroad and the square, refurbishing the gateway, aswell as directional signs to the center at severalstrategic locations form Kuala Lumpur to KualaSelangor, Selangor. With the initiatives undertakenby TNB to upgrade and enhance the area, more andmore visitors are drawn to the place, thus providinga sustainable livelihood for theboatmen.
Additional initiatives also include sponsoring basicconversational Arabic and Japanese classes for theboatmen to enable them to converse with touristsfromtheArabcountriesandJapan,whomakeupthemajority of visitors. TNB also organised the annual“Lets Go To School with TNB” programme as a formoffinancial support for childrenof theboatmen.
CorporaTeSoCiaLreSpoNSibiLiTy (CoNT’d)
poweriNg The work ForCe
TNB believes that its employees are its greatestassets. Its CSR initiatives for the employees over theyears involved systematic training programmes andcareer development opportunities to enhance theirprofessionalism as well as to encourage theirinvolvement in volunteerism and extracurricularactivities to achievea goodwork life balance.
Training and development
TNB puts a strong emphasis on having a highlycompetent workforce and this is achieved throughcontinuous human capital development. During theperiodunder review,TNBspentapproximatelyRM87million to provide training and development for itsemployees. As a result about 80% of the workforceattended a minimum of 3 training days. Thesetraining programmes are provided by its trainingarm, TNB Integrated Learning Solution Sdn. Bhd. –ILSASandalsoby external consultants.
Type of training programmes include ExecutiveDevelopment Programme (EDP), Middle ManagersProgramme (MMP), Long term educationalprogrammes for new employees and careerdevelopmentsuchasProgramPendidikanKemahiranKetukangan (PPKK), Program Pendidikan KadetJuruteknik (PPKJ), Program Pendidikan PembantuTadbir (PPPT) and mandatory training programmesfor all levels of non-executive employees, bothtechnical and support services staff.
health benefits and wellness
TNBprovidesawiderangeofhealthcareandmedicalbenefits in order to ensure its employees, retireesand eligible dependents receive the best services inhealthcare and medical treatment. There are 910clinics all over the country registered as TNB panelsas of June 2010 inclusive of GP, homeopathy,acupuncture, specialists hospitals & dialysis centers.The company also budgeted RM186,500 (for staffand retirees) to provide medical aids such aswheelchairs, hearingaids andprosthetic limbs.
Children of employees are also eligible for medicalbenefits up to the age of 18 years or up to 24 yearsif they are still pursuing studies at institutions ofhigher learning and there is no age limit for ‘specialchildren’.
Regularhealthtalksandscreeningsareorganisedforemployees and retirees and TNB continuouslyprovides information and updates on diseases andadopts variousmeasures to ensure thathealth of itsemployees are lookedafter.
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kumpulan wang khairat dan pesara TNb (death Levy Fund)
Kumpulan Wang Khairat Pekerja dan Pesara TNB(KWKPPTNB)was incorporatedon3 June1969underthe name Kilat Death Levy Fund and changed to itspresent name on 4 July 2005. KWKPPTNB wasestablished to manage monetary contribution offundscollectedfrommemberstoelectedbeneficiariesof the deceased employee and acts as a means ofrelief from some of the financial burden of thedeceasedemployee’s family.
KWKPPTNB’s membership consists of ordinary andlife members (those who have been a KWKPPTNBmember for at least 15 years at retirement age).During the period under review, there were 12,820ordinarymembers and2,912 lifemembers.
benefits for immediate Families
TNB is caring not only for the well-being of itsemployeesbut also that of their immediate families.In the period under review, TNB spent aboutRM840,000 in the formofmonetary contributions toaid widows and orphans. During the period underreview, fifty three (53) TNB widows received a one-offcontributionofRM2,000intheprogrammeMajlisJasamu Dalam Ingatan held nationwide while 755TNB orphans received a monthly contribution ofRM60 each (for children aged 7-12 years old) andRM90each (for childrenaged13-17 years old)underTNB’sBantuanPendidikanAnakYatimprogramme.
TNB also spent approximately RM2.34 million toprovide early education assistance for children ofemployeesthrough11kindergartensand10nurseriesnationwide, and charging a minimal rate for tuitionclassesunderKelasBimbinganTenaga.
recognition of employees Contributions
TNBrecognisesemployeeswhoarecommittedtothecompany’scauseandhavededicatedagreaterpartifnotalloftheirworkinglivesforthecompany.Duringthe period under review, 2,108 employees from all
over the country who have rendered 20, 25, 30 and35 years of service were awarded the Long ServiceAward in recognition of their contributions. Inaddition, TNB also recognised excellence in workperformance. Twenty three staff members wereidentified as model employees and were awardedwith the Meritorious Service Award during theperiod.
TNB also provides a platform for its retirees toorganise social activities through TNB FormerEmployeesAssociation(PersatuanBekasPekerjaTNB).During the period under review, RM110,000 wasspent to conduct various social and recreationalactivities for the association such as Majlis BerbukaPuasaandMajlisHari Raya.
187TENAGA NASIONAL BERHADANNUAL REPORT 2010
CorporaTeSoCiaLreSpoNSibiLiTy (CoNT’d)
Sports Carnival
TNB held its bi-annual Sports Carnival at UniversitiTenaga Nasional on 18-19 May 2010. The event wasorganised as a platform for employees to forge strongrelations through sports,whilst cultivating the spirit ofunityandcompetition.
A total of 1,010 staff, representing contingents fromfive zones participated in the event. They competedin nine games namely futsal, netball, badminton,ping pong, road relay, bowling, volleyball, sepaktakrawand tugofwar.
Festive Celebrations
TNBhasalwaysbeenastrongproponentofthespiritof “1Malaysia”. One of the main social activitiessupported by the Company is the celebration ofmajor festivals of the country, namely Hari RayaAidilfitri, Chinese New Year and Deepavali. It iscelebrated nationwide by all state offices and at theheadquarters of TNB in a big way through thetraditional“openhouse”conceptwhereManagement,staff,stakeholdersandotherguestscometogetherinthe spirit ofunity.
poweriNg ChampioNS
SportshavealwaysbeenonTNB’s corporateagenda.TheCompany’s interest for sports lies not only in itssocial role but more importantly as a catalyst to
develop future champions. TNB’s active involvementin sports through the years is in line with theGovernment’saspirationtoproducetopathletesandtobe a top-notch sportingnation.
hockey programme
TNB has pledged its support for national hockeydevelopment through monetary sponsorships since2006totheMalaysianHockeyFederationtoorganisethe TNB Malaysian Hockey League and other relatedactivities
Sports Coaching programme
TNBisthemainsupporterofthenationaldevelopmentof hockey. One of the key initiatives is the hockeyclinic development programme which providescoachingsessionstoselectedstudentsbetween12to18 years old. It is conducted by national hockeyplayerswhoare also TNB staff.
This programme is jointly organised with theMalaysian Hockey Federation and state hockeyassociations. To date, 2,000 new talents have beenidentified fromseven states through thisprogramme.
Cricket programme
Besides hockey, TNB is also the main sponsor forcricket in this country. It is actively involved in thedevelopment of cricket by officially competing ineverytournamentbothlocalandinternational,underthe auspicesof theMalaysianCricketAssociation.
188 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
CommiTmeNTTo The
eNviroNmeNT
TeNaga NaSIONal fully recOgNISeS ThaT ecONOmIc grOWTh, SuSTaINable deVelOpmeNT aNd qualITy Of lIfe gO haNd IN haNd.
We are cOmmITTed TO cONTINual ImprOVemeNT Of eNVIrONmeNTal perfOrmaNce WhIlST reSpONSIbly prOVIdINg Safe, effIcIeNT aNd relIable Supply Of elecTrIcITy.
TNb eNviroNmeNTaL poLiCy
• Protect,conserveandimprovetheenvironmentinall of its operations anddecisionmaking.
• Comply with all applicable laws and regulations,establish standards that will lead to continuousimprovementof its environmentperformance.
• Implement an Environmental ManagementSystem (EMS) that will ensure all impacts on theenvironment from its operations are eliminatedorminimised.
• Carry out environmental audits at requiredintervals toensure compliancewith itsCorporateEnvironment commitments, and implementenvironmental training programmes for ouremployees to deve lop a h igh leve l o fcompetency.
• Promote environmental awareness amongstcontractors, the public and other stakeholdersand to make available the environmental policyto them.
in line with this policy, TNb shall:
• Protect,conserveandimprovetheenvironmentinall of its operations anddecisionmaking.
• Incorporateenvironmentalmanagementprinciplesin i ts corporate strategy, planning andimplementation.
• Comply with all applicable laws and regulationsand voluntarily adopt or establish standards tocons tant l y improve i t s env i ronmenta lperformance.
• Conduct and support relevant research anddevelopment to improve the qual ity ofenvironment.
• Adopt3R conceptof Reuse, Repair andRecycle.
• Conduct environmental audits and reviews.
• Promote active education programmes amongstTNB employees to enhance environmentalawareness.
189TENAGA NASIONAL BERHADANNUAL REPORT 2010
CommiTmeNTTo TheeNviroNmeNT (CoNT’d)
a. eNviroNmeNTaL maNagemeNT pLaN
environmental monitoring programme
The Environmental Management Plan wasformulated as a licensing requirement underthe Environmental Quality Act, 1974 or incompliance with the specific Department ofEnvironment’s (DoE) detailed EnvironmentImpact Assessment (EIA) or as a condition forEIAapprovalfortherespectivepowerstations.The programme focused on monitoring airand water quality as well as boundary noiselevel. In addition, some stations have alsoconducted ecological monitoring as part ofthe EnvironmentalMonitoringprogramme.
TNB has diligently installed efficient andenvironmentallyfriendlyequipmentaswellasputting in place the Continuous EmissionMonitoring System (CEMS) in new powerstations.Currently,emissiongasfromthermalpower plants is monitored in real time withtheGenerationPlantManagement System.
b. eNviroNmeNTaL audiTS aNd mS iSo CerTiFiCaTioN
To ensure the execution of effectiveenvironmentsystemwhileensuringcontinuousimprovement in managing the environment,
all 12 TNB power stations have implementedenvironmental Management System MS ISO14001:2004. TNB power stations alsosucceeded in maintaining the certificationthroughyearlyauditsconductedbySIRIMQasInternational Sdn. Bhd.
In addition, TNB’s Generation Division alsounderwent the annual Environment InternalManagement Audit based on MS ISO14001:2004whichiscompulsoryforallpowerstations every year. The audit was conductedby competent and trained internal auditorsfromall power stations.
C. SCheduLed waSTe diSpoSaL
TNB’s scheduled Waste Managementprogrammes was implemented to complywith the Environmental Quality (ScheduledWaste) Regulation 2005. Scheduled wasteincludes all waste generated periodically thatrequires disposal by DoE – registeredcontractors.
TheDoEwillbenotifiedofallscheduledwastegeneratedwhicharetemporarilystoredattheScheduled Waste Store prior to disposal.Environmental Management Representative(EMR) is responsible for recording,monitoringand managing wastes generated at theirrespectiveunits.
d. reCyCLiNg programme
Thewasterecyclingandreductionprogrammeswere included in the EMS initiatives withintherespectiveDivisions.Currently,mostpowerstations are implementing this programme inaddition to the Environmental Managementprogrammes tominimisewastageand reduceconsumption of resources. Some of thestations had also assigned Recycling Centresat strategic locations in the station. Staffawareness programmes were continuouslyconducted through staffmonthly gathering.
190 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
i) Condition monitoring programmes (Cmp):
TheTransmissionDivisionhas implemented theCMP in its operations. One of the initiatives ofCMP involved transformer oil reclamationswhere used transformer oil is filtered by usingthe latest technology and subsequently reusedinoperations.
ii) recycling old power cables:
The recycling of old power cables is conductedthrough the Scrap Committee at each region.The recycling process can take place uponapprovalbythecommitteewhichwouldappointa recycling company to handle the scrapmaterials for furtherprocessing.
e. CriSiS maNagemeNT
Crisis Management in TNB is headed by a DisasterTeam, representedbytheEmergencyResponseTeam(ERT). The ERT is themain component of TNB SafetyExcellence Management System (SEMS) which hasbeen implemented in allDivisions.
SEMSwill identifyeverypossibleemergencythatcantake place in the Divisions’ business activities. AnEmergencyResponsePlan(ERP)willthenbedevelopedto mitigate these emergencies. All Divisions alsoconduct an annual ERP exercise involving all staff,and the relevant Government authorities andagencies.
F. haLoN repLaCemeNT
TNB ishalon free inalloperationsof theGeneration,TransmissionandDistributionDivisions.
g. CurreNT iSSueS
i. research on emF measurement presented to the energy Commission: Communities living neartransmission cables claimed that they wereexposed to danger and the risk of sufferingfrom various diseases such as cancer andleukemia. Following the claim, DistributionDivision with the cooperation of RegulatoryRelativeManagement(RRM),TNBhadtakentheinitiative to invite representatives from EnergyCommission to observe the reported area aswell as to conduct IMF and electric fieldmeasurement at TNB towers.
Research conducted by UNITEN in 18 differentlocations around Klang Valley indicated anaverage magnetic field level of 15-20 miliGaus(mG) and 3-5 kV/m for electric field. The levelsrecorded are actually lower than the standard1,000 mG for magnetic field and 15 kV/m forelectric field as stipulated by World HealthOrganisat ion (WHO) and Internat ionalCommissiononNon-IonisingRadiationProtection(ICNIRP).
191TENAGA NASIONAL BERHADANNUAL REPORT 2010
ii. education and awareness on environment: AnIntelligent Education Camp was conducted atMini Hydro Station Pangson, Hulu Langat,Selangor for the purpose of education andenvironmental research. This programme wasattended by students and lecturers fromUniverstiti Malaysia Sabah (UMS) as part of itsprogramme of visit to TNB. UMS studentswereexposed to activities related to education andrehabilitation of the environment. Apart fromthat,thecampwaschosenasaplacetoconductexercise and research foruniversity students.
iii. environmental Cleaning activity: TNB was alsoinvolved in environmental cleaning progammeorganised by the local authorities or thecompany.Among theactivites conductedare:
• Beach clean up campaign by GenerationDivisioninthevicinityofTNBThermalPowerStations throughoutMalaysia.
Transmission Division was involved in theNational River Clean Up campaign at LubokManggis, Hulu Langat organised by KAGUM aNon-GovernmentOrganisation (NGO).
Such activities not only had created awarenessto employees on the importanceof keeping thecleanliness of the environment and enhancingits quality, what is more important is thecooperation and commitment from eachemployeeduring the conduct of the activities.
iv. research on Fireflies rehabilitation at kg. kuantan, kuala Selangor: The research isoneofTNB’s key initiative in sustaining the firefliesspeciesandensuringthe increase in thefirefliespopulation. This is part of the Memorandum ofUnderstanding between TNB and the stateGovernment of Selangor Darul Ehsan. Theresearchwasconductedthroughthecollaborationbetween a subsidiary of TNB namely, TNBResearch Sdn. Bhd. with Universiti KebangsaanMalaysia, UKM. In addition, TNB had alsoorganised the 2nd International FirefliesSimposium in collaboration with the ForestResearch InstituteMalaysia (FRIM).
v. “Tree for a Tree” programme: Thisisanongoingprogramme organised by the TransmissionDivision every year. This programme wasdesigned to instil a sense of responsibilitytowards the environment and to create cleanand safe living conditions free from the threatof pollution and impact of globalwarming. Theprogramme is also part of the initiative tointroduce green elements in areas surroundingTNB installations, housing and recreation areas.The Transmission Division introduced thereplanting of tree or plants as replacement forthosefelledinthecourseofconstructionofnewsubstations or the installation of transmissiontowers.
oTher ServiCeS –produCTiviTy aNd QuaLiTy
maNagemeNT
The Product iv ity and Qual ity ManagementDepartment(PQM)hasbeengiventheresponsibilityof facilitating the Company’s drive towardsexcellence. This is done mainly through strategict r an s f o rma t i on i n i t i a t i v e s , p e r f o rmanceenhancement projects and quality managementprogrammes.
Quality Management programmes include thePresident’s Quality Award (AKP), participativemanagementprogrammeslikeWIT-ICC,5S,QCFTandvariousotherQualityAssurance initiatives.
TheBi-annualAKPassessmentwasagainheldduringthe financial year. At the last assessment there wasan increase from an overall average of 729 to 768points out of a total of 1,000 points. Two of oursubsidiaries namely University Tenaga Nasional(UNITEN) and Tenaga Switchgear had been short-listed as finalists for the Quality ManagementExcellence Award (QMEA). UNITEN emerged thewinner and later won the prestigious award “2009Anugerah Kecemerlangan Industri Perdana Menteri”(AKIPM)award.
TNB still maintains its excellent tradition of WorkImprovement Team – Innovative and Creative Circle(WIT-ICC) activities. Currently there are over 700active teams throughout the organisation of whichtwo teams participated in the InternationalConvention for Quality Control Circle (ICQCC) in thePhilippines and Indonesia and seven teamsparticipatedintheNationalICCConventionorganisedby the Malaysian Productivity Corporation (MPC).TNBwon several awards through this participation.
To instill a culture of excellence in its staff, thePlanning Division of TNB has embarked on a “workculture enhancement programme” branded asGanbatte. The programme’s objectives are to createmotivated staff, enhance culture, improve teamworkand instil l execution mindset. Through thisprogramme six issues and culture characteristicshavebeen identified for further action.
193TENAGA NASIONAL BERHADANNUAL REPORT 2010
oTher ServiCeS –produCTiviTy aNd QuaLiTymaNagemeNT (CoNT’d)
TofurtherimproveitsInternalAudit(IA),TransmissionDivision introduced the quarterly combined audit byregional offices comprising Internal Technical &Management Audit, Finance Compliance Audit,HumanResourceComplianceAudit.
TNB also successfully implemented “5S” conceptthroughout the organisation in order to promote asafe and conducive work environment. Though it isnottheultimateaim,weareproudtoannouncethattodatemorethan90%ofTNBbusinessunitsandallten power plants under Generation Division arealready “5S” certified by MPC. A few had succeededin winning the highest “5S” award given, the latestbeingTNBKulaijayawinningthe“anugerah pengamal 5S peringkat kebangsaan mpC 2009” . TheTransmissionDivision had added a new scopewhichcovers internal 5S crossbusinessunit audit.
The Process Standardisation & Improvement (PSI)programme is a major initiative that propels TNBtowardsBusinessExcellence.Thecompanyasawholeis now ISO 9001:2008 certified. Currently TNB has1,816 processes supported by a pool of 1262 ISOauditors.
Twenty three Key Initiatives have been successfullyimplemented under the ambit of the ServiceExcellence 10/10 (SE10/10) Strategic TransformationProgramme. Those that benefit customers directlyare Condition Based Monitoring techniques toimprove supply reliability, Distribution ProjectMonitoringSystem(DPMS),33kVProjectManagementSystem(PromSys33kV),IndividualSupplyApplicationMonitoring System (iSAMS), Establishment ofCustomer Charter, Introduction of One Stop EnquiryCentre: 1300-88-5454, Introduction of ShortMessaging System (SMS) reminding customers onthe status of their current electricity bill andintroduction of Virtual Q System for TNB CareLine15454. ShortMessaging System (SMS).
In addition to these Key Initiatives, there are 60Special Change Projects to enhance performance inTNB products, services and organisation. Among thenotable ones are Ops-Trim-X, Tell CEO Programme,Connect Supply on time, World Class Power PlantProgramme, Review of checklists effectiveness ontransmission project and maintenance proceduresand regulatory satisfaction index for RegulatoryRelationship Management. The extensive experiencegained by PQM in all these change initiatives hasnow enabled the group to provide managementconsultancy services and quality managementconsultancy services, both to internal and externalclients. This augurs well for TNB’s next strategicphaseofGeographical Expansion.
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TowardSgreaTer
iNNovaTioN
diviSioNaL goaLS/obJeCTiveS
ICTDivision is entrustedwith three key responsibilities:-
• Planningand consolidating theusageof ICT in TNB
• Providing ICT infrastructure and services to support TNBbusinesses
• Providinggovernance in theuseof ICT in TNB
operaTioNaL Summary
Efforts in transforming ICTDivision to amore customer-centricorganisation in recent years have brought positive benefits toitsmanycustomers.MonthlysurveysgeneratedbyitsCustomerManagement System (CMS) have shown a consistent score ofover 9.0.
TodelightTNB’scustomers, ICTDivisionhadrevampedtheTNBCorporate Website that improved communication andengagement with its stakeholders. TNB’s own Intranet called“Livewire” had been improved to provide greater interactivityanduseful staff-related information.
We are cOmmITTed TO cONTrIbuTe effecTIVely TO The buSINeSS gOalS aNd grOWTh Of TNb ThrOugh Value creaTION, SerVIce aNd effIcIeNcy ImprOVemeNT, OrgaNISaTION excelleNce aNd dIVerSIfIcaTION.
daTO’ razalI bIN aWaNgchief Information Officer
195TENAGA NASIONAL BERHADANNUAL REPORT 2010
TowardSgreaTeriNNovaTioN (CoNT’d)
The continued upgrading of computing infrastructure and networkcommunication equipment has resulted in a very reliable and accessiblesystem. Key enterprise applications such as eCIBS (Customer InformationBilling System) and ERMS (Enterprise Resource Management System) weremadeavailable for over 99.9% throughout the year.
highLighTS/aChievemeNTS
ICTDivisionhadembraced the ideaof “Green IT” for some time, through theimplementation of server consolidation and virtualisation that resulted inoptimising the purchase, usage and power consumption of computerequipment.ProjectssuchasEDMS(ElectronicDocumentManagementSystem)and ESS (Employee Self-Service) had allowed the processing and storage ofonlinedocument thathelped reduce theneed for printedhardcopies.
The expansion and escalating use of IT solutions has necessitated theintroduction of proper governance and control on ICTDivision’s products andservices.Assuch,anewGovernanceandSecurityComplianceunitwascreatedto ensure all ICT-related processes are governed and sustained accordingly,and that all IT applications and infrastructure are secured and had compliedwith TNB’s security guidelines.
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maJor proJeCTS
• CGIS (CorporateGeospatial Information Systems) This10-yearprojectisattheinitialstagesofimplementation.
The first module namely Asset Register went live on 28April 2010. Users can now view the various assets inrelation to their geo-location and perform basic queryingandnetworktracing.On14June2010,DNIM(DistributionNetwork InformationManagement) system functionalitiesand data were successfully migrated to CGIS. On 10 Julythe same year, integration of ERMS and eCIBS to CGISwere implemented.
• MFFA (Mobile Field ForceAutomation) TheprojectiscurrentlyinPhase4andisavailableinKuala
Lumpur, Selangor, Penang and Johor (south). Additional117GPSunits (oftheexisting282units)weredeployed infault-finder’svehicleswhile147morePDAs(oftheexisting388units)weredelivered to the end-users.
• RFID (Radio Frequency Identification) FollowingthesuccessofPhase1atBukitSentosa,Phase2
was implemented to furtherextend thesystemto3otherwarehouses in KlangValley. This rollout is expected to becompletedbyQ1of FY2011.
• ESS (Employee Self-Service) UnderthecurrentPhase3,executivesthroughoutTNBcan
now submit their leave applications, claims for onlineprocessing, update details of their employee profile andsubmit applications for internal job vacancies. In addition,timesheetandattendancerecordsarecurrentlybeingusedat ICTDivision.
• EHRMS(EnterpriseHumanResourceManagementSystem)has been fully extended to UNITEN to replace its legacysystem. The EHRMS provides a consolidated platform tothe subsidiary and promotes greater cost operationaleffectiveness.
• BI (Business Intelligence) provides analytical view ofcompany performance for strategic and operationaldecisionmaking.Itisexpectedtobereadybynextfinancialyear.
• ERPDataArchiving–thisproject,aimedatoptimisingERPdata storage is important towards promoting efficientsystem performance whilst complying with relatedstatutory requirements andpolicy. Theproject is currentlyentering its completion stage.
• ISAMS(IndividualSupplyApplicationManagementSystem)is an ongoing project which ensures on time delivery ofsupplytocustomersbymonitoringtheirsupplyapplicationsandnotifying customersupon completionof theprocess.
197TENAGA NASIONAL BERHADANNUAL REPORT 2010
TowardSgreaTeriNNovaTioN (CoNT’d)
• TOMAS (Transmission Operation Management & AnalysisSystem) is also an ongoing project that provides mobileworks management for technical staff in conducting on-site equipmentmaintenance.
• EASY (Employee Attendance System) is currently in Phase4andisavailableinCentralandNorthernregions.Ittracksstaff attendanceandmanagesbuilding security.
• EDMS (Enterprise Document Management System) iscurrently inPhase2and isavailable toalldivisions.Phase3hasbeenearmarkedfortheDistributionDivision.Effortsindocument conversionwere completed inMay2010.
• CbPMS (Competency-based Performance ManagementSystem)isoneofthemajorin-housedevelopedapplications.It was recently upgraded to v4 and featured staff matrixreporting, multirater appraisal, online appeal, and newemployee development plans which served as inputs toannual training calendar and careerprogressionplanning.
• Firewall, Antivirus & NIPS (Network Intrusion PreventionSystem). Computer security has been enhanced by theimplementation of NIPS, and upgrading and replacementof the existing firewall and antivirus systems. Softwaresfor assessing security vulnerability for applications,databases andnetworkwere acquired.
• National Cyber Security Response. As TNB had beenidentified by the Government as a CNII (Critical NationalInformation Infrastructure) organisation, ICT hadparticipated in Cyberdrill 2010 (X-Maya 3) organised bytheNational SecurityCouncil andCyberSecurityMalaysia.
• System Infrastructure for newly acquired computerhardware, additional backup solutions for midrange andenterprise systemsarebeing installed.
• Network Infrastructure. The initiatives identified in theTelecommunications Network Development Master Plan(2006-2013)were as follows:-
– Enhancements to TNB’s Digital TelecommunicationNetwork & Teleprotection System (Phase 4) projectincludereplacingoldfibreopticcablesontransmissionlines, upgrading analog PLC system to new digitalsystem, providing alternative routes to improve thereliability, and improving fiber capacity and alleviatebottleneckswithin the existingfiber opticsnetwork.
– The Last Mile Fiber Optic Network Upgrade (Phase 3)project is to install and commission approximately95kmof12-corefiberoptic cableson9 identified linksto replace damaged links and to strengthen links tocritical TNBBusinessCentres.
– The on-going implementation of IP/MPLS (MultipleProtocol Label Switching) Network is one of theinitiatives in the Integrated Data Network (IDN)Framework that will integrate the two Corporate andOperation network for enhanced data services withQoS (quality of service), improved security, centralisedmanagement and increasedefficiency.
– The on-going INMS project (Integrated NetworkManagementSystem) is to integrate several individualnetwork management systems of the NOC (NationalOperations Centre) into a single system to provideenhancedequipment,networkandservicemanagementfunctions such as alarm management, fault
198 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
management , r emote con f igu ra t ion , andtelecommunication database management. This willresultinimprovedserviceavailability,betterresourceutilisationandenhanced customer service.
key perFormaNCe iNdiCaTorS
Theinitiativestosupporttheoperationalplansaremeasuredthrough KPIs based on the Balanced Score Card which arebenchmarkedagainst industry standards.
Highlights of KPI achievements by ICT Division include anaveragedCSIof9.0outofanindexof10.0andnetworkandsystemavailability of 99.96%and99.90% respectively.
ChaLLeNgeS/proSpeCTS
The continued demands by our customers for quality andeffective ICT solutions to meet their business needs havecreated the following key challenges to ICTDivision:-
• Fulfilling customer expectations – It has becomeincreasinglychallengingtodevelopandmanageprojectswhich not only meet customer requirements but aredelivered on time and within budget. Several initiativeswhich include Strategic Sourcing, Out-Tasking and
standards such as SOA (Service Oriented Architecture),PMI Framework (Project Management Institute), ITIL (ITInfrastructure Library), EA (Enterprise Architecture), andimplementation of ISO 20000 for service delivery areintended to improve the building of quality applicationsat a lower cost and in faster completion time.
• Valuecreation–Toensurethatthesystemsimplementedby the ICT Division are contributing directly to TNB’sbusiness needs, it is necessary to maintain alignmentwith and focus on TNB’s key strategic objectives. This isbeing enhanced by initiatives like SCM (Supply ChainManagement) and monitored through CMS (CustomerManagement System) and EPM (Enterprise ProjectManagement).
• Governance and Security – It is equally important forend-userstoabidebyTNB’spoliciesandguidelineswhenusing ICT’s products and services. To manage this, theGRC (Governance Risk & Compliance) project is beingembarkedtoimprovethemonitoringandcontrolofuseraccess and role management to TNB’s enterprisesystems.
199TENAGA NASIONAL BERHADANNUAL REPORT 2010
oCCupaTioNaLSaFeTy aNd heaLThreporT
Inordertomeetthedemandsofthecurrentenvironment,thestandardofperformanceofOSHsetby themanagementandthe competitiveness of all Divisions towards compliancebecomes an important part of operations to ensure a safeworkplace and reliable supplyof safe electricity.
Despite the goodoverall performance in safety andhealth asindicatedbythereductionofreportedaccidentrate,to1.8per1,000 workers, the incidence of electrical contact remains anareaof concern that requires a stricter applicationof existingrequirements. The direct involvement of the AccidentCommitteeof themanagement topreview serious incidencesshowedcommitmenttomitigateunwarrantedsituations.Thiscommitmentwas alsopartakenby vendors and contractors.
SaFeTy maNagemeNT
The Safety Excellence Management System (SEMS) which isused by the core divisions, namely Generation, Transmissionand Distribution, is now being widely adopted by all otherDivisions and Subsidiaries in the Group as a standard tomanageOSH.SEMS isbenchmarkedagainst the requirementsof OSHAS 18001:2007 and MS 1722:2001 in order to gainexternalandinternationalrecognitionandisalsosubjectedtoannual review to ensure that progress is in line with thecurrentperformanceandbestpractices.Thee-SEMS,electronicaudit reporting led by Distribution Division will also beadoptedby otherDivisions to enhance and simplify reportingof deviations in the safetymanagement system.
The vie for awards for best safety performance from theMalaysianSocietyofOccupationalSafetyandHealth(MSOSH)had seen advancement, initially from theGenerationDivisionto other core divisions as well. The award winning divisionsand stations are listed in the ‘Awards and Recognition’ pagefor further reference.
There was also an increase in the number of departmentsbeing certified under OHSAS 18001:2007 and MS 1722:2001.Initiated by the Generation Division, this trend has spurredother divisions to also jump on the bandwagon, initially forthe purpose of enhancing awareness, then after, also toprepare for certification.
With the support of the management, the future is verybright for this initiative as TNB will benefit from having asafer workplace towards being recognised as an organisationwhichhas ahigh standardof safetyperformance inplace.
SaFeTy CampaigN
ThebiennialSafetyCampaign,withthetheme“SafetyCulture,HealthyLifestyle”washeldinAugust2010;heraldinganotherprogramme to instil further impact on organisation culture.Various activities such as health screening, blood donation,exhibitionbooths and seminarswereheld.
In conjunction with the campaign, the TNB Employee SafetyPassport (TESP), was launched. TESP, a pocket-size safetybooklet containing safety tips and Safety Policy, will bedistributed to all employees, to fill in their particulars andother safety information. The Management received theircopiesduring the launching.
The yearly OSH and Environmental Excellence Awards werealso presented during the campaign. Based on the previousSEMS audit, the best three stations from each core divisionswere rewarded with a trophy. New awards to recognise theefforts of hard working employees in enhancing the level ofOSHat their respective stationswere introduced. Thehighestscoring subsidiary, Project without Work Days Lost due toaccident, and stations with the highest Number of DayswithoutAccidentwere also awarded.
aS We prOgreSS INTO The mIlleNNIum, OccupaTIONal SafeTy aNd healTh (OSh) IS aN area ThaT WarraNTS dIlIgeNT ObSerVaNce. The STrINgeNT STaNce adOpTed by The auThOrITIeS ON OSh IN INduSTrIeS IN malaySIa SaW lITIgaTIONS aNd peNalTIeS gracINg The pageS aNd ScreeNS Of The medIa due TO VIOlaTIONS Of The laWS.
200 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
SaFeTy TraiNiNg
Occupational safety and health awareness programmes aregeared towards promoting a disciplined and safety culturedworkforce.Hence,OSH courses suchas SEMSAuditors, SafetyRepresentatives,OfficeSafety,etc.runcontinuouslythroughoutthe year to ensure that all TNB personnel attended at leastonedayofOSH trainingper year.NIOSH-TNBSafety Passport(NTSP) training programme for Supervisor is a compulsorycourse for contractor’s supervisor and securitypersonnel.
ANationalSafetySymposiumwasalsoheld inMarch2010atCollege of Information Technologies (COIT), UNITEN. SafetyExperts from various divisions were invited to share theirexperiences and knowledge. Similarly, safety symposiums onasmallerscalewerealsoheldinAlorSetar,KualaKangsarandSeremban.
AspecialprogrammeheldforfemaleemployeesinconjunctionwiththebiennialSafetyCampaign,“CitySurvival”sharingtipson self defence and preservation received an overwhelmingresponse from its participants.
TNB acknowledged Social Security Organisation’s (SOCSO)contribution for the Motorcycle Safety Programme. Theprogramme was jointly organised with the Malaysian Societyof Occupational Safety and Health (MSOSH). The 500participants, mostly our meter readers, will be monitored fora year todetermine the effectivenessof theprogramme.
TransmissionDivisiontogetherwithCorporateCommunicationsDepartment continued with the ongoing programme toenhance electrical safety awareness among school teachers.Teachers from10states inPeninsularMalaysiawhoattendedthis programme will then impart their knowledge to theirstudents.
CoNTraCTor’S SaFeTy
ToensurethesafetyofcontractorsworkingatTNBinstallations,NTSP cards (NIOSH-TNB Safety Passport) was introduced incollaboration with National Institute of Occupational andHealth (NIOSH), ensuring that the Occupational Safety andHealth Act, 1994 was complied with. Starting from 2009, allTNB contractors’ workers need a valid NTSP Cards to enterwork-site.TheyhavetositandpasstheNTSPcourseconductedbyNIOSH.Stringentenforcementhassuccessfullyreducedthenumberof fatal incident among the contractors.
Safety performance is also one of the criteria for projecttender evaluation. An audit system, known as SafetyCompliance Audit (SAFCA) is used by Transmission Division tomonitor the safety performance of their contractors. Thecontractorswereauditedperiodicallyandanynon-compliancewould be corrected. Their safety performance would carryweight forthenexttenderexercisethattheywillparticipate in.
Inaddition, safetyprogramme fornewprojectsarepresentedto Department of Occupational Safety and Health (DOSH)before project started. This “Smart Partnership” programmeimplemented will forge a closer relationship between TNB,Contractors andDOSH.
201TENAGA NASIONAL BERHADANNUAL REPORT 2010
geothermal energy refers to the use of energy in the earth's crust for heating and cooling purposes. geothermal power plants use heat deep in the earth to generate steam, which in turn powers generator to generate electricity. The concept behind geothermal power generation is simple. holes are drilled deep into the earth to tap into a pressurised area of hot water and steam. Steam is piped to the surface and used to drive a turbine to generate electricity.
GEOTHERMALENERGY
STaTemeNT oFCorporaTegoverNaNCe
To ensure that the Company fully embracesthe culture of good Corporate Governance,Management is fully committed towardsenhancing and instilling good CorporateGovernance in their activities. At variousDivisions in the Company, units wereestablished for self auditing activities with aview of strengthening internal controlprocesses andenforcement.
The Board of Directors of TNB (the Board) isfully committed to the principles and bestpractices of the Malaysian Code of CorporateGovernance (Revised 2007) (“The Code”). TheBoard constantly strives to ensure that thehighest standards of corporate governanceare practiced throughout the Group; whichare fundamental to fulfilling its responsibilityof protecting and enhancing the financialperformanceoftheCompanyandshareholdersvalue.
TheBoardalso,recognisesthatgoodcorporategovernance practices should extend beyondmere compliance. It should seek to attain thehighest standards of business ethics,accountability, integrity and professionalismacross all theGroup’s activities and conducts.In addition, the Board considers strong
governance as one of the key strategydeterminants in building a competitiveorganisation, achieving its set corporate andbusinessobjectivesandultimately in realisinginvestors’ confidence and shareholders value.Hence,theBoardiscommittedtocontinuouslyimprove the Group’s standards of corporategovernance by ensuring that all stakeholders’interests areprotectedand value-enhanced.
The Board plays a key role in the governanceprocess through its review and approval ofthe Group’s direction and strategy, itsmonitoring of professional standards andbusiness performance, its review of theadequacyandintegrityoftheGroup’sinternalcontrolsystems,includingtheidentificationofprincipalrisksandensuringtheimplementationofappropriatesystemstomanagethoserisks,and the acceptance of its underlying duty toensurethattheCompanyandtheGroupmeetits responsibilities to its shareholders andstakeholders. Good Corporate Governancepaysboth in goodanddifficult times.
The Board, to the best of their knowledge,confirms that the Group has applied theprinciplesassetoutinPart1andhascompliedwith thebest practices as set out in Part 2 ofTheCode throughout the yearunder review.
TNb recOgNISeS ThaT aS a uTIlITy aNd a publIc lISTed cOmpaNy IT haS a reSpONSIbIlITy, INdeed aN OblIgaTION TO cONTrIbuTe TO The Value Of ITS SharehOlderS aNd STakehOlderS. TO delIVer ThIS ObjecTIVe ON a cONTINuOuS baSIS The bOard IS cOmmITTed TO fully uphOld gOOd cOrpOraTe gOVerNaNce pracTIceS WIThIN The OrgaNISaTION.
204 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
(a) The board oF direCTorS
ThecurrentcompositionoftheBoardisincompliancewith Chapter 15.02 of the Main Market ListingRequirements of Bursa Malaysia Securities Berhad(“Listing Requirements”) as more than one third ofitsmembers are IndependentDirectors.
Composition of the board
The Board of TNB presently consists of 12 membersand is well balanced with one (1) Non-ExecutiveChairman, two (2) ExecutiveDirectors, eight (8)Non-ExecutiveDirectors andone (1)AlternateDirector.
TheprofileofeachDirectorassetoutintheBoardofDirectors profile on pages 74 to 81 of the AnnualReportdemonstrateawealthofexperienceandskillsvital for themanagementof theGroupbusinessandto navigate the Group through this challengingeconomic environment.
board appointment process
Appointment to the Board of TNB is made either bythe Special Shareholder pursuant to Article 5(2) oftheCompany’sArticlesofAssociationorbytheBoardofDirectorspursuanttoArticle133oftheCompany’sArticles ofAssociation.
Allnominees to theBoardarefirstconsideredby theBoard Nomination and Remuneration Committeetaking into account the required mix of skills,competencies, experience and other qualities, beforethey are recommended to theBoard.
roles and responsibilities
The Board is responsible to periodically review andapprove the overall strategies, business andorganisation,andsignificantpoliciesoftheCompany.The Board also sets the Company’s core values andadoptsproperstandardstoensurethatTNBoperateswith integrity and complies with the relevant rulesand regulations.
TheBoardhasa formal scheduleofmatters reservedfor its decision which include, amongst others, thefollowing:-
• reviewing and approving the strategic businessplans for TNBandGroup;
• identifyingandmanagingprincipal risksaffectingtheGroup;
• reviewing the adequacy and integrity of theGroup’s internal control system;
• overseeing the conduct and the performance oftheGroup’s businesses;
• approving theappointmentand compensationofSeniorManagement staff;
• approving new policies pertaining to staff salaryandbenefits;
• approving changes to the corporate organisationstructure.
Apart from these specific responsibilities, the Boardalso takes full, independent responsibility andaccountability for the smooth functioning of coreprocesses involving governance, business values andethical oversight. To facilitate effective discharge ofthese responsibilities, dedicated Board Committeeshave been establishedwith clear terms of reference,comprisingDirectorswhohavecommittedtheir timeand effort as members. The Board Committees arechaired by Non-Executive Directors who exercisetheir leadership with the benefit of in-depthknowledgeof the relevant industry.
The Board practices a clear segregation of dutiesbetween the Chairman and the President/ChiefExecutive Officer. The Board is led by the Chairman,Tan Sri Leo Moggie, whose principal responsibility isto ensure the effective running of the Board and isindependent of the management. The post of thePresident/Chief Executive Officer is held by Dato’ SriCheKhalibBinMohamadNohwhoseprimary task istoreport,communicateandrecommendkeystrategic
205TENAGA NASIONAL BERHADANNUAL REPORT 2010
STaTemeNT oFCorporaTegoverNaNCe (CoNT’d)
and operational matters and proposals to the Boardfordecisionmakingpurposesaswellastoimplementpolicies and decisions approved by the Board. TheNon-Independent Non-Executive Directors are fromvaried business and professional backgrounds andbringwith themawealthof experiencewhich couldassist inboarddecisions andpolicy formulations.
TheindependenceofeachIndependentNon-ExecutiveDirectors is safeguarded as none is involved in theday-to-day management of the Group and they donot engage in any business dealings or otherrelationshipswith theGroup. The presence of six (6)Independent Non-Executive Directors, representingmore than a third of the total members withnecessary caliber, ensures that the Board is well-balancedandabletocarrysufficientweightonBoarddecisions. Although all the Directors have equalresponsibilitiesfortheGroup’soperations,theroleofthese Independent Non-Executive Directors isparticularly important in ensuring that all businessstrategies proposed by the Management are fullyand independently discussed and assessed, and takeinto account the long term interest, not only ofshareholders, but also employees, customers,suppliers and the communities in which the Groupoperates. The Board is satisfied that the size andcompositionoftheBoardhasfulfilleditsrequirementadequately.
In linewith best practices on CorporateGovernance,the Board has identified and appointed Dato’ ZainalAbidin Bin Putihwith effect from1October 2010 asthe new Senior Independent Non-Executive Directorreplacing Tan Sri Dato’ Lau Yin Pin @ Lau Yen Bengwho resigned with effect from 15 September 2010.The Senior Independent Non-Executive Director isalsoexpectedtopromotehighstandardsofCorporateGovernance and ensure that the Company’sobligations to shareholders areunderstoodandmet.
Accountability is part and parcel of governance inTNB – whilst the Board is accountable to theshareholders, theManagement is accountable to theBoard. TheBoardensures that theManagementactsin the best interests of the Company and itsshareholders by working to enhance the Company’sperformance.
There is a clear division of responsibilities betweentheBoardand theManagement.ThePresident/ChiefExecutive Officer supported by his team ofManagementthroughCommitteesnamelytheGroupExecutive Council Committee, Group ExecutiveManagementCommittee,GroupManagementTenderCommittee, Energy Supply Committee, Group RiskManagement Committee and Fuel ProcurementExecutive Committee. These Committees areresponsible for the implementation of Boardresolutions, overall responsibilities over the day-to-day operations of the Group’s business andoperational efficiency.
operation of the board
In accordance with Article 146 of the Company’sArticles of Association, the Board delegates certainresponsibilities to five (5) Board Committees. Allcommitteeshavewritten termsof reference and theBoard receives reports on their proceedings anddeliberations. Where committees have no authoritytomakedecisionsonmatters reservedfor theBoard,recommendations are highlighted in their respectivereportsfortheBoard’sdeliberationandendorsement.The Chairman of the respective Committees willreport the outcome of the Committee meetings tothe Board and relevant decisions are incorporatedinto theminutesof theBoardofDirectorsmeeting’.
206 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Adiagramoutlining themainCommittees involved in thedecision-makingprocess is set outbelow:-
board oF direCTorS
board Committees management Committees
BoardAuditCommittee GroupExecutiveCouncil Committee
BoardTenderCommittee GroupExecutiveManagementCommittee
Board Finance& InvestmentCommittee GroupManagement TenderCommittee
BoardNomination&RemunerationCommittee GroupRiskManagementCommittee
BoardDisciplinaryCommittee Energy SupplyCommittee
Fuel Procurement ExecutiveCommittee
The salient termsof referenceof theBoardCommittees are as follows:-
board audit Committee (baC)
The BAC had a total of fifteen (15) meetings during the Financial Year and the attendance record is asfollows:-
directors meeting attendance
Dato’ ZainalAbidinBin Putih(Appointed as Chairman w.e.f. 1 October 2010)
15/15
Dato’MohammadZainal Bin Shaari 10/15
TanSriDato’HariNarayanana/lGovindasamy 15/15
Dato’AbdManafBinHashim(Appointed w.e.f. 1 February 2010)
10/10
TanSriDato’ LauYin Pin@ LauYenBeng(Resigned w.e.f. 15 September 2010)
15/15
*SuriaBintiAbRahman(Alternate Director to Dato’ Mohammad Zainal Bin Shaari)(Appointed w.e.f. 30 November 2009)
2/2
*As Inviteewhen thePrincipalDirectorwasunable to attend themeeting.
principal duties and responsibilities• The terms of reference of the Board Audit Committee are detailed out under the Audit Committee
Report.
207TENAGA NASIONAL BERHADANNUAL REPORT 2010
STaTemeNT oFCorporaTegoverNaNCe (CoNT’d)
board Tender Committee (bTC)
The BTC had a total of ten (10) meetings during the Financial Year. The attendance by the members is asfollows:-
directors meeting attendance
Dato’ PutehRukiahBintiAbdMajid 10/10
Dato’MohammadZainal Bin Shaari 8/10
Dato’ FuadBin Jaafar 10/10
TanSriDato’ LauYin Pin@ LauYenBeng(Resigned w.e.f. 15 September 2010)
10/10
SuriaBintiAbRahman(Alternate Director to Dato’ Mohammad Zainal Bin Shaari)(Appointed w.e.f. 30 November 2009)
1/1
principal duties and responsibilities• Toensure implementationandcompliancewith theTNBProcurementPolicyandProceduresand tomake
the necessary recommendations (if any) to the Board. The Committee shall ensure TNB practices BestValuewith integrity andaccountability;
• ToensureTNBcomplieswiththeapplicablelaws,regulations,rulesandguidelinestoachieveBestBusinessPractices in its procurementof equipment,materials,worksor services;
TheChiefProcurementOfficerorhisrepresentativeattendedalltheBTCmeetingsuponinvitationtobrieftheBTCon specific issues as andwhen required.
board Nomination and remuneration Committee (bNrC)
The BNRC had a total of three (3)meetings during the Financial Year. The attendance by themembers is asfollows:-
directors meeting attendance
TanSri LeoMoggie 3/3
Dato’MohammadZainal Bin Shaari 3/3
TanSriDato’HariNarayanana/lGovindasamy 3/3
Dato’ FuadBin Jaafar 3/3
TanSriDato’ Seri SitiNormaBinti Yaakob 3/3
principal duties and responsibilities• To identifyandrecommendnewnomineestotheBoardand itssubsidiariesaswellastheBoardCommittees;
• ToassisttheBoardinreviewingtheBoard’srequiredmixofskills,experienceandotherqualities,includingcore competencieswhichNon-ExecutiveDirectors shouldbring to theBoard;
208 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
• To implement theprocess formulatedby theBoarddesignedtoassess theeffectivenessof theBoardasawhole, BoardCommittees and the contributionof each individualDirector;
• Todetermine the remunerationpackagesof ExecutiveDirectorswhich shall beadecisionof theBoardasawhole.
board Finance and investment Committee (bFiC)
The BFIC had a total of three (3) meetings during the Financial Year. The attendance by the members is asfollows:-
directors meeting attendance
TanSri LeoMoggie 3/3
Dato’MohammadZainal Bin Shaari 2/3
Dato’ ZainalAbidinBin Putih 2/3
TanSriDato’ Seri SitiNormaBinti Yaakob 3/3
principal duties and responsibilitiesToestablisha frameworkofpolicies fromwhich theCommitteeshallmake its recommendation to theBoardinrelationtothemanagementoftheCompany’sfinancialandinvestmentactivitiesandreviewingbudgetfortheGroup.
board disciplinary Committee (bdC)
The BDC had a total of one (1) meeting during the Financial Year. The attendance by the members is asfollows:-
directors meeting attendance
TanSriDato’ Seri SitiNormaBinti Yaakob 1/1
Dato’ PutehRukiahBintiAbdMajid 1/1
Dato’ FuadBin Jaafar 1/1
Dato’AbdManafBinHashim 1/1
principal duties and responsibilities• Tomanage the disciplinary issues and actionswith regards to any employee’smisconduct except for the
hearingofappealfromexecutivesofgradeM15andaboveorequivalentgradewithregardstodisciplinarycasesofwhich thepower lieswith theBoard;
• To report to theBoardonupdatesof anydisciplinary cases concluded from time to time;
• Toestablishnewdisciplinaryproceduresor amending theexistingprocedurewheneverapplicable subjectto theBoard’s approval;
• TheBoardDisciplinaryCommitteemeets as andwhen required.
209TENAGA NASIONAL BERHADANNUAL REPORT 2010
STaTemeNT oFCorporaTegoverNaNCe (CoNT’d)
The board meetings
All Directors have complied with requirement thatDirectorsmustattendatleast50%ofBoardmeetingsheld in the Financial Year in accordance with theListingRequirements.
Dates for the Board meetings are scheduled inadvance at the end of the previous financial year toenable Directors to plan ahead and fit the year’smeetings into their own schedules. Apart from theregular scheduled meetings, additional meetings areconvened as and when necessary to deliberate andapproveadhoc,urgentand important issues.DuringtheFinancialYearwhichendedon31August2010,atotal of 12Boardmeetingswereheld.
A Pre-Board Meeting is a casual or informal sessionbetween the Chairman and the President/ChiefExecutive Officer together with other SeniorManagement which is scheduled before a BoardMeeting is held. The Management uses thisopportunitytobrief theChairmanonstrategic issuesfordiscussion forviewsand inputbefore thecomingBoardmeeting.
To ensure effectiveness of Board meetings, themeeting agenda is structured to address prioritystrategic issues aligned with the Company’s visionand mission; papers relating to the agenda arecirculatedtoallDirectorspriortoeachBoardmeeting.These papers include progress reports on operations,quarterly results of the Group and the Company,financial,material litigationsandcorporateproposalsor collaboration agreements, transactions which arematerial or strategic in nature, regulatory matterswithsubstantial impactonthebusinessandminutesof theBoardCommittees.
The Directors are given sufficient time to enablethem to peruse matters that will be tabled at theBoard meetings, participate in the deliberations ofissues to be raised and to make informed decisionsviaquality and in-depthdiscussions.
Senior Management are invited to attend Boardmeetingstofurnishadditionaldetailsorclarificationson matters tabled for the Board’s consideration.IndependentAdvisersandprofessionalsappointedbythe Company in relation to corporate exercise mayalso be invited to attend the Board meetings toprovide explanations or clarifications and advice totheDirectors.
All Directors have unrestricted access to allinformation within the Company in furtherance oftheir duties. In addition, all Directors have access tothe advice of the Company Secretary and wherenecessary, in furtherance of their duties, takeindependent professional advice at the Group’sexpense.
It has been also the practice by the Board memberswho are absent in any of the meetings to providetheir views on the issues for consideration anddeliberation.
In conjunction with the scheduled meetings or onseparate occasions, the Directors also visit locationsof operating units, sites of new projects and otheroperation sites to allow them to have betterassessments of the operational progress, status ofdevelopments and any important issues to beaddressedonnewproposals.
All Board decisions are properlyminuted.Minutes ofeachBoardmeetingarecirculatedtoallDirectors fortheir perusal prior to confirmation of theminutes tobe done at the commencement of the followingBoard meeting. The Directors may request forclarification or raise comments before the minutesare tabled for confirmation as being correct recordsofBoardproceedings.Minutesandresolutionspassedat each Board and Board Committees Meetings arekept in the statutory register at the registered officeof theCompany.
210 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Supply of information to the board
The Board and its Committees have full andunrestricted access to all information within TNBpertaining to theGroup’s business andaffairs.
Information provided to the Board goes beyond thequantitative performance data as it includesqualitativeperformancesfortheDirectorstoobtainaholistic view on the issues deliberated. All Directorsare entitled to call for additional clarification and
information tobe furnished to them for thepurposeofassistingthemintheirdecisionmaking.Inaddition,in arriving at any decision recommended by theManagement,athoroughdeliberationanddiscussionby theBoard is a prerequisite.
The Board is also notified of any disclosures/announcements made to Bursa Malaysia SecuritiesBerhad and updated by the Company Secretary onnewstatutoryandregulatoryrequirementsconcerningtheir duties and responsibilities as and whennecessary.
attendance details of board members
directors meeting attendance
TanSri LeoMoggie (Chairman) 12/12
Dato’ Sri CheKhalibBinMohamadNoh 11/12
Dato’ PutehRukiahBintiAbdMajid 11/12
Dato’MohammadZainal Bin Shaari 9/12
Dato’ ZainalAbidinBin Putih 11/12
TanSriDato’HariNarayanana/lGovindasamy 11/12
Dato’ FuadBin Jaafar 12/12
TanSriDato’ Seri SitiNormaBinti Yaakob 10/12
Dato’AbdManafBinHashim(Appointed w.e.f. 1 February 2010)
7/7
Dato’ Ir. AzmanBinMohd(Appointed w.e.f. 15 April 2010)
4/5
ChungHonCheong(Appointed w.e.f. 1 October 2010)
N/A
SuriaBintiAbRahman(Alternate Director to Dato’ Mohammad Zainal Bin Shaari)(Appointed w.e.f. 30 November 2009)
1/1
TanSriDato’ LauYin Pin@ LauYenBeng(Resigned w.e.f. 15 September 2010)
12/12
211TENAGA NASIONAL BERHADANNUAL REPORT 2010
STaTemeNT oFCorporaTegoverNaNCe (CoNT’d)
board effectiveness
The present composition, size, modus operandi,strength of relationship with the Management andfunctional Board Committees contribute towardsBoard effectiveness. This is also in line with theprinciples and best practices of the Malaysian Codeof Corporate Governance (revised 2007). Apart fromthe convening of Board Meetings on a regular basis,deliberations and discussions at Board Meetings areconducted in a comprehensive and in-depth mannerbefore arriving at any decision, as recommended bytheManagement.
Inaddition to themonthlyBoardmeeting, theBoardand Management sit in an interactive sessionsinternally known as the Board and ManagementBreakouts (BBO); one such session was held on9 November 2009 while another is to be held on22 November 2010. The BBO is a useful platform todeliberate, exchange views and share opinionsbetween Board and Management to formulatestrategic plans and to chart the direction of theCompany.
Onceineverytwo(2)years,theBACBreakoutsessionwasconductedasaplatformforopencommunicationand positive interaction to ensure that follow-upactions have been taken to address audit findingsand recommendations. The BAC Breakout was heldon19 July 2010.
board performance evaluation
The effectiveness of the Board is vital to the successoftheGroup.Theavailabilityofthestructuredformatfor Board Members evaluation assists the membersindischarging their duties effectively andefficiently.
TheBoard,throughitsNominationandRemunerationCommittee, undertakes an evaluation each year toassessperformanceof theBoardand itsCommitteesas a whole. The evaluation covers the Board’scomposition, skills mix, experience, communication,roles and responsibilities, effectiveness as well as
conduct. All Directors complete a questionnaireregardingtheBoardandCommittees’processes,theireffectiveness and where improvements may beconsidered. The areas of assessment covertransactionalandoperationalefficiencywhichincludeBoard and Board Committees’ minutes of meeting,papers and meeting arrangements, training andknowledge management as well as advisory onmatters concerning Directors’ Duties such asdisclosure of interest and prohibition against insidertrading.TheCompanySecretary reports theoutcomeof the evaluation exercise to the Nomination andRemuneration Committee and then to the Board forreview.
Following the performance evaluation process for2009 which was conducted in October – November2009, the Directors have concluded that the Boardand its Committees have been operating effectively.Additionally, the Chairman has concluded that eachDirector had made an effective contribution tothe Board. Each Director is well prepared, has goodunderstanding of the Group’s business hence theircommitment remains strong.
board balance and independence
The requirement of The Code for a board balance isfulfilled with Independent Directors forming morethanone thirdof theBoard.
The current Board consists of six (6) IndependentNon-Executive Directors who are independent ofManagementandfreefromanybusinessrelationshipsthat could materially interfere with the exercise oftheir independent judgement. Theyare TanSriDato’HariNarayanana/lGovindasamy,Dato’ZainalAbidinBinPutih,Dato’FuadBinJaafar,TanSriDato’SeriSitiNorma Binti Yaakob, Dato’ Abdul Manaf Bin HashimandChungHonCheong.ThepresenceofIndependentDirectorsassuresanadditionalelementofbalancetotheBoardas theyprovideunbiasedand independentviews, advice and judgement to al l Boarddeliberations.
212 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
re-election
In accordance with the Listing Requirements andpursuant to Article 135 of the Company’s Articles ofAssociation,allDirectorsaresubject to re-electionbyrotationonceateachAnnualGeneralMeetingwhereone-third of the longest servingDirectors shall retireand if eligible, may offer themselves for re-election.Executive Directors also rank for re-election byrotation. The Nomination and RemunerationCommittee is a lso responsible for makingrecommendations to the Board on the appointmentofnewDirector to theCompanyand its subsidiaries.
There-electionofDirectorsensuresthatshareholdershavearegularopportunitytoreassessthecompositionof theBoard. Particulars ofDirectors standing for re-election have been provided to shareholders in thestatement accompanying the notice of TNB’s 20thAnnual General Meeting scheduled to be held on15December2010.
Pursuant to Section 129(2) of the Companies Act1965, a Director who is over 70 years of age mustretireattheAnnualGeneralMeetingoftheCompany,and may be reappointed by shareholders with notless than a three-forth majority. At the coming 20thAnnualGeneralMeeting,TanSriDato’SeriSitiNormaBinti Yaakob, has offered herself for reappointmentin accordance with Section 129(6) of the CompaniesAct 1965 to hold office until the conclusion of thenextAnnualGeneralMeetingof theCompany.
board proFeSSioNaLiSm
directorships in other Companies
Pursuant to the Listing Requirements, each memberof theBoardholds less than ten (10)directorships inpublic listed companies and less than fifteen (15)directorships in non-public listed companies. This istoensurethattheircommitment,resourcesandtimeare more focused to enable them to discharge theirduties effectively.
Conflict of interest
In line with various statutory requirements on thedisclosure of director’s interest, it has been thepractice of TNB that members of the Board wouldmake a declaration to that effect at the Boardmeeting in the event theyhave interest in proposalsbeing consideredby theBoard, includingwhere suchinterest arose through close family members andother connected parties. Any interested Directorswould abstain from deliberations and decisions ofthe Board on the subject proposal and whereappropriate, excuse themselves from being presentin thedeliberations.
Trading on insider information
TNB’sDirector and PrincipalOfficers are not allowedto trade in securities or any kind of property basedon price sensitive information and knowledge whichhas not been publicly announced. Notices on thecloseperiod for trading in company’s sharesare sentto Directors and Principal Officers on a quarterlybasis specifying the timeframe during which theDirectorsandthePrincipalOfficersarealsopromptednot to deal in the Company’s share at the pointwhen price sensitive information is shared withthem.
directors’ insurance
The Company has in place a liabilities insurancepolicy for Directors in respect of liabilities arisingfromholdingofficeintheCompany.Thepolicycoverspersonal liability of Directors in the form ofprofessional indemnity insurance against any breachof trust, breach of duty, act, neglect, error, omission,misstatement, misleading statements, breach ofwarranty or authority committed in the respectivecapacities as Directors. Even though the Directorscontribute a part of the premium paid for theinsurance policy annually, such policy does notprovide coverage in the event the Directors areproven to have acted fraudulently, dishonestly ormaliciously.
213TENAGA NASIONAL BERHADANNUAL REPORT 2010
STaTemeNT oFCorporaTegoverNaNCe (CoNT’d)
Continuing board development
In compliance with the Listing Requirements, theDirectors are mindful that they shall receive anappropriate training which may required from timeto time to keep them abreast with the currentdevelopments in the industry as well as the newstatutory and regulatory requirement.
During the Financial Year, the Board have attendedrelevant development and training programmeseither attended by the Directors according to theirindividualneedsorasarrangedbyCompanySecretaryto enhance their ability on discharging their dutiesand responsibilitiesmore effectively.
A Board Development Programme was organisedinternally on 30 September 2010 whereby SenatorDato’ Sri Idris Jala presented on EconomicTransformationPlan.
On an annual basis, technical visits of the DirectorsarearrangedbytheCompanytoprovidetheDirectorswith knowledge and insights of the utility/electricitybusinessaroundtheworld.Fortheyearunderreview,two (2) technical visits to Europe and United StatesofAmericatoABBFactory,CESIatMilan,ConcentratedSolar Power Station (Solucar Platform) at Seville,Pump Storage Power Station at Alquera and DraxPower Station at London, Southern CaliforniaElectricity Company, US Nuclear RegulatoryCommis s i on , Consu l t an t s ( CH2M H i l l &WorleyParsons), NGO’s (NEI & Climate Institute),Exelon (IPP and Power & Gas Utility), Vendors – GEHitachi Nuclear Energy and Westinghouse and USDepartmentof Energy.
The Company Secretary facilitates in coordinatinginternal and external training programmes for theDirectorsaswellaskeepingacompleterecordofthetrainingattendedby theDirectors.
directors’ remuneration procedure
The Executive Directors’ remuneration comprisesbasicsalaryandallowancesincludingothercustomarybenefits made available to the Group. Any salaryreview takes into account market rates and theperformanceofthe individualandtheGroup.FortheExecutive Director, the component parts ofremuneration are structured so as to link short andlong-term rewards to corporate and individualperformance. A significant portion of the ExecutiveDirector’s compensation package has been madevariable in nature to be determined by performanceduringtheyearagainsttheindividualKeyPerformanceIndicators in a scorecard aligned with the corporateobjectives, andapprovedby theBoard.
TheremunerationpackageofNon-ExecutiveDirectorscomprisesof the followingelements:-
i) Fees The Directors are paid fixed monthly fees and
monthly allowances for each Board and BoardCommittee meeting attended during the year.Such fees are tabled to the shareholders of theCompany for approval.
ii) benefits-in-kind Other benefits in the form of coverage on
electricity bills and reimbursement are madeavailable as appropriate.
214 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Details of remuneration of eachDirector of the Company, categorised into appropriate components for the Financial Year end31August2010, are as follows:-
Name of directors
(i) Salary &(ii) Contribution
to epF(rm)
director’s Fee meeting allowance
bonus(rm)
benefits in kind
Total(rm)
Company(rm)
Subsidiary(rm)
Company(rm)
Subsidiary(rm)
(i) Car allowance &
(ii) Special allowance
(rm)electricity
(rm)others
(rm)
executive directors
*Dato’ Sri CheKhalibBinMohamadNoh
(i) 1,200,000.00(ii) 236,964.00 302,500.00
(i) 60,000.00(ii) 7,200.00 1,806,664.00
1,436,964.00 67,200.00
Dato’ Ir. AzmanBinMohd(appointed w.e.f. 15 April 2010)
(i) 457,440.00(ii) 77,801.00 171,143.22
(i) 48,000.00(ii) 936.00 755,320.22
535,241.00 48,936.00
Non-executive directors
TanSri LeoMoggie — 120,000.00 108,000.00 25,500.00 34,500.00 — — 6,343.00 19,448.15 313,791.15
Dato’ PutehRukiahBintiAbdMajid — 60,000.00 — 21,850.00 — — — — 4,745.00 86,595.00
Dato’MohammadZainalBin Shaari — **60,000.00 — **29,550.00 — — — 29,524.15 14,982.80 134,056.95
Dato’ZainalAbidinBinPutih — 60,000.00 — 27,300.00 — — — 18,205.75 9,920.00 115,425.75
TanSriDato’HariNarayanana/lGovindasamy — 60,000.00 12,000.00 28,150.00 3,400.00 — — 24,625.65 5,110.00 133,285.65
Dato’ FuadBin Jaafar — 60,000.00 24,000.00 25,750.00 9,350.00 — — 8,673.75 7,970.00 135,743.75
TanSriDato’ Seri SitiNormaBinti Yaakob — 60,000.00 — 18,950.00 — — — 7,628.45 19,663.40 106,241.85
Dato’AbdManafBinHashim(appointed w.e.f. 1 February 2010) — 35,000.00 — 16,350.00 — — — — 6,300.00 57,650.00
SuriaBintiAbRahman–AlternateDirector toDato'MohammadZainalBin Shaari(appointed w.e.f. 30 November 2009) — — **4,400 — — — — — — 4,400.00
TanSriDato’ LauYin Pin@LauYenBeng(resigned w.e.f. 15 September 2010) — 60,000.00 — 37,500.00 — — — 544.95 10,000.00 108,044.95
Total 1,972,205.00 575,000.00 144,000.00 235,300.00 47,250.00 473,643.22 116,136.00 95,545.70 98,139.35 3,757,219.27
* During Financial Year 2009/2010, Dato' Sri Che Khalib also received RM400,000.00 and RM600,000.00 in respect of arrears for new salary and Special Ex-Gratia which was approved by MOF and TNB Board of Directors
** Inclusive of RM60,000.00 and RM33,950.00 paid to Khazanah Nasional Berhad, in respect of Directors Fee and Meeting Allowance provided for Dato’ Mohammad Zainal Bin Shaari and Puan Suria Binti Ab Rahman
215TENAGA NASIONAL BERHADANNUAL REPORT 2010
STaTemeNT oFCorporaTegoverNaNCe (CoNT’d)
Company Secretary
Promoting and sustaining Corporate Governancepractices within the Company is a collectiveresponsibility of the Company Secretary. She isresponsible to advise the Board on issues relating toCorporate Compliance with Board and Managementon relevant laws, rules, procedures and regulationaffecting the Board and the Group, as well as bestpractices of governance.
The Company Secretary provides the Board as awhole and Directors individually with necessarysupport and detailed guidance as to how theirresponsibilities should be discharged in the bestinterestoftheCompany.Tohelptheboarddischargeits duties, the Company Secretary needs to makesure that board is furnished with adequate andrelevant informationonatimelybasis.TheCompanySecretary also briefs the Board on the proposedcontents and timing of material announcements tobe made to Bursa Malaysia Securities Berhad. Theduties of Company Secretary also include amongstothers, the following:-
• attending Board and Board Committee meetingsand ensuring that the proceedings of Board andBoard Committee meetings and decisions madethereof, are accurately and sufficiently recorded;
• ensuring that minutes of meetings are properlykept for the purposes of meeting statutoryobligations, as well as obligations arising fromthe Listing Requirements and other regulatoryrequirements;
• communicating the decisions of the Board forSenior Management’s attention and furtheraction;
• ensuring all appointments and re-appointmentsof Directors are in accordance with the relevantlegislations;
• handling Company share transactions, such asissuance of new shares and arranging for thepaymentof dividends;
• advisingDirectorsonregulatorycomplianceissuesrelevant toDirectors’ duties;
• managing the necessary preparation andarrangements for general meetings to ensuresmooth proceedings and adherence toregulations.
(b) SharehoLderS
TNB is committed to maintain a constructiverelationship with its shareholders, pursuing its on-going commitment to sustain the highest standardsof corporate governance practices throughout theGroup with full appreciation of its impact on long-termcorporateperformanceandoptimalshareholdervalue.
relations between the Company and investors
The Board and Management of TNB recognise theimportance of transparency and accountability to itsshareholders and investors, hence its pursuit of thehighest standards of corporate governance practicesthroughout theGroup.
In this regard, TNB has developed and maintains anInvestor Relations Policy to ensure a high level ofquality and service is achieved when information isprovided to investors and stakeholders.
Whilst various channels of communication areoptimisedtoprovideshareholdersandinvestorswitha balanced and comprehensive view of the Group’sperformance and the issues faced by the Group inlight of the challenging environment, the role ofinvestorrelationsisentrenchedasthecommunicationplatform between the Group and the investor atlarge. In this regard, the Investor Relations &Management Reporting Department, a dedicateddepartment under the Finance Division has beenentrustedwith the responsibilityof coordinatingandresponding to all queries and information raised byshareholders, research analysts and investors. Anequal level of importance is placed on the need forinvestor relations to channel the views of theinvestmentcommunitybacktotheManagementandtheBoard.
216 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
The annual investor relations programme serves toprovide theManagementwithopportunitiesand theplatform to interact with investors, analysts as wellas the media. The events and activities scheduled intheProgramme include:-
• quarterly results announcement
• analyst briefing/conference call
• full year result announcement
• preparationand releaseofAnnual Report
• AnnualGeneralMeeting
• site visits
• domestic/international road shows
• major international broker conferences
During the year under review, the Company,represented by its Senior Management, hadparticipated in various local and international eventswhich include:
• Seven (7) conferences and forums organised byresearchhouses:-
1) Morgan Stanley – Asia Pacific Summit –Singapore
2) Deutsche Bank – Corporate Access Day –Singapore
3) Daiwa– InvestmentConference– Tokyo
4) Bursa/Maybank IB– InvestMalaysia–KualaLumpur
5) Deutsche Bank – Access Asia Conference –Singapore
6) Macquarie – Asia Pacific Power, Energy &CoalConference–HongKong
7) Nomura–Non-DealRoadshow–HongKong
• announcement of quarterly financial results tothe financial community and the media. Duringthese events, teleconferencing facilities arearranged to enable the investment communitiesat major financial centers worldwide to listen aswellastoparticipateinthebriefings.Onaverage,
some88participantsfromthefinancialcommunityand the media attended or took part in thete leconfe renc ing dur ing the quar te r l ypresentations in the Financial Year.
The quarterly financial results and analysts’presentationmaterialsarealsomadeavailableonthe Company’s website to enable broader accessto Company information by investors and otherstakeholders.
In addition to the Company’s website, investorscancontacttheCompanyatanytimebyemailorother correspondence. A designated CompanyOfficers at Investor Relations & ManagementReportingDepartmentarealsoavailabletoprovideinformation to shareholdersupon request.
• participation in the invest malaysia annual international investors’ Conference organised byBursa Malaysia and aimed at bringing Malaysiancorporates and institutional investors both localand international, at a mutually beneficialforum.
• one on-one and group meetings with equity andfixed income investors and analysts. Recoveringfrom the global economic slowdown, FY2010provided opportunities for TNB to aggressivelyreach out to local and foreign fundmanagers onthe back of a stronger economy and attractivevaluations. This was done through regularmeetings with the financial community, whichhelp enhance investors’ understanding andperception of the Group, as well as regain theirconfidence in the company’s commitment to itsshareholders.
• in-house meetings. Aside from the conferencesand meetings attended outside of TNB premises,Management and IR frequently played host tolocal and international fund managers andinvestors who have requested for meetings atTNB offices. During the year under review, TNBheldapproximately67ofsuchmeetings(excludingQuarterly announcementoffinancial results).
217TENAGA NASIONAL BERHADANNUAL REPORT 2010
STaTemeNT oFCorporaTegoverNaNCe (CoNT’d)
In the Financial Year, TNB had approximately 147meetings with equity research analysts, fundmanagers and investorswho had requested tomeetup with company officials (including investors thatwere seenat conferences and road shows).
Constructive use of the annual general meeting
TheAnnualGeneralMeeting(AGM)isavitalplatformfor direct two way interaction between theshareholders, Board and Senior Management of theGroup. The AGM provides an open forum at whichshareholders and investors are informed of currentdevelopments.
AttheAGM,theBoardprovidesshareholderswithanopportunity to ask questions on the progress andperformance of the Company without limiting thetime and types of questions asked. The Companysupports The Code’s principles to encourageparticipation by shareholders. The turnout ofshareholders at AGM has always been high where atotal of 2447 registered shareholders and 1736proxiesattended the lastAGMheldon15December2009. The Chairman provides sufficient time forshareholders questions on matters pertaining to theCompany’s performance and responds to theshareholders with regard to their concerns andquestions raised.
At the AGM, shareholders can exercise their votingrights in strict compliance with the laws andproceduresofgeneralmeetings.Separate resolutionsareproposedforseparatemotionsandtheChairmandeclares the outcome of each resolution after it isproposed and seconded by the shareholders. Eachitemofordinaryandspecialbusiness inthenoticeofthe general meeting is accompanied by a fullexplanation of the effects of the proposedresolution.
A press conference is held immediately after AGMwhere the Chairman, President/Chief ExecutiveOfficer,ChiefFinancialOfficerandSeniorManagementmembers are present to clarify and explain issuesraised by the media. An announcement on the
resolutions passed at the AGM is made to BursaMalaysia Securities Berhad. Theminutes of theAGMis kept by Company Secretary Office for futurereference.
Continuing disclosure of material information
The Board is fully committed to provide and presenta true and fair view of the financial performancesandfutureprospectsoftheCompany.Thisisprovidedthroughthequarterlyandannualfinancialstatementsaswell as theAnnual Report.
The Board also recognises the need to fully disclosetoshareholdersallmajordevelopments inrelationtothe Group on a timely basis. In addition to themandatorydisclosuresrequirementbyBursaMalaysiaas well as other corporate disclosures, the Companyalso maintains a website – www.tnb.com.my – foraccessby thepublic and shareholders.
While the Company endeavors to provide sufficientinformation to its shareholders and stakeholders, itmust also be wary of the legal and regulatoryframework governing the release of material andprice-sensitive information. All corporate disclosurestakeintoaccounttheprevailinglegislativerestrictionsand requirements as well as the investors’ need fortimely release of price-sensitive information such asfinancial performance results and statements,material acquisitions, significant corporate proposalsaswell as other significant corporate events.
In all circumstances, the Group is cautious not toprovide undisclosed material information about theGroup and continuously stresses on the importanceof timely and equal dissemination of information toshareholders and stakeholders.
Confidentiality of information
In the event of briefings or presentations conductedonany information regardedasundisclosedmaterialinformation about the Company and its operations,theCompanyensuresthatthestrictestconfidentialityismaintained.
218 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
(C) aCCouNTabiLiTy aNd audiT
Financial reporting
In presenting the annual financial statement andquarterly announcements to shareholders, theDirectors aim to present a balanced and candidassessment of the Group’s position and prospects.Thisalsoappliestootherprice-sensitivepublicreportsand reports to regulators. Timely release ofannouncements reflects the Board’s commitment toprovide up-to-date and transparent information ontheGroup’s performance.
In the preparation of the financial statements, theDirectors consider compliance with all applicableFinancial Reporting Standards and provisions of theCompanies Act 1965. The Board is assisted by theAudit Committee who reviews both annual financialstatements and the quarterly announcements toensure reports reflect a true and fair view of thestateof affairs of theGroupandCompany.
relationship with the auditors
The Group’s internal audit function is performed in-housebytheGroupInternalAuditDepartmentwhichaudits the internal control practices and reportssignificant findings to the Board Audit Committeewith recommended corrective actions. Managementis responsible to ensure that corrective actions onreported weaknesses are undertaken within anappropriate time frame.
TheBoardAuditCommitteehasmetwiththeexternalauditors in relation to the audit of the annualfinancial statements without the presence of theExecutive Directors and Management twice (26October 2009 and 20 April 2010) in respect of theFinancial Year under review. A report by the BoardAudit Committee is provided on pages 228 to 230and its Termsof Reference is provided onpages 233to237.
internal Control
The Directors acknowledge their responsibility tomaintainasoundsystemofinternalcontrolscoveringnot only financial controls but also operational andcompliancecontrolsaswellasriskmanagement.Thissystemisdesignedtomanage,ratherthaneliminate,the risk of failure to achieve the Group’s corporateobjectives, as well as to safeguard shareholders’investmentsand theGroup’sassets.TheBoardseeksregularassuranceonthecontinuityandeffectivenessof the internal control system through independentreviewby the internal andexternal auditors.
reSpoNSibiLiTy STaTemeNT iN reSpeCT oF The FiNaNCiaL year uNder review(Pursuant to paragraph 15.26(a) of the Main Market Listing Requirements Bursa Malaysia Securities Berhad)
The Board is fully accountable to ensure that thefinancialstatementsareprepared inaccordancewiththeCompaniesAct1965andtheapplicableapprovedaccounting standards set by Malaysian AccountingStandards Board so as to present a true and fairview, balanced and understandable assessment ofthe Group’s financial position and prospects. In thisAnnual Report, an assessment is provided in theDirectors ’ Report of the Audited FinancialStatements.
The Board Audit Committee reviews the statutorycompliance and scrutinises the financial aspects ofthe Audited Financial Statements prior to fulldeliberationat theBoard level.
addiTioNaL CompLiaNCe STaTemeNT
Apart from providing the shareholders and thestakeholders with an overview of the state ofcorporate governance in the Company, TNB is alsopleased todisclose the following information:-
(1) utilisation of proceeds raised from any Corporate proposal
There were no proceeds raised from anyCorporate Proposal in the Financial Year ended31August2010.
219TENAGA NASIONAL BERHADANNUAL REPORT 2010
STaTemeNT oFCorporaTegoverNaNCe (CoNT’d)
(2) Share buy-back for the Financial year There was no share buy-back exercise carried
outbytheCompanyfortheFinancialYearended31August2010.
(3) options, warrants or Convertible Securities exercised
During the financial year, 15,665,000 newordinary shares of RM1.00 each were issued bytheCompany comprising:-
15,665,000 ordinary shares of RM1.00 each inTNB pursuant to the Employees’ Share OptionSchemeII(‘ESOSII’)atexercisepricesofRM6.71,RM6.99, RM7.42, RM7.33, RM6.33, RM5.57,RM6.35andRM7.18per share.
The new ordinary shares issued during thefinancial year ranked pari passu in all respectswith the existing ordinary shares of theCompany.
The Company has been granted an exemptionbytheCompaniesCommissionofMalaysiaviaaletter dated27 September 2010 fromhaving todisclose in this Report the name of the personstowhomoptionshavebeengrantedduring theFinancial Year and details of their holdingspursuant to Section 169 (11) of the Companies
Act, 1965 except for information on employeeswhoweregrantedoptionsrepresenting450,000ordinary shares and above. None of theCompany’sandGroup’semployeesweregrantedoption representing 450,000 ordinary sharesand above under ESOS II during the FinancialYear.
(4) american depository receipts (“adr”) In January 1994, TNB launched its Level 1
American Depository Receipts (ADR) in NewYork, the United States of America. Each ADRcarries an equivalent of four underlying TNBshares. The only custodian bank for TNB’s ADRprogramme is Malayan Banking Berhad. TheBank of New York in the USA is the Depositorybankand theADRsare tradedover the counter.As at 31 August 2010, the total number ofordinary shares held through these ADRs were3,559,305 which represented less than five percent of the total issued and paid-up capital ofthe4,352,719,795 sharesof TNB.
(5) Sanctions/penalties There were no sanctions and/or penalties
imposed on the Company and its subsidiaries,Directors or Management by the relevantregulatory bodies during the Financial Yearended31August2010.
(6) Non audit Fees Apart from the annual audit fees, the Group had paid non audit fees to the external auditors. The
amountspaid for the Financial Year ended31August2010are as follows:-
No. division/Subsidiary Nature of Non-audit Fees to auditors rm’000
1. SabahElectricity Sdn. Bhd. ReviewOfCash Flows 330
2. Group InternalAudit *ManagementAndEngineeringAudit 1,700
3. TNBRepairMaintenance Sdn. Bhd. AgreedUponProcedure 8
4. TenagaNasionalBerhad TaxConsultation 70
ToTaL 2,108
* Relates to work commissioned by the Energy Commission and Tenaga Nasional Berhad on the Management and Engineering Audit of the Group, undertaken by a consortium consisting of PwC Malaysia and an international engineering and consulting firm. RM1.7 million reimbursed by the Group relates to portion earned by PwC Malaysia.
220 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
(7) variation in results TheCompanydidnot issueanyprofit forecast for theFinancialYearended31August2010.As such,no
commentary ismadeon variation in results.
(8) profit guarantee TheCompanydidnot issueanyprofitguarantee for the Financial Year ended31August2010.
(9) material Contracts TherewerenomaterialcontractsenteredintobytheCompanyand/or itssubsidiaries involvingDirectors
andmajorshareholders’ interest,eithersubsistingasat31August2010orentered intosincetheendoftheprevious Financial Year ended31August2009.
(10) revaluation policy The revaluation policy of the Company in relation to its landed properties is set out inNote 2(g) of the
Notes to the Financial Statements set out onpages263 to264of thisAnnual Report.
(11) related party Transactions To ensure that theCompanymeets its obligationsunder the ListingRequirements and its obligations in
connectionwith relatedparty transactions,an internal compliance frameworkwasestablished.Directorswho have any interest in transactions with the Company and Group will abstain themselves fromdeliberation and voting on the relevant resolutions at the Board or any general meetings. All relatedparty transactions are reviewedby theBoardAuditCommittee annually.
A listof the significant relatedpartydisclosuresbetween theCompanyand it subsidiaries, andbetweentheGroupandother relatedparties including relevantkeymanagementpersonnel for FY2010 is setoutonpages335 to337of theAnnualReport. TheDirectors areof theopinion that the transactions in theNote 41 have been established in terms and conditions that are not materially different from thoseobtainable in transactionswithunrelatedparties.
STaTemeNT oN CompLiaNCe wiTh The reQuiremeNTS oF burSa maLaySia iN reLaTioN To appLiCaTioN oF priNCipLeS aNd adopTioN oF beST praCTiCeS Laid dowN iN The maLaySiaN Code oF CorporaTe goverNaNCe(Pursuant to paragraph 15.25 of the Main Market Listing Requirements Bursa Malaysia Securities Berhad)
The Board is pleased to report to shareholders that the Company has applied the principles of corporategovernance and is in compliance with Part 1 of the Code. Further to that, the Board remains committed toattain the highest possible standard of corporate governance through continuous adoption of best practicesas recommended in Part 2 of theCode.
Signedonbehalf of theBoardofDirectors in accordancewith their resolutiondated2November2010.
daTo’ ZaiNaL abidiN biN puTihSenior IndependentNon-ExecutiveDirector
221TENAGA NASIONAL BERHADANNUAL REPORT 2010
eNTerpriSewide riSkmaNagemeNT (ewrm)
riSk aSSeSSmeNT & reporTiNg
EWRMDepartmenthad conductedmore than70 risk awareness and review sessions forTNB’s operating divisions/departmentstogether with the appointed Risk Managersand Risk Coordinators. The exercise is toidentify and review risk managementimplementation issues (if any), changesmadeto the operating risks as well as to ensurethat all risk profiles continue to be alignedwithTNB’sbusiness strategies andobjectives.
Half-yearly risk assessment reports from alldivisions are submitted to the EWRMDepartment for analysis and subsequentlyforwarded to the relevant risk managementcommittees for deliberation.
In addition, a risk competency survey wasconducted to assess the understanding andawareness of the Risk Managers, RiskCoordinatorsandRiskOwnerswithregardstothe principles and application of riskmanagement in their respective scope ofwork. The survey results showed that therespondents have a high level of awarenessand understanding of the principles of riskmanagement.
riSk CommuNiCaTioN
Risk communication, focusing on thedisseminationof risk informationatall levels,forms an integral part of risk managementactivities in TNB.
TwoRiskManagementForumswereorganisedasaplatformtocommunicateriskinformationto the appointed Risk Managers, RiskCoordinators and senior management acrossTNB Group. Topics that were discussed weregovernanceand riskmanagement inMalaysiaby an external speaker from KhazanahNasional,emergingrisksinviewoftheseconddestination in TNB’s 20-year strategic planand risks, challenges and issues involved innuclearpowerproduction.
Riskcommunicationisalsochanneledthroughthe internal Group Finance website andpublications in TNB’s Tenagawanmagazine.
aS The year 2009/2010 IS a mIleSTONe fOr The fIrST deSTINaTION Of TNb’S 20-year STraTegIc plaN WITh The prImary fOcuS ON “SerVIce excelleNce”, STrucTured, effecTIVe aNd cONSISTeNT eNTerprISe WIde rISk maNagemeNT (eWrm) IS eSSeNTIal TO The SucceSSful ImplemeNTaTION Of VarIOuS key INITIaTIVeS. The eWrm frameWOrk, IN place SINce 2003, allOWS The prIOrITISINg Of STraTegIc aNd OperaTIONal rISkS ThrOughOuT The grOup, aS Well aS TO eNable The deVelOpmeNT Of aN effecTIVe INTerNal cOmplIaNce aNd reVIeW plaN. The eWrm frameWOrk prOVIdeS fOr a cOmpleTe rISk maNagemeNT cycle INcOrpOraTINg The aSSeSSmeNT, repOrTINg, TreaTmeNT, mONITOrINg aNd reVIeW Of The buSINeSS rISkS WIThIN The grOup.
222 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
CorporaTe emergeNCy reSpoNSe pLaN (Cerp)
TNBhaddevelopedaCorporateEmergencyResponsePlan (CERP) to provide a coordinated and promptresponse to an emergency situation affecting theGroup. A CERP Steering Committee, chaired by theappointed TNB Crisis Commander, consists ofrepresentatives from various divisions providesdirectionandguidanceforthesuccessfulformulationand implementationof TNBCERPacross TNBGroup.
SeveralmajorCERPactivities/initiativeswere:
• Testing and drills were carried out in the yearunderreviewintheeffortstoembedtheprinciplesofemergencyresponseandbusinesscontinuityinTNB.
• Frequent collaboration and cooperation wereundertaken with various government agenciessuch as the National Security Council, ChiefGovernment Security Officer and Ministry ofScience,TechnologyandInnovationaswellastheEnergy Commission to ensure available andreliable electricity to essential services in thecountry. One such collaboration is the efforts tomitigate the threat of cyber attacks by ensuringthat TNB’s corporate networks and controlsystems are adequately and reasonably securedfrom the risk of it being tamperedwith.
way Forward
In view of TNB’s strategic destination for 2010 to2015, that is “Geographical Expansion”, it is crucialthat TNB continuously improve its risk managementframework to ensure a strong footing in theinternational arena to achieve TNB’s vision to beamongtheleadingcorporationsinenergyandrelatedbusinessesglobally.
In addition, regular risk management trainings arecarried out throughout the year by TNB’s trainingsubsidiary company, ILSAS, to improve the riskmanagementskillsofnewlyappointedRiskManagers,Risk Coordinators and Risk Owners or as refreshercourses for those alreadyappointed.
TNb riSk iNFormaTioN SySTem
Theon-line TNBRisk Information System (TRIS) is anin-house system developed with collaboration fromthe ICT Division for the purpose of complementingtheestablishmentand implementationof theEWRMprocess. In order to ensure the smooth running ofthe system, TRIS Helpdesk services are managed bydedicatedTRIS administrators.
In the year under review, significant enhancementsto the system was developed and implemented ascontinuous improvement and to meet the needs ofthe users. Comprehensive training was given to RiskManagers and Risk Coordinators to ensure that TNBemployees are able to effectively use the enhancedTRIS in managing and monitoring their respectiverisks.
riSk maNagemeNT CompLiaNCe & review
Risk management compliance and review is a newresponsibility in EWRM Department and it seeks toprovide assurance to the operating divisions in TNBof its internalcontrolsystemstomanagerisksacrossthe Group. It also offers independent challenge tothe divisions to ensure that the principles andrequirements of managing risks are consistentlyadopted. In the year under review, four divisionswere reviewed. These compliance and reviewexercises are an on-going initiative in theimplementationof riskmanagement throughout theGroup.
223TENAGA NASIONAL BERHADANNUAL REPORT 2010
STaTemeNT oFiNTerNaLCoNTroL
board reSpoNSibiLiTy
TheBoardofDirectors(“Board”) isresponsiblefor TNB’s Group (“the Group”) system ofinternal control. The system is designed tomeet the Group’s business objectives andsafeguard shareholders’ investments, theinterest of customers, regulators andemployees, and the Group’s assets. Theinternal control system covers the areas ofrisk management, finance, operations,management information systems andcompliance with the relevant laws andregulations.Thesystemprovidesa reasonablebutnotanabsoluteassuranceagainstmaterialmisstatement, loss or fraud.
The Board has established a framework foridentifying, evaluating and managing thesignificant risks faced by the Group. Theframework and risk management processesare reviewedat regular intervalsby theBoardand is in accordance with the Statement onInternal Control: Guidance for Directors ofPublic ListedCompanies.
riSk maNagemeNT
AnEnterpriseWideRiskManagement(EWRM)System has been approved by the Board andimplementedbytheGroupto identify,assess,treat, report and monitor strategic andoperational risks faced by the Group. TheBoard Audit Committee (BAC) reviews theeffectiveness of the system and the reportsarising from risk management activitiesundertaken during the year. The BAC isassisted by the Group Risk ManagementCommittee, Chief Risk Officer, PlanningDivision, EWRM Department and operationsstaff involved in the risk managementprocesses. Review of the EWRM systems isundertaken by EWRM together with GroupInternal Audit (GIA) on the operating entitiesto provide assurance on the adequacy and
effectiveness of the system in mitigating andcontrolling the risks faced by the Group. Theprocesses in place enable the system to berefined and enhanced to meet the challengesand needs of the Group. During the year, thefollowing initiatives were undertaken toenhance risk management processes in theGroup:
• Enhanced TNB’s Risk Information System(TRIS) to improve its usefulness inmanaging risks.
• Conducted a risk competency survey toassess the understanding and awarenessof Risk Managers, Risk Coordinators andRiskOwners.
• Established a Risk Management &Compliance Unit in EWRM Department toprovideassuranceontheadequacyofTRISand the completeness of information inmanagingandmitigating risks.
CoNTroL STruCTureS
The Board has established control structuresand is committed to evaluate, enhance andmaintain them to ensure effective strategicand operational controls over the Group’sbusinessoperations.Thefollowingkeyinternalcontrol structures are in place to assist theBoard to mainta in a proper contro lenvironment:
board and management Committees
Initseffortstopromotecorporategovernance,transparency and accountability, the BoardhassetupBoardandManagementCommitteesto assist them to accomplish the vision,mission, strategies and objectives set for theGroup. The Committees oversee the areasassigned to them under their Terms ofReference.TheCommitteesplayan importantrole to direct, monitor and ensure that theplans and operations are in accordance with
224 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
the Group’s approved long term and short termbusiness plans, and the policies of the Group. TheCommittees are:
board Committees
• AuditCommittee
• TenderCommittee
• DisciplinaryCommittee
• Nomination&RemunerationCommittee
• Finance& InvestmentCommittee
management Committees
• GroupExecutiveCouncil Committee
• GroupExecutiveManagementCommittee
• Energy SupplyCommittee
• GroupManagement TenderCommittees
• GroupRiskManagementCommittee
• Fuel Procurement ExecutiveCommittee
organisation Structure
TheBoardhas implementedadivisionalstructurefortheGroup.Clear linesofauthority, responsibilityandaccountability have been established to enable theGroup’s vision, mission, strategies and operationalobjectives to be achieved. The divisional structureenhancestheabilityofeachdivisiontofocusontheirassigned core or support functions within theGroup.
The Board also reviews and refines the effectivenessof theGroup’sorganisationandcontrol structures toenhance theGroup’sability toachieve their strategicandoperationalobjectivesandmanagechallenges initsoperatingenvironment.Inordertofurtherenhanceaccountability,thereportinglineforthecoredivisionsanda subsidiarywas changed, as follows:
• TheCoreDivisions (Generation, TransmissionandDistribution) and TNB Research Sdn. Bhd. reportto the ExecutiveDirector/ChiefOperatingOfficer.This was after the creation of the ExecutiveDirector/ChiefOperatingOfficerposition.
• The Company Secretary and Legal ServicesDepartment report to the President/ChiefExecutiveOfficer.
• The Corporate Communication and Government/Regulatory Management Departments report totheVice PresidentCorporateAffairsDivision.
management information Systems
The Board recognises the importance of leveragingon information and communication technology toassist in providing effective and efficient businessoperations, timely andaccurate communicationwithstakeholders,andenhancingtheGroup’sperformancein the long term. The major systems used by theGroupare:
• EnterpriseResourceManagement System (ERMS)
• eCustomer Information&Billing System (eCIBS)
• EnterpriseHumanResourceManagement System(EHRMS)
• Supervisory Control and Data Acquisition System(SCADA)
• RemoteMeter System (RMR)
• ElectronicBanking Facilities
• TNBRisk Information System (TRIS)
• Electronic Document Management System(EDMS)
TheAssetRegisterModuleoftheCorporateGeospatialInformationSystem(CGIS)was rolledouton28April2010. The other CGIS modules are expected to beimplemented over a period of 10 years. Additionally,the Distribution Network Information Management(DNIM)will bepart of theCGIS.
group policies and procedures
The Board has approved policies and procedures togovern the financial and operational functions, andethicsoftheGroup.Theobjectivesofthepoliciesareto ensure that ethics, and internal control principlesand mechanisms are embedded in operations. Thisenables the Group to respond quickly to evolvingrisks and immediately report on any significantcontrol failure. The policies and procedures are also
225TENAGA NASIONAL BERHADANNUAL REPORT 2010
STaTemeNT oFiNTerNaLCoNTroL (CoNT’d)
reviewed on a regular basis to ensure relevance andeffectiveness. Amongst others, the policies andprocedures implementedare:
• InternalControlGuidelines
• Group Financial Policies&Procedures
• Treasury Policy
• Safety&Health Policy
• Environmental Policy
• Investment Policy
• Procurement Policy&Procedures
• Anti FraudPolicy
• Disciplinary Policy&Procedures
• Information& Communication Policy& Codes ofPractice
• Enterprise Wide Risk Management Policy &Guidelines
• Limits ofAuthority
• Codeof Ethics
• ProcurementCodeofConduct
• WhistleBlowingProcedures
During the year, Group Procurement Division hadissued several Procurement guidelines to enhanceinternal control systemsandprovideguidance to thestaff. Additionally, a Supplier Handbook was issuedinMay2010asareferenceandguidelineforsuppliersonmatters relating toprocurement.
revenue maximisation department
The roles of the Department are to further curb thetheftofelectricity(TOE)activitiesandcurtailrevenueleakages from billing, metering and administrativeerrors.TheDepartmentisalsoresponsibletoimproveTOE internal controlmechanismsandensureprocesscompliance.
moNiToriNg & review
board interactions with management via breakout Sessions
TheBoardinteractsactivelywithmanagementduringbreakout sessions to discuss and review the plans,strategies,performanceandrisksfacedbytheGroup.During the year, one (1) Board Breakout and one (1)BAC Breakout sessions were held. These sessionsprovide a monitoring and review mechanism toenhance the Board’s effectiveness and enablesmanagement to seek mandates to address the risksfaced in its internal andexternal environment.
business planning & budgeting
TheBoardhasapprovedthe implementationofa20-Year Strategic Plan. Business plans, budgets and KeyPerformance Indicators (KPI) are aligned to theStrategic Plan. These serve as guides to theachievement of the Group’s vision of becomingamongtheleadingcorporationsinenergyandrelatedbusiness globally.
Strategies identified in the Strategic Plan, 5-YearBusiness Plans and Annual Operation Plans and KPIsare reviewed, approved and monitored by the Boardand management. Revisions are made based onchanges in business and operating environments.Feedback from the Board during breakout sessionswith them is used to develop the5-Year andAnnualOperatingPlans.
The 5-Year Business Plan andAnnualOperating Planalso contain the budget of the Group, to enable theGrouptodirectitsresourcestowardtheachievementof itsfinancialobjectives.Thebudget ismonitoredatregularlyintervalsbymanagementtoensureeffectivebudgetutilisation.
Long Term System planning and development
The Planning Division carries out long term systemplanning and development of the electricity supplyinfrastructure for TNB to cater for load demand. Thelongtermforecastsare reviewed inconjunctionwiththe changes in the economic climate as well asensure close monitoring and response to the load
226 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
demand situation. On the supply side, generationexpansion plans are formulated for PeninsularMalaysia taking into account the long term energysecurity vis-à-vis the diversification of fuel resources,generation plan type and global energy outlookscenarios.Additionally,thetransmissiondevelopmentplans are reviewed and assessed according toeconomic conditions.
Financial and operational review
TheBoardAuditCommittee(BAC)reviewstheGroup’squarterly financial performance together withmanagement, and these are subsequently reportedto the Board. The quarterly reviews enable the BACtodeliberateandassess theGroup’sfinancial resultsand operational performance. Monthly managementaccounts which serve as a monitoring tool, are alsocirculatedtotheBoardandkeymanagementstafftoprovide information on key financial results,operationalperformance indicators,budgetvariancesto enable them to monitor and contribute towardsimprovingperformance.
group internal audit (gia)
The Group Internal Audit Department (GIA) was setup by the Board to provide independent assuranceontheadequacyofriskmanagement,internalcontroland governance systems. GIA carries out regularreviews on the business processes to assess theadequacy and effectiveness of internal controls,compliancewith regulationsandtheGroup’spoliciesand procedures, and highlight significant risksaffecting theGroup.
GIA scope of coverage includes generation,transmission, distribution, projects, procurement,engineering, finance, human resources, corporateservices,informationandcommunicationtechnology,investment in subsidiaries, risk management andcompliance.
BAC meetings are held regularly to deliberate auditfindings, management response, corrective actions,andmonitoringof actions takenbymanagement forareaswithsignificantorhighrisks.A followupauditwill be conducted to review the adequacy andeffectiveness of corrective actions taken bymanagement on all significant matters raised. AcertainpercentageofKeyPerformanceIndicator(KPI)isallocatedtoeachDivision’sHeadforcompletionofagreed correctiveactions takenbymanagement.TheachievementofthecorrectiveactionsbyeachDivisionwill alsobedeliberatedduring theBACmeeting.
GIA has an independent status in the Group andreports functionally to the Board through the BAC.GIA annual audit plans, budgets, competency andresources are reviewed and approved by the BAC.Thisistoenablereviewontheadequacyofcoverage,resources available and coverage of significant andhigh risk areas. The review also helps to confirm theaudits that are to be co-sourced and outsourced tofacilitatetransferofknowledgefromconsultantsandcoverage by external party in areas where technicalskills arenot available inGIA.
CoNCLuSioN
Forthefinancialyearunderreview,someweaknessesin internalcontrolweredetected.However,afterdueand careful inquiry and based on the informationand assurance provided, the Board is satisfied thatthere were no material losses as a result ofweaknesses in the system of internal control, thatwouldrequireseparatedisclosureinTenagaNasionalBerhad’s Annual Report. Nevertheless, for areasrequiring attention, measures have been and arebeing taken to ensure ongoing adequacy andeffectiveness of internal controls and to safeguardshareholders’ investments and theGroup’s assets.
This statement is made in accordance with theresolutionoftheBoardofDirectorsdated28October2010.
227TENAGA NASIONAL BERHADANNUAL REPORT 2010
boardaudiT CommiTTeereporT
memberShip aNd meeTiNgS
TheBoardAuditCommittee (BAC)membersand thenumberofmeetingswhich theyattendedduring thefinancial yearareas follows:
No. NameSTaTuS oF direCTorShip iNdepeNdeNT
No. oF meeTiNgS aTTeNded
1. Dato’ ZainalAbidinBin Putih(AppointedasChairmanw.e.f 1.10.10)
Non-ExecutiveDirector Yes 15/15
2. Dato’MohammadZainal Bin Shaari Non-ExecutiveDirector No 10/15
3. TanSriDato’HariNarayanana/lGovindasamy Non-ExecutiveDirector Yes 15/15
4. Dato’AbdManafBinHashim(Appointedw.e.f 1.2.2010)
Non-ExecutiveDirector Yes 10/10
5. TanSriDato’ LauYin Pin@ LauYenBeng(Resignedw.e.f 15.9.2010) (Not in thepicture)
Non-ExecutiveDirector Yes 15/15
The bac WaS eSTablIShed ON 9 december 1990 by The bOard Of dIrecTOrS, TO aSSIST Them TO carry OuT TheIr reSpONSIbIlITIeS. The bac IS guIded by TheIr TermS Of refereNce WhIch IS SeT OuT IN pageS 233 TO 237 Of The aNNual repOrT.
228 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
According to the BAC’s Terms of Reference, theCommittee shall convene meetings as and whenrequired,andatleastsix(6)timesduringthefinancialyear. TheCommitteemetfifteen (15) times.
The Chief Internal Auditor and Company Secretarywho is also the secretary to the BAC were inattendanceduring themeetings.ThePresident/ChiefExecutive Officer, and officers of the company werealso invited to attend the meetings on the mattersrequiring their attentionand feedback.
The BAC Chairman submits a report on mattersdeliberated to the Board of Directors after each BACmeeting.
ChaNgeS iN board audiT CommiTTee memberS
The BAC Chairman, Tan Sri Dato’ Lau Yin Pin @ LauYen Beng resigned with effect from 15 September2010. The new BAC Chairman, Dato’ Zainal AbidinBin Putih was appointed with effect from 1 October2010.
Summary oF aCTiviTieS oF The board audiT CommiTTee
A summary of the activities performed by the BACduring thefinancial year is set outbelow.
risk management
• Reviewed the TNB Strategic Risk AssessmentReport and the Group’s Bi-annual Strategic andOperating Risk Profiles, and the activitiesundertaken by the Enterprise Wide RiskManagement Department to promote andimprove risk management awareness andprocesses.
internal audit
• Reviewed and approved Group Internal Audit(GIA)’s Budget and Annual Audit Plan to ensureadequacyofresources,competenciesandcoverageon auditable entities with significant and highrisks.
• ReviewedinternalauditreportsissuedbyGIAandexternalpartiesontheeffectivenessandadequacyofgovernance,riskmanagement,operationalandcomplianceprocesses.
• Reviewed the adequacy and effectiveness ofcorrective actions taken by management on allsignificantmatters raised.
• Deliberated the results of ad-hoc investigationsperformedandconfirmedthatappropriateactionsare taken to correct theweaknesses.
• DeliberatedandapprovedGIA’sQualityAssuranceand Improvement Program (QAIP).
• Assessed the performance of the Group InternalAuditDepartment.
• ConductedthesecondBACBreakoutSessionwithSenior Management to improve internal controlawareness, highlight staff responsibilities oninternal controls and actions required to addresscommonand recurringauditfindings.
• ReviewedtheKeyPerformanceIndicatorsachievedby Division Heads on undertaking correctiveactions.
external audit
• Reviewed and approved the External Audit Planand the scope for the annual audit.
• Deliberatedandreportedtheresultsoftheannualaudit to theBoardofDirectors.
• Recommended to the Board of Directors theappointment and remuneration of the GroupExternalAuditor.
• MetwiththeGroupExternalAuditorwithout thepresence of management to discuss any mattersthat theymaywish topresent.
Financial results
• Reviewed the Quarterly and Annual Financialstatements of the Company andGroup includingannouncements, and recommended them to theBoard for their approval.
229TENAGA NASIONAL BERHADANNUAL REPORT 2010
boardaudiT CommiTTeereporT (CoNT’d)
related party Transactions
• Reviewed the system for identifying, monitoringand disclosing related party transactions for TNBand its subsidiaries.
annual reporting
• Reviewed and recommended the Statement onCorporate Governance, Statement on InternalControl,BoardAuditCommitteeReport,StatementOn Internal Audit Function, Report on RelatedParty Transactions and Recurrent Related PartyTransactions and Corporate Social ResponsibilityReport, to theBoard for approval.
others
• Deliberated on the results of TNB’s Management& Engineering Audit 2008 which was conductedby an external consultant. Management actionsrequiredwere also reviewed.
• Reviewedand verified that the allocationoptionsgranted under the Employees’ Share OptionScheme (ESOS) during the Financial Year were inaccordance to the required provisions set outunder theCompany’s Scheme.
• Visited a distribution state office and a powerstation to enhance awareness of operations andprovided feedback to management on areasrequiring improvement.
group iNTerNaL audiT
The internal audit function of the Group is carriedout by the GIA Department. GIA is independent andreportsdirectly to theBAC.
GIA provides independent, objective assurance onareas of operations reviewed, and advice on bestpractices that will improve and add value to theGroup.
A systematic and disciplined approach is adopted toevaluate adequacy and effectiveness of thegovernance, risk management, financial, operational,compliance processes. Internal audit activities arealigned to the strategic plan/objectives of the
company. A risk-based methodology is adopted toensurethattherelevantcontrolsaddressingrisksarereviewed regularly.
During the financial year, a total of 168 reportscovering 483 assignments were issued. The areas ofcoverage includes generation, transmission,distribution, procurement, engineering, projects,finance, corporate governance, human resource,logistics,informationandcommunicationtechnology,investments in subsidiaries and riskmanagement.
Thereportsissuedprovideindependentandobjectiveassessmentof the following:
• Existence, effectiveness and adequacy of theinternal control systems to manage operationsand safeguard theGroup’s assets.
• Adequacy and effect iveness of the r iskmanagement operations, governance andcompliance functions to manage and anticipatepotential risks over keybusinessprocesses.
The internal audit reports arising from theassignments were issued to management for theirresponse,correctiveactionsandprovisionofdeadlinesto complete the relevant preventive and correctiveactions. The reportswere subsequently tabled to theBAC for their deliberation. Management staff waspresent during the deliberation of the reports toensure that they undertake the responsibility ofcarryingoutpreventiveand correctiveactionson theweaknesses reported.
During the year, GIA seconded a staff to set up RiskComplianceUnitatEnterpriseWideRiskManagementDepartmentandalsoassistedcertainDivisionstosetup theirComplianceDepartment/Unit.
daTo’ ZaiNaL abidiN biN puTihChairmanBoardAuditCommitteeTenagaNasionalBerhad(Senior IndependentNon-ExecutiveDirector)
230 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
STaTemeNT oNiNTerNaL audiT
FuNCTioN
The internal audit functionof the company iscarried out by the Group Internal AuditDepartment (GIA). GIA was established tosupport the Board, through the Board AuditCommittee to discharge their responsibilitiesof maintaining a sound system of internalcontroltosafeguardshareholders’investment,the interest of stakeholders and the Group’sassets.
GIA reports functionally to the Board AuditCommittee and administratively to the ChiefExecutive Officer. GIA authority, scope andresponsibilities are governed by a GroupInternal Audit Charter that was revised andapproved by the Board Audit Committee in2007.
GIA’s mission is to provide objective andindependent assuranceof theGroup’s systemof internal control, through the following:
• Preparing and implementing a risk basedstrategic annual audit plan which coversthe auditable ent i t ies within theorganisation.
• Reviewing the adequacy and effectivenessof governance, risk management andcontrolprocessesestablishedbytheGrouptomanage its risks andoperations.
• Reporting internalcontrolweaknessesandrecommending preventive/correctiveactions to improve operations, enableaccurate reporting, safeguard assets andpromote the economic utilisation ofresources.
• Monitoring the implementation ofcorrective actions to ascertain theiradequacy and ability of the auditableentities to strengthen internal controls intheir areaof operations.
The internal audit function is structured intocore and non-core units. The areas of auditcoverageincludesthefunctionsofgovernance,risk management and review of controls inthe areas of generation, transmission,d i s t r ibut ion , p rocurement , p ro jec ts ,engineering, accounting & finance, humanresource, information & communicationtechnologyand investment in subsidiaries.
During the Financial Year, GIA issued 168reports arising from the performance of 220planned jobs, 10 ad hoc jobs and 253 followup audits on corrective actions. Out of the220 planned jobs, 2 were co-sourced withexternalconsultants.Therestwereperformedin-house by GIA. The co-sourced jobs were inthe area of information and communicationtechnology. The co-sourcing of assignmentsenabled GIA to build up their skills andcompetencies in the area co-sourced.Additionally, GIA successfully coordinatedManagement & Engineering (M&E) Audit2008forTNBandassistedsubsidiariesintheirM&Eaudits.
GIA is staffed by a total of 94 auditors. Theauditors comprise staff with backgrounds inengineering, finance, business, accounting,information and communication technologyandquantity surveying.
TheoverallcostspentbyGIA inFinancialYear2009/2010 isRM15.3million,where56%wasfor staff relatedcosts,2% for co-sourcing feesto consultants and23% forM&Eaudit fees.
231TENAGA NASIONAL BERHADANNUAL REPORT 2010
STaTemeNT oNiNTerNaL audiTFuNCTioN (CoNT’d)
Training courses are provided to GIA staff in theareas of auditing skills, technical skills, personaldevelopment and also English language courses. Thetotal training costs for Financial Year 2009/2010 isRM100 thousand. Apart from training courses, staffareencouragedtobecomeCertified InternalAuditors(CIA). They are provided with incentives such asallowances and reimbursement of examination andregistrationfeeswhentheypasstheCIAexaminations.During the year, one (1) staff has successfullycompleted the examination and is certified.Additionally, a total of 16 staff are pursuing the CIAqualification at various levels. Additionally, GIA wonthe2010CorporateAward–Tier4,Category1for itsstrong commitment to Continuous ProfessionalDevelopment for the period of January 2009 toDecember2009fromtheInstituteofInternalAuditorsMalaysia.
The initiatives/improvements carried out by GIAduring the Financial Year include the following:
• Implementation of a Quality Assurance &Improvement Plan which was approved by theBoardAuditCommittee.
• IdentificationofinternalcontrolelementsapplyingtheCommitteeofSponsoringOrganisation(COSO)Framework for planned audits to assistManagement to identify and improve controls.
• Enhancement of internal auditing and internalcontrol awareness through BAC Breakout andsessionswithManagement.
• Mentored and trained staff from TNB’s talentpool and high performers to enable them tounderstand and enhance their knowledge onsystems, processes and controls.
• Seconded a staff to set up Risk Compliance UnitatEnterpriseWideRiskManagementDepartmentandalso assisted certainDivisions to setup theirComplianceDepartment/Unit.
GIAiscommittedtoprovideobjectiveandindependentassurance aswell as provide value added services toour customers in accordance with the InternationalProfessional Practices Framework on internalauditing.
daTo’ ZaiNaL abidiN biN puTihChairmanBoardAuditCommitteeTenagaNasionalBerhad(Senior IndependentNon-ExecutiveDirector)
232 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
TermS oF reFereNCe oFThe board audiT
CommiTTee
1. CoNSTiTuTioN
1.1 The Board of Directors of Tenaga Nasional Berhad(TNB), in accordance with Article 146 of theMemorandum and Articles of Association of TNB,has established a Committee of the Board, knownas the Board Audit Committee (BAC), vide MinuteNo. 39/90on9October1990.
1.2 The function and authority of the BAC extends toTNB and all its subsidiaries, joint ventures andassociates where management responsibility isvested to TNB or subsidiaries of TNB (Collectivelyreferred to as the “Group”).
2. CompoSiTioN oF The CommiTTee
2.1 Themembers of the BAC shall be appointed by theBoard of Directors of TNB and shall consist of notlessthanthree(3)members.Alltheauditcommitteemembersmustbenon-executivedirectors,with themajorityofwhomshallbeindependentinaccordancewith the definition in Bursa Malaysia ListingRequirements.
2.2 Where the members for any reason are reduced toless than three (3), thatBoard shallwithin three (3)months of the event, appoint such number of newmembers as may be required to make up theminimumnumberof three (3)members.
2.3 At least one (1) member of the Committee mustmeet the criteria set by the Bursa Malaysia ListingRequirements, i.e.:
i) must be a member of the Malaysian InstituteofAccountants or
ii) if he/she is not a member of the MalaysianInstituteofAccountants,hemusthaveat least3 years’working experience, and:-
a) he/shemusthavepassedtheexaminationsspecified in Part 1 of the 1st Schedule oftheAccountantsAct 1967; or
b) he/she must be a member of one of theassociations of accountants specified inPart I I of the 1st Schedule of theAccountantsAct 1967.
2.4 TheBoardshallelectaChairmanfromtheCommitteewho shall be an independent director as set out intheBursaMalaysia ListingRequirements.
2.5 ThetermofofficeandperformanceoftheCommitteeshallbereviewedbytheBoardtodeterminewhetherthe Committee has carried out its duties inaccordancewith their termsof reference.
2.6 No alternate Directors shall be appointed to theBAC.
3. ChairmaN oF The CommiTTee
3.1 Thefollowingarethemaindutiesandresponsibilitiesof theChairmanof theCommittee:
3.1.1 to steer the Committee to achieve itsobjectives;
3.1.2 to provide leadership to the Committee andensure proper flow of information to theCommittee, review adequacy and timing ofdocumentation;
3.1.3 to provide a reasonable time for discussionat the Committee meetings. Organise andpresent the agenda for Committeemeetingsbased on input from Members and ensurethatall relevant issuesareon theagenda. Inaddition, the Chairman should encourage ah e a l t h y l e v e l o f s k e p t i c i s m a n dindependence;
3.1.4 toensurethatconsensus is reachedoneveryCommittee resolution and where considerednecessary, call for a vote and the decisionwill be made by simple majority. Dissentingopinions shouldbe captured;
3.1.5 to manage the process and working of theCommittee and ensure that the Committeedischarges its responsibilities;
3.1.6 toensurethatallmembersparticipateinthediscussiontoenableeffectivedecisionstobemade; and
233TENAGA NASIONAL BERHADANNUAL REPORT 2010
TermS oF reFereNCe oFThe board audiTCommiTTee (CoNT’d)
3.1.7 the Chairman of the BAC shall be availableto answer questions about the Committee’swork at the Annual General Meeting of theCompany.
4. CommiTTee memberS
4.1 EachCommitteeMember is expected to:
4.1.1 provide independent opinions to the fact-finding,analysisanddecisionmakingprocessof theCommittee,basedon their experienceand knowledge;
4.1.2 consider viewpoints of the other committeemembers ; and make dec i s ions andrecommendationsforthebestinterestoftheGroup;
4.1.3 keep abreast of the latest corporategovernance guidelines in relation to theCommittee and theBoardas awhole; and
4.1.4 continuouslyseekoutbestpractices intermsof the processes utilised by the Committee,following which these should be discussedwith the rest of the Committee for possibleadoption.
5. obJeCTiveS oF The CommiTTee
Theobjectivesof theCommittee are:
5.1 to ensure transparency, integrity and accountabilityin the Group’s activities so as to safeguard therights and interests of the shareholders;
5.2 to provide assistance to the Board in fulfilling itsfiduciary responsibilities relating to corporateaccountingand reportingpractices;
5.3 to improve the Group’s business efficiency, thequality of the accounting and audit function andstrengthening public confidence in the Group’sreportedfinancial results;
5.4 to maintain, through regularly scheduled meetings,a direct line of communication between the Boardand the External and InternalAuditors;
5.5 to ensure the independence of the external andinternal audit functions; and
5.6 to create a climate of discipline and control whichwill reduce theopportunity for fraud.
6. auThoriTy oF The CommiTTee
TheCommittee is authorisedby theBoard to:
6.1 investigateanyactivitywithinitsTermsofReference;or asdirectedby theBoardofDirectors;
6.2 determine and obtain the resources required toperform its duties, including approving the budgetfor the external and internal audit functions;
6.3 have full and unrestricted access to all employees,the Group’s properties and works, to all books,accounts, records and other information of theGroup inwhatever form;
6.4 have direct communication channels with externalauditors and person(s) carrying out the internalaudit functionor activity for theGroup;
6.5 direct the InternalAudit Function in theGroup;
6.6 approve the appointment of the Head of InternalAudit;
6.7 engage independent advisers and to secure theattendance of outsiders with relevant experienceandexpertise if it considers thisnecessary; and
6.8 to review the adequacy of the structure and TermsofReferenceoftheBoardCommittees,includingtheBAC.
234 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
7. FuNCTioNS oF The CommiTTee
The functions and responsibilities are as follows:
7.1 Corporate Financial Reporting
7.1.1 To review and recommend acceptance orotherwise of accounting policies, principlesandpractices.
7.1.2 To review the quarterly results and annualfinancial statements of the Company andGroup before submission to the Board. Thereview should focusprimarily on:
i. a n y c h a n g e s i n e x i s t i n g o rimplementation of new accountingpolicies;
ii. major judgment areas, significant andunusual events;
iii. significant adjustments resulting fromaudit;
iv. thegoing concernassumptions;
v. compliance with accounting standards;and
vi. compliance with Bursa Malaysia ListingRequirements and other legal andstatutory requirements.
7.1.3 Toreviewwithmanagementandtheexternalauditors the results of the audit, includinganydifficulties encountered.
7.1.4 Toreviewandverifytheallocationofschemeoptions pursuant to the Company’sEmployees’ Share Option Scheme (ESOS) inaccordance to the Bursa Securities ListingRequirements as to provide a statement byaudit committee in the annual report.
7.2 EnterpriseWideRiskManagement
7.2.1 To review the adequacy of and to provideindependent assurance to the Board of theeffectiveness of risk management functionsin the TNBGroup.
7.2.2 Toensurethattheprinciplesandrequirementsof managing risk are consistently adoptedthroughout the TNBGroup.
7.2.3 Todeliberateonthekeyriskissueshighlightedby Group Risk Management Committee intheir reports toBAC.
7.3 InternalControl
7.3.1 Toassessthequalityandeffectivenessofthesystemsof internalcontrolandtheefficiencyof theGroup’s operations.
7.3.2 To review the findings on internal control intheGroupby internal andexternal auditors.
7.3.3 To review and approve the Statement onInternal Control for the Annual Report asrequired under Bursa Malaysia ListingRequirements.
7.4 InternalAudit
7.4.1 To approve the Corporate Audit Charter ofthe internal audit function in theGroup.
7.4.2 To ensure that the internal audit functionhas appropriate standing in the Group andhave the necessary authority, resources andcompetency to carry out their work. Thisincludes a review of the organisationals t ru c tu re , r e sou r ce s , budge t s andqual i f icat ions of the internal auditpersonnel.
7.4.3 To review internal audit reports andmanagement’sresponseandactionstakeninrespectofthese.Whereactionsarenottakenw i th in an adequate t imef rame bymanagement, theBACwill report thematterto theBoard.
7.4.4 To review the adequacy of internal auditplans and the scope of audits, and ensurethat the internal audit functions are carriedoutwithout anyhindrance.
7.4.5 To appraise the performance of Head ofInternalAudit.
7.4.6 Tobe informedof resignationsand transfersof senior internal audit staff and provideresigning/transferred staff an opportunity toexpress their views.
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TermS oF reFereNCe oFThe board audiTCommiTTee (CoNT’d)
7.4.7 To direct any special investigation to becarriedoutby InternalAudit.
7.4.8 To review and approve the Statement onInternalAudit Function requiredunderBursaMalaysia ListingRequirements.
7.5 ExternalAudit
7.5.1 To nominate the External Auditors togetherwith such other functions as may be agreedtobytheBoardandrecommendforapprovalof the Board the external audit fee, andconsider any questions of resignation ortermination.
7.5.2 To review external audit reports andmanagement’sresponseandactionstakeninrespectofthese.Whereactionsarenottakenw i th in an adequate t imef rame bymanagement, theBACwill report thematterto theBoard.
7.5.3 To review external audit plans and scope ofwork.
7.5.4 TheBACshallmeettheexternalandinternalauditors or both at least twice a year todiscuss problems and reservations arisingout of audits and any matters the auditorsmay wish to discuss, in the absence ofmanagement, Executive Directors or non-independentDirectorswherenecessary.
7.6 CorporateGovernance
7.6.1 Toreviewtheeffectivenessofthesystemformonitoring compliance with laws andregulationsandtheresultsofmanagement’sinvestigation and follow up (includingdisciplinary action) of any instances of non-compliance.
7.6.2 To review the findings of any examinationsby regulatory authorities.
7.6.3 To review any related party transaction andconflict of interest situation that may arisewithin the Group including any transaction,procedure or course of conduct that raisesquestionsof integrity.
7.6.4 To review and approve the Statement ofCorporateGovernance for theAnnual Reportas required under Bursa Malaysia ListingRequirements.
7.6.5 To review the investor relations programmeand shareholder communications policy forthe company.
7.6.6 To examine instances and matters that mayhavecompromisedtheprinciplesofcorporategovernanceand report back to theBoard.
7.6.7 To develop and regularly review TNB’s Codeof Corporate Governance and BusinessEthics.
7.6.8 Where the BAC is of the view that a matterreported by it to the Board has not beensatisfactorily resolved, resulting in a breachof Bursa Malaysia Listing Requirements, theBAC must promptly report such matters toBursaMalaysia.
8. CommiTTee meeTiNgS
8.1 The Committee shall convene meetings as andwhen required,andat least six (6) timesduring thefinancial year of TNB.
8.2 ThenumberofCommitteemeetingsheldayearandthedetailsofattendanceofeachindividualmemberin respect of meetings held should be disclosed inthe annual report.
8.3 TheChairmanoftheCommittee,ortheSecretaryontherequisitionofanymember, theHeadof InternalAudit or the External Auditors, shall at any timesummon a meeting of the Committee by givingreasonable notice. It shall not be necessary to givenotice of a Committee meeting to any member forthe timebeingabsent fromMalaysia.
8.4 No business shall be transacted at any meeting ofthe Committee unless a quorum is present. Thequorum for each meeting shall be three (3)members.
236 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
8.5 The Chairman of the Committee shall chair theCommittee meetings and in his absence, thememberspresentshallelectoneamongstthemselvestobe theChairmanof themeeting.
8.6 In appropriate circumstances, the Committee maydeal with matters by way of circular reports andresolution in lieuof conveninga formalmeeting.
8.7 Officersof theGrouporothersasnecessarymaybeinvited to attend meetings where the Committeeconsiders their presencenecessary.
8.8 All recommendations of the Committee shall besubmitted to theBoard for approval.
8.9 A Committee member shall excuse himself/herselffromthemeetingduringdiscussionsordeliberationsof any matter which gives rise to an actual orperceived conflict of interest situation for themember.Where this causes insufficientDirectors tomakeupaquorum, theCommitteehas the right toappoint another Director(s), which meets themembership criteria.
8.10The Committee, through its Chairman, shall reportto theBoardafter eachmeeting.
8.11Subject to theprovisionsof thisTermsofReferenceand Memorandum and Articles of Association ofTNB, the Committee shall establish its ownprocedures formeetings.
9. SeCreTary oF The CommiTTee
9.1 The Secretary of the Committee shall be theCompanySecretary.
9.2 The Secretary shall draw up an agenda for eachmeeting, in consultation with the Chairman of theCommittee.TheAgendashallbesenttoallmembersof theCommitteeandtheHeadof InternalAuditatleast three (3) working days before each meetingtogetherwith the relevantpapers.
9.3 The Secretary shall promptly prepare the writtenminutes of the meeting and distribute it to eachmember. The minutes of the Committee meetingshall be confirmed and signed by the Chairman ofthemeetingat thenext succeedingmeeting.
9.4 The minutes of each meeting shall be entered intothe minutes book kept at the registered office ofthe Company under the custody of the CompanySecretary. The minutes shall be available forinspection by the members of the Board, externalauditors, internal auditors, and other personsdeemedappropriateby theCompanySecretary.
10. diSCLoSure
10.1The Committee shall assist the Board in makingdisclosures concerning the activities of theCommittee, in the Report of the Board AuditCommittee, tobe issued in theAnnual Report.
10.2The Board requires all Directors to submit aDisclosure of Interest to avoid any conflict betweentheir personal interests and the interests of theCompany. Intheeventofaconflict,eitherperceivedor actual, this Disclosure of Interest shall besubmitted to the Chairman of the Committee witha copy to theCompanySecretary.
11. reviSioN oF The TermS oF reFereNCe
11.1Any revision or amendment to the Terms ofReference, as proposed by the Committee or anythird party, shall be presented to the Board for itsapproval.
11.2Upon the Board’s approval, the said revision oramendment shall form part of this Terms ofReference and this Terms of Reference shall beconsideredduly revisedor amended.
237TENAGA NASIONAL BERHADANNUAL REPORT 2010
240 Directors’ Report
245 IncomeStatements
246 Balance Sheets
248 StatementofChanges in Equity
250 Cash FlowStatements
253 Notes to the Financial Statements
362 StatementbyDirectors
362 StatutoryDeclaration
363 IndependentAuditors’ Report
240 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
The Directors have pleasure in submitting their Report with the audited financial statements of the Group and the Companyfor thefinancial year ended31August2010.
priNCipaL aCTiviTieS
The Group and the Company are primarily involved in the business of the generation, transmission, distribution and sale ofelectricity and those tabulated inNote15 to thefinancial statements.
Therehavebeenno significant changes in these activitiesduring thefinancial yearunder review.
FiNaNCiaL reSuLTS
group Company rm’million rm’million
Profit for thefinancial year attributable to– Equityholders of theCompany 3,201.9 2,708.5–Minority interests (4.6) 0
Profit for thefinancial year 3,197.3 2,708.5
divideNdS
Thedividendspaidor declared since31August2009were as follows: rm’million
In respect of thefinancial year ended31August2009 as shown in theDirectors’ Report for thatfinancial year:Final dividendof 10.0 sengrossper ordinary share, less income tax at 25%and2.3 senper ordinary share, tax exempt, paidon24December2009 425.3
In respect of thefinancial year ended31August2010:Interimdividendof 6.0 sengrossper ordinary share, less income tax at 25%,paidon27May2010 195.5
For the financial year ended 31 August 2010, the Directors had on 28 October 2010 recommended the payment of a finaldividend of 20.0 sen gross per ordinary share, less income tax at 25% subject to the approval of the shareholders at theforthcomingAnnualGeneralMeetingof theCompany.
direCTorS’ reporT
241TENAGA NASIONAL BERHADANNUAL REPORT 2010
reServeS aNd proviSioNS
Allmaterial transfers toor from reserves andprovisionsduring thefinancial year are shown in thefinancial statements.
iSSue oF ShareS
During the financial year, 15,665,000 new ordinary shares of RM1.00 each were issued by the Company pursuant to theEmployees’ ShareOption Scheme II (‘ESOS II’) at exercise prices of RM6.71, RM6.99, RM7.42, RM7.33, RM6.33, RM5.57, RM6.35andRM7.18per share.
Thenewordinary shares issued during thefinancial year ranked pari passu in all respectswith the existing ordinary shares oftheCompany.
empLoyeeS’ Share opTioN SCheme (‘eSoS’)
OptionsundertheESOSweregrantedtoeligibleDirectors,employeesandretireesoftheGrouptosubscribeforordinarysharesof RM1.00each in TNB. Thefirst ESOSexpiredon11May2002.
The Company implemented a new Employees’ Share Option Scheme II (‘ESOS II’) on 8 July 2003 for a period of 10 years. TheESOS II is governed by the bye-laws, which were approved by the shareholders at the Extraordinary General Meeting (‘EGM’)heldon29May2003andamendedat the EGMheldon15December2005.
Themain featuresandmovementsduring thefinancial year in thenumberofoptionsover the sharesof theCompanyare setout inNote35 to thefinancial statements.
TheCompanyhasbeengrantedanexemptionbytheCompaniesCommissionofMalaysiaviaa letterdated27September2010fromhaving to disclose in this Report the name of the persons towhomoptions have been granted during the financial yearanddetailsoftheirholdingspursuanttoSection169(11)oftheCompaniesAct,1965exceptforinformationonemployeeswhoweregrantedoptions representing450,000ordinary shares andabove.
None of the Company’s and Group’s employees were granted options representing 450,000 ordinary shares and above underESOS II during thefinancial year.
242 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
direCTorS’ reporT(CoNT’d)
direCTorS
TheDirectorswhohaveheldofficeduring theperiod since thedateof the last Report are:TanSri LeoMoggieDato’ Sri CheKhalibbinMohamadNohDato’ PutehRukiahbintiAbdMajidDato’MohammadZainal bin ShaariTanSriDato’HariNarayanana/lGovindasamyDato’ ZainalAbidinbin PutihDato’ Fuadbin JaafarTanSriDato’ Seri SitiNormabinti YaakobSuriabintiAbRahman (AlternateDirector toDato’MohammadZainal bin Shaari. Appointedw.e.f. 30November2009)Dato’AbdManafbinHashim (Appointedw.e.f. 1 February2010)Dato’ Ir. AzmanbinMohd (Appointedw.e.f. 15April 2010)ChungHonCheong (Appointedw.e.f. 1October2010)TanSriDato’ LauYin Pin@ LauYenBeng (Resignedw.e.f. 15 September2010)
direCTorS’ beNeFiTS
During and at the endof thefinancial year, no arrangements subsisted towhich theCompany is a party, being arrangementswith theobjectorobjectsofenablingDirectorsof theCompany toacquirebenefitsbymeansof theacquisitionof shares inordebenturesoftheCompanyoranyotherbodycorporate,exceptfortheoptionsgrantedtothePresident/ChiefExecutiveOfficerandExecutiveDirector/ChiefOperatingOfficerpursuant to the ESOS II.
Sincetheendofthepreviousfinancialyear,noDirectorhasreceivedorbecomeentitledtoreceiveabenefit(otherthanbenefitsdisclosed as Directors’ remuneration and benefits in Note 5 to the financial statements) by reason of a contract made by theCompany or a related corporation with the Director or with a firm of which the Director is a partner, or with a company inwhich theDirectorhas a substantial financial interest.
direCTorS’ iNTereSTS iN ShareS aNd debeNTureS
According to the Register of Directors’ shareholdings, particulars of the interests of Directorswho held office as at the end ofthefinancial year in shares in theCompanyare as follows: Number of ordinary shares of rm1.00 each as at 1.9.2009/ appointment as at date acquired disposed 31.8.2010
Dato’ ZainalAbidinbin Putih 1,250 0 0 1,250Dato’ Fuadbin Jaafar 62,500 0 0 62,500TanSriDato’ Seri SitiNormabinti Yaakob 1,250 0 0 1,250Dato’ Ir. AzmanbinMohd (Appointedw.e.f. 15April 2010) 3,500 0 0 3,500
243TENAGA NASIONAL BERHADANNUAL REPORT 2010
direCTorS’ iNTereSTS iN ShareS aNd debeNTureS (CoNT’d)
options over ordinary shares of rm1.00 each as at 1.9.2009/ appointment as at date granted exercised 31.8.2010
Dato’ Sri CheKhalibbinMohamadNoh 1,095,000 180,000 0 1,275,000Dato’ Ir. AzmanbinMohd (Appointedw.e.f. 15April 2010) 475,000 0 0 475,000
According to theRegister ofDirectors, noneof theotherDirectorsheld anyoptionsover shares in theCompany.
No otherDirectors in office at the end of the financial year held any other interest in shares and debentures of the Companyand its related corporations.
STaTuTory iNFormaTioN oN The FiNaNCiaL STaTemeNTS
Before the income statements and balance sheets of the Group and of the Company were prepared, the Directors tookreasonable steps:
(a) toascertainthatproperactionhadbeentaken inrelationtothewritingoffofbaddebtsandthemakingofallowancefordoubtfuldebtsand satisfied themselves thatall knownbaddebtshadbeenwrittenoff and thatadequateallowancehadbeenmade for doubtful debts; and
(b) to ensure that any current assets, other thandebts,whichwereunlikely to be realised in the ordinary course of businesstheir values as shown in theaccounting recordsof theGroupandof theCompanyhadbeenwrittendown toanamountwhich theymightbe expected tobe realised.
At thedateof this Report, theDirectors arenot awareof any circumstances:
(a) which would render the amount written off for bad debts or the amount of the allowance for doubtful debts in thefinancial statementsof theGroupandof theCompany inadequate to any substantial extent; or
(b) whichwould render the values attributed to current assets in thefinancial statementsof theGroupandof theCompanymisleading; or
(c) whichhavearisenwhich renderadherence to theexistingmethodof valuationofassetsor liabilitiesof theGroupandoftheCompanymisleadingor inappropriate.
244 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
direCTorS’ reporT(CoNT’d)
STaTuTory iNFormaTioN oN The FiNaNCiaL STaTemeNTS (CoNT’d)
Nocontingentorother liabilityhasbecomeenforceableor is likely tobecomeenforceablewithin theperiodof twelvemonthsafter the end of the financial yearwhich, in the opinion of theDirectors,will ormay affect the ability of theGroup or of theCompany tomeet their obligationswhen they fall due.
At thedateof this Report, theredoesnot exist:
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year whichsecures the liability of anyotherperson; or
(b) any contingent liability of theGroupandof theCompanywhichhas arisen since the endof thefinancial year.
oTher STaTuTory iNFormaTioN
At the date of this Report, the Directors are not aware of any circumstances not otherwise dealt within this Report or thefinancial statementswhichwould render anyamount stated in thefinancial statementsmisleading.
In theopinionof theDirectors:
(a) theresultsoftheGroup’sandCompany’soperationsduringthefinancialyearwerenotsubstantiallyaffectedbyany item,transactionor eventof amaterial andunusualnature; and
(b) therehasnotarisen inthe intervalbetweentheendofthefinancialyearandthedateofthis reportany item,transactionor event of a material and unusual nature likely to affect substantially the results of the operations of the Group orCompany for thefinancial year inwhich this Report is prepared.
audiTorS
Theauditors, PricewaterhouseCoopers, have expressed theirwillingness to continue inoffice.
Signedonbehalf of theBoardofDirectors, in accordancewith their resolutiondated2November2010.
TaN Sri Leo moggie daTo’ Sri Che khaLib biN mohamad NohCHAIRMAN PRESIDENT/CHIEF EXECUTIVE OFFICER
245TENAGA NASIONAL BERHADANNUAL REPORT 2010
iNCome STaTemeNTS
For The FiNaNCiaL year eNded 31 auguST 2010
group Company
Note 2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Revenue 4 30,320.1 28,785.6 28,368.8 26,743.6
Operating expenses 5 (26,519.7) (25,443.9) (25,416.7) (24,250.5)Other operating income 7 382.3 357.2 350.5 590.7
Operatingprofit 4,182.7 3,698.9 3,302.6 3,083.8Foreignexchangegain/(loss) 8 656.0 (1,239.2) 606.9 (882.9)Shareof results of associates 44.6 33.1 0 0
Profitbeforefinance cost 4,883.3 2,492.8 3,909.5 2,200.9Finance income 209.7 177.1 356.6 308.3Finance cost 9 (1,070.9) (1,126.8) (757.6) (822.5)
Profitbefore taxationand zakat 4,022.1 1,543.1 3,508.5 1,686.7
Taxationand zakat 10 (824.8) (690.1) (800.0) (616.0)
Profit for thefinancial year 3,197.3 853.0 2,708.5 1,070.7
Attributable to:
Equityholders of theCompany 3,201.9 917.9 2,708.5 1,070.7Minority interests (4.6) (64.9) 0 0
Profit for thefinancial year 3,197.3 853.0 2,708.5 1,070.7
Sen SenEarningsper share – basic 11(a) 73.74 21.18 –diluted 11(b) 73.40 21.15
Dividendsper share: Sen Sen
Interimdividend (gross) 12 6.0 2.0Interimdividend (tax exempt) 12 0 2.0Final dividend (gross) 12 0 10.0Final dividend (tax exempt) 12 0 2.3Proposedfinal dividend (gross) 12 20.0 0
Thenotes set out onpages253 to361 forman integral part of thesefinancial statements.
246 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
baLaNCeSheeTSaS aT 31 auguST 2010
group Company
Note 2010 2009 2010 2009 rm’million RM’million rm’million RM’million
NoN-CurreNT aSSeTSProperty, plant andequipment 13 58,031.8 58,227.4 48,767.3 48,688.7Prepaidoperating leases 14 863.5 833.6 721.9 689.0Subsidiaries 15 0 0 3,978.9 3,978.9Jointly controlled entities 16 0 7.9 0 7.9Associates 17 296.4 297.3 161.3 166.3Investments 18 38.0 38.0 38.0 38.0Deferred tax assets 32 55.9 0 0 0Long term receivables 19 0 0 405.8 525.0
59,285.6 59,404.2 54,073.2 54,093.8
CurreNT aSSeTSNon-current assetsheld for sale 20 18.0 19.6 18.0 19.2Inventories 21 2,450.4 1,955.7 1,265.0 1,043.3Receivables, deposits and prepayments 22 3,881.4 3,774.1 2,199.4 2,494.6Current tax assets 15.2 15.4 0 0Amountsdue from subsidiaries 23 0 0 2,573.0 2,075.9Amountsdue fromassociates 5.7 9.2 5.3 4.2Short term investments 24 72.5 12.6 72.5 12.6Marketable securities 25 8.6 8.3 8.6 8.3Deposits, bankand cashbalances 26 8,343.7 6,163.9 6,456.6 5,189.8
14,795.5 11,958.8 12,598.4 10,847.9
CurreNT LiabiLiTieSPayables 27 5,596.9 5,604.0 3,759.6 3,952.6Amountsdue to subsidiaries 23 0 0 1,105.1 1,126.5Amountsdue to associates 623.6 294.0 623.6 294.0Current tax liabilities 317.6 206.9 306.6 193.9Short termborrowings 28 3,162.7 1,157.9 2,531.8 401.8
9,700.8 7,262.8 8,326.7 5,968.8
NeT CurreNT aSSeTS 5,094.7 4,696.0 4,271.7 4,879.1
ToTaL aSSeTS LeSS CurreNT LiabiLiTieS 64,380.3 64,100.2 58,344.9 58,972.9
Thenotes set out onpages253 to361 forman integral part of thesefinancial statements.
247TENAGA NASIONAL BERHADANNUAL REPORT 2010
group Company
Note 2010 2009 2010 2009 rm’million RM’million rm’million RM’million
NoN-CurreNT LiabiLiTieSBorrowings 29 (18,100.9) (21,458.1) (11,922.6) (14,772.4)Amountsdue to subsidiaries 23 0 0 (2,796.7) (3,525.8)Consumerdeposits 30 (2,903.9) (2,717.3) (2,731.3) (2,558.0)Employeebenefits 31 (3,866.3) (3,470.6) (3,704.8) (3,321.7)Other liabilities (216.4) (235.5) (48.0) (52.7)Deferred tax liabilities 32 (6,837.1) (6,640.4) (5,869.0) (5,745.1)Deferred income 33 (3,042.2) (2,952.2) (2,676.4) (2,617.1)Governmentdevelopmentgrants 34 (599.0) (579.8) 0 0
(35,565.8) (38,053.9) (29,748.8) (32,592.8)
ToTaL NeT aSSeTS 28,814.5 26,046.3 28,596.1 26,380.1
eQuiTy
Share capital 35 4,352.7 4,337.0 4,352.7 4,337.0Sharepremium 36 5,354.2 5,271.5 5,354.2 5,271.5Revaluationandother reserves 37 682.8 593.0 1,015.5 989.1Retainedprofits 38 18,389.2 15,804.6 17,873.7 15,782.5
aTTribuTabLe To eQuiTy hoLderS oF The CompaNy 28,778.9 26,006.1 28,596.1 26,380.1miNoriTy iNTereSTS 35.6 40.2 0 0
ToTaL eQuiTy 28,814.5 26,046.3 28,596.1 26,380.1
Sen Sen
NeT aSSeTS per Share aTTribuTabLe To eQuiTy hoLderS oF The CompaNy 661.2 599.6
Thenotes set out onpages253 to361 forman integral part of thesefinancial statements.
248 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
STaTemeNT oFChaNgeS iN eQuiTyFor The FiNaNCiaL year eNded 31 auguST 2010
attributable to equity holders of the Company
ordinary employees’ shares Share option revaluation of rm1.00 Share Scheme and other retained minority Total Note each premium reserve reserves profits interests equity rm’million rm’million rm’million rm’million rm’million rm’million rm’million
group
At1 September2009 4,337.0 5,271.5 89.1 503.9 15,804.6 40.2 26,046.3
Currency translationdifferences 0 0 0 59.9 0 0 59.9Realisationof revaluation reserve 37 0 0 0 (3.5) 3.5 0 0
Incomeandexpense recognised directly in equity 0 0 0 56.4 3.5 0 59.9Profit for thefinancial year 0 0 0 0 3,201.9 (4.6) 3,197.3Total recognised incomeand expense for thefinancial year 0 0 0 56.4 3,205.4 (4.6) 3,257.2Dividendspaid for thefinancial year ended – 31.08.2009 12 0 0 0 0 (425.3) 0 (425.3) – 31.08.2010 12 0 0 0 0 (195.5) 0 (195.5)Employees’ ShareOption Scheme – optionsgranted 0 0 33.4 0 0 0 33.4Issuanceof share capital – shareoptions 35, 36 15.7 82.7 0 0 0 0 98.4
At31August2010 4,352.7 5,354.2 122.5 560.3 18,389.2 35.6 28,814.5
At1 September2008 4,334.5 5,258.8 62.8 655.4 15,345.7 104.7 25,761.9
Currency translationdifferences 0 0 0 (133.7) 0 0 (133.7)Realisationof revaluation reserve 37 0 0 0 (17.8) 17.8 0 0
Incomeandexpense recognised directly in equity 0 0 0 (151.5) 17.8 0 (133.7)Divestmentof a subsidiary 0 0 0 0 0 0.4 0.4Profit for thefinancial year 0 0 0 0 917.9 (64.9) 853.0Total recognised incomeand expense for thefinancial year 0 0 0 (151.5) 935.7 (64.5) 719.7Dividendspaid for thefinancial year ended – 31.08.2008 12 0 0 0 0 (325.1) 0 (325.1) – 31.08.2009 12 0 0 0 0 (151.7) 0 (151.7)Employees’ ShareOption Scheme – optionsgranted 0 0 26.3 0 0 0 26.3Issuanceof share capital – shareoptions 35, 36 2.5 12.7 0 0 0 0 15.2
At31August2009 4,337.0 5,271.5 89.1 503.9 15,804.6 40.2 26,046.3
Thenotes set out onpages253 to361 forman integral part of thesefinancial statements.
249TENAGA NASIONAL BERHADANNUAL REPORT 2010
Non-distributable distributable
ordinary employees’ shares Share option revaluation of rm1.00 Share Scheme and other retained Total Note each premium reserve reserves profits equity rm’million rm’million rm’million rm’million rm’million rm’million
Company
At1 September2009 4,337.0 5,271.5 81.4 907.7 15,782.5 26,380.1
Realisationof revaluation reserve 37 0 0 0 (3.5) 3.5 0
Incomeandexpense recognised directly in equity 0 0 0 (3.5) 3.5 0Profit for thefinancial year 0 0 0 0 2,708.5 2,708.5Total recognised incomeand expense for thefinancial year 0 0 0 (3.5) 2,712.0 2,708.5Dividendspaid for thefinancial year ended – 31.08.2009 12 0 0 0 0 (425.3) (425.3) – 31.08.2010 12 0 0 0 0 (195.5) (195.5)Employees’ ShareOption Scheme – optionsgranted 0 0 29.9 0 0 29.9Issuanceof share capital – shareoptions 35, 36 15.7 82.7 0 0 0 98.4
At31August2010 4,352.7 5,354.2 111.3 904.2 17,873.7 28,596.1
At1 September2008 4,334.5 5,258.8 56.2 925.5 15,170.8 25,745.8
Realisationof revaluation reserve 37 0 0 0 (17.8) 17.8 0
Incomeandexpense recognised directly in equity 0 0 0 (17.8) 17.8 0Profit for thefinancial year 0 0 0 0 1,070.7 1,070.7Total recognised incomeand expense for thefinancial year 0 0 0 (17.8) 1,088.5 1,070.7Dividendspaid for thefinancial year ended – 31.08.2008 12 0 0 0 0 (325.1) (325.1) – 31.08.2009 12 0 0 0 0 (151.7) (151.7)Employees’ ShareOption Scheme – optionsgranted 0 0 25.2 0 0 25.2Issuanceof share capital – shareoptions 35, 36 2.5 12.7 0 0 0 15.2
At31August2009 4,337.0 5,271.5 81.4 907.7 15,782.5 26,380.1
Thenotes set out onpages253 to361 forman integral part of thesefinancial statements.
250 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
CaSh FLowSTaTemeNTSFor The FiNaNCiaL year eNded 31 auguST 2010
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
CaSh FLowS From operaTiNg aCTiviTieS
Profit for thefinancial year 3,197.3 853.0 2,708.5 1,070.7Adjustments for: Taxationand zakat 824.8 690.1 800.0 616.0 Property, plant andequipment: –Depreciation 3,923.2 3,537.7 3,283.5 2,899.4 –Writtenoff 86.6 12.9 86.5 6.6 –Gainondisposals (2.0) (0.3) (2.0) (0.1) Amortisationof prepaidoperating leases 27.0 23.8 19.6 16.4 Provision for retirementbenefits 765.4 697.6 751.6 673.7 Provision for shareoptions 33.4 26.3 29.9 25.2 Translation (gain)/loss (632.6) 1,177.8 (584.1) 827.0 (Gain)/loss ondisposals of: –Non-current assetsheld for sale (2.3) (26.9) (2.3) (27.1) – Prepaidoperating leases (1.0) (3.9) (1.0) (3.9) – Redemptionof redeemablepreference shares in subsidiaries 0 0 0 (230.8) Loss onwindingup/disposal of subsidiaries 112.7 0 0.1 0 Shareof results in associates (44.6) (33.1) 0 0 Dividend income (6.6) 0 (62.7) (54.1) Interest income (209.7) (177.1) (356.6) (308.3) Interest onborrowings 920.4 996.8 627.8 699.8 Releaseof deferred income (366.4) (356.4) (326.9) (317.2) ReleaseofGovernmentdevelopmentgrants (42.9) (44.6) 0 0 Allowance for doubtful debts: – Tradeandother receivables 103.3 76.7 93.1 75.5 –Amountsdue from subsidiaries 0 0 323.5 236.9 –Amountsdue from jointly controlled entities 14.6 0 14.6 0 Write-backof allowance for doubtful debts 0 (8.1) 0 (1.2) Impairment lossesof investments in: – Subsidiaries 0 0 0 42.9 – Jointly controlled entities 7.9 0 7.9 0 Allowance for/(writebackof) diminution in valueof –Marketable securities (0.3) 0.2 (0.3) 0.2 – Long term investments 0 0 0 59.4 Allowance for/(write-backof) inventoryobsolescence 3.5 (6.9) 3.5 (8.3) Inventorieswrittenoff 23.7 21.5 23.4 21.3
8,735.4 7,457.1 7,437.6 6,320.0
Thenotes set out onpages253 to361 forman integral part of thesefinancial statements.
251TENAGA NASIONAL BERHADANNUAL REPORT 2010
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
CaSh FLowS From operaTiNg aCTiviTieS (CoNT’d)
Inventories (518.4) 253.1 (248.5) 101.9Receivables 85.0 (489.3) 311.1 (252.0)Payables (361.1) 231.9 (125.5) 143.9Amountsdue from subsidiaries 0 0 (1,323.7) (520.4)Amountsdue to/(from) associates 333.1 (15.9) 328.5 (17.6)Amountsdue from jointly controlled entities 0 0 (14.6) 0
Cashgenerated fromoperations 8,274.0 7,436.9 6,364.9 5,775.8Employeebenefitspaid (369.7) (351.8) (368.5) (351.1)Consumer contributions received 458.5 409.2 386.2 353.5Consumerdeposits received 186.6 165.4 173.3 156.9Taxationand zakatpaid (578.7) (250.4) (563.4) (235.4)
Net cashflow fromoperatingactivities 7,970.7 7,409.3 5,992.5 5,699.7
CaSh FLowS From iNveSTiNg aCTiviTieS
Additional investments in:–Associate (0.3) (0.2) (0.3) (0.2)– Jointly controlled entity 0 (7.9) 0 (7.9)Proceeds from redemption–Unsecured loannotes in a subsidiary 0 0 0 12.0–Redeemablepreference shares in a subsidiary 0 0 0 755.2–Unsecured loannotes in anassociate 5.3 4.9 5.3 4.9Purchaseof short term investments (59.9) 0 (59.9) 0Dividend income received 46.7 54.0 58.4 54.1Interest income received 189.4 175.8 156.7 145.8Property, plant andequipment–Additions (3,708.1) (4,128.4) (3,242.9) (3,575.1)– Proceeds fromdisposals 3.5 3.0 3.5 2.5Prepaidoperating leases–Additions (22.7) 0 (22.7) 0– Proceeds fromdisposals 1.7 5.8 1.7 5.8Proceeds fromdisposal ofnon-current assetsheld for sale 4.8 60.7 4.8 60.7
Net cashflow from investingactivities (3,539.6) (3,832.3) (3,095.4) (2,542.2)
Thenotes set out onpages253 to361 forman integral part of thesefinancial statements.
252 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
CaSh FLow STaTemeNTSFor The FiNaNCiaL year eNded 31 auguST 2010 (CoNT’d)
Thenotes set out onpages253 to361 forman integral part of thesefinancial statements.
group Company
Note 2010 2009 2010 2009 rm’million RM’million rm’million RM’million
CaSh FLowS From FiNaNCiNg aCTiviTieS
Governmentdevelopmentgrants received 66.5 60.8 0 0Proceeds from issuanceof shares 98.4 15.2 98.4 15.2Long termborrowings–Proceeds 417.4 352.2 166.1 289.0–Repayments (1,103.3) (1,631.4) (492.5) (1,178.2)Short termborrowings–Proceeds 109.5 240.0 0 0–Repayments (127.0) (165.3) 0 0Interest paid (1,089.8) (1,188.8) (781.5) (829.8)Dividendspaid to shareholders (620.8) (476.8) (620.8) (476.8)
Net cashflow fromfinancingactivities (2,249.1) (2,794.1) (1,630.3) (2,180.6)
NeT iNCreaSe iN CaSh aNd CaSh eQuivaLeNTS 2,182.0 782.9 1,266.8 976.9
eFFeCT oF ChaNgeS iN ForeigN CurreNCy (2.2) (2.9) 0 0
CaSh aNd CaSh eQuivaLeNTS aT The begiNNiNg oF The FiNaNCiaL year 6,163.9 5,383.9 5,189.8 4,212.9
CaSh aNd CaSh eQuivaLeNTS aT The eNd oF The FiNaNCiaL year 26 8,343.7 6,163.9 6,456.6 5,189.8
Cashat bank, held in trust* (0.5) (7.0) 0 0 Debt reserve account (237.3) (236.7) 0 0 Funds fromMOF (7.4) (10.9) 0 0
CaSh aNd CaSh eQuivaLeNTS avaiLabLe aT The eNd oF The FiNaNCiaL year 8,098.5 5,909.3 6,456.6 5,189.8
* The cashatbankheld in trust is in respectof agrantgiven toa subsidiaryby theGovernmentofMalaysia for adesignatedcapital project.
253TENAGA NASIONAL BERHADANNUAL REPORT 2010
NoTeS To The FiNaNCiaL STaTemeNTS
31 auguST 2010
1. geNeraL iNFormaTioN
TheGroup and the Company are primarily involved in the business of the generation, transmission, distribution and saleof electricity and those tabulated inNote15 to thesefinancial statements.
Therehavebeenno significant changes in these activitiesduring thefinancial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main BoardofBursaMalaysia SecuritiesBerhad.
Theaddress of the registeredofficeof theCompany is 129, JalanBangsar, 59200Kuala Lumpur,Malaysia.
2. Summary oF SigNiFiCaNT aCCouNTiNg poLiCieS
Unless otherwise stated, the following accounting policies have been applied consistently in dealing with items that areconsidered material in relation to the financial statements. These policies have been consistently applied to all the yearspresented, unless otherwise stated.
(a) basis of preparation
ThefinancialstatementsoftheGroupandtheCompanyhavebeenpreparedinaccordancewiththeprovisionsoftheCompaniesAct1965andFinancialReportingStandards (‘FRS’), theMASBApprovedAccountingStandards inMalaysiafor EntitiesOther thanPrivate Entities.
Thefinancialstatementshavebeenpreparedunderthehistoricalcostconventionexceptasdisclosedinthissummaryof significant accountingpolicies.
The preparation of financial statements in conformity with FRS, requires the use of certain critical accountingestimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements, and the reported amounts of revenues and expensesduring the reported period. It also requires Directors to exercise their judgement in the process of applying theGroup’s accountingpolicies.Although these estimates and judgementarebasedon theDirectors’ best knowledgeofcurrent events andactions, actual resultsmaydiffer.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates aresignificant to thefinancial statements aredisclosed inNote3 to thesefinancial statements.
(i) Standards, amendments to published standards and interpretations that are applicable to the Group andCompanyandare effective
FRS 8 “Operating Segments” (‘FRS 8’) replaces FRS 1142004 Segment Reporting and is effective from1 July 2009.
There are no new accounting standards, amendments to published standards and interpretations to existingstandards that are effective for the financial year ended 31 August 2010 and applicable to the Group andCompany.
254 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
NoTeS To The FiNaNCiaL STaTemeNTS31 auguST 2010 (CoNT’d)
2. Summary oF SigNiFiCaNT aCCouNTiNg poLiCieS (CoNT’d)
(a) basis of preparation (cont’d)
(ii) Standards, amendments to published standards and interpretations to existing standards that are applicable totheGroupandCompanybutnot yet effective
Thefollowingnewstandards,amendmentsandimprovementstopublishedstandardsandIC Interpretationswillbe effective for annual periods beginning on or after 1 January 2010 unless otherwise stated. The Group andCompanywill apply these standards and IC Interpretations fromfinancial yearbeginning1 September2010.
FRS3“BusinessCombinations”(revised)(effectiveprospectivelyfrom1July2010).Therevisedstandardcontinuesto apply the acquisition method to business combinations, with some significant changes. For example, allpayments to purchase a business are to be recorded at fair value at the acquisition date, with contingentpayments classified as debt subsequently re-measured through the income statement. There is a choice on anacquisition-by-acquisitionbasis tomeasure thenon-controlling interest in the acquiree either at fair valueor atthenon-controllinginterest’sproportionateshareoftheacquiree’snetassets.Allacquisition-relatedcostsshouldbe expensed.
FRS 101 “Presentation of Financial Statements” (revised). The revised standard will prohibit the presentation ofitems of income and expenses (that is, ‘non-owner changes in equity’) in the statement of changes in equity,requiring‘non-ownerchangesinequity’tobepresentedseparatelyfromownerchangesinequity.All‘non-ownerchanges inequity’willbe requiredtobeshown inaperformancestatement,butentitiescanchoosewhether topresent one performance statement (the statement of comprehensive income) or two statements (the incomestatementandstatementofcomprehensiveincome).Whereentitiesrestateorreclassifycomparativeinformation,theywill be required to present a restatedbalance sheet as at the beginning comparative period in addition tothecurrent requirement topresentbalancesheetsat theendof thecurrentperiodandcomparativeperiod. It islikelythatboththeincomestatementandstatementofcomprehensiveincomewillbepresentedasperformancestatements.
FRS 123 “Borrowing Costs” which replaces FRS 1232004 requires an entity to capitalise borrowing costs directly
attributable to the acquisition, construction or production of a qualifying asset (one that takes a substantialperiodoftimetogetreadyforuseorsale)aspartofthecostofthatasset.Theoptionofimmediatelyexpensingthoseborrowing costswill be removed.
FRS 127 “Consolidated and Separate Financial Statements” (revised) (effective prospectively from 1 July 2010).The revised standard requires the effects of all transactions with non-controlling interests to be recorded inequityifthereisnochangeincontrolandthesetransactionswillnolongerresultingoodwillorgainsandlosses.The standard also specifies the accounting when control is lost. Any remaining interest in the entity isre-measured to fair value, anda gainor loss is recognised in the income statements.
Amendments to FRS 132 “Financial Instruments: Presentation”, and FRS 101 (Amendment) “Presentation ofFinancial Statements” – “Puttable financial instruments and obligations arising on liquidation”. The amendedstandards require entities to classify puttable financial instruments and instruments, or components ofinstrumentsthatimposeontheentityanobligationtodelivertoanotherpartyaproratashareofthenetassetsof the entity only on liquidation.
255TENAGA NASIONAL BERHADANNUAL REPORT 2010
2. Summary oF SigNiFiCaNT aCCouNTiNg poLiCieS (CoNT’d)
(a) basis of preparation (cont’d)
(ii) Standards, amendments to published standards and interpretations to existing standards that are applicable totheGroupandCompanybutnot yet effective (cont’d)
Amendments to FRS 2 “Share-based Payment: Vesting Conditions and Cancellations” clarify that vestingconditionsare serviceconditionsandperformanceconditionsonly.Other featuresofa share-basedpaymentarenot vesting conditions. These features would need to be included in the grant date fair value for transactionswithemployeesandothersprovidingsimilarservices; theywouldnot impact thenumberofawardsexpectedtovestor valuation thereof subsequent tograntdate.All cancellations,whetherby theentityorbyotherparties,should receive the sameaccounting treatment.
FRS7“FinancialInstruments:Disclosures”providesinformationtousersoffinancialstatementsaboutanentity’sexposure to risks and how the entity manages those risks. The improvement FRS 7 clarifies that entities mustnot present total interest income and expense as a net amountwithin finance costs on the face of the incomestatement.
FRS 139 “Financial Instruments: Recognition and Measurement” establishes principles for recognising andmeasuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. Hedgeaccounting is permitted under strict circumstances. The amendments to FRS 139 provide further guidance oneligible hedged items. The amendmentprovides guidance for two situations.On thedesignationof a one-sidedrisk in a hedged item, the amendment concludes that a purchased option designated in its entirety as thehedging instrument of a one-sided risk will not be perfectly effective. The designation of inflation as a hedgedrisk or portion is not permitted unless in particular situations. The improvement to FRS 139 clarifies that thescope exemption in FRS 139 only applies to forward contracts but not options for business combinations thatarefirmly committed tobeing completedwithin a reasonable timeframe.
The amendment to FRS 132 “Financial Instruments: Presentation” removes the transitional provision thatexempted entities from applying the component part classification for a compound instrument issued before1 January 2003. Upon adoption of FRS 139, entities are required to classify the compound financial instrumentinto its liability andequity elements.
TheamendmenttoFRS132“FinancialInstruments:Presentation”onclassificationofrightsissues(effectivefrom1 March 2010) addresses accounting for rights issues that are denominated in a currency other than thefunctional currency of the issuer. Provided certain conditions are met, such rights issues are now classified asequity instruments instead of as derivative liabilities, regardless of the currency in which the exercise price isdenominated.
IC Interpretation9 “Reassessmentof EmbeddedDerivatives” requires an entity to assesswhether an embeddedderivative is required tobe separated from thehost contract andaccounted for as a derivativewhen the entityfirst becomes a party to the contract. Subsequent reassessment is prohibited unless there is a change in theterms of the contract that significantly modifies the cash flows that otherwise would be required under thecontract, inwhich case reassessment is required.
256 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
NoTeS To The FiNaNCiaL STaTemeNTS31 auguST 2010 (CoNT’d)
2. Summary oF SigNiFiCaNT aCCouNTiNg poLiCieS (CoNT’d)
(a) basis of preparation (cont’d)
(ii) Standards, amendments to published standards and interpretations to existing standards that are applicable totheGroupandCompanybutnot yet effective (cont’d)
IC Interpretation10“InterimFinancialReportingand Impairment”prohibits the impairment losses recognised inan interimperiodongoodwilland investments inequity instrumentsandinfinancialassetscarriedatcosttobereversedat a subsequentbalance sheetdate.
IC Interpretation 11 “Group and Treasury Share Transactions” provides guidance on whether share-basedtransactions involving treasury shares or involving group entities (for example, options over a parent’s shares)should be accounted for as equity-settled or cash-settled share-based payment transactions in the stand-aloneaccountsof theparent andgroup companies.
IC Interpretation 12 “Service Concession Arrangements” (effective from 1 July 2010) applies to contractualarrangements whereby a private sector operator participates in the development, financing, operation andmaintenanceof infrastructure forpublic sector services.Dependingon the contractual terms, this interpretationrequires theoperator to recogniseafinancialasset if ithasanunconditional contractual right to receivecashoran intangible asset if it receives a right (license) to charge users of the public service. Some contractual termsmaygive rise tobothafinancial asset andan intangible asset.
ICInterpretation14“TheLimitonaDefinedBenefitAsset,MinimumFundingRequirementsandtheirInteraction”providesguidanceonassessing the limit in FRS119on theamountof the surplus that canbe recognisedas anasset. It alsoexplainshow thepensionassetor liabilitymaybeaffectedbya statutoryor contractualminimumfunding requirement.
IC Interpretation 16 “Hedges of a Net Investment in a Foreign Operation” (effective from 1 July 2010) clarifiesthe accounting treatment in respect of net investment hedging. This includes the fact that net investmenthedgingrelatestodifferences infunctionalcurrencynotpresentationcurrency,andhedginginstrumentsmaybeheldbyanyentityinthegroup.TherequirementsofFRS121“TheEffectsofChangesinForeignExchangeRates”doapply to thehedged item.
IC Interpretation17 “DistributionofNon-cashAssets toOwners” (effective from1 July 2010) provides guidanceon accounting for arrangements whereby an entity distributes non-cash assets to shareholders either as adistributionof reservesor asdividends.
Thefollowingnewstandards,amendmentsandimprovementstopublishedstandardsandIC Interpretationswillbe effective for annual periods beginning on or after 1 January 2011. TheGroup andCompanywill apply thesestandards and IC Interpretations fromfinancial yearbeginning1 September2011.
TheamendmenttoFRS2“Share-basedPayment:GroupCash-settledShare-basedPaymentTransactions”clarifiesthat an entity that receives goods or services in a share-based payment arrangement must account for thosegoods or services no matter which entity in the group settles the transaction, and no matter whether thetransaction is settled in shares or cash. The amendments also incorporate guidance previously included in ICInterpretation 8 “Scope of FRS 2” and IC Interpretation 11 “FRS 2 – Group and Treasury Share Transactions”,which shall bewithdrawnuponapplicationof this amendment.
257TENAGA NASIONAL BERHADANNUAL REPORT 2010
2. Summary oF SigNiFiCaNT aCCouNTiNg poLiCieS (CoNT’d)
(a) basis of preparation (cont’d)
(ii) Standards, amendments to published standards and interpretations to existing standards that are applicable totheGroupandCompanybutnot yet effective (cont’d)
AmendmentstoFRS7“Financial Instruments:Disclosures”andFRS1“First-timeAdoptionofFinancialReportingStandards” requires enhanced disclosures about fair value measurement and liquidity risk. In particular, theamendment requiresdisclosureof fair valuemeasurementsby level of a fair valuemeasurementhierarchy.
IC Interpretation4 “DeterminingWhetheranArrangementContainsa Lease” requires theGroup to identifyanyarrangement that does not take the legal form of a lease, but conveys a right to use an asset in return for apaymentorseriesofpayments.Thisinterpretationprovidesguidancefordeterminingwhethersucharrangementsare, or contain, leases. The assessment is based on the substance of the arrangement and requires assessmentofwhether the fulfilment of the arrangement is dependent on the use of a specific asset and the arrangementconveys a right to use the asset. If the arrangement contains a lease, the requirements of FRS 117 “Leases”shouldbe applied to the lease elementof the arrangement.
IC Interpretation18 “TransfersofAssets fromCustomers” (effectiveprospectively for assets receivedonor after1 January 2011) provides guidance where an entity receives from a customer an item of property, plant andequipment(orcashtoacquiresuchanasset)thattheentitymustthenusetoconnectthecustomertoanetworkor toprovide thecustomerwithservices.Where the transferred itemmeets thedefinitionofanasset, theassetis recognisedasan itemofproperty,plantandequipmentat its fairvalue.Anycorrespondingcredit isallocatedto each separate service to be performed under the agreement. Revenue is recognised for each service inaccordancewith the recognition criteria of FRS118 “Revenue”. This interpretation is to be appliedprospectivelyto assets received fromcustomeronor after 1 January2011.
(iii) MASB had issued improvement to standards which are effective for annual periods beginning on or after1 January2010unless otherwise stated
The improvements to standardswhichare applicable to theGroupandCompanyare as follows:
FRS2“Share-basedPayment”(effectivefrom1July2010)clarifiesthatthefollowingtransactionsareoutsidethescopeof FRS2 and revised FRS3:
– Contributionsby abusinesson the formationof joint venture; and – Common control transactions.
FRS5 “Non-currentAssetsHeld for Sale andDiscontinuedOperations” – Improvement effective from 1 January 2010 clarifies that FRS 5 disclosures apply to non-current assets or
disposal groups that are classifiedasheld for sale anddiscontinuedoperations. – Improvement effective from 1 July 2010 clarifies that all of a subsidiary’s assets and liabilities are classified
asheldforsale ifapartialdisposalsaleplanresults in lossofcontrol.Relevantdisclosureshouldbemadefor this subsidiary if thedefinitionof adiscontinuedoperation ismet.
FRS8“OperatingSegments”clarifiesthatentitieswillonlyneedtodisclose informationaboutsegmentassets ifthat information is regularly reviewedby the chief operatingdecisionmaker.
258 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
NoTeS To The FiNaNCiaL STaTemeNTS31 auguST 2010 (CoNT’d)
2. Summary oF SigNiFiCaNT aCCouNTiNg poLiCieS (CoNT’d)
(a) basis of preparation (cont’d)
(iii) MASB had issued improvement to standards which are effective for annual periods beginning on or after1 January2010unless otherwise stated (cont’d)
FRS101(revised)“PresentationofFinancialStatements”widensthescopeofthestandardtoallowcurrent/non-current classification of a derivative and clarifies how to classify the liability component of a convertibleinstrument.
FRS 107 “Statement of Cash Flows” clarifies that only expenditure resulting in a recognised asset can becategorisedas a cashflow from investingactivities.
FRS 108 “Accounting Policies, Changes in Accounting Estimates and Errors” clarifies the use of guidance in thestandard.
FRS 110 “Events After the Balance Sheet Date” confirms that dividends are liabilities when the company isobliged topay.
FRS 116 “Property, Plant & Equipment” and FRS 107 “Statement of Cash Flows” changes how certain entitiespresent the sale of assetsheld for rental.
FRS 117 “Leases” requires entities with existing leases of land and buildings (combined) to reassess theclassificationof landas afinanceor operating lease.
FRS 118 “Revenue” replaces the term ‘direct costs’with ‘transaction costs’ and clarifies the distinction betweenwhenanentity is actingas a ‘principal’ andan ‘agent’.
FRS 119 “Employee Benefits” clarifies the terms ‘curtailments’ and ‘negative past service cost’, changes thedefinitionof ‘returnonplanassets’ or replacementof term ‘fall due’.
FRS 120 “Accounting for Government Grants” accounting for government loans with a below-market rate ofinterest and changes the terminology.
FRS123 “BorrowingCosts” changes thedefinitionof borrowing costs.
FRS127“Consolidated&SeparateFinancialStatements”clarifiestheaccountingforaninvestmentinasubsidiaryheld for sale.
FRS 128 “Investments in Associates” clarifies that an investment in an associate is treated as a single asset forimpairment testingpurposes.Reversalsof impairmentare recordedasanadjustment to thecarryingamountofthe investment to the extent that the recoverable amountof the associate increases.
259TENAGA NASIONAL BERHADANNUAL REPORT 2010
2. Summary oF SigNiFiCaNT aCCouNTiNg poLiCieS (CoNT’d)
(a) basis of preparation (cont’d)
(iii) MASB had issued improvement to standards which are effective for annual periods beginning on or after1 January2010unless otherwise stated (cont’d)
FRS 128 “Investments in Associates” and FRS 131 “Interests in Joint Ventures” (consequential amendments toFRS 132 “Financial Instruments: Presentation” and FRS 7 “Financial Instruments: Disclosure”) clarify that whereaninvestmentinassociateorjointventureisaccountedfor inaccordancewithFRS139,onlycertain,ratherthanalldisclosurerequirementsinFRS128orFRS131needtobemadeinadditiontodisclosuresrequiredbyFRS132and FRS7.
FRS 134 “Interim Financial Reporting” clarifies that basic and diluted earnings per share (“EPS”) must bepresented in an interim report only in the casewhen the entity is required todisclose EPS in its annual report.
FRS 136 “Impairment of Assets” discloses estimates used to determine recoverable amount and clarifies thatentitiesmustassess theirgoodwill impairmentwithin cash-generatingunitsatorbelow theoperating segmentlevel.
FRS138 “IntangibleAssets” – Improvement effective from1 January2010 clarifies that a prepaymentmayonlybe recognised in the event
that payment has been made in advance of obtaining right of access to goods or receipt of services. This means that an expense will be recognised for mail order catalogues when the entity has access to the cataloguesandnotwhen thecataloguesaredistributed to customers. It confirms that theunitofproduction methodof amortisation is allowed.
– Improvementeffective from1 July2010clarifiesthatagroupofcomplementary intangibleassetsacquired in a business combination is recognisedas a single asset if the individual assethas similaruseful lives.
FRS 140 “Investment Property” changes the accounting for property not yet used as investment property andclarifies the accounting for investmentpropertyheldunder lease.
IC Interpretation 9 “Reassessment of Embedded Derivatives” (effective from 1 July 2010) clarifies that thisinterpretation does not apply to embedded derivatives in contracts acquired in a business combination,businessesunder common control or the formationof a joint venture.
IC Interpretation15 “Agreements forConstructionofReal Estates” (effective from1 July2010) clarifieswhetherFRS 118 “Revenue” or FRS 111 “Construction Contracts” should be applied to particular transactions. It is likelyto result in FRS118beingapplied to awider rangeof transactions.
IC Interpretation 16 “Hedges of a Net Investment in a Foreign Operation” (effective from 1 July 2010) clarifiesthe accounting treatment in respect of net investment hedging. This includes the fact that net investmenthedgingrelatestodifferences infunctionalcurrencynotpresentationcurrency,andhedginginstrumentsmaybeheldbyanyentityinthegroup.TherequirementsofFRS121“TheEffectsofChangesinForeignExchangeRates”doapply to thehedged item.
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(a) basis of preparation (cont’d)
(iii) MASB had issued improvement to standards which are effective for annual periods beginning on or after1 January2010unless otherwise stated (cont’d)
TheGroupandCompanyhasappliedthetransitionalprovisionintherespectivestandardsbelowwhichexemptsentities from disclosing the possible impact arising from the initial application of the standard on the financialstatementsof theGroupandCompany.
– FRS139,Amendments to FRS139oneligiblehedged items, Improvement to FRS139and IC Interpretation9 – FRS7 and Improvement to FRS7 – IC Interpretation12
The impactof IC Interpretation4“DeterminingWhetheranArrangementContainsaLease”, IC Interpretation12“Service Concession Arrangements” and FRS 120 “Accounting for Government Grants” is still being assessed.Aside from FRS 7 and FRS 139, IC Interpretation 9 and the proposed changes to FRS 101, the adoption of theStandards, amendment to published standards and IC interpretation to existing standards are not expected tohaveamaterial impact to thefinancial statementsof theGroupandCompany.
(iv) Standards, amendments to published standards and interpretations to existing standards that are not yeteffective andarenot relevant to theGroupandCompany
Amendments to FRS 1 “First-time Adoption of Financial Reporting Standards” and FRS 127 “Consolidated andSeparateFinancialStatements:CostofanInvestmentinaSubsidiary,JointlyControlledEntityorAssociate”allowfirst-time adopters to use a deemed cost of either fair value or the carrying amount under previous accountingpracticetomeasuretheinitialcostof investmentsinsubsidiaries, jointlycontrolledentitiesandassociates intheseparatefinancialstatements.TheamendmentalsoremovesthedefinitionofthecostmethodfromFRS127andreplaces it with a requirement to present dividends as income in the separate financial statements of theinvestor.
The amendment to FRS 1 “First-time Adoption of Financial Reporting Standards” provides exemption for first-timeadoptersintheoilandgasindustryandthosewithleasingcontracts.Oilandgasentitiesusingthefullcostmethod for its oil and gas assets are exempted from retrospective application. Entities with existing leasingcontractsareexemptedfromreassessingtheclassificationofthosecontractsinaccordancewithICInterpretation4“DeterminingWhetheranArrangementContainsaLease”whenapplicationofthepreviousaccountingpracticeproduces the same result.
FRS4“InsuranceContracts”exemptsentities fromdisclosing information requiredunderparagraph30(b)ofFRS108 “AccountingPolicies, Changes inAccounting Estimates andErrors”.
FRS129 “Financial Reporting inHyperinflationary Economies” confirmsmeasurement at fair value.
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(a) basis of preparation (cont’d)
(iv) Standards, amendments to published standards and interpretations to existing standards that are not yeteffective andarenot relevant to theGroupandCompany (cont’d)
ICInterpretation13“CustomerLoyaltyProgrammes”clarifiesthatwheregoodsorservicesaresoldtogetherwithacustomerloyaltyincentive(forexample,loyaltypointsorfreeproducts),thearrangementisamultiple-elementarrangementandthe revenue in respectof theconsideration receivable fromthecustomer isallocatedbetweenthe componentsof the arrangementusing fair values.
(b) Subsidiaries and basis of consolidation
(i) Subsidiaries
Subsidiaries are those corporations or other entities (including special purpose entities) inwhich theGroup haspower to exercise control over thefinancial and operating policies so as to obtain benefits from their activities,generally accompanying a shareholding of more than one half of the voting rights. The existence and effect ofpotential voting rights that are currently exercisable or convertible are considered when assessing whether theGroup controls another entity.
In theCompany’s separatefinancial statements, investments in subsidiaries are statedat cost less accumulatedimpairment losses. On disposal of such investments, the difference between net disposal proceeds and theircarryingamounts is included in the income statement.
(ii) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries.Thefinancial statementsof the subsidiaries areprepared for the same reportingdate as theCompany.
SubsidiariesareconsolidatedfromthedateonwhichtheGroupobtainscontrol,andcontinuetobeconsolidateduntil the date that such control ceases. In preparing the consolidatedfinancial statements, intragroupbalances,transactionsandunrealisedgainsor lossesareeliminated infull.Uniformaccountingpoliciesareadopted intheconsolidatedfinancial statements for like transactions andevents in similar circumstances.
Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accountinginvolves allocating the cost of acquisition to the fair value of the assets acquired and liabilities and contingentliabilitiesassumedat thedateofacquisition.Thecostofanacquisition ismeasuredas theaggregateof the fairvalues, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instrumentsissued, plus any costsdirectly attributable to the acquisition.
Any access of the cost of acquisition over the Group’s interest in the net fair value of the identifiable assets,liabilities and contingent liabilities represents goodwill (seeNote2(f)). Any excess of theGroup’s interest in thenet fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition isrecognised immediately inprofit and loss.
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(b) Subsidiaries and basis of consolidation (cont’d)
(ii) Basis of consolidation (cont’d)
Minority interestsrepresentthatportionoftheprofitor lossandnetassetsofasubsidiaryattributabletoequityinterests that are not owned, directly or indirectly through subsidiaries, by the parent. It is measured at theminorities’shareofthefairvalueofthesubsidiaries’ identifiableassetsandliabilitiesattheacquisitiondateandtheminorities’ shareof changes in the subsidiaries’ equity since thatdate.
(c) Transactions with minority interests
TheGroupapplies apolicyof treating transactionswithminority interests as transactionswith equityownersof theGroup. For purchases from minority interests, the difference between any consideration paid and the relevant shareof thecarryingvalueofnetassetsof thesubsidiaryacquired isdeducted fromequity.Gainsor lossesondisposals tominority interests are also recorded in equity. For disposals to minority interests, differences between any proceedsreceivedand the relevant shareofminority interests are also recorded in equity.
(d) Jointly controlled entities
Jointly controlled entities are corporations, partnerships or other entities over which there is contractually agreedsharing of control by the Group with one or more parties where the strategic financial and operating decisionsrelating to the entities requires unanimous consent of the parties sharing control. The Group’s interest in jointlycontrolled entities is accounted for in the consolidatedfinancial statementsusing the equitymethodof accounting.
Equityaccounting involves recognising in theconsolidated incomestatementandconsolidatedstatementof changesin equity, the Group’s share of profits less losses of jointly controlled entities based on the latest audited financialstatementsormanagementaccountsofthejointlycontrolledentities,madeuptothefinancialyearendoftheGroup.Where necessary, adjustments are made to the results and net assets of jointly controlled entities to ensureconsistency of accounting policies with those of the Group. The Group’s investment in jointly controlled entities isrecorded at cost inclusive of goodwill and adjusted thereafter for accumulated impairment loss and the postacquisition change in theGroup’s shareofnet assets of the jointly controlled entities.
UnrealisedgainsontransactionsbetweentheGroupand its jointlycontrolledentitiesareeliminatedtotheextentoftheGroup’s interest inthejointlycontrolledentities.Unrealisedlossesarealsoeliminatedonthesamebasisbutonlytotheextentofthecoststhatcanberecovered,andthebalancethatprovidesevidenceofreductioninnetrealisablevalueor an impairmentof the asset transferredare recognised in the consolidated income statement.
(e) associates
Associates are enterprises in which the Group exercises significant influence. Significant influence is the power toparticipate in thefinancial andoperatingpolicydecisionsof the associatesbutnot control over thosepolicies.
Investments in associates are accounted for in the consolidated financial statements using the equity method ofaccountingandare initially recognisedatcost.Theequitymethod isappliedbasedonthe latestfinancial statementsormanagementaccountsof theassociates,madeup to thefinancial year endof theGroup. TheGroup’s investmentin associates includesgoodwill identifiedonacquisition, net of anyaccumulated impairment losses (seeNote2(f)).
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(e) associates (cont’d)
The Group’s share of its associates’ post-acquisition profits or losses is recognised in the consolidated incomestatement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisitionmovementsareadjustedagainstthecarryingamountoftheinvestment.WhentheGroup’sshareoflossesinanassociateequalsor exceeds its interest in theassociate, includinganyotherunsecured receivables, theGroup’sinterest is reduced to nil and recognition of further losses is discontinued except to the extent that the Group hasincurred legal or constructiveobligationsormadepaymentsonbehalf of the associate.
UnrealisedprofitsontransactionsbetweentheGroupandtheassociatesareeliminatedpartially to theextentof theGroup’s interest in the associates; unrealised losses are also eliminated unless the transaction provides evidence onimpairment of the asset transferred.Where necessary, in applying the equitymethod, adjustments aremade to thefinancial statementsof associates to ensure consistencyof accountingpolicieswith thoseof theGroup.
Dilutionof gains and losses in associates are recognised in the consolidated income statement.
For incremental interest inanassociate, thedateofacquisition is thedateatwhichsignificant influence isobtained.Goodwill iscalculatedateachpurchasedatebasedonthefairvalueofassetsand liabilities identified.Thepreviouslyacquired stake is steppedup to fair valueand the shareofprofitsandequitymovements for thepreviouslyacquiredstakearenot recognised since they are embedded in the stepup.
(f) goodwill
Goodwill representstheexcessofthecostoftheacquisitionovertheGroupshareofthefairvalueofthe identifiablenet assets including contingent liabilities of subsidiaries, associates and joint ventures at thedateof the acquisition.
Capitalised goodwill is tested for impairment at least annually, or if events or circumstances occur indicating thatimpairmentmayexist.
(g) property, plant and equipment and depreciation
Property, plant and equipment are stated at cost or valuation less accumulated depreciation and accumulatedimpairment losses. Cost includes expenditure that is directly attributable to the construction or acquisition of theitems and bringing them to the location and condition so as to render themoperational in themanner intended bythe Group. The Group allocates the cost of an item of property, plant and equipment to its significant system andcomponentparts.
TheDirectorshaveappliedthetransitionalprovisionsof InternationalAccountingStandardNo.16(revised)“Property,Plant and Equipment” as adopted by the Malaysian Accounting Standards Board which allow the freehold land,buildings and civilworks tobe statedat their previous years’ valuations less accumulateddepreciation.
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(g) property, plant and equipment and depreciation (cont’d)
Surpluses arising on revaluation are credited to the revaluation reserve account. Any deficit arising from revaluationis charged against the revaluation reserve to the extent of a previous surplus held in the revaluation reserve for thesameasset. In all other cases, a decrease in the carryingamount is charged to the income statement.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, onlywhenit isprobablethatfutureeconomicbenefitsassociatedwiththe itemwillflowtotheGroupandthecostoftheitem canbemeasured reliably. The carryingamountof the replacedpart is derecognised.
The cost of major overhaul/inspection is recognised in the asset’s carrying amount as a replacement and theremaining carryingamountof thepreviousmajor overhaul/inspection is derecognised.
MajorsparepartsandstandbyequipmentarerecognisedasassetswhentheGroupexpectstousethemduringmorethanoneperiod.Similarly, if thesparepartsandservicingequipmentcanbeusedonly inconnectionwithan itemofproperty, plant andequipment, they are accounted for asproperty, plant andequipment.
Gainsand lossesondisposalofproperty,plantandequipmentaredeterminedby reference to their carryingamountandaretaken intoaccount indeterminingprofit/(loss)beforetaxation.Ondisposalofrevaluedassets,theamount inrevaluation reserve relating to thoseproperty, plant andequipment are transferred to retainedprofits.
Freehold landand capital project-in-progress arenotdepreciated.
Depreciation is provided on all other categories of property, plant and equipment on a straight line basis whichreflects the estimateduseful lives of the assets.
The estimateduseful lives of property, plant andequipment are as follows:
Buildings and civilworks 10 to60 years Plant andmachinery 10 to40 years Lines anddistributionmains 25 to35 years Distribution services 20 years Meters 15 years Public lighting 15 to25 years Furniture,fittings andoffice equipment 3 to10 years Motor vehicles 5 to10 years
Whereanindicationofimpairmentexists,thecarryingamountoftheassetisassessedandwrittendownimmediatelyto its recoverable amount (seeNote2(o)).
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(h) prepaid operating leases
The Directors have applied the transitional provisions of FRS 117 “Leases”, treating the leasehold land as prepaidoperating leaseswhichwaspreviously classifiedwithinproperty,plantandequipmentandallowtheGroup to retainthe unamortised revalued amount of the previously revalued leasehold land as the surrogate carrying amount ofprepaidoperating leases and suchprepaidoperating leases shall be amortisedona straight linebasis over the leaseterm.
Leasehold land is amortised over the remaining period of the respective leases ranging from 5 to 99 years on astraight linebasis.
(i) Non-current assets held for sale
The Group shall classify a non-current asset as held for sale if its carrying amount will be recovered principallythrougha sale transaction rather than through continuinguse.
Theassetsclassifiedasnon-currentassetsheld forsalewillbemeasuredat the lowerof itscarryingamountandfairvalue less costs to sell.
No depreciation or amortisation is provided against the assets while it is classified as non-current assets held forsale.
The assets shall be derecognised on disposal and the difference between the net disposal proceeds and the carryingamount is recognisedasprofitor loss in theperiodof disposal.
Anasset thatceases tobeclassifiedasnon-currentassetsheld forsaleshallbemeasuredat the lowerof itscarryingamountbeforetheassetwasclassifiedasnon-currentassetsheldforsale,adjustedforanydepreciation,amortisationor revaluations that would be recognised had the asset not be classified as non-current assets held for sale, and itsrecoverable amount at thedateof the subsequentdecisionnot to sell.
(j) intangible assets
Expenditure on acquired rights, patents, trademarks and licenses is capitalised and amortised using the straight linemethodover their estimateduseful lives. Intangible assets arenot revalued.
(k) research and development
Expenditureonresearchactivities,undertakenwiththeprospectofgainingnewscientificortechnicalknowledgeandunderstanding, is recognised in the income statement as an expenseas incurred.
Expenditure on development activities,whereby research findings are applied to a plan or design for the productionof new or substantially improved products and processes, is capitalised if the product or process is technically andcommercially feasible and theGrouphas sufficient resources to complete thedevelopment.
Capitaliseddevelopmentcostsare recognisedas intangibleassetsandamortisedfromthepointatwhichtheasset isready foruseona straight-linebasis over its useful life.
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(l) Capitalisation of interest
Interest incurred on external borrowings related to long term project-in-progress is capitalised until the assets areready for their intendeduse.
(m) investments
Investments in other non-current investments are shown at cost and an allowance for diminution in value is madewhere, in the opinion of the Directors, there is a decline other than temporary in the value of such investments.Where therehasbeenadeclineother than temporary in the valueof an investment, such adecline is recognised asan expense in thefinancial year.
On disposal of an investment, the difference between net disposal proceeds and the carrying amount is charged orcredited to the income statement, as the casemaybe.
(n) marketable securities and short term investment
Marketable securities are stated at the lower of cost and market value on an aggregate portfolio basis. Short terminvestment is statedat the lowerof cost andmarket value.
Cost is derived at on the weighted average basis. Market value is calculated by reference to the relevant stockexchange quoted selling prices at the close of business at the balance sheet date. Any write downs to the marketvalueof investmentsor subsequentwritebacks to cost aredealtwith through the income statement.
(o) impairment of non-financial assets
Property,plantandequipmentandothernon-currentassets, including intangibleassets,arereviewedfor impairmentlosses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.Impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverableamount. The recoverable amount is thehigher of fair value less cost to sell and its value-in-use. For thepurposes ofassessing impairment, assets aregroupedat the lowest level forwhich there are separately identifiable cashflows.
Impairment loss is charged to the income statement unless it reverses a previous revaluation in which case it ischarged to the revaluation surplus. Any subsequent increase in recoverable amount is recognised in the incomestatementunless it reverses an impairment loss ona revaluedasset inwhich case it is taken to revaluation surplus.
(p) deferred income
Contributions received from customers to defray the cost of capital projects are credited to the deferred incomeaccount.Theamount inthisaccount is releasedtothe incomestatementonastraight linebasisover15years,beingtheaverageuseful life of suchprojects.
(q) operating leases
Assetsleasedoutasoperatingleasesareincludedwithinproperty,plantandequipmentinthebalancesheetandtheyaredepreciatedover their expecteduseful lives onabasis consistentwith similar assets.
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(r) inventories
Inventories are statedat the lowerof cost andnet realisable value.
Costofwork-in-progressandfinishedgoodscompriserawmaterials,direct labourandaproportionoftheproductionoverheads. Cost is determinedon theweightedaverageandfirst-in-first-outbasis.
Net realisablevalue is theestimatedsellingprice in theordinarycourseofbusiness, less thecostsof completionandselling expenses.
(s) Trade receivables
Trade receivablesarecarriedatanticipated realisablevalue.Baddebtsarewrittenoff in theperiod inwhich theyareidentified.Anallowance ismadefordoubtful receivablesbasedonreviewofalloutstandingamountsatthefinancialyear end.
(t) Trade payables
Trade payables are stated at cost,which is the fair value of the consideration to be paid in the future for the goodsand services received.
(u) Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise cash in hand, deposits held at callwithbanks,bankoverdraftsandshort term,highly liquid investments thatare readilyconvertible toknownamountsof cashandwhichare subject to an insignificant risk of changes in value.
(v) Share capital
(i) Classification
Ordinary shares and non-redeemable preference shares with discretionary dividends are classified as equity.Other shares are classified as equity and/or liability according to the economic substance of the particularinstrument.
Theportionofaconvertiblebondrepresentingthevalueoftheconversionoptionatthetimeofissueisincludedin equity (see Note 2(w) on borrowings). The value of the conversion option is not changed in subsequentperiods.Uponconversionof thebondtoequityshares, theamountcreditedtosharecapitalandsharepremiumis the aggregate of the amounts classifiedwithin liability and equity at the time of conversion.No gain or lossis recognised. If thebond is redeemed, the conversionoption is transferred to retainedearnings.
Distributions to holders of a financial instrument classified as an equity instrument are charged directly toequity.
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(v) Share capital (cont’d)
(ii) Share issue costs
Incremental external costsdirectly attributable to the issuanceofnew sharesor optionsare shown in equity asadeduction, net of tax, from theproceeds.
(iii) Dividends to shareholders of theCompany
Dividendsonredeemablepreferencesharesarerecognisedasa liabilityandexpressedonanaccrualbasis.Otherdividends are recognisedas a liability in theperiod inwhich they are approved.
(w) borrowings
Borrowingsareinitiallyrecognisedbasedontheproceedsreceived.Thecostsofissuingdebtinstrumentsareexpensedas andwhen incurred.
Interestanddividendsonfinancial instrumentsdeemedasborrowingsarereportedwithinfinancecost inthe incomestatement.
(x) income tax
Current taxexpense isdeterminedaccording to the tax lawsofwhich theGroupandCompanyoperatesand includeall taxesbasedupon the taxableprofits.
Deferred tax is recognised in full, using the liabilitymethod, on temporary differences arising between the amountsattributed to assets and liabilities for taxpurposes and their carryingamounts in thefinancial statements.However,deferredtax isnotaccountedfor if itarises from initial recognitionofanassetor liability ina transactionother thanabusiness combination that at the timeof the transactionaffectsneither accountingnor taxableprofitor loss.
Deferredtaxassetsare recognisedtotheextent that it isprobablethat taxableprofitwillbeavailableagainstwhichthedeductible temporarydifferences, unused tax losses andunutilised tax credits canbeutilised.
Tax rates enactedor substantively enactedby thebalance sheetdate areused todeterminedeferred tax.
(y) employee benefits
(i) Short termemployeebenefits
Wages,salaries,paidannualleave,bonuses,andnon-monetarybenefitsareaccruedinthefinancialyearinwhichthe services are renderedby employeesof theGroup.
(ii) Post-employmentbenefits
The Group has various post-employment benefit schemes which are either defined contribution or definedbenefitplans.
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(y) employee benefits (cont’d)
(ii) Post-employmentbenefits (cont’d)
Defined contributionplans
The Group’s contributions to defined contribution plans are charged to the income statement in the financialyear to which they relate. Once the contributions have been paid, the Group has no further paymentobligations.
Definedbenefitplans
TheGroupmakes contributions to theCompany’sRetirementBenefitPlan, adefinedbenefitplanandapprovedfund independent of the Company’s finances. A book provision is also provided by the Company as thecontribution rate required to fundthebenefitsunder thesaidplan is inexcessof the InlandRevenuemaximumlimit. TheGroupand theCompanyalsoprovide for apost retirementmedical plan for certain employees.
The liability in respect of a defined benefit plan is the present value of the defined benefit obligation at thebalancesheetdateminus the fairvalueofplanassets, togetherwithadjustments foractuarialgains/lossesandpastservicecost.TheGroupdeterminesthepresentvalueof thedefinedbenefitobligationandthe fairvalueofany plan assets with sufficient regularity such that the amounts recognised in the financial statements do notdiffermaterially from theamounts thatwouldbedeterminedat thebalance sheetdate.
The defined benefit obligation, calculated using the Projected Unit Credit Method, is determined by anindependentactuarialfirm,consideringtheestimated futurecashoutflowsusingmarketyieldsatbalancesheetdate of Government securities which have currency and terms to maturity approximating the terms of therelated liability. The last revaluationwasdone inDecember2009.
Theamountofnetactuarialgainsand lossesare creditedor charged to the incomestatement, as the casemaybe, over the expectedaverage remaining service lives of theparticipating employees.
(iii) Share-based compensation
TheGrouphasapplied theprovisionofFRS2 toallequity instrumentsgrantedafter31December2004butnotyet vestedas at 1 September2006, the effectivedate theGroupadopted this FRS.
TheGroupoperatesanequity-settled,share-basedcompensationplanfortheemployeesoftheGroup.Employeeservices received in exchange for the grant of the share options is recognised as an expense in the incomestatementover the vestingperiodsof thegrantwith a corresponding increase in equity.
Thetotalamounttobeexpensedoverthevestingperiodisdeterminedbyreferencetothefairvalueoftheshareoptionsgranted,excluding the impactofanynon-marketvestingconditions (forexample,profitabilityandsalesgrowth targets). Non-market vesting conditions are included in assumptions about the number of options thatare expected to be vested. At each balance sheet date, the Group revises its estimates of the number of shareoptions that are expected to be vested. It recognises the impact of the revision of original estimates, if any, inthe income statement,with a correspondingadjustment to equity.
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(y) employee benefits (cont’d)
(iii) Share-based compensation (cont’d)
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominalvalue) and sharepremiumwhen theoptions are exercised.
(z) government development grants
Grants from the government are recognised at their fair valuewhere there is a reasonable assurance that the grantwill be receivedand theGroupwill complywith all attached conditions.
Government grants relating to costs are deferred and recognised in the income statement over the periodnecessarytomatch themwith the costs they are intended to compensate.
Governmentgrantsrelatingtoconstructionofproperty,plantandequipmentare includedinnon-current liabilitiesasdeferred income and are credited to the income statement on the straight line basis over the expected lives of therelatedassets.
(aa) Contingent liabilities
TheGroupdoesnotrecogniseacontingentliabilitybutdisclosesitsexistenceinthefinancialstatements.Acontingentliability is a possible obligation that arises from past events whose existence will be confirmed by uncertain futureeventsbeyond thecontrolof theGrouporapresentobligation that isnot recognisedbecause it isnotprobable thatanoutflowof resourceswill be required to settle theobligation.
(ab) revenue recognition
Sales are recognisedupon invoiced valueof servicesdeliverednet of billing adjustments.
Other operating income earned by the Group and the Company comprises interest and leasing income as well asdividend income. Leasing income isaccrued,unless collectability is indoubt.Dividend income is recognisedwhen theshareholders’ rights to receivepayment is established.
Interest income is recognisedona timeproportionbasis that takes into account the effective yieldon theasset.
(ac) Foreign currencies
(i) Functional andpresentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency ofthe primary economic environment in which the entity operates (the ‘functional currency’). The financialstatements arepresented inRinggitMalaysia,which is theCompany’s functional andpresentation currency.
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(ac) Foreign currencies (cont’d)
(ii) Transactions andbalances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing atthe dates of the transactions. Monetary assets and liabilities in foreign currencies are translated at exchangerates rulingat thebalance sheetdate.All exchangedifferences aredealtwith through the income statement.
(iii) Group companies
Theresultsandfinancialpositionofall thegroupentities (noneofwhichhasthecurrencyofahyperinflationaryeconomy) that have functional currencies different from the presentation currency are translated into thepresentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
• income and expenses for each income statement are translated at average exchange rates (unless this average isnota reasonableapproximationof thecumulativeeffectof the ratesprevailingon the transaction dates, inwhich case incomeandexpenses are translatedat the rateon thedatesof the transactions); and
• all resulting exchangedifferences are recognisedas a separate componentof equity.
On consolidation, exchangedifferences arising from the translation of the net investment in foreign operationsaretakentoshareholders’equity.Whenaforeignoperation ispartiallydisposedoforsold,exchangedifferencesthatwere recorded in equity are recognised in the income statement aspart of thegainor loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets andliabilities of the foreign entity and translatedat the closing rate.
Theprincipal closing ratesused in translationof foreign currency amountswere as follows:
Foreign currency 2010 2009 rm RM
1USDollar 3.1390 3.5255 100 JapaneseYen 3.6919 3.7540 1 SterlingPound 4.8860 5.7434 100Pakistani Rupee 3.6800 4.2456 1 EURO 3.9958 5.0538
(ad) Financial instruments
(i) Description
Financial instruments carried on the balance sheet include cash and bank balances, investments, receivables,payables, leases and borrowings. The particular recognition methods adopted are disclosed in the individualpolicy statements associatedwith each item.
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2. Summary oF SigNiFiCaNT aCCouNTiNg poLiCieS (CoNT’d)
(ad) Financial instruments (cont’d)
(i) Description (cont’d)
The Group and the Company are also parties to financial instruments that manage exposure to fluctuations inforeigncurrencyexchangeandinterestrate.Thesefinancialinstruments,whichmainlycompriseforeigncurrencyforward contracts, cross currency swap contracts and interest rate swap contracts, are not recognised in thefinancialstatements.DerivativefinancialinstrumentsareusedintheGroupandtheCompany’sriskmanagementof foreign currency and interest rate risk exposureof itsfinancial liabilities.
(ii) Financial instrumentsnot recognisedon thebalance sheet
Foreign currency forward contracts
The Group enters into foreign currency forward contracts to protect the Group from movements in exchangeratesby establishing the rate atwhicha foreign currency asset or liabilitywill be settled.
Exchangegains and losseson contracts are recognised in the income statement at timeof settlement.
Cross currency swap contracts
Crosscurrencyswapsareentered into tomanageexposure tomovements inexchange ratesbyestablishing thecurrency atwhicha foreign currency liabilitywill be settled.
The notional principal of these contracts are off balance sheet. Any differential in terms of exchange gains orlossesarerecognised inthe incomestatement inthesameperiodastheexchangedifferencesontheunderlyinghedged items.
Currencyoptions
CurrencyoptionsaredesignedtomanagetheGroup’sexposuretoprotecttheGroupfrommovementsinforeigncurrency.Thenotionalprincipalofthecontractisoffbalancesheet.Thepremiumpaidisexpensedtotheincomestatementwhen it is incurred.Gains or losses on early termination of currency options or on repayment of theborrowingare taken to the income statement.
Interest rate swap contracts
Interest rate swaps, collars and caps agreements are designed to manage the Group’s exposure to protect theGroup from movements in interest rates. The notional principal of these contracts are off balance sheet. Anydifferential to be paid or received on an interest rate swap contract is recognised as a component of interestincomeor expenseover theperiodof the contract.Gainsand lossesonearly terminationof interest rate swapsor on repaymentof theborrowingare taken to the income statement.
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2. Summary oF SigNiFiCaNT aCCouNTiNg poLiCieS (CoNT’d)
(ad) Financial instruments (cont’d)
(iii) Fair value estimation for disclosurepurposes
In assessing the fair valueoffinancial instruments, theGroupand theCompanymake certain assumptions andapply the discounted cash flow method to discount future cash flows to determine the fair value of financialinstruments. The fair value of financial liabilities are estimated by discounting future cash flows at currentmarket interest rate available to theGroupand theCompany.
Fair value of publicly traded derivatives and securities is based on quoted market prices at balance sheet datewhereas the fair value of foreign currency forward contracts is calculated using spot rates, as published byReuters, at balance sheetdate.
The fairvalueofcrosscurrencyswapsandcurrencyoptionsarecalculatedas thepresentvalueof theestimatedfuture cashflowsand/or valuation from thebanks.
The carrying amount for financial assets and liabilities with a maturity of less than one year are assumed toapproximate their fair values.
(ae) rural electrification and projects under the malaysia plan
(i) Rural electrificationprojects are capitalisedasproperty, plant andequipment.
(ii) The costs of the projects under the Malaysia Plan in the State of Sabah are only capitalised and accounted foras property, plant and equipmentupon receipt of formal handover documentation. The corresponding amountsare recorded as Government development grants and such grants are credited to the income statement on astraight linebasis over the sameperiodas the expected economic life of theprojects.
3. CriTiCaL aCCouNTiNg eSTimaTeS aNd JudgemeNTS
Estimates and judgements are continually evaluated by the Directors and are based on historical experience and otherfactors, including expectationsof future events that arebelieved tobe reasonableunder the circumstances.
(a) Critical judgement in applying the group’s accounting policies
Indeterminingandapplyingaccountingpolicies, judgement isoften required in respectof itemswhere thechoiceofspecific policy couldmaterially affect the reported results and financial position of theGroup. The accounting policyto classify between investment properties and property, plant and equipment requires subjective judgements, oftenas a result of theneed tomakeestimates about the effect ofmatters that are inherentlyuncertain.
Investmentproperty is a propertyheld to earn rentals or for capital appreciationor both.
Severalproperties compriseaportion that isheld toearn rentalsor for capitalappreciationandanotherportion thatisheld foruse in theproductionor supplyofgoodsor servicesor foradministrativepurposes. If theseportionscouldbe sold (or leased out under a finance lease) separately, then these portions would be accounted separately by theGroup.
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3. CriTiCaL aCCouNTiNg eSTimaTeS aNd JudgemeNTS (CoNT’d)
(a) Critical judgement in applying the group’s accounting policies (cont’d)
If theportions couldnotbe sold separately, theproperty is an investmentpropertyonly if an insignificantportion isheld for use in the production or supply of goods or services or for administrative purposes. Judgement is made onanindividualpropertybasistodeterminewhetherancillaryservicesaresosignificantthatapropertydoesnotqualifyas an investmentproperty.
(b) Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, bydefinition, rarely equate to the related actual results. To enhance the information content of the estimates, certainkey variables that are anticipated to have amaterial impact on theGroup’s results and financial position are testedforsensitivitytochanges intheunderlyingparameters.Theestimatesandassumptionsthathaveasignificantriskofcausing a material adjustment to the carrying amounts of assets and liabilities within the next financial year areoutlinedbelow.
(i) Impairmentof property, plant andequipment
The Group assesses impairment of assets whenever the events or changes in circumstances indicate that thecarrying amount of an asset may not be recoverable i.e. the carrying amount of the asset is more than therecoverable amount.
Recoverable amount ismeasured at the higher of the fair value less cost to sell for that asset and its value-in-use.Thevalue-in-useisthenetpresentvalueoftheprojectedfuturecashflowderivedfromthatassetdiscountedatanappropriatediscount rate.Projected futurecashflowsarebasedonGroup’sestimatescalculatedbasedonhistorical, sectorand industry trends,generalmarketandeconomicconditions, changes in technologyandotheravailable information.Theassumptionsused, resultsandconclusionof the impairmentassessmentarestated intheNote13 to thesefinancial statements.
(ii) Estimateduseful lives of property, plant andequipment
TheGroup regularly reviews the estimated useful lives of property, plant and equipment based on factors suchas business plan and strategies, expected level of usage and future technological developments. Future resultsofoperationscouldbemateriallyaffectedbychangesintheseestimatesbroughtaboutbychangesinthefactorsmentionedabove.Areductionintheestimateduseful livesofproperty,plantandequipmentwould increasetherecordeddepreciationanddecrease the valueof property, plant andequipment.
(iii) Share-basedpayment
Equity settled share-based payment (share options) ismeasured at fair value at the date they are granted. Theassumptions used in the valuation to determine these fair value are stated in Note 35 to these financialstatements.
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3. CriTiCaL aCCouNTiNg eSTimaTeS aNd JudgemeNTS (CoNT’d)
(b) Critical accounting estimates and assumptions (cont’d)
(iv) Contingent liabilities
Determination of the treatment of contingent liabilities is based on management’s view of the expectedoutcomeofthecontingenciesafterconsulting legalcounselfor litigationcasesandinternalandexternalexpertsto theGroup formatters in theordinary courseof business.
(v) Allowance for receivables
The allowance is established when there is objective evidence that the Group will not be able to collect allamount dues according to the original term of receivables. This is determined based on the ageing profile andcollectionpatterns.
(vi) Estimationof income taxes
Income taxes are estimatedbasedon the rules governedunder the IncomeTaxAct 1967.
Differences in determining the capital allowances and deductibility of certain expenses may arise during theestimation of the provision for income taxes between tax calculated at the balance sheet date, and the finalsubmission to Inland Revenue Board as a result of obtaining further detailed information that may becomeavailable subsequent to thebalance sheetdate.
Where thefinal taxoutcomeof thesematters isdifferent fromtheamounts thatwere initially recognised, suchdifferenceswill impact the income taxprovisions in theperiod inwhich suchdetermination ismade.
4. reveNue
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Sales – electricity 29,594.2 28,083.8 28,041.9 26,426.4 – goods and services 357.4 345.4 0 0 Releaseof deferred income (Note33) 368.5 356.4 326.9 317.2 30,320.1 28,785.6 28,368.8 26,743.6
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5. operaTiNg eXpeNSeS
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Energy cost 19,089.0 18,538.2 18,889.5 18,262.0 Transmission cost 1,236.5 1,143.2 1,233.8 1,141.6 Distribution cost 3,583.8 3,404.2 3,578.5 3,398.5 Administrative expenses 1,784.0 1,576.3 1,067.0 883.4 Otheroperating expenses 826.4 782.0 647.9 565.0
26,519.7 25,443.9 25,416.7 24,250.5
Operatingexpenses include the following items: group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Purchases from Independent Power Producers (IPPs) 12,528.0 11,827.0 15,904.4 14,620.1 Directors’ remuneration – fees 1.0 0.9 0.8 0.8 – other emoluments 2.8 1.4 2.8 1.4 Auditors remuneration – statutory audit fees – PricewaterhouseCoopers,Malaysia 1.5 1.5 0.7 0.7 –Memberfirmof PricewaterhouseCoopers International Limited ** # 0 0 0 0 – assurance related fees 0.3 0.3 0.3 0.3 –non-audit fees – PricewaterhouseCoopers,Malaysia ## 2.1 1.3 1.1 0.9 Staff cost (Note6) 2,932.3 2,734.0 2,565.4 2,363.3 Property, plant andequipment: –Depreciation 3,923.2 3,537.7 3,283.5 2,899.4 –Writtenoff 86.6 12.9 86.5 6.6 Amortisationof prepaidoperating leases 27.0 23.8 19.6 16.4 Lossonwindingup/disposal of subsidiaries 112.7 0 0.1 0 Allowance for doubtful debts: – Tradeandother receivables 103.3 76.7 93.1 75.5 –Amountsdue from subsidiaries 0 0 323.5 236.9 –Amountsdue froma jointly controlled entity 14.6 0 14.6 0 Write-backof allowance for doubtful debts 0 (8.1) 0 (1.2)
277TENAGA NASIONAL BERHADANNUAL REPORT 2010
5. operaTiNg eXpeNSeS (CoNT’d)
Operatingexpenses include the following items: (cont’d) group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Impairment lossesof investments in: – Subsidiaries 0 0 0 42.9 – Jointly controlled entity 7.9 0 7.9 0 Allowance for/(writebackof) diminution in valueof –Marketable securities (0.3) 0.2 (0.3) 0.2 – Long term investments 0 0 0 59.4 Allowance for/(write-backof) inventoryobsolescence 3.5 (6.9) 3.5 (8.3) Inventorieswrittenoff 23.7 21.5 23.4 21.3 Rental of landandbuildings 53.4 56.6 34.5 36.4 Rental of plant andmachinery 20.0 14.7 20.0 14.7 Researchanddevelopment expenses 46.9 23.6 44.8 20.8 Receipt ofGovernment subsidies* (521.4) (426.2) 0 0
* This represents the subsidies that Sabah Electricity Sdn Bhd (‘SESB’) received for diesel and medium fuel oil from the Government of Malaysia. The total amount credited in the current year was RM521.4 million (2009: RM426.2 million) and it has been offset against energy cost.
** This represents the audit fees for Liberty Power Ltd amounting to RM34,729 (2009: RM37,635).# Separate and independent legal entities from PricewaterhouseCoopers, Malaysia.# # Current year amount primarily relates to work commissioned by the Energy Commission on the management and
engineering audit, jointly undertaken by PwC Malaysia and an international engineering and consulting firm.
The estimated monetary value of benefits-in-kind received by the Directors was RM309,821 (2009: RM512,647) for theGroupand theCompany.
Therewasnoamountpaidandpayable toanyfirm,ofwhichaDirector is apartner, forprofessional services rendered totheGroupand theCompany (2009:Nil).
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6. STaFF CoST
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Wages, salaries andbonuses 1,765.6 1,643.8 1,477.9 1,379.9 Defined contribution retirementplan 189.6 178.7 150.9 143.0 Retirementbenefitplan (Note31) 251.6 258.5 249.2 259.1 Retirementmedical plan (Note31) 513.8 439.1 502.4 414.6 Employees’ ShareOption Scheme II 33.4 26.3 29.9 25.2 Other employeebenefits 178.3 187.6 155.1 141.5
2,932.3 2,734.0 2,565.4 2,363.3
Details of the retirement benefit and retirementmedical plans of theGroup and the Company are set out inNote 31 tothesefinancial statements.
7. oTher operaTiNg iNCome
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Dividend income from investments in: –quoted shares 4.1 0 4.1 0 –unquoted shares 2.5 0 58.6 54.1 Leasing income 4.7 5.5 7.0 7.8 Rental income 12.2 7.8 33.9 34.7 ReleaseofGovernmentdevelopmentgrants (Note34) 42.9 44.6 0 0 Governmentgrants relating to income 50.0 0 0 0 Gainondisposals – Property, plant andequipment 2.0 0.3 2.0 0.1 – Prepaidoperating leases 1.0 3.9 1.0 3.9 –Non-current assetsheld for sale 2.3 26.9 2.3 27.1 Gainon redemptionof redeemable preference shares in a subsidiary 0 0 0 230.8 Interest on latepayments 81.8 71.4 81.8 71.4 Minimumcharges 33.2 33.0 33.2 33.0 Other income 145.6 163.8 126.6 127.8
382.3 357.2 350.5 590.7
279TENAGA NASIONAL BERHADANNUAL REPORT 2010
8. ForeigN eXChaNge gaiN/(LoSS)
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Foreignexchangegain/(loss) comprises:
Translationgain/(loss) – foreign currency denominated term loans 638.7 (1,124.9) 647.3 (816.8) Translation loss – others (6.1) (52.9) (63.2) (10.2) Transactiongain/(loss) – foreign term loans 27.7 (76.7) 27.7 (71.9) Transaction (loss)/gain–others (4.3) 15.3 (4.9) 16.0
656.0 (1,239.2) 606.9 (882.9)
9. FiNaNCe CoST
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Interest onborrowings 1,161.8 1,264.8 869.2 967.8 Less:Amount capitalised intoproperty, plant andequipment (241.4) (268.0) (241.4) (268.0)
920.4 996.8 627.8 699.8
Interest on consumerdeposits 150.5 130.0 129.8 122.7
1,070.9 1,126.8 757.6 822.5
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10. TaXaTioN aNd ZakaT
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Current tax: –Malaysian corporate income tax 666.8 377.1 658.9 360.2 Deferred tax (Note32) 140.8 303.0 123.9 245.8 Real property gains tax 0 0.2 0 0.2
Tax expense 807.6 680.3 782.8 606.2 Zakat 17.2 9.8 17.2 9.8
824.8 690.1 800.0 616.0
Theanalysis of the tax expense is as follows:
Current tax: Current year 669.6 388.6 661.6 375.3 Over accrual inprior years (2.8) (11.5) (2.7) (15.1)
666.8 377.1 658.9 360.2
Deferred tax: Originationof temporarydifferences 140.8 303.0 123.9 245.8
Real property gains tax 0 0.2 0 0.2
807.6 680.3 782.8 606.2
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10. TaXaTioN aNd ZakaT (CoNT’d)
The explanationof the relationshipbetween tax expenseandprofitbefore taxation is as follows:
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Profitbefore taxationand zakat 4,022.1 1,543.1 3,508.5 1,686.7
Tax calculatedat theMalaysian corporate income tax rate of 25% (2009: 25%) 1,005.5 385.7 877.1 421.7 Tax effects of: – Shareof results of associates 4.8 1.7 0 0 – Incomenot subject to tax (304.6) (177.1) (248.1) (157.9) – Expensesnotdeductible for taxpurposes 142.1 436.9 195.4 350.0 – Expensesqualifying for doublededuction (9.4) 0 (9.4) 0 Overprovisionof current tax inprior years (2.8) (11.5) (2.7) (15.1) (Over)/underprovisionof deferred tax inprior years (29.6) 7.4 (29.5) 7.3 Benefits frompreviouslyunrecognised tax losses (9.2) (1.6) 0 0 Current yearunrecognised temporarydifferences andunused tax losses 10.8 38.6 0 0 Real property gains tax 0 0.2 0 0.2 Zakat 17.2 9.8 17.2 9.8
Taxand zakat charge 824.8 690.1 800.0 616.0
Averageeffective tax rate (%) 20.6 44.7 22.8 36.5
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11. earNiNgS per Share
(a) Basic earningsper share
Basic earnings per share is calculated by dividing the profit attributable to ordinary equity holders of the Companyfor thefinancial yearby theweightedaveragenumberof ordinary shares in issueduring thefinancial year.
group
2010 2009
Profit attributable toordinary equityholders of theCompany (RM’million) 3,201.9 917.9
Weightedaveragenumberof ordinary shares in issue (’000) 4,342,410 4,334,776
Basic earningsper share (sen) 73.74 21.18
(b) Diluted earningsper share
group
2010 2009
Profitused todeterminediluted earningsper share (RM’million) 3,201.9 917.9
Weightedaveragenumberof ordinary shares in issue (’000) 4,342,410 4,334,776 Adjustment for shareoptions (’000) 19,650 5,406
Weightedaveragenumberof ordinary shares for diluted earningsper share (’000) 4,362,060 4,340,182
Dilutedearningsper share (sen) 73.40 21.15
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12. divideNdS
Company
2010 2009 rm’million RM’million
Interimdividendof 6.0 sengrossper ordinary share, less income tax at 25%, (2009: interimdividendof 2.0 sengrossper ordinary share, less income tax at 25%and2.0 senper ordinary share, tax exempt) 195.5 151.7
Proposed: Proposedfinal dividendof 20.0 sengrossper ordinary share, less income tax at 25% (2009:final dividendof 10.0 sengrossper ordinary share, less income tax at 25%and 2.3 senper ordinary share, tax exempt) 653.3 425.3
848.8 577.0
Interimdividendsarepaidandaccountedfor inshareholders’equityasanappropriationofretainedprofitsinthefinancialyear.
AttheforthcomingAnnualGeneralMeeting,afinaldividendinrespectofthefinancialyearended31August2010of20.0sengrossper ordinary share, less income tax at 25%will beproposed for shareholders’ approval.
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13. properTy, pLaNT aNd eQuipmeNT
exchange Transfers/ as at rate reclassi- as at 1.9.2009 adjustment additions disposals fication 31.8.2010 rm’million rm’million rm’million rm’million rm’million rm’million
group 2010 Cost/valuation At1984andearlier valuations:
Buildings and civilworks 5.6 0 0 0 (5.6) 0
At1994 valuation:
Freehold land 557.1 0 0.1 (0.7) 5.9 562.4 Buildings and civilworks 442.4 0 0 (1.5) 5.6 446.5
1,005.1 0 0.1 (2.2) 5.9 1,008.9 At cost:
Freehold land 376.3 (0.3) 20.0 (0.4) (34.2) 361.4 Buildings and civilworks 11,986.2 (0.5) 356.6 (1.8) 11.8 12,352.3
13,367.6 (0.8) 376.7 (4.4) (16.5) 13,722.6
Plant andmachinery 41,496.5 (92.9) 2,446.2 (467.9) 108.5 43,490.4 Lines anddistributionmains 26,526.7 0 1,946.4 0 48.5 28,521.6 Distribution services 2,646.4 0 248.7 0 4.6 2,899.7 Meters 1,535.6 0 110.2 0 4.1 1,649.9 Public lighting 309.7 0 17.7 0 0 327.4 Furniture, fittings and office equipment 1,204.2 (0.6) 48.3 (2.0) 2.7 1,252.6 Motor vehicles 285.7 (0.2) 22.8 (2.5) 4.6 310.4
87,372.4 (94.5) 5,217.0 (476.8) 156.5 92,174.6 Capital project-in-progress 5,906.9 (3.3) 3,984.1 0 (5,388.6) 4,499.1
93,279.3 (97.8) 9,201.1 (476.8) (5,232.1) 96,673.7
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13. properTy, pLaNT aNd eQuipmeNT (CoNT’d)
Charged for the released on as at financial disposals/ as at 1.9.2009 year transfers 31.8.2010 rm’million rm’million rm’million rm’million
group 2010 Accumulateddepreciation At1984andearlier valuations:
Buildings and civilworks 3.9 0 (3.9) 0
At1994 valuation:
Freehold land 0 0 0 0 Buildings and civilworks 217.2 18.1 3.0 238.3
221.1 18.1 (0.9) 238.3 At cost:
Freehold land 0 0 0 0 Buildings and civilworks 3,225.4 327.4 (2.0) 3,550.8
3,446.5 345.5 (2.9) 3,789.1
Plant andmachinery 16,638.2 2,073.4 (332.9) 18,378.7 Lines anddistributionmains 10,940.2 1,162.7 3.8 12,106.7 Distribution services 1,405.6 123.6 0 1,529.2 Meters 781.8 90.4 4.0 876.2 Public lighting 177.0 15.1 0 192.1 Furniture, fittings andoffice equipment 999.0 86.5 (2.4) 1,083.1 Motor vehicles 223.4 26.0 (2.8) 246.6
34,611.7 3,923.2 (333.2) 38,201.7
Accumulated impairment losses Plant andmachinery 440.2 0 0 440.2
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13. properTy, pLaNT aNd eQuipmeNT (CoNT’d)
exchange Transfers/ as at rate reclassi- as at 1.9.2008 adjustment additions disposals fication 31.8.2009 rm’million rm’million rm’million rm’million rm’million rm’million
group 2009 Cost/valuation At1984andearlier valuations:
Buildings and civilworks 5.6 0 0 0 0 5.6
At1994 valuation:
Freehold land 572.5 0 0 (1.7) (13.7) 557.1 Buildings and civilworks 445.2 0 0 (0.3) (2.5) 442.4
1,023.3 0 0 (2.0) (16.2) 1,005.1 At cost:
Freehold land 368.8 (1.7) 19.5 0 (10.3) 376.3 Buildings and civilworks 11,931.6 (0.6) 480.4 (1.4) (423.8) 11,986.2
13,323.7 (2.3) 499.9 (3.4) (450.3) 13,367.6
Plant andmachinery 38,335.3 (34.7) 2,716.6 (71.5) 550.8 41,496.5 Lines anddistributionmains 25,117.2 0 1,365.7 0 43.8 26,526.7 Distribution services 2,510.3 0 123.5 0 12.6 2,646.4 Meters 1,412.8 0 125.5 0 (2.7) 1,535.6 Public lighting 294.4 0 15.5 0 (0.2) 309.7 Furniture, fittings and office equipment 1,135.4 (0.4) 97.2 (3.4) (24.6) 1,204.2 Motor vehicles 279.3 (1.7) 15.8 (8.9) 1.2 285.7
82,408.4 (39.1) 4,959.7 (87.2) 130.6 87,372.4 Capital project-in-progress 6,668.4 (0.2) 4,425.7 0 (5,187.0) 5,906.9
89,076.8 (39.3) 9,385.4 (87.2) (5,056.4) 93,279.3
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13. properTy, pLaNT aNd eQuipmeNT (CoNT’d)
Charged for the released on as at financial disposals/ as at 1.9.2008 year transfers 31.8.2009 rm’million rm’million rm’million rm’million
group 2009 Accumulateddepreciation At1984andearlier valuations:
Buildings and civilworks 3.9 0 0 3.9
At1994 valuation:
Freehold land 0 0 0 0 Buildings and civilworks 203.6 14.8 (1.2) 217.2
207.5 14.8 (1.2) 221.1 At cost:
Freehold land 0 0 0 0 Buildings and civilworks 3,144.7 84.3 (3.6) 3,225.4
3,352.2 99.1 (4.8) 3,446.5
Plant andmachinery 14,671.6 2,027.4 (60.8) 16,638.2 Lines anddistributionmains 9,869.9 1,070.3 0 10,940.2 Distribution services 1,293.1 112.5 0 1,405.6 Meters 696.2 85.6 0 781.8 Public lighting 162.6 14.4 0 177.0 Furniture, fittings andoffice equipment 908.6 103.1 (12.7) 999.0 Motor vehicles 207.2 25.3 (9.1) 223.4
31,161.4 3,537.7 (87.4) 34,611.7
Accumulated impairment losses Plant andmachinery 440.2 0 0 440.2
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13. properTy, pLaNT aNd eQuipmeNT (CoNT’d)
Transfers/ as at reclassi- as at 1.9.2009 additions disposals fication 31.8.2010 rm’million rm’million rm’million rm’million rm’million
Company 2010 Cost/valuation At1994 valuation:
Freehold land 557.0 0.2 (0.7) 5.9 562.4 Buildings and civilworks 442.3 0 (1.5) 0 440.8
999.3 0.2 (2.2) 5.9 1,003.2
At cost:
Freehold land 316.5 20.0 (0.4) (38.2) 297.9 Buildings and civilworks 10,392.9 343.4 (1.8) 2.9 10,737.4
11,708.7 363.6 (4.4) (29.4) 12,038.5
Plant andmachinery 30,911.4 2,196.4 (412.2) (15.2) 32,680.4 Lines anddistributionmains 25,347.4 1,942.4 0 5.6 27,295.4 Distribution services 2,515.3 248.4 0 0 2,763.7 Meters 1,501.5 105.9 0 0 1,607.4 Public lighting 309.8 17.7 0 0 327.5 Furniture, fittings andoffice equipment 1,057.4 35.7 (1.0) 0.2 1,092.3 Motor vehicles 235.4 11.3 (2.5) 2.0 246.2
73,586.9 4,921.4 (420.1) (36.8) 78,051.4 Capital project-in-progress 5,539.8 3,484.3 0 (4,921.4) 4,102.7
79,126.7 8,405.7 (420.1) (4,958.2) 82,154.1
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13. properTy, pLaNT aNd eQuipmeNT (CoNT’d)
Charged for the released on as at financial disposals/ as at 1.9.2009 year transfers 31.8.2010 rm’million rm’million rm’million rm’million
Company 2010 Accumulateddepreciation At1994 valuation:
Buildings and civilworks 217.2 18.0 (1.1) 234.1
217.2 18.0 (1.1) 234.1
At cost:
Freehold land 0 0 0 0 Buildings and civilworks 2,840.9 265.1 (1.5) 3,104.5
3,058.1 283.1 (2.6) 3,338.6
Plant andmachinery 13,451.2 1,572.3 (327.3) 14,696.2 Lines anddistributionmains 10,591.1 1,114.9 0 11,706.0 Distribution services 1,320.5 118.2 0 1,438.7 Meters 765.8 87.3 0 853.1 Public lighting 176.6 15.1 0 191.7 Furniture, fittings andoffice equipment 890.8 71.6 (1.0) 961.4 Motor vehicles 183.9 21.0 (3.8) 201.1
30,438.0 3,283.5 (334.7) 33,386.8
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Transfers/ as at reclassi- as at 1.9.2008 additions disposals fication 31.8.2009 rm’million rm’million rm’million rm’million rm’million
Company 2009 Cost/valuation At1994 valuation:
Freehold land 572.4 0 (1.7) (13.7) 557.0 Buildings and civilworks 445.1 0 (0.3) (2.5) 442.3
1,017.5 0 (2.0) (16.2) 999.3 At cost:
Freehold land 308.9 19.5 0 (11.9) 316.5 Buildings and civilworks 10,356.1 465.2 (1.4) (427.0) 10,392.9
11,682.5 484.7 (3.4) (455.1) 11,708.7
Plant andmachinery 27,982.5 2,587.6 (30.9) 372.2 30,911.4 Lines anddistributionmains 24,004.8 1,342.6 0 0 25,347.4 Distribution services 2,393.8 121.5 0 0 2,515.3 Meters 1,383.5 120.7 0 (2.7) 1,501.5 Public lighting 294.5 15.5 0 (0.2) 309.8 Furniture, fittings andoffice equipment 1,010.1 82.0 (0.1) (34.6) 1,057.4 Motor vehicles 234.4 10.4 (7.6) (1.8) 235.4
68,986.1 4,765.0 (42.0) (122.2) 73,586.9 Capital project-in-progress 6,461.7 3,843.1 0 (4,765.0) 5,539.8
75,447.8 8,608.1 (42.0) (4,887.2) 79,126.7
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13. properTy, pLaNT aNd eQuipmeNT (CoNT’d)
Charged for the released on as at financial disposals/ as at 1.9.2008 year transfers 31.8.2009 rm’million rm’million rm’million rm’million
Company 2009 Accumulateddepreciation At1994 valuation:
Buildings and civilworks 203.6 14.8 (1.2) 217.2
203.6 14.8 (1.2) 217.2
At cost:
Freehold land 0 0 0 0 Buildings and civilworks 2,821.9 22.4 (3.4) 2,840.9
3,025.5 37.2 (4.6) 3,058.1
Plant andmachinery 11,969.9 1,527.2 (45.9) 13,451.2 Lines anddistributionmains 9,573.5 1,017.6 0 10,591.1 Distribution services 1,213.1 107.4 0 1,320.5 Meters 683.0 82.8 0 765.8 Public lighting 162.2 14.4 0 176.6 Furniture, fittings andoffice equipment 816.0 91.1 (16.3) 890.8 Motor vehicles 171.1 21.7 (8.9) 183.9
27,614.3 2,899.4 (75.7) 30,438.0
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13. properTy, pLaNT aNd eQuipmeNT (CoNT’d)
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Netbook value At1984andearlier valuations:
Buildings and civilworks 0 1.7 0 0
At 1994 valuation:
Freehold land 562.4 557.1 562.4 557.0 Buildings and civilworks 208.2 225.2 206.7 225.1
770.6 784.0 769.1 782.1 At cost:
Freehold land 361.4 376.3 297.9 316.5 Buildings and civilworks 8,801.5 8,760.8 7,632.9 7,552.0
Total landandbuildings 9,933.5 9,921.1 8,699.9 8,650.6
Plant andmachinery 24,671.5 24,418.1 17,984.2 17,460.2 Lines anddistributionmains 16,414.9 15,586.5 15,589.4 14,756.3 Distribution services 1,370.5 1,240.8 1,325.0 1,194.8 Meters 773.7 753.8 754.3 735.7 Public lighting 135.3 132.7 135.8 133.2 Furniture, fittings andoffice equipment 169.5 205.2 130.9 166.6 Motor vehicles 63.8 62.3 45.1 51.5
53,532.7 52,320.5 44,664.6 43,148.9 Capital project-in-progress 4,499.1 5,906.9 4,102.7 5,539.8
58,031.8 58,227.4 48,767.3 48,688.7
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13. properTy, pLaNT aNd eQuipmeNT (CoNT’d)
Had the revalued property, plant and equipment been included in the financial statements at cost less accumulateddepreciationandaccumulatedimpairmentlosses,thenetbookvalueoftherevaluedproperty,plantandequipmentwouldhavebeenas follows:
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Freehold land 55.1 50.5 48.2 43.6 Buildings and civilworks 88.6 95.5 88.6 95.5
143.7 146.0 136.8 139.1
The valuations of freehold land, buildings and civil works of the Group and the Company was based on an independentvaluation by a professional firm of valuers on the open market value basis in 1994. The net surplus on revaluation wasincorporated into thefinancial statements as at 31August1996and transferred to revaluation reserve.
Thevaluationsofbuildingsofasubsidiarywerecarriedoutin1982and1984respectivelybasedonindependentvaluationsby professional firms of valuers on the open market value basis. The net surplus on revaluation was transferred torevaluation reserve.
The title deeds of certain land are in the process of being registered in the name of the Company and certainsubsidiaries.
Interest capitalised during the financial year in capital project-in-progress amounted to RM241.4 million (2009: RM268.0million) for theCompany.
The capitalisation rate used to determine the amount of borrowing cost eligible for capitalisation is 6.30% (2009: 6.23%)for theGroupand theCompany.
Impairment test for property, plant andequipment
During thefinancial year, three subsidiariesundertookannual impairment test for property, plant andequipment.
(a) TNB Liberty Power Limited
TNB Liberty Power Limited has recognised in prior years, a provision for impairment totalling RM440.2 million. Theassessment showed that no further impairment loss is required for the carrying amount of property, plant andequipment assessed, including where realistic variations are applied to key assumptions. The carrying value of theproperty, plant andequipment at balance sheetdate is RM379.2million (2009: RM463.8million).
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Impairment test for property, plant andequipment (cont’d)
(b) SabahElectricity SdnBhd (‘SESB’)
SESB undertook an annual test for impairment of its property, plant and equipment represented by cash-generatingunit (‘CGU’) in accordance with Note 3(b). Based on the impairment test, no impairment loss is required for thecarryingamountofproperty,plantandequipmentasat31August2010as its recoverableamount is inexcessof itscarryingamount.Thecarryingvalueof theproperty,plantandequipmentatbalancesheetdate isRM2,585.1million(2009: RM2,447.6million).
(i) Key assumptionsused in the value-in-use (‘VIU’) calculations
The recoverable amountof theproperty, plant andequipment is determinedbasedonVIU calculation. ThisVIUcalculation apply a discounted cash flow model using cash flow projections covering a ten-year period for theproperty,plantandequipmentreflectingtheremainingaverageusefullivesoftheexistingassets.Theprojectionsover these periods reflect the subsidiary’s expectation of usage, revenue growth, maximum capacity andoperatingcostsoftheseassetsbasedonpastexperienceandcurrentassessmentofelectricitydemandinSabah,particularlymarket growthand industry growth.
Thevalue inusecalculationalso includes theassumption that thesubsidiarywill receive tariff subsidy fromtheFederalGovernment to continue its operations, over theprojectionperiod. Tariff is assumed to remain constantover theprojectionperiod.
Cashflowprojectionsbeyondyeartenarenotextrapolatedusingestimatedterminalgrowthrates.However,thecashflowprojectionsareassumedtobederivedfromtheresidualvalueoftheassetsequivalenttotheexpectednetbook valueof the assetsdepreciated in accordancewith the existingdepreciation rates.
For purposes of theVIU calculation, a discount rate of 5.83% (2009: 5.80%)has been applied. Thediscount ratereflects the SESB’s cost of funds.
(ii) SensitivityAnalysis
Sensitivity analysis show that no impairment loss is required for the carrying amount of property, plant andequipment assessed, includingwhere realistic variations are applied to key assumptions.
(c) Kapar EnergyVentures SdnBhd (‘KEV’)
KEVundertookanannual test for impairmentof itsproperty,plantandequipment.No impairment losswasrequiredforthecarryingamountofproperty,plantandequipmentasat31August2010asitsrecoverableamountisinexcessof its carrying amount. The carrying value of the property, plant and equipment at balance sheet date is RM3,292.8million (2009: RM3,389.2million).
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13. properTy, pLaNT aNd eQuipmeNT (CoNT’d)
Impairment test for property, plant andequipment (cont’d)
(c) Kapar EnergyVentures SdnBhd (‘KEV’) (cont’d)
(i) Key assumptionsused in theVIU calculations
The recoverable amountof theproperty, plant andequipment is determinedbasedonVIU calculation. ThisVIUcalculation apply a discounted cash flow model using cash flow projections covering the estimated remaininguseful life of the property, plant and equipment. The projections over these periods reflect the management’sbest estimate of plant availability, unplanned outage rates and electrical outputs based on the plant’s pastperformanceand the target set forth in thePower PurchaseAgreement.
For the purposes of the VIU calculation, a pre-tax discount rate of 9.21% based on the estimated of weightedaverage cost of capital applicable for theCompany.
(ii) SensitivityAnalysis
Based on the sensitivity analysis performed on the capacity payment, if the estimated unplanned outage ratesusedforthepurposeofassessmentofimpairmentofproperty,plantandequipmenthadbeen1.68%higherthanmanagement’s estimate, assumingall other variables remainunchanged, the carryingamountwill approximaterecoverable amount.
Sensitivity analysis show that no impairment loss is required for the carrying amount of property, plant andequipment assessed, includingwhere realistic variations are applied to key assumptions.
14. prepaid operaTiNg LeaSeS
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Cost/Valuation
As at thebeginningof thefinancial year 1,073.0 1,059.9 868.6 855.5 Additions 22.7 0 22.7 0 Disposals (4.0) (2.1) (4.0) (2.1) Reclassified tonon-current assetsheld for sale (Note20) (3.1) (0.5) (3.1) (0.5) Reclassification 37.6 15.7 33.1 15.7
As at the endof thefinancial year 1,126.2 1,073.0 917.3 868.6
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14. prepaid operaTiNg LeaSeS (CoNT’d)
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Accumulatedamortisation
As at thebeginningof thefinancial year 239.4 215.8 179.6 163.4 Charged for thefinancial year 27.0 23.8 19.6 16.4 Releasedondisposals (3.3) (0.2) (3.3) (0.2) Releasedon reclassification to non-current assetsheld for sale (Note20) (0.5) (0.1) (0.5) (0.1) Releasedon reclassification 0.1 0.1 0 0.1
As at the endof thefinancial year 262.7 239.4 195.4 179.6
Netbook valueas at the endof thefinancial year 863.5 833.6 721.9 689.0
Prepaid operating leases were previously classified as leasehold land within property, plant and equipment and compriselong leasehold landand short leasehold land.
Included in the reclassification was RM2.6 million being the carrying amount of prepaid operating lease reclassified asassetsheld for sale (seeNote20).
The last revaluationof the leasehold landwas in1994.
15. SubSidiarieS
Company
2010 2009 rm’million RM’million
Unquotedordinary shares, at cost 296.6 296.7 Redeemableunsecured loan stocks, at cost 535.5 535.5 Redeemablepreference shares, at cost 4,075.7 4,075.7
4,907.8 4,907.9 Less:Accumulated impairment losses (928.9) (929.0)
3,978.9 3,978.9
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15. SubSidiarieS (CoNT’d)
Redeemable unsecured loan stocks bear interest at 15.0% (2009: 15.0%) per annumon the outstanding nominal value oftheprincipalandacompounding interestwillbechargedat5.0%(2009:5.0%)perannumontheunpaid interestaftertheduedate.
Country of Name of subsidiary group’s interest principal activities incorporation
2010 2009
TNB JanamanjungSdnBhd 100% 100% Generate anddeliver Malaysia electricity andgenerating capacity to TNB
TNBPowerDaharki Ltd# 100% 100% Investmentholding Mauritius
TNB Fuel Services SdnBhd 100% 100% Supplying fuel and coal for Malaysia powergeneration
TNBEnergy Services 100% 100% Generating, distributing, Malaysia SdnBhd supplying, dealing, sellingof different kindsof energy sources and related technical services
TNBResearch SdnBhd 100% 100% Researchand Malaysia development, consultancy andother services
TNBVentures SdnBhd 100% 100% Dormant Malaysia
TNBEngineeringCorporation 100% 100% Principally engagedas Malaysia SdnBhd turnkey contractors, energy project development specialising indistrict cooling systemand co-generation includingoperationand maintenanceworks
TNBRepairAnd 100% 100% Repair andmaintenance Malaysia Maintenance SdnBhd services toheavy industries andother related services
TNBEngineers SdnBhd 100% 100% Dormant Malaysia
TNBCapital (L) Ltd 100% 100% Investmentholding Malaysia
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15. SubSidiarieS (CoNT’d)
Country of Name of subsidiary group’s interest principal activities incorporation
2010 2009
Universiti TenagaNasional 100% 100% Providinghigher Malaysia SdnBhd educationand training
Malaysia Transformer 100% 100% Principally engaged in the Malaysia Manufacturing SdnBhd manufacturing, selling and repairingdistribution, power andearthing transformers
TNBCoal International Ltd* 100% 100% Dormant Mauritius
Power andEnergy 100% 100% Investmentholding Mauritius International (Mauritius) Ltd*
OrionMission SdnBhd 100% 100% Investmentholding Malaysia
SabahElectricity SdnBhd 80% 80% Businessof generation, Malaysia transmission, distribution, and sale of electricity and services in Sabah
TenagaSwitchgear SdnBhd 60% 60% Principally engaged in the Malaysia businessof assemblingand manufacturingofhigh voltage switchgears and contracting of turnkey transmission substations
Kapar EnergyVentures 60% 60% Generate anddeliver Malaysia SdnBhd electricity energy and generating capacity to TNB
TNB Integrated Learning 100% 100% Establish,maintain and Malaysia Solution SdnBhd carry out training center inMalaysia
TNBGeneration SdnBhd 100% 100% Dormant Malaysia
TNBTransmissionNetwork 100% 100% Dormant Malaysia SdnBhd
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15. SubSidiarieS (CoNT’d)
Country of Name of subsidiary group’s interest principal activities incorporation
2010 2009
TNBDistribution SdnBhd 100% 100% Dormant Malaysia
TNBRiskManagement 100% 100% Dormant Malaysia SdnBhd
TNB Logistics SdnBhd*** 100% 100% Dormant Malaysia
TNB– IT SdnBhd 100% 100% Dormant Malaysia
TNBWorkshopServices 100% 100% Dormant Malaysia SdnBhd*** TNBMetering Services 100% 100% Dormant Malaysia SdnBhd***
TNBHidro SdnBhd 100% 100% Dormant Malaysia
SumberHidroManagement 0% 100% Dormant Malaysia SdnBhd**
TNBPrai SdnBhd 100% 100% Dormant Malaysia
TNBProperties SdnBhd 100% 100% Dormant Malaysia
TNBKulimGeneration 100% 100% Dormant Malaysia SdnBhd
SepangPower SdnBhd 70% 70% Dormant Malaysia
Subsidiaries of TNb engineering Corporation Sdn bhd
Bangsar Energy Systems 100% 100% Operatingan integrated Malaysia SdnBhd district cooling system for air conditioning systems of officebuilding
TNECConstruction SdnBhd 100% 100% Dormant Malaysia
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15. SubSidiarieS (CoNT’d)
Country of Name of subsidiary group’s interest principal activities incorporation
2010 2009
Subsidiaries of TNb engineering Corporation Sdn bhd (cont’d)
TNECOperations and 100% 100% Operations and Malaysia Maintenance SdnBhd maintenanceof cooling andpowerplants
Subsidiary of power and energy international (mauritius) Ltd
Independent Power 100% 100% Investmentholding Mauritius International Ltd*
Subsidiary of bangsar energy Systems Sdn bhd
Selesa Energy Systems 70% 70% Dormant Malaysia SdnBhd
Subsidiary of TNeC operations and maintenance Sdn bhd
Tomest EnergyManagement 51% 51% Dormant Malaysia SdnBhd
Subsidiary of TNb power daharki Ltd
TNB Liberty Power Ltd# 100% 100% Operationof power Pakistan plant andgeneration of electricity
Subsidiary of TNb properties Sdn bhd
TNPConstruction SdnBhd 100% 100% Dormant Malaysia
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15. SubSidiarieS (CoNT’d)
Country of Name of subsidiary group’s interest principal activities incorporation
2010 2009
Subsidiary of university Tenaga Nasional Sdn bhd
UNITENR&DSdnBhd 100% 100% Providing researchand Malaysia development in areas related to engineering, information technology, business, accountancy, liberal studies andother services Subsidiaries of TNb repair and maintenance Sdn bhd
TrichyPower Ltd*** 100% 100% Dormant India
Trichy Energy Ltd*** 100% 100% Dormant India
TNBOperations and 100% 100% Investmentholding Mauritius Maintenance International Ltd TNBRemacoPakistan 100% 0% Providing repair and Pakistan Private Limited* maintenance services to heavy industries andother related services
Subsidiary of TNb operations and maintenance international Ltd
Oasis Parade SdnBhd 100% 100% Investmentholding Malaysia
Subsidiary of TNb ventures Sdn bhd
TenagaCable Industries 76% 76% Manufacturingand Malaysia SdnBhd distributionof power and general cables, aluminium rods and relatedactivities
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15. SubSidiarieS (CoNT’d)
Country of Name of subsidiary group’s interest principal activities incorporation
2010 2009
Subsidiary of TNb Coal international Ltd
DynamicAcres SdnBhd* 100% 100% Dormant Malaysia
Subsidiary of orion mission Sdn bhd
LahadDatuHoldings 100% 100% Dormant Malaysia SdnBhd
Subsidiary of Lahad datu holdings Sdn bhd
LahadDatu Energy 100% 100% Dormant Malaysia SdnBhd
* Not auditedby PricewaterhouseCoopers.# Audited by a member firm of PricewaterhouseCoopers International Limited which is a separate and independent
legal entity fromPricewaterhouseCoopersMalaysia.** SumberHidroManagement SdnBhdwasdissolvedon25March2010.*** The companies are in theprocessof beingwoundup.
16. JoiNTLy CoNTroLLed eNTiTieS
group
2010 2009 rm’million RM’million
Shareofnet assets of jointly controlled entities 0 7.9
Company
2010 2009 rm’million RM’million
Unquotedordinary shares, at cost 7.9 7.9 Less:Accumulated impairment losses (7.9) 0
0 7.9
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16. JoiNTLy CoNTroLLed eNTiTieS (CoNT’d)
Details of the jointly controlled entities are as follows:
Name of jointly Country of controlled entities group’s interest principal activities incorporation
2010 2009
Seatrac SdnBhd 50% 50% Dormant Malaysia
TNBEnergy Services 51% 51% As the turnkey contractor Malaysia SdnBhd&Eramaz toundertake thedesign, Technology SdnBhd JV buildingand commissioning of the system for the supply of electricity inKalabakan, Sabahawardedby Kemajuan LuarBandardan Wilayah (“KKLW”)
17. aSSoCiaTeS
group
2010 2009 rm’million RM’million
Shareofnet assets of associates 296.4 297.3
Company
2010 2009 rm’million RM’million
Unquoted shares, at cost 60.7 60.4 Less:Accumulated impairment losses (9.6) (9.6)
51.1 50.8
Redeemablepreference shares, at cost 33.2 33.2 Unsecured loannotes 77.0 82.3
161.3 166.3
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17. aSSoCiaTeS (CoNT’d)
TheGroup’s shareof revenue, profit, assets and liabilities of associates are as follows: 2010 2009 rm’million RM’million
Revenue 280.3 330.0 Profit after taxation 44.6 33.1
Non-current assets 549.2 563.7 Current assets 277.9 261.1 Current liabilities (146.5) (89.4) Non-current liabilities (384.2) (438.1)
Net assets 296.4 297.3
Details of the associates are as follows: Country of Name of associate group’s interest principal activities incorporation
2010 2009
Teknologi TenagaPerlis 20% 20% Design, construction, Malaysia ConsortiumSdnBhd divesting, operationand maintenanceof electricity generating facility
PerusahaanOtomobil Elektrik 20% 20% Dormant Malaysia (Malaysia) SdnBhd
GB3SdnBhd 20% 20% Design, construction, Malaysia operationandmaintenance of electricity generating facility
FibrecommNetwork 49% 49% Provisionoffibreoptic Malaysia (M) SdnBhd transmissionnetwork services
JimahEnergyVentures 20% 20% Generate electric power and Malaysia Holdings SdnBhd investmentholdings
FTJBiopower SdnBhd 24.5% 24.5% Generationanddistribution Malaysia of electricityusingpalmempty fruit bunchas itsmain fuel source
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17. aSSoCiaTeS (CoNT’d)
Country of Name of associate group’s interest principal activities incorporation
2010 2009
associates of TNb properties Sdn bhd
INDERA-TNB 40% 40% Dormant Malaysia Properties SdnBhd
KMMetro-TNB 40% 40% Dormant Malaysia Properties SdnBhd
TNBProperties-JB 0% 40% Dormant Malaysia Citytowers SdnBhd*
associate of TNb ventures Sdn bhd
NorthernUtility Resources 20% 20% Development and Malaysia SdnBhd managementof an (Receivers andManagers independentpowerutility for appointed) thegenerationand supplyof electricity to tenantswithin thegazettedareaofKulim Hi-Tech through its subsidiaries
associate of independent power international Ltd
Malaysian Shoaiba 20% 20% Investmentholding Malaysia ConsortiumSdnBhd
associate of oasis parade Sdn bhd
Saudi-MalaysiaOperation 30% 30% Investmentholding SaudiArabia andMaintenance Services Company Limited
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17. aSSoCiaTeS (CoNT’d)
Country of Name of associate group’s interest principal activities incorporation
2010 2009
associate of TNb energy Services Sdn bhd
Jana Landfill SdnBhd 20% 20% Generationanddistribution Malaysia of heat andelectricity usingmethanegas from landfill sites
associate of TNb engineering Corporation Sdn bhd
AbrajCooling LLC 49% 49% Contractingworks for the UnitedArab constructionofDistrict Emirates CoolingPlants
* The companywasdissolvedon11March2010.
18. iNveSTmeNTS
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Unquoted shares, at cost 39.7 39.7 39.7 39.7 Unquotedunsecured loan stocks, at cost 0 0 59.4 59.4
39.7 39.7 99.1 99.1 Allowance for diminution in value: –unquoted shares (1.7) (1.7) (1.7) (1.7) –unquotedunsecured loan stocks 0 0 (59.4) (59.4)
38.0 38.0 38.0 38.0
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19. LoNg Term reCeivabLeS
Company
2010 2009 rm’million RM’million
Amountsdue from subsidiaries 405.8 525.0
The amounts due from subsidiaries comprise advances and other receivables fromTNB Liberty Power Limited (‘TLPL’) andTNBPowerDaharki Ltd (‘TPD’) amounting toRM48.8million (2009: RM54.9million) andRM357.0million (2009: RM470.1million) respectively.
These amounts are unsecured and the Company has given an undertaking to the subsidiaries that the amounts will notbe recalled within 12 months from the balance sheet date. The amount due from TLPL is interest free. The amount duefromTPD is subject to interest at rates ranging from1.9% to4.7% (2009: 3.2% to7.4%)per annum.
20. NoN-CurreNT aSSeTS heLd For SaLe
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Cost/valuation As at 1 September 21.2 14.7 20.8 14.1 Amount transferred from –property, plant andequipment (Note13) 6.7 49.9 6.7 49.9 –prepaidoperating leases (Note14) 3.1 0.5 3.1 0.5 Amount transferred to –property, plant andequipment (Note13) (7.5) (8.0) (7.5) (8.0) –prepaidoperating leases (Note14) 0 (0.1) 0 (0.1) Disposals (3.6) (35.8) (3.2) (35.6)
As at 31August 19.9 21.2 19.9 20.8
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20. NoN-CurreNT aSSeTS heLd For SaLe (CoNT’d)
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
accumulated depreciation/amortisation As at 1 September 1.6 0.6 1.6 0.6 Amount transferred from –property, plant andequipment (Note13) 1.1 3.0 1.1 3.0 –prepaidoperating leases (Note14) 0.5 0.1 0.5 0.1 Amount transferred to –property, plant andequipment (Note13) (0.6) 0 (0.6) 0 –prepaidoperating leases (Note14) 0 (0.1) 0 (0.1) Disposals (0.7) (2.0) (0.7) (2.0)
As at 31August 1.9 1.6 1.9 1.6
Net book amount Property, plant andequipment 15.4 19.2 15.4 18.8 Prepaidoperating leases 2.6 0.4 2.6 0.4
As at 31August 18.0 19.6 18.0 19.2
During thefinancialyear, theCompanyentered intoseveral saleandpurchaseagreementswithvariousparties, forwhichthedisposals are still inprogress.
21. iNveNTorieS
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Rawmaterials, fuel and consumables 2,351.0 1,880.6 1,265.0 1,043.3 Work-in-progress 72.9 64.7 0 0 Finishedgoods 26.5 10.4 0 0
2,450.4 1,955.7 1,265.0 1,043.3
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22. reCeivabLeS, depoSiTS aNd prepaymeNTS
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Trade receivables 3,044.3 2,954.1 2,076.3 2,131.8 Less:Allowance for doubtful debts (576.7) (486.3) (500.3) (397.1)
2,467.6 2,467.8 1,576.0 1,734.7
Rechargeabledebtors 64.8 73.9 64.8 73.9 Less:Allowance for doubtful debts (64.8) (73.9) (64.8) (73.9)
0 0 0 0
Staff advances/loans 450.9 506.7 447.7 505.0 Partial payment to contractors 103.5 150.6 7.6 55.6 Deposits andprepayments 134.9 133.7 24.9 25.1 Other receivables 724.5 515.3 143.2 174.2
1,413.8 1,306.3 623.4 759.9
3,881.4 3,774.1 2,199.4 2,494.6
TheGroup’s and the Company’s credit policy provides trade receivableswith a 30 days (2009: 30 days) credit period. TheGrouphasnomajorsignificantconcentrationofcredit riskother thanbusinessandresidential trade receivablesdueto itsdiverse customer base. All credit and recovery risks associated with receivables have been provided for in the financialstatements.
Included in staff advances/loans are staff housing and car loans amounting to RM404.6 million (2009: RM441.7 million)whicharenot recoverablewithin12months.
23. amouNT due From/(To) SubSidiarieS
AmountduefromSESB issubjecttoan interestrateof6.0%(2009:6.0%)perannum, isunsecuredandhasnofixedtermsof repayment.Amountdue fromTNBCoal International Ltd is subject to interest rateof 7.0% (2009: 7.0%)per annum.
Amount due to TNB Capital (L) Ltd is subject to an interest rates ranging from 0.5% to 5.3% (2009: 1.8% to 5.3%)per annum, is unsecuredandhasnofixed termof repayment.
Amountdue from/(to) all other subsidiaries areunsecured, interest free andhavenofixed termsof repayment.
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24. ShorT Term iNveSTmeNTS
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
At cost –quotedwarrants 0 12.6 0 12.6 –quoted shares 72.5 0 72.5 0
72.5 12.6 72.5 12.6
Market value –quotedwarrants 0 23.8 0 23.8 –quoted shares 113.3 0 113.3 0
25. markeTabLe SeCuriTieS
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Quoted inMalaysia, at cost: Shares 27.1 27.1 27.1 27.1 Less:Allowance for diminution in value (18.5) (18.8) (18.5) (18.8)
8.6 8.3 8.6 8.3
Market value 8.6 8.3 8.6 8.3
26. depoSiTS, baNk aNd CaSh baLaNCeS
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Cash inhandandat bank 477.1 639.3 296.6 371.0 Depositswith licensedbanks 7,866.6 5,524.6 6,160.0 4,818.8
8,343.7 6,163.9 6,456.6 5,189.8
311TENAGA NASIONAL BERHADANNUAL REPORT 2010
26. depoSiTS, baNk aNd CaSh baLaNCeS (CoNT’d)
The interest rate per annum of deposits, bank and cash balances that were effective as at balance sheet date were asfollows:
group Company
2010 2009 2010 2009 % % % %
Depositswith licensedbanks 1.50 – 7.75 1.77–3.61 2.55 – 3.50 2.07–2.48 Bankbalances 0.07 0.13–1.80 0.07 0.13–1.80
Depositswith licensedbanksareheld in the short termmoneymarket.Depositshavematurityperiods ranging from1 to365days (2009: 7 to94days) for theGroupand8 to365days (2009: 7 to94days) for theCompany.
DepositsoftheGroupandtheCompanyattheendofthefinancialyearhaveanaveragematurityperiodof92days(2009:39days).
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Cashand cash equivalents at the end of thefinancial year comprise:
Cash inhandandat bank 477.1 639.3 296.6 371.0 Depositswith licensedbanks 7,866.6 5,524.6 6,160.0 4,818.8 Cashat bankheld in trust* (0.5) (7.0) 0 0 Debt reserve account** (237.3) (236.7) 0 0 Funds fromMOF*** (7.4) (10.9) 0 0
8,098.5 5,909.3 6,456.6 5,189.8
* ThecashatbankheldintrustisinrespectofagrantanddepositgiventosubsidiariesbytheGovernmentofMalaysiafor designated capital projects.
** Debt reserve account relates to deposits placed with licensed financial institution as part of security obligations forbondfinancing.
*** Ministryof Finance (MOF) fundgiven to a subsidiaryunder stimuluspackage for trainingprogrammes.
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27. payabLeS
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Tradepayables 3,869.8 4,149.7 3,053.8 3,354.9 Accrued interest onborrowings 605.9 535.6 189.4 198.2 Payroll liabilities 307.5 201.1 292.6 189.1 Deposits 30.7 21.8 25.2 16.4 Otherpayables andaccruals 783.0 695.8 198.6 194.0
5,596.9 5,604.0 3,759.6 3,952.6
Credit terms of trade payables of theGroup and the Company vary from 30 to 60 days (2009: 30 to 60 days) dependingon the termsof the contracts.
28. ShorT Term borrowiNgS
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Portionof borrowingsduewithinonefinancial year (Note29) – unsecured 2,668.3 652.8 2,531.8 401.8 – secured 274.0 264.8 0 0
2,942.3 917.6 2,531.8 401.8
Short term loans – secured 200.0 219.6 0 0 – unsecured 0.4 4.3 0 0 Bankers’ acceptances 20.0 16.4 0 0
3,162.7 1,157.9 2,531.8 401.8
Theshorttermborrowingscarry interestatratesrangingfrom0.52%to7.63%(2009:0.75%to18.00%)perannumfortheGroupand from0.65% to7.63% (2009: 0.75% to6.40%) for theCompany.
313TENAGA NASIONAL BERHADANNUAL REPORT 2010
29. borrowiNgS
group Company
2010 2009 2010 2009 Note rm’million RM’million rm’million RM’million
Unsecured – Term loans (a) 10,062.3 10,824.1 8,130.2 8,437.1 –Bonds (b) 5,813.3 6,342.5 4,719.5 5,115.2 – IncomeSecurities (c) 1,500.0 1,500.0 1,500.0 1,500.0 –Amountdue toCagamasBerhad (d) 104.7 121.9 104.7 121.9 –Redeemableunsecured loan stocks (e) 357.0 357.0 0 0
17,837.3 19,145.5 14,454.4 15,174.2 Secured – Term loans (a) 1,013.9 774.2 0 0 –Bonds (b) 2,192.0 2,456.0 0 0
21,043.2 22,375.7 14,454.4 15,174.2
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Payablewithinone year includedunder short term borrowings (Note28) 2,942.3 917.6 2,531.8 401.8
Repayable after one year:
After oneandup to two years 1,315.6 2,233.6 812.3 1,702.5 After twoandup tofive years 4,291.9 4,490.2 1,577.7 2,947.0 Afterfiveandup to ten years 3,625.5 5,122.0 1,831.6 1,541.4 After tenandup to twenty years 7,042.6 7,805.7 6,333.4 7,242.7 After twenty andup to thirty years 1,579.2 1,411.2 1,121.5 983.0 After thirty years 246.1 395.4 246.1 355.8
18,100.9 21,458.1 11,922.6 14,772.4
21,043.2 22,375.7 14,454.4 15,174.2
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29. borrowiNgS (CoNT’d)
group
2010 2009 rm’million RM’million
Netbook valuesof property, plant andequipmentpledged as security for term loans:
(i) Machinery andequipment 2,449.0 2,549.4(ii) Building 744.1 773.2
3,193.1 3,322.6
The Company’s unsecured term loans guaranteed by the Government of Malaysia amounts to RM4,312.9 million (2009:RM4,437.7million) as at 31August2010.
On 7 April 2010, the Company had fully prepaid RM13.4 million of unsecured term loans due to the Government ofMalaysia.
(a) Term loans
Details of term loanswithdesignatedderivativefinancial instruments are as follows:
(i) 30-YEAR JPY26.0BILLIONTERMLOAN
On 30 March 2004, TNB Capital (L) Ltd (‘TNBCL’) entered into a 30-year JPY26.0 billion unsecured loan, payinginterests at USD fixed rates. The loan will mature on 13 April 2034. The loan is an amortising loan whoseprincipal is payable in 20 equal annual instalments. The first repayment shall be due on 13 April 2015. Theinterest is paid semi-annually on13April and13October each year commencing13October2004. Thebalanceas at 31August2010 is RM959.9million (2009: RM976.0million).
Forward Start JPY call spread
In April 2004, TNBCL entered into Currency Option Agreements with a notional amount of JPY26.0 billion as ahedge on its Term Loan. This transaction enables TNBCL to reduce its exposure to losses that may arise fromadversefluctuationonUSD/JPY exchange rates in relation to the aboveTerm Loan.
(ii) 5-YEAR JPY11.0BILLIONTERMLOAN
On 13 December 2004, the Company entered into a 5-year JPY11.0 billion unsecured loan, paying floatinginterest rates. The loan is an amortising loan whose principal amount is payable in 10 equal semi-annualinstalments. Thefirst repaymentof the loan commencedon4 July 2005.
As at 4 January2010, the term loanhasbeen fully repaid.
315TENAGA NASIONAL BERHADANNUAL REPORT 2010
29. borrowiNgS (CoNT’d)
(a) Term loans (cont’d)
(ii) 5-YEAR JPY11.0BILLIONTERMLOAN (cont’d)
JPY-MYR cross-currency swap (‘CCS’)
In October 2006, TNB entered into a CCS agreement that entitles TNB to receive a floating interest rate in JPYand to pay a fixed rate of 4.23% in Ringgit Malaysia. The notional principle of the swap is JPY7.7 billion. Theeffectofthistransactionistofixtheinterestratepayableonthat loanandreduceTNB’sexposuretolossesthatmay arise from adverse fluctuation on foreign currency exchange rates and interest rates in relation to theloan.
TheCCShas sincematuredon4 January2010.
(iii) 9-YEARUSD503.0MILLIONTERMLOAN (ECA LOAN)
On30August 2006, theCompanynovated the loan to TNBCapital (L) Ltd. (‘TNBCL’), awholly owned subsidiaryofTNB.TheloanisguaranteedbytheCompanyandrecognisedasaninter-companyloanbetweentheCompanyandTNBCL.The loan isanamortising loan inwhichtheprincipal ispayable in17equalsemi-annual instalmentsandwillmatureon28February2015.Thefirst repaymentof the loan ison28February2007.Thebalanceasat31August2010 is RM835.9million (2009: RM1,251.8million).
Interest Rate Swap (‘IRS’)
The Company entered into IRS agreements on 10 October 2008 with effective period from 15 October 2008 to28 February 2015 that entitles it to receive interest at floating rates, and obliges it to pay interest at fixed rateof 3.76%onaggregatenotional principal ofUSD384.6million.
The effect of this transaction is to effectivelyfix the interest ratepayableon the loan.
(b) Bonds
Details of bondswithdesignatedderivativefinancial instruments are as follows:
ISLAMICDEBTSECURITIES–BAIBITHAMINAJIL (‘BaIDS’)
On 28 June 2004, Kapar Energy Ventures Sdn Bhd (‘KEV’), a subsidiary of TNB obtained RM3,402.0 million BaIDS tofinance the acquisition of Stesen Janaelektrik Sultan Salahuddin Abdul Aziz. The tenure of the BaIDS Facility rangesfrom1 to15 yearswith aprofit rateof between3.65%and8.70%per annum.
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29. borrowiNgS (CoNT’d)
(b) Bonds (cont’d)
TheBaIDSare securedby the following:
(i) ChargeoverTNB’sleasedland.Thechargeoftheleasedlandwasnoteffectedasat31August2010.Thecarryingvalueof the leased landas at 31August2010 is RM65.4million.
(ii) Debenture over KEV’s assets and properties and assignment of all rights, title interest and benefits under theprojectdocuments, theassigned insurances,andthedesignatedaccountstosecurethepaymentandrepaymentof the total securedamounts.
(iii) ThePriority andSecurity SharingAgreement.
The termsof BaIDS require deposits to beplaced in thedebt reserve accountwith a licensedbank tomeet thedebtservicing requirements. The termsofBaIDSalso requireKEV tomaintain certainfinancial covenants.
(c) IncomeSecurities
Fixed IncomeSecurities (‘FIS’)
The FIS consists of both redeemable bonds and Redeemable Preference Shares (‘RPS’), details of which are asfollows:
(i) 1,500 interest bearing 10-year redeemable unsecured bonds (“Bonds”) of an aggregated nominal value ofRM999.0 million issued at 100% of nominal value (in denominations of RM999,000.00 each), with detachablecoupons representing interest on the Bonds. The Bonds are to be redeemed at par in two tranches withredemption amounts of RM999.0 million and RM499.5 million on 16 August 2011 and 19 September 2011respectively, and;
(ii) 1,000 Class A RPS of RM1.00 each, issued at a premiumof RM999.00 per share and 500Class B RPS of RM1.00each, issued at a premium of RM999.00 per share. Both classes of RPS are redeemable at RM1,000 each at theCompany’s option at any time on or after 16 August 2010 and 19 September 2010, for Class A and B RPSrespectively. If theClassAandBRPSarenot redeemedby16August2011and19September2011respectively,an additional sumof RM1.0million on thefirst tranche andRM0.5million on the second tranche shall becomedueandpayableunder thefinalBondCouponpayment for eachof the tranches.
With the adoption of the Single Tier Tax System, the Company is now making coupon payments on the FIS insteadof dividend. The interest payableunder theBondCoupon is RM94.5millionper annumpayable semi-annually.
The FIS are classifiedasdebt instruments andhenceare reportedas liabilities.
(d) Amountdue toCagamasBerhad
On16 January1995, TNBhadentered intoanAgreementwithCagamasBerhadwherebyTNB can sell ona recoursebasis its housing loans provided by the company to its employees to Cagamas Berhad. The balance as at 31 August2010 is RM104.7million (2009: RM121.9million).
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29. borrowiNgS (CoNT’d)
(e) Redeemableunsecured loan stocks (‘RULS’)
On 29 June 2004, KEV issued RM957,574,000 of Redeemable Unsecured Loan Stocks (RULS) to the Company andMalakoffBerhad tofinance theacquisitionof Stesen Janaelektrik Sultan SalahuddinAbdulAziz, Kapar.
Themain featuresof theRULSare as follows:
(i) The RULS bear interest at 15% (2009: 15%) per annum on the outstanding nominal value of the RULS. Theinterest is repayablesemi-annuallyonthe lastdayoftherelevantsixmonthperiodfromthe issuedateofRULS.A compounding interestwillbe chargedat5% (2009:5%)perannumon theunpaid interestafter theduedate.The change in the compounding interest rate from 15% to 5% has been approved by the RULS holders at itsmeetingon15October2008and is effective from thefirst issuancedateof theRULS.
(ii) The RULS are repayable from the third year from the issue date of RULS as stipulated in the agreement dated29 June2004. TheRULShas tobe settled in full by thefinalmaturitydateof 8 July 2029.
30. CoNSumer depoSiTS
Consumers (with the exception of employees and government departments/agencies) are required to deposit a sumsufficient to cover charges for two months supply of energy as allowed under the regulation of the Licensee Supply(Amendment) Regulations 2002. In default of payment of the deposit within the time specified, the supply to theconsumer’s installationmaybedisconnected, subject to certain conditions laidout in theRegulations.
TNB and SESB shall pay a sum equivalent to 5% per annum on the amount of cash deposit as a rebate, on a pro-ratedbasis, in January every year.
31. empLoyee beNeFiTS
Themovementsduring thefinancial year in the amounts recognised in the consolidatedbalance sheet are as follows:-
retirement retirement benefit medical plan plan Total rm’million rm’million rm’million
group At 1 September2008 1,246.5 1,878.3 3,124.8 Charged to income statement (Note6) 258.5 439.1 697.6 Contributionandbenefitspaid (181.0) (170.8) (351.8)
At 31August2009 1,324.0 2,146.6 3,470.6
Charged to income statement (Note6) 251.6 513.8 765.4 Contributionandbenefitspaid (171.2) (198.5) (369.7)
At 31August2010 1,404.4 2,461.9 3,866.3
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31. empLoyee beNeFiTS (CoNT’d)
Theamounts recognised in the consolidatedbalance sheet are analysedas follows:
retirement retirement benefit plan medical plan Total rm’million rm’million rm’million
At 31August2009 Present valueof obligations 2,378.4 3,320.6 5,699.0 Fair valueof planassets (720.4) 0 (720.4)
Present valueofunfundedobligations 1,658.0 3,320.6 4,978.6 Unrecognisedactuarial losses (287.6) (1,174.0) (1,461.6) Unrecognisedpast service cost (46.4) 0 (46.4)
Liability in thebalance sheet 1,324.0 2,146.6 3,470.6
At 31August2010 Present valueof obligations 2,720.9 4,089.0 6,809.9 Fair valueof planassets (817.0) 0 (817.0)
Present valueofunfundedobligations 1,903.9 4,089.0 5,992.9 Unrecognisedactuarial losses (478.0) (1,627.1) (2,105.1) Unrecognisedpast service cost (21.5) 0 (21.5)
Liability in thebalance sheet 1,404.4 2,461.9 3,866.3
319TENAGA NASIONAL BERHADANNUAL REPORT 2010
31. empLoyee beNeFiTS (CoNT’d)
The expense recognised in the consolidated income statement is analysedas follows:
retirement retirement benefit plan medical plan Total rm’million rm’million rm’million
group 2009 Current service cost 133.0 4.8 137.8 Interest cost 141.4 223.9 365.3 Expected returnonplanassets (38.9) 0 (38.9) Actuarial losses recognised 7.5 209.2 216.7 Past service cost 15.5 0 15.5 Others 0 1.2 1.2
Total, included in staff costs (Note6) 258.5 439.1 697.6
Actual returnonplanassets (46.2) 0 (46.2)
retirement retirement benefit plan medical plan Total rm’million rm’million rm’million
2010 Current service cost 146.2 20.0 166.2 Interest cost 161.5 265.7 427.2 Expected returnonplanassets (44.7) 0 (44.7) Actuarial losses recognised 21.3 236.7 258.0 Past service cost 15.1 0 15.1 Curtailmentgain (46.3) 0 (46.3) Others (1.5) (8.6) (10.1)
Total, included in staff costs (Note6) 251.6 513.8 765.4
Actual returnonplanassets 46.2 0 46.2
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31. empLoyee beNeFiTS (CoNT’d)
The charge to income statementwas included in the administrative expenses.
Theprincipal actuarial assumptionsused in respect of theGroup’s definedbenefitplanswere as follows:
retirement retirement benefit plan medical plan % %
group at 31 august 2009 Discount rates 6.5 7.1 Expected returnonplanassets 6.0 N/A Expected rateof salary increases 6.0 N/A Medical cost inflation – inpatient N/A 8.0 –outpatient N/A 5.0
at 31 august 2010 Discount rates 6.6 7.1 Expected returnonplanassets 6.0 N/a Expected rateof salary increases 6.0 N/a Medical cost inflation – inpatient N/a 8.0 – outpatient N/a 5.0
Themovementsduring thefinancial year in the amounts recognised in theCompany’s balance sheet are as follows:
retirement retirement benefit plan medical plan Total rm’million rm’million rm’million
Company At 1 September2008 1,233.4 1,765.7 2,999.1 Charged to income statement (Note6) 259.1 414.6 673.7 Contributions andbenefitspaid (180.2) (170.9) (351.1)
at 31 august 2009 1,312.3 2,009.4 3,321.7
Charged to income statement (Note6) 249.2 502.4 751.6 Contributions andbenefitspaid (170.0) (198.5) (368.5)
At 31August2010 1,391.5 2,313.3 3,704.8
321TENAGA NASIONAL BERHADANNUAL REPORT 2010
31. empLoyee beNeFiTS (CoNT’d)
Theamounts recognised in theCompany’s balance sheet are analysedas follows:
retirement retirement benefit plan medical plan Total rm’million rm’million rm’million
At 31August2009 Present valueof obligations 2,361.7 3,183.4 5,545.1 Fair valueof planassets (717.1) 0 (717.1)
Present valueofunfundedobligations 1,644.6 3,183.4 4,828.0 Unrecognisedactuarial losses (285.9) (1,174.0) (1,459.9) Unrecognisedpast service cost (46.4) 0 (46.4)
Liability in thebalance sheet 1,312.3 2,009.4 3,321.7
At 31August2010 Present valueof obligations 2,716.8 3,940.4 6,657.2 Fair valueof planassets (817.0) 0 (817.0)
Present valueofunfundedobligations 1,899.8 3,940.4 5,840.2 Unrecognisedactuarial losses (478.0) (1,627.1) (2,105.1) Unrecognisedpast service cost (30.3) 0 (30.3)
Liability in thebalance sheet 1,391.5 2,313.3 3,704.8
The expense recognised in theCompany’s income statement is analysedas follows:
retirement retirement benefit plan medical plan Total rm’million rm’million rm’million
Company 2009 Current service cost 134.2 0 134.2 Interest cost 140.6 214.5 355.1 Expected returnonplanassets (38.6) 0 (38.6) Actuarial losses recognised 7.4 200.1 207.5 Past service cost 15.5 0 15.5
Total, included in staff costs (Note6) 259.1 414.6 673.7
Actual returnonplanassets 46.2 0 46.2
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31. empLoyee beNeFiTS (CoNT’d)
retirement retirement benefit plan medical plan Total rm’million rm’million rm’million
2010 Current service cost 142.3 0 142.3 Interest cost 161.5 265.7 427.2 Expected returnonplanassets (44.7) 0 (44.7) Actuarial losses recognised 21.3 236.7 258.0 Past service cost 15.1 0 15.1 Curtailmentgain (46.3) 0 (46.3)
Total, included in staff costs (Note6) 249.2 502.4 751.6
Actual returnonplanassets 51.5 0 51.5
The charge to income statementwas included in the administrative expenses.
Theprincipal actuarial assumptionsused in respect of theCompany’s definedbenefitplanswere as follows:
retirement retirement benefit plan medical plan % %
Company At 31August2009 Discount rates 6.5 7.1 Expected returnonplanassets 6.0 N/A Expected rateof salary increases 6.0 N/A Medical cost inflation – inpatient N/A 8.0 –outpatient N/A 5.0
At 31August2010 Discount rates 6.6 7.1 Expected returnonplanassets 6.0 N/a Expected rateof salary increases 6.0 N/a Medical cost inflation – inpatient N/a 8.0 – outpatient N/a 5.0
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32. deFerred TaXaTioN
Deferred tax assets and liabilities are offsetwhen there is a legally enforceable right to set off current tax assets againstcurrent tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, determinedafter appropriateoffsetting, are shown in thebalance sheet:
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Deferred tax assets 55.9 0 0 0 Deferred tax liabilities (6,837.1) (6,640.4) (5,869.0) (5,745.1)
Net total (6,781.2) (6,640.4) (5,869.0) (5,745.1)
Themovementsduring thefinancial year relating todeferred tax are as follows:
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
As at thebeginningof thefinancial year (6,640.4) (6,337.4) (5,745.1) (5,499.3) (Charged)/credited to income statement: – property, plant andequipment (294.0) (401.9) (257.2) (332.1) –unutilised tax losses 18.4 12.6 0 0 – provisionandallowances 134.8 86.3 133.3 86.3
(140.8) (303.0) (123.9) (245.8)
As at the endof thefinancial year (6,781.2) (6,640.4) (5,869.0) (5,745.1)
Subject to income tax
Deferred tax assets (beforeoffsetting) – Provisionandallowances 1,061.3 926.5 1,057.4 924.1 –Unutilised tax losses 32.7 14.3 0 0 – Property, plant andequipment 238.6 321.6 0 0 Offsetting (1,276.7) (1,262.4) (1,057.4) (924.1)
Deferred tax assets (after offsetting) 55.9 0 0 0
Deferred tax liabilities (beforeoffsetting) – Property, plant andequipment (8,113.8) (7,902.8) (6,926.4) (6,669.2) Offsetting 1,276.7 1,262.4 1,057.4 924.1
Deferred tax liabilities (after offsetting) (6,837.1) (6,640.4) (5,869.0) (5,745.1)
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32. deFerred TaXaTioN (CoNT’d)
The amount of deductible temporary differences, unused tax losses and reinvestment allowance (which have no expirydate) forwhichnodeferred tax assets is recognised in thebalance sheet are as follows:
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Deductible temporarydifferences 1,351.7 1,370.8 0 0 Tax losses 1,338.4 1,312.4 0 0 Reinvestmentallowance 28.2 28.2 0 0
33. deFerred iNCome
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
As at thebeginningof thefinancial year 2,952.3 2,899.4 2,617.1 2,580.8 Receivedduring thefinancial year 458.4 409.2 386.2 353.5 Released to income statement (Note4) (368.5) (356.4) (326.9) (317.2)
As at the endof thefinancial year 3,042.2 2,952.2 2,676.4 2,617.1
34. goverNmeNT deveLopmeNT graNTS
group
2010 2009 rm’million RM’million
As at thebeginningof thefinancial year 579.8 563.6 Receivedduring thefinancial year 66.5 60.8 Released to income statement (Note7) (42.9) (44.6) Reclassified tootherpayables (4.4) 0
As at the endof thefinancial year 599.0 579.8
The Government development grants are in respect of capital grants received by Sabah Electricity Sdn Bhd for capitalprojects in the Stateof Sabah.
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35. Share CapiTaL
group and Company
2010 2009 rm RM
Authorised:
Ordinary sharesof RM1.00each 5,000,000,000 5,000,000,000
Special RightsRedeemable Preference Shareof RM1.00each 1 1
ClassARedeemable Preference Sharesof RM1.00each
As at thebeginning/endof thefinancial year 1,000 1,000
ClassBRedeemable Preference Sharesof RM1.00each
As at thebeginning/endof thefinancial year 500 500
Issuedand fully paid:
Ordinary sharesof RM1.00each 4,352,719,795 4,337,054,795
Special RightsRedeemable Preference Shareof RM1.00each 1 1
Total share capital issuedand fully paid as at the endof thefinancial year 4,352,719,796 4,337,054,796
Movements in issuedordinary sharesof RM1.00each
As at thebeginningof thefinancial year 4,337,054,795 4,334,518,345 Issuanceof ordinary sharesof RM1.00eachunder the ESOS II 15,665,000 2,536,450
As at the endof thefinancial year 4,352,719,795 4,337,054,795
Employees’ ShareOption Scheme (‘ESOS’)
The Company implemented a new Employees’ Share Option Scheme II (‘ESOS II’) on 8 July 2003 for a period of 10 years.The ESOS II is governed by the bye-laws, which were approved by the shareholders at an Extraordinary General Meeting(‘EGM’) on29May2003andamendedat the EGMheldon15December2005.
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35. Share CapiTaL (CoNT’d)
Employees’ ShareOption Scheme (‘ESOS’) (cont’d)
Themain featuresof ESOS II are as follows:
(a) The total number of ordinary shares to be issued by the Company under the ESOS II shall not exceed 10% of totalissued andpaid-upordinary shares of theCompany, such that notmore than50%of the shares available under theESOS II are allocated, in aggregate, toDirectors and seniormanagement.
(b) Notmorethan10%ofthesharesavailableundertheESOS II isallocatedtoany individualDirectororemployeewho,either singly or collectively through his/her associates, holds 20% or more in the issued and paid-up capital of theCompany.
(c) Any employee, including any Executive Director and those categorised as Fixed Term Senior Management, butexcluding a Skim A employee (the scheme governing employees who, upon the corporatisation and privatisation ofthe Lembaga Letrik Negara in 1990, remain employed under the Government’s terms and conditions) are eligible toparticipate in the ESOS II. Employeesunder the FixedTermSeniorManagement are also entitled to the PerformanceOptionsbasedon themmeetingprescribedperformance targets.
(d) Theoptionpriceunder theESOS II is thehigherof theweightedaveragemarketpriceof the sharesas shown in thedaily official list issued by the BursaMalaysia Securities Berhad for the five trading days preceding the date of offerwith a 10%discount on thenominal value of the shares, subject always that the discount shall not be applicable toany sharesunder thePerformanceOption.
(e) In the event of any alteration to the capital structure of the Company during the option period which expires on7 July 2013, such correspondingalterations shall bemade in:
(i) thenumberofnew shares in relation to the ESOS II so far asunexercised;(ii) theoptionprice; and/or(iii) themethodof the exerciseof theoption.
(f) OptionsgrantedundertheESOSIIcarrynodividendsorvotingrights.Uponexerciseoftheoptions,sharesissuedrankpari passu in all respectswith the thenexistingordinary sharesof theCompany.
(g) ThepersonstowhomtheoptionshavebeengrantedundertheESOSIIhavenorighttoparticipate inanyshare issueof anyother companywithin theGroup.
327TENAGA NASIONAL BERHADANNUAL REPORT 2010
35. Share CapiTaL (CoNT’d)
Employees’ ShareOption Scheme (‘ESOS’) (cont’d)
Movementsinthenumberofsharesrepresentedbyoptionsoutstandingandtheirrelatedweightedaverageexercisepricesare as follows:
2010 2009 average Average exercise Number exercise Number price of shares price of shares rm/share ‘000 RM/share ‘000
Beginningof year 7.27 117,654 7.50 102,066 Granted 7.26 22,128 5.89 18,926 Exercised 6.28 (15,665) 6.01 (2,536) Expired 7.62 (476) 8.06 (802)
At endof year 7.39 123,641 7.27 117,654
Details relating to theoptions exercisedduring thefinancial year are as follows:
Number of Fair value of shares shares at share issued as at exercise date issue date exercise price 31.8.2010 rm/share rm/share September2009 8.00–8.49 6.71/6.99/7.33/6.33/5.57 705,400 October2009 8.19–8.57 6.71/6.99/7.42/7.33/6.33/5.57 546,750 November2009 8.38–8.55 6.71/6.99/7.42/7.33/6.33/5.57 1,610,350 December2009 8.29–8.48 6.71/6.99/7.33/6.33/5.57 1,153,300 January2010 7.97–8.46 6.71/6.99/7.33/6.33/5.57/6.35 871,950 February2010 7.73–8.09 6.71/6.99/7.42/7.33/6.33/5.57 411,900 March2010 7.91–8.03 6.71/6.99/7.33/6.33/5.57 412,400 April 2010 8.09–8.57 6.71/6.99/7.42/6.33/5.57 775,350 May2010 8.06–8.58 6.71/6.99/7.42/7.33/6.33/5.57 3,059,200 June2010 8.20–8.58 6.71/6.99/7.42/7.33/6.33/5.57/7.18 1,347,375 July 2010 8.35–8.70 6.71/6.99/7.42/7.33/6.33/5.57/7.18 1,500,900 August2010 8.29–8.80 6.71/6.99/7.42/7.33/6.33/5.57/7.18 3,270,125
TOTAL 15,665,000
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35. Share CapiTaL (CoNT’d)
Employees’ ShareOption Scheme (‘ESOS’) (cont’d)
Shareoptionsoutstandingat the endof thefinancial yearhave the followingexpirydates andexerciseprice.
Number of shares
expiry date exercise price 2010 2009 rm/share ‘000 ‘000
07.07.2013 6.71 38,137 41,160 07.07.2013 6.99 4,662 5,016 07.07.2013 7.75 205 205 07.07.2013 7.42 6,703 7,119 07.07.2013 8.39 0 0 07.07.2013 7.80 288 288 07.07.2013 7.33 7,181 7,551 07.07.2013 7.33 2,924 3,008 07.07.2013 9.189 1,306 1,306 07.07.2013 11.07 14,926 15,027 07.07.2013 11.558 13 13 07.07.2013 11.237 34 34 07.07.2013 9.189 90 90 07.07.2013 9.189 1,023 1,023 07.07.2013 10.716 0 0 07.07.2013 6.33 11,567 16,967 07.07.2013 7.33 1,184 1,206 07.07.2013 7.03 52 52 07.07.2013 7.95 18 18 07.07.2013 9.17 43 43 07.07.2013 9.17 246 246 07.07.2013 9.189 37 37 07.07.2013 9.189 80 80 07.07.2013 9.189 691 691 07.07.2013 10.716 90 90 07.07.2013 11.558 37 37 07.07.2013 5.57 10,770 15,979 07.07.2013 9.189 180 180 07.07.2013 9.189 42 42 07.07.2013 9.189 126 126 07.07.2013 9.17 20 20 07.07.2013 9.17 50 0 07.07.2013 7.95 170 0 07.07.2013 7.62 129 0 07.07.2013 6.35 0 0 07.07.2013 7.03 50 0 07.07.2013 9.189 180 0 07.07.2013 11.558 50 0 07.07.2013 7.03 60 0 07.07.2013 9.189 210 0
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35. Share CapiTaL (CoNT’d)
Employees’ ShareOption Scheme (‘ESOS’) (cont’d)
Shareoptionsoutstandingat the endof thefinancial yearhave the followingexpirydates andexerciseprice.
Number of shares
expiry date exercise price 2010 2009 rm/share ‘000 ‘000
07.07.2013 5.95 70 0 07.07.2013 10.716 120 0 07.07.2013 9.17 139 0 07.07.2013 7.62 46 0 07.07.2013 7.18 19,692 0
123,641 117,654
TheweightedaveragefairvalueofoptionsgrantedduringthefinancialyearwasdeterminedusingtheTrinomialvaluationmodel. The significant inputs into themodelwere as follows:
expected 5 year average Share price exercise option dividend risk free share price grant date at grant date price life yield interest rate movement rm rm years % % %
25.02.2005 8.24 7.75 8 1.14 3.64 21.57 30.03.2005 8.00 7.42 8 1.14 3.33/3.72 22.13 17.07.2005 8.56 7.80 7 1.14 3.40 19.41 24.02.2006 8.70 7.33 7 1.14 3.43/3.63/3.77 24.01 16.04.2006 8.65 7.33 7 1.14 3.55/3.96 18.07 25.09.2006 9.91 9.19 6 1.14 3.86/3.95 18.52 28.03.2007 11.50 11.07 6 1.14 3.48/3.50 17.59 26.07.2007 10.95 11.56 6 1.14 3.48 17.45 24.08.2007 10.29 11.24 6 1.14 3.60 19.92 27.10.2007 9.28 9.19 6 1.14 3.56 17.40 27.12.2007 9.54 9.19/10.72 6 1.14 3.64/3.79 17.47 25.04.2008 6.76 6.33 5 1.14 3.37/3.45 20.32 30.07.2008 8.35 7.33 5 1.14 3.73/3.89 22.42 06.11.2008 6.11 9.189 5 1.14 3.73 23.43 14.11.2008 6.20 9.189 5 1.14 3.60 23.47 19.12.2008 5.97 7.03/7.95/ 5 1.14 2.94/3.02 23.45 9.17/9.189/ 10.716/ 11.558
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35. Share CapiTaL (CoNT’d)
Employees’ ShareOption Scheme (‘ESOS’) (cont’d)
expected 5 year average Share price exercise option dividend risk free share price grant date at grant date price life yield interest rate movement rm rm years % % %
26.12.2008 6.01 9.17 5 1.14 2.92 23.40 27.03.2009 6.10 5.57 4 1.14 1.98/2.81 23.93 26.06.2009 7.73 9.189/9.17 4 1.14 2.89 23.82 06.07.2009 7.77 9.189 4 1.14 2.92 23.82 15.07.2009 7.92 9.189 4 1.14 3.72 23.79 30.12.2009 8.29 5.95/6.35/ 4 1.14 3.24 18.72 7.03/7.18/ 7.62/7.95/ 9.17/9.189/ 10.716/ 11.558 29.04.2010 8.48 7.18 3 1.14 2.57/2.99 15.80
The charges to income statement arising from share-based payments during the financial year amounted to RM33.4million (2009: RM26.3 million) for the Group and RM29.9 million (2009: RM25.2 million) for the Company as set out inNote6 to thesefinancial statement.
31.8.2010 rm’000
Ordinary share capital, at par 15,665 Sharepremium 82,633
Proceeds receivedonexerciseof shareoptions 98,298
Fair valueat exercisedateof shares issued 130,957
331TENAGA NASIONAL BERHADANNUAL REPORT 2010
35. Share CapiTaL (CoNT’d)
Special RightsRedeemable Preference Share (‘Special Share’)
(a) TheSpecial Sharewouldenable theGovernmentofMalaysia through theMinisterof Finance Incorporated toensurethat certainmajor decisions affecting the operations of the Company are consistentwith theGovernment’s policies.The Special Shareholder,whichmay only be theGovernment or any representative or person acting on its behalf, isentitled to receive notices of meetings but not to vote at such meetings of the Company. However, the SpecialShareholder is entitled to attendand speakat suchmeetings.
The Special Shareholder has the right to appoint any person, but notmore than six at any time, to be the Board ofDirectors of theCompany.
(b) Certainmatters, inparticularthealterationoftheArticlesofAssociationoftheCompanyrelatingtotherightsof theSpecial Shareholder, creationand issueofadditional shareswhich carrydifferent voting rights, thedissolutionof theCompany,substantialdisposalofassets,amalgamations,mergerandtakeover,requirethepriorconsentoftheSpecialShareholder.
(c) The Special Shareholderdoesnothaveany right toparticipate in the capital or profits of theCompany.
(d) The Special Shareholderhas the right to require theCompany to redeem the Special Share, at par, at any time.
ClassA andClassBRedeemable Preference Shares (‘RPS’)
Themain featuresof theCompany’sClassA andClassBRPSare as follows:
(a) TheRPSdonot carry any right toparticipate in the assets and surplusprofitof theCompany.
(b) TheRPSholdershaveno voting rights excepton resolution to amend theRPSholders’ rights.
(c) TheseRPSarenot convertible intoordinary shares.
(d) TheCompanyhastherighttoredeemallClassAandClassBRPSonorafter16August2010and19September2010respectively at RM1,000each.
Asdescribed inNote29(c) to thesefinancial statements, theseRPS formpart of theCompany’s Fixed IncomeSecurities.
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36. Share premium
group and Company
2010 2009 rm’million RM’million
As at thebeginningof thefinancial year 5,271.5 5,258.8 Arising in respect of ordinary shares issuedduring thefinancial year 82.7 12.7
As at the endof thefinancial year 5,354.2 5,271.5
37. revaLuaTioN aNd oTher reServeS
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Non-distributable
Revaluation reserve 914.3 917.8 904.2 907.7 Foreign currency translation reserve (207.4) (267.3) 0 0 Reserveon consolidation (146.6) (146.6) 0 0 Employees’ ShareOption Scheme reserve 122.5 89.1 111.3 81.4
682.8 593.0 1,015.5 989.1
Themovements in each categoryof reserveswere as follows: group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Revaluation reserve
As at thebeginningof thefinancial year 917.8 935.6 907.7 925.5 Realisationof revaluation reserve (3.5) (17.8) (3.5) (17.8)
As at the endof thefinancial year 914.3 917.8 904.2 907.7
Foreign currency translation reserve
As at thebeginningof thefinancial year (267.3) (133.6) 0 0 Arising in thefinancial year 59.9 (133.7) 0 0
As at the endof thefinancial year (207.4) (267.3) 0 0
333TENAGA NASIONAL BERHADANNUAL REPORT 2010
37. revaLuaTioN aNd oTher reServeS (CoNT’d)
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Reserveon consolidation
As at thebeginning/endof thefinancial year (146.6) (146.6) 0 0
Employees’ ShareOption Scheme reserve
As at thebeginningof thefinancial year 89.1 62.8 81.4 56.2 Arising in thefinancial year 33.4 26.3 29.9 25.2
As at the endof thefinancial year 122.5 89.1 111.3 81.4
Total revaluationandother reserves
As at thebeginningof thefinancial year 593.0 718.2 989.1 981.7 Arising in thefinancial year 93.3 (107.4) 29.9 25.2 Realisationof revaluation reserve (3.5) (17.8) (3.5) (17.8)
As at the endof thefinancial year 682.8 593.0 1,015.5 989.1
38. reTaiNed proFiTS
Subject to agreement by the Inland Revenue Board, the Company has sufficient tax credits under Section 108 of theIncomeTaxAct,1967availabletofrankapproximatelyRM853.8million(2009:RM1,374.9million)of itsretainedprofitsasat 31 August 2010, if paid out as dividends. The remaining profits of RM17,019.9 million (2009: RM14,518.5 million) canbedistributedas exemptdividendsunder the Single Tier Tax system.
In addition, the Company has tax exempt income as at 31 August 2010 arising from the Income Tax (Amendment) Act,1999, relating to tax on income earned in 1999 being waived and exempt dividend income amounting to approximatelyRM1.1million (2009:RM100.7million)available fordistributionas taxexemptdividends toshareholders.This taxexemptincome is subject to agreementby the InlandRevenueBoard.
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39. CommiTmeNTS
(a) Capital andother commitments for 5 years group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Authorised capital expenditurenotprovided in thefinancial statements
Contracted 976.4 531.2 591.5 130.0 Not contracted 12,429.3 10,752.4 11,760.2 10,252.9
13,405.7 11,283.6 12,351.7 10,382.9
(b) Non-cancellableoperating lease commitments group and Company
2010 2009 rm’million RM’million
Futureminimum leasepayments
Not later thanone year 11.0 11.0
Theabove leasepayments relate to thenon-cancellableoperating leasesof theGroupand theCompany.
335TENAGA NASIONAL BERHADANNUAL REPORT 2010
40. CoNTiNgeNT LiabiLiTieS (uNSeCured)
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
Claimsby thirdparties 617.4 860.3 427.4 588.5 Tradeguarantees andperformancebonds 24.5 1.0 0 0 Guaranteesgiven tofinancial institutions in respect of facilities granted 284.4 319.5 3,174.0 3,794.1 Stampduties on transfer of assets to a subsidiary (1) 108.0 108.0 0 0 Bankguarantees 3.6 19.9 0 0 Letter of guarantee 0 32.0 0 0 Other contingent liabilities 4.9 8.8 0 0
1,042.8 1,349.5 3,601.4 4,382.6
Claimsbythirdpartiesincludeclaimsbycontractors,consultants,consumersandformeremployees.Theseclaimsarebeingresolved and the Directors are of the opinion that their outcome will not have a material adverse effect on the financialpositionof both theGroupand theCompany.
(1) In respect of stamp duties on transfer of assets from Lembaga Letrik Sabah, SESB is in the process of obtaining a vesting order to exempt itself from any potential liability.
41. SigNiFiCaNT reLaTed parTy diSCLoSureS
The related party transaction of the Company comprises mainly transactions between the Company and its subsidiariesandassociatesnamely the followings:
Subsidiaries
• TNB JanamanjungSdnBhd • SabahElectricity SdnBhd
• TNB Fuel Services SdnBhd • TNBResearch SdnBhd
• Kapar EnergyVentures SdnBhd • TNBCapital Ltd.
• TenagaSwitchgear SdnBhd • TNBRepairAndMaintenance SdnBhd
• Malaysia TransformersManufacturing SdnBhd • TenagaCable Industries SdnBhd
• TNB Integrated Learning Solution SdnBhd • Universiti TenagaNasional SdnBhd
• TNBEngineeringCorporation SdnBhd • TNBPowerDaharki Ltd.
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41. SigNiFiCaNT reLaTed parTy diSCLoSureS (CoNT’d)
Associates
• Teknologi TenagaPerlis ConsortiumSdnBhd
• GB3SdnBhd
• FibrecommNetwork (M) SdnBhd
• JimahEnergyVenturesHoldings SdnBhd
All related party transactions were entered into in a normal course of business and at prices available to third parties oratnegotiated terms.
Inaddition to relatedpartybalancesmentionedelsewhere in thefinancial statements, setoutbelowareother significantrelatedparty transactionswhichwere carriedouton termsand conditionsnegotiatedamongst the relatedparties:
Company
2010 2009 rm’million RM’million
(a) Transactionswith subsidiaries
Income – Sales of electricity 33.2 31.5 – Interest income 179.7 161.9 –Dividend income 15.6 0.1 – Rental income 28.6 29.3
Expenditure – Purchasesof electricity 4,199.5 3,652.2 – Training fees 38.5 31.4 – Interest expense 96.0 141.9
Amountsdue from subsidiaries 2,978.8 2,600.9
Amountsdue to subsidiaries 3,901.8 4,652.3
337TENAGA NASIONAL BERHADANNUAL REPORT 2010
41. SigNiFiCaNT reLaTed parTy diSCLoSureS (CoNT’d)
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
(b) Transactionswith associates
Income – Sales of electricity 13.2 7.2 13.2 7.2 – Interest income 3.6 4.3 3.6 4.3 –Dividend income 40.5 54.0 40.5 54.0 – Leasing income 4.7 5.5 4.7 5.5
Expenditure – Purchasesof electricity 3,226.6 1,969.3 3,226.6 1,969.3
Amountsdue fromassociates 5.7 9.2 5.3 4.2
Amountsdue to associates 623.6 294.0 623.6 294.0
Salesandpurchasesofelectricitytoandfromassociatesareaggregatedbecausethetransactionsaresimilar innatureandno single transaction is significant enough towarrant separatedisclosure.
group Company
2010 2009 2010 2009 rm’million RM’million rm’million RM’million
(c) Keymanagement compensation
Short termemployeebenefits – Salaries, allowances andbonus 11.2 11.8 6.6 10.3 –Benefits-in-kind 0.5 0.6 0.3 0.5 –Defined contribution retirementplan 1.2 1.1 0.8 1.0 –Other staff benefits 0.5 0.6 0.4 0.3
Share-basedpayment – ESOSexpense 0.7 0.6 0.6 0.5
Keymanagement personnel are the personswhohave authority and responsibility for planning, directing and controllingtheactivities of theCompanyor theGroupeitherdirectly or indirectly.
Whenever exist, related party transactions also includes transactionwith entities that are controlled, jointly controlled orsignificantly influenceddirectly or indirectly by any keymanagementpersonnel or their close familymembers.
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42. SegmeNTaL reporTiNg
Segmental reporting isnotpresentedas theGroup isprincipallyengaged in thegeneration, transmission,distributionandsales of electricity and the provision of other related services, which are substantially within a single business segment.TheGroupoperatesprimarily inMalaysia.
43. FiNaNCiaL riSk maNagemeNT
(a) Financial riskmanagementobjectives andpolicies
The main risks arising from the Group’s financial assets and liabilities are foreign currency exchange, interest rate,credit, liquidity and cashflow risks.
The Group’s overall risk management seeks to minimise potential adverse effects of these risks on the financialperformanceof theGroup.
The Group has established risk management policies, guidelines and control procedures to manage its exposure tofinancial risks. Hedging transactions are determined in the light of commercial commitments; derivative financialinstruments are used only to hedge underlying commercial exposures and are not held or sold for speculativepurposes.
• Currency risk
The foreign currency exchange risk of the Group arises mainly from borrowings denominated in foreigncurrencies. Themain currencyexposuresareprimarily inUnitedStatesDollar and JapaneseYen. TheGroupalsoenters into contractual obligation where the payment is denominated in foreign currencies. The main currencyexposure is primarily inUnited StatesDollars. TheGroup also has subsidiaries, associates and branch operatingin foreign countries, which generate revenue and incur costs denominated in foreign currencies. The maincurrency exposure is primarily inUnited StatesDollar.
• Interest rate risk
The Group has cash and bank balances and deposits placed with creditworthy licensed banks and financialinstitutions. The Group manages its interest rate risks by placing such balances on varying maturities andinterest rate terms.
The Group’s debt includes bank overdrafts, bank borrowings, bonds and notes. The Group’s interest rate riskmanagement objective is to manage the interest expense consistent with maintaining an acceptable level ofexposure to interest rate fluctuations. In order to achieve this objective, the Group targets a mix of fixed andfloating debt based on assessment of its existing exposure and desired interest rate profile. To obtain thismix,theGroup combines cross-currency interest rate swaps, interest rate swaps and options to convert certain longterm foreign currencyborrowings fromvariable tofixed rate and vice versa.
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43. FiNaNCiaL riSk maNagemeNT (CoNT’d)
(a) Financial riskmanagementobjectives andpolicies (cont’d)
• Credit risk
FinancialassetsthatpotentiallysubjecttheGrouptoconcentrationsofcreditriskconsistprimarilyofreceivables,cashand cash equivalents,marketable securities andfinancial instrumentsused inhedgingactivities.
Due to the nature of the Group’s business, customers are mainly segregated into business and residential. TheGroup has no other major significant concentration of credit risk other than business and residential tradereceivablesdue to its diverse customerbase.Credit risk ismanaged through theapplicationof credit limits andmonitoring procedures. Where appropriate, the Group obtained deposits or bank guarantees from thecustomers.
The Group places its cash and cash equivalents and marketable securities with a number of creditworthyfinancial institutions. The Group’s policy limits the concentration of financial exposure to any single financialinstitution.
Allhedging instrumentsareexecutedwithcreditworthyfinancial institutionswithaviewto limit thecredit riskexposureof theGroup. TheGroup,however is exposed to credit-related losses in theeventofnon-performancebycounterpartiestofinancialderivativeinstruments,butdoesnotexpectanycounterpartiestofailtomeettheirobligations.
• Liquidity and cashflow risks
In themanagement of liquidity and cash flow risk, theGroupmonitors andmaintains a level of cash and cashequivalentdeemedadequateby themanagement tofinance theGroup’soperationsandmitigate theeffectsoffluctuationsincashflows.Duetothedynamicnatureoftheunderlyingbusiness,theGroupaimsatmaintainingflexibility in fundingby keepingboth committedanduncommitted credit lines available.
(b) Interest rate risk
Fair value interest rate risk
The Group’s exposure to the risk that the value of a financial instrument will fluctuate due to changes in marketinterest rates are asmentioned inNote28.
Cashflow interest rate risk
The Group’s income and operating cash flows are substantially independent of changes in market interest rates.InterestrateexposurearisesfromtheGroup’sborrowingsanddeposits,andismanagedthroughtheuseoffixedandfloating rate debt andderivativefinancial instruments.Derivativefinancial instruments are used,where appropriate,to generate thedesired interest rateprofile.
The weighted average interest rate of the Company’s fixed rate borrowings at balance sheet date was 4.95%(31.8.2009:5.00%)perannum.After the interest rateswap, theCompany’sweightedaverage interest rateatbalancesheetdatewas4.89% (31.8.2009: 4.91%)per annum.
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43. FiNaNCiaL riSk maNagemeNT (CoNT’d)
(b) Interest rate risk (cont’d)
The tables below summarise theGroup and the Company’s exposure to interest rate risk. Included in the tables arethe Group and the Company’s financial assets and liabilities at carrying amounts, categorised by the earlier ofrepricingorcontractualmaturitydates.Theoff-balancesheetgap represents thenetnotionalamountsofall interestrate sensitive derivative instruments. Sensitivity to interest rates arises frommismatches in the repricingdates, cashflowsandother characteristics of assets and their corresponding liability funding.
effective interest Fixed rate instruments Total at balance Floating maturing or repriced in interest sheet date rate < 1 year 1-2 years 2-3 years 3-4 years 4-5 years > 5 years sensitive % per annum rm’million rm’million rm’million rm’million rm’million rm’million rm’million rm’million
group 2010 Financial assets Tradeandother receivables 12.16 305.9 217.8 0 0 0 0 0 523.7 Deposits andbank balances 2.96 0 5,044.3 0 0 0 0 0 5,044.3
305.9 5,262.1 0 0 0 0 0 5,568.0
2009 Financial assets Tradeandother receivables 12.75 52.9 255.4 0 0 0 0 0 308.3 Deposits andbank balances 2.32 0 3,642.8 0 0 0 0 0 3,642.8
52.9 3,898.2 0 0 0 0 0 3,951.1
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(b) Interest rate risk (cont’d)
balances Total Non under interest interest islamic sensitive sensitive principles Total rm’million rm’million rm’million rm’million
group 2010 Financial assets Investments 0 110.5 0 110.5 Tradeandother receivables 523.7 2,669.6 299.7 3,493.0 Amountsdue fromassociates 0 5.7 0 5.7 Marketable securities 0 8.6 0 8.6 Deposits andbankbalances 5,044.3 419.1 2,880.3 8,343.7 Other assets (amount receivable from swap counterparties) 0 1.9 0 1.9
5,568.0 3,215.4 3,180.0 11,963.4
2009 Financial assets Investments 0 50.6 0 50.6 Tradeandother receivables 308.3 2,726.2 329.1 3,363.6 Amountsdue fromassociates 0 9.2 0 9.2 Marketable securities 0 8.3 0 8.3 Deposits andbankbalances 3,642.8 551.5 1,969.6 6,163.9 Other assets (amount receivable from swap counterparties) 0 11.6 0 11.6
3,951.1 3,357.4 2,298.7 9,607.2
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(b) Interest rate risk (cont’d)
effective interest Fixed rate instruments Total at balance Floating maturing or repriced in interest sheet date rate < 1 year 1-2 years 2-3 years 3-4 years 4-5 years > 5 years sensitive % per annum rm’million rm’million rm’million rm’million rm’million rm’million rm’million rm’million
Company 2010 Financial assets Amountsdue from subsidiaries 5.97 357.0 0 48.8 0 0 0 0 405.8 Deposits andbank balances 2.96 0 3,330.0 0 0 0 0 0 3,330.0
357.0 3,330.0 48.8 0 0 0 0 3,735.8
2009 Financial assets Amountsdue from subsidiaries 6.89 470.1 0 54.8 0 0 0 0 524.9 Deposits andbank balances 2.32 0 2,982.0 0 0 0 0 0 2,982.0
470.1 2,982.0 54.8 0 0 0 0 3,506.9
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(b) Interest rate risk (cont’d)
balances Total Non under interest interest islamic sensitive sensitive principles Total rm’million rm’million rm’million rm’million
Company 2010 Financial assets Investments 0 110.5 0 110.5 Tradeandother receivables 0 1,815.2 299.7 2,114.9 Amountsdue from subsidiaries 405.8 2,573.0 0 2,978.8 Amountsdue fromassociates 0 5.3 0 5.3 Marketable securities 0 8.6 0 8.6 Deposits andbankbalances 3,330.0 246.3 2,880.3 6,456.6 Other assets (amount receivable from swap counterparties) 0 1.9 0 1.9
3,735.8 4,760.8 3,180.0 11,676.6
2009 Financial assets Investments 0 50.6 0 50.6 Tradeandother receivables 0 2,107.4 329.1 2,436.5 Amountsdue from subsidiaries 524.9 2,076.0 0 2,600.9 Amountsdue fromassociates 0 4.2 0 4.2 Marketable securities 0 8.3 0 8.3 Deposits andbankbalances 2,982.0 283.1 1,924.7 5,189.8 Other assets (amount receivable from swap counterparties) 0 11.6 0 11.6
3,506.9 4,541.2 2,253.8 10,301.9
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(b) Interest rate risk (cont’d)
effective interest Fixed rate instruments Total at balance Floating maturing or repriced in interest sheet date rate < 1 year 1-2 years 2-3 years 3-4 years 4-5 years > 5 years sensitive % per annum rm’million rm’million rm’million rm’million rm’million rm’million rm’million rm’million
group 2010 Financial liabilities Borrowings 5.14 1,073.6 2,274.7 600.4 250.0 250.0 1,484.4 10,988.5 16,921.6 Other liabilities 0.1 0.1 0.2
1,073.6 2,274.8 600.5 250.0 250.0 1,484.4 10,988.5 16,921.8
On-balance sheet interest sensitivity gap (767.7) 2,987.3 (600.5) (250.0) (250.0) (1,484.4) (10,988.5) (11,353.8) Off-balance sheet interest sensitivity gap 835.9 0 0 0 0 0 (835.9) 0
Total interest sensitivity gap 68.2 2,987.3 (600.5) (250.0) (250.0) (1,484.4) (11,824.4) (11,353.8)
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(b) Interest rate risk (cont’d)
effective interest Fixed rate instruments Total at balance Floating maturing or repriced in interest sheet date rate < 1 year 1-2 years 2-3 years 3-4 years 4-5 years > 5 years sensitive % per annum rm’million rm’million rm’million rm’million rm’million rm’million rm’million rm’million
Group 2009 Financial liabilities Borrowings 5.47 1,356.9 102.8 2,432.2 613.6 250.0 250.0 12,764.1 17,769.6
1,356.9 102.8 2,432.2 613.6 250.0 250.0 12,764.1 17,769.6
On-balance sheet interest sensitivity gap (1,304.0) 3,795.4 (2,432.2) (613.6) (250.0) (250.0) (12,764.1) (13,818.5) Off-balance sheet interest sensitivity gap 1,293.1 (34.1) 0 0 0 0 (1,251.8) 7.2
Total interest sensitivity gap (10.9) 3,761.3 (2,432.2) (613.6) (250.0) (250.0) (14,015.9) (13,811.3)
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(b) Interest rate risk (cont’d)
balances Total Non under interest interest islamic sensitive sensitive principles Total rm’million rm’million rm’million rm’million
group 2010 Financial liabilities Tradeandotherpayables 0 5,497.4 0 5,497.4 Amountsdue to associates 0 623.6 0 623.6 Borrowings (includingaccrued interest) 16,921.6 262.4 4,654.9 21,838.9 Other liabilities (amountpayable to swap counterparties) 0 17.8 0 17.8 Other liabilities 0.2 0 0 0.2
16,921.8 6,401.2 4,654.9 27,977.9
On-balance sheet interest sensitivity gap (11,353.8) (3,185.8) (1,474.9) (16,014.5) Off-balance sheet interest sensitivity gap 0 0 0 0
Total interest sensitivity gap (11,353.8) (3,185.8) (1,474.9) (16,014.5)
2009 Financial liabilities Tradeandotherpayables 0 4,593.2 0 4,593.2 Amountsdue to associates 0 294.0 0 294.0 Borrowings (includingaccrued interest) 17,769.6 257.3 4,856.3 22,883.2 Other liabilities (amountpayable to swap counterparties) 0 24.2 0 24.2
17,769.6 5,168.7 4,856.3 27,794.6
On-balance sheet interest sensitivity gap (13,818.5) (1,811.3) (2,557.6) (18,187.4) Off-balance sheet interest sensitivity gap 7.2 0 0 7.2
Total interest sensitivity gap (13,811.3) (1,811.3) (2,557.6) (18,180.2)
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(b) Interest rate risk (cont’d)
effective interest Fixed rate instruments Total at balance Floating maturing or repriced in interest sheet date rate < 1 year 1-2 years 2-3 years 3-4 years 4-5 years > 5 years sensitive % per annum rm’million rm’million rm’million rm’million rm’million rm’million rm’million rm’million
Company 2010 Financial liabilities Amountsdue to subsidiaries 3.11 835.9 0 0 0 0 48.0 2,053.7 2,937.6 Borrowings 4.95 17.3 2,274.7 600.4 250.0 250.0 250.0 8,662.1 12,304.5
853.2 2,274.7 600.4 250.0 250.0 298.0 10,715.8 15,242.1
On-balance sheet interest sensitivity gap (496.2) 1,055.3 (551.6) (250.0) (250.0) (298.0) (10,715.8) (11,506.3) Off-balance sheet interest sensitivity gap 835.9 0 0 0 0 0 (835.9) 0
Total interest sensitivity gap 339.7 1,055.3 (551.6) (250.0) (250.0) (298.0) (11,551.7) (11,506.3)
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(b) Interest rate risk (cont’d)
effective interest Fixed rate instruments Total at balance Floating maturing or repriced in interest sheet date rate < 1 year 1-2 years 2-3 years 3-4 years 4-5 years > 5 years sensitive % per annum rm’million rm’million rm’million rm’million rm’million rm’million rm’million rm’million
Company 2009 Financial liabilities Amountsdue to subsidiaries 4.49 1,238.3 0 0 0 0 0 2,196.3 3,434.6 Borrowings 4.96 99.5 102.8 2,432.2 613.6 250.0 250.0 9,276.1 13,024.2
1,337.8 102.8 2,432.2 613.6 250.0 250.0 11,472.4 16,458.8
On-balance sheet interest sensitivity gap (867.7) 2,879.2 (2,377.4) (613.6) (250.0) (250.0) (11,472.4) (12,951.9) Off-balance sheet interest sensitivity gap 1,293.1 (34.1) 0 0 0 0 (1,251.8) 7.2
Total interest sensitivity gap 425.4 2,845.1 (2,377.4) (613.6) (250.0) (250.0) (12,724.2) (12,944.7)
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(b) Interest rate risk (cont’d)
balances Total Non under interest interest islamic sensitive sensitive principles Total rm’million rm’million rm’million rm’million
Company 2010 Financial liabilities Tradeandotherpayables 0 3,476.6 0 3,476.6 Borrowings (includingaccrued interest) 12,304.5 138.2 2,185.9 14,628.6 Amountsdue to subsidiaries 2,937.6 964.2 0 3,901.8 Amountsdue to associates 0 623.6 0 623.6 Other liabilities (amountpayable to swap counterparties) 0 17.8 0 17.8
15,242.1 5,220.4 2,185.9 22,648.4
On-balance sheet interest sensitivity gap (11,506.3) (459.6) 994.1 (10,971.8) Off-balance sheet interest sensitivity gap 0 0 0 0
Total interest sensitivity gap (11,506.3) (459.6) 994.1 (10,971.8)
2009 Financial liabilities Tradeandotherpayables 0 3,667.1 0 3,667.1 Borrowings (includingaccrued interest) 13,024.2 150.2 2,185.6 15,360.0 Amountsdue to subsidiaries 3,434.6 1,217.7 0 4,652.3 Amountsdue to associates 0 294.0 0 294.0 Other liabilities (amountpayable to swap counterparties) 0 24.2 0 24.2
16,458.8 5,353.2 2,185.6 23,997.6
On-balance sheet interest sensitivity gap (12,951.9) (812.0) 68.2 (13,695.7) Off-balance sheet interest sensitivity gap 7.2 0 0 7.2
Total interest sensitivity gap (12,944.7) (812.0) 68.2 (13,688.5)
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(b) Interest rate risk (cont’d)
The table below summarises the effectiveweighted average interest rate as at 31August 2010and31August 2009bymajor currencies for each class offinancial asset andfinancial liability.
uSd Jpy euro rm others % % % % %
group 2010 Financial assets Tradeandother receivables 0 0 0 0 12.16 Deposits andbankbalances 0 0 0 2.96 7.75
Financial liabilities Borrowings 5.70 1.81 0 6.45 0
2009 Financial assets Tradeandother receivables 0 0 0 0 12.75 Deposits andbankbalances 1.80 0 0 2.32 0
Financial liabilities Borrowings 7.84 1.01 0 6.48 0
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(b) Interest rate risk (cont’d)
uSd Jpy euro rm others % % % % %
Company 2010 Financial assets Amountsdue from subsidiaries 2.88 0 0 5.58 0 Deposits andbankbalances 0 0 0 2.96 0
Financial liabilities Amountsdue to subsidiaries 2.57 4.06 0 0 0 Borrowings 5.70 1.81 0 6.45 0
2009 Financial assets Amountdue from subsidiaries 3.34 0 0 5.65 0 Deposits andbankbalances 1.80 0 0 2.32 0
Financial liabilities Amountsdue to subsidiaries 3.58 4.05 0 0 0 Borrowings 7.45 1.22 0 6.16 0
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(c) Credit risk
(i) Onbalance sheet, commitment and contingencies
Credit risk is the risk that one party to a financial instrumentwill fail to discharge an obligation and cause theotherpartyto incurafinancial loss.ThefollowingtablesanalysetheGroup’sandtheCompany’sfinancialassetsby industry concentrationas at thebalance sheetdate.
interest receivable deposits Trade from Total and bank investment receivables swap on- Commitment balances in unquoted and other inter- counter- balance and (excl. cash) instruments# assets company parties sheet contingencies rm’million rm’million rm’million rm’million rm’million rm’million rm’million
group 2010 Government 0 0 106.7 0 0 106.7 0 Financial institutions 8,325.9 38.0 26.7 0 1.9 8,392.5 0 Business 0 0 1,914.1 0 0 1,914.1 0 Individuals 0 0 1,003.2 0 0 1,003.2 0 Associates 0 0 0 5.3 0 5.3 0 Subsidiaries 0 0 0 0 0 0 0 Others 0 0 94.2 0 0 94.2 284.4
8,325.9 38.0 3,144.9 5.3 1.9 11,516.0 284.4*
2009 Government 0 0 124.8 0 0 124.8 0 Financial institutions 5,524.6 39.7 7.6 0 11.6 5,583.5 0 Business 0 0 1,745.9 0 0 1,745.9 0 Individuals 0 0 1,113.2 0 0 1,113.2 0 Associates 0 0 0 4.2 0 4.2 0 Subsidiaries 0 0 0 0 0 0 0 Others 0 0 110.6 0 0 110.6 319.5
5,524.6 39.7 3,102.1 4.2 11.6 8,682.2 319.5*
# This amount excludes equity instruments amounting to RM81.1 million (2009: RM20.9 million), net of allowance.
* This amount represents the guarantees issued by the Company on the borrowing facilities given.
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(c) Credit risk (cont’d)
(i) Onbalance sheet, commitment and contingencies (cont’d)
interest receivable deposits Trade from Total and bank investment receivables swap on- Commitment balances in unquoted and other inter- counter- balance and (excl. cash) instruments# assets company parties sheet contingencies rm’million rm’million rm’million rm’million rm’million rm’million rm’million
Company 2010 Government 0 0 69.4 0 0 69.4 0 Financial institutions 6,456.6 38.0 26.7 0 1.9 6,523.2 0 Business 0 0 1,047.4 0 0 1,047.4 0 Individuals 0 0 877.2 0 0 877.2 0 Associates 0 0 0 5.3 0 5.3 0 Subsidiaries 0 0 0 2,978.8 0 2,978.8 2,889.6 Others 0 0 94.2 0 0 94.2 284.4
6,456.6 38.0 2,114.9 2,984.1 1.9 11,595.5 3,174.0*
2009 Government 0 0 87.5 0 0 87.5 0 Financial institutions 4,818.8 39.7 7.6 0 11.6 4,877.7 0 Business 0 0 1,286.0 0 0 1,286.0 0 Individuals 0 0 944.9 0 0 944.9 0 Associates 0 0 0 4.2 0 4.2 0 Subsidiaries 0 0 0 2,600.9 0 2,600.9 3,474.6 Others 0 0 110.5 0 0 110.5 319.5
4,818.8 39.7 2,436.5 2,605.1 11.6 9,911.7 3,794.1*
# This amount excludes equity instruments amounting to RM81.1 million (2009: RM20.9 million), net of allowance.
* This amount represents the guarantees issued by the Company on the borrowing facilities given.
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(c) Credit risk (cont’d)
(ii) Off balance sheet
TheGroupandtheCompanyareexposed tocredit riskwhere the fairvalueof thecontract is favourable,wherethecounterpartyisrequiredtopaytheGrouportheCompanyintheeventofcontracttermination.Thefollowingtable summarises the favourable fair valuesof the contracts, indicating the credit risk exposure.
group Company Contract or Contract or notional Favourable notional Favourable principal net fair principal net fair amount value amount value rm’million rm’million rm’million rm’million
2010 Currencyoption 959.9 53.4 0 0 Interest rate swap 835.9 (70.8) 835.9 (70.8)
1,795.8 (17.4) 835.9 (70.8)
2009 Cross currency interest rate swap 34.1 6.8 34.1 6.8 Currencyoption 976.0 21.2 0 0 Interest rate swap 1,251.8 (59.3) 1,251.8 (59.3)
2,261.9 (31.3) 1,285.9 (52.5)
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(d) Foreignexchange risk
The currency exposure of financial assets and financial liabilities of the Group and the Company that are notdenominated in the functional currencyof the respective companies is set outbelow.
uSd Jpy euro others rm’million rm’million rm’million rm’million
group 2010 Financial assets Receivables, deposits andprepayments 14.8 0 11.3 0 Deposits andbankbalances 1.6 0 0 14.6 Other assets (interest receivable from swap counterparties) 1.9 0 0 0
18.3 0 11.3 14.6
Financial liabilities Payables – external 41.6 0 0 0 Borrowings 4,516.5 5,306.8 0 0 Other liabilities (interest payable to swap counterparties) 17.8 0 0 0
4,575.9 5,306.8 0 0
2009 Financial assets Receivables, deposits andprepayments 0.6 0 11.3 0 Deposits andbankbalances 116.1 3.4 0 16.4 Other assets (interest receivable from swap counterparties) 11.5 0.1 0 0
128.2 3.5 11.3 16.4
Financial liabilities Payables – external 17.5 0 1.6 0.4 Borrowings 5,502.4 5,480.3 0 0 Other liabilities (interest payable to swap counterparties) 23.9 0.2 0 0
5,543.8 5,480.5 1.6 0.4
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(d) Foreignexchange risk (cont’d)
uSd Jpy euro others rm’million rm’million rm’million rm’million
Company 2010 Financial assets Amountsdue from subsidiaries 1,120.6 0 0 0.3 Deposits andbankbalances 1.5 0 0 0 Other assets (interest receivable from swap counterparties) 1.9 0 0 0
1,124.0 0 0 0.3
Financial liabilities Amountsdue to subsidiaries 1,978.7 959.9 0 0 Borrowings 2,586.8 4,312.9 0 0 Other liabilities (interest payable to swap counterparties) 17.8 0 0 0
4,583.3 5,272.8 0 0
2009 Financial assets Amountsdue from subsidiaries 1,329.5 0 0 0.3 Deposits andbankbalances 0.4 6.7 0 0 Other assets (interest receivable from swap counterparties) 11.5 0.1 0 0
1,341.4 6.8 0 0.3
Financial liabilities Amountsdue to subsidiaries 2,689.6 885.6 0 0 Borrowings 3,023.4 4,465.6 0 0 Other liabilities (interest payable to swap counterparties) 23.9 0.2 0 0
5,736.9 5,351.4 0 0
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(e) Fair value
Thefairvalueofafinancial instrument isassumedtobetheamountatwhichthe instrumentcouldbeexchangedorsettledbetweenknowledgeableandwillingparties inanarm’s lengthtransaction,other than in forcedor liquidationsale.Quotedmarketprices,whenavailable,areusedas themeasureof fairvalues.However, fora significantportionof the Group’s and the Company’s financial instruments, quoted market prices do not exist. For such financialinstruments, fair values presented are estimates derived using the net present value or other valuation techniques.The above techniques involve uncertainties and are significantly affected by the assumptions used and judgementsmade regarding risk characteristics of various financial instruments, discount rates, estimates of future cash flows,future expected loss experience and other factors. Changes in assumptions could significantly affect these estimatesand the resulting fair values.
The face values forfinancial assets and liabilitieswith amaturity of less thanone year are assumed to approximatetheir fair values.
(i) Onbalance sheet
Thecarryingamountsoffinancialassetsand liabilitiesof theGroupandtheCompanyat thebalancesheetdateapproximated their fair values except as set outbelow.
group Company Carrying Fair Carrying Fair amount value amount value rm’million rm’million rm’million rm’million
2010 Financial assets Long term receivables 0 0 405.8 404.1
Financial liabilities Borrowings 21,838.9 22,658.4 14,628.6 15,191.9 Amountdue to subsidiaries (non-current) 0 0 2,796.7 3,083.5
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(e) Fair value (cont’d)
(i) Onbalance sheet (cont’d)
group Company Carrying Fair Carrying Fair amount value amount value rm’million rm’million rm’million rm’million
2009 Financial assets Long term receivables 0 0 525.0 523.0
Financial liabilities Borrowings 22,883.2 23,160.0 15,360.0 15,614.8 Amountdue to subsidiaries (non-current) 0 0 3,525.8 3,812.5
Financial assets
The fair value of long term receivables is lower than carrying amount at balance sheet date as the Companygives its subsidiaries advances at below current market rate. The Directors consider the carrying amount fullyrecoverable as theydonot intend to realise thefinancial assets via exchangewith another counterparty.
Financial liabilities
The fair valueof quotedbondshasbeen estimatedusing the respectivequotedprice. Forunquotedborrowingswith fixed interest rate, the fair values have been estimated by discounting the estimated future cash flowsusing the prevailing market rates for similar credit risks and remaining period to maturity. For unquotedborrowings with floating interest rate, the carrying values are generally reasonable estimates of their fairvalues.
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(e) Fair value (cont’d)
(i) Onbalance sheet (cont’d)
Financial liabilities (cont’d)
The method by which fair value information was determined and any significant assumptions made in itsapplicationare as follows:
• quoted shares andmarketable securities –quotedmarketprices at balance sheetdate
• loans to subsidiaries, amounts due from subsidiaries and staff loans – future contractual cash flowsdiscountedusingdealer quotesof interest rates for similar loans
• bank overdrafts, cash and cash equivalents, receivables and payables with a maturity period of less thanone year (all ofwhichwere subject tonormal credit terms) – carrying valueat balance sheetdate
• borrowingsotherthanbankoverdraft–futurecontractualcashflowsdiscountedatcurrentmarket interestrates available for similarfinancial instruments
• financial guarantees given to third parties – quotation from bankers in respect of the amount required tosettle the contingentobligations at thebalance sheetdate
• forward foreign exchange contracts – difference between the spot exchange rates and the contractedforward exchange rates at balance sheetdate, applied to the contracted sum
• interest rate swaps–present valueof estimated future cashflows calculatedusing forward rates
(ii) Off balance sheet
The financial derivative instruments are used to hedge foreign exchange and interest rate risks associatedwithcertain longtermforeigncurrencyborrowings.Thecontractnotionalprincipalamountsofthederivativeandthecorresponding fair valueadjustments are analysedasbelow.
Fairvalueoffinancialderivative instrumentsare thepresentvaluesof their futurecashflowsandarearrivedatbasedonvaluationscarriedoutby theCompany’sbankers. Favourable fairvalue indicatesamount receivablebytheCompany if the contracts are terminatedas at 31August2010or vice versa.
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(e) Fair value (cont’d)
(ii) Off balance sheet (cont’d)
Contract or notional principal Favourable unfavourable amount net fair value net fair value rm’million rm’million rm’million
group 2010 Interest rate swaps 835.9 0 (70.8) Currencyoption 959.9 53.4 0 Corporateguaranteegiven tofinancial institutions in respect of facilities granted to jointly controlled entity of anassociate 284.4 0 0
2,080.2 53.4 (70.8)
2009 Interest rate swaps 1,251.8 0 (59.3) Cross currency interest rate swap 34.1 6.8 0 Currencyoption 976.0 21.2 0 Corporateguaranteegiven tofinancial institutions in respect of facilities granted to jointly controlled entity of anassociate 319.5 0 0
2,581.4 28.0 (59.3)
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(e) Fair value (cont’d)
(ii) Off balance sheet (cont’d)
Contract or notional principal Favourable unfavourable amount net fair value net fair value rm’million rm’million rm’million
Company 2010 Corporateguaranteegiven tofinancial institutions in respect of facilities granted to subsidiaries and jointly controlled entity of anassociate 3,174.0 0 (286.8) Interest rate swap 835.9 0 (70.8)
4,009.9 0 (357.6)
2009 Corporateguaranteegiven tofinancial institutions in respect of facilities granted to subsidiaries and jointly controlled entity of anassociate 3,794.1 0 (357.4) Cross currency interest rate swap 34.1 6.8 0 Interest rate swap 1,251.8 0 (59.3)
5,080.0 6.8 (416.7)
44. approvaL oF FiNaNCiaL STaTemeNTS
Thefinancial statementshavebeenapprovedby theBoardofDirectors on2November2010.
362 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
STaTemeNT by direCTorSpurSuaNT To SeCTioN 169 (15) oF The CompaNieS aCT, 1965
STaTuTory deCLaraTioNpurSuaNT To SeCTioN 169 (16) oF The CompaNieS aCT, 1965
We,TanSriLeoMoggieandDato’SriCheKhalibbinMohamadNoh,twooftheDirectorsofTenagaNasionalBerhad,doherebystate that, in the opinion of theDirectors, the financial statements set out on pages 245 to 361 are drawnup so as to give atrue and fair view of the state of affairs of the Group and of the Company as at 31 August 2010 and of the results and thecashflowsof theGroupandof theCompany for thefinancial yearendedon thatdate inaccordancewith theMASBApprovedAccounting Standards inMalaysia for EntitiesOther thanPrivate Entities and theprovisionsof theCompaniesAct, 1965.
Signedonbehalf of theBoardofDirectors, in accordancewith their resolutiondated2November2010.
TaN Sri Leo moggie daTo’ Sri Che khaLib biN mohamad NohCHAIRMAN PRESIDENT/CHIEF EXECUTIVE OFFICER
I,MohamedRafiqueMericanbinMohdWahiduddinMerican, thepersonprimarily responsible for thefinancialmanagementofTenaga Nasional Berhad, do solemnly and sincerely declare that the financial statements set out on pages 245 to 361 are, inmy opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of theprovisionsof the StatutoryDeclarationsAct, 1960.
mohamed raFiQue meriCaNbiN mohd wahiduddiN meriCaN
Subscribed and solemnly declared by the above named Mohamed Rafique Merican bin Mohd Wahiduddin Merican at KualaLumpur,Malaysia on2November2010, beforeme.
CommiSSioNer For oaThS
363TENAGA NASIONAL BERHADANNUAL REPORT 2010
iNdepeNdeNT audiTorS’ reporT
To The memberS oF TeNaga NaSioNaL berhad (incorporated in malaysia) (Company No. 200866-w)
reporT oN The FiNaNCiaL STaTemeNTS
WehaveauditedthefinancialstatementsofTenagaNasionalBerhad,whichcomprisethebalancesheetsasat31August2010of theGroup and of the Company, and the income statements, statements of changes in equity and cash flow statements oftheGroup and of the Company for the financial year then ended, and a summary of significant accounting policies and otherexplanatorynotes, as set out onpages245 to361.
directors’ responsibility for the Financial Statements
The directors of the Company are responsible for the preparation and fair presentation of these financial statements inaccordancewithMASBApprovedAccounting Standards inMalaysia for EntitiesOther than Private Entities and theCompaniesAct, 1965. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparationandfairpresentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror;selectingandapplyingappropriate accountingpolicies; andmakingaccounting estimates that are reasonable in the circumstances.
auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit inaccordancewithapprovedstandardsonauditinginMalaysia.Thosestandardsrequirethatwecomplywithethicalrequirementsand plan and perform the audit to obtain reasonable assurance whether the financial statements are free from materialmisstatement.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.The procedures selected depend on our judgment, including the assessment of risks ofmaterialmisstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to theentity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriatein the circumstances, butnot for thepurposeof expressinganopinionon the effectivenessof the entity’s internal control. Anauditalso includesevaluating theappropriatenessofaccountingpoliciesusedand the reasonablenessofaccountingestimatesmadeby thedirectors, aswell as evaluating theoverall presentationof thefinancial statements.
Webelieve that the audit evidencewehaveobtained is sufficient andappropriate toprovide abasis for our audit opinion.
opinion
Inouropinion,thefinancialstatementshavebeenproperlydrawnupinaccordancewithMASBApprovedAccountingStandardsin Malaysia for Entities Other than Private Entities and the Companies Act, 1965 so as to give a true and fair view of thefinancial position of the Group and of the Company as of 31 August 2010 and of their financial performance and cash flowsfor thefinancial year thenended.
PricewaterhouseCoopers (AF 1146)Chartered AccountantsLevel 10, 1 SentralJalan Travers, Kuala Lumpur SentralP O Box 1019250706 Kuala Lumpur, MalaysiaTelephone +60 3 2173 1188Facsimile +60 3 2173 1288www.pwc.com
364 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
iNdepeNdeNT audiTorS’ reporTTo The memberS oF TeNaga NaSioNaL berhad (incorporated in malaysia) (Company No. 200866-w) (CoNT’d)
reporT oN oTher LegaL aNd reguLaTory reQuiremeNTS
In accordancewith the requirementsof theCompaniesAct, 1965 inMalaysia,wealso report the following:
(a) Inouropinion, theaccountingandother recordsand the registers requiredby theAct tobekeptby theCompanyand itssubsidiaries ofwhichwehaveactedas auditorshavebeenproperly kept in accordancewith theprovisionsof theAct.
(b) Wehave considered thefinancial statements and the auditors’ reports of all the subsidiaries ofwhichwehavenot actedas auditors,whichare indicated inNote15 to thefinancial statements.
(c) WearesatisfiedthatthefinancialstatementsofthesubsidiariesthathavebeenconsolidatedwiththeCompany’sfinancialstatementsareinformandcontentappropriateandproperforthepurposesofthepreparationofthefinancialstatementsof theGroupandwehave received satisfactory informationandexplanations requiredbyus for thosepurposes.
(d) Theaudit reportson thefinancial statementsof the subsidiariesdidnot containanymaterialqualificationoranyadversecommentmadeunder Section174(3) of theAct.
oTher maTTerS
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act,1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of thisreport.
priCewaTerhouSeCooperS ThayaparaN a/L S. SaNgarapiLLai(No.AF: 1146) (No. 2085/09/12 (J))CharteredAccountants CharteredAccountant
Kuala Lumpur2November2010
aNaLySiS oFSharehoLdiNgS
as at 19 October 2010
Share CapiTaL
Authorised ShareCapital : 5,000,000,000ordinarysharesofRM1.00pershare,1(One)SpecialRightsRedeemablePreferenceShare of RM1.00 per share, 1,000 Class A Redeemable Preference Share of RM1.00 per share,500ClassBRedeemable Preference Shareof RM1.00per share.
Issuedand Fully Paid-Up : 4,355,546,495ordinarysharesofRM1.00pershare,1(One)SpecialRightsRedeemablePreferenceShareCapital Share of RM1.00 per share, 1,000 Class A Redeemable Preference Share of RM1.00 per share,
500ClassBRedeemable Preference Shareof RM1.00per share.
VotingRight : One voting right for oneordinary share
aNaLySiS oF SharehoLdiNgS
SiZe oF SharehoLdiNgSNo. oF
SharehoLderS% oF
SharehoLderS No. oF ShareS% oF iSSued
Share CapiTaL
LESS THAN100 1,044 3.13 27,298 0.00
100–1,000 7,626 22.84 5,907,752 0.14
1,001–10,000 21,924 65.65 59,351,333 1.36
10,001–100,000 2,015 6.03 55,587,666 1.27
100,001TO LESS THAN5%OF ISSUEDSHARES 782 2.34 1,738,712,671 39.92
5%ANDABOVEOF ISSUEDSHARES 3 0.01 2,495,959,775 57.31
ToTaL 33,394 100.00 4,355,546,495 100.00
direCTorS’ SharehoLdiNgS
No. Name oF direCTorS
No. oF ShareS
direCT/iNdireCT iNTereST %
1. TANSRI LEOMOGGIE — —
2. DATO’ SRICHEKHALIBBINMOHAMADNOH — —
3. DATO’ PUTEHRUKIAHBINTIABDMAJID — —
4. DATO’MOHAMMADZAINALBINSHAARI — —
5. DATO’ ZAINALABIDINBINPUTIH 1,250 0.00
6. TANSRIDATO’HARINARAYANANA/LGOVINDASAMY — —
7. DATO’ FUADBIN JAAFAR 62,500 0.00
8. TANSRIDATO’ SERI SITINORMABINTI YAAKOB 1,250 0.00
9. DATO’ABDMANAFBINHASHIM(Appointed w.e.f. 1 February 2010)
— —
10. DATO’ Ir. AZMANBINMOHD(Appointed w.e.f. 15 April 2010)– TasecNominees (Tempatan) Sdn. Bhd.
3,500 0.00
11. CHUNGHONCHEONG(Appointed w.e.f. 1 October 2010)
— —
12. SURIABTABRAHMAN(Alternate Director to Dato’ Mohammad Zainal Bin Shaari)(Appointed w.e.f. 30 November 2009)
— —
13. TANSRIDATO’ LAUYINPIN@ LAUYENBENG(Resigned w.e.f. 15 September 2010)
— —
365TENAGA NASIONAL BERHADANNUAL REPORT 2010
aNaLySiS oFSharehoLdiNgS(CoNT’d)
SubSTaNTiaL SharehoLderS
No. Name oF SubSTaNTiaL SharehoLderS No. oF ShareS %
1. KHAZANAHNASIONALBERHAD 1,551,724,689 35.63
2. EMPLOYEESPROVIDENT FUNDBOARD–515,632,586 sharesheld in its ownname–1,500,000 sharesheld in its ownname–16,231,700 sharesheld throughSBBNominees (Tempatan) Sdn. Bhd.– 20,278,400 sharesheld throughAlliancegroupNominees (Tempatan) Sdn. Bhd.– 3,350,000 sharesheld throughAlliancegroupNominees (Tempatan) Sdn. Bhd.–6,718,700 sharesheld throughAmNominees (Tempatan) Sdn. Bhd.–5,901,200 sharesheld throughCitigroupNominees (Tempatan) Sdn. Bhd.–792,000 sharesheld throughCitigroupNominees (Tempatan) Sdn. Bhd.–1,200,000 sharesheld throughCitigroupNominees (Tempatan) Sdn. Bhd.– 965,000 sharesheld throughDB (Malaysia)Nominee (Tempatan) SendirianBerhad–18,698,850 sharesheld throughHSBCNominees (Tempatan) Sdn. Bhd.–5,241,200 sharesheld throughMaybanNominees (Tempatan) Sdn. Bhd.–4,800,000 sharesheld throughMaybanNominees (Tempatan) Sdn. Bhd.–600,000 sharesheld throughMaybanNominees (Tempatan) Sdn. Bhd.–6,100,000 sharesheld throughRHBNominees (Tempatan) Sdn. Bhd.
608,009,636 13.96
3. AMANAHRAYATRUSTEESBERHADSKIMAMANAHSAHAMBUMIPUTERA
428,602,500 9.84
30 LargeST SharehoLderS
No. Name oF SharehoLderS No. oF ShareS %
1. KHAZANAHNASIONALBERHAD 1,551,724,689 35.63
2. EMPLOYEESPROVIDENT FUNDBOARD 515,632,586 11.84
3. AMANAHRAYATRUSTEESBERHADSKIMAMANAHSAHAMBUMIPUTERA
428,602,500 9.84
4. LEMBAGATABUNGHAJI 166,892,775 3.83
5. KUMPULANWANGPERSARAAN (DIPERBADANKAN) 130,375,400 2.99
6. AMANAHRAYATRUSTEESBERHADAMANAHSAHAMMALAYSIA
74,128,700 1.70
7. AMANAHRAYATRUSTEESBERHADAMANAHSAHAMWAWASAN2020
73,395,400 1.69
8. CARTABANNOMINEES (ASING) SDN.BHD.EXEMPTANFORSTATE STREETBANK&TRUSTCOMPANY (WESTCLTOD67)
63,474,465 1.46
9. VALUECAPSDN.BHD. 62,060,900 1.42
10. PERMODALANNASIONALBERHAD 45,822,275 1.05
11. MALAYSIANOMINEES (TEMPATAN) SENDIRIANBERHADGREATEASTERN LIFEASSURANCE (MALAYSIA)BERHAD (PAR1)
41,362,500 0.95
12. CITIGROUPNOMINEES (TEMPATAN) SDN.BHD.EXEMPTANFORPRUDENTIAL FUNDMANAGEMENTBERHAD
38,182,875 0.88
13. HSBCNOMINEES (ASING) SDN.BHD.BBHANDCOBOSTONFORVANGUARDEMERGINGMARKETS STOCK INDEX FUND
28,976,746 0.67
366 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
No. Name oF SharehoLderS No. oF ShareS %
14. HSBCNOMINEES (ASING) SDN.BHD.EXEMPTANFORTHEBANKOFNEWYORKMELLON (MELLONACCT)
25,480,905 0.59
15. CITIGROUPNOMINEES (TEMPATAN) SDN.BHD.EXEMPTANFORAMERICAN INTERNATIONALASSURANCEBERHAD
22,514,150 0.52
16. AMANAHRAYATRUSTEESBERHADAMANAHSAHAMDIDIK
20,967,950 0.48
17. ALLIANCEGROUPNOMINEES (TEMPATAN) SDN.BHD.PHEIMASSETMANAGEMENTSDN.BHD. FOREMPLOYEESPROVIDENT FUND
20,278,400 0.47
18. HSBCNOMINEES (TEMPATAN) SDN.BHD.NOMURAASSETMGMTMALAYSIA FOREMPLOYEESPROVIDENT FUNDBOARD
18,698,850 0.43
19. HSBCNOMINEES (ASING) SDN.BHD.EXEMPTANFOR JPMORGANCHASEBANK,NATIONALASSOCIATION (U.A.E.)
18,098,915 0.41
20. HSBCNOMINEES (ASING) SDN.BHD.EXEMPTANFOR JPMORGANCHASEBANK,NATIONALASSOCIATION (BVI)
18,095,300 0.41
21. MAYBANNOMINEES (TEMPATAN) SDN.BHD.MAYBANTRUSTEESBERHADFORPUBLIC ITTIKAL FUND (N14011970240)
17,689,200 0.40
22. CARTABANNOMINEES (TEMPATAN) SDN.BHD.PETROLIAMNASIONALBERHAD (STRATEGIC INV)
17,390,900 0.40
23. MAYBANNOMINEES (TEMPATAN) SDN.BHD.MAYBANTRUSTEESBERHADFORPUBLICREGULARSAVINGS FUND (N14011940100)
17,209,100 0.40
24. AMANAHRAYATRUSTEESBERHADPUBLIC ISLAMICDIVIDENDFUND
17,098,200 0.39
25. SBBNOMINEES (TEMPATAN) SDN.BHD.EMPLOYEESPROVIDENT FUNDBOARD
16,231,700 0.37
26. CARTABANNOMINEES (ASING) SDN.BHD.BBH (LUX) SCA FOR FIDELITY FUNDSSOUTHEASTASIA
15,251,400 0.35
27. AMANAHRAYATRUSTEESBERHADAS1MALAYSIA
15,250,000 0.35
28. HSBCNOMINEES (ASING) SDN.BHD.EXEMPTANFOR JPMORGANCHASEBANK,NATIONALASSOCIATION (NETHERLANDS)
14,321,600 0.33
29. PERTUBUHANKESELAMATANSOSIAL 13,794,400 0.32
30. AMANAHRAYATRUSTEESBERHADPUBLIC ISLAMICEQUITY FUND
13,398,750 0.30
ToTaL 3,522,401,531 80.87
367TENAGA NASIONAL BERHADANNUAL REPORT 2010
properTyLiST
group
Location
LaNd buiLdiNgS deSCripTioN
Leasehold Freehold Total
No.(10)
built-up area
(sq m)(11)
Total Nbv(rm’000)
(12) (13)
No. of Lots(1)
area(sq m)
(2)
Nbv(rm’000)
(3)
No. of Lots(4)
area(sq m)
(5)
Nbv(rm’000)
(6)
No. of Lots
(1+4)
area(sq m)(2+5)
Nbv (rm’000)
(3+6)
Perlis 42 128,132 2,083 50 139,945 3,471 92 268,077 5,554 81 10,496 70,684
PowerStations,Rural PowerStations,MiniHydros,Jetties,Dams,MainIntakeSubstations,DistributionSubstations,ResidentialHouses,Apartments,HolidayBungalows,OfficeBuildings,Warehouse,Stores,&Workshop
Kedah 176 848,527 14,971 525 781,302 57,130 701 1,629,829 72,101 347 95,409 243,363
PulauPinang 131 1,677,278 63,982 424 478,986 54,025 555 2,156,264 118,007 288 37,966 461,650
Perak 587 926,736 123,407 385 3,337,600 113,361 972 4,264,336 236,768 647 230,406 905,348
Selangor 468 50,540,118 374,489 640 2,666,074 311,321 1,108 53,206,192 685,810 1,306 236,720 2,740,471
WilayahPersekutuan
193 357,343 62,766 394 235,400 101,800 587 592,743 164,566 503 175,251 903,658
Putrajaya/Cyberjaya
— — 66 3 — 660 3 — 726 59 — 35,971
N. Sembilan 272 1,109,320 15,650 194 692,594 40,509 466 1,801,914 56,159 295 146,859 585,485
Melaka 209 632,125 16,243 329 401,701 53,111 538 1,033,826 69,354 239 89,809 106,691
Johor 651 1,489,192 86,690 721 1,270,697 91,912 1,372 2,759,889 178,602 758 111,110 857,438
Pahang 281 1,225,184 22,338 283 430,939 23,313 564 1,656,123 45,651 563 92,312 537,802
Terengganu 264 4,364,697 49,376 120 70,953 17,928 384 4,435,650 67,304 312 67,802 340,587
Kelantan 265 910,563 13,593 410 525,676 20,792 675 1,436,239 34,385 318 399,426 920,499
Sabah 83 6,261,621 17,842 62 4,501,754 32,465 145 10,763,375 50,307 418 132,600 299,091
Pakistan — — — 1 856,207 2,015 1 856,207 2,015 3 12,713 978
ToTaL 3,622 70,470,836 863,496 4,541 16,389,828 923,813 8,163 86,860,664 1,787,309 6,137 1,838,879 9,009,716
Note: NBV–NetBookValue
368 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
groupdireCTory
headQuarTerS
ChairmanTenaga Nasional berhadLevelM,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966011/6612Fax : 03-22827641
President/Chief Executive OfficerTenaga Nasional berhadLevel 1,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966177/6610Fax : 03-22840223
Chief Operating Officer/ Executive DirectorTenaga Nasional berhadLevel 3,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966346Fax : 03-22823850
Chief Financial Officer/ Vice President (Group Finance)Tenaga Nasional berhadLevel 3,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966262Fax : 03-22827292
Vice President (Human Resource)Tenaga Nasional berhadLevel 8,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966659/6954Fax : 03-22827631
Vice President (Transmission)Tenaga Nasional berhadLevel 3,NLDCBuilding129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966635Fax : 03-22823657
Vice President (Generation)Tenaga Nasional berhadLevel 8,GenerationBuilding129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22965511Fax : 03-22831555
Vice President (Distribution)Tenaga Nasional berhadLevel 19,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679000D/Line: 03-79679001Fax : 03-79600331
Vice President (Planning)Tenaga Nasional berhadLevel 1,NLDCBuilding129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22696848/6633Fax : 03-22822906
Vice President (Corporate Affairs)Tenaga Nasional berhadLevel 5,HeadquartersNo. 129 JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966240Fax : 03-22881419
Chief Information OfficerTenaga Nasional berhadLevel 37North,Menara TMOff JalanPantai Baru59200Kuala LumpurTel : 03-22466000D/Line: 03-22466001/6067Fax : 03-22407020
Company SecretaryTenaga Nasional berhadLevel 2,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966247Fax : 03-22833686
Chief Procurement Officer (Procurement Division)Tenaga Nasional berhadLevel 2,GenerationBuilding129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22965605Fax : 03-22821090
Senior General Manager (Investment Management)Group Finance DivisionTenaga Nasional berhadLevel 4,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966348Fax : 03-22840748
Senior General Manager (Corporate Services)Tenaga Nasional berhadLevel 3, Lobby1, Crystal PlazaNo. 4, Jalan51A/22346100Petaling Jaya, SelangorTel : 03-79643600D/Line: 03-79643611Fax : 03-79566734
369TENAGA NASIONAL BERHADANNUAL REPORT 2010
groupdireCTory(CoNT’d)
CorporaTe ServiCeS diviSioN
Senior General Manager (Corporate Services)Tenaga Nasional berhadLevel 3, Lobby1Crystal PlazaNo. 4, Jalan51A/22346100Petaling Jaya, SelangorTel : 03-79643600D/Line: 03-79643611Fax : 03-79566734
General Manager (Property Services Department)Tenaga Nasional berhadLevel 3,WilayahBuilding129, JalanBangsar59200Kuala LumpurTel : 03-22965566Fax : 03-22964868
General Manager (Security Services & Intelligence Department)Tenaga Nasional berhadLevel 17, Pantai Building, Plaza PantaiNo. 5, Jalan4/83AOff JalanPantai Baru59200Kuala LumpurTel : 03-22957000Fax : 03-22835443
General Manager (Logistic Services Department)Tenaga Nasional berhad129, JalanBangsar59200Kuala LumpurTel : 03-22965566Fax : 03-22826300
Head (Planning and Performance)Corporate Services DivisionTenaga Nasional berhadLevel 3, Lobby1, Crystal PlazaNo. 4 Jalan51A/22346100Petaling Jaya, SelangorTel : 03-79643600D/Line: 03-79643605Fax : 03-79566734
Head (Finance)Corporate Services DivisionTenaga Nasional berhadLevel 3, Lobby1, Crystal PlazaNo. 4, Jalan51A/22346100Petaling Jaya, SelangorTel : 03-79643600D/Line: 03-79643604Fax : 03-79566734
Head (Human Resource Management & Admin Services)Corporate Services DivisionTenaga Nasional berhadLevel 3, Lobby1, Crystal PlazaNo. 4, Jalan51A/22346100Petaling Jaya, SelangorTel : 03-79643600D/Line: 03-79643661Fax : 03-79566734
Senior Manager (Freight Management)Logistic Services DepartmentTenaga Nasional berhadGround Floor, BangunanNLDC129, JalanBangsar59200Kuala LumpurTel : 03-22966450Fax : 03-22842949
Head of BranchVehicle Management UnitLogistic Services DepartmentTenaga Nasional berhad31700MalimNawar, PerakTel : 05-4773346Fax : 05-4773424
Head of BranchVehicle Management UnitLogistic Services DepartmentTenaga Nasional berhadJalanGelam2GongBadak IndustrialArea21300Kuala Terengganu, TerengganuTel : 09-6664175Fax : 09-6674180
Head of BranchMobile Gen Set Services UnitLogistic Services DepartmentTenaga Nasional berhadLebuhrayaTunRazakTNBQuarters26700BandarMuadzamShahMuadzamShah, PahangTel : 09-4501220Fax : 09-4501221
diSTribuTioN diviSioN
Vice President (Distribution)Tenaga Nasional berhadLevel 19,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679000D/Line: 03-79679001Fax : 03-79600331
Senior General Manager(Operations – Region 1)Distribution DivisionTenaga Nasional berhadLevel 19,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679000D/Line: 03-79679295Fax : 03-79588904
370 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Senior General Manager(Operations – Region 2)Distribution DivisionTenaga Nasional berhadLevel 18,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679000D/Line: 03-79679105Fax : 03-79588905
General ManagerStrategic Management & Organisational DevelopmentDistribution DivisionTenaga Nasional berhadLevel 18,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679000D/Line: 03-79379087Fax : 03-79600340
Senior General Manager (Asset Management)Distribution DivisionTenaga Nasional berhadLevel 11,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679000D/Line: 03-79679216Fax : 03-79600360
General ManagerCustomer Services and MarketingDistribution DivisionTenaga Nasional berhadLevel 17,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679000D/Line: 03-79679022Fax : 03-79600343
General Manager(Planning and Asset Development)Distribution DivisionTenaga Nasional berhadLevel 6,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679000D/Line: 03-79679197Fax : 03-79679032
General Manager (Finance)Distribution DivisionTenaga Nasional berhadLevel 15,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679000D/Line: 03-79679095Fax : 03-79600337
General Manager (Material Management)Distribution DivisionTenaga Nasional berhadLevel 13,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679000D/Line: 03-79679199Fax : 03-79600349
General Manager (Human Resource Management & Admin Services)Distribution DivisionTenaga Nasional berhadLevel 12,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679000/03-79600341 03-79600329
General Manager (Metering Service)Distribution DivisionTenaga Nasional berhad3, Jalan51A/223Peti Surat 68246770Petaling Jaya, SelangorTel : 03-79552121/3301Fax : 03-79556269
Head (Revenue Management)Distribution DivisionTenaga Nasional berhadLevel 17,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79679355Fax : 03-79600355
perLiS iNdera kayaNgaN
State General Manager (Perlis)Distribution DivisionTenaga Nasional berhadWismaTNB,Bulatan Jubli Emas01000Kangar, PerlisTel : 04-9760021/022/023D/Line: 04-9767470Fax : 04-9761921
371TENAGA NASIONAL BERHADANNUAL REPORT 2010
groupdireCTory(CoNT’d)
kedah daruL amaN
State General Manager (Kedah)Distribution DivisionTenaga Nasional berhadLevel 8,WismaTNBNo. 887, Jalan SultanBadlishah05990Alor Star, KedahTel : 04-7333737D/Line: 04-7358808Fax : 04-7330591
Area Manager (Alor Star)Distribution DivisionTenaga Nasional berhadLevel 1,WismaTNBNo. 887, Jalan SultanBadlishah05990Alor Star, KedahTel : 04-7332020D/Line: 04-7347837Fax : 04-7331167
Area Manager (Sungai Petani)Distribution DivisionTenaga Nasional berhadNo. 23, JalanPetri08009Sungai Petani, KedahTel : 04-4212020D/Line: 04-4213982Fax : 04-4218027
Area Manager (Kulim)Distribution DivisionTenaga Nasional berhadJalanPondok Labu09000Kulim,KedahTel : 04-4906020/04-4906077D/Line: 04-4959733Fax : 04-4905019
Branch Manager (Jitra)Distribution DivisionTenaga Nasional berhadBatu13, JalanChanglun06000 Jitra, KedahTel : 04-9171004D/Line: 04-9175552Fax : 04-9172646
Branch Manager (Pulau Langkawi)Distribution DivisionTenaga Nasional berhadNo. 7&8, Lot PT3418JalanPenarak07000KuahPulau Langkawi, KedahTel : 04-9666020Fax : 04-9667020
Branch Manager (Guar Chempedak)Distribution DivisionTenaga Nasional berhadLot 2, 3&4, TamanWarisan08800GuarChempedak,KedahTel : 04-4686020D/Line: 04-4686150Fax : 04-4687400
Branch Manager (Baling)Distribution DivisionTenaga Nasional berhadUMNO/WakafBuildingJalan SultanAbdulHalim09100Baling,KedahTel : 04-4701021D/Line: 04-4701349Fax : 04-4702025
Branch Manager (Pendang)Distribution DivisionTenaga Nasional berhadNo. 119, Jalan SukamariRumahKedai 2 TingkatMukimAir Putih06700Pendang,KedahTel : 04-7597294D/Line: 04-7594844Fax : 04-7597141
Branch Manager (Bandar Baru)Distribution DivisionTenaga Nasional berhad11, JalanBulatan34930BandarBaru,KedahTel : 05-7161713Fax : 05-7169745
Branch Manager (Sik)Sungai Petani AreaDistribution DivisionTenaga Nasional berhadNo. 8, 12&13Bangunan Inai08200Sik, KedahTel : 04-4695151/04-4695896Fax : 04-4695500
Branch Manager (Kuala Nerang)Distribution DivisionTenaga Nasional berhadNo. 1A, 1B, PekanKualaNerang06300KualaNerang,KedahTel : 04-7866021D/Line: 04-7866867Fax : 04-7866290
puLau piNaNg puLau muTiara
State General Manager (Pulau Pinang)Distribution DivisionTenaga Nasional berhadLevel 17,WismaTNBNo. 30, JalanAnson10400PulauPinangTel : 04-2224000Fax : 04-227311
Area Manager (Pulau Pinang)Distribution DivisionTenaga Nasional berhadLevel 9,WismaTNBNo. 30, JalanAnson10400PulauPinangTel : 04-2224000Fax : 04-2270637
Area Manager (Seberang Jaya)Distribution DivisionTenaga Nasional berhadNo. 3031, JalanTenagaSeberang Jaya13700Perai, PulauPinangTel : 04-3820200Fax : 04-3903044
372 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Area Manager (Nibong Tebal)Distribution DivisionTenaga Nasional berhadNo. 51, 53, 55, 57 JalanCenderawasih3TamanCenderawasih Indah14300NibongTebalSeberangPerai, PulauPinangTel : 04-5931606/607Fax : 04-5933070/5932881
Branch Manager (Kepala Batas)Distribution DivisionTenaga Nasional berhadGround FloorUMNOBuildingBahagianKepalaBatas2001, JalanBertam13200KepalaBatasSeberangPeraiUtara, PulauPinangTel : 04-5751020/04-5753932 04-5754679Fax : 04-5751126
Branch Manager (Bayan Baru)Distribution DivisionTenaga Nasional berhad64,Off JalanMahsuri11950BayanBaru, PulauPinangTel : 04-6427121Fax : 04-6421011
perak daruL ridZuaN
State General Manager (Perak)Distribution DivisionTenaga Nasional berhadLevel 2,WismaTNBJalan Lahat, 30200 Ipoh, PerakTel : 05-2532020D/Line: 05-2547475Fax : 05-2545199
Area Manager (Ipoh)Distribution DivisionTenaga Nasional berhadLevel 1,WismaTNBJalan Lahat, 30200 Ipoh, PerakTel : 05-2532020Fax : 05-2410855
Area Manager (Taiping)Distribution DivisionTenaga Nasional berhadNo. 20,WismaTNBJalan Istana Larut34000Taiping, PerakTel : 05-8082020D/Line: 05-8075373Fax : 05-8073321
Area Manager (Kuala Kangsar)Distribution DivisionTenaga Nasional berhadLot 5135, Jalan Sultan Iskandar Shah33000KualaKangsar, PerakTel : 05-7762021D/Line: 05-7793353Fax : 05-7762744
Area Manager (Seri Manjung)Distribution DivisionTenaga Nasional berhadLot 1754, JalanDato’ Seri Kamaruddin32040SeriManjung, PerakTel : 05-6882020D/Line: 05-6884761Fax : 05-6884763
Area Manager (Bidor)Distribution DivisionTenaga Nasional berhadLot 6121, JalanTapah35500Bidor, PerakTel : 05-4341020D/Line: 05-4341915Fax : 05-4342870
Area Manager (Teluk Intan)Distribution DivisionTenaga Nasional berhadJalanChangkat Jong36009Teluk Intan, PerakTel : 05-6223011/12/13Fax : 05-6213563
Area Manager (Kampar)Distribution DivisionTenaga Nasional berhad2209, JalanTimahTamanBandarBaru31900Kampar, PerakTel : 05-4651199Fax : 05-4662858
Branch Manager (Bagan Serai)Distribution DivisionTenaga Nasional berhadLot 7364, JalanTaiping34300BaganSerai, PerakTel : 05-7215020D/Line: 05-7215018Fax : 05-7211293
Branch Manager (Tanjung Rambutan)Distribution DivisionTenaga Nasional berhadJalanBesar,UluKinta31250TanjungRambutan, PerakTel : 05-5332122D/Line: 05-5330027Fax : 05-5332932
Branch Manager (Batu Gajah)Distribution DivisionTenaga Nasional berhad29, JalanDewangsa31009BatuGajah, PerakTel : 05-3661155D/Line: 05-3661201Fax : 05-3662977
373TENAGA NASIONAL BERHADANNUAL REPORT 2010
groupdireCTory(CoNT’d)
Branch Manager (Gerik)Distribution DivisionTenaga Nasional berhad101, JalanTakongDatok33300Gerik, PerakTel : 05-7911361Fax : 05-7911950
Branch Manager (Tanjong Malim)Distribution DivisionTenaga Nasional berhadNo. 43, JalanPermai 1TamanKetoyongPermai35900TanjongMalim, PerakTel : 05-4597020D/Line: 05-4597304Fax : 05-4590802
Branch Manager (Hutan Melintang)Distribution DivisionNo. 3, LorongWawasan1TamanWawasanJalanHutanMelintang36400HutanMelintang, PerakTel : 05-6416218/05-6411392Fax : 05-6414840
Branch Manager (Seri Iskandar)Distribution DivisionTenaga Nasional berhadLot 28&24, Taman IskandarBistari32610Bandar Seri IskandarSeri Iskandar, PerakTel : 05-3714020/22/23Fax : 05-3713670
Branch Manager (Sungai Siput)Distribution DivisionTenaga Nasional berhadNo. 15, JalanBesar31100Sungai Siput (U), PerakTel : 05-5981234Fax : 05-5986050
Branch Manager (Selama)Distribution DivisionTenaga Nasional berhad363A&BBangunanUmnoBhg LarutJalanKgRaja34100Selama, PerakTel : 05-8395702D/Line: 05-8392352Fax : 05-8392352/05-8395691
Branch Manager (Kampung Gajah)Distribution DivisionTenaga Nasional berhadBangunanPKNPJalanBesar36800KampungGajah, PerakTel : 05-6311420Fax : 05-6311420
Branch Manager (Pantai Remis)Distribution DivisionTenaga Nasional berhad7 JalanBesarTamanPelagi34900Pantai Remis, PerakTel : 05-6772650Fax : 05-6772650
Local Senior Metering Engineer (Ipoh)Metering ServiceDistribution DivisionTenaga Nasional berhadNo. 2, JalanKilang1Jelapang IndustrialAreaTamanPertama, 30100 Ipoh, PerakTel : 05-5262711/713Fax : 05-5263878
SeLaNgor daruL ehSaN
State General Manager (Selangor)Distribution DivisionTenaga Nasional berhadLevel 7,MenaraMRCBJalanMajlis 14/10Seksyen14P.OBox733640000ShahAlam, SelangorTel : 03-55224000Fax : 03-55224181
Area Manager (Petaling Jaya)Distribution DivisionTenaga Nasional berhad72, Jalan Selangor46990Petaling Jaya, SelangorTel : 03-79557733Fax : 03-79559046
Area Manager (Rawang)Distribution DivisionTenaga Nasional berhadPejabat Sg.DuaNo. 1, JalanR2/3Rawang IntegratedParkOff JalanBatuArang48000Rawang, SelangorTel : 03-60910576Fax : 03-60910572
Area Manager (Klang)Distribution DivisionTenaga Nasional berhadJalanMeru, Peti Surat 201041990Klang, SelangorTel : 03-33412020Fax : 03-33422020
Area Manager (Shah Alam)Distribution DivisionTenaga Nasional berhadPersiaranDamai, Seksyen1140702ShahAlam, SelangorTel : 03-55102020Fax : 03-55197304
374 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Area Manager (Bandar Baru Bangi)Distribution DivisionTenaga Nasional berhadLot 1, Jalan6C/1343650BandarBaruBangi, SelangorTel : 03-89264990Fax : 03-89264966
Area Manager (Banting)Distribution DivisionTenaga Nasional berhadLot 4, JalanBungaPekan42700Banting, SelangorTel : 03-31872020Fax : 03-31871782
Area Manager (Pelabuhan Klang)Distribution DivisionTenaga Nasional berhadJalanKem,BegBerkunciNo. 22042009PelabuhanKlang, SelangorTel : 03-31672020Fax : 03-31679113
Area Manager (Subang Jaya)Distribution DivisionTenaga Nasional berhadSubangSquare EastWing E1-01-0Jalan SS15/4G47500Subang Jaya, SelangorTel : 03-56286500Fax : 03-56314659
Area Manager (Kuala Selangor)Distribution DivisionTenaga Nasional berhadNo. 19, JalanRaja IdrisBegBerkunciNo. 945000Kuala Selangor, SelangorTel : 03-32892020/1586Fax : 03-32893161
Branch Manager (Sungai Besar)Distribution DivisionTenaga Nasional berhadLot 4744&4745Jalan Sungai Limau43300SungaiBesar, SelangorTel : 03-32241226/2941Fax : 03-32242464
Branch Manager (Cheras)Distribution DivisionTenaga Nasional berhadNo. 13, Jalan Suarasa8/3Bandar TunHusseinOnn43200Cheras, SelangorTel : 03-90863000Fax : 03-90863030
Branch Manager (Sepang)Distribution DivisionTenaga Nasional berhadNo. 2, Jalan2,Medan120BandarBaru Salak Tinggi43900Sepang, SelangorTel : 03-87064415Fax : 03-87064413
Branch Manager (Kuala Langat)Distribution DivisionTenaga Nasional berhadNo. 7, Level 1, JalanDendang1TamanTelok PanglimaGarang42500Kuala Langat, SelangorTel : 03-31229103Fax : 03-31871782
wiLayah perSekuTuaN – kuaLa Lumpur
General Manager (Kuala Lumpur)Distribution DivisionTenaga Nasional berhadLevel 11,WismaTNBJalanKepong, Peti Surat 1105050990Kuala LumpurTel : 03-62506020D/Line: 03-62506301Fax : 03-62506500
Area Manager (Kuala Lumpur-Barat)Distribution DivisionTenaga Nasional berhadLevel 5,WismaTNBJalanKepongPeti Surat 1103150990Kuala LumpurTel : 03-62506020/03-62545100Fax : 03-62506302
Area Manager (Kuala Lumpur-Timur)Distribution DivisionTenaga Nasional berhad247&248, JalanBandar13TamanMelawati53100Kuala LumpurTel : 03-41079355Fax : 03-41079373
Area Manager (Kuala Lumpur-Pusat)Distribution DivisionTenaga Nasional berhadLevel 13A,Menara THSelborn153, JalanTunRazak50400Kuala LumpurTel : 03-26875666Fax : 03-26812637
375TENAGA NASIONAL BERHADANNUAL REPORT 2010
groupdireCTory(CoNT’d)
Area Manager (Kuala Lumpur-Selatan)Distribution DivisionTenaga Nasional berhad12 Jalan1/37C,BedfordBusiness ParkBatu5, JalanKlang Lama58200Kuala LumpurTel : 03-77843844Fax : 03-77838344
wiLayah perSekuTuaN – puTraJaya/CyberJaya
General Manager (Putrajaya & Cyberjaya)Distribution DivisionTenaga Nasional berhadLevel 1, Peti Surat 01-01Lot3C4, 26Boulevard, Presint 362675PutrajayaTel : 03-88866888Fax : 03-88893588
Negeri SembiLaN daruL khuSuS
State General Manager (Negeri Sembilan)Distribution DivisionTenaga Nasional berhadJalanDato’ Bandar Tunggal70990Seremban,Negeri SembilanTel : 06-7652150Fax : 06-7644271
Area Manager (Seremban)Distribution DivisionTenaga Nasional berhadLevel 1, BangunanWismaTNBJalanDato’ Bandar Tunggal70990Seremban,Negeri SembilanTel : 06-7679075Fax : 06-7634837
Area Manager (Kuala Pilah)Distribution DivisionTenaga Nasional berhadJalanBahau72009Kuala Pilah,Negeri SembilanTel : 06-4811193Fax : 06-4815910
Area Manager (Port Dickson)Distribution DivisionTenaga Nasional berhadKM3, JalanPantai71009PortDickson,Negeri SembilanTel : 06-6477700/06-6472622Fax : 06-6474101
Branch Manager (Tampin)Distribution DivisionTenaga Nasional berhadLot 176, JalanBesar73000Tampin,Negeri SembilanTel : 06-4411364Fax : 06-4411524
Branch Manager (Nilai)Distribution DivisionTenaga Nasional berhadPT7444 (Kompleks18)JalanBBN1/2HBandarBaruNilai71800Nilai,Negeri SembilanTel : 06-8500422Fax : 06-8500522
Branch Manager (Bahau)Distribution DivisionTenaga Nasional berhad133&134, JalanMewah72100Bahau,Negeri SembilanTel : 06-4545802Fax : 06-4542905
Branch Manager (Rembau)Distribution DivisionTenaga Nasional berhadNo. 30, JalanTerentang71300Rembau,Negeri SembilanTel : 06-6855764Fax : 06-6854577
Branch Manager (Kuala Klawang)Distribution DivisionTenaga Nasional berhadPT54, JalanDato’Menteri71600KualaKlawang,Negeri SembilanTel : 06-6138361/62Fax : 06-6137446
Branch Manager (Gemas)Distribution DivisionTenaga Nasional berhad21, JalanPasar73400Gemas,Negeri SembilanTel : 07-9482902Fax : 07-9482442
meLaka baNdaraya berSeJarah
State General Manager (Melaka)Distribution DivisionTenaga Nasional berhadLevelMezzanineJalanBandaKabaKarungBerkunci 100575990MelakaTel : 06-2828544Fax : 06-2826460
Branch Manager (Jasin)Distribution DivisionTenaga Nasional berhadJ7923, JalanBungaTanjungTamanMaju, 77000 Jasin,MelakaTel : 06-5292132Fax : 06-5292001
376 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Branch Manager (Alor Gajah)Distribution DivisionTenaga Nasional berhadNo. 11, PrimaAlorGajah78000AlorGajah,MelakaTel : 06-5562840Fax : 06-5564453
Branch Manager (Masjid Tanah)Distribution DivisionTenaga Nasional berhadJalanBesar78300Masjid Tanah,MelakaTel : 06-3843000/03Fax : 06-3844120
Branch Manager (Merlimau)Distribution DivisionTenaga Nasional berhadJalan Jasin77300Merlimau,MelakaTel : 06-2635023Fax : 06-2635041
Johor daruL TakZim
State General Manager (Johor)Distribution DivisionTenaga Nasional berhadLevel 14,WismaTNBJalanYahyaAwal80100 JohorBahru, JohorTel : 07-2192000Fax : 07-2231425
Area Manager (Johor Bahru)Distribution DivisionTenaga Nasional berhadLevel 3,WismaTNBJalanYahyaAwal80100 JohorBahru, JohorTel : 07-2192200Fax : 07-2192237
Area Manager (Batu Pahat)Distribution DivisionTenaga Nasional berhadJalanBakauChondong83000BatuPahat, JohorTel : 07-4346088Fax : 07-4319727
Area Manager (Muar)Distribution DivisionTenaga Nasional berhadJalan Sulaiman84000Muar, JohorTel : 06-9532950Fax : 06-9528739
Area Manager (Kluang)Distribution DivisionTenaga Nasional berhadJalanMengkibol86009Kluang, JohorTel : 07-7722020Fax : 07-7724410
Area Manager (Kulai Jaya)Distribution DivisionTenaga Nasional berhadJalan Senai-Kulai81000Kulai Jaya, JohorTel : 07-6632128Fax : 07-6632267
Area Manager (Pasir Gudang)Distribution DivisionTenaga Nasional berhadL106/06A,Kompleks PusatBandarJalanBandar81700PasirGudang, JohorTel : 07-2520355Fax : 07-2511362
Branch Manager (Segamat)Distribution DivisionTenaga Nasional berhadJalanHassan85000Segamat, JohorTel : 07-9314020Fax : 07-9313744
Branch Manager (Pontian)Distribution DivisionTenaga Nasional berhadJalanParitMasjid82000Pontian, JohorTel : 07-6871172Fax : 07-6870622
Branch Manager (Kota Tinggi)Distribution DivisionTenaga Nasional berhadJalan Lombong81900Kota Tinggi, JohorTel : 07-8833013/07-8832589Fax : 07-8834898
Branch Manager (Taman Molek)Distribution DivisionTenaga Nasional berhad79&81, JalanMolek3/10TamanMolek81100 JohorBahru, JohorTel : 07-3562753Fax : 07-3533044
Branch Manager (Mersing)Distribution DivisionTenaga Nasional berhadNo. 48, Jalan Ismail86800Mersing, JohorTel : 07-7992020Fax : 07-7992773
377TENAGA NASIONAL BERHADANNUAL REPORT 2010
groupdireCTory(CoNT’d)
Branch Manager (Tangkak)Distribution DivisionTenaga Nasional berhadJalanPayamas84900Tangkak, Ledang, JohorTel : 06-9784067Fax : 06-9784598
Head (Iskandar Malaysia)Distribution DivisionTenaga Nasional berhadLower Level, SeriMediniPersiaran LedangHeight81560Nusajaya, Johor
pahaNg daruL makmur
State General Manager (Pahang)Distribution DivisionTenaga Nasional berhadLevel 13,WismaTNBLot14, Seksyen19JalanGambut25000Kuantan, PahangTel : 09-5155555/09-5155556Fax : 09-5155656
Area Manager (Kuantan)Distribution DivisionTenaga Nasional berhadLevel 2,WismaTNBLot14, Seksyen19JalanGambut25000Kuantan, PahangTel : 09-5155555/09-5155556Fax : 09-5155674
Area Manager (Temerloh)Distribution DivisionTenaga Nasional berhadNo. 40A, JalanTengku Ismail28000Temerloh, PahangTel : 09-2965020/09-2965021Fax : 09-2960402
Area Manager (Bentong)Distribution DivisionTenaga Nasional berhadJalan Sri Jaafar28709Bentong, PahangTel : 09-2221769/09-2223020 09-2222020Fax : 09-2225979
Branch Manager (Raub)Distribution DivisionTenaga Nasional berhadJalanPekelilingPeti Surat 2527600Raub, PahangTel : 09-3552020/09-3552021Fax : 09-3551410
Branch Manager (Pekan)Distribution DivisionTenaga Nasional berhadLot 27, Seksyen8Jalan SultanAhmad26600Pekan, PahangTel : 09-4222020/09-4222021Fax : 09-4221001
Branch Manager (Kuala Rompin)Distribution DivisionTenaga Nasional berhadNo. 49&51, Jalan SyedOsman26800KualaRompin, PahangTel : 09-4145020/09-4145215Fax : 09-4145177
Branch Manager (Jerantut)Distribution DivisionTenaga Nasional berhadJalanDulang, BandarBaru27000 Jerantut, PahangTel : 09-2663020/09-2664020Fax : 09-2661887
Branch Manager (Kuala Lipis)Distribution DivisionTenaga Nasional berhadJalan Lipis/Benta27200Kuala Lipis, PahangTel : 09-3122020Fax : 09-3122001
Branch Manager (Bera)Distribution DivisionTenaga Nasional berhad28, Jalan Sri Kerayong2BandarBaruBera28200Bera, PahangTel : 09-2505086/09-2505142Fax : 09-2506781
Branch Manager (Jengka)Distribution DivisionTenaga Nasional berhadJalanBesar26400Bandar Pusat Jengka, PahangTel : 09-4662455Fax : 09-4662600
Branch Manager (Gebeng)Distribution DivisionTenaga Nasional berhadA5, JalanGebeng2/8KawasanPerindustrianGebeng26080Kuantan, PahangTel : 09-5836021/09-5836020Fax : 09-5839020
Branch Manager (Muadzam Shah)Distribution DivisionTenaga Nasional berhadMM84&85,MedanMewah26700MuadzamShah, PahangTel : 09-4522275/09-4522035Fax : 09-4522476
378 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Branch Manager (Maran)Distribution DivisionTenaga Nasional berhadBandarBaruMaran26500Maran, PahangTel : 09-4771520/09-4772648Fax : 09-4771746
Branch Manager (Pulau Tioman)Distribution DivisionTenaga Nasional berhadKgTekek, PulauTioman26800PulauTioman, PahangTel : 09-4191224/09-4191637Fax : 09-4191225
Branch Manager (Cameron Highland)Distribution DivisionTenaga Nasional berhadNo.B-G-3–B-G-11JalanRoyal Lily, TamanRoyal Lily 139000TanahRataCameronHighland, PahangTel : 05-4911177Fax : 05-4911444
TereNggaNu daruL imaN
State General Manager (Terengganu)Distribution DivisionTenaga Nasional berhadJalanCherong Lanjut20673Kuala Terengganu, TerengganuTel : 09-6223401/09-6223022Fax : 09-6243896
Area Manager (Kuala Terengganu)Distribution DivisionTenaga Nasional berhadJalanCherong Lanjut20673Kuala Terengganu, TerengganuTel : 09-6223022Fax : 09-6313955
Area Manager (Kemaman)Distribution DivisionTenaga Nasional berhadJalan Sulaiman24000Kemaman, TerengganuTel : 09-8583300Fax : 09-8591066
Branch Manager (Dungun)Distribution DivisionTenaga Nasional berhadLot 7933, JalanBaruPak Sabah23000Dungun, TerengganuTel : 09-8481628/09-8484060Fax : 09-8483230
Branch Manager (Besut)Distribution DivisionTenaga Nasional berhadKarungBerkunciNo. 1JalanTembila, KampungRaja22200Besut, TerengganuTel : 09-6956217/09-6956417Fax : 09-6956807
Branch Manager (Marang)Distribution DivisionTenaga Nasional berhad15,BangunanMajlisDaerahMaranSungaiKerak21600Marang, TerengganuTel : 09-6182810Fax : 09-6182812
Branch Manager (Setiu)Distribution DivisionTenaga Nasional berhadJalanPermaisuri 2Bandar Permaisuri22100Setiu, TerengganuTel : 09-6099220Fax : 09-6099461
Branch Manager (Kerteh)Distribution DivisionTenaga Nasional berhadLot 72&73, Bandar Seri Kerteh24300Kerteh,Kemaman, TerengganuTel : 09-8260400/09-8260404Fax : 09-8260403
Branch Manager (Kuala Berang)Distribution DivisionTenaga Nasional berhadNo. 7, TamanTiras21700KualaBerang, TerengganuTel : 09-6811498/09-6811499Fax : 09-6811729
Branch Manager (AMBS)Distribution DivisionTenaga Nasional berhadBangunanKoperasi 3KJalan SultanZainalAbidin1BandarAl-MukhtafiBillah Shah23400Dungun, TerengganuTel : 09-8221730/09-8221426 09-8221729Fax : 09-8221475
Branch Manager (Batu Rakit)Distribution DivisionTenaga Nasional berhadKampungWakaf TengahMukimBatuRakit21030Kuala Terengganu, TerengganuTel : 09-6699545Fax : 09-6243896
379TENAGA NASIONAL BERHADANNUAL REPORT 2010
groupdireCTory(CoNT’d)
keLaNTaN daruL Naim
State General Manager (Kelantan)Distribution DivisionTenaga Nasional berhadLevel 5,WismaTNBJalanTokHakim15000KotaBharu,KelantanTel : 09-7483988/09-7445477Fax : 09-7449161
Area Manager (Kota Bharu)Distribution DivisionTenaga Nasional berhadLevel 2,WismaTNBJalanTokHakim15000KotaBharu,KelantanTel : 09-7482020/09-7484020D/Line: 09-7482050Fax : 09-7431625
Area Manager (Tanah Merah)Distribution DivisionTenaga Nasional berhadLot 531, JalanPasirMas17500TanahMerah,KelantanTel : 09-9552040D/Line: 09-9553142Fax : 09-9557024
Branch Manager (Kuala Krai)Distribution DivisionTenaga Nasional berhadJalanTNB18000KualaKrai, KelantanTel : 09-9666020D/Line: 09-9664833Fax : 09-9666651
Branch Manager (Bachok)Distribution DivisionTenaga Nasional berhadLot PT147, JalanKampungTelok16300Bachok,KelantanTel : 09-7788820D/Line: 09-7789020/9120Fax : 09-7789211
Branch Manager (Tumpat)Distribution DivisionTenaga Nasional berhadJalanBesar16200Tumpat, KelantanTel : 09-7256607/6020D/Line: 09-7256642Fax : 09-7256162
Branch Manager (Pasir Puteh)Distribution DivisionTenaga Nasional berhad16800Pasir Puteh,KelantanTel : 09-7867020/7019D/Line: 09-7866150Fax : 09-7866786
Branch Manager (Pasir Mas)Distribution DivisionTenaga Nasional berhadJalanMasjid Lama17000PasirMas, KelantanTel : 09-7909029D/Line: 09-7900402Fax : 09-7908120
Branch Manager (Machang)Distribution DivisionTenaga Nasional berhadLot 779&780, JalanBakti18500Machang,KelantanTel : 09-9752020D/Line: 09-9751910Fax : 09-9752243
Branch Manager (Gua Musang)Distribution DivisionTenaga Nasional berhadLot 998, BandarBaru18300GuaMusang,KelantanTel : 09-9121020/0123D/Line: 09-9122306Fax : 09-9122257
geNeraTioN diviSioN
Vice President (Generation)Tenaga Nasional berhadLevel 8,GenerationBuildingNo. 129 JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22965511Fax : 03-22831555
Senior General Manager (Operation)Generation DivisionTenaga Nasional berhadLevel 5,GenerationBuildingNo. 129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22965812Fax : 03-22823940
Senior General Manager (Asset Development)Generation DivisionTenaga Nasional berhadLevel 15,MenaraPJPusat PerdaganganAmcorp46050Petaling Jaya, SelangorTel : 03-79539600Fax : 03-79545476
Managing DirectorTNB Repair & Maintenance (REMACO)Generation DivisionTenaga Nasional berhadLevel 7&8,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79642600D/Line: 03-79642701Fax : 03-79608006
380 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Site Project ManagerHulu Terengganu Hydroelectric ProjectAsset Development DepartmentGeneration DivisionTenaga Nasional berhadPengkalanUtama, SungaiGawi21700,KualaBerang, TerengganuTel : 09-6810100Fax : 09-6810101
power STaTioNS
General ManagerPutrajaya Power StationGeneration DivisionTenaga Nasional berhadBegBerkunciNo. 211PusatMel43650BandarBaruBangi, SelangorTel : 03-89488980Fax : 03-89488814
General ManagerConnaught Bridge Power StationGeneration DivisionTenaga Nasional berhadJalanDato’ SidinBegBerkunci 201341990Klang, SelangorTel : 03-33712011/03-33716920 03-33712214Fax : 03-33716844
General ManagerGelugor Power StationGeneration DivisionTenaga Nasional berhadJalanTunkuKudin11700Gelugor, PulauPinangTel : 04-6577295/04-6591075 04-6591073Fax : 04-6591086
General ManagerSultan Iskandar Power StationGeneration DivisionTenaga Nasional berhadKarungBerkunci 10481709PasirGudang, JohorTel : 07-2512721Fax : 07-2510197
General ManagerSultan Ismail Power StationGeneration DivisionTenaga Nasional berhadPeti Surat 523100Paka, TerengganuTel : 09-8313333/09-8271053
General ManagerTuanku Jaafar Power StationGeneration DivisionTenaga Nasional berhadPeti Surat 26, 71007PortDicksonNegeri SembilanTel : 06-6468888/06-6471199Fax : 06-6474655
Chief Operating Officer/ Station General ManagerSultan Azlan Shah Power StationGeneration DivisionTenaga Nasional berhadJalan SemarakApi, TelukRubiah32040SeriManjung, PerakTel : 05-6898000Fax : 05-6884309
General ManagerSg. Perak Hydro StationGeneration DivisionTenaga Nasional berhadBersia, BegBerkunciNo. 933300Gerik, PerakTel : 05-7912026Fax : 05-7911315
General ManagerCameron Highlands Power StationsGeneration DivisionTenaga Nasional berhadBegBerkunci 10035009Tapah, PerakTel : 05-4914120/4169Fax : 05-4915952
General ManagerSultan Mahmud Kenyir Power StationGeneration DivisionTenaga Nasional berhad21700KualaBerang, TerengganuTel : 09-6818566/09-6818822 09-6818823Fax : 09-6818172
Chief Executive Officerkapar energy ventures Sdn. bhd.Sultan SalahudinAbdulAziz PowerStationPeti Surat 22042200Kapar, SelangorTel : 03-32508801Fax : 03-32507617
381TENAGA NASIONAL BERHADANNUAL REPORT 2010
groupdireCTory(CoNT’d)
TraNSmiSSioN diviSioN
Vice President (Transmission)Tenaga Nasional berhadLevel 3, BangunanNLDCNo. 129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966635Fax : 03-22823657
Senior General ManagerAsset MaintenanceTransmission DivisionTenaga Nasional berhadLevel 5, Lobi 1, Crystal PlazaJalan51A/22346100Petaling Jaya, SelangorTel : 03-79482400Fax : 03-79584641
Senior General ManagerAsset DevelopmentTransmission DivisionTenaga Nasional berhadLevel 2, BangunanPenghantaranNo. 129 JalanBangsar59200Kuala LumpurTel : 03-22965100/03-22965015Fax : 03-22841254
General Manager (Strategic Management & Organisation Development)Transmission DivisionTenaga Nasional berhadLevel 2,WismaBintangNo. 13A, Jalan225, Seksyen51A46710Petaling Jaya, SelangorTel : 03-79475207Fax : 03-79602451
General Manager (Engineering)Transmission DivisionTenaga Nasional berhadLevel 4, Lobi 2, Crystal PlazaJalan51A/22346100Petaling Jaya, SelangorTel : 03-79654888Fax : 03-79654777/03-79574209
General Manager (Finance)Transmission DivisionTenaga Nasional berhadLevel 4, BangunanNLDCNo. 129, JalanBangsar59200Kuala LumpurTel : 03-22966362/03-22966888Fax : 03-22828203
General Manager(Human Resource Management & Admin Service)Transmission DivisionTenaga Nasional berhadLevel 5, Lobi 1, Crystal PlazaJalan51A/223, 46100Petaling JayaSelangorTel : 03-79482400Fax : 03-79569648
General ManagerAsset ManagementTransmission DivisionTenaga Nasional berhadLevel 2, BangunanPenghantaran129 JalanBangsar59200Kuala LumpurTel : 03-22965043/03-22965018Fax : 03-22823064
State Manager (Kuala Lumpur)Asset MaintenanceTransmission DivisionTenaga Nasional berhadGround&1st Floor,WismaBintang13A, Jalan225, Seksyen51A46100Petaling Jaya, SelangorTel : 03-79605490Fax : 03-79605548
Head Engineer (Main Project)Asset DevelopmentTransmission DivisionTenaga Nasional berhadLevel 6&7, Blok1 SelatanPusatBandarDamansara50490Kuala LumpurTel : 03-20962944/03-20955649 03-20958194Fax : 03-20958054
State Manager (Pulau Pinang)Asset MaintenanceTransmission DivisionTenaga Nasional berhadLevel 8,WismaTNB,Bandar PerdaNo. 1, JalanPerdaBarat14000BukitMertajam, PulauPinangTel : 04-5381200/04-5300785 04-5300758Fax : 04-5309200
State Manager (Kedah & Perlis)Asset MaintenanceTransmission DivisionTenaga Nasional berhadLot 1903, JalanTambangBadak05100Alor Star, KedahTel : 04-7353712/04-7353713D/Line: 04-7353714Fax : 04-7334286
382 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Area Manager (Perak)Asset MaintenanceTransmission DivisionTenaga Nasional berhadLevel 3,WismaTNB, Jalan Lahat30200 Ipoh, PerakTel : 05-2532021/05-2533430Fax : 05-2416837
State Manager (Johor 1 – Johor Bahru)Asset MaintenanceTransmission DivisionTenaga Nasional berhadLevel 9,WismaTNB, JalanYahyaAwal80100 JohorBahru, JohorTel : 07-2192400Fax : 07-2192444
State Manager (Johor II – Kluang)Asset MaintenanceTransmission DivisionTenaga Nasional berhadNo. 28, Jalan18, TamanSri Kluang86000Kluang, JohorTel : 07-7723712/07-7727134Fax : 07-7725895
State Manager (Pahang)Asset MaintenanceTransmission DivisionTenaga Nasional berhadLevel 8,WismaTNB, JalanGambut25000Kuantan, PahangTel : 09-5155555Fax : 09-5155634
Regional Manager (Northern)Project Management – NorthernAsset MaintenanceTransmission DivisionTenaga Nasional berhadLevel 4&5,WismaTNB,Bandar PerdaNo. 1, JalanPerdaBarat14000BukitMertajam, PulauPinangTel : 04-5301020D/Line: 04-5375020Fax : 04-5374020
Regional Manager (Southern)Project Management – SouthernAsset DevelopmentTransmission DivisionTenaga Nasional berhadLevel 1,WismaBungaJalan Lambak86000Kluang, JohorTel : 04-7744403Fax : 04-7742773
Regional Manager (Eastern)Project Management – EasternAsset DevelopmentTransmission DivisionTenaga Nasional berhadLevel 10,WismaTNB, JalanGambut25000Kuantan, PahangTel : 09-5155555Fax : 09-5155593
Regional Manager (Central)Project Management – CentralAsset DevelopmentTransmission DivisionTenaga Nasional berhadLevel 3,WismaBintangNo. 13A, Jalan225, Seksyen51A46710Petaling Jaya, SelangorTel : 03-79607464Fax : 03-79566927
Head (Project Coordination)Asset DevelopmentTransmission DivisionTenaga Nasional berhadLevel 2, BangunanPenghantaranNo. 129, JalanBangsar59200Kuala LumpurTel : 03-22965002Fax : 03-22841254
General Manager, Asset Development (Central & Main Project)Asset DevelopmentTransmission DivisionTenaga Nasional berhadLevel 2, BangunanPenghantaranNo. 129, JalanBangsar59200Kuala LumpurTel : 03-22965138Fax : 03-22841254
General Manager, Asset Development (Norther, Sourthern and Eastern)Asset DevelopmentTransmission DivisionTenaga Nasional berhadLevel 2, BangunanPenghantaranNo. 129, JalanBangsar59200Kuala LumpurTel : 03-22965167Fax : 03-22841254
General Manager (Operation System)Transmission DivisionTenaga Nasional berhadLevel 6, BangunanNLDCNo. 129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966478Fax : 03-22827629
General Manager (Central-Southern Region)Asset MaintenanceTransmission DivisionTenaga Nasional berhadLevel 5, Lobi 1, Crystal PlazaJalan51A/22346100Petaling Jaya, SelangorTel : 03-79555180Fax : 03-79561640
383TENAGA NASIONAL BERHADANNUAL REPORT 2010
groupdireCTory(CoNT’d)
General Manager (Northern-Eastern Region)Asset MaintenanceTransmission DivisionTenaga Nasional berhadLevel 5, Lobi 1, Crystal PlazaJalan51A/22346100Petaling Jaya, SelangorTel : 03-79555180Fax : 03-79561640
Manager (Support Service)Asset DevelopmentTransmission DivisionTenaga Nasional berhadLevel 2, BangunanPenghantaranNo. 129, JalanBangsar59200Kuala LumpurTel : 03-22965160Fax : 03-22822568
Head Engineering (Procurement & Contract)Asset DevelopmentTransmission DivisionTenaga Nasional berhadLevel 3, BangunanPenghantaranNo. 129, JalanBangsar59200Kuala LumpurTel : 03-22965101Fax : 03-22846475
General Manager (Asset Management)Assest DevelopmentTransmission DivisionTenaga Nasional berhadLevel 2, BangunanPenghantaranNo. 129, JalanBangsar59200Kuala LumpurTel : 03-22965043/03-22965108Fax : 03-22823064
State Manager (Kelantan)Asset MaintenanceTransmissionDivisionTenaga Nasional berhadLevel 7,WismaTNB, JalanTokHakim15000KotaBharu,KelantanTel : 09-7439934/09-7439935Fax : 09-7439936
State Manager (Negeri Sembilan)Assest MaintenanceTransmission DivisionTenaga Nasional berhadBangunanTNBJalanDato’ Bandar Tunggal70990Seremban,Negeri SembilanTel : 06-7652101/06-7652102 06-7652116/06-7652117Fax : 06-7671600
State Manager (Melaka)Assest MaintenanceTransmission DivisionTenaga Nasional berhadPt. 7097, JalanTU2TamanTasikUtama75450AyerKeroh,MelakaTel : 06-2327766/06-2328585 06-2328869Fax : 06-2327900
State Manager (Terengganu)Assest MaintenanceTransmission DivisionTenaga Nasional berhadLot 6609, Batu48 JalanPaka-DungunMukimSura, 23000DungunTerengganuTel : 09-8455892/09-8455712Fax : 09-8455497
iCT diviSioN
Chief Information OfficerICT DivisionTenaga Nasional berhadLevel 37 (Utara),Menara TMOff JalanPantai Baru59200Kuala LumpurTel : 03-22466000D/Line: 03-22466001Fax : 03-22407020
General ManagerIT & Business SolutionICT DivisionTenaga Nasional berhadLevel 36 (Utara),Menara TMOff JalanPantai Baru59200Kuala LumpurTel : 03-22466000D/Line: 03-22466003Fax : 03-22400020
General ManagerInfrastructure Development & ICT OperationICT DivisionTenaga Nasional berhadLevel 38 (Utara),Menara TMOff JalanPantai Baru59200Kuala LumpurTel : 03-22466000Fax : 03-22413020
Manager (ICT Regional Operation – North)Infrastructure Development & ICT OperationICT DivisionTenaga Nasional berhadLevel 1,WismaTNB,Bandar PerdaNo. 1, JalanPerdaBarat14000BukitMertajam, PulauPinangTel : 04-5301500
384 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
Engineer (ICT Regional Operation – Ipoh)Infrastructure Development & ICT OperationICT DivisionTenaga Nasional berhadLevel 1,No. 1-5JalanDato’Maharajalela30000 Ipoh, PerakTel : 05-2536955/05-2556848 05-2546411
Engineer (ICT Regional Operation – Kota Bharu)Infrastructure Development & ICT OperationICT DivisionTenaga Nasional berhadLevel 7,WismaTNBJalanTokHakim15000KotaBharu,KelantanTel : 09-7430945/09-7439935 09-7460946
Manager (ICT Regional Operation – Southern)Infrastructure Development & ICT OperationICT DivisionTenaga Nasional berhadLevel 7,WismaTNBJalanYahyaAwal80300 JohorBahru, JohorTel : 07-2192400
Engineer (ICT Regional Operation– Kluang)Infrastructure Development & ICT OperationICT DivisionTenaga Nasional berhadLevel 4, BangunanTNBJalanMengkibol86000Kluang, JohorTel : 07-7744489Fax : 07-7744452
Engineer (ICT Regional Operation – Melaka)Infrastructure Development & ICT OperationICT DivisionTenaga Nasional berhadF-07, Peringgit PointJalanRayaPeringgit75900MelakaTel : 06-2829227/06-2830472Fax : 06-2869463
Manager (ICT Regional Operation – Kuantan)Infrastructure Development & ICT OperationICT DivisionTenaga Nasional berhadLevel 11,WismaTNBJalanGambut25200Kuantan, PahangTel : 09-5155575/09-5155579 09-5155581Fax : 09-5155550
Manager (ICT Regional Operation – Central)Infrastructure Development & ICT OperationICT DivisionTenaga Nasional berhadLevel 5, Collegeof IT (COIT),UNITENKM7, JalanKajang– Puchong43009Kajang, SelangorTel : 03-89218600Fax : 03-89218700
Engineer (ICT Regional Operation – Terengganu)Infrastructure Development & ICT OperationICT DivisionTenaga Nasional berhadLevel 3, JalanCherong Lanjut20673Kuala Terengganu, TerengganuTel : 09-6223522ext. 237Fax : 09-6237741
SubSidiarieS
Vice Chancelloruniversiti Tenaga NasionalLevel 1BangunanPengurusanPentadbiranJalanKajang– Puchong43009Kajang, SelangorTel : 03-89212020D/Line: 03-89263990Fax : 03-89263504/03-89263507
universiti Tenaga NasionalKampus SultanHajiAhmadShah26700BandarMuadzamShah, PahangTel : 09-4552020Fax : 09-4552000
Managing DirectorTenaga Switchgear Sdn. bhd.Lot 3, JalanTeknologi 3/6Seksyen3, TamanSains SelangorKotaDamansara47810Petaling Jaya, SelangorTel : 03-61406520Fax : 03-61406530
Managing Directormalaysia Transformer manufacturing Sdn. bhd.Lot 22, JalanAU3/1KawasanPerusahaanAmpang54200UluKlang,Kuala LumpurTel : 03-41076233D/Line: 03-41085663Fax : 03-41071110/03-41054580
Managing DirectorTNb research Sdn. bhd.No. 1, LorongAirHitamKawasan Institusi Penyelidikan43000Kajang, SelangorTel : 03-89225000/03-89268828/9Fax : 03-89268830
385TENAGA NASIONAL BERHADANNUAL REPORT 2010
groupdireCTory(CoNT’d)
Managing DirectorTenaga Cable industries Sdn. bhd.Lot 2, JalanP/12, Seksyen10KawasanPerusahaanBandarBaruBangi43650BandarBaruBangi, SelangorTel : 03-89222678D/Line: 03-82100912Fax : 03-89255911/03-82100918
Managing DirectorTNb engineering Corporation Sdn. bhd.1701, Level 17, BlokB,MenaraAmcorp18, PersiaranBarat, Jalan Sultan46000Petaling Jaya, SelangorTel : 03-79582121Fax : 03-79582626
Managing DirectorTNb Fuel Services Sdn. bhd.Level 4, Lobi 1Crystal Plaza, Jalan51A/22346100Petaling Jaya, SelangorTel : 03-79568349Fax : 03-79569221
Managing DirectorTNb energy Services Sdn. bhd.Level 5,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79600296/03-79600297Fax : 03-79600294
Chief Executive OfficerTNb Liberty power Limited92, Razia Sharif Plaza4th FloorBlueAreaG-7/F-7 Islamabad, PakistanTel : 009251227747-6Fax : 92512276348
group humaN reSourCe diviSioN
General Manager(Compensation Benefit & Administration Management)Group Human Resource DivisionTenaga Nasional berhadLevel 7,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566Fax : 03-22842239
General Manager(Human Resource Planning & Development)Group Human Resource DivisionTenaga Nasional berhadLevel 8,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566Fax : 03-22841970/03-22827631
General Manager(Internal Affairs)Group Human Resource DivisionTenaga Nasional berhadLevel 4, Lobi 2, Crystal PlazaJalan51A/22346100Petaling Jaya, SelangorTel : 03-79643773Fax : 03-79583457
TNb integrated Learning Solution Sdn. bhd. – iLSaSJalan IKRAM–UNITENKarungBerkunci 20543650BandarBaruBangi, SelangorTel : 03-89227222/03-89258250Fax : 03-89263505/03-89264437
Branch ManagerTNb integrated Learning Solution Sdn. bhd. – iLSaSCawanganMalimNawarBegBerkunciNo. 137100MalimNawar, PerakTel : 05-4775960Fax : 05-4775954
General Manager (Human Resource Management)Group Human Resource DivisionTenaga Nasional berhadLevel 9,HeadquartersNo. 129, JalanBangsar59200Kuala LumpurTel : 03-22965566Fax : 03-22840469/03-22821087
General Manager (Occupational Safety, Health & Environment)Group Human Resource DivisionTenaga Nasional berhadLevel 5,WismaTNBNo. 19, JalanTimur46200Petaling Jaya, SelangorTel : 03-79586366Fax : 03-79586337/03-76252036
386 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
oFFiCe oF preSideNT/ ChieF eXeCuTive oFFiCer
General ManagerProductivity and Quality Management (PQM)Tenaga Nasional berhadAras5, Lobi 1, Crystal PlazaJalan51A/22346100Petaling Jaya, SelangorTel : 03-79555180Fax : 03-79543642
Group Internal AuditTenaga Nasional berhadSuite PH3, Penthouse LevelWismaUOAPantaiNo. 11, JalanPantai Jaya (Jalan4/83A)59200Kuala LumpurTel : 03-22400599Fax : 03-22408268
Nuclear Energy UnitTenaga Nasional berhadA-05-02, BlokA, BangunanPJ8No. 23, JalanBarat, Seksyen846050Petaling Jaya, SelangorTel : 03-79490500D/Line: 03-79490477Fax : 03-79490410
Company SecretaryTenaga Nasional berhadLevel 2,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966247Fax : 03-22833686
Senior General ManagerLegal ServicesTenaga Nasional berhadLevel 23&24, BangunanTMAnnexe2JalanPantai Jaya,Off JalanPantai Baru59200Kuala LumpurTel : 03-22411244D/Line: 03-22409639Fax : 03-22409644/03-22409634
Managing DirectorSabah electricity Sdn. bhd.Wisma LLSJalanTuankuAbdul Rahman88673KotaKinabalu, SabahTel : 088-282699Fax : 088-223320
CorporaTe aFFairS diviSioN
Vice President (Corporate Affairs)Tenaga Nasional berhadLevel 5,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966240Fax : 03-22881419
General ManagerCorporate Communications DepartmentCorporate Affairs DivisionTenaga Nasional berhadLevel 5,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966240Fax : 03-22881419
DirectorYayasan Tenaga NasionalCorporate Affairs DivisionTenaga Nasional berhadLevel 1, BangunanBBUniversiti TenagaNasionalKM7, Jalan IKRAM–UNITEN43009Kajang, SelangorTel : 03-89247500D/Line: 03-89247503Fax : 03-89247501
General ManagerRegulatory Relations and ManagementCorporate Affairs DivisionTenaga Nasional berhadLevel 3,GenerationBuilding129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22961502Fax : 03-22829584
Head (Support Services Management)Corporate Affairs DivisionTenaga Nasional berhadLevel 5,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566D/Line: 03-22966448Fax : 03-22881419
387TENAGA NASIONAL BERHADANNUAL REPORT 2010
groupdireCTory(CoNT’d)
group FiNaNCe diviSioN
Senior General Manager (Investment Relations)Group Finance DivisionTenaga Nasional berhad Level 3,Headquarters129, JalanBangsar59200Kuala LumpurTel : 03-22965566/03-22966348Fax : 03-22860748
Tax UnitGroup Finance DivisionTenaga Nasional berhadLevel 3A, BlockA, BangunanPJ8Seksyen8, JalanBarat46050Petaling Jaya, SelangorTel : 03-79490500/03-79490497
General Manager (Tax)Group Finance DivisionTenaga Nasional berhadA-3A-01, BlokABangunanPJ8No. 23, JalanBaratSeksyen846050Petaling Jaya, SelangorTel : 03-79490500/03-79490497Fax : 03-79490497
General ManagerEnterprise Wide Risk Management (EWRM)Group Finance DivisionTenaga Nasional berhadLevel 9,WismaTNBNo. 19, JalanTimur46000Petaling Jaya, SelangorTel : 03-76200170Fax : 03-76200184
proCuremeNT diviSioN
Chief Procurement OfficerTenaga Nasional berhadLevel 2,GenerationBuilding129, JalanBangsar59200Kuala LumpurD/Line: 03-22965558 03-22965605 (PA)
Manager (Human Resource Management & Admin Services)Procurement DivisionTenaga Nasional berhadLevel 3,GenerationBuilding129, JalanBangsar59200Kuala LumpurD/Line: 03-22965628
Head (Sourcing Controller)Procurement DivisionTenaga Nasional berhadLevel 3,GenerationBuilding129, JalanBangsar59200Kuala LumpurD/Line: 03-22965621 03-22965699 (PA)
Head (Best Practice & Policies)Procurement DivisionTenaga Nasional berhadLevel 3,GenerationBuilding129, JalanBangsar59200Kuala LumpurD/Line: 03-22965550
Head (Shared Purchasing)Procurement DivisionTenaga Nasional berhadLevel 2,GenerationBuilding129, JalanBangsar59200Kuala LumpurD/Line: 03-22965682 03-22965864 (PA)
Head (Strategic Supplier Management)Procurement DivisionTenaga Nasional berhadLevel 2,GenerationBuilding129, JalanBangsar59200Kuala LumpurD/Line: 03-22965560 03-22965532 (PA)
Note: All addresses are updated as at 31 August 2010.
388 TENAGA NASIONAL BERHAD ANNUAL REPORT 2010
proXyForm
I/We, NRICNo./PassportNo./Co.No.(FULLNAME INCAPITAL LETTERS)
of beingaMember/Membersof TenagaNasionalBerhad,(ADDRESS)
herebyappoint:-
Name/NriC No. No. of shares percentage (%)
Proxy1 or failinghim/her
Proxy2 or failinghim/her
TOTAL
the Chairman of the Meeting, as my/our proxy, to vote for me/us, and on my/our behalf at the 20TH ANNUAL GENERALMEETINGofTENAGANASIONALBERHADtobeheldatDewanSerbaguna,KompleksSukanTNB, JalanPantaiBaru,59200KualaLumpuron wednesday, 15 december 2010, at 10.00 a.m. and/or at anyadjournment thereof.
My/Ourproxy is to vote as indicatedbelow:-
NormaL buSiNeSS For agaiNST
1. ordiNary reSoLuTioN 1 To receive the Audited Financial Statements for the Financial Year ended31August2010
2. ordiNary reSoLuTioN 2 DeclarationofDividend
3. ordiNary reSoLuTioN 3 PaymentofDirectors’ Fees
4. ordiNary reSoLuTioN 4 Re-election of Dato’ Sri Che Khalib Bin Mohamad Noh in accordance withArticle 135
5. ordiNary reSoLuTioN 5 Re-electionofDato’ FuadBin Jaafar in accordancewithArticle 135
6. ordiNary reSoLuTioN 6 Re-electionofDato’AbdManafBinHashim in accordancewithArticle 133
7. ordiNary reSoLuTioN 7 Re-electionofDato’ Ir. AzmanBinMohd in accordancewithArticle 133
8. ordiNary reSoLuTioN 8 Re-electionofChungHonCheong in accordancewithArticle 133
9. ordiNary reSoLuTioN 9 Re-appointment of Tan Sri Dato’ Seri Siti Norma Binti Yaakob in accordancewith Section129of theCompaniesAct, 1965
10. ordiNary reSoLuTioN 10 Re-appointment of Messrs PricewaterhouseCoopers as the Company’sAuditors
SpeCiaL buSiNeSS
11. ordiNary reSoLuTioN 11 Issuanceof Sharespursuant to Employees’ ShareOption Scheme II (ESOS II)
12. ordiNary reSoLuTioN 12 ProposedRenewal of ShareBuy-BackAuthority
13. ordiNary reSoLuTioN 13 ProposedBonus Issue
14. ordiNary reSoLuTioN 14 Proposed Increase in theAuthorised ShareCapital
15. SpeCiaL reSoLuTioN 1 ProposedM&AAmendments1
16. SpeCiaL reSoLuTioN 2 ProposedM&AAmendments2
(Please indicate “X” in the appropriate box against each Resolution as to how you wish your proxy/proxies to vote. If no voting instruction is given, this form will be taken as to authorise the proxy/proxies to vote at his/her discretion).
Dated: December2010
Signatureof Shareholder(s) orCommonSeal
NumberofOrdinary Share(s) held
CDSAccountNo.:
STAMP
Symphony Share registrars Sdn. bhd.Level 6, SymphonyHousePusatDaganganDana1JalanPJU1A/4647301Petaling JayaSelangorDarul Ehsan
NOTES:-
1. Any member entitled to attend and vote at this Meeting of the Company 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 of his attorney duly appointed under a power of attorney. Where the instrument appointing a proxy/proxies is executed by a corporation, it shall be executed either under its common seal or under the hand of any officer or attorney duly appointed under a power of attorney.
3. Where a member appoints two (2) proxies, the appointment shall be invalid unless the percentage of the holding to be represented by each proxy is specified.
4. A corporation which is a member, may by resolution of 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 107(6) of the Company’s Articles of Association.
5. The instrument appointing a proxy/proxies must be deposited at Symphony Share Registrars Sdn. Bhd., Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for the Meeting.