Annual Report & Accounts - malaysiastock.biz Sales volume 88 88 - ... pengurusan kerja dan kontrak,...
Transcript of Annual Report & Accounts - malaysiastock.biz Sales volume 88 88 - ... pengurusan kerja dan kontrak,...
Annual Report & Accounts
ESSO MALAYSIA BERHADAn ExxonMobil Subsidiary in Malaysia
On the cover:Esso Malaysia Berhad provides high
quality fuels and products to improve
quality of life. We are committed to
maintaining excellence in safety,
product quality and environmental care
while being a good neighbour in the
local community.
Table of contents
Financial Highlights
Chairman’s Statement
Penyata Pengerusi
Five-Year Summary Charts
Board of Directors /Lembaga Pengarah
Profile of Directors
Corporate Citizenship Highlights
Corporate Information
Corporate Governance
Board Audit Committee Report
Report of the Directors
Financial Statements
Independent Auditors’ Report
Information on Stockholdings
List of Major Properties Owned
Notice of Annual General Meeting
Statement Accompanying Notice ofAnnual General Meeting
Notis Mesyuarat Agung Tahunan
Penyata Yang Dilampirkan BersamaNotis Mesyuarat Agung Tahunan
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2
5
8
10
12
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18
19
27
29
32
52
53
54
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56
57
58
2009 2008 %RM Million RM Million Change
Revenues 8,032 11,735 (32)
Profit / (Loss) after taxation 146 (251) N/A
Earnings / (Loss) per ordinary stock unit (sen) 53.9 (93.1) N/A
Gross dividend per ordinary stock unit (sen) 12 12 -
Total assets employed 2,018 1,754 15
Total shareholders’ funds 513 392 31
Sales volume 88 88 -(thousands of barrels per calendar day)
FINANCIAL HIGHLIGHTS
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The Annual General Meeting provides shareholders and the participants of our Young Entrepreneur Programme the opportunity to obtain a better understanding of the Company’s operations and financial performance.
Overall, the Company invested RM62 million mainly in retail service station
development and site upgrading programmes to continue to provide a high
quality service station network.
The Industrial Fuels and Liquefied Petroleum Gas (LPG) business remained
profitable reflecting on-going efforts to diversify customer portfolio and
improve supply chain efficiency. In the Lubes and Specialties business,
overall margins strengthened mainly due to a successful pricing strategy,
offsetting the impact of lower sales to the commercial transportation and
general manufacturing sectors.
In the area of corporate citizenship, our goal is to make a difference in the
lives of the community where we live and work. In 2009, we continued our
long-standing tradition of investing in the community by funding a variety of
projects in the key focus areas of education, community welfare and health.
These included awarding scholarships to primary and secondary students
through the ExxonMobil Education and Scholarship Fund, recognising
outstanding young athletes, investing in English, Mathematics, Science and
energy efficiency awareness programmes at the school level and working
with several non-governmental organisations (NGOs) to help women fulfill
their economic potential. A key activity was the 'Week of Caring' in October
where employees and their families volunteered their time and effort to
support worthy community activities.
Our refueling operations at the Kuala Lumpur International Airport received the prestigious ExxonMobil Aviation Global Airport Award and the Regional Airport Award for Asia Pacific.
Our stores offer snacks, beverages and even chicken meals for customers on the go.
ESSO MALAYSIA BERHAD
Business Outlook
Domestic economy has shown signs of recovery
supported by stronger growth performance in the fourth
quarter of 2009. However, looking ahead, the
sustainability of the economic recovery will be subject to
the global economic outlook in 2010. The industry will
remain challenging. Uncertainty in the crude price
environment may result in potential earnings volatility. In
this environment our strategy remains focused on
flawless operations, cost control and product and
service quality, while sustaining our competitive
position.
Board Matters
Mr. Lam Foo Keong, the Company's Executive Treasury
Director, opted to retire after 30 years of service with
ExxonMobil and resigned from the Board on April 1,
2009. Mr. Liam M. Mallon, the Chairman, resigned from
the Board on June 4, 2009 to assume the position of
Vice President of Engineering with ExxonMobil
Production Company in Houston, USA. I was appointed
to succeed Mr. Mallon as Chairman effective the same
day. I would like to place on record our appreciation to
both Mr. Mallon and Mr. Lam for their many invaluable
contributions to the Company.
On behalf of the Board, I would like to thank our
employees for their continued hard work and exemplary
dedication. The petroleum refining and marketing
business remains challenging and the Company's
success is highly dependent on the skills, abilities and
commitment of each employee to deal with and
overcome these challenges. I also express my
sincerest appreciation to our shareholders, dealers and
customers for their continued support of the Company.
Hugh W. Thompson Chairman
April 25, 2010
4 ANNUAL REPORT & ACCOUNTS 2009
We continuously work to improve the safety and health of our employees and contractors. Our objective is to develop and improve the leadership behaviours necessary to achieve safety, health and environmental excellence.
Our RON95 petrol, marketed as synergy 5000, is formulated with a multifunctional detergent additive to neutralise the negative effects of friction in your car‘s engine cylinders.
Penyata Pengerusi
Bagi pihak Lembaga Pengarah, saya dengan sukacitanya melaporkan
prestasi kewangan dan operasi Syarikat bagi tahun berakhir 31 Disember
2009.
Keputusan Kewangan 2009
Syarikat mencatatkan keuntungan selepas cukai sebanyak RM146 juta bagi tahun
2009, berbanding kerugian sebanyak RM251 juta dalam tahun 2008. Peningkatan
keputusan dalam tahun 2009 disumbang oleh hasil keuntungan inventori dan margin
yang lebih kukuh.
Perolehan keseluruhan tahun 2009 adalah sebanyak RM8.0 bilion berbanding
RM11.7 bilion yang dicatat dalam tahun 2008, di mana sebahagian besar
dipengaruhi oleh harga purata produk petroleum yang lebih rendah dalam tahun
2009.
Dividen untuk Tahun Kewangan 2009
Selaras dengan objektif Syarikat untuk menghasilkan pulangan yang wajar kepada
pemegang saham, Lembaga Pengarah telah mengesyorkan dividen akhir 12 sen
ditolak cukai pendapatan Malaysia 25% untuk seunit saham biasa bagi tahun
kewangan 31 Disember 2009.
Ulasan Operasi
Dalam tahun 2009, Loji Penapis Port Dickson telah memproses minyak mentah
dengan purata 63 ribu tong sehari, lebih tinggi dari tahun sebelumnya. Loji penapis
telah meneruskan usaha memperbaiki keanjalan operasinya melalui peningkatan
tahap kegunaan loji untuk membolehkannya memproses pelbagai minyak mentah
dan mengurangkan kos melalui penggunaan tenaga yang lebih cekap serta
amalan terbaik dalam penyenggaraan. Sebagaimana yang dirancang, dalam
tahun ini, Syarikat telah menjalankan kerja-kerja penyenggaraan unit
"powerformer" di loji penapis dengan selamat, melaksanakan pertukaran
spesifikasi bahan bakar kepada Euro 2M dan mula mengeluarkan minyak
petrol RON95 tanpa plumbum. Pada keseluruhannya, loji penapis dan terminal
penyimpanan produk kami telah mengekalkan tahap prestasi operasi yang
mantap tanpa kemalangan kakitangan yang menyebabkan hilang hari
bekerja yang dicatatkan selama 13 tahun berturut-turut di samping kejayaan
merangkul beberapa anugerah termasuk Anugerah Utama dari Persatuan
Keselamatan dan Kesihatan Pekerjaan Malaysia (MSOSH). Syarikat telah
melancarkan beberapa program keselamatan seperti pengukuhan sistem
pengurusan kerja dan kontrak, serta peningkatan kecekapan aplikasi
“Behaviour Based System”. Seiring dengan matlamat Exxon Mobil
Corporation untuk memantapkan tahap kecemerlangan dalam penjagaan
alam sekitar dan selaras dengan slogan “Protect Tomorrow. Today”, Syarikat
telah melaksanakan amalan kerja terbaik dalam mengurangkan pembakaran
gas terbuang dan meningkatkan kualiti efluen di loji penapis kami.
5ANNUAL REPORT & ACCOUNTS 2009
Hugh W. ThompsonPengerusi
Perniagaan runcit kami terus berkembang dengan pembukaan enam stesen
servis baru dalam tahun 2009. Syarikat telah melabur dalam pembelian tapak
perniagaan runcit yang mempunyai pertumbuhan tinggi, meneruskan program
peningkatan jenama untuk menambahbaik dan menaiktaraf stesen servis dan
telah melancarkan minyak petrol RON95 di semua stesen servis kami dengan
sempurna dan mengikut jadual. Di bawah program kad loyalti Smiles, beberapa
aktiviti promosi telah dijalankan sepanjang tahun untuk memberi peluang kepada
pelanggan berjimat dalam keadaan ekonomi yang lembap. Di antaranya, di
bawah program promosi seperti “Cara Baru untuk Berjimat”, ahli Smiles
berpeluang untuk menukar mata ganjaran mereka kepada barangan keperluan
harian seperti beras dan minyak masak dengan harga di bawah paras runcit.
Syarikat telah melabur RM62 juta terutamanya dalam pembangunan dan program
naik taraf stesen servis runcit agar dapat terus menyediakan rangkaian stesen
servis yang bermutu tinggi.
Perniagaan bahan bakar industri dan gas petroleum cecair (LPG) kekal memberi
keuntungan berikutan usaha berterusan bagi mempelbagaikan portfolio
pelanggan dan meningkatkan kecekapan rangkaian bekalan. Margin keseluruhan
perniagaan bahan pelincir dan produk khusus bertambah kukuh terutamanya
disebabkan kejayaan strategi harga, diimbang kesan dari jualan yang lebih rendah
kepada sektor pengangkutan komersial dan pembuatan am.
Dalam usaha untuk menjadi warga korporat yang bertanggungjawab, tumpuan
kami adalah untuk memberi manfaat kepada komuniti di mana kami tinggal dan
beroperasi. Dalam tahun 2009, kami meneruskan tradisi yang telah lama kami
amalkan, di mana kami telah menyumbang kepada komuniti melalui pembiayaan
pelbagai program pendidikan, kebajikan masyarakat dan kesihatan. Ini termasuk
penganugerahan biasiswa kepada pelajar-pelajar sekolah rendah dan menengah
melalui Tabung Pelajaran dan Biasiswa ExxonMobil, menghargai olahragawan
muda cemerlang, membiayai program Bahasa Inggeris, Matematik, Sains dan
program kesedaran tentang kecekapan penggunaan tenaga di peringkat sekolah,
serta bekerjasama dengan beberapa organisasi bukan kerajaan (NGOs) untuk
membantu wanita meningkatkan potensi ekonomi mereka. Program utama
Syarikat adalah perlaksanaan "Minggu Penyayang" dalam bulan Oktober di mana
kakitangan dan keluarga mereka secara sukarela telah meluangkan masa dan
tenaga membantu menjayakan aktiviti kemasyarakatan yang bermanfaat.
ESSO MALAYSIA BERHAD
6 ANNUAL REPORT & ACCOUNTS 2009
Pelanggan-pelanggan boleh menikmati produk dan perkhidmatan berkualiti tinggi dari Syarikat kami.
Prospek Perniagaan
Ekonomi tempatan telah menunjukkan tanda-tanda pemulihan, disokong oleh pencapaian yang lebih kukuh dalam suku tahun keempat 2009. Walau-bagaimanapun, samada pemulihan ekonomi ini akan kekal di masa hadapan atau- pun tidak adalah tertakluk kepada keadaan ekonomi global dalam tahun 2010. Industri ini dijangka akan terus mencabar. Persekitaran harga minyak mentah yang tidak menentu berkemungkinan akan menyebabkan potensi perolehan yang turun naik. Dalam persekitaran sebegini, strategi kami akan tertumpu kepada kesempurnaan operasi, pengawalan kos serta mutu produk dan perkhidmatan, di masa yang sama mengekalkan dayasaing kami.
Hal-hal Lembaga
Encik Lam Foo Keong, Pengarah Eksekutif Perbendaharaan Syarikat, telah memilih untuk bersara setelah berkhidmat dengan ExxonMobil selama 30 tahun, dan telah meletak jawatan sebagai ahli Lembaga Pengarah pada 1 April 2009. Encik Liam M. Mallon, Pengerusi, meletak jawatan sebagai ahli Lembaga pada 4 Jun 2009 untuk memegang jawatan Naib Presiden Kejuruteraan dengan ExxonMobil Production Company di Houston, Amerika Syarikat. Pada tarikh yang sama, saya telah dilantik untuk menggantikan Encik Liam M. Mallon sebagai Pengerusi. Saya ingin merakamkan penghargaan kepada Encik Mallon dan Encik Lam yang telah memberi sumbangan yang amat bernilai kepada Syarikat.
Bagi pihak Syarikat, saya juga ingin merakamkan penghargaan kepada kakitangan kami atas kegigihan dan tahap dedikasi mereka yang tinggi lagi berterusan. Perniagaan penapisan dan pemasaran petroleum akan kekal mencabar dan kejayaan Syarikat bergantung kepada kepakaran, keupayaan dan komitmen setiap kakitangan dalam mengatasi cabaran ini. Saya juga dengan tulus ikhlas merakamkan penghargaan kepada pemegang saham, pengusaha dan pelanggan kami atas sokongan berterusan mereka kepada Syarikat.
Hugh W. ThompsonPengerusi
25 April, 2010
7ANNUAL REPORT & ACCOUNTS 2009
Kami mengstrukturkan pengurusan operasi kami demi mencapai prestasi keselamatan dan alam sekitar yang kukuh.
THOUSANDS OF BARRELSPER CALENDAR DAY
TOTAL THROUGHPUT
2005 2006 20070
20
40
60
80
100
2008
707174
61 63
2009
ESSO MALAYSIA BERHAD
Five-Year Summary Charts
SALES VOLUMETHOUSANDS OF BARRELSPER CALENDAR DAY
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2005 2006 2007
REVENUES(NET OF GOVERNMENT DUTIES)RM MILLION
RM MILLIONPROFIT / (LOSS) AFTER TAX
207
ESSO MALAYSIA BERHAD
-150
0
50
150
-300
146
2005 2006 2007 20080
20
40
60
80
93100
9497
88
2009
88
8,269
0
2,000
6,000
4,000
2005 2006 20082007
9,336
8,000
10,000
12,000 11,735
2009
9,740
(251)
20092008
578,032
ESSO MALAYSIA BERHAD ESSO MALAYSIA BERHAD ESSO MALAYSIA BERHAD
8 ANNUAL REPORT & ACCOUNTS 2009
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SHAREHOLDERS’ INFORMATION
Earnings/(loss) per ordinary stock unit (sen) 7.3 2.6 21.2 (93.1) 53.9
Gross dividend per ordinary stock unit (sen) 12 12 12 12 12
Dividend yield (%) 4.7 4.3 4.3 5.3 5.2
Share price (RM) - Highest 2.97 4.06 3.30 2.81 2.86- Lowest 2.31 2.30 2.02 1.82 1.90- Average 2.56 2.78 2.76 2.27 2.32
2005 2006 2007 2008 2009
Number of employees at year-end 352 327 326 318 299
RM MILLIONFinanced by:
TOTAL ASSETS EMPLOYED
Shareholders’ funds
CAPITAL EXPENDITURERM MILLION
Taxes payable, provisions and others
Trade payables
Notes payable and bank borrowings
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2005 2006 2007 20080
20
40
60
80
38
54
61
37
2009
57
2005 2006 2007 2008
1,000
3,000
2,0002,006
2,123
2,700
1,754
2009
2,018
9 9ANNUAL REPORT & ACCOUNTS 2009
0
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ESSO MALAYSIA BERHAD
SEATED FROM LEFT TO RIGHTDUDUK DARI KIRI KE KANANY. Bhg. Dato’ Zainal Abidin PutihY. Bhg. Tan Sri Abdul Halim AliMr. Hugh W. ThompsonChairman / PengerusiY. Bhg. Tan Sri Dato’ Dr. Syed JalaludinSyed Salim
STANDING FROM LEFT TO RIGHTBERDIRI DARI KIRI KE KANANPuan Faridah AliExecutive Retail Business Director /Pengarah Eksekutif PerniagaanJualan RuncitEncik Abu Bakar Siddik Che EmbiExecutive Refinery Director / Pengarah Eksekutif PenapisanPuan Fatimah MericanExecutive Business Services Director / Pengarah Eksekutif Urusan Perniagaan
Puan Sri Junaidah Mohd SaidMr. Manoj DevadasanJoint Secretaries / Setiausaha-setiausaha Bersama
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Board of Directors/ Lembaga Pengarah
Mr. Liam M. Mallon Chairman PengerusiResigned w.e.f. June 4, 2009Meletak jawatan berkuatkuasa 4 Jun, 2009
Mr. Lam Foo KeongExecutive Treasury Director Pengarah Eksekutif PerbendaharaanRetired w.e.f. April 1, 2009Bersara berkuatkuasa 1 April, 2009
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ANNUAL REPORT & ACCOUNTS 2009
ESSO MALAYSIA BERHAD
Fatimah Merican
Abu Bakar Siddik Che Embi
Faridah Ali
Executive Business Services DirectorHigher National Diploma, Polytechnic of Central London (now University of Westminster) (1976)
Puan Fatimah Merican, aged 55, a Malaysian, was appointed Business Services Director of the Company on December 1, 2008. She joined ExxonMobil Exploration and Production Malaysia Inc. (EMEPMI) in 1977. Over her career with the Company she has held various professional and managerial positions in the local and global Information Technology organisations of ExxonMobil. She also completed a rotational assignment in EMEPMI Public Affairs, and foreign assignments with ExxonMobil Asia Pacific Pte. Ltd., Singapore and ExxonMobil Limited, Thailand.
Prior to October 1, 2008, she was Manager, Downstream/Chemical Applications, Business Line Applications, Information Technology, ExxonMobil Business Support Centre Malaysia Sdn. Bhd. in Kuala Lumpur. Effective October 1, 2008, she was transferred to Upstream Business Services and thereafter appointed Business Services Director.
Executive Refinery DirectorB.Sc. (Hons.) Chemical Engineering, Leeds University, United Kingdom
Encik Abu Bakar Siddik Che Embi, aged 57, a Malaysian, was appointed Refinery Director of the Company on September 1, 2003. He started his career with the Port Dickson Refinery in 1976 and held various technical, operational and supervisory positions in the Refinery until 1990, when he was assigned to the Baytown Refinery, Exxon U.S.A., for about three years. In this assignment, he held the position of Technical Advisor and a number of leadership roles in the Process Department. Following that, he spent six months with Exxon Company International's Refinery Department in Florham Park, New Jersey as Refinery Advisor. In 1994, he returned to Malaysia and assumed the position of Deputy Manufacturing Manager of the Port Dickson Refinery. In 1995, he was promoted to Manufacturing Manager and held this position until 2003, when he was appointed Refinery Director.
Puan Faridah Ali, aged 45, a Malaysian, was appointed Retail Business Director of the Company on June 13, 2005. She began her career in ExxonMobil Malaysia Sdn. Bhd., and over the years, held supervisory roles in various functions including financial accounting, costing, planning, financial analysis, human resources and retail business. In 2000, after the merger of Exxon Corporation and Mobil Corporation in the United States of America, she assumed the position of Marketing Support Manager and subsequently Business Analysis and Reporting Manager before assuming her current position.
Executive Retail Business DirectorB.Sc. (Hons.) Accounting, University of East Anglia, Norwich, ACA (England & Wales)
Hugh W. ThompsonChairmanB. Sc. (Hons.) Geology, University of Aberdeen, ScotlandM.Sc. (Hons.) in Petroleum Engineering, Heriot-Watt University, Edinburgh, Scotland
Mr. Hugh W. Thompson, aged 47, a citizen of the United Kingdom, was appointed Director and Chairman of the Company on June 4, 2009. He joined ExxonMobil in 1988 and over the past 21 years has held positions of increasing responsibility in assignments ranging from Engineering and Operations Management, major project management and strategic business planning. He has spent the majority of his career with ExxonMobil in international assignments and has worked in Aberdeen and London in the United Kingdom as well as in Louisiana, Texas and California in the United States of America. He was the Planning Manager (Planning and Business Analysis) with ExxonMobil Production Company in Houston, Texas, United States of America before being appointed the Global Planning Manager for the ExxonMobil Production Company; a position he held until his appointment in 2009 as the Chairman of the ExxonMobil Subsidiaries in Malaysia.
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Y. Bhg. Tan Sri Dato' Dr. Syed Jalaludin Syed Salim
Y. Bhg. Tan Sri Abdul Halim Ali
Y. Bhg. Dato' Zainal Abidin Putih
Independent Non-Executive Director and Member of the Board Audit CommitteeP.S.M., D.S.S.A., D.P.M.P., J.S.M. F.A. Sc., B.V.Sc., University of Punjab, M.Phil. and Ph.D., University of London, D.Sc., Honoris Causa, University of Hull, U. K., D.Sc., Honoris Causa, Soka University, Japan, D.Agriculture Technology, Honoris Causa, Thaksin University, Thailand, D.Sc., Honoris Causa, Open University Malaysia.
Y. Bhg. Tan Sri Dato' Dr. Syed Jalaludin Syed Salim, aged 66, a Malaysian and a national science laureate, as well as a founder fellow of the Academy of Sciences Malaysia, was appointed Director of the Company on February 15, 2000. He had a long illustrious academic carrier in both University of Malaya and University Putra Malaysia (UPM) before retiring as Vice Chancellor of UPM in 2001. He was responsible for transforming UPM to become one of the leading centres of higher education. As an accomplished academician, he has helped found many academic societies and associations, and has published over 350 papers in journals and proceedings in the fields of animal science, university management and education. For his meritorious career and services, he has received numerous awards, decorations and honours nationally as well as internationally. He retired from UPM in April 2001. He is the Chairman of Bank Kerjasama Rakyat Malaysia Berhad, Kejuruteraan Samudra Timur Berhad, Taylor's Education Berhad and Halal Industry Development Corporation. He is also a Director of TAFI Industries Berhad.
ndependent Non-Executive Director and Member of the Board Audit CommitteeP.M.N., P.J.N., S.P.M.S., S.I.M.P., D.G.S.M., D.H.M.S., D.S.D.K., J.S.M., K.M.N.B.A. (Hons.), University of Malaya
Y. Bhg. Tan Sri Abdul Halim Ali, aged 66, a Malaysian, was appointed Director of the Company on May 22, 2001. Upon graduation from University of Malaya, he joined the Ministry of Foreign Affairs in 1966. After several domestic and foreign postings, he was appointed the Malaysian Deputy Permanent Representative to the United Nations in 1979. He was appointed Ambassador to Vietnam in 1982 and returned to Malaysia in 1985 to be Deputy Secretary General in the Ministry of Foreign Affairs before being appointed Ambassador to Austria. In 1991, he again returned to Malaysia to be Deputy Secretary General I in the Ministry of Foreign Affairs and in 1996 he was promoted to Secretary General. In July 1998, he was appointed Chief Secretary to the Government, the highest ranking civil service post in the country and was responsible for overseeing and coordinating the policies of the government and their implementation. He retired as Chief Secretary to the Government in March 2001. He currently is the Chairman of the Multimedia Development Corporation and Malaysia Building Society Berhad and he is also a Director of Malakoff Corporation Berhad and IJM Corporation Berhad.
ndependent Non-Executive Director and Chairman of the Board Audit CommitteeD.S.N.S., J.P., FCA (ICAEW), CA (M), CPA (M)
Y. Bhg. Dato' Zainal Abidin Putih, aged 64, a Malaysian, was appointed Director of the Company on March 6, 2003. Upon qualifying from the Institute of Chartered Accountants in England and Wales, he joined the firm of Hanafiah Raslan & Mohamad, which merged with Ernst & Young in July 2002. He has extensive experience in audit having worked as a practicing accountant throughout his career covering many principal industries including banks, insurance, energy, transport, manufacturing, government agencies, plantations, properties, hotels, investment companies and unit trusts. He also has a good working knowledge of taxation matters and management consultancy, especially in the areas of acquisitions, takeovers, amalgamations, restructuring and public listing of companies. He plays an active role in the community and the corporate world being a past president of the Malaysian Institute of Certified Public Accountants. He was also a member of the Malaysian Communication & Multimedia Commission, a body set up by the Malaysian government to oversee the orderly development of the multimedia and telecommunication industry in Malaysia. He was the Chairman of Pengurusan Danaharta Nasional Berhad as well as the Malaysian Accounting Standards Board. He is currently the Chairman of Dutch Lady Milk Industries Berhad. He is also a Director of Tenaga Nasional Berhad and a Director of CIMB Group Holdings Berhad (formerly known as Bumiputra-Commerce Holdings Berhad), including its subsidiaries CIMB Bank Berhad and CIMB Investment Bank Berhad. He is also Chairman of CIMB Group's subsidiary Southeast Asia Special Asset Management Berhad. He also acts as a Trustee of the National Heart Institute Foundation.
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orporate social responsibility, or corporate citizenship as we like to call it, has long been a tradition
in our 117 year history in Malaysia. At Esso Malaysia Berhad (EMB) we strive to be a leader in
corporate responsibility by operating with integrity, maintaining a steadfast commitment to safety,
health and the environment and observing the highest ethical standards in the way we conduct our
business. We treat our employees and customers with respect and seek to help improve the quality of life in
the community where we operate. This section describes the corporate citizenship efforts and
accomplishments of EMB and the other subsidiaries of ExxonMobil in Malaysia.
Our success as a corporate citizen begins with a commitment to the highest standards of ethics, corporate governance, financial controls and operations integrity. The way we conduct our business is as important as the results themselves.
Management systems. This commitment to high ethical standards is implemented through our policies and practices in every aspect of our business.
lOur form the foundation for this commitment and provide a common set of ethical standards for employees of EMB and other ExxonMobil affiliates worldwide. These policies, which deal with, among others, Business Ethics, Conflicts of Interest, Antitrust, Alcohol and Drug Use, Gifts and Entertainment, Harassment in the Workplace and Outside Directorships, are strictly enforced. Employees are required to annually confirm that they have read and are familiar with the policies. Our Controls Integrity Management System is a framework for ongoing controls integrity in our day-to-day business.
lOur Operations Integrity Management System (OIMS) provides a framework for controlling and managing safety, health, security and environmental risks at all our facilities. It is designed to help drive all operational incidents to as close to zero as possible and meets the requirements of the International Organisation for Standardisation's standard for environmental management systems (ISO 14001).
lIn 2009, refresher training on our business practices were conducted for employees to ensure they understand company expectations. Controls clinics were organised to encourage dialogue on the application of guidelines and policies. We also conducted training for employees who interact, or may potentially interact, with government officials, to ensure they understand expectations of ethical and honest dealings with governments as well as obligations to comply with competition laws, including antitrust legislation of the United States.
Corporate governance and business integrity
Standards of Business Conduct
Corporate Citizenship Highlights
ESSO MALAYSIA BERHAD
ANNUAL REPORT & ACCOUNTS 200914
Corporate social responsibility has been a cornerstone of our business model and has contributed to our long term success.
Environmental performance
Product safety & stewardship
We are committed to operating our business in a way that protects the environment and takes into account the economic and social needs of the communities where we operate. Our environmental management processes are guided by our Protect Tomorrow. Today. initiative which outlines expectations for delivering superior environmental performance and achieving industry leadership in key environmental areas.
Operating safely and ensuring the integrity of our facilities are critical to minimising potentially adverse environmental impacts. We take active measures at our facilities to reduce emissions, improve energy efficiency, prevent environmental incidents and minimise our environmental footprint through various systems and initiatives.
lWithin ExxonMobil's global refining business, the Port Dickson Refinery (PDR) is among the leaders in energy conservation. It sustained high levels of energy efficiency, and reduced greenhouse gas emissions at the plant by applying ExxonMobil's Global Energy Management System Best Practices across all aspects of refinery operations. Operational efficiencies at PDR have resulted in savings of almost RM7 million.
lIn recognition of its accomplishments in energy efficiency, PDR was presented with the ExxonMobil Refining Energy Efficiency Award for first quartile performance and the ExxonMobil Refining Award for best ever performance in energy efficiency for 2009.
lOur service stations continued to be upgraded to ensure the highest standards of environmental protection. This included the installation of an early leak detection system and underground risk management system.
We are dedicated to minimising the risks and impacts associated with the manufacture and use of our products, from its development up to the marketing of these products. We ensure our products are safely delivered to our customers in all sectors and conduct regular safety checks of all our equipment. We provide updates on product specifications as well as guides on safe handling procedures of the products we sell.
Our service station dealers are trained on safety and environmental procedures to ensure safety at our sites and to minimise the impact of any security or environmental incident that may occur. We offer innovative products and services and strive to ensure a pleasant and enjoyable visit for each of our customers. Service station dealers and staff are trained to deal with different customer needs and to address complaints. Hotlines are also available for customers to make their suggestions or communicate their concerns directly to the Company.
ANNUAL REPORT & ACCOUNTS 2009 15
The Port Dickson Refinery employs a number of technologies and best practices to reduce energy usage and lower greenhouse gas emissions. It was presented with 2 energy efficiency awards for its stellar environmental performance in 2009.
ESSO MALAYSIA BERHAD
ANNUAL REPORT & ACCOUNTS 200916
Workplace
We are committed to conducting our business in a manner that protects the safety and health of our employees, contractors, customers and the public. Excellence in safety and health in the workplace is one of our core values.
Workplace safety. We strive for an incident-free workplace and enforce strict compliance with safety procedures and management systems to achieve our vision of Nobody Gets Hurt.
To mitigate operating risks that are inherent in our business, we continue to focus on underlying behaviours - reinforcing the message of safety leadership, personal accountability and procedural compliance - while enhancing our facilities, systems and competencies.
?PDR sustained its excellent safety record and continued to receive recognitions for its outstanding safety performance. It received a Special Recognition Award from the ExxonMobil Refining & Supply President for operating 5 years without a recordable injury to its workforce. It also received the ExxonMobil Asia Pacific Refining & Supply Director's Gold Award for completing 7 years without a Lost Time Incident (LTI). Externally, PDR was recognised with the Malaysian Society for Occupational Safety & Health (MSOSH) Grand Award for the third consecutive year.
?Our Distribution function recorded 12.8 years without an employee or contractor LTI, with our distribution terminals receiving 2 MSOSH Gold Awards for their outstanding SHE performance.
?Our airport operations at the Kuala Lumpur International Airport was chosen from a shortlist of 47 selected airport operations globally to receive the prestigious ExxonMobil Aviation Global Airport of the Year award in recognition of its excellence in operations, flawless performance and continuous improvements. They have also recorded 35 years of LTI-free operations.
?Our Industrial & Wholesale business received the ExxonMobil Fuels Marketing President's Safety award for best performing business segment. Some of their safety initiatives include consistent execution of the Loss Prevention System, Personal Safety Plans for everyone, quality application of safety programmes for our LPG dealers and distributors, as well as a Safety Week for employees.
Workplace health. We carry out numerous occupational health programmes and enhancements to prevent and reduce the risk of occupational injury or illness to employees, contractors and others involved in the company's operations. Programmes such as Alcohol and Drug Use, Fitness-for-Work evaluation and management of injury and illness ensure that our workers are medically fit to carry out their jobs without endangering themselves and others.
In 2009, we implemented an initiative to address injury and illness related to ergonomic factors associated with personnel working in an office environment. It included a globally consistent office ergonomics template to assess proper office configuration as well as observation tools for behaviour-based safety.
Employment policies and practices. We are committed to attracting, developing and retaining the best people from the broadest possible employee pool to meet our business needs. We aim to maintain a safe and productive work environment, enriched by diversity and characterised by trust, open communication and fair treatment. We strive to foster a productive work environment that encourages employee growth and engagement with management.
We uphold a set of policies that reflects our commitment in providing equal employment ?opportunity and a positive workplace. We have zero tolerance for all forms of discrimination and harassment and our Workplace Flexibility Programme helps employees achieve an effective work-life balance.
We strive to provide our employees with the best career opportunities in our industry, ?including assignments abroad for individual growth and achievement. At the end of 2009, EMB employees were among the 120 Malaysians on international assignments within ExxonMobil.
Ensuring the safety and reliability of our operations are fundamental to our business success.
Community development
We have a long tradition of investing in the community through both corporate contributions and employee volunteerism. Partnering with local NGOs and government agencies, we strive to make positive contributions to the communities through projects that bring sustainable, long-term benefits in five key areas - education, welfare and community aid, health, environment and the arts.
In 2009, EMB and the other ExxonMobil subsidiaries in Malaysia contributed to about 100 non-profit organisations. Some of the highlights of our contributions include:
Scholarships and best student awards for deserving students from secondary and ?primary schools in Negeri Sembilan under the ExxonMobil Education and Scholarship Fund.
Funding of educational programmes to promote English and science education, ?improve computer literacy among youth from the rural areas, and sports awards to recognise outstanding young athletes.
Support for health programmes and equipment upgrades such as community ?health programmes at Hospital Tuanku Ja'afar, Seremban.
Beyond direct financial investments, our employees also offer their expertise and personal time to their local communities through our various employee volunteer programmes:
ExxonMobil Young Entrepreneur Programme: 20 employees, including three from ?the PDR, volunteered over a period of six months to help 180 young entrepreneurs from six secondary schools around Klang Valley and Port Dickson learn entrepreneurial skills.
Employee Involvement Programme: 43 employees received RM1,500 each to ?assist the civic organisations that they served. A total of RM66,000 in grants were distributed for educational development, and to youth associations, welfare homes and environmental organisations.
ExxonMobil Community Projects Programme: EMB employees were part of the ?close to 1,000 employees who organised the "Week of Caring". Thirteen community events were carried out at various locations around the Klang Valley and in Port Dickson, targeting welfare homes as well as projects with safety and environmental themes such as a safety helmet campaign for school children, tree planting and river cleaning projects. About RM470,000 was spent for the year's programme, which ended with a Family Day for an estimated 2,500 disabled people and their families from across Malaysia, which was organised in conjunction with World Disabled Day in December 2009.
ANNUAL REPORT & ACCOUNTS 2009 17
Community service is a way of life at EMB. Our corporate contributions and employee volunteerism efforts are aimed at creating long-term benefits for the community.
Corporate Information
ESSO MALAYSIA BERHAD
ANNUAL REPORT & ACCOUNTS 200918
ESSO MALAYSIA BERHAD (Company No:3927-V)Incorporated in Malaysia
DirectorsMr. Hugh W. Thompson(Chairman)
Y. Bhg. Tan Sri Dato' Dr. Syed Jalaludin Syed Salim(Independent Non-Executive Director)
Y. Bhg. Tan Sri Abdul Halim Ali(Independent Non-Executive Director)
Y. Bhg. Dato' Zainal Abidin Putih(Independent Non-Executive Director)
Puan Fatimah Merican(Executive Business Services Director)
Encik Abu Bakar Siddik Che Embi(Executive Refinery Director)
Puan Faridah Ali(Executive Retail Business Director)
Joint SecretariesPuan Sri Junaidah Mohd Said(LS0008614)
Mr. Manoj Devadasan(LS0006885)
Share RegistrarTricor Investor Services Sdn. Bhd. (118401-V)(formerly known as Tenaga Koperat Sdn. Bhd.)Level 17, The Gardens North TowerMid Valley CityLingkaran Syed Putra59200 Kuala LumpurTel: 603-22643883 Fax: 603-22821886
AuditorsPricewaterhouseCoopers (No. AF-1146)Chartered AccountantsKuala Lumpur
Stock Exchange ListingMain Board of Bursa Malaysia Securities Berhad
SolicitorsMessrs. Raja, Darryl & Loh, Kuala LumpurMessrs. Azman, Davidson & Co, Kuala LumpurMessrs. Skrine, Kuala LumpurMessrs. Lee Hishammuddin Allen & Gledhill,Kuala LumpurMessrs. Shearn Delamore & Co, Kuala LumpurMessrs. Zaid Ibrahim & Co, Kuala Lumpur
Registered Office
EMB Company Secretary's OfficeLevel 29, Menara ExxonMobilKuala Lumpur City Centre50088 Kuala LumpurTel: 603-23803024 Fax: 603-23803473
CORPORATE GOVERNANCE
The Board of Directors of Esso Malaysia Berhad is committed to ensuring that the highest standards of corporate governance are practised throughout the Company. The Board views this as a fundamental part of its responsibilities to protect and enhance shareholder value. Accordingly, the Board fully supports the principles laid out in the Malaysian Code on Corporate Governance.
Exxon Mobil Corporation, as the Company's ultimate holding company, has developed a series of policies and management systems that are designed to create and support a strong system of corporate governance. The policies and management systems have been adopted by the Board and are communicated to the Company's employees, contractors and vendors, so that each has a clear understanding of the Company's expectations.
The policies, which are set out in a Standards of Business Conduct booklet, and the management systems are strictly enforced. The Foundation Policies include Business Ethics, Conflicts of Interest, Antitrust, Alcohol and Drug Use, Gifts and Entertainment, Harassment in the Workplace and Outside Directorships. The management systems are designed to achieve high standards of performance in the areas of safety, operations integrity, internal control and legal and environmental compliance.
The Board and the Board Audit Committee ensure that the policies and the management systems are fully implemented and consistently enforced. They are supported in these regards by an internal Management Committee and an Audit and Controls Committee, both led by the Chairman.
The Board leads and controls the Company. The Board meets at least four times a year, with additional matters resolved by way of Circular Resolutions as and when necessary. Each Non-Executive Director is independent and brings invaluable judgment to bear on issues of strategy, performance, resource allocation, risk management and standards of conduct.
For the year ended December 31, 2009, four Board and four Board Audit Committee meetings were held. Details of the Directors' attendance at these meetings are summarised below:
Directors Number of Board Number of Board AuditMeetings Committee Meetings
Held Attended Held Attended
Mr. Hugh W. Thompson 2* 2 Non-member Non-member(Appointed to the Board w.e.f. June 4, 2009)
Y. Bhg. Tan Sri Dato' Dr. Syed Jalaludin Syed Salim 4 3 4 3
Y. Bhg. Tan Sri Abdul Halim Ali 4 4 4 4
Y. Bhg. Dato' Zainal Abidin Putih 4 4 4 4
Puan Fatimah Merican 4 4 Non-member Non-member
Encik Abu Bakar Siddik Che Embi 4 4 Non-member Non-member
Puan Faridah Ali 4 4 Non-member Non-member
Mr. Liam M. Mallon 2** 1 Non-member Non-member(Resigned from the Board w.e.f. June 4, 2009)
Mr. Lam Foo Keong 1** 1 Non-member Non-member(Resigned from the Board w.e.f. April 1, 2009)
* Reflects number of Board of Directors meetings held following appointment to the Board of Directors** Reflects number of Board of Directors meetings held in the year until resignation
The Board
ANNUAL REPORT & ACCOUNTS 2009 19
Board Membership
Supply of Information
Appointment and Re-election of Directors
Remuneration Committee
Directors' Remuneration
The Board had 7 members as at the end of 2009, with 3 Independent Non-Executive Directors and 4 Executive Directors (including the Chairman). Together, the Directors form the mind and management of the Company.
The functional organisation of the Company provides a system and structure of checks and balances in the decision making process. There is a clear division of responsibilities between the Chairman and each of the other Executive Directors.
Balance in the Board is achieved and maintained with the composition of both Executive and Independent Non-Executive Directors. In recognition that the Independent Non-Executive Directors have a primary role in providing unbiased and independent views, the Company has selectively appointed highly qualified individuals of integrity and character, with broad experience and proven business and management expertise.
Y. Bhg. Tan Sri Dato' Dr. Syed Jalaludin Syed Salim is the longest serving Independent Non-Executive Director of the Company. Shareholders are at liberty to approach Y. Bhg. Tan Sri Dato' Dr. Syed Jalaludin Syed Salim, or any of the other Independent Non-Executive Directors, should there be any concerns relating to the Company and its Management.
Information regarding the Company's business and affairs is normally provided to the Board by the Company's management and staff and by the Company's independent auditors. Towards meeting this objective, Board meetings are structured with a pre-determined agenda. Board papers covering the Company's operational and financial performance, strategic plans on any significant matters and developments, together with the minutes of the previous Board and Board Audit Committee meetings, are circulated to the Directors (or Members of the Board Audit Committee, as the case may be) in advance of each meeting. This allows the Directors time to deliberate on the issues to be raised and discussed at each meeting. The Board, in addition to having full access to the advice and services of the Company Secretaries, has the authority to retain such outside advisors, including accountants, legal counsels, and other experts, as it deems appropriate. The fees and expenses of any such advisors will be paid by the Company.
In accordance with the Company's Articles of Association, the Board can appoint any person to be a Director as and when it is deemed necessary. However, consistent with the best practices of the Malaysian Code on Corporate Governance, the Nominating Committee makes recommendations to the Board prior to such appointments. Any person so appointed shall hold office until the next Annual General Meeting at which time the candidate will be subject to election by the shareholders. An election of Directors takes place every year, with each Director retiring from office at least once every three years. Directors retiring by rotation are eligible for re-election by the shareholders at the Annual General Meeting.
The Remuneration Committee is responsible for the recommendation of the remuneration of the Executive and the Independent Non-Executive Directors, for the Board's consideration and decision.
The current members of the Remuneration Committee are as follows:1. Mr. Hugh W. Thompson (Executive Director) - Chairman
Puan Fatimah Merican (Executive Director) - Alternate Chairman2. Y. Bhg. Tan Sri Dato' Dr. Syed Jalaludin Syed Salim (Independent Non-Executive Director) 3. Y. Bhg. Dato' Zainal Abidin Putih (Independent Non-Executive Director)
The remuneration received by the Independent Non-Executive Directors in 2009 was recommended by the Board as a whole (with the Independent Non-Executive Directors abstaining from participation in the discussions and voting on the matter) and approved by the shareholders at the Annual General Meeting on May 29, 2009.
With the recommendation of the Remuneration Committee, the Board has adopted Exxon Mobil Corporation's compensation system to set the remuneration of Executive Directors. The compensation system took into account the performance of each Executive Director and the competitive environment in which the Company operates. The Executive Directors took no part in deciding their own remuneration.
CORPORATE GOVERNANCE (Continued)
ESSO MALAYSIA BERHAD
ANNUAL REPORT & ACCOUNTS 200920
An analysis of the aggregate Directors' remuneration incurred by the Company for the year ended December 31, 2009 as prescribed under Appendix 9C Part A Item 10(a) of the Main Market Listing Requirements of the Bursa Malaysia Securities Berhad (“BMSB”) is set out below :
FEES VALUE OF TOTAL(RM) AND (RM)
EXECUTIVE DIRECTORS - 1,486,529 1,486,529
INDEPENDENT NON-EXECUTIVE 108,000 34,000 142,000 DIRECTORS
An analysis of the number of Directors whose remuneration, incurred by the Company, falls in successive bands of RM50,000 as prescribed under Appendix 9C Part A Item 10(b) of the Main Market Listing Requirements of the BMSB is set out below:
Remuneration (RM) Number of Executive Number of Non-Executive Directors Directors
Less than 50,000 3
50,001 - 100,000 1
100,001 - 150,000 2
150,001 - 200,000 1
200,001 - 250,000
250,001- 300,000 1
300,001 - 350,000
350,001 - 400,000
400,001 - 450,000
450,000 - 500,000
500,001 - 550,000
550,001 - 600,000 1
600,001 - 650,000
The Company has opted not to disclose each Director's remuneration as the Board considers the information to be sensitive and proprietary.
The Nominating Committee is responsible for the recommendation of candidates for Independent Non-Executive Directors and Executive Directors and the recommendation of Directors for Committees, for the Board's consideration and decision.
The Nominating Committee is also responsible for the assessment of the effectiveness of individual Directors, Board Committees and the overall Board on an ongoing basis. These assessments, based on a combination of qualitative and quantitative factors, were carried out by the Nominating Committee in 2009. The findings and results of these assessments by the Nominating Committee were reported to the Board.
The current members of the Nominating Committee are as follows:1. Mr. Hugh W. Thompson (Executive Director) - Chairman
Puan Fatimah Merican (Executive Director) - Alternate Chairman 2. Y. Bhg. Tan Sri Dato' Dr. Syed Jalaludin Syed Salim (Independent Non-Executive Director) 3. Y. Bhg. Tan Sri Abdul Halim Ali (Independent Non-Executive Director)
The Board when setting up the Nominating Committee in 2003 formed the view, which it still holds today, that the Chairman of the Company, being an Executive Director, should be a member and Chairman of the Nominating Committee. While the composition of the Nominating Committee departs from the Best Practices as outlined in the Malaysian Code on Corporate Governance, compliance with which is not compulsory, the Board is of the view that the inclusion of the Chairman of the Company provides the Nominating Committee with invaluable perspective on the business and operational needs of the Company. Such input is needed in the selection and recommendation of suitable candidates for appointment by the Board, as well as in assessing the performance of the Board, Directors and Committees.
Apart from the Chairman, the Nominating Committee members are all Independent Non-Executive Directors.
REMUNERATIONOTHERS (RM)
Nominating Committee
CORPORATE GOVERNANCE (Continued)
ANNUAL REPORT & ACCOUNTS 2009 21
Directors' Training
Dialogue between the Company and Investors
Annual General Meeting
Accountability and Audit
Internal Control
The Board places great emphasis on continuous education for Directors. In this regard, the status of each Director's continuous education was regularly monitored and reviewed by the Board. The Board had in 2006, adopted the 'Principles for Training of Directors of the Company' that sets out the philosophies on and the types and modes of training, that the Directors will undertake in each year, to help them serve the Board more effectively. These same Principles were applied by the Board in determining the relevant training for Directors of the Company in 2009.
All Directors on the Board had received or undergone relevant training in 2009. Further details of the training programmes attended by the Directors in 2009 are as set out in pages 24 to 26.
The Company reimburses Directors for costs incurred in attending continuous education programmes. Puan Fatimah Merican who was appointed to the Board on December 1, 2008, attended the Mandatory Accreditation Programme on March 24-25, 2009. Mr. Hugh W. Thompson who was appointed to the Board on June 4, 2009 attended the Mandatory Accreditation Programme on September 29-30, 2009.
The Directors are also briefed at quarterly Board meetings on any significant changes in laws and regulations that are relevant to the Company's operations.
The Board values and encourages dialogue with the shareholders to establish better understanding of the Company's objectives and performance. The Annual General Meeting provides an appropriate forum for the shareholders to dialogue with the Board. Additionally, queries from investors and potential investors are dealt with by our Investor Relations. The Company also has its own website with contact details of a dedicated officer for such purpose. The Company holds open discussions with investors and analysts upon request. In this regard, the Company disseminates information in strict adherence to the disclosure requirements of the Main Market Listing Requirements of the BMSB. Material information relating to the Company is disclosed to the public by way of announcements to the BMSB, as required by the Main Market Listing Requirements of the BMSB.
At the Annual General Meeting, the Chairman of the Board reviews the progress and performance of the Company with the shareholders. A question and answer session is also conducted to allow shareholders the opportunity to question Management on the Company's business and the proposed resolutions. The Chairman, the Board members and the external auditors are available at the Annual General Meeting to respond to questions.
In announcing the quarterly, semi-annual and annual financial statements to the shareholders and the public, the Board endeavours to present a balanced and understandable assessment of the Company's financial position and prospects. The Board Audit Committee assists the Board by ensuring the accuracy and adequacy of the information announced.
The Directors are responsible for the Company's system of internal controls. The system applies to all financial and operating activities with the objective of safeguarding the shareholders' investment and the Company's assets. The internal control system has clear management support, including the involvement of the Board, and is designed to meet the risks to which the Company is exposed. The Board is satisfied with the design of the control system and believes that there is compliance with all of the requirements.
Key elements of the Company's internal control system include:
1. a comprehensive and clearly documented System of Management Control Standards Manual that establishes the core requirements for good controls within the Company. The Manual not only identifies the principal risks faced by the Company, but also prescribes the appropriate systems to manage these risks. The Manual also specifies the overall control framework, the required control checks and the required checks on the system's effectiveness;
2. a clearly defined organisational structure with clear lines of accountability and delegation of authority for each level;
3. annual reviews of the control system, including internal and external audits. The results are reviewed with various levels of management and any major concerns are raised to senior management and the Board Audit Committee;
CORPORATE GOVERNANCE (Continued)
ESSO MALAYSIA BERHAD
ANNUAL REPORT & ACCOUNTS 200922
CORPORATE GOVERNANCE (Continued)
Internal Control (Continued)
Statement of Directors' Responsibility for Preparing the Financial Statements
Relationship with Auditors
Material Contracts
Non-Audit Fees
Other Information
4. key policies covering, among others, Business Ethics, Conflicts of Interest, Antitrust, Alcohol and Drug Use, Gifts and Business Entertainment, Harassment in the Workplace and Outside Directorships. They include requirements to comply with all applicable laws and regulations. These policies are communicated to and acknowledged by employees on an annual basis;
5. a Controls Integrity Management System to assess and sustain the effectiveness of the organisation's system of controls; and
6. a yearly representation of compliance to the internal control system and key policies by the managers of each business unit in the Company. Managers are required to document any outstanding control concerns and the planned corrective action steps.
It should be noted that systems of internal control and risk management are designed to manage rather than eliminate the risk of failure to achieve business objectives, and any system can only provide reasonable and not absolute assurance against material misstatement or loss.
The Directors are required by the Companies Act, 1965 and the Main Market Listing Requirements of the BMSB to confirm that the financial statements for each financial year have been made out in accordance with the applicable approved accounting standards and that they give a true and fair view of the results of the business and state of affairs of the Company for the financial year.
The Directors have carried out their responsibilities by:
?selecting suitable accounting policies and applying them consistently;
?making judgments and estimates that are reasonable and prudent;
? ensuring that all applicable accounting standards have been adhered to; and
?basing the financial statements on a going-concern basis, as the Directors have a reasonable expectation, after having made due enquiries, that the Company has adequate resources to continue in operational existence for the foreseeable future.
The Directors are responsible for ensuring that the Company keeps accounting records which disclose with reasonable accuracy, the financial position of the Company, enabling the Directors to ensure that the financial statements comply with the Companies Act, 1965 and to safeguard the assets of the Company.
The Board has established a formal and transparent relationship with the auditors of the Company. The role of the Board Audit Committee in relation to the internal and external auditors is described on pages 27 and 28.
The Company is not and was not a party to any material contracts involving the Directors' interests during the year. Further the Company is not and was not a party to any material contracts that are not in its ordinary course of business involving its major shareholders' interests during the year.
No non-audit fees were paid or are payable to the external auditors, Pricewaterhouse Coopers, by the Company for the financial year ended December 31, 2009.
i) Family Relationship
None of the Directors have any family relationship with any other Director and/or major shareholder(s) of the Company.
ii) Conflicts of Interest
None of the Directors have any conflicts of interest with the Company.
ANNUAL REPORT & ACCOUNTS 2009 23
Other Information(Continued)
iii) Conviction for offences (excluding traffic offences)
None of the Directors have been convicted for any offences within the past 10 years.
iv) Sanctions and/or penalties
No sanction or penalty has been imposed on the Company, or the Directors or the Management, by the relevant regulatory bodies.
This Statement is made in accordance with the Board of Directors' resolution dated February 24, 2010.
Training Attended by Directors in 2009Directors / Training Date in 2009 Organiser
Hugh W. Thompson
?ExxonMobil Operational Briefings Jun ExxonMobil
?“Technology & Alternative Energy” (Panel Chairman) – Asian Jun 8-9 PETRONASOil & Gas Conference
?Strategic Management of Emergencies Jul 30 ExxonMobil
?Briefing on MMLR Aug 18 ExxonMobil
?Refinery Operation at PDR Aug 18 ExxonMobil
?Visiting Senior Executives Programme Aug 26 Thunderbirds, Singapore
?Mandatory Accreditation Programme Sep 29-30 Bursatra
Tan Sri Dato' Dr Syed Jalaludin Syed Salim
?Financial Institutions Directors' Education Programme Jan 16 Bank Negara Malaysia
?Ministrial Leadership Lecture – YB Dato' Seri Khaled Nordin Jan 30 Ministry of Higher Education
?Financial Institutions Directors' Education Programme Feb 20-21 Bank Negara Malaysia
?Financial Institutions Directors' Education Programme Mar 20-21 Bank Negara Malaysia
?Transforming from Knowledge Economy to an Innovation Economy Mar 30 EPU, Prime Minister's – Dr Curtis Carlson of Sanford Research Institute International Department
?Financial Institutions Directors' Education Programme Apr 24-25 Bank Negara Malaysia
?Standards of Business Conduct May 19 ExxonMobil
?Governance Trends and Issues – by Prof Mervyn King of King May 21 Bank Negara MalaysiaCommittee on Corporate Governance
?Financial Institutions Directors' Education Programme May 22-23 Bank Negara Malaysia
?Marketing in Turbulent Times by Prof Mark Kotler May 30 Ministry of Higher Education
?Risk Management in Islamic Finance Jun 20 Bank Negara Malaysia
?Managing Economic Crisis by Board Jul 6 Smart Business Consulting
?Briefing on MMLR Amendments Aug 18 ExxonMobil
?Refinery Operations at PDR Aug 18 ExxonMobil
?BNM Financial Industry Conference Nov 17-18 Bank Negara Malaysia
rd?3 Islamic Financial Service Board Public Lecture Nov 23 Bank Negara Malaysia
– Financial Policy and Stability
?BNM High Level Conference on Financial Stability Nov 24 Bank Negara Malaysia
CORPORATE GOVERNANCE (Continued)
ESSO MALAYSIA BERHAD
ANNUAL REPORT & ACCOUNTS 200924
Training Attended by Directors in 2009 (Continued)Directors / Training Date in 2009 Organiser
Tan Sri Abdul Halim Ali
?Ministrial Leadership Lecture Jan 30 Ministry of Higher Education
?Risk Governance Feb 5 Employees Provident Fund
?Leading Changes – What Leaders Really Do Mar 15 Ministry of Higher Education
?Lead without Title Seminar May 13 Ministry of Higher Education
?Standards of Business Conduct May 19 ExxonMobil
?Innovation Led Economy in Malaysia Jul 21 Ministry of Higher Education
?Briefing on MMLR Amendments Aug 18 ExxonMobil
?Refinery Operations at PDR Aug 18 ExxonMobilst
?21 Century Challenges in Financial Services Sep 1 King's College Alumni
?Truth, Lies and Corporate Governance Sep 28-29 Corporate Governance Summit 2009
?Lecture by Sir John Hartnell Bond (Chairman of Vodaphone) Oct 21 Khazanah Nasional
?MINDA Directors Forum 2009 Nov 22-25 MINDA
– Board Response to Turbulent Times
Dato' Zainal Abidin Putih
?Financial Inst Directors Training (Module 3) Jan 16-17 Bank Negara Malaysia
?Market Developments in Islamic Financing and Jan 22 MASB Future of Islamic Financial Reporting
?Forum on IASB – Paper on Financial Statement Presentation Feb 4 MASB
?Financial Inst Directors Training (Module 4) Feb 13-14 Bank Negara Malaysia
?Financial Inst Directors Training (Module 5) Mar 13-14 Bank Negara Malaysia
?2009 IFRS Forum and AOSSG Seminar Apr 16-17 China Accounting Standards Committee
?Public Forum – 2009 IASB (Regional Standard Setter) Apr 28 MASB
?MASB Conference – Accounting Challenges in Turbulent Times Apr 29 MASB
?New Fund Raising & New Board Structure May 8 Securities Commission and Bursa Malaysia
?Commemorative Lecture: What is Bursa Malaysia's Voice to May 14 MICPAEmbrace the Global Meltdown in Confidence?
?Standards of Business Conduct May 19 ExxonMobil
?FIDE Talk by Prof Mervyn King – Chairman of King Committee on May 21 Bank Negara MalaysiaCorporate Governance on Governance Trends & Issues and PIDM
?Panelist at CG Best Practices Forum for PLCs Jun 11 Securities Commission and Bursa Malaysia
?Briefing on MMLR Amendments Aug 18 ExxonMobil
?Refinery Operations at PDR Aug 18 ExxonMobil
?Insight and Perspective of Malaysia's Industry Leaders Aug 20 Perdana Leadership Foundation
?Khazanah Megatrends Forum Oct 6 Khazanah Nasional
?Lecture by Sir John Hartnell Bond (Chairman of Vodaphone) Oct 21 Khazanah Nasional
?Consumer Sales and Distribution Review Oct 21 CIMB Bank(Keynote Adr: Tun Mahathir Mohamed)
?Lunch Talk by David Eldon (Chairman of DIFC) Oct 27 FIDE / Bank Negara Malaysia
?FIDE Roundtable Nov 2 FIDE / Bank Negara Malaysiast
?1 Meeting of Asian-Oceanian Standard-Setters Group (AOSSG) Nov 4-5 MASB
ANNUAL REPORT & ACCOUNTS 2009 25
Directors / Training Date in 2009 Organiser
Fatimah Merican
?Malaysia Gas Business Overview Jan 30 ExxonMobil
?EMEPMI Leadership Workshop Mar 11-12 ExxonMobil
?Ergonomics for Managers and Supervisors Mar 23 ExxonMobil
?Mandatory Accreditation Programme Mar 24-25 Bursatra
?Anti Corruption Summit: Panelist and Speaker Mar 31 ASLI / TI Malaysia
?Overseas Security Advisory Council Briefing Apr 7 AMCHAM and US Embassy
?Advanced ESG Apr 22-24 LINK Associates International
?Standards of Business Conduct May 19 ExxonMobil
?Asian Oil and Gas Conference – Technology and Alternative Energy Jun 9 PETRONAS
?Combined HUET with EBS and Sea Survival Jun 17 Terengganu Safety Training Centre
?Strategic Management in Emergencies Jul 30 ExxonMobil
?Breakfast Confidentials Aug 12 Paddy Schubert
?Briefing on MMLR Amendments Aug 18 ExxonMobil
?Refinery Operations at PDR Aug 18 ExxonMobil
?Talk by Ambassador Melanne Verveer – Global Women's Issues Dec 4 AMCHAM
?SAP R-3 Training Dec 9 ExxonMobil
?ExxonMobil in Malaysia -Strategies Meeting Dec 14 ExxonMobil
Abu Bakar Siddik Che Embi
?Standards of Business Conduct May 19 ExxonMobil
?Strategic Management in Emergencies Jul 30 ExxonMobil
?LPS Executive Training Workshop Aug 5-6 ExxonMobil
?Briefing on amendments to MMLR Aug 18 ExxonMobil
?Refinery Operations at PDR Aug 18 ExxonMobil
?Joint Esso Australia – RRT 'LIP' Exercise Oct 26-29 ExxonMobil
?Worldwide Refinery Managers' Conference Nov 3-5 ExxonMobil
Faridah Ali
?Ergonomics for Managers and Supervisors Mar 23 ExxonMobil
?Advanced ESG Apr 22-24 LINK Associates International
?Standards of Business Conduct May 19 ExxonMobil
?Lunch talk by Dr. Zeti Aktar on Malaysian Economic Outlook May 18 AMCHAM
?Briefing on amendments to MMLR Aug 18 ExxonMobil
?Refinery Operations at PDR Aug 18 ExxonMobil
?MPI on Electronic Data Protection Sep 17 ExxonMobil
?Anti-Trust/FCPA/Legal Implication Related to SHE Sep 17 ExxonMobil
?Globesmart Training Oct 26 ExxonMobil
Training Attended by Directors in 2009 (Continued)
ESSO MALAYSIA BERHAD
ANNUAL REPORT & ACCOUNTS 200926
Meetings and Minutes (Continued)
Authority
Duties
The Secretary to the Committee shall be appointed by the Committee. The Secretary shall be responsible for the timely issuance of meeting notices together with meeting agenda and any supporting documents in advance of such meeting, for recording, keeping and distributing the minutes of meetings and any other duties ordinarily discharged by a secretary of such Committee.
The Committee is authorised by the Board:
to investigate any matter within its terms of reference;?to have the resources which are required to perform its duties;?to have full and unrestricted access to any information pertaining to the Company;?to have unrestricted access to and communication with the external auditors of the Company and internal auditors;?to obtain external legal or other independent professional advice as necessary; and?to convene meetings with the external auditors of the Company, without the attendance of the executive members of ?the Committee, whenever deemed necessary.
The Committee is charged with the following duties:
to review with the external auditors of the Company and internal auditors, the audit plan of the Company, the ?respective auditors' evaluation of the Company's system of internal accounting controls and the audit report, the external auditors' management letter and management's response to such letter, and report the same to the Board;
to review and report to the Board the assistance given by the Company's employees to the external auditors of the ?Company and internal auditors;
to review and report to the Board the adequacy of the scope, functions, competency and resources of the internal ?audit function and that it has the necessary authority to carry out its work;
to review and report to the Board the internal audit programme, processes, the results of the internal audit ?programme, processes, or investigation undertaken, and whether or not appropriate action has been taken on the recommendations of the internal audit;
to review and report to the Board the quarterly results and year end financial statements, including the balance sheet ?and profit and loss statement, prior to submission of the statements to the Board for approval, focusing particularly on:- changes in existing accounting policies or implementation of new accounting policies;- significant and unusual events;- compliance with accounting standards and other legal requirements; and- the going concern assumption;
to review and report to the Board any related party transaction and conflict of interest situation that may arise within ?the Company;
to review and report to the Board any removal, resignation, appointment and audit fee of the Company's external ?auditors;
to review and report to the Board whether there is reason (supported by grounds) to believe that the Company's ?external auditors are not suitable for reappointment;
to recommend the nomination of a person or persons as external auditors of the Company;?to report promptly to Bursa Malaysia Securities Berhad (BMSB) matters reported by the Committee to the Board ?which have not been satisfactorily resolved resulting in a breach of the Listing Requirements of BMSB ; and
to perform such other functions as may be agreed to by the Committee and the Board.?
This Statement is made in accordance with the Board of Directors' resolution dated February 24, 2010.
Board Audit Committee Report (Continued)
ESSO MALAYSIA BERHAD
ANNUAL REPORT & ACCOUNTS 200928
REPORT OF THE DIRECTORS
The Directors are pleased to submit the annual report together with the audited financial statements of the Company for the year ended December 31, 2009.
PRINCIPAL ACTIVITIES
The Company is a public company incorporated in Malaysia under the Companies Act, 1965 and is listed on the Bursa Malaysia Securities Berhad. The Company's principal activities are the manufacturing and marketing of petroleum products in Peninsular Malaysia. There has been no significant change in the nature of the Company's activities during the year.
FINANCIAL RESULTSRM'000
Net profit attributable to shareholders 145,518Retained profits brought forward 249,025Profits available for appropriation 394,543Dividends paid less income tax at 25% (24,300) Retained profits carried forward 370,243
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DIVIDENDS
The amount of dividends paid since December 31, 2008 are as follows:RM'000
In respect of the year ended December 31, 2008:
Final dividend per stock unit, paid on June 22, 2009:Ordinary – 12 sen gross less income tax at 25% 24,300
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The Directors propose that a final dividend of 12 sen less income tax at 25% per ordinary stock unit, amounting to RM24,300,000 be paid for the year ended December 31, 2009.
RESERVES AND PROVISIONS
All material transfers to or from reserves and provisions during the year are shown in the financial statements.
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS
Before the income statement and balance sheet were completed, the Directors took reasonable steps:
1. to satisfy themselves that all receivables had been properly analysed, that bad debts had been written off where appropriate and that adequate provision for impairment of receivables had been established; and
2. to ensure that any current assets, which were unlikely to be realised in the ordinary course of business, were written down to the expected realisable amount.
At the date of this report, the Directors are not aware of any circumstances:
1. which would make the amounts written off for bad debts or the provision for impairment of receivables in the financial statements of the Company inadequate to any substantial extent; or
2. which would make the values attributed to current assets in the financial statements of the Company misleading; or
3. which would make adherence to the existing method of valuation of assets or liabilities of the Company misleading or inappropriate.
ANNUAL REPORT & ACCOUNTS 2009 29
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (Continued)
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the year which, in the opinion of the Directors, will or may affect the ability of the Company to meet its obligations when they fall due.
At the date of this report, there does not exist:
1. any charge on the assets of the Company which has arisen since the end of the year which secures the liability of any other person; or
2. any contingent liability of the Company which has arisen since the end of the year.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would make any amount stated in the financial statements misleading.
In their opinion:
1. the results of the Company's operations during the year were not substantially affected by any item, transaction or event of a material and unusual nature; and
2. there has not arisen in the interval between the end of the year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Company for the year in which this report is made.
DIRECTORS
The Directors who have held office during the period since the date of the last report are as follows:
Mr. Hugh W. Thompson (appointed w.e.f. June 4, 2009)Y. Bhg. Tan Sri Dato' Dr. Syed Jalaludin Syed SalimY. Bhg. Tan Sri Abdul Halim AliY. Bhg. Dato' Zainal Abidin PutihPuan Fatimah Merican Encik Abu Bakar Siddik Che EmbiPuan Faridah AliMr. Liam M. Mallon (resigned w.e.f. June 4, 2009)Mr. Lam Foo Keong (resigned w.e.f. April 1, 2009)
DIRECTORS' BENEFITS
Since the end of the previous year, no Director has entered into or received or become entitled to receive a benefit (other than benefits disclosed in notes 8 and 9 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest. All transactions between the Company or a related corporation and companies in which Directors have interests are conducted on an arms-length, commercial basis in the ordinary course of business.
The Company was not a party to any contract or arrangement during the year and at the end of the year, as envisaged by section 169(6)(f) of the Companies Act, 1965, which would have enabled any of the Directors to acquire benefits through the acquisition of shares in or debentures of the Company or any other body corporate.
ESSO MALAYSIA BERHAD
ANNUAL REPORT & ACCOUNTS 200930
DIRECTORS' INTERESTS IN SHARES
According to the register of Directors' shareholdings, the interests of Directors who held office at the end of the year in the share capital of the Company and its related corporations are as follows:
As at01.01.09
No other Director in office at the end of the year held any interest in the share capital of the Company or its related corporations during the year.
ULTIMATE HOLDING COMPANY
The Directors regard Exxon Mobil Corporation, a corporation incorporated in the state of New Jersey, United States of America, as the ultimate holding company of the Company.
AUDITORS
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
In accordance with a resolution of the Board of Directors dated February 24, 2010.
...............................Hugh W. ThompsonChairman
...............................Fatimah MericanDirector
Kuala Lumpur,February 24, 2010
or date of As at appointment Acquired Sold 31.12.09
Exxon Mobil Corporation (Ultimate holding company) - Number of common stock without par value
held by the following Directors:
Mr. Hugh W. Thompson 3,400 1,641 - 5,041 Puan Fatimah Merican 7,752 6,000 (3,900) 9,852
Puan Faridah Ali 367 70 - 437
ANNUAL REPORT & ACCOUNTS 2009 31