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146Tenaga Nasional Berhad Annual Report 2007

To ensure complaints and comments are captured; TNB has developed a customer repository of all its 6.8 million customers and is able to view its customer feedback on a single platform. The customer repository is developed to enhance customers’ experience as they deal with TNB.

The PRIME Management Programme generates a quarterly report that gives management insight into areas of concern that might prevail or explore new initiatives that can be introduced to improve TNB’s products and services.

Meanwhile, conducted on a daily basis through CMC, weekly through media and monthly through SMP, the analysis focuses on complaints received from the general public through various customer touch points.

Distribution Division continuously improved its products and services as well as some of the programmes and activities undertaken over recent months. They include an enhanced awareness programme on Power Quality, street lighting, renewable energy and energy efficiency. Apart from the new integrated software developed to make processes between the calls, service and control centre seamless, CMC services have also been experiencing another wave of enhancement as Short Message Service (SMS) is now added onto Distribution’s 15454 TNB CareLine. The SMS service now allows subscribers of Celcom, Maxis and Digi to send information on electricity breakdown and streetlights breakdown report via SMS to 15454. The centralised CMC is also equipped with Interactive Voice Recorder (IVR) and IP Telephony and CTI (integration of computer and the telephone).

As a whole, compilation of performance data is captured through SMP, CMC and PRIME Management Programmes supplemented by information derived from dialogues and regional managers handling of media reports. Information available on the systems where these are recorded and managed accordingly is accessible to all levels of management.

Kedai Tenaga being the customers’ service centre for TNB is currently undergoing service and image enhancement. Ongoing initiatives to boost TNB service levels include the “Service with a Smile” campaign whereby front liners are encouraged to smile when rendering their service. On top of that, counter staff are given new corporate uniforms that will project a professional image. A FAQ booklet has also been developed to assist counter staff in responding to customer enquiries in a proper and consistent manner.

TNB is always striving to provide the highest quality service to its customers. As such, Kedai Tenaga centres are equipped with a new queue system to facilitate better tracking and monitoring of response and waiting time of the counter service.

Distribution


Relationship with Stakeholders

TNB is working closely with the regulatory and the Ministry groups to introduce a Customer Charter that reflects the growing demands of the customers. The Division’s Customer Charter will further strengthen Distribution’s compliance to the terms and conditions of the TNB License (Syarat 15) in fulfilling customer needs, satisfaction and expectation. This is also in line with TNB’s strategic mission to become the preferred power provider by 2010.

TNB has established a Strategic Supplier Relation Management framework in January 2007 with the objective of developing a stable and competitive supplier base that has direct impact on quality products and services procured. This will improve reliability of supply, quality products and services whilst developing competent and capable local suppliers in achieving the national objective. There are three main groups of suppliers:

the Strategic Supplier Programme refers to vendors that supply products and services which are critical to core operations and significant annual spending

the Supplier Management Programme focuses on vendors that have been awarded contracts which contributed to 80 per cent of the total procurement spending

the Bumiputera Vendor Development Programme refers to a special programme to develop Bumiputera companies in medium and high technology industries and knowledge based on the field of manufacturing, works and services.

TNB is also committed to support the national objective of “developing Bumiputera companies”. Tremendous emphasis was given to enhance the development of Bumiputera companies in ensuring quality products and services based on TNB’s requirements. Additionally, as part of the initiative to enhance quality and as a feedback mechanism for vendors, several dialogues and training programmes were conducted throughout the country to educate vendors on recent development and enhancement in TNB’s procurement and quality assurance practice.

Distribution


Distribution

Several initiatives have been undertaken to maintain and enhance existing ties with the media. Among the programmes conducted include goodwill games such as golf and bowling as well as media luncheon.

TNB continues to support the Government through various means. Under the Rural Street Lighting programme administered by the Rural and Federal Ministry, TNB has embarked on Phase III of the programme which saw a total of 26,408 approved units of 150W streetlights to be installed throughout the Peninsular Malaysia. The Phase III project is scheduled for completion in December 2007.

To enhance the quality of life through the provision of electricity supply to remote and rural areas, TNB together with the Rural and Federal Ministry also worked hand-in-hand in implementing the Rural Area Electricity Supply project that is funded by the AAIBE (Akaun Amanah Industri Bekalan Elektrik).

Two Solar Hybrid electrification projects, each in Pulau Kapas and Pulau Perhentian, Terengganu were also completed and launched in June 2007 and September 2007 respectively. These efforts are in line with the Government’s initiative in identification and utilisation of renewable energy sources.


Dato’ Izzaddin Idris Chief Financial Officer

Finance division sees its role as a

business partner to the core business

divisions and to align business strategies

to enhance shareholder value

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Finance

Operations Review


Finance Division

In recent years the Finance Division’s responsibilities have extended beyond the conventional boundaries of financial and management reporting, corporate finance as well as treasury operations, to include investor relations, strategic and financial planning, business development and risk management. The role of the Finance Division has moved away from just being responsible for the traditional accounting aspects of an organisation to a role that has been increasingly linked with the strategic and operational aspects of the business as well as value creation through:-

• Strengthening internal reporting systems and aligning them with the Company’s strategy

• Exploring new business and growth opportunities

• Being stewards of value preservation

• Aligning the Group’s business strategies to enhance shareholder value and improve return on assets

• Promoting discipline in cost management

• Proactively managing investor relations

Highlights of Achievements:• Formulation of a progressive

dividend policy comparable with international peers

• Implementation of Divisional Accounting (DA) within TNB

• Implementation of an Investment Evaluation Framework for Budget Planning

• Establishment of TNB Economic

Council (TNB-ECouncil)

• Excercised the Call Option of the Guaranteed Exchangeable Bonds

thereby improving the gearing position

• Initiation of the process to remove foreign shareholding restrictions

• Signing of the Memorandum of Understanding for the ASEAN Power Grid in August 2007

• Implementation of a comprehensive Policy Manual for the Limits of Authority to enhance the effectiveness of existing internal control systems


The key activities of the Finance Division during the year under review are summarised below:-

Progressive Development of the Malaysian Electricity Supply Industry

During the year under review, the Division submitted a report titled “Recommendations for a Malaysian Power Exchange-Issues and Options” to the Ministry of Energy, Water and Communications. This has been viewed as a proactive effort by TNB to contribute to the progressive development of the electricity supply industry. A paper titled “The National Energy and Electricity Sector: Towards 2020: Energy Policies and Strategies” was presented by TNB’s President and Chief Executive Officer at the 4th National Energy Summit in Kuala Lumpur on 29 August 2007. The paper highlighted several major considerations which needed to be addressed for a smooth transition of the industry, if that was the direction. Discussions with Ministry officials and the Energy Commission are still ongoing.

Service Excellence 2010 (SE10/10) - First milestone in TNB’s 20-Year Strategic Plan

Formulated in 2005, the TNB 20-Year Strategic Plan seeks to guide the organisation in achieving its vision of becoming amongst the leading corporations in the energy and related businesses globally. The first destination in this 20-year journey, encapsulated under ‘Service Excellence 2010 (SE 10/10),’ is essentially to build a solid foundation for the future growth and business expansion of the organisation. The primary focus of this SE 10/10 programme is not only to be amongst the best-run corporations in Malaysia, but also in the region. As a testimony to this, TNB aims to achieve the Prime Minister’s Industrial Excellence Award by 2010.

Formulation of Corporate Strategies

With the increasing utilisation of coal as a fuel source for power generation in Peninsular Malaysia, the Division has commissioned and completed a study on the ‘Coal Supply Security Issues and Mitigation Strategies’ during the year under review. The study highlighted the key problems and issues related to coal supply and recommended several additional mitigating actions to address these issues. The recommendations, include amongst others, lobbying for fuel cost pass-through mechanism, identifying opportunities to establish long term supplier relationships with credible mine operators or coal suppliers and building internal expertise to manage the coal supply chain.

Finance Division


Prudent Debt Liability Management to Achieve Optimal Capital Leverage and Debt Mix

During the year under review, the Group did not embark on any significant funding exercise as its cash flow from operations and healthy cash position was more than adequate to meet its capital expenditure and debt repayments.

To ensure efficient utilisation of the Group’s capital, TNB has initiated a capital management programme, in line with the Government Linked Companies (GLCs) Purple Book Transformation Programme Guidelines. TNB’s capital management program involves establishing an optimum capital structure and capital efficiency (encompassing capital expenditure, working capital and disposal programme for non-core assets).

On 12 September 2006, TNB exercised its call option to exchange the balance outstanding on its 2.625 per cent Guaranteed Exchangeable Bonds with new TNB shares. With the expiry of the right to exchange the bonds, a total of USD398,960,000 nominal value in bonds were exchanged at the close of business on 6 October 2006. As a result of the exchange, the paid-up ordinary share capital of TNB increased by a total of 187,155,756 new TNB shares.

In April 2007, the Board approved and announced a progressive dividend policy for TNB effective from FY2007. Under the newly formulated policy, TNB intends to distribute 40-60 per cent of TNB’s annual free cash flow (defined as operating cash flow less normalised capital expenditure and interest servicing) as dividends. This will enable TNB to provide stable and sustainable dividends to shareholders, while maintaining an efficient capital structure and ensuring sufficient funding for future growth. The new payout structure is comparable with other international peers and meets overall market expectations.

As part of Central Treasury Management’s efforts to manage and reduce TNB’s exposure to foreign exchange risk, TNB entered into a Cross Currency and Interest Rate Swap in October 2006 for a notional amount of JPY 7.7 billion. The swap transaction had the effect of partially reducing TNB’s exposure to losses that may arise from adverse fluctuations on exchange rates and interest rates in relation to the underlying Yen loan.


Financial Ratios Financial Year

2003 2004 2005 2006 2007

Self-Financing Ratio 40:60 25:75 51:49 68:32 118:-18

Effective Weighted Average Cost of Funds* 4.9% 5.3% 5.4% 5.9% 5.9%

Currency Mix (RM:Foreign) 49:51 51:49 50:50 52:48 55:45

Debt Service Cover Ratio 2.0x 1.6x 1.4x 1.8x 2.5x

Debt-Equity (Net of Cash) Ratio 2.11# 1.94# 1.69# 1.19# 0.78#

* reflective of RM equivalent of currency exposure# after FRS 112-Income Taxes and FRS 119-Employee Benefits

1. ROA is computed after adjusting for foreign exchange gain/loss and provision for staff benefits2. SAIDI refers to System Average Interruption Duration Index

KPIs Financial Year

Actual Actual Actual Target Actual

2004 2005 2006 2007 2007

Return on Assets (ROA)1 2.6% 2.2% 3.3% 6.5% 6.3%

Gearing 68.6% 64.9% 58.1% 50.0-55.0% 49.9%

Unplanned Outage Rate (UOR) 9.4% 6.1% 4.7% 4.4% 2.2%

T&D Losses 10.8% 10.5% 11.0% 10.5% 10.0%

Transmission System Minutes (mins) 18.0 14.0 7.3 <7.0 9.3

Distribution SAIDI Minutes (mins) 2 152.0 148.0 101.6 95.0 83.0

For the Financial Year under review, TNB had arguably achieved the targeted Headline KPIs which were stretched, showing a strong commitment to the GLC Transformation efforts of the Government. TNB’s Headline KPIs performance over the past few years are set out below:-

Financial Ratios and Headline KPIs

With the new tariff accorded to TNB effective from June 2006 and together with the various initiatives undertaken for cost management and value creation, there has been a significant improvement in TNB’s financial ratios and Headline Key Performance Indicators (KPIs) as shown below:-

Finance Division


Processes and Procedures to Improve Cash Flow and Effective Cost Management

The year under review saw an overall reduction in the cost of insurance premium payments and brokerage fees, resulting from lower loss ratios for most of the policies, improved perception of TNB’s operational risk by the insurance market and improved risk management through creating awareness and sharing of information/knowledge on risk management.

In line with the objectives of ensuring timely payment, the Division embarked on an internet based payment method via Maybank2e.net (Malayan Banking) and BizChannel (CIMB Bank) initially to cover payroll (and related payments), with plans to include third party payments in the immediate future. For the current Financial Year under review, the application has been extended to staff claims and vendors/suppliers with Maybank accounts.

The focus of Group Tax Unit is to manage all taxation matters, both direct and indirect taxes, relating to the TNB Group. In this regard, the Unit has to ensure that the Group plans its operations and investments in a tax-efficient manner whilst complying with all relevant tax legislation. The Group Tax unit focuses on achieving tax efficiencies through maximising tax relief and incentives wherever possible in structuring new investments locally and abroad and assisting subsidiaries in tax audits, to minimise tax exposure and liabilities. In FY2007, tax savings amounting to RM70 million was achieved in the form of custom duty and sales tax exemption.

Removal of foreign shareholding restrictions

On 5 February 2007, the level of foreign shareholding in TNB exceeded 25 per cent reaching a peak of 28.4 per cent on 30 May 2007. On 16 February 2007, the Division initiated an application to the Authorities for the removal of foreign shareholding restrictions and received approval of the Ministry of Finance on 19 April 2007. TNB has convened an Extraordinary General Meeting in December 2007 to seek shareholders approval for the amendments to the Articles of Association to remove the limit. The removal will provide an opportunity for more foreign shareholders to invest in TNB and lead to further diversification of the profile of the shareholders of TNB.

Finance Division


Diversifying Earnings Base and Establishing International Partnerships and Cooperation

The progress of TNB’s investment through the consortium undertaken by Saudi-Malaysia Water And Electricity Company Limited (SAMAWEC) in Shuaibah III Independent Water and Power Project (IWPP) in Saudi Arabia is progressing as scheduled. As of August 2007 the overall construction progress of Shuaibah III has reached 68.9 per cent. The USD2.5 billion project is scheduled to commence Commercial Operations in July 2009.

Following the success of Shuaibah III, the Government of Saudi Arabia has requested SAMAWEC to undertake a special project to expand the Shuaibah III IWPP’s desalination plant by 150,000 m3/day over the planned capacity of 880,000 m3/day. The USD232 million Expansion Project, utilising Reverse Osmosis desalination technology is located at a site adjacent to the main project. The Project is expected to commence Commercial Operation on 28 February 2009.

Other opportunities are continuously being explored by the Business Development team which could potentially lead to partnerships and cooperation with international counterparts in the utility services around the region. In building relationships with other utilities, TNB plans to sign an MOU with the Korea Electric Power Corporation, KEPCO. This MOU will encompass technical cooperation activities in identified areas, including the exchanging of information and personnel on the subject matters mutually agreed by both Parties. The year saw the completion of cooperation activities with Vietnam, Yemen and Mongolia whilst there is an on-going technical services arrangement with Yemen. The inter-connection project across the Straits of Malacca reached another milestone with the completion of the joint commercial feasibility study by TNB and its Indonesian counterpart in January 2007, covering legal, financial and tax perspectives. The final report was presented to the Joint Steering Committee (JSC) comprising representatives from both utilities as an input to the realisation of the ASEAN Power Grid.

The Division continues its role as TNB’s secretariat for ASEAN and HAPUA activities. The year’s activities include the participation of TNB in the HAPUA Working Committee meeting in Feb 2007 and Council Meeting in June 2007 in Yangon Myanmar. The meetings deliberated on the next course of action by HAPUA upon the signing of the MOU on the ASEAN Power Grid by the respective ASEAN Governments and the activities of the eight HAPUA working groups. The key milestone of HAPUA/ASEAN activity this year was the signing of the Memorandum of Understanding (MOU) for the ASEAN Power Grid MOU in August 2007.

Formation of TNB Economic Council

The first inaugural meeting of the TNB Economic Council (TNB-ECouncil) was initiated in January 2007, followed by the second meeting held in July 2007. The main objective of the council is to assess and formulate a view on Malaysia’s economic growth and to assist in preparing the electricity demand forecasts. The meetings have generated constructive deliberations on matters relating to the economic direction/growth of the industry as well as structural changes to facilitate internal planning activities within TNB especially on the electricity demand forecast and capacity planning. Following the formation of the TNB-ECouncil, the Division has been entrusted with the responsibility of maintaining a Long-Term Economic Model for input to TNB’s internal planning requirements. A short-term Quarterly Sectoral Model is also currently being developed together with Rating Agency of Malaysia Consultancy Services to further assist TNB in its short-term planning activities.

Finance Division


Implementation of Divisional Accounting

In an effort to enhance performance measurement, TNB has implemented Divisional Accounting by creating separate financial statements for the core businesses namely (Generation (G), Transmission (T) and Distribution Business (D) as well as for each power station and Distribution state levels. Their Divisional Accounts serves as a platform for an objective and transparent performance measurement of each Division. The framework will ensure that all financial statement items are allocated in a consistent and equitable basis to the respective divisions, power stations and state levels and also to identify enhancements where applicable. The Divisional Accounting framework will enable TNB to benchmark with Independent Power Producers in terms of cost of production amongst its power plants.

Investment Evaluation Framework for Capital Budgeting

In the continuous efforts to improve the alignment between the Group’s business and policy objectives, the Finance Division has developed an investment evaluation framework for capital budgeting. This is expected to facilitate the creation of a more structured and disciplined process for approving and managing TNB’s annual capital expenditure with the aim of improving the return on capital investments. The framework would further enhance TNB’s capital efficiency programme in line with the objectives of the GLC Purple Book.

The evaluation framework which will be implemented in 2008, will ensure that consistent cost benefit analyses are carried out in assessing the viability of electricity supply projects. This is also to meet TNB’s investment objectives as follows;

• Minimising the risk of stranded assets and poor return on investment;

• Ensuring that investment proposals or projects have gone through a rigorous process of assessment and evaluation;

• Ensuring a consistent financial approach or indicators are used by planners in planning for capital expenditure projects; and

• Ensuring a fair return on investment for capital expenditure projects where appropriate.

Finance Division


Improved Financial Governance

The Policy Manual for the Limits of Authority (LOA) was officially rolled out on 1 January 2007 as part of management’s effort to enhance the effectiveness of the Company’s existing internal control system. The implementation and enforcement of the LOA ensured an improved management accountability structure through the assignment of a clear, practicable and uniform set of both monetary and non-monetary limits in support of the management role and decision making function. Since then, the LOA has also been introduced to the respective subsidiaries within the Group. Designed to be a user friendly internal control instrument, the continuous updating of the LOA will ensure its relevancy and effectiveness in line with the dynamic requirements of the business.

Investor Relations

Being one of the largest companies (in terms of market capitalisation) listed on Bursa Malaysia, TNB views the role of investor relations as a strategic management responsibility that combines the disciplines of finance, communication and marketing to manage the content and flow of information to financial markets, investors, brokerage firms and other constituencies so as to provide an accurate portrayal of the Group’s performance and prospects. An equal level of importance is placed on the need for investor relations to channel the views of the investment community back to Management and the Board of Directors.

During the year under review, TNB participated in several utility conferences arranged by leading investment banks, as this provides the platform to meet with fund managers and investors, both existing and potential, to provide them with an update on the Company’s performance and to address any issues and concerns they may have regarding the Company. In November 2006, TNB participated in a non-deal roadshow covering parts of Europe and the United Kingdom to meet investors and fund managers, whilst on the domestic front, Management went on a domestic roadshow to meet key local shareholders. During the Financial Year under review TNB met a total of 200 fund managers and investors during the conferences and roadshows.

The response from the financial community and media to attend TNB’s quarterly financial results announcement has always been encouraging. These are attended by the research analysts covering TNB, the credit rating agencies and media reporters, whilst fund managers were invited to be teleconferenced in for the sessions. On the average, a total of 85 research analysts, fund managers and media attended or conferenced in for these quarterly presentations.

In FY2007, TNB had 68 meetings with equity research analysts, fund managers and investors who had requested for meeting officials apart from those investors at conferences, roadshows and quarterly financial results presentations.

On 21 June 2007, Bursa Malaysia launched the establishment of the Malaysian Investor Relations Association (“MIRA”), with the key objective to spearhead the development and raise the standard and level of IR in practice in Malaysia and assist listed companies in initiating and implementing their IR programs. Following the launch, TNB accepted the invitation by Bursa Malaysia to be an inaugural member as well as to nominate a representative on the Board of Directors of MIRA.

Finance Division


Improving Human Capital Development

During the year under review, TNB had been accredited as a training organisation by several professional accounting bodies. In November 2006, TNB received authorisation from the Institute of Chartered Accountants of England and Wales (ICAEW) to be the Authorised Training Provider. TNB was also recently certified under the Association of Certified Chartered Accountants (ACCA) Approved Training Scheme. In June 2007, TNB held a Professional Bodies (accountancy) Open Day for TNB accountants which involved all the accounting professional bodies present in Malaysia.

Moving Forward

The Finance Division has achieved much in the last few years, particularly in terms of its primary responsibility to improve cashflow management and effective debt liability and capital management. Underpinning these achievements is the desire for continuous improvement and a commitment towards achieving “Service Excellence”.

For Financial Year ending 31 August 2008, we will continue to exploit synergies within the Group and strive to create greater shareholder value through financial and operational efficiencies. The value creation drive is entrenched within the Division and more efforts have been devoted to improving staff communications and nurturing a culture of continuous improvement. Key initiatives for FY2008 include the followings:-

• Strengthening the Business Development Unit of the Division and aggressively identifying, exploring and supporting new business opportunities.

• Achieving Balance Sheet efficiency through effective working capital management and the improvement of the payment process and procedures.

• Developing in-house capability in the management of coal supply, in light of the significant increase in the utilisation of coal as fuel for power generation. The study will, amongst others look into the coal supply and demand dynamics, issues with respect to coal logistics and, factors affecting coal and coal freight prices.

• TNB is also striving towards transforming itself into a Gulf Cooperation Council (GCC) Syariah compliant company, to support the Malaysian Government’s aspiration to be an Islamic financing hub outside the Middle East. One of the initiatives to achieve such an objective is to source new funds using Middle East Syariah compliant structures.

• Implementating the Investment Evaluation Framework for Budget Planning to ensure an efficient and effective review that supports the budgeting process and ensures the regular monitoring and management of the Group’s investments.

• Providing a supporting role in the various issues and challenges related to the current review of the electricity tariff-setting mechanism and pricing studies.

• Continuously reviewing the Group’s Financial Policies and Procedures, with particular regard to improving workflow and processes and moving towards a “paperless” environment.

Finance Division


Dato’ Nik Ibrahim binNik Mohamed Vice President

These initiatives taken have shown positive overall financial performance. For FY2007, ROI was higher at 79.2 per cent against more than 60 per cent targeted; EVA was higher at RM420.33 million against more than RM250 million targeted; stranded cost lower at RM23.7 milion against less than RM40 million targeted.

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Operations Review

InvestmentManagement


Investment Management Division

Operational Summary

The main focus of the Investment Management Division (IMD) is to ensure that all investments bring positive value to TNB. All TNB investments whether in the form of subsidiaries, associates or other long-term investments, are closely monitored. The investment equity value under its purview is worth RM577.17 million for 17 active operating companies. The Division also monitors other subsidiaries which are dormant, inactive and facing litigation proceedings.

IMD’s main responsibilities include the monitoring and supervision of Malaysia Transformer Manufacturing Sdn Bhd, Tenaga Cable Industries Sdn Bhd and Tenaga Switchgear Sdn Bhd that operate in the manufacturing sector; Liberty Power Limited in Pakistan which is involved in the electricity generation business; Fibrecomm Network (M) Sdn Bhd in the communication and IT related business; University Tenaga Nasional (UNITEN) in education and knowledge development; TNB Engineering Corporation Sdn Bhd in district cooling, engineering advisory and consultancy services and related functions; and TNB Fuel Services Sdn Bhd in the supply of fuel and coal for the power generation sector.

Highlights of Achievements:• Price-benchmarking report prepared to ensure all

investments are providing products and services with good value-for-money to TNB

• Positive overall financial performance, such as Return on Investment (ROI) and Economic Value Added (EVA)

• Costing and price benchmarking exercise for products/services


In monitoring the business performance of the investments which include the financial and operating performance, the Division has taken up various initiatives to reduce subsidiaries’ issues, giving emphasis on the financial health. Tools and systems have also been developed for evaluation and monitoring of all investments. Strategic plans for identified investments have been developed and implemented.

These initiatives taken have shown positive overall financial performance. For FY2007, ROI was higher at 79.2 per cent against more than 60 per cent targeted; EVA was higher at RM420.33 million against more than RM250 million targeted; stranded cost lower at RM23.7 milion against less than RM40 million targeted.

The Division consistently monitors subsidiaries, contract compliance to ensure subsidiaries comply with their contract agreements. These impacted many areas within the organisation and could significantly influence inventory, operations, customer satisfaction, reduced costs and wastage, project management and corporate image.

In its effort to improve the performance of the investments, IMD has also prepared a price-benchmarking report to ensure that the investments are providing good value-for-money products and services to TNB.

IMD participated in the AKP and implemented the PSI, 5S, IMD Best Employee Award, and Work Improvement Team (WIT) framework as approaches to bring efficiency improvement to the Division.

For continuous improvement in process standardisation and to promote transparency, IMD adopted MS ISO 9001:2000 and acquired certification under Corporate TNB in January 2006. Subsidiaries under the purview of IMD have also gone through the same exercise for their own individual certification, namely TNB Engineering Corporation Sdn Bhd, Bangsar Energy System Sdn Bhd, TNB Properties Sdn Bhd, UNITEN, Tenaga Switchgear Sdn Bhd and TNB Fuel Sdn Bhd.

Key initiatives implemented by IMD towards becoming customer oriented and to resolve feedbacks promptly and effectively, are done through Customer Satisfaction Index (CSI) surveys used to provide a consistent framework and platform for ongoing improvement and measurement; Suggestion Box for customers to give their feedback to help improve IMD services further; Subsidiaries Performance Review, conducted with subsidiaries and with the President/Chief Executive to promote direct communication.

From the CSI survey carried out, about 68 per cent of the respondents were satisfied with the services provided, an improvement of 1.1 per cent from previous surveys.

Investment Management Division


Razali bin Awang Chief Information Officer

Operations Review

ICT DivisionICT Division continues to subscribe to three main objectives towards supporting TNB’s overall Vision and Mission, i.e. effectively govern and consolidate the use of ICT in TNB, E-enabling critical TNB processes to drive corporate efficiencies higher and providing the digital infrastructure to enable intelligent power delivery system.

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ICT Division

In this Financial Year, ICT Division has completed a number of major ICT projects to help spearhead TNB towards excellence in the areas of customer service and internal operations and administration.

During the year under review, ICT Division was selected as a recipient of the “Anugerah Khas Jabatan yang Menggunakan Sistem SEMS” during the Kecemerlangan Keselamatan dan Kesihatan Pekerjaan TNB 2006 held in May 2007. In July 2007, the Division received another recognition of two SEMS stars in the inaugural year of SEMS implementation.

Highlights of Achievements:• Implementation of Mobile Field Force Automation (MFFA)

Phase One to improve communication and breakdown response time between TNB’s Call Management Centre and its field crew

• E-Application for housing developers to apply for new electric supply via online

• Enhancement of the PRIME system to better manage TNB’s major customers

• Implementation of Electronic Document Management System (EDMS) and Properties Information System to improve internal processes

• Enhancement of TNB telecommunication network to increase network availability for TNB operations and administration


Operational Summary

ICT Division has been entrusted to effectively govern and consolidate the use of ICT in TNB. To date, this has been realised through the enforcement of ICT policies, codes of practice and guidelines endorsed by TNB Management.

The Division’s core operational focus is to ensure TNB’s telecommunication network and IT system’s are always available. This is a prerequisite to indirectly assist TNB’s core operations in providing a secure, reliable and continous electricity supply to the customers.

Besides this, the Division has also been entrusted to put in place security features to assure TNB stakeholders and customers that data integrity is not compromised. It is with this in mind that ICT has prepared a security framework and implemented security upgrades at critical areas. The Division is in the midst of upgrading and expanding its data centre to host critical TNB ICT services.

Our network infrastructure serves both corporate and operational needs of TNB’s businesses. ICT Division provides peripheral support service that covers both ends of the spectrum, from the simplest user personal computers to the most state-of-the-art, high-end servers. The Division also offers consultation and project management services to TNB divisions and subsidiaries.

ICT Division has implemented the Mobile Field Force Automation Project in Selangor and Kuala Lumpur that provides an integrated communication platform between TNB’s Call Management Centre, Supply Recovery Centre , the Distribution Network Information Management (DNIM) System and field workers which comprise of Maintenance and Repair Teams and Fault Finder Teams. This communication platform utilises mobile devices to enable supervisors to effectively determine crew location and enable efficient dispatching of teams. This has directly improved TNB’s response time to breakdown calls, thereby reducing interruption time.

The Division is also expanding the scope of this project to include other Distribution teams located in Peninsular Malaysia such as Johor and Pulau Pinang. ICT Division also intends to roll out this project to the Transmission Division in the near future.

ICT Division also provided its expertise in the successful roll out of the Distribution Network Information Management (DNIM) System in Shah Alam, which involves mapping of all TNB’s Distribution Infrastructure on a single platform. This project is expected to improve Distribution’s capability in network planning and outage restoration.

The Division has also upgraded its telecommunication network and commissioned TNB’s telecommunication Customer Premises Equipment at critical sites to provide the much needed bandwidth to transmit data for DNIM, video and desktop conferencing and operational transactions.

ICT recently embarked on a realignment of business operations to provide efficient and effective end-to-end ICT products and services. This is in line with TNB’s Service Excellence initiative.

ICT Division


ICT Division

Internal Process Standardisation and Improvement

ICT Division heavily utilises the Process Standardisation and Improvement (PSI) platform to improve its internal services. This platform has enabled the Division to study and propose improvement systems in line with its main objective of E-enabling critical TNB processes to drive corporate efficiencies higher.

In this Financial Year itself, ICT Division consolidated and simplified a number of processes to enhance its internal effectiveness. This initiative has seen the Division’s number of processes reduced from 38 to 23 process control documents. This was successfully conducted through work improvement and Cross Functional Teams throughout the Division. Besides using the Online PSI System, ICT Division also administered the PSI.

Quality Management and Initiatives

ICT Division has also embarked on several other quality initiatives such as:

• Developed improvements in the Enterprise Resource Planning System;

• Established Work Improvement Teams (WIT);

• Implemented the 5S programme;

• Conducted the Safety and Environment Management System (SEMS) baseline audit.

In FY2006, ICT Division had introduced the WIT and 5S practice among the staff. The objectives are to inculcate teamwork, continual improvement and safety culture in the workplace.

Four WITs have been set up. A total of 49 ICT Division staff took part in proposing ways to improve their day-to-day work. Several proposals were approved and have been implemented in the Division.

In line with TNB’s call for increasing safety awareness amongst staff, ICT Division had undertaken the SEMS baseline audit initiative to determine the safety level of all operational units in the four regions of Peninsular Malaysia. On the overall, ICT Division received two SEMS stars in July 2007.


The Way Forward

ICT Division faces a challenging year ahead to meet the ever increasing business demands of TNB. The Division will be implementing a total of 29 plans and initiatives; 19 of which to cater for system expansion and 10 productivity improvement systems for TNB Group.

The 19 upgrading plans include security improvement initiatives, storage virtualisation, enhancement of TNB’s digital transmission and protection network, provision of network connectivity for TNB’s Integrated Security Management System and upgrading its Data Centre.

The 10 productivity improvement systems include the implementation of the Mobile Field Force Automation for other locations in Peninsular Malaysia, Radio Frequency Identification for warehouse and implementation of an Integrated Fleet Management System.

ICT Division has adopted ITIL, the globally accepted best practice framework in IT Service Management towards improving its service delivery. Phase One of Customer Management System (CMS) is implemented in line with ITIL. ICT Division is also in the midst of a collaboration with UNITEN in drafting a comprehensive best practices adoption roadmap for the ICT Division.

With the objective of enhancing staff competency and engagement, ICT has conducted knowledge sharing sessions to impart knowledge to all levels of staff, developed a comprehensive TNI/TNA report to develop executives according to job requirements and established succession plan for critical posts in ICT.

ICT Division

ICT Division has adopted ITIL, the globally accepted best practice framework in IT Service Management towards improving its service delivery


Dato’ Kamaruzzaman bin Jusoh Vice President

Operations Review

Group Human

The Code of Ethics & Whistle Blowing

procedure were launched to uphold

and further strengthen the Company’s

integrity and reputation.

““

Resource


Group Human Resource

• Succession Management - Current Talent Pool size stands at 188. An additional 103 executives were evaluated for consideration to be included into the Talent Pool.

• Specialist Career Path - One technical expert was promoted to the rank of Specialist whilst 16 new Technical Experts were appointed. Currently in total there are two Specialists and 21 Technical Experts.

• The Policy for managing Low Performers which was launched in May 2007 provides the guidelines and comprehensive programmes for staff deemed as ‘low performers’ to increase their productivity towards achieving their target set.

• Institut Latihan TNB - ILSAS was awarded the Human Resource Ministry Award 2007 (Training Provider Category)

Highlights of Achievements:

Operational Summary

An external consultant was engaged to conduct a study on Employee Engagement. The level of engagement attained was 83 per cent fairly close to the 87 per cent for The Best Employer in Asia.

The succession management initiative in 2007 reviewed the talents assessed in 2006. One hundred and eighty-eight talents from 227 have now been formally included in the talent pool. The management team had also outlined the career plan for top talents during the management break out session. In the talent development effort, five Progems (Programme for General Managers) involving 166 talents had been conducted in this Financial Year. Cross functional team projects have been assigned to all Progem participants. Concurrently, new talents, totalling 103 executives, have been identified and assessed in August 2007. The new group of talents has a higher percentage of executives in the lower/middle management group. To date, almost 10 per cent of the executive population had been assessed for their potential. The Succession Management activities will prepare the talents for the Key Leadership Positions (KLP).


In building the human resource capacity and retaining technical expertise, one Technical Expert was promoted as Specialist and 16 were appointed as Technical Experts in the Specialist Career Path (SCP) scheme for the Financial Year, bringing to date two Specialists and 21 Technical Experts to be in the SCP.

A similar scheme, known as the Specialised Technician Career Path, was introduced for the non-executives with creation of thirty-eight Specialised Technician positions.

A new policy on managing low performers had been established to provide a platform for line management to manage the low-performers. At the same time non-performers were provided an opportunity for self-improvement through a programme called Performance Improvement Programme with a maximum period of six months for executives and nine months for non-executives.

This past year has seen the Counseling Services Unit actively giving talks to educate and create awareness towards improving the mental and emotional well-being of TNB employees. The unit is also currently embarking on recruiting and training more “Pembimbing Rakan Sekerja TNB” throughout Peninsular Malaysia with expectations to provide employees with a more positive and harmonious working environment for a greater work-life balance.

The Company continues its efforts to contain medical costs throughout the year 2007. Preventive programmes were initiated by implementing Wellness Programmes in all divisions. The programmes give high emphasis on early detection of common diseases and health awareness talks were also given. More audits were conducted on panel clinics throughout the year.


System Improvement

In Phase 3 of the Competency Based Performance Management System (CbPMS), further enhancement to the Employee Performance Appraisal process was made in an effort to improve efficiency and reduce time as well as to create a more transparent process. The Appeal and Employee Development Plan module (EDF) can be done online starting this financial year. The online Appeal would enable employees to register their appeal, in which the management is able to identify the number of appeals made during the appeal period and understand which element of the ratings or results is being appealed by employees. While EDF online would allow the training unit to plan and carry out training programmes, particularly in new skills as identified by employees, this enables the staffing department to plan future emplacement of executives.

Customer Service

The HR Division engaged UNITEN to conduct a Customer Satisfaction Survey (CSS) to garner information pertaining to the services being provided. With this information, corrective action is taken to further improve services given. The level of satisfaction attained this year was 68.6 per cent compared to 67.9 per cent in 2006 and 66.8 in 2005.

The Customer Complaint Procedure for the Human Resource Division was certified MS ISO 9001:2000. The certification would enable appropriate action to be taken based on feedbacks from HR customers/clients.



Training and Development

The TNB Training Institute - ILSAS has close partnerships with leading local and international training providers such as Turbo Welding Institute (TWI), Institut Kemahiran Belia Negara (IKBN), Energy Commission, Institute of Engineers Malaysia (IEM) and Universiti Kebangsaan Malaysia.

In an effort to increase competency levels, a total of 102 Development and 1,227 Mandatory Training Programmes were organised for Executives and Non-Executives respectively. Institut Latihan TNB-ILSAS have hosted several state-of-the-art training workshops and technical lab sessions to allow the trainees to get practical experience so that they may apply what they have learnt in class, at work.

300MW Simulator

Overhead Lines Workshop

Heavy Mechanical Workshop

Basic Mechanical WorkshopProtection Workshop

Electrical Wiring Workshops


Dato’ Hajah Che Zurina binti Zainul AbidinVice President

The Corporate Services Division provides

support services to TNB Group in areas it

specialises in i.e. procurement, property,

legal, logistics, research, security and

intelligence services.

““

Operations Review

CorporateServices


Corporate Services

Procurement

The Procurement Department is responsible for formulating the Company’s procurement policy, providing advisory services, enforcing compliance and driving procurement-related activities in line with corporate strategic directions. The Department is also responsible for promoting and implementing the National Procurement Policy, in particular the Entrepreneur Development Programme that supports the National Economic Policy.

FY2007 is the first year of implementation of the procurement transformation programme. Hence the focus of the department is to continue all initiatives that drive and add value to the Company. Five key focus areas are the promotion of the use of local content and ensuring Bumiputera equity shares, realising value creation, enhancing procurement process transparency, integrity and effectiveness, enhancing supplier management and strengthening our procurement organisation by transforming it into a more strategic function.

Highlights of Achievements:• Completion of Integrity and Ethics Awareness Programme for

Generation and Support services

• Successful implementation of first year Procurement Transformation Plan

• Implementation of various Customer Relationship Management activities, resulting in improved CSI rating in PSD

• Implementation of Integrated Fleet Management by Logistics Department

A trade mission to the Middle East, “The Asian Showcase and Exhibition” in Doha, Qatar was organised in order to build the Company’s brand at international level and to support entrepreneur development under the Entrepreneur Development Programme. The trade was held from January 12 – 19, 2007 at the Sheraton Doha Convention Centre.

During the year under review, the Department had aggressively conducted various procurement dissemination sessions throughout the Company. The department had also introduced “Info Perolehan” in the TNB webpage as a channel for customer information and developed a customer complaint management platform and began to produce bulletins.

In response to the Company’s strategic plan to achieve “Service Excellence” by 2010, the Department will continue to drive the Company’s procurement initiatives through its Transformation Plan which includes short and long-term initiatives.


Legal Services

The Legal Services Department (LSD) aims to be the central provider of quality legal services within TNB and amongst its subsidiaries with the goal of supporting TNB’s core business, non-core business and management services. The Department is divided into three units, namely Corporate Advisory, Regulatory and Legal Documentation and Litigation.

During the year under review, the first and second phase of the Litigation and Corporate Advisory Modules were successfully implemented. Under the litigation module, the system allows for tracking and managing reports of litigation matters effectively. Judgement and legal opinions prepared by the Legal Department and panel lawyers are constantly uploaded for future references. Similarly, the Corporate Advisory, Regulatory and Legal Documentation module also provides an avenue for executives to track and better manage opinions and agreements.

For FY2007, several roadshows were carried out as a continuance of the awareness programme. They were held in several states by the Regulatory and Legal Documentation Unit to executives and non executives of the Distribution Division regarding the legal issues on land matters, trespassing and acquisition of land for TNB installations, rechargeable job order, housing loan for TNB’s staff and supply matters.

During the year under review, a legal forum was held on commercial contracts, legal perpectives organised by the Corporate Advisory Unit. A total of 80 participants attended the forum from the various divisions within TNB. The Department had also participated in the PSI Programmes supporting TNB for MS ISO 9001:2000 certification in 2006. Focus on human resource development saw comprehensive training programmes for all legal executives. Legal Services also contributes articles for the Company’s inhouse bulletin i.e. “Tenagawan” and also produces its own Legal Services Department Bulletin.

Corporate Services


Property Services

The Property Services Department (PSD) provides property support services to the core business of TNB, in the form of property planning and development, land procurement, project management, property management and property maintenance.

Some of the major achievements recorded during the year are:-

• Customer Satisfaction Index rating further improved from 69 per cent in FY2006 to 76 per cent in 2007 due to continuous effort to improve services.

• Continuation of Service Level Agreement (SLA) with other divisions for better customer services and better understanding of work scope and roles and responsibilities. This leads to better work efficiency.

Other initiatives implemented were:

1. Full implementation of 5S initiatives throughout the department and coming out first in the division during audit.

2. Successful roll out of Phase 1 and Phase 2 of the Property Information System.

3. Various quick win initiatives implemented for better efficiency and services such as confirmation of ownership of land through official search for registered lease and land vesting application. These quick win initiatives are for completion in 30, 60 and 90 days.

4. Electronic Document Management System (EDMS) which is currently still under discussion with ICT Division.

5. Use of data for better management and efficiency such as quit rent and assessment, TNB office buildings throughout the country, rented office space in Klang Valley, property projects and holiday bungalows throughout the country.

Corporate Services


Logistics Services

The Logistics Services Department (LSD) consists of three operational units, namely Freight Management, Fleet Management and Generator Set Services. LSD aims to become the most cost-effective one-stop logistics centre and the most improved service provider targeting 800 AKP points by 2010. The department aims to provide cost-effective logistics services to customers and providing new value added services by the Group. LSD’s objective is to manage total logistics requirements in order to meet customer expectation.

LSD provided cost-efficient and effective logistics services with high customer satisfaction comprising freight, fleet and generator set services to support TNB’s core business. Major jobs handled during the year under review include vehicle repair and maintenance, vehicles sent for PUSPAKOM inspection, supply of generator sets, freight shipments and customs clearance, transportation of general cargo and heavy lift.

Among the highlights and achievement for FY2007 were:

1. Integrated Fleet Management (IFM) e.g. appointment of panel workshops, establishment of schedule rate, savings from implementation of IFM, centralised vehicle resale and disposal.

2. Taking over all generator sets from Distribution Division.

3. New generator sets operating bases set up in Chain Ferry, Penang.

4. More than 50 per cent engine drivers certified.

5. Expansion of feeder pillar repair – increase of requests by Distribution Division.

6. Expansion of hydraulic repair to the southern area.

Security and Intelligence Services

Security and Intelligence Services (SSID) is one of the important support services provided for the Company. The Department’s functions cover Operations, Planning and Crisis Management, including Investigation and Intelligence. Services provided are to safeguard TNB’s key installations from damage, vandalism and theft. Security forces are stationed at various critical locations such as power stations, substations and regional warehouses and offices throughout Peninsular Malaysia. As an auxilliary police force, close links are being maintained with the nation’s police force, which enables the latter to respond swiftly during emergencies.

Some of the major achievements during FY2007 were:

• TNB Fraud Policy Statement was approved for implementation.

• A joint council meeting between TNB/GLCs and Second-hand Dealer Association Malaysia was held to discuss issues relating to thefts at TNB installation and to procure cooperation from the above association in overcoming the problem.

• Formation of task force for GLCs where SSID is the chairman. The purpose behind the formation of this task force is mainly to get cooperation and understanding between the various GLC companies on security issues.

• Arrest of 117 persons from September 06 to August 07 through cooperation with various Government Agencies in cases involving trespassing, thefts and other crimes related to TNB.

Corporate Services


TNB Research

As an approved Research and Development (R&D) company and the research arm of TNB, TNBR’s main role is to enhance the core businesses of TNB through its Research and Development, Consultancy Services, Laboratory Testing and Quality Assurance units. TNBR aims to be the point of reference for new technological developments in the electricity industry by leveraging on its technical consultancy and advisory strengths.

Research and development findings are widely applied to improve efficiency, availability and reliability of our electricity supply network. Through its pilot projects, TNBR is able to demonstrate the best approach in applying new technologies and processes and to guide its customers, both internally and externally, to make critical decisions on technical specifications and standard operating procedures.

A total of 26 research and development projects worth RM30.5 million were completed for TNB’s core business and support divisions including SESB. The projects addressed different areas of impact such as reliability, efficiency, environment, technological evaluation, quality assurance and cost savings. As the Quality Assurance (QA) agent for TNB, TNBR is responsible for ensuring that all equipment supplied to TNB meets necessary technical and functional standards through measures like product inspection, product certification and second-party quality systems audit.

TNBR also provides consultancy services in the areas of environmental assessment and energy. The department is registered with the Department of Environment, Malaysia as an approved body to conduct Environment Impact Assessment (EIA) studies. TNBR is also engaged as a consultant in energy-related works, especially renewable energy, by the Ministry of Energy, Water and Communications, Malaysia Energy Centre and universities. Scientific services are a revenue centre and the biggest contribution comes from laboratory testing and scientific services. TNBR clients are mainly from TNB core divisions, vendors as well as industries. TNBR has secured several SLAs due to its remarkable service performance. TNBR has successfully displaced some of the technical work previously done by foreign consultants. In areas such as Material Engineering, High Voltage Diagnostics, Lightning and Hydro Plant Optimisation, TNBR has developed its intellectual capital to meet the technology and engineering challenges faced by TNB core divisions. Specialists and technical experts are placed on a separate career path to ensure they can retain their technical expertise as they climb up the corporate ladder.

Corporate Services


Group InternalAudit

A total of 109 planned and ad-hoc

assignments were completed and 45

reports were issued during the year

““


The Group Internal Audit (GIA) function was established by the Board and reports functionally to the Board Audit Committee (BAC) and administratively to the President/Chief Executive Officer.

GIA’s mission is to provide objective and independent assurance on the system of internal controls in the Group. The main functions carried out by GIA to fulfill the mission are:

• Preparing a strategic risk-based audit plan and performing planned audits to ensure adequate coverage of all auditable entities.

• Reviewing the adequacy and effectiveness of risk management, compliance and governance processes established by the Group to manage its risks and operations.

• Establishing the existence, effectiveness and adequacy of internal control processes designed to manage operations and safeguard the assets of the Group.

The GIA function is structured into units that focus on generation, transmission, distribution, procurement, projects, group corporate services, core business support services, information and communication technology, investment management and risk management functions.

As at 31 August 2007, GIA had 78 staff. A total of 109 planned and ad-hoc assignments were completed and 45 reports were issued during the year by both GIA and external consultants. The processes reviewed include the following:

• Generation plant performance, maintenance processes, fuel and resource management

• Transmission asset maintenance including wayleave, engineering practices and warehouse management

• Distribution revenue assurance, customer services and network services

• Project procurement and implementation

• Group Corporate Services covering the areas of finance, human resource, procurement, asset management, vehicle management and training school

• Management Information System covering project implementation review, security and access, data integrity, SAP R/3 applications, business process controls

• Operational systems of subsidiaries owned by the Group

• Risk management systems and activities undertaken to manage risks

During the year, the following activities were undertaken by GIA to continuously improve its performance:

• Implementation of Customer Satisfaction Surveys to obtain feedback for enhancing internal audit services.

• Implementation of Board Audit Committee Satisfaction Survey to seek feedback to achieve a higher level of performance.

• Introduction of a Key Performance Indicator to measure customer satisfaction.

• Revision of the GIA Charter to improve and align internal audit practices and processes to best practices.

• Provision of in-house training courses to enhance staff competencies.

Group Internal Audit


Operations Review

Sabah ElectricitySdn. Bhd.

Eight T7 programmes were implemented

aggressively“ “

Ir. Baharin bin DinManaging Director


Sabah Electricity Sdn. Bhd.

Highlights of Achievements• Turnaround of Sabah Electricity Sdn Bhd sees sales rise to

RM807 million in FY2007 compared to RM703.5 million in FY2006

• Distribution SAIDI was reduced to 1,850 minutes from 2,581 minutes

• System losses were improved to 11.74 per cent from 13.79 per cent

Sales of electricity at Sabah Electricity Sdn Bhd (SESB) registered RM807 million in FY2007 compared to RM703.5 million recorded in FY2006.

During the year under review, SESB had implemented the T7 programmes aggressively. There were eight T7 key initiatives that included -

1. Reducing generation cost2. Ensuring State Grid Interconnection projects were completed on time and within budget (Transmission)3. Improving transmission supply reliability - West Coast Grid (WCG)4. Improving transmission supply reliability - East Coast Grid (ECG)5. Reducing distribution system loss6. Improving distribution supply reliability & quality7. Improving revenue collection (ACP)8. Developing staff competency



During the year, Generation capacity was at 430.9 MW with maximum demand from throughout Sabah at 605 MW. Generation fuel mix at SESB as at 31 August 2007 is depicted here –

The total cost per unit, ie CPU, for all SESB and IPP plants in FY2007 was 17.1 cent/kWh (at corrected diesel price of RM0.495/litre and MFO price of RM0.420/litre). The overall units generated and expenses incurred were 3,908 GWh and RM670 million respectively. From these total figures, minor and rural stations contributed 1.6 per cent of the total units generated and 2.3 per cent from the total expenses incurred. In order to reduce the overall generation cost, the key initiative for the Generation Division is to focus on SESB major stations, all the IPP plants as well as the SESB mini hydro plants. The key steps to reducing generation cost have been to focus on the following:-

(a) Optimising power generation from hydro and gas plants.(b) Completion of IPP projects on time (SPBC and Powertron)

The IPP project Sepanggar Bay Power Corporation Phase 1 (66 MW) was completed in November 2006 while the East-West Interconnection was completed in July 2007. This allows energy from the West Coast to be exported to the East Coast, thus reducing units generated from the expensive gas turbine operations (running on diesel) at Tawau and Sandakan. The Kundasang power station was decommissioned in June 2007. On 28 July 2007, the East-West grid project was completed with the commissioning of the 275 kV lines from Kolopis substation to Segaluid substation. With the commissioning of the 246 km double circuit 275 kV lines, the state-wide Sabah Grid was formed linking the West Coast Grid (WCG) and the East Coast Grid (ECG). With this completion of the Sabah Grid, the system reliability will be improved and the production cost per unit lowered. This project is financed under the Eight Malaysian Plan.

Diesel IPP (Sutra)3.0%

Biomass IPP (THS)1.5%

SESB Hydro13.9%

Gas (SESB) 15.1%

Diesel (SESB) 12.8%

Gas IPP29.8%

MFO IPP23.9%


SESB is also undertaking new projects, one of which is the Kota Kinabalu outer-ring connecting Northern Town to Kepayan Substation that is expected to be completed by the end of 2007. Another new project is the extension of the transmission lines from Inanam substation to the Minintod substation expected to be commission by the middle of 2008.

During FY2007, SESB’s Transmission Division achieved the following -


0.347 0.1760.642

Targets and Objectives TargetKey Performance

Indicators / Measures

Achievement

Delivery Point Unreliability Index (DPUI)

System Minutes 46

System Average Interruption Frequency Index (SAIFI)

Interruption /Delivery Point

0.37

21.02 18.9968.56

WCG 01/9/06 to

27/7/07

Sabah Grid 28/7/07 to

31/8/07

ECG 01/9/06 to

27/7/07

SESB also completed the timely upgrading of transformer capacity from 2 x 7.5 MVA to 2 x 30/45 MVA at the Papar Substation on 4 February 2007.

During the year, a state control centre in Penampang Substation – State Load Despatch Centre (SCADA/EMS Systems) was completed in February 2007 has improved supply reliability. Under the key initiative to reduce system loss, Strike Force operations have been carried out in all twenty areas to check metering installations for Ordinary Power Consumers (OPC), mainly commercial, industrial and residential. Of the 12,646 covered by the operations in FY2007, 1,780 installations were found tampered. Random checking of Large Power Consumer (LPC) installations was also undertaken. With the combined measures, losses were reduced from 13.79 per cent to 11.74 per cent.



The key initiative to improve supply reliability saw several major 33 kV projects implemented to strengthen the distribution networks. The new 33/11 kV substations have provided new injection points to strengthen 11 kV distribution network. The major projects commissioned were -

The 11 kV projects such as the installation of auto-reclosers and the changing from bare to aerial cables, have also been implemented to improve supply reliability. A major maintenance exercise was carried out for all the PPUs. Distribution SAIDI was reduced from 2,581 to 1,850 minutes in spite of having more scheduled shut-downs during the year for more maintenance and system upgrades.

Today with a resource of 2,326 employees, SESB continues to develop its staff competency in order to enhance the productivity of the company. During FY 2007, the company conducted several workshops and training such as 5S, Management Tools, SWOT, AKP Assessor Course and many more for both the executives and non-executives. SESB also facilitated the opportunity for employees to be involved in quality improvement activities such as 5S, CFT and WIT. The company also conducted the Acid Test in June 2007 to evaluate the effectiveness of employee involvement. The AKP Score for SESB in this Financial Year is 700. The achievement in AKP will be the prime mover for SESB to step forward in achieving service excellence in the year 2012.

33/11 kV ABC System for Kalumpang – Balung – Wakuba, Tawau

Projects Completion Date

PPU Sim Sim, Sandakan

Supply Erection Testing and commissioning of new 33 kV ABC from PMU Segaliud

Erection Testing and Commissioning double circuit 33 kV U/G Cable & Optical Cable from SSU Sibuga to PPU Permai, Sandakan

19 May 2007

26 July 2007

12 April 2007

28 July 2007


Other Services


Other Services

Yayasan Tenaga NasionalTNB executes a major part of its corporate social responsibility through a trust body, Yayasan Tenaga Nasional (YTN), mainly in education sponsorship and welfare contributions.

For FY2007, YTN provided scholarships and study loans amounting to RM47.3 million to top and deserving students to pursue their tertiary education at local and world-renowned universities abroad. This is a direct contribution towards the development of professional manpower for TNB and the country. Since its inception, YTN has provided education sponsorship to more than 6,300 students.

YTN had also contributed RM1.36 million in FY2007 to community programmes such as the annual “Program Jejak Kegemilangan” and “Program Kem Remaja Bestari”.

During “Program Jejak Kegemilangan” held this Financial Year, 142 students with good academic results from rural areas and underprivileged families from all over Malaysia were selected for a study visit to Kuala Lumpur, including University Tenaga Nasional (UNITEN). The objective is to give exposure and inspire them to continuously achieve academic excellence.

“Program Kem Remaja Bestari” is essentially an educational camp programme for children of TNB employees as well as orphans. It is intended to guide and inspire participating students to perform well in public examinations such as the UPSR, PMR and SPM. About 1,550 students attended these annual camps, which were held simultaneously in four regional zones - North, South, East and Central, with the assistance of local TNB management. This programme has been implemented since 2001 and has a yearly budget of RM500,000.

To further its cause, other contributions made during the year included RM250,000 to the Ministry of Education for the setting up of Pusat Pendidikan Khas, Putrajaya for handicapped children RM250,000 to Institut Jantung Negara (IJN) Foundation to sponsor infant/young heart patients requiring surgery, RM200,000 to National Cancer Council (MAKNA) the Mobile Cancer Screening Programme (MCSP) and RM100,000 for the supply of selected electrical appliances to various orphanages with the purpose of improving their living conditions.


Other Services

Corporate

Communications

Corporate Communications as the custodian of TNBs image, branding and relationship management plays an important support services role to the Company. The Department drives various initiatives to enhance TNB as an ethical, caring and highly respected energy provider in Malaysia. It also implements various initiatives to foster a positive image among our stakeholders, in particular the Government, the media and the general public.

The Department is restructured into two units, Internal and External, streamlined with the goal of delivering effective communications in the most relevant manner. Internal Communication is responsible for communications with regards to TNB’s internal publics, events and sports management services, publications and website management. External Communications deals with media relations, branding as well as Government and Community Relations.

In support of the strategic initiatives undertaken by the Company such as T7 and SE 10/10, about 30 internal communication roadshows were held with the objective of creating awareness and of instilling commitment to all citizens of TNB to ensure the success and achievement of these strategic plans. These efforts were undertaken as all employees plays an important role as flagbearers of the Company, hence contributing towards strengthening the corporate image of the Company in the various roles that they play.

A total of 13 major corporate events such as opening ceremonies of TNB plants and premises were held during the year with the purpose of improving corporate image besides fostering relationships with the various stakeholders. The Department also organised various exhibitions as a platform to improve networking and to support the business expansion strategy. Some of the exhibitions that we have participated in won the Company a number of awards such as:-

• Best Show Award for Best New Services at ACM Expo and Exhibition 2006 held in September 2006

• Best Theme Booth for The 50th Merdeka held from 30 August to 2 September 2007 in Putra World Trade Centre, Kuala Lumpur

The Corporate Communications Department also made TNB proud with some achievements that included:

• NACRA Silver Award for TNB Annual Report 2005 (adjucated in 2006)

• Three IABC Malaysia Silver Quill Awards 2007 for the TNB Annual Report 2006

The Corporate Communications also oversees and implements the various processes deemed mandatory for the MS ISO 2001:9000 certification received by TNB in 2006. Beyond that it acts as the corporate complaints management centre, handling issues at the corporate level.

In essence, Corporate Communications continues to play an active role in supporting TNB’s strategic initiatives, adding intangibles values in terms of improved corporate image and relationship with important stakeholders.


Other Services

Productivity And Quality Management The Productivity and Quality Management Department (PQM) is tasked with the responsibilitiy of driving initiatives within the TNB Group to improve overall productivity and quality in line with the SE 10/10 strategy.

After five years of effort in bringing about change through it’s 32 key initiatives under the T7 strategy which ends on 31st August, 2007 this unit is currently developing a strategy called Service Excellence 10/10 .

Throughout the year there are ongoing efforts to review and improve existing processes. In addition to that PMU has embarked on steps to assist SESB in their efforts to obtain MS ISO 9000:2000 certification.

The AKP initiative continues to be carried out this year. Satisfactory results where the average achievement rose from 687 points to 728 points as compared to the previous year were recorded. Apart from using the AKP initiative to improve the business units, these results were also used as a benchmark in preparation for TNBs’ participation in the upcoming Prime Minister Industry Excellence Award.

So far TNB still continues it’s tradition towards excellence especially through WIT activities. The following are records of some WIT’s achievement throughout FY2007:

1. The “Anugerah Panca Satya” award – for the continued participation in the Indonesian Quality Convention since 2002.

2. “Anugerah Prisma Kategori 1” award– Gold Medal was conferred to the WIT named P-Power of SJ Pasir Gudang, Johor at the Indonesian Quality Convention 2006 in Bali Indonesia.

3. The “Johan Sektor Perkhidmatan” was conferred to a WIT named K-Power from TNBD Kuala Lipis Pahang at the National ICC Convention 2006 held at Genting Highlands from 19-21 September, 2006.

4. “Johan Sektor Perkhidmatan” and “Johan Keseluruhan” was awarded to a WIT named Circle Point, a WIT from TNBD Kuantan, Pahang at the National ICC Convention 2007.

5. Silver Award was awarded to K-Power, a WIT from TNBD Kuala Lipis Pahang at the International Convention of Quality Control Circles (ICQCC) 2007 in Beijing on 23-26 October, 2007.

Beginning this year, TNB also implemented 5S initiative which was launched throughout the organisation in June 2007.


Other Services

Internal Affairs

Internal Affairs at TNB has the key objective of reducing misconduct in the Company through managing, conducting and monitoring of disciplinary actions taken against employees. Reporting direct to the Board of Directors’ Disciplinary Committee, Internal Affairs is tasked with investigating, deciding prima facie, prosecution, conciliation, defending cases in industrial courts, research and development as well as educating and training TNB employees on matters of discipline.

During the year under review, the Whistle Blowing Procedure was introduced. The process for “caught red-handed cases” was also introduced. As a result of the various initiatives and efforts in FY2007, disciplinary cases at prosecution level were reduced to 109 from 158, reflecting a drop by 31 per cent.


Other Services


Occupational Safety& Health Report


Occupational Safety & Health Report

Introduction

The ever-changing environment of the workplace and the diversity of tasks to be undertaken especially during breakdowns and emergency situations, pose a great challenge to the Company and its personnels to ensure immediate restoration of electrical supply while making sure that safety issues are at the same time prioritised. Hence, as a saying goes, “No job so important, no task so urgent, that time cannot be taken to do the job safely“, means striking a balance which have to be met without compromise. In trying to meet all these challenges, the management of Occupational Safety and Health (OSH) has, within the operational processes, been able to effectively reduce losses due to unnecessary accident. TNB has put in place a comprehensive OSH management system base which resulted in certain stations being recognised and awarded prestigious OSH awards by governmental and non-governmental institutions.

Service Quality Enhancement

Management of OSH with the new structure within the divisions of TNB (that has been approved by the management since reported in the previous Financial Year) has brought tremendous improvement in OSH across the board. The numbers of qualified Safety and Health Officers (SHO) has been increased to ensure TNB’s readiness to accept and adopt any changes in the requirements of the government enforcement agencies. Second level Safety Inspectors (SI) and third level Safety Representatives (SR), were appointed to ensure OSH performance at the far end of the job chain, are monitored and reported to the management.

MS ISO 9001:2000 documents are being scrutinised further to ensure OSH requirements in processes and procedures are being incorporated in the OSH framework to ensure transparency of the management on these issues.


OSH Management System

The OSH Management System, aptly known as, the “Safety Excellence Management System, (SEMS)”, has gone a long way in managing OSH in TNB. Challenges from certification bodies to ensure best OSH performance, saw SEMS being further enhanced to meet these requirements. The system has been fine-tuned to meet the requirements of the OHSAS 18001:2000 and the MS 1772:2005, and various programmes are in place to adapt to new challenges.

Trainings are conducted continuously for all personnel requiring competency in managing, implementing and auditing as required by the system. ICT Division and TNB Engineering Corporation Sdn Bhd, has started their paces to achieve excellence, Tenaga Switchgear Sdn Bhd, has been handed their Baseline Report after a Baseline Audit conducted by the Occupational Safety, Health and Environment Department (OSHED), under the Group Human Resource Division.

OSH Excellence Award

In recognition of the diligent OSH management by TNB, the prestigious “Anugerah Kecemerlangan Keselamatan Pekerjaan”, was awarded to the best three ranking stations in the respective core divisions, the best in terms of over-all performance in distribution state and several best performance awarded to sub-division station. The standard of OSH management performance has continuously been reviewed to ensure new requirements of the law are always being incorporated into the system.

The National Award for OSH Excellence 2006 saw four stations being awarded comprising of three generation and one distribution stations. The stations, Stesen Janaelektrik Chenderoh and Stesen Janaelektrik Sultan Ismail Petra had received the Gold Award while Stesen Janaelektrik Tuanku Jaafar and TNB Distribution (Johore) received the Silver Award.

The Malaysian Society of Occupational Safety and Health Award 2006, saw, five generation stations being awarded in the utilities sector. Gold (Class II) Award was received by; Serdang Power Station (now known as Putrajaya Power Station), Stesen Janaelektrik Sultan Iskandar, Stesen Janaelektrik Tuanku Jaafar and Stesen Janaelektrik Jambatan Connaught and Silver Award was received by Stesen Janaelektrik Gelugor.



Emergency Response

In the effort to preserve life and assets, alertness and readiness for any crisis and emergency is the key factor. Planning for eventualities takes center stage with new threats coming from unexpected angles. New risks were identified and efforts were taken to ensure immediate response can be exercised should any threat arises. The Emergency Response Plan was reviewed and the latest techniques were sought from the market to ensure immediate response.

Emergency Response Personnel were trained by the best available training facility in the country and other personnel were trained to act safely during crisis.

OSH Awareness and Training

Top level management at the helm of TNB were given continuous exposure on OSH management knowledge by CEO’s and experts of leading OSH organisation. The commitment to drive TNB to world OSH excellence requires maximum effort on resources available. Thus, charting TNB’s course towards world’s best will be fully supported with the knowledge and experience gained.

All staffs are required to attend at least one day of training and exposure each on OSH while OSH practitioners were required to impart OSH knowledge. Continuous trainings, seminars, conferences, symposiums and workshops are identified for all levels, for participants to gain exposure on new developments in OSH. Trainers were also identified to assist the National Institute of Occupational Safety and Health (NIOSH) in their programmes that are related to the electrical utility industry.

Contractors working in TNB are made aware on the importance of OSH. The NIOSH-TNB Safety Passport was developed in a joint effort with NIOSH to ensure contractors are aware of the basic requirements of OSH. This programme will later be made compulsory to all contractors working in TNB. This programme is also conducted for field supervisors, to ensure cognisance and coordination of TNB’s efforts to eradicate ignorance of contractors on OSH matters.

The public was not forgotten in the quest to impart electrical safety knowledge. Schools, non-government organisation, industries and various associations were assisted on their request, to ensure safety in the use of electricity. Safety Campaigns were also carried out by divisions to involve all staffs as well as the public in the effort to discharge TNB’s corporate social responsibility.



Statement ofEnvironment

TNB is committed to achieving excellence

in environmental management. This is thus

part of our Corporate Social Responsibility in

preserving the environment for the benefit of

future generations

““


TNB’s Environmental Policy

• Protect, conserve and improve the environment in all of its operations and decision-making

• Comply with all applicable laws and regulations, and establish standards that will lead to continuous improvement of its environmental performance

• Implement an Environmental Management System (EMS) that will ensure all impacts on the environment from its operations are eliminated or minimised

• Carry out environmental audits at required intervals to ensure compliance with its Corporate Environmental commitments, and implement environmental training programmes for our employees to develop a high level of competency

• Promote environmental awareness amongst contractors, the public and other stakeholders and to make available the environmental policy to them

Some of the initiatives implemented during the year:-

A. Recycling Programme

The waste recycling and reduction programme was included in the EMS initiatives within respective divisions. Currently, most of the power stations are implementing an Environmental Management programme to minimise wastage and reduce consumption of resources. Some of the stations have also assigned Recycling Centres at strategic places in the station. Continuous staff awareness programmes were undertaken via staff monthly gatherings.

(i) Condition Monitoring Programme (CMP) : Transmission Division is continuously implementing CMP.

(ii) Recycling old power cables : Recycling old power cables was implemented via the Scrap Committee at each region. The recycling process of old power cables can be conducted upon approval from this committee. Usually, the committee will appoint a recycling company to handle the scrap materials for further processing.

Statement of Environment


Statement of Environment

B. Scheduled Waste Disposal

TNB Scheduled Waste Management programme has been implemented to comply with the Environmental Quality (Scheduled Wastes) Regulation 2005. Scheduled wastes include all waste generated periodically that requires disposal by DoE-registered contractors.

All scheduled wastes generated are notified to DoE and temporarily stored at Scheduled Waste Store prior to disposal. EMR is responsible to record, monitor, and manage wastes generated at their respective units.

C. Environmental Management Plan

i) Environment Monitoring Programme

The Environmental Management Plan was conducted as per requirements for licences under the Environmental Quality Act, 1974 or in accordance with the specific DoE’s Detailed EIA or EIA approval conditions for the respective power stations. In general, the monitoring programme focused on monitoring the air quality, water quality and boundary noise level.

TNB is continuously installing efficient and environmentally friendly equipment as well as the Continuous Emission Monitoring System (CEMS) in the new power stations.

ii) Coal Dust Study

TNB Research Sdn Bhd has designed and developed a Laboratory Scale Gasifier and is currently performing tests on coal gasification using various types of coal in the gasifier. The results of gasification can help researchers increase their understanding and knowledge of the gasification process in general.

D. Halon Replacement

The halon replacement programme is among the key focus areas of the Network Maintenance (NM) Department of Transmission Division. Gradual halon gas replacement with new approved gas in the existing fire fighting system is implemented under the NM department’s 2004 - 2008 Business Plan.


E. Environmental Audits And MS ISO Certification

All the power stations have a complete set of MS ISO 14001 documentations and are currently implementing EMS based on the standards. Recently, Manjung PS had also received MS ISO 14001 certification from SIRIM QAS. It was the 11th power station to achieve MS ISO 14001 certification.

Annual Environmental Management Audits or EMS based on MS ISO 14001 are conducted at all power stations by TNB Generation Division auditors (GRMU). The EMS reassessment audit is conducted once a year by SIRIM QAS International.

F. Crisis Management

The Disaster Team is represented by the Emergency Response Team which is the main component of the TNB Safety Excellence Management System (SEMS) which is implemented at all divisions.

SEMS will identify every possible emergency that can happen in the division business activities and consequently an Emergency Response Plan is developed as mitigation measures.

All divisions also conduct an annual ERP exercise that involves all staff and relevant authorities and agencies.


TNB recognises that effective risk management is the key element in the Company’s overall strategy with a focus on the on-going implementation of an Enterprise-Wide Risk Management (EWRM) framework to ensure that the major areas of risks are managed and controlled effectively.

The EWRM framework ensures a uniform application of risk management across the Group through standardised risk management processes and Group-wide exchange of risk information.

Enterprise-Wide Risk Management Framework

The TNB EWRM framework sets the foundation for a structured risk management framework that consists of a complete cycle involving risk assessment, reporting, treatment, monitoring and review of the business risks within the Group.

Enterprise Wide Risk Management


Enterprise-Wide Risk Management

Risk Management Policy

The TNB EWRM Policy has been reviewed and amended accordingly to further enhance the effectiveness of the framework. This policy that has been approved by the BAC aims at achieving the following:

• simplifying the Content Structure and the EWRM Policy Summary;• incorporating the Group Risk Management Working Committee (GRMWC) Roles and

Responsibilities, Risk Manager and Risk Coordinator Roles and Responsibilities;• extending the applicability of the Policy to major projects and all new business ventures other

than operations;• establishing of the Divisional Risk Management Committee or utilisation of existing Divisional

Management Committee to discuss risk management issues at the Operating Divisional level; • Approving authority on amendments of the EWRM policy and procedures at the Group Risk

Management Committee (GRMC) and the Group Risk Management Working Committee (GRMWC);

• revising the regularity of reporting for GRMWC.

Risk Management Structure

The EWRM framework requires that a risk management structure be adopted to ensure that roles, responsibilities and accountabilities for managing risk are clearly defined and communicated. The risk management structure comprises various levels of authority in the Group i.e. the Board of Directors, Board Audit Committee, Group Risk Management Committee (GRMC), Group Risk Management Working Committee (GRMWC), Enterprise-Wide Risk Management (EWRM) Department and TNB Operating Divisions.

BOARD OF DIRECTORS

BOARD AUDIT COMMITTEE

Group Risk Management Committee (GRMC)

Group Risk Management Working Committee (GRMWC)

EWRM Department Group Internal Audit

ManagementServices

CoreBusiness

Non-CoreBusiness


Risk Assessment Process

In supporting the framework, the Group Wide Risk Assessment Process was also established to standardise the risk management methodology used throughout the Group which focuses on risk assessment, risk treatment, risk reporting as well as risk monitoring and review. In order to ensure the comprehensiveness of the risk assessment process and that the principal risks that may materially affect the business are considered, several broad risks areas which comprise of Governance, Operational, Financial, Technology, Integrity, Compliance, Preparedness, Environment, Reputation, Human Resources and Management Information are evaluated.

Risk Profile Review and Verification

Risk profile review and verification sessions for the TNB’s operating divisions have been carried out to validate the changes made to the operating risks as well as to ensure that all risk profiles remain aligned with the present TNB’s business strategies and objectives in the Financial Year. More than 30 sessions analysing more than 75 risk profiles were carried out by the EWRM Department together with the relevant Risk Managers and Risk Coordinators as well as Risk Owners.

In addition, risk profile development activities are carried out continuously to be consistent with the objectives of EWRM framework to ensure that comprehensive risk identification and assessment efforts are carried out across the Group.

Risk Communication Risk communication, being one of the important elements in the EWRM framework as it focuses on the dissemination of risk information at all levels, forms an integral part of the risk management activities in TNB.




Risk Coordinators Forum

Two Risk Coordinator Forums were organised and used as a platform to communicate decisions made by GRMWC, GRMC and BAC to the risk managers and risk coordinators, brainstorm the way forward on risk related issues and highlight as well as resolve issues faced in the process of implementing the EWRM framework. The forums held in this Financial Year were attended by risk managers and risk coordinators as well as senior management across the Group. External speakers from other GLCs were invited to share their experiences on the implementation of enterprise risk management.

EWRM Website

The EWRM website has now been integrated into the revamped Group Finance website and is currently being finalised to be published.

Risk Analysis

A risk analysis was carried out on risk of accidents in TNB focusing on areas causing fatality and bodily injury to TNB personnel. The recommendations had been presented and approved by GRMWC, GRMC and BAC and are being implemented at various levels. The risk analysis paper had also been presented at two safety conferences in TNB.

As for the risk analysis that has been previously carried out i.e. legal and fraud risks in TNB, the implementation of the recommendations are at a mature stage and some of the recommendations have been completed i.e. TNB Code of Ethics and Whistle Blowing procedures are currently being communicated down to all levels in TNB while the legal risks taskforce has identified the top three contributing factors to TNB’s legal risks exposures.

TNB Risk Information System

TNB Risk Information System Phase 2 involving enhancement to the system had been successfully rolled out to all divisions and relevant trainings was provided to all.


Streamlining of Risk Management Activities with Key Activities/ Processes The approved process of streamlining the risk management activities with business planning and budgeting has been implemented to ensure that controls and mitigation plans for risk management are built into the business plans, budgets and key performance indicators of the Group.

Development of Curriculum for Risk Management

To further enhance and inculcate the risk management culture in TNB, EWRM has developed the first EWRM Awareness Module with guidance and cooperation from our trainning centre, ILSAS. In view of this, a few Divisional Risk Managers/Coordinators and EWRM personnel had been trained as Certified Trainers. The module will officially be made a part of the training module in ILSAS and is targeted to be implemented in FY2008.




The TNB Chief Financial Officer/ Chief Risk Officer delivering the welcoming address at the TNB Risk Coordinators’ Forum.

Corporate Emergency Response Plan (CERP)

Preparedness

The TNB CERP Steering Committee deliberated on several matters including the compilation, printing and distribution of the TNB CERP Document – System Related which has been printed and distributed to critical personnel within TNB. An awareness training programme was also carried out for the relevant personnel throughout TNB and SESB. The training programme would be extended to all wholly-owned subsidiaries in Peninsular Malaysia by the next Financial Year.

Collaboration with External Parties / Government Agencies

As an essential service and crucial towards TNB ensuring a potent state of National Security, continues to collaborate with external parties and various Government Agencies in particular the National Security Department and the National Security Council in the Prime Minister’s Department and the Ministry of Health.

TNB participated in the “Pameran Sempena Seminar Sasaran Penting” organised by the Chief Government Security Officer with the Ministry of Internal Security Malaysia, aimed at creating awareness and furnishing information on all government and private agencies that are listed as Critical Installations.

Most of the generation power stations have carried out scheduled mock drills and as the secretariat of TNB CERP, EWRM has participated in these exercises.

Generation Division had activated their annual ‘OPSTRANG’ exercise aimed to:-

• ensure that all black start diesel generators are able to run and synchronised to bars

• assess the Power Stations readiness in responding to emergency or crisis situations

• test the communication system for all power stations, and

• test the activation of the operations rooms at all power stations.

TNB also participated in the Chemical, Biological, Radiation and Nuclear Awareness Programme which was organised by the Crisis and Disaster Management Division, National Security Council, Prime Minister’s Department following which a mock drill was carried out at the KLCC LRT Station.

Transmission Division, with Generation and Distribution Division had successfully conducted two Blackstart test Communication drills at KLPP in January 2007 and at Putrajaya in July 2007. The purpose was to ensure good coordination with all parties especially power stations,Transmission Division and Distribution Division.


CorporateCalendar

1. 4 September

TNB held the TNB Staff Gathering

in conjunction with its 57th

Anniversary at TNB Headquarters.

2. 6 September

TNB honoured the top

management retirees at a

special function “Majlis Jasamu

Dikenang” at KL Hilton Hotel,

Kuala Lumpur.

September 2006September 2006

1. 3 October

TNB organised “Majlis Berbuka

Puasa 2006” at the Balai Islam,

TNB Headquarters.

2. 19 October

Launching of TNB Hari Raya

Television Commercial 2006

- “Majlis Semanis-manis Dodol

Manis Lagi Dibuat Bersama” at TNB

Headquarters.

October 2006October 2006

1

2

1

2


Corporate Calendar

1. 4 November

TNB held the 2006 Deepavali

Celebration at TNB Sports

Complex, Kuala Lumpur.

2. 16 November

TNB held the 2006 Hari Raya

Aidilfitri Celebration at TNB

Sports Complex, Kuala Lumpur.

3. 21 - 23 November

TNB participated in the Asia

Pacific Regional Conference &

Exhibition at Sunway Convention

Centre, Petaling Jaya, Selangor.

November 2006November 2006

1. 12 December

4th T7 Review Session held at

Hotel Armada, Petaling Jaya,

Selangor.

2. 14 December

TNB held its 2006 Annual General

Meeting at TNB Sports Complex,

Kuala Lumpur.

December 2006December 2006

1

2

3

1

2


Corporate Calendar

1. 17 January

TNB’s Connaught Bridge Power

Station celebrates its achievement

of 200,000 Equivalent Operating

Hours (EOH) on two SIEMENS

branded V94.2 gas turbines at

Connaught Bridge Power Station.

2. 19 January

TNB held the 2007 New Year Staff

Gathering at TNB Sports Complex,

Kuala Lumpur.

3. 24 - 25 January

SIRIM conducted MS ISO 9001:

2000 Surveillance Audit for

TNB Corporate Level, at TNB

Headquarters.

January 2007January 2007

1. 5 February

TNB held Occupational, Health

and Safety Seminar for TNB Top

Management at Holiday Villa,

Subang Jaya, Selangor.

2. 23 February

“Soft Launching and Awareness

Session” of Prime Minister’s

Industry Excellence Award at Bilik

Kenyir, TNB Headquarters.

3. 26 February

TNB held the 2007 Chinese New

Year Celebration at TNB Sports

Complex, Kuala Lumpur.

February 2007February 2007

1

2

3

1

2

3


Corporate Calendar

1. 9 - 11 March

TNB-Singapore Power Friendly

Games held in Kuala Lumpur.

2. 20 - 21 March

TNB participated in the Vendor

Network Programme organised

by the Ministry of Entrepreneur

and Cooperative Development

(MECD) at Kuala Lumpur

Convention Centre.

March 2007March 2007

1. 5 April

TNB Switchgear Factory’s opening was

officiated by Y.Bhg. Dato’ Seri Rafidah

Aziz, Minister of International Trade

and Industry.

2. 30 April

Official Opening Ceremony of Sultan

Azlan Power Station, Manjung by

DYMM Sultan Perak.

April 2007April 2007

1

2

1

2


Corporate Calendar

1. 5 May

TNB won four awards - the

“Anugerah Harapan Majikan

Berdaya Saing kategori Industri

Besar”, “Anugerah Tokoh Pekerja

Lelaki (Bukan Eksekutif)”, “Anugerah

Tokoh Pekerja Lelaki (Eksekutif)”

and “Anugerah Harapan Tokoh

Pekerja Lelaki (Bukan Eksekutif)”

at the National Labour Day 2007

celebration held in Putra Stadium,

Bukit Jalil, Kuala Lumpur

2. 15 May

TNB recognised 471 long serving

staff at the Long Service Award

Ceremony for Eastern Region at

Hotel Grand Riverview, Kota Bharu,

Kelantan.

May 2007May 2007

1. 1 - 3 June

TNB participated in the 4th

International Trade Exhibition

& Conference ‘Enterprise Asia

2007’ at Putra World Trade Centre

(PWTC), Kuala Lumpur.

2. 5 - 8 June

TNB participated in SMIDEX

2007 Exhibition at Kuala Lumpur

Convention Centre.

June 2007June 2007

1

2

1

2


Corporate Calendar

1. 13 July

TNB announced its Third Quarter

Financial Results for FY 2007

at the Analyst Briefing at TNB

Headquarters.

2. 14 July

TNB organised Corporate TNB Family

Day 2007 at TNB Sports Complex,

Kuala Lumpur.

3. 23 July

Launching of TNB Code of Ethics and

Whistle Blowing Initiative at TNB

Headquarters.

July 2007July 2007

1. 4 August

TNB participated in the “Majlis

Bersama TNB/GLC dan Persatuan

Pekedai Barang-Barang Lusuh

Malaysia” at TNB Sports Complex,

Kuala Lumpur.

2. 23 - 25 August

“Majlis Tilawah Al-Quran TNB

Peringkat Kebangsaan” held at

Intekma Hotel @ UITM Shah Alam,

Selangor.

3. 30 August - 2 September

TNB participated in the 50th Merdeka

Expo at Putra World Trade Centre

(PWTC), Kuala Lumpur.

August 2007August 2007

1

2

3

1

2

3


Financial Calendar

Quarterly Results Announcement Date

First Quarter ended 30 November 2006

25 January 2007

Second Quarter ended 28 February 2007

16 April 2007

Third Quarter ended 31 May 2007

13 July 2007

Fourth Quarter ended 31 August 2007

25 October 2007

Distribution of Annual Report 21 November 2007

Seventeenth Annual General Meeting 13 December 2007

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