Strategic and Financial Matters
1) In the Chairman’s Statement, it was stated that PGB was further entrusted by PETRONAS to develop two additional LNG Regasification terminals at Pengerang, Johor and LahadDatu, Sabah. When would these regasification terminals be expected to be fully commissioned and what is the maximum send-out capacity of these terminals?
Targeted completion date for both projects is in 2015.
We are currently conducting preliminary design work on Pengerang and LahadDatu regasification facilities. The maximum capacity for both facilities is dependent on customers’ demand which is yet to be finalised.
2) Implementing Third Party Access (“TPA”) will enable parties other than PETRONAS to utilise available capacity in the Peninsular Gas Utilisation gas pipeline system for gas transportation to end customers. How significant would the implementation of TPA contribute to the revenue of PGB?
PGB Third Party Access (TPA) will enable interested parties other than PETRONAS to bring in their own gas through our LNG Regasification facilities and transport the gas using our PGU pipeline to their customers.
There are potential third parties to come into the system with the liberalisation of the gas price as announced by the Government and introduction of RGT facility.
The expected contribution from TPA and LNG Regasification Terminal in Melaka is up to 13% of revenue and profit upon full capacity being utilised.
3) PGB has ventured into power production via Kimanis Power Sdn. Bhd. (“KPSB”) in Sabah. What are the Group’s plans in regards to its venture into independent power production?
PGB intends to leverage on experience in owning and operating a gas fired power plant and will continue to explore growth opportunities relating to gas processing, gas transportation, utilities, LNG regasification and gas fired power plant whether domestically or overseas.
Corporate Governance Matters
2) We would like the Board to evaluate and address the following issues as well as disclose its view on (a) and (b):-
(a) Reinforce independence
i) As stated in the Malaysian Code of Corporate Governance 2012 (“MCCG 2012”), the board must comprise a majority of independent directors where the chairman of the board is not an independent director.
We take note of the Malaysian Code of Corporate Governance 2012 (“MCCG 2012”), in particular where the Board must comprise a majority of independent directors where the Chairman of the Board is not an independent director. We will study this recommendation in detail. Currently, the Company is in compliance with the Main Market Listing Requirements (“MMLR”).
ii) Formalise a policy on succession planning, evaluating the directors credentials and ability to serve effectively in the interest of shareholders including the tenure limits for independent directors in view of the fact that two of the directors have served on the Board for more than nine years exceeding the cumulative term of up to nine years tenure limit recommended under MCCG 2012.
In respect of our independent directors, we wish to highlight that there is only one (1) director i.e Dato Sadasivan who has served the Board as an independent director for more than nine (9) years. Encik Muri bin Muhammad has only served as an independent director since 14 February 2008 and hence his tenure as an independent director has not exceeded nine (9) years.
(b) Gender Diversity
Addressing and formalising the approach to gender diversity and actions taken to meet the target of 30% women directors and also discloses it in the Annual Report.
In respect of the issue of formalizing a policy on gender diversity in our boardroom, please be advised that the Board is rigorously looking into infusing the Board’s talents based on merits including skills, knowledge and experience at the appropriate time and the composition is irrespective of gender.
3) On the disclosure of directorships of directors in public listed companies, as required by the Main Listing Requirement Appendix 9C, Part A (3)(e), we note that Dato’ Abdul Halim bin Mohyiddin sits on 10 public listed companies but was disclosed as five. We would like the Board to examine this and state why this was so.The Board should set out expectations on time commitment for its members and protocols for accepting new directorships to ensure that each director can effectively contribute their time and efforts in the companies they represent.
In respect of directorships of Dato' Ab Halim Mohyiddin, we wish to confirm that Dato’ Ab. Halim sits on the board of 10 public listed companies. The disclosure in his Director's Profile regarding this matter was by no means intended to be exhaustive. Nevertheless, we wish to emphasize that the number of directorships held by Dato’ Ab Halim is in compliance with paragraph 15.06 of the MMLR.