Petronas Dagangan BHD Ar 2019

PETRONAS DAGANGAN BERHAD INTEGRATED REPORT 2019
“We are committed to add value to our customers

through continuous improvement of our daily
operations. To this end, we are investing in digital
solutions that are crucial to elevate operations
efficiency and productivity.”
OUR KEY OPERATIONS

MOHD SHOBRI A. BAKAR
Head, Supply and Distribution Division
VALUE CREATED BY OUR KEY OPERATIONS
WHO WE ARE AND WHAT WE DO

Reliability
The Supply and Distribution Division is
Safe, timely and reliable product delivery to our customers
responsible to ensure an uninterrupted
end-to-end supply chain to deliver
products to our costumers in a safe,
timely and reliable manner. Create
Cost optimisation along our value chain and increase
From product sourcing to product profitability
delivery, we support our business lines
and customers through strategic planning,
effective distribution channels and an
extensive network of supply via our 38 @
Network
terminals across Malaysia. Long-term partnerships with various stakeholders
Over and above this, we strive to create

value for our customers through our cost
optimisation efforts and unsurpassed Cultivate
services, while ensuring our HSE standards Cultivate capabilities and good culture behaviour of
are not compromised. employees and contractors
Innovate
Add value to our business lines and customers through
process simplification and digital solutions.
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MOVE LIKE NEVER BEFORE
OUR KEY OPERATIONS
KEY ACHIEVEMENTS
OPERATIONAL EXCELLENCE RESULT 2 (OER2) IS A METHODOLOGICAL APPROACH TOWARDS

STRENGTHENING OPERATING DISCIPLINE. THIS FOCUSES ON IMPROVING WORK PROCESSES,
MANAGEMENT SYSTEM AND BUILDING EMPOWERMENT FOR FASTER DECISION MAKING.
Embarked on OER2 to improve Operating Improved On-Time Performance Index

Discipline by 23.9% to 1.8
Reduced: Maintained Inventory Days at the

• Primary Distribution cost by 14.3% optimum level of 8.2 days
• Secondary Distribution cost by 2.7%
CHALLENGES
Challenges Our Response
1. Exposure to HSE risk due to • Continuous compliance to HSE standards in all our operations
the inherent nature of the
• Heighten safety and compliance culture amongst to dealers, contractors
Company’s operations (i.e.
and hauliers
highly flammable products
and transportation hazard)
2. To ensure uninterrupted • Optimisation of fleet schedule to achieve timely delivery at the most
product supply across the efficient cost
value chain and consistent
• Ensure efficiencies of products ordering system (i.e. e-service system)
delivery of quality product
and readiness of road tankers to deliver products at all times to avoid
supply disruption
3. Increasing operating and • Continue to re-negotiate term charter contracts and land lease rates
logistic costs impacting
• Optimise vessel term and spot charter utilisation
profitability
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OUR KEY OPERATIONS

BUSINESS HIGHLIGHTS
STRATEGIC STRATEGIC
KEY INITIATIVES RESULTS
PRIORITIES OBJECTIVES
1. To ensure a. Inaugural Supply and Distribution Division a. Enhanced emergency response

continuous Emergency Response Team Competition preparedness among Emergency Response
compliance with b. Transportation safety: Team members at terminals
high HSE standards • Enhance the implementation of various b. Improvement of 87.0% on our Rakan
among employees safety initiatives Khidmat Penghantar achieved category A
and contractors rating
• ‘Safe Delivery’ campaign to sustain and
SRE improve Health, Safety, Security, and
Environment performance
SAFE
2. Accreditation for a. Distinct demonstration of safe systems of a. Awarded 17 Gold awards by the Malaysian
Excellent work and generative HSSE culture throughout Society for Occupational Safety & Health
Occupational Health terminal operations b. Zero major HSE incident across terminals
and Safety b. Strict adherence to HSE Management Systems
Performance with effective First Line of Assurance
1. Margin improvement a. Integrated Inventory Management to minimise a. Sustained optimum inventory levels below
exposure to price volatility 9 days
b. Forecasted product availability through end- b. Zero stock out incident at terminals
SRE to-end visibility and data automation
RELIABLE 2. Ensure reliable and a. Rationalisation of fleet size to meet business a. Improvement of 99.3% timely product
timely product requirements delivery
delivery
1. Improvement of a. Enhanced Operating Discipline towards World a. All Southern Terminals have passed the OER2
Operational Class competitiveness and empowered Initial Implementation Assessment by achieving
Discipline organisation through OER2 initiative 90.0% for both Maintain Facility Work Process
b. Proactive equipment maintenance to reduce and Operate Facility Work Process within 3
downtime months instead of the 6-month standard
practice
SRE
b. Improved equipment efficiency by 3.0%
EFFICIENT
2. Cost Optimisation a. Re-negotiate vessel charter rates and a. Reduced primary distribution cost by 14.3%
optimise utilisation
b. Optimise fleet utilisation through improved b. Lower secondary distribution cost by 2.7%
load size and effective route planning
GPW
For more information on Great Place to Work, please refer to Driving Sustainability on pages 166 to 181 of this <IR>
GREAT PLACE
TO WORK
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For more information on Digitally Enabled, please refer pages 74 to 75 of this <IR>
DIGITALLY
ENABLED
OUTLOOK
Moving forward, Supply and Distribution will continue to create seamless and frictionless customer experience
by focusing on continuous improvement and implementing OER2 at other terminals to ensure we deliver
sustainable competitive advantage for the Company.
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“Our achievements in 2019 are the result of putting the

customer’s first mindset in everything we do. We pushed
boundaries, created new, innovative products and
experiences, and Move Like Never Before in our efforts
to truly create a seamless and frictionless experience
for our customers. The introduction of our new PRIMAX
95 with Pro-Drive provided our customers with an
exceptional fuel that delivers a smooth, responsive, and
efficient experience. We continue to challenge ourselves
to create better products, services, and experiences in
both the physical and digital space.”
RETAIL
KHALIL J MURI
Our Retail Business offers FUEL AND NON-FUEL Head, Retail Business Division
PRODUCTS AND SERVICES to consumers through
our network of more than 1,000 PETRONAS stations VALUE CREATED BY OUR RETAIL BUSINESS
and 700 Kedai Mesra nationwide.
• FUEL segment comprises premium products,
developed in partnership with the Mercedes-AMG
Quality
PETRONAS Formula One™ team which include
PETRONAS Primax 97 with Advanced Energy World-Class Quality Fuel and carefully selected non-fuel
Formula, PETRONAS Primax 95 with Pro-Drive, solutions for our customers
PETRONAS Dynamic Diesel (B10) and PETRONAS
Dynamic Diesel Euro 5 with Pro-Drive. Value Proposition
• NON-FUEL segment comprises on-the-go
Superior financial returns through stringent and selective
consumer products and services which include
investment
our partnerships with Quick Service Restaurants,
food solutions including our own Makan@Mesra,
Innovate
banking facilities, hypermarts, terminal services,
courier services, car wash and other convenience Provide seamless and frictionless experience to customers
offerings through the KEDAI MESRA. In by leveraging digital technology
supporting the Retail business, we reward our
loyal customers through the PETRONAS Mesra Diversity
Loyalty Programme.
Wide range of offerings via multiple channels to provide
• SETEL® is Malaysia’s first mobile application that
better option for consumers
creates seamless on-the-go refuel and retail
experience for PETRONAS customers. Setel® will
definitely ease the typical pain points faced by Nurture
customers when fueling at petrol stations. Provide local economic opportunities through
• ROVR, the 1st mobile refuelling service in Malaysia, employment, business partnerships and entrepreneurship
beyond conventional petrol stations.
• All PETRONAS stations are operated by RAKAN Cultivate
NIAGA, who are appointed through a stringent
selection process and provided with continuous Cultivate capabilities of our workforce, Rakan Niaga and
training. Retail Business manages PETRONAS business partners
stations via two categories of dealerships –
COMPANY-OWNED, DEALER-OPERATED and @
Network
DEALER-OWNED, DEALER-OPERATED.
Maintain long-term partnerships with stakeholders
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RETAIL
KEY ACHIEVEMENTS
Recorded higher sales volume Upgraded: Introduced Makan@Mesra

of 7.0%
• PETRONAS Primax 95 with
Pro-Drive Euro 4M ahead of
Launched: Government gazetted date New food solutions and
• New PETRONAS Primax 95 with enhanced offerings at Kedai
Pro-Drive Setel® expanded to >300 Mesra
stations and demonstrated
• ROVR, the 1st mobile refuelling
strong customer traction
service in Malaysia.
evident through more than
Revenue (RM million)
• Mesra Redemption portal which half a million users, high NPS
Year
enables customers to redeem and recognised as the top 5
loyalty points beyond fuel application in Malaysia RM14,214.4
2019
• Developed in-house SHIFT
portal, an online platform that Strengthened existing
2018
facilitates ordering, tracking partners collaboration
RM13,911.2
and ensure timely product and established ~90 new
replenishment at Kedai Mesra strategic partnerships
CHALLENGES
Intense competition in a • Launched a superior quality fuel, the new PETRONAS Primax 95 with Pro-Drive
mature market
• Leveraged innovation and digital solutions to create seamless and frictionless
experience
• Focused and targeted marketing campaigns to attract customers
• Increased attractiveness and flexibility of loyalty programmes
• Enhanced offerings and established strategic partnerships
Customers experience • Maintain Cleaner, Brighter and Safer Ambience at stations through assets refresh
may be and timely maintenance programme
affected if facilities or
• Ensure consistent delivery of service through training programmes for Rakan Niaga
services are not
and Krew PETRONAS as well as regular compliance checks at stations
consistently reliable
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RETAIL
We aim to provide the best products and services at our stations to keep delighting our customers through implementation
of station transformation programme. Under this programme we focused on ensuring we deliver superior customer experience
in a consistent manner based on the following key value propositions:
OUR TRANSFORMATION OF PETRONAS STATIONS FOCUSES ON FIVE KEY VALUE PROPOSITIONS
Ensuring a Cleaner, Creating Improving Providing Delivering

Brighter and Safer Convenience Customers’ Hassle-Free Quality
Ambience at the for Customers Turnaround Services Fuel
Stations Time
BUSINESS HIGHLIGHTS
STRATEGIC STRATEGIC
1. Elevate delivery of a. Launched new PETRONAS Primax 95 • Achieved PETRONAS Primax 95 with
customer with Pro-Drive Pro-Drive volume growth of 9.0%
experience
b. Increased Setel® availibility to more • Setel® expanded to >300 stations and
stations demonstrated strong customer
traction evident through more than
half a million users, high NPS and
recognised as the top 5 application in
Malaysia
c. Introduction of ROVR • 9 ROVR mobile trucks serving B2B

customers
ML
d. Enhanced offerings at Kedai Mesra • Multi-fold increase of Kedai Mesra
MARKET income from new Mesra concept
LEADERSHIP
including new Makan@Mesra,
Mesra-Bites range and improved
food solutions
e. Established new strategic partnerships • Secured ~90 new partners
f. Launched Mesra Redemption Portal • Mesra points redeemable with 81

expand beyond fuel partners
2. Having the right a. Grow PETRONAS stations network at • Operationalised 8 new stations
station at the right strategic locations
place
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RETAIL
STRATEGIC STRATEGIC
3. Attract traffic to a. Collaborate with Rakan Niaga to • Fuel volume and non-fuel income
the stations conduct active customer increased by 7.0% and 6.0%
engagements and localised respectively as compared to 2018
promotions
MARKET
LEADERSHIP
(CONT’D) b. Implement targeted and impactful • NPS score of 75.0% and Top of Mind
marketing campaigns improved by 2.0% from last year
which indicated stronger brand
presence in the market
1. Ensure ‘Clean, a. Uplift assets through aggressive asset • Completed asset refresh and
SRE Bright and Safe’ refresh programme refurbishment works at close to
ambience at 70 stations and 50 Kedai Mesra,
SAFE, RELIABLE stations For more information on Safe, Reliable respectively
AND EFFICIENT
And Efficient, please refer to Our Key
Operations on pages 58 to 60 of this <IR>
GPW
GREAT PLACE
TO WORK
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DIGITALLY
ENABLED
OUTLOOK AND PROSPECTS
As public transportation, ride hailing services and energy efficient vehicles gain a stronger foothold in Malaysia,
demand for conventional fuels may be affected. We are however prepared for these market disruptors as
we continue to strengthen our product quality, branding and enhance customers experience at PETRONAS
stations with reliable facilities, superior fuel products and attractive lifestyle-based offerings all delivered at
a consistently high level of service. These products and services will be supported by our best-in-industry
customer loyalty programme as well as a growing e-commerce and digital presence.
64
“Our Commercial Business continues to build on our strengths and

we achieve a record high financial performance for FY2019. We also
increased total sales volumes for the year by securing new supply
contracts, despite the competitive business environment. This
remarkable performance was delivered through intensifying our focus
on customer-centricity to provide our clients with an unrivalled level
of service. Moving forward, our Commercial Business will focus on
accelerating the pace of executing our growth strategy and we will
continue to build synergies that allow us to cross-sell our products
and services with PDB’s other business segments. To deliver on these
goals, we will continue to Move Like Never Before in the year ahead.”
COMMERCIAL
RAMZULHAKIM RAMLI
Head, Commercial Business Division
VALUE CREATED BY OUR COMMERCIAL BUSINESS
Commercial Business handles a diversified
portfolio of products from PETRONAS refineries
that cater to various industries and market
segments. We are responsible for the sale and Create
marketing of bulk petroleum products and their
Commanding market position with solid financial returns
uninterrupted supply to customers throughout
the country.
We offer a wide range of quality fuel solutions Diversify

such as Diesel, Jet A-1, Fuel Oil, Bitumen,
Quality products and services to fulfil customers’ demands
Gasoline, Kerosene, Petroleum Coke and Sulphur
to various market segments namely
manufacturing, aviation, power, oil and gas
exploration, agriculture, fishery, construction, Cultivate
timber, marine and transportation.
Cultivate capabilities of business partners
Commercial Business is the leading player in the
domestic market with the key competitive
advantage of an extensive distribution network Diversity
including terminals, storage and transportation
to reach and serve the commercial sector Wide range of offerings via multiple channels to meet
nationwide. consumers’ needs
@ Network
Maintain long-term partnerships with stakeholders
65
COMMERCIAL
KEY ACHIEVEMENTS
Volume growth of 4.2%
Revenue (RM Million)

Year
Increased market leadership whilst RM14,248.0
cementing our position as a reliable and 2019
trusted fuel supplier
2018
RM14,272.9
Preserved long-term strategic partnerships
CHALLENGES
Intensifying competition and • Strategic Channel Management enabled us to navigate challenges and
decline in Diesel demand due sustain Diesel’s performance as a significant contributor to the Commercial
to the deferment of major Business portfolio
infrastructure projects
Penetration of fuel-efficient • Acquired new airlines supply contract and strengthened relationships with
technologies in the aviation existing airlines through differentiated offerings
industry impacting our aviation
• Leveraged extensive presence at airports nationwide and proven track
fuel sales
record as a reliable and credible aviation fuel supplier
International Marine • Ensured and strengthened supply continuity to the remaining markets which
Organisation 2020 regulation are exempted from both regulations
which limits sulphur content
• Leveraged comprehensive supply capability to cement position as a trusted
and the enforcement of Clean
and reliable bunker supplier of Low Sulphur Fuel Oil (LSFO) meeting IMO
Air Regulation Act will cause a
2020
shift towards cleaner fuels
66
COMMERCIAL
BUSINESS HIGHLIGHTS
STRATEGIC STRATEGIC
1. Customer’s 1st a. Elevate customer experience by • Improved customer satisfaction and

mindset providing high quality services and increased retention
solutions
2. Grow domestic a. Pursue acquisition of new supply • Grew aviation volume by 4.3%
market leadership contracts with airlines
• Expanded Aviation offshore business
ML
to regional countries
MARKET
LEADERSHIP b. Maintain strategic alliances to • Ensured long-term continuity of
strengthen position in selected Bitumen sales
markets
c. Optimise sales channel and expand • Volume growth of 7.2% for Diesel
into new market to maximise values
SRE
For more information on Safe, Reliable and Efficient, please refer to Our Key Operations on pages 58 to 60 of this <IR>
SAFE, RELIABLE
AND EFFICIENT
GPW
GREAT PLACE
TO WORK
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DIGITALLY
ENABLED
Looking ahead, we expect competition in our markets to continue to increase and new regulations will
necessitate consumers to switch to using cleaner fuels particularly in the marine sector. As we navigate
through these changes, we will continue to elevate the customers’ experience to maximise our value
proposition, defend our current leadership position and steer the business towards sustainable growth.
67
“The LPG Business faced one of its most challenging

years in 2019, as we operated against a backdrop of
dampened economic conditions and rising business
competition. Our resilience and adaptability were
evident as we solidified our position as the market
leader. The two central pillars of our success are our
strong infrastructure network and our relentless effort
to expand our dealership network. These efforts
allowed us to build on our competitive advantage,
which resulted in increased sales volumes.”
LPG
PRAMELA VALLINAYAGAN
LPG Business is Malaysia’s No. 1 retailer and Head, LPG Business Division
marketer of LPG products. We market 12kg and
14kg LPG cylinders for the Household segment, VALUE CREATED BY OUR LPG BUSINESS
14kg and 50kg LPG cylinders for the Commercial
segment, and in Bulk for the Industrial segment.
Our quality products are offered through the Create

nation’s widest LPG supply and distribution
network that encompasses eight terminals and Sustain market leadership and profitability
bottling facilities as well as LPG Channel Members
consisting of premier dealers, dealers and bulk @
Network
dealers. As the leading industry player, we will
continue to create seamless and frictionless Serving customers through extensive network
customer experience through innovative sale
channels and solutions to reinforce our market
leadership. Nurture
Develop local economies and contribute to the success

of dealers’ businesses
Innovate
Capitalise on technology and innovation to improve on

customers experience
Reliability
Safe and reliable products to consumers
Skilled
Develop high performing and skilled workforce
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LPG
KEY ACHIEVEMENTS
Sales volume growth of 1.0% Solidified market leadership Recorded significant increase
in challenging market with increased market share in C50 sales volume of 10.0%
Expanded dealership network Revenue (RM Million)

by > 4.0% Year
RM1,263.6 million
2019
2018
RM1,292.1 million
CHALLENGES
Intense market competition • Strengthened and expanded dealership network
• Offered competitive pricing and attractive sales package
Changing market landscape • Widened market reach in Commercial segment through C50
• Improved operational efficiency through cost optimisation
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LPG
BUSINESS HIGHLIGHTS
STRATEGIC STRATEGIC
1. Redefine customer a. LPG@PS - nationwide rollout to a. LPG@PS – operational at 20 stations

experience selected stations nationwide
b. Gas2U – continue to improve the b. Gas2U – improved delivery

ML user experience of mobile application performance
MARKET 2. Fortify market a. Expansion and enhancement of a. Dealership network grew by more
LEADERSHIP
leadership dealership network than 4.0%
b. Focus on C50 segment through b. Achieved C50 volume growth of

competitive pricing 10.0%
SRE
SAFE, RELIABLE
AND EFFICIENT
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GREAT PLACE
TO WORK
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DIGITALLY
ENABLED
Against the backdrop of cautious economic outlook and uncertain regulatory environment, we expect
minimal growth in market demand for LPG going forward. Nevertheless, LPG Business is committed to
future-proofing our business in anticipation of any potential market disruptors to deliver sustainable long-
term growth and maximise our value creation.
70
“In 2019, we focused our pursuit towards market

leadership by growing our Power Brands and our
network penetration successfully with the collaboration
of our partners. We will continue to leverage
technology i.e. Fluid Technology Solutions, which is a
winning differentiator in responding to the needs of
our customers, OEM partners and the industry.”
LUBRICANT
WHO WE ARE AND WHAT WE DO HARDEEP SINGH KIRPAL SINGH
Chief Executive Officer
Our Lubricant Business undertakes all sales, PETRONAS Lubricants Marketing (Malaysia) Sdn. Bhd.
marketing and technical services related to
PETRONAS Lubricant and car care products in
Malaysia. Our portfolio encompasses Passenger
Car Motor Oils, Motorcycle Oils, Commercial VALUE CREATED BY OUR LUBRICANT BUSINESS
Vehicle Lubricants as well as Industrial and
Marine Lubricants that caters for consumers,
commercial and industrial consumption.
Quality
Technology underpins our propositions for these
segments of the Malaysian market, delivering World-class products developed through supperior R&D
and creating value for our customers. technology for top performance and fuel efficiency
In addition, PDB also markets lubricant products Create

in Thailand through its subsidiary, PIMTCL which
Sustainable margins for all business partners along our
is focused on growing sales in both B2B and value chain
B2C segments.
Business Synergy
Offering winning propositions, enabling our partners to
grow with us
Capability
Upskill our people, dealers’ workshops and key customers
on product and technical knowledge
@
Network
Long-term partnerships with various stakeholders and
capitalise on cross-selling opportunities via PDB’s other
business segments
Environment
Enhanced engine and plant efficiency contributing to
cleaner environment
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LUBRICANT
KEY ACHIEVEMENTS
• Remarkable volume growth Launched:

of 14.0% for PETRONAS Syntium • First PETRONAS AutoExpert which is
Premium tier and 52.0% for available at 9 locations
PETRONAS Sprinta
• First to launch lowest viscosity lubricant
• Increase in volume by 13.0% in 0W-16, that delivers better engine
Direct B2B segment and 17.0% protection and fuel economy performance
for Highstreet
Revenue (RM Million)

• Proton contract renewal Year
• 5 new partners RM540.9
2019
2018
RM572.0
CHALLENGES
Competitive environment with • Offering and demonstrating value through our differentiated winning
new entrants propositions
• Recruitment of new capable partners and upskilling our partners/dealers

to compete in the challenging and demanding landscape
Macro-economic factors • Sharpened our focus to grow the B2B segment

affecting demand in the B2B
• Focus on driving Power Brand for PETRONAS Syntium with oCoolTechTM,
segment:
PETRONAS Urania with ViscGuardTM, PETRONAS Sprinta with UltraFlexTM
• Downward trend in the
• Close collaboration with Commercial Business in winning new customers
plantation and construction
and capitalising on cross-selling opportunities of lubricant products via
sectors
different business channels
• Automotive sector
experienced decline in
market demand
• Improvement in public
transportation and higher
product quality impacting
consumption in the B2C
segments
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LUBRICANT
BUSINESS HIGHLIGHTS
STRATEGIC STRATEGIC
1. Achieve market a. Launched the latest range of a. PETRONAS Sprinta with UltraFlexTM
leadership in B2C PETRONAS flagship motorcycle volume grew by 52.0%
engine oil, PETRONAS Sprinta with
UltraFlexTM technology
b. Launched Malaysia’s first PETRONAS b. PETRONAS AutoExpert expanded to

AutoExpert service center 9 locations and achieved 83.0%
Customer Satisfaction performance
c. Strengthened Power brands (Syntium/ c. Achieved better brand visibility and

Sprinta) via various media and improved Top of Mind by 3.0% for
motorsport platforms Syntium
ML
d. Secured new partners and expand d. Growth in the power brands of 14.0%
MARKET customer base across all channels for PETRONAS Syntium and 52.0% for
LEADERSHIP PETRONAS Sprinta with increased
outlet penetration
e. Implemented impactful trade loyalty e. Strong growth for Power Brands in

marketing programmes Highstreet segment
2. Achieve market a. Prioritised market segment based on a. Improvement of Direct channel

leadership in B2B attractiveness and growth potential volume by 13.0%
b. Expanded hi-grade strategic partners b. Secured 5 new customers and

renewed 9 contracts with key
strategic partners
SRE
SAFE, RELIABLE
AND EFFICIENT
GPW
GREAT PLACE
TO WORK
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DIGITALLY
ENABLED
Although we expect the lubricant market to experience a slower growth, we continue to build strong
relationships with our partners/customers and enhance our cost competitiveness. These initiatives, along
with our efforts to improve our customer’s journey experience and differentiate our products and services,
are expected to support our growth vision.
73
“In 2019, we advanced our technology systems to accelerate

our growth as a company. Going forward, in 2020 our
priorities will be to further strengthen our data and analytics
platforms, continue enhancing our customer interfaces and
strenghten our digital assets to protect against system
vulnerabilities and safeguard our customers’ data. The
targeted outcome is to drive PDB to become a truly data-
driven organisation and to realise our Digital Strategy
Blueprint.”
DIGITALLY ENABLED
WAN YUSSMAN WAN YUSOF
Chief Technology Officer

OUR DIGITAL TRANSFORMATION
Being Digitally Enabled is the fourth leg of PDB’s
growth strategy and this has been a landmark
Our digital transformation is driven by a two-prong strategy:
year for delivering on our digital transformation.
STRENGTHENING THE CORE
This year, PDB launched its Digital Strategy This aims to future-proof our organisation by putting
Blueprint that provides a roadmap for our digital 01 in place systems and processes to prevent our business
transformation over the next three years, from being disrupted.
beginning from 2020. The ultimate aim of our
digital strategy is to deliver on PDB’s promise of
creating a seamless and frictionless customer
experience across our businesses. DEMOCRATISATION OF DATA
This will allow us to disrupt the competitive business
02 landscape in which we operate, principally through the
optimised use of data available from our large retail
network.
The implementation of our Digital Strategy Blueprint

encompasses major changes to both our business and
operational approaches which will transform PDB into a
data-driven organisation.
A key part of delivering this transformation is enabling the

sharing of data within PDB, to ensure that everyone within
the organisation has access to the data that they need in
order to execute their business objectives.
Our Digital team has been expanded significantly in 2019,

both in numbers and the breadth of skill sets to deliver our
Digital Strategy Blueprint.
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DIGITALLY ENABLED
STRENGTHENING THE CORE DEMOCRATISATION OF DATA
A critical part of our digital strategy is the This is being delivered through integrating our diverse
strengthening of our core systems through process information systems and developing our workforce’s
improvements, systems refresh and upgrades as well capability to optimise the use of data. With this in
as the development of new customer-facing place, we will be able to utilise the large amount of
touchpoints. Delivering on that, during the year we data generated by our daily customer interactions
have considered cloud-based strategy, building data and our business operations in an integrated way, so
hub infrastucture and system modernisation at that the data that we have is no longer just descriptive
PETRONAS stations. Implementing these changes or predictive but, eventually, becomes prescriptive
have contributed towards driving down transaction for our business planning.
costs, plugging revenue leakages and opening up
new revenue streams. We will also optimise the use of our extensive data
by creating delightful touch points to deliver a
Among the key initiatives that were undertaken in seamless and frictionless customer experience. This
2019 include: will be driven through enhancements to our Setel®
mobile application and through embedding
• A new generation Point of Sales (POS) solution technology more deeply into our stations and other
that enables near real-time data collection and points of contact with the customers. Setel ®
remote management. smartphone application is central to our digital
• Piloting upgrade of Outdoor Payment Terminals strategy and spearheads the delivery of digital
to maintain Payment Card Industry Data Security experience of our customers at PETRONAS stations.
Standard Compliant. Our aim for 2020 is to make Setel ® available
• Introduction to Mesra Virtual Agent (MeVA), our nationwide and expand the number of features
chat bot virtual assistant to improve customer available through the application.
service.
• Strengthening our Mesra Loyalty Redemption
programme by allowing Mesra loyalty points to
be redeemed with 81 partner merchant outlets
The application was launched in late 2018 and
beyond our petrol stations.
has seen rapid growth since then. By the end of
2019 Setel® had almost more than half a million
users, and was available at ~300 PETRONAS
stations. Setel® is Malaysia’s first mobile application
that creates seamless on-the-go refuel and retail
experience for PETRONAS customers by
eliminating everyday pain points. Setel® will
definitely ease the typical pain points faced by
customers when fueling at petrol stations. Setel®
is available for download on iOS and Android
devices and is now one of the top-5 financial
applications in Malaysia.
DATA PROTECTION AND CYBER SECURITY
We are committed to ensuring the highest levels of personal data protection for our customers by strengthening
our processes and investing in the necessary systems to ensure that customer data remains secure.
We adhere to PETRONAS Cyber Security Enterprise Framework. During the year, we strengthened our cyber
security capability against potential cyber threats and as our business becomes increasingly digitalised, it is vital
that we continue to invest and harden our cyber security system.
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5-YEAR GROUP FINANCIAL HIGHLIGHTS
FY2015 FY2016 FY2017 FY2018 FY2019
OPERATING RESULTS (RM MILLION)

Revenue 25,060 21,535 27,421 30,069 30,294
Operating profit 1,092 1,191 1,441 1,178 1,147
Profit before taxation 1,082 1,190 1,438 1,177 1,129
Profit after taxation 795 947 1,545 862 838
KEY BALANCE SHEET DATA (RM MILLION)

Property, plant and equipment 3,990 3,794 3,372 3,336 4,135
Total assets 8,071 9,365 9,748 9,171 9,996
Total borrowings 212 119 67 55 334#
Total liabilities 3,087 4,028 3,708 3,234 3,985
Share capital 993 993 993 993 993
Shareholders' equity 4,952 5,303 6,002 5,897 5,976
SHARE INFORMATION
Per share (sen)
Basic earnings 79.5 sen 95.1 sen 155.0 sen 85.5 sen 83.5 sen
Gross dividend 60 sen 70 sen 97 sen* 70 sen 85 sen**
Share price as at financial year end (RM) 24.86 23.80 24.26 26.50 23.10
FINANCIAL RATIOS
Return on revenue 3.2% 4.2% 4.0% 2.9% 2.8%
Return on equity 16.0% 17.8% 25.7% 14.4% 14.0%
Return on total assets 9.8% 9.6% 11.2% 9.4% 8.4%
Debt to equity ratio 4.3% 2.2% 1.1% 0.9% 5.6%#
Dividend payout 79.0% 81.0% 78.0% 86.0% 104.0%
* Includes special dividend of 22 sen per ordinary share

** Includes special dividend of 15 sen per ordinary share
# Includes lease liabilities as part of total debts
76
5-YEAR GROUP FINANCIAL SUMMARY
REVENUE PROFIT BEFORE TAXATION PROFIT AFTER TAXATION
(RM Million) (RM Million) (RM Million)
1,896.3
1,545.0
1,437.9**
30,068.8 30,293.6
27,420.6* 1,190.4
1,087.9**
1,177.0
25,060.2 1,128.9
1,082.5 946.5
861.5
837.6
21,534.6 794.6
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
EQUITY ATTRIBUTABLE TOTAL ASSETS TOTAL LIABILITIES

TO SHAREHOLDERS
(RM Million) (RM Million) (RM Million)
9,748.2 9,996.3
9,364.9 9,170.8
8,070.6 4,028.4 3,984.9

6,001.7 5,897.1 5,975.9 3,707.6
5,303.0
4,952.3 3,233.5
3,086.6
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
EARNINGS PER SHARE

(sen)
155.0
109.5**
95.1
85.5 83.5
79.5
2015 2016 2017 2018 2019
* Restated following adoption of MFRS15 Revenue from Contracts with Customers

** Excluding discontinued operations and gain on disposal of subsidiaries
77
SIMPLIFIED GROUP
STATEMENT OF FINANCIAL POSITION
ASSETS EQUITY & LIABILITIES
3% 2%
8% 1% 10% 1%
41%
16%
2019 2019
50%
34%
34%
TOTAL RM9,996.3 million TOTAL RM9,996.3 million
Non Current Assets Reserves
Cash and Cash Equivalents Trade and Other Payables
Trade and Other Receivables Share Capital
Inventories Non-Current Liabilities
Fund Investment Other Current Liabilities

Non-Controlling Interests
1% 2%
9% 1%
11% 1%
41%
24%
2018
2018
32%
53%
25%
TOTAL RM9,170.8 million TOTAL RM9,170.8 million
78
SEGMENTAL ANALYSIS
TOTAL REVENUE
51%
49%
2019 50%
RM30,294 million
2018
2019 million
RM30,069
50%
Retail Commercial
79
GROUP QUARTERLY FINANCIAL PERFORMANCE
2019
In RM Million Quarter 1 Quarter 2 Quarter 3 Quarter 4 FY2019
Revenue 7,086 7,606 7,807 7,795 30,294

Operating profit 387 240 322 198 1,147
Profit before taxation 383 238 318 190 1,129
Profit after taxation 294 174 241 129 838
Earnings per share (sen) 29.3 17.4 24.1 12.7 83.5
Dividend per share (sen) 15.0 14.0 16.0 40.0* 85.0*
* Includes special dividend of 15.0 sen per ordinary share
2018
In RM Million Quarter 1 Quarter 2 Quarter 3 Quarter 4 FY2018
Revenue 7,070 7,278 7,819 7,902 30,069

Operating profit 291 422 395 70 1,178
Profit before taxation 291 424 392 70 1,177
Profit after taxation 220 322 271 48 861
Earnings per share (sen) 22.0 31.6 27.2 4.7 85.5
Dividend per share (sen) 13.0 16.0 16.0 25.0 70.0
80
KEY INTEREST BEARING ASSETS AND LIABILITIES
2019 2018
As at Effective Interest As at Effective Interest

31 Interest Income/ 31 Interest Income/
December Rate (Expenses) December Rate (Expenses)
(RM mil) (%) (RM mil) (RM mil) (%) (RM mil)
Interest earning assets

Cash and cash equivalents 3,409.3 3.6 121.1 2,178.1 4.4 95.0
Fund investment 51.0 3.5 0.9 50.0 4.1 1.0
Interest bearing liabilities

Islamic financing facilities 29.8 4.3-4.7 (1.8) 49.0 4.3-4.7 (2.7)
Revolving credit 5.5 2.9 (0.1) 6.0 2.6 (0.2)
Lease liabilities 298.9 4.2-8.4 (18.9) – – –
81
STATEMENT OF VALUE ADDED
Value added is defined as the value created by the activities of a business and its employees and in the case of PDB is
determined as revenue less the cost of goods and services. The value added statement reports on the calculation of value
added and its application among the stakeholders in the Group. This statement shows the total wealth created and how it
was distributed, taking into account the amounts retained and reinvested in the Group for future growth.
2019 2018
Group RM'000 RM'000
Revenue 30,293,571 30,068,753

Less: Purchase of goods and services (28,787,620) (28,693,239)
Value added 1,505,951 1,375,514

Other income 439,527 424,901
Financing costs (21,812) (4,547)
Share of net profit of associates and joint ventures 3,889 3,504
Value Created 1,927,555 1,799,372
82
DISTRIBUTION OF VALUE ADDED
2019 2018
RM'000 RM'000
To Employees – employment costs 305,414 276,584

To Shareholders – dividends 699,093 944,347
To Government – taxation 291,237 315,567
Retained for reinvestment and future growth:
Depreciation and amortisation 471,457 341,215
Retained profits 160,354 (78,341)
1,927,555 1,799,372
32% 16%
37%
2019 15%
15%
15%
2018
18%
52%
To Employees – employment costs

To Shareholders – dividends
To Government – taxation
Retained for reinvestment and future growth
83
FINANCIAL CALENDAR
2019
26 February 2019 27 June 2019

Announcement of the unaudited consolidated results Date of payment of the interim dividend for the 1st
for the 4th quarter ended 31 December 2018 quarter ended 31 March 2019
27 February 2019 23 August 2019

Announcement of the audited financial statements for Announcement of the unaudited consolidated results
the financial year ended 31 December 2018 for the 2nd quarter ended 30 June 2019
27 March 2019 20 September 2019

Date of Notice of 37th
Annual General Meeting and date Date of payment of the interim dividend for the 2nd
of issuance of FY2018 Integrated Report quarter ended 30 June 2019
28 March 2019 22 November 2019

Date of payment of the interim dividend for the 4th Announcement of the unaudited consolidated results
quarter ended 31 December 2018 for the 3rd quarter ended 30 September 2019
25 April 2019 20 December 2019

37th Annual General Meeting Date of payment of the interim dividend for the 3rd
quarter ended 30 September 2019
28 May 2019
Announcement of the unaudited consolidated results
for the 1st quarter ended 31 March 2019
2020
25 February 2020
Announcement of the unaudited consolidated results for the 4th quarter ended 31 December 2019
27 February 2020
Announcement of the audited financial statements for the financial year ended 31 December 2019
26 March 2020
Date of payment of the interim and special dividend for the 4th quarter ended 31 December 2019
31 March 2020
Date of Notice of 38th Annual General Meeting and date of issuance of FY2019 Integrated Report
84
INVESTOR RELATIONS
We value our shareholders and place utmost importance in establishing and continuing strong
relationship with them. We seek to uphold their trust in PDB by maintaining high standards
of transparency and regular communication to inform them of material development in the
Company. Our Investor Relations activities and engagement programmes are designed to
provide fair and balanced information regarding the Company and focused around maintaining
confidence within the Investment Communities, locally and internationally.
PDB INVESTOR RELATIONS POLICY AND GUIDELINES

All of our Investor Relations programmes are guided by PDB’s Investor Relations Policy and Guidelines, developed in 2011
and has been amended and approved by PDB’s Board of Directors on 20 August 2018.
For more information on PDB’s Investor Relations Policy and Guidelines, please refer to PDB’s corporate website at www.mymesra.com.my
INVESTOR RELATIONS COMMUNICATION AND ENGAGEMENT CHANNELS

Communication lines with local and foreign investors were kept firmly open throughout the year, except during blackout
periods. Engagements with investors/analysts are conducted either via direct one-on-one meetings, teleconferences or via
roadshows and corporate conferences. IR engagements are fronted by only authorised spokesperson to ensure credibility and
effective communication with PDB’s shareholders. The MD/CEO and CFO lead the investor relations activities with support
from the Investor Relations.
QUARTERLY FINANCIAL RESULT ANNOUNCEMENTS AND ANALYST BRIEFINGS

We consistently issue our quarterly financial result announcements to Bursa Malaysia in accordance with MMLR in a
timely manner. Subsequently, we conduct analyst briefings for investment communities to allow further clarification
and interaction between the analysts and the management. The sessions were chaired by the MD/CEO together with
CFO. In 2019, we conducted 4 face-to-face Analyst Briefings and engaged 111 analysts. Following the Briefings,
presentation packs on PDB’s business and financial performances, the quarterly announcements to Bursa Malaysia as
well as press releases were published on PDB’s corporate website.
For more information on Quarterly Financial Result Announcements and Analyst Briefings, please refer to PDB’s corporate website at
www.mymesra.com.my
Purpose:
To keep the Investment Communities updated on PDB’s quarterly performance and outlook for balanced understanding
of the Company’s business and to provide a basis for fair valuation.
CORPORATE CONFERENCES
During the year, PDB participated in three
Corporate Conferences and engaged with 64
analysts. Our participation in local and
international Corporate Conferences were based
on invitation by the financial institutions.
Purpose:
To provide an update on PDB’s financial
performance and business outlook to current
and potential investors, analysts and fund
managers locally and internationally.
85
INVESTOR RELATIONS
NON-DEAL ROADSHOW
PDB also participated in one NDR in
Thailand and engaged with four
companies. Our participation in the NDR
is based on research houses’
recommendations and registered interests
from Investment Communities.
Purpose:
To provide an update on PDB’s
financial performance and business
outlook to current and potential
investors, analysts and fund
managers locally and internationally.
ANNUAL GENERAL MEETING

PDB’s 37th AGM was held on 25 April 2019 at Grand Ballroom, Level 2, InterContinental Kuala Lumpur. All resolutions
tabled at the AGM were duly passed and voting were performed via electronic polling. Independent scrutineers were
engaged to validate the voting on each proposal presented to 1,501 shareholders and proxies who attended the
meeting. The PDB Board and LT were present at the AGM to provide answers and clarifications to queries from
shareholders. The minutes of PDB’s AGM is available on PDB’s corporate website within 60 days upon AGM.
For more information on AGM, please refer to Corporate Governance Overview Statement on page 134 of this <IR>
Purpose:
To present the Company’s business and financial performances; the strategic focus areas moving forward and
to seek shareholders’ approval on the proposed resolutions.
SITE VISIT
On 9 December 2019, a site visit to Fuel, LPG and Aviation
Terminals in Kuching, Sarawak was conducted for the Investment
Communities which consists of 16 analysts.
Purpose:
To increase awareness, knowledge and in-depth
understanding about PDB’s extensive distribution facilities
and further strengthen confidence in PDB’s overall business.
For more information on Investor Relations Engagement, please refer Stakeholder Engagement on pages 48 to 49 of this <IR>
86
INVESTOR RELATIONS
INVESTOR RELATIONS ACTIVITIES
ANALYST BRIEFING
IN 2019
RESULTS ANNOUNCEMENT DATE BRIEFING DATE
Q1 28 May 2019 29 May 2019
Q2 23 August 2019 26 August 2019
Q3 22 November 2019 25 November 2019
Q4 25 February 2020 26 February 2020
Note:
The 2020 Analyst Briefing dates will be available on PDB’s corporate website at www.mymesra.com.my one week prior to the Analyst Briefing
CORPORATE CONFERENCE
Date Event Location
5 January 2019 CIMB 11th Annual Malaysia Corporate Day Malaysia
10 January 2019 DBS Pulse of Asia Conference Singapore
15 January 2019 Alliance Investment Bank Corporate Day Malaysia
NON-DEAL ROADSHOW
Date Event Location
8 July 2019 Affin Hwang Capital NDR Thailand
SITE VISIT
Date Facilities Location
Fuel and LPG Terminals IOT Kuching

9 December 2019
Aviation Terminals Kuching
87
INVESTOR RELATIONS
SHARE PRICE PERFORMANCE

PDB’s share price reached its peak of RM28.48 on 25 February 2019 and dipping at the lowest point to RM21.20 on
3 September 2019.
PDB SHARE PRICE VS FBM KLCI IN 2019
Total PDB
Volume Share FBM
(’000) Price KLCI
(RM) (Points)
5,000 30 2,000
4,000 20 1,900
3,000 26 1,800
2,000 24 1,700
1,000 22 1,600
0 20 1,500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month
PDB Volume PDB Closing Price FBM KLCI Closing Price
MARKET PDB VOLUME SHARE PRICE DIVIDEND PER FOREIGN

CAPITALISATION TRADED SHARE SHAREHOLDINGS
RM22.95 billion 112.85 million Opening: RM26.00 85 sen 9.37%
in 2019 in 2019 Closing: RM23.10 in 2019 as at 31 July 2019
Highest:RM28.48 (include special dividend of 15 sen) * Highest during the year
2018: RM26.33 2018: 191.81 million Lowest:RM21.20 2018: 70 sen 28 February 2018: 9.86%
SHAREHOLDINGS
BY GEOGRAPHY BY INSTITUTION
As at 31 December 2019, around 91.0%
of our shareholders are Malaysians, 1.33% 1.53%
2.33% 1.48% 0.75%
comprised of nominees, government 0.20% 0.31%
10.50%
agencies/institutions, banks/finance 3.77%
0.01%
companies, corporations and other types

of shareholders. Our parent company,
PETRONAS is our largest shareholder,
holding close to 64.0% equity in PDB.
90.88%
In 2019, our foreign shareholding reached 86.91%
its highest at 9.37% in July.
Malaysia Others Nominee Government
U.S. United Kingdom Banks/Finance Agencies/Institutions
Europe South Africa Companies Others
Asia and Asia Pacific Individual
As at 31 December 2019
Source: Symphony and Bloomberg
88
INVESTOR RELATIONS
ANALYST COVERAGE ANALYST RECOMMENDATIONS

Overall recommendation on PDB’s share price
12 research houses covered PDB’s stock in 2019, as follows:
in 2019 by the research houses:
01 02
Affin Hwang Capital AllianceDBS Research
Sdn Bhd
BUY/ADD 3
03 04
BIMB Securities CIMB Investment
Sdn Bhd Bank Berhad
05 06
Hong Leong Investment KAF-Seagroatt & Campbell HOLD/NEUTRAL 7
Bank Berhad Securities Sdn Bhd
07 08
Kenanga Investment Macquarie Capital Securities
Bank Berhad (Malaysia) Sdn Bhd
09 10 SELL/REDUCE 2
MIDF Amanah RHB Research Institute
Investment Bank Sdn Bhd
Note:
11 12 The recommendations were based on FY2019 results
TA Securities UOB Kay Hian Securities (M) announcement
Holdings Berhad Sdn Bhd
For more information on areas of concerns, please refer to Stakeholder Engagement
on pages 48 to 49 of this <IR>
IR CONTACT, WEBSITE AND FEEDBACK

WEBSITE IR CONTACT AND FEEDBACK
All Investor Relations engagements and activities The Investment Communities may forward any enquiries
are published on PDB’s corporate website at and feedback related to Investor Relations matters to
www.mymesra.com.my. This website provides the following representatives:
information, among others on PDB’s IR Policy and
Guidelines, announcements, financial results, Nur Asyirin Ibrahim
quarterly briefing materials, minutes of AGM, press Head, Investor Relations
releases and disclosures to Bursa Malaysia. Email: nurasyirin@petronas.com.my
89
OUR BOARD AT A GLANCE
1 2
1
Nationality 2 Age Group
9 5
Malaysian Below 50 years

Non-Malaysian 50-55 years
56-60 years
61-65 years
3 3
Length of
Gender Service/
Diversity 5
Tenure
7 2
Male 1-3 years

Female 4-6 years
7-9 years
90
OUR BOARD AT A GLANCE
SKILLS MATRIX INDUSTRY EXPERIENCE
Finance/Audit 1 Oil and Gas
Economics 2
Retail
Engineering 3
Shipping/Logistics
Commercial/Marketing 4
Operations 5 Regional/International
Corporate Planning
and Development 6
Banking and Finance
Risk Management 7
Education
Human Resource 8
Information Technology 9 Automotive
* Include tertiary education and professional experience.
91
BOARD OF DIRECTORS’ PROFILE
Present Directorships Board Committee

DATUK MD ARIF MAHMOOD
Listed entities: Nil
Chairman
• PETRONAS Dagangan Berhad
Non-Independent Non-Executive Director
• PETRONAS Chemicals Group Berhad
Other public company

AGE: 57 Nil
GENDER: Male
NATIONALITY: Malaysian
Other Principal Appointments
Date of Appointment: 16 April 2015
• Chairman, PETRONAS Chemicals Group Berhad
Length of Service: 4 years and 10 months
• Executive Vice President and Chief Executive Officer, Downstream Business, PETRONAS
Number of Board Meetings Attended: 5/6
• Member, Executive Leadership Team, PETRONAS
• Member, People Development Committee, PETRONAS
• Member, Talent Council, PETRONAS
• Member, Industry Advisory Panel, Universiti Teknologi PETRONAS
• Director, Johor Petroleum Development Corporation
Academic / Professional Qualification • Chairman and Director, various companies within PETRONAS
• Masters of Business Administration, Past Experience

Massachusetts Institute of Technology, United
States of America • Director, PETRONAS
• Bachelor of Science in Electrical Engineering • Senior Vice President, Corporate Strategy, PETRONAS
(summa cum laude), Boston University, United • Vice President, Oil Business, PETRONAS
States of America • Managing Director/Chief Executive Officer, ASEAN Bintulu Fertilizer Sdn Bhd
• Senior General Manager, Retail Business Division, PETRONAS Dagangan Berhad
Skills Matrix and Industry Experience • General Manager (Gas Processing Plant B), PETRONAS Gas Berhad
Skills Matrix Industry Experience
3 4 5 6
92
AZRUL OSMAN RANI LIM BENG CHOON

Managing Director/Chief Executive Officer Senior Independent Director
AGE: 46 GENDER: Male NATIONALITY: Malaysian AGE: 60 GENDER: Male NATIONALITY: Malaysian
Date of Appointment: 1 January 2020 Date of Appointment: 13 August 2012
Length of Service: 2 months Length of Service: 7 years and 6 months
Number of Board Meetings Attended: – Number of Board Meetings Attended: 6/6
Academic / Professional Qualification Academic / Professional Qualification

• Advanced Management Program, Harvard Business School, United • Bachelor of Science (Hons) in Mathematics and Computer Science,
States of America Australian National University, Canberra, Australia
• Bachelor of Science in Economics with double major in Industrial
Management, Carnegie Mellon University, Pennsylvania, United States
of America
Skills Matrix and Industry Experience Skills Matrix and Industry Experience
Skills Matrix Industry Experience Skills Matrix Industry Experience
2 4 6 1 4 5 6 8 9
Present Directorships Board Committee Present Directorships Board Committee
Listed entity: Nil Listed entities: • Chairman of NRC

• PETRONAS Dagangan Berhad • PETRONAS Dagangan Berhad • Member of BAC
• MISC Berhad
Other public company:
Nil Other public company:
Nil
Other Principal Appointments Other Principal Appointments

• Chairman and Director, various companies within PETRONAS • Member, BAC, MISC Berhad
• Member, NRC, MISC Berhad
• Trustee in the ECM Libra Foundation
• Member, Board of Directors, Universiti Pendidikan Sultan Idris
Past Experience Past Experience

• Head (Commercial • Senior Manager for Business • Independent Non-Executive • Member, BAC, Hong Leong
Development and JV Development Oil Portfolio in Director, PETRONAS Gas Bank Berhad
Formation) of PETRONAS PETRONAS Business Berhad • Country Managing Director,
Refinery and Petrochemical Development Unit • Chairman, NRC, PETRONAS Accenture, the global
Corporation (“PRPC”), • Manager Trading, Agriculture Gas Berhad consulting, technology and
Downstream Product, MITCO • Member, BAC, PETRONAS Gas outsourcing company
• Chief Executive Officer of PRPC • Country Manager, MITCO Berhad • Managing Partner, Accenture’s
Utilities and Facilities Indonesia Office • Independent Non-Executive Resources Industry Group (Oil
Director, Hong Leong Bank and Gas, Chemicals, Utilities
• Business Director, Uzbekistan • Various positions within
Berhad and Natural Resources) in
Gas to Liquid Limited Liability PETRONAS Group
Southeast Asia
Company
• Senior Manager, International
Trading, Malaysian International
Trading Corporation Sdn Bhd
(“MITCO”)
93
VIMALA V.R. MENON DATUK ANUAR AHMAD

Independent Non-Executive Director Independent Non-Executive Director
AGE: 65 GENDER: Female NATIONALITY: Malaysian AGE: 66 GENDER: Male NATIONALITY: Malaysian
Date of Appointment: 18 November 2011 Date of Appointment: 1 August 2014
Length of Service: 8 years and 3 months Length of Service: 5 years and 7 months
Number of Board Meetings Attended: 6/6 Number of Board Meetings Attended: 6/6

• Fellow, Institute of Chartered Accountants in England and Wales • Bachelor of Science (Econs) London School of Economics and
• Member, the Malaysian Institute of Accountants Political Science, University of London, United Kingdom
• Advanced Management Programme, Harvard Business School, United
States of America
1 4 6 9 2 4 5 6 8

Listed entities: • Chairman of BAC Listed entities: • Member of BAC
• PETRONAS Dagangan Berhad • PETRONAS Dagangan Berhad
• Member of NRC • Member of BRC
• DiGi.Com Berhad • ENRA Group Berhad
• Member of BRC • Nylex (Malaysia) Berhad
Other public company: • Kumpulan Fima Berhad
Nil • Chemical Company of Malaysia
Berhad
Other public company:
Nil

• Chairman, Audit Committee, Jardine Cycle & Carriage, Singapore • Chairman, NRC, ENRA Group Berhad
• Member, Audit and Risk Committee, DiGi.Com Berhad • Member, Audit Committee, ENRA Group Berhad
• Director, Jardine Cycle & Carriage, Singapore • Member, Audit Committee, Nylex (Malaysia) Berhad
• Chairman, Finance and Investment Committee, Chemical Company
of Malaysia Berhad
• Member, Risk Management Committee, Chemical Company of
Malaysia Berhad

• Director, PETRONAS Chemicals • Director, Finance and • Chairman, Audit Committee, E.A. • Executive Vice President, Gas and
Group Berhad Corporate Affairs, PROTON Technique (M) Berhad Power Business, PETRONAS
• Chairman, BAC, PETRONAS Holdings Berhad • Member, Remuneration Committee, • Vice President, Oil Business,
Chemicals Group Berhad • Executive Director, Finance and E.A. Technique (M) Berhad PETRONAS
• Member, NRC PETRONAS Corporate Services, Edaran • Chairman, PETRONAS Gas Berhad • Vice President, Human Resource
• Chairman, PETRONAS Dagangan Management, PETRONAS
Chemicals Group Berhad Otomobil Nasional Berhad
Berhad • Managing Director/Chief Executive
• Member, BRC PETRONAS • Director, EON Bank Berhad
• Director, PETRONAS Officer, PETRONAS Dagangan
Chemicals Group Berhad • Director, Jardine Cycle & • Member, Executive Committee, Berhad
• Director, Cycle & Carriage Carriage Limited PETRONAS • Various senior managerial positions
Bintang Berhad • Director, PT Astra International • Member, Management Committee, within PETRONAS Group
Tbk, Indonesia PETRONAS
94
NURAINI ISMAIL DATO’ SRI SYED ZAINAL ABIDIN SYED MOHAMED TAHIR
Non-Independent Non-Executive Director Non-Independent Non-Executive Director
AGE: 57 GENDER: Female NATIONALITY: Malaysian AGE: 57 GENDER: Male NATIONALITY: Malaysian
Date of Appointment: 18 November 2011 Date of Appointment: 31 July 2017
Length of Service: 8 years and 3 months Length of Service: 2 years and 7 months

• Fellow, Association of Chartered Certified Accountants, United • Bachelor of Science in Civil Engineering, University of Maryland,
Kingdom United States of America
1 2 4 5 3 4 5 6

Listed entity: • Member of BAC Listed entity: Nil
• PETRONAS Dagangan Berhad • PETRONAS Dagangan Berhad
Other public company: Other public company:

Nil Nil

• Vice President, Treasury, PETRONAS • Vice President, Marketing, Downstream Business PETRONAS
• Director, various companies within PETRONAS Group • Chairman, Universiti Teknologi MARA
• Member, various committees within PETRONAS Group • Mentor, CEO@Faculty Programme, Ministry of Higher Education
• Member, Industry Advisory Panel, various local universities
• Chairman and Director, various companies within PETRONAS Group

• Senior General Manager, Group • General Manager, Commercial • Managing Director/Chief • Group Managing Director,
Treasury, PETRONAS Services, Malaysian International Executive Officer of PETRONAS PROTON Holdings Berhad
• General Manager, Finance and Trading Corporation Sdn Bhd Dagangan Berhad • Deputy Managing Director,
Accounts Services, Malaysian • Various positions in Bank • Member, NRC, PETRONAS PERODUA
International Trading Bumiputra Malaysia Berhad, Dagangan Berhad • Executive Director, PERODUA
Corporation Sdn Bhd Bumiputera Merchant Bankers • Independent Non-Executive Auto Corporation Sdn Bhd
and Maybank Finance Berhad Director, RHB Islamic Bank • Senior General Manager,
Berhad PERODUA
• Independent Non-Executive • Various Senior Positions within
Director, RHB Bank HICOM Holdings Berhad
• Board member, various • Various positions within
subsidiaries within the PROTON PETRONAS Group
Group
95
SHAFIE SHAMSUDDIN ALVIN MICHAEL HEW THAI KHEAM

Independent Non-Executive Director Independent Non-Executive Director
AGE: 49 GENDER: Male NATIONALITY: Singaporean AGE: 56 GENDER: Male NATIONALITY: Malaysian
Date of Appointment: 6 February 2018 Date of Appointment: 6 February 2018
Length of Service: 2 years Length of Service: 2 years

• Bachelor of Business Administration, Nanyang Technological • Master of Business Administration, INSEAD-Europe Campus,
University, Singapore Fontainebleau, Ile de France
• Bachelor of Commerce (Honours), Queen’s University, Kingston,
Ontario, Canada
• Bachelor of Arts (Minor Economics), Queen’s University, Kingston,
Ontario, Canada
4 5 6 8 1 2 4 5 6 8

Listed entities: • Member of NRC Listed entities: • Chairman of BRC
• PETRONAS Dagangan Berhad • Member of BRC • PETRONAS Dagangan Berhad
• AEON Co. (M) Bhd • Maxis Berhad
Other public company: Other public company:

Nil Nil

• Director, AEON Big Sdn. Bhd. • Member, Nomination Committee, Maxis Berhad
• Chief Executive Officer, AEON Retail (Malaysia) • Group Managing Director, Southgate Ventures Pte. Ltd.
• Managing Director/Digital Transformation Officer, AEON Co. (M) Bhd • Board Director, SIS Group of Schools

• Chief Strategy Officer, AEON • Managing Director, Singapore • Board Director, Wine Connection • Managing Director, H2O Capital
Asia and South Regional Director Group Limited, Taiwan
• President Director and Chief Operations, Malaysia • Board Director, I Can Read • Managing Director, L’Oreal Taiwan
System and Malaysia
Executive Officer, PT Trans • Store Director, Marcom
• Board Director, PSGOURMET Pte. • General Manager Consumer
Retail, Indonesia Director, Non-Food Director Ltd Products Division, L’Oreal Malaysia
• Executive Director, Global and Human Resources, • Board Director and Chairman of • Project Manager, L’Oreal S.A, Paris
Talent Management and Singapore Governance Committee, Taipei • Brand Manager Hair Care, Procter
Organisational Development, • Bazaar Merchandise Manager, American School & Gamble, Vietnam
Carrefour Group in France Carrefour Indonesia • Board Advisor, TORO Limited • Brand Manager South Asia,
• President and Chief Executive • Division Manager for • Board Director and Co-Chair, Procter & Gamble AG, Switzerland
Events and Communications, • Financial Analyst, Lancaster
Officer, Carrefour Indonesia Commercial and
European Chamber of Commerce Financial Inc., Canada
• Managing Director, Carrefour Merchandising, Carrefour Taiwan • Account Manager, Toronto-
Singapore and Malaysia Singapore • Director and Treasurer, Toronto Dominion Bank, Canada
Condominium Corp YCC 332
96
COMPANY SECRETARIES:
NIRMALA DORAISAMY NUR NADIA MOHD NORDIN

Independent Non-Executive Director Company Secretary
AGE: 53 GENDER: Female NATIONALITY: Malaysian

For more information about Nur Nadia Mohd Nordin, please refer to
Date of Appointment: 15 October 2019
page 103 of this <IR>
Length of Service: 4 months
Number of Board Meetings Attended: 2/2
Academic / Professional Qualification
• Fellow, Chartered Institute of Management Accountants, United Kingdom

• Member, Malaysian Institute of Accountants
• Chartered Global Management Accountant, United Kingdom
• Master in Business Administration, International Islamic University
• Bachelor of Economics (Honours), Universiti Malaya
Skills Matrix and Industry Experience

Skills Matrix Industry Experience
1 5 6 7
Present Directorships Board Committee

Listed entities: • Member of BRC
• PETRONAS Dagangan Berhad
• Evergreen Fibreboard Bhd
Other public company: YEAP KOK LEONG

Nil Joint Secretary
Other Principal Appointments AGE: 59 GENDER: Male NATIONALITY: Malaysian

• Senior Independent Director, Evergreen Fibreboard Bhd
• Chairman, Risk and Sustainability Management Committee, Evergreen
Fibreboard Bhd Academic / Professional Qualification
• Chairman, Nomination Committee, Evergreen Fibreboard Bhd • Fellow of the Institute of Chartered Secretaries
• Member, Audit Committee, Evergreen Fibreboard Bhd and Administrators (ICSA)
Past Experience
• Director, Ecobuilt Holdings • Head of Risk Management, Additional Information of the Board of Directors:
Berhad Credit Guarantee Corporation • Family Relationship: Save as disclosed, none of the Directors has
• Chairman, Nomination Bhd
any family relationship with any Director and/or major shareholder
Committee, Ecobuilt Holdings • Various positions in Affin Bank
Berhad Bhd, Alliance Bank Malaysia of PDB
• Member, Audit Committee, Berhad and MBf Finance Bhd • Conflict of Interests: Save as disclosed, none of the Directors has
Ecobuilt Holdings Berhad any conflict of interests with PDB
• Conviction for Offences: None of the Directors has any conviction
for offences, other than traffic offences, if any, for the past 5 years
• Public Sanction or Penalty: None of the Directors has any sanction
or penalty imposed on them by any regulatory bodies during the
financial year ended 31 December 2019
97
LEADERSHIP TEAM
AZRUL OSMAN RANI

Managing Director/
Chief Executive Officer
NORLIWATI ABDUL WAHAB
Chief Financial Officer
WAN YUSSMAN WAN YUSOF KHALIL JAFFRI RAMZULHAKIM RAMLI

Chief Technology Officer MUHAMMAD MURI Head, Commercial
Head, Retail Business Division Business Division
PRAMELA VALLINAYAGAN AADRIN AZLY

Head, LPG Business Division Head, Ventures Division
HARDEEP SINGH
KIRPAL SINGH
Chief Executive Officer,
PETRONAS Lubricants
Marketing (Malaysia)
Sdn. Bhd.
Declaration
• No family relationship with any Director/Major Shareholder

• No conflict of interest with PETRONAS Dagangan Berhad
• Has never been charged for any offence within the past five years other than traffic offences, if any
• All Leadership Team members at present have no present directorship in public companies and listed issuers, save
for Azrul Osman Rani who, in his capacity as MD/CEO, is a Director on the Board of PETRONAS Dagangan Berhad
98
LEADERSHIP TEAM
MOHD SHOBRI A. BAKAR

Head, Supply and
d Distribution Division
MIN EDINA MUSTAPHA KAMAL
Head, Strategy Division
RUZIAH AZDI ABDUL RAHMAN NAINA MOHD SHUKRI OMAR

Head, Strategic Communications Head, Human Resource
Division Management Division
NUR NADIA MOHD NORDIN

Head, Legal and Secretariat
Division
ROSNAN HAMZAH
Head, Health, Safety and
Environment Division
MOHD IMRAN M. ASHRAF

Head, Technical Services Division
99
LEADERSHIP TEAM’S PROFILE
AZRUL OSMAN RANI

Managing Director / Chief Executive Officer
GENDER: Male AGE: 46 NATIONALITY: Malaysian DATE OF APPOINTMENT: 1 January 2020
Academic / Professional Qualification

• Bachelor of Science in Economics, Carnegie Mellon University, United States of America.
• Advanced Management Programme, Harvard Business School, United States of America.
Skills Matrix and Experiences
Skills matrix Industry experiences
2 4 6 11
Key Responsibilities
Responsible for strategic decisions and guiding the overall operational, financial and sustainable performance of PDB and its subsidiaries.
Past Experiences
• Head of Commercial Development and JV Formation at PETRONAS • Senior Manager, Business Development Department, PETRONAS
Refinery and Petrochemical Corporation (PRPC) and CEO of PRPC Utilities • Agriculture Trading Manager, Malaysian Trading Corporation Sdn. Bhd.
and Facilities • Indonesia Country Manager, Malaysian Trading Corporation Sdn. Bhd.
• Business Director, JV Office, Uzbekistan, GTL LLC, PETRONAS • Various positions within PETRONAS Group
• Senior Manager, VP Office, Gas Business, PETRONAS
NORLIWATI ABDUL WAHAB WAN YUSSMAN WAN YUSOF

Chief Financial Officer Chief Technology Officer
GENDER: Female NATIONALITY: Malaysian GENDER: Male NATIONALITY: Malaysian
AGE: 44 DATE OF APPOINTMENT: 1 March 2017 AGE: 43 DATE OF APPOINTMENT: 1 July 2019

• Masters in Mechanical Engineering, Imperial College, United Kingdom • Bachelor of Science in Information and Decision Systems, Carnegie
• Member, Institute of Chartered Accountants in England and Wales Mellon University, United States of America
Skills Matrix and Experiences Skills Matrix and Experiences
Skills matrix Industry experiences Skills matrix Industry experiences
1 5 6 9 15 4 8 11
Key Responsibilities Key Responsibilities

Responsible for the management of all financial related matters for PDB Responsible for the planning, development and implementation of all digital,
and its subsidiaries, risk management and investor relations. operations, technology systems and relevant initiatives.
Past Experiences Past Experiences

• Head (Finance and Accounts) PETCO Trading Labuan Co. Ltd. • Group Chief Technology Officer, Accendo Technologies Sdn. Bhd.
• Head Corporate Strategic Planning, PETRONAS • Senior Vice President & Lead Solutions Architect, Prestariang SKIN Sdn. Bhd.
• Manager (Budget and Management Reporting), PETRONAS Exploration • Managing Director, Custom Codes Sdn. Bhd.
and Production Division • General Manager, Software Engineering, Mesiniaga Berhad
• Manager (Budget and Management Reporting), PETRONAS Carigali Sdn. Bhd. • Senior Director of Software Engineering, Monster Technologies (M) Sdn. Bhd.
• Chief Accountant, PETRONAS Vietnam Co. Ltd. • Global Build Manager, British American Tobacco GSD (KL) Sdn. Bhd.
• Various positions within PETRONAS Group • Solutions Delivery Manager, iPerintis Sdn. Bhd.
• Auditor and Business Advisor PKF Chartered Accountant in Manchester, • Lead Architect, Qiva Sdn. Bhd.
United Kingdom and Perth, Australia • IT Group Leader, AqilQisti Technologies Sdn. Bhd.
• Customer Service Engineer, Natsoft Sdn. Bhd. (renamed Juris Technologies)
Skills Matrix Industry Experiences

1 Finance/Audit 8 Information Technology Oil and Gas Education
2 Economics 9 Risk Management Shipping/Logistics Information Technology/Digital
3 Engineering 10 HSE Regional/International Legal Practice (Litigation)
4 Commercial/Marketing 11 Business Transformation Manufacturing Telecommunications
5 Operations 12 Corporate and Marketing Communications Banking and Finance Technical Services
6 Corporate Planning 13 Brand and Reputation Management
and Development 14 Law/Secretarial
7 Human Resource 15 Corporate Governance
100
KHALIL JAFFRI MUHAMMAD MURI RAMZULHAKIM RAMLI

Head, Retail Business Division Head, Commercial Business Division
GENDER: Male NATIONALITY: Malaysian GENDER: Male NATIONALITY: Malaysian
AGE: 46 DATE OF APPOINTMENT: 1 January 2019 AGE: 43 DATE OF APPOINTMENT: 1 January 2020

• Bachelor of Science in Industrial Management and Economics, Carnegie Mellon • Bachelor of Commerce (Accounting), University of New South Wales, Australia
University, United States of America • Fellow of CPA Australia (FCPA)
2 4 5 6 1 4 6 9 11

Responsible for the profitability and sustainability of the Retail Business. Key Responsible for the sustainability of value and growth of the Commercial
accountabilities include network development, station operations, marketing, Business.
customer service and convenience retailing.
• Head, ROVR Project, Retail Business Division, PETRONAS Dagangan Berhad • Head, LPG Business Division, PETRONAS Dagangan Berhad
• Head, Light Distillates, PETRONAS Trading Corporation Sdn. Bhd. • General Director/Chief Executive Officer, PETRONAS (Vietnam) Co. Ltd. And
• Senior Manager, Marketing and Trading, Crude Oil for Asia Pacific/Far East, Thang Long LPG Co. Ltd.
PETRONAS Trading Corporation Sdn. Bhd. • Chief Financial Officer, PETRONAS (Vietnam) Co. Ltd. and Thang Long LPG Co. Ltd.
• Senior Manager, LNG Marketing for Korea and Taiwan • Head, Business Development, Vice President Downstream Marketing Office,
• Business Manager, OPTIMAL Group of Companies PETRONAS
• Analyst, PETRONAS Chemicals Group Berhad • Project Manager (Thailand), Downstream Marketing, PETRONAS
• Various positions within PETRONAS Group
PRAMELA VALLINAYAGAN HARDEEP SINGH KIRPAL SINGH

Head, LPG Business Division Chief Executive Officer, PETRONAS Lubricants Marketing
(Malaysia) Sdn. Bhd.
GENDER: Female NATIONALITY: Malaysian GENDER: Male NATIONALITY: Malaysian
AGE: 45 DATE OF APPOINTMENT: 1 January 2020 AGE: 50 DATE OF APPOINTMENT: 1 February 2019

• Bachelor of Business Administration, Universiti Utara Malaysia, Malaysia • Bachelor in Mechanical Engineering, Universiti Teknologi Malaysia, Malaysia
4 5 6 9 2 3 4 5 6 15

Responsible for LPG’s business growth and value creation for PDB, direction and Responsible for strategic decisions and guiding the overall operational, financial and
strategic planning for the business, as well as LPG distribution network efficiency. sustainable performance of PLMMSB and PIMTCL

• Head, Commercial Excellence Department, Commercial Business Division, • Head, International Markets, PETRONAS Lubricants International
PETRONAS Dagangan Berhad • Interim CEO, PT PETRONAS Lubricants International
• Head, Supply Integration and Optimisation Department, Enterprise Optimisation • Interim CEO, PETRONAS Lubricants Australia
under Vice President’s Office of Refining and Trading, PETRONAS • Various senior positions, Shell Global and Shell Malaysia
• Various positions within PETRONAS Group
101
AADRIN AZLY MOHD SHOBRI A. BAKAR

Head, Ventures Division Head, Supply and Distribution Division
AGE: 42 DATE OF APPOINTMENT: 1 January 2020 AGE: 59 DATE OF APPOINTMENT: 1 January 2014

• Bachelor of Commerce, University of Adelaide, Australia • Bachelor of Mechanical Engineering (Hons), Universiti Teknologi Malaysia,
• Advanced Management Programme, Harvard Business School, United Malaysia
States of America.
Skills Matrix and Experiences
Skills Matrix and Experiences Skills matrix Industry experiences
Skills matrix Industry experiences 3 4 5 10
2 4 5 6 11 15

Responsible for the setting up of early stage growth platform as well as invent, launch Responsible for PDB’s overall operational excellence and supply reliability across
and scale disruptive ventures to create a future-proof and sustainable revenue streams. the integrated value chain.

• Chief Operating Officer, PDB • Chief Executive Officer, Lub Dagangan Sdn. Bhd.
• Head, Retail Business Division, PETRONAS Dagangan Berhad • Chief Executive Officer, PETRONAS International Marketing Thailand Co. Ltd.
• Senior General Manager, Strategy and Portfolio, Upstream Business, PETRONAS • General Manager, Lubricants Business, PETRONAS Dagangan Berhad
• Senior General Manager, Integrated Gas, Upstream Business, PETRONAS • General Manager, Lubricants Unit, PETRONAS
• Executive Assistant and General Manager, President’s Office, PETRONAS • General Manager, Supply and Distribution Division, PETRONAS Dagangan Berhad
• Senior Manager, Corporate Planning and Development, PETRONAS • Senior Manager, Peninsular Distribution, PETRONAS Dagangan Berhad
• Manager, Vice President’s Office of Oil Business, PETRONAS • Operations Manager, Central Region, PETRONAS Dagangan Berhad
• Various positions within PETRONAS Group • Various positions within PETRONAS Dagangan Berhad
MIN EDINA MUSTAPHA KAMAL RUZIAH AZDI ABDUL RAHMAN

Head, Strategy Division Head, Strategic Communications Division
GENDER: Female NATIONALITY: Malaysian GENDER: Female NATIONALITY: Malaysian
AGE: 41 DATE OF APPOINTMENT: 16 April 2018 AGE: 56 DATE OF APPOINTMENT: 1 December 2015

• Bachelor of Science in Commerce, University of Virginia, United States of America • Bachelor of Science in Business Management (Economics and Finance),
University of Tennessee, United States of America

4 6 11 12 13

Responsible for PDB’s long-term strategic plans, new business development, Responsible for the planning, development and implementation of PDB’s corporate
business transformation and government relations. and product branding, stakeholder management, strategic communications and
reputation management.
• Head, Business Improvement and Transformation, Upstream Business, PETRONAS • General Manager, Corporate Affairs and Administration, PETRONAS Chemicals
• Manager, Supply Chain Planning, PETRONAS Carigali, PETRONAS Group Berhad
• Manager, Corporate Planning and Performance, PETRONAS Carigali Sdn. Bhd. • General Manager, Corporate Communications and Media Relations, East Coast
• Manager, Business Planning, PETRONAS Carigali Sdn. Bhd. Economic Region Development Council
• Various positions within PETRONAS Group • Senior Manager, Brand Department, PETRONAS Dagangan Berhad
• Manager, Brand Communications, PETRONAS Dagangan Berhad
• Business Manager, Mesralink, PETRONAS Dagangan Berhad
• Various positions within PETRONAS Dagangan Berhad
102
NAINA MOHD SHUKRI OMAR NUR NADIA MOHD NORDIN

Head, Human Resource Management Division Head, Legal and Secretariat Division
GENDER: Male NATIONALITY: Malaysian GENDER: Female NATIONALITY: Malaysian
AGE: 45 DATE OF APPOINTMENT: 1 June 2016 AGE: 45 DATE OF APPOINTMENT: 16 March 2018

• Bachelor of Accountancy (Hons), University Utara Malaysia, Malaysia • Certificate of Legal Practice, Malaysia
• Certified Coach from the Canadian Council of Professional Certification • Bachelor of Laws, University of Kent at Canterbury, United Kingdom
7 14 15

Responsible for the formulation and implementation of people strategies, talent Responsible for legal advisory services and corporate secretarial services to PDB
development and management. and its Group of Companies as well as advisory services to the Board.

• Head, Human Resource Management, Upstream International, Upstream Business, • Senior Legal Counsel, Marketing and Special Projects, Legal Downstream, Group
PETRONAS Legal, PETRONAS
• Senior Manager, People Management, Human Resource Management, Upstream • Senior Legal Counsel, Corporate Services and Technology, Group Legal,
Business, PETRONAS PETRONAS
• Manager, Human Resource Management, PICL (Egypt) Corporation Ltd., Gas • Legal Manager, Malaysia LNG Sdn. Bhd.
and Power Business, PETRONAS • Legal Manager, Gas Business, PETRONAS
• Various positions within PETRONAS Group • Senior Legal Officer, PETRONAS NGV Sdn. Bhd.
• Advocate and Solicitor of the High Court of Malaya
ROSNAN HAMZAH MOHD IMRAN M. ASHRAF

Head, Health, Safety and Environment Division Head, Technical Services Division
AGE: 47 DATE OF APPOINTMENT: 1 November 2018 AGE: 39 DATE OF APPOINTMENT: 1 July 2018

• MBA in Strategic Management, International Islamic University Malaysia, Malaysia • Masters (MEng) in Mechanical Engineering, Bath University, United Kingdom
• Master of Science in Occupational Health, National University of Malaysia, Malaysia
• Bachelor of Science in Mechanical Engineering, The University of Michigan, United
States of America

3 5 9 10 3 5 9

Responsible for the management of all matters on health, safety and environment Responsible for the direction and overall management of PDB asset management,
for PDB and its subsidiaries. technical integrity and institutionalisation of best practices to ensure asset integrity,
equipment reliability and safety.
• Head, HSE Governance, Malaysia Petroleum Management, PETRONAS • Manager (Asset Integrity Management), PETRONAS Penapisan (Terengganu) Sdn.
• Senior HSE Specialist, JV Aral Sea Operating Company LLC, Uzbekistan Bhd.
• Head, HSE Performance Management, PETRONAS Carigali Sdn. Bhd. • Manager (Refinery Maintenance), PETRONAS Penapisan (Terengganu) Sdn. Bhd.
• Head, Health Management, PETRONAS Carigali Sdn. Bhd. • Manager, (Offsite, Marine & Shipping Maintenance), PETRONAS Penapisan
• Academician, Faculty of Medicine and Health Sciences, Universiti Putra Malaysia (Terengganu) Sdn. Bhd.
• Product Engineer, Sapura Research Sdn. Bhd. • Team Leader (Risk Based Inspection), ENGEN Refinery, Durban, South Africa
• Automation Engineer, Motorola Semiconductor Sdn. Bhd.
103
ORGANISATION STRUCTURE
PDB
BOARD
BOARD
MD/CEO AUDIT COMMITTEE
INTERNAL
AUDIT
LEGAL AND
SECRETARIAT
Retail Business Strategy
Commercial Business Finance
LPG Business Health, Safety and Environment
Venture Builder Human Resource Management
Supply and Distribution Strategic Communications
Digital Technical Services
Note:
1. Organisation Structure as at 1 January 2020
2. Lubricant Business is managed via PDB’s subsidiary, PLMMSB
Direct report to MD/CEO Direct report to BAC F

unction performed by PETRONAS Group Legal
For more information on the Group Corporate Structure, please refer to page 10 to 11 of this <IR>
104
CHAIRMAN’S CORPORATE GOVERNANCE OVERVIEW
Incorporated in 1982, PETRONAS

ONAS
Dagangan Berhad (PDB) today ay is
Malaysia’s leading retailer and
marketer of petroleum products.
ucts.
With the obsession of designing
ning
solutions from the lens off the
customers, it has positioned PDB
to be Malaysia’s favourite Brand
rand
of Choice at the Putra Brandrand
Awards 2019.
Innovative solutions in delivering seamless and frictionless Underpinning the vision of PDB’s sustainable business
customer experience will continue to be PDB’s key objective performance is through our commitment of the highest
to stay resilient and relevant in meeting the demanding and standards of corporate governance by the Board to create
rapid changing customer needs. With “Move Like Never a long-term sustainable value for all stakeholders. This is
Before” spirit, PDB will further innovate and leverage on subsequently embedded within the Company’s policies,
technologies and digital solutions to enhance its operations inculcating a transformational discipline that adopts best
and introduce new products in the markets. practices in governance, ethics, integrity and transparency.
Our commitment to sustainability is reflected in the way we I am pleased to note that this Corporate Governance Overview
do our business. As such, meeting the triple bottom line of is prepared in accordance to the relevant requirements and
profit, people and planet has always been at the core of our cover the following areas as required by the Malaysian Code
strategy. At PDB, we are committed to creating value by on Corporate Governance 2017 (MCCG 2017):
making a positive impact to the society, as reflected in our
Sustainability Journey on page 155 of this report. We strive i) Board Leadership and Effectiveness
to sustain the operations of all our facilities at best-in-class ii) Effective Audit and Risk Management
in safety, reliability and efficiency. iii) Integrity in Corporate Reporting and Meaningful
Relationship with Stakeholders
105
CHAIRMAN’S CORPORATE GOVERNANCE OVERVIEW
PDB has also strengthened its governance framework through I am pleased to welcome Ms. Nirmala Doraisamy as an
the establishment of a Board Risk Committee (BRC), made Independent Non-Executive Director (INED) effective 15
up only by Independent Non-Executive Directors. The BRC October 2019. She is also a member of the BRC, where her
undertakes the function of overseeing the risk management vast experience in the area of Risk Management is particularly
in PDB, which was previously under the purview of the Board an advantage. Her appointment denotes 60% INEDs as well
Audit Committee. as 30% female representation on the Board; in line with the
requirements of Paragraph 15.02 of the Main Market Listing
PDB strives to uphold the highest accountability and Requirements (MMLR) or Bursa Malaysia Securities Berhad
transparency in safety, performance, and integrity within a (Bursa Malaysia) and Practices 4.1 and 4.5 of MCCG 2017.
robust governance framework. We have laid foundations set
by the framework that endorses ethical values, good corporate Azrul Osman Rani was appointed as Managing Director/Chief
governance and risk management practices that are in line Executive Officer (MD/CEO) of PDB to replace Dato’ Sri Syed
with our strategic business goals. Zainal Abidin Syed Mohamed Tahir effective 1 January 2020
to allow Dato’ Sri Syed Zainal to focus on his role as Vice
In 2019, PDB established an Anti-Money Laundering Policy President, Marketing, Downstream Business, PETRONAS. Dato’
and Framework to comply with both the specific provisions Sri Syed Zainal remains as a director on PDB Board.
and the spirit of all relevant laws, regulations, guidelines and
industry leading practices. In addition, PDB also adopted The Board wishes to extend its gratitude to Dato’ Sri Syed
PETRONAS’s Third Party Risk Management controls under Zainal for his contribution and services during his tenure as
our legal compliance framework and established a due MD/CEO of PDB and to welcome Azrul Osman Rani on the
diligence tool being the “Know Your Counterparty (KYC)” PDB Board.
process which allows PDB to assess and safeguard the Group
against reputational and legal risks posed by parties outside As at the date of this report, I am pleased to inform that the
the organisation. Corporate Governance Overview Statement, Nomination and
Remuneration Committee, Board Audit Committee, Board
The Board has been informed of the new Section 17A of the Risk Committee reports together with the Statement on Risk
Malaysian Anti-Corruption Commission Act that takes effect Management and Internal Control have applied and complied
on 1 June 2020, noting on the new legislation and its with the relevant provisions of the MMLR of Bursa Malaysia,
implications to PDB, its Directors and its Management. PDB the Companies Act 2016, the MCCG 2017, the Corporate
has zero-tolerance to all forms of bribery and corruption, Governance Guide – 3rd Edition issued by Bursa Malaysia
and has in place the necessary measures to safeguard PDB Berhad. Additionally, our practices are benchmarked against
and the Board members against a corruption prosecution. the ASEAN Corporate Governance Scorecard. The status of
PDB will continue to bolster its procedures to ensure its PDB’s application of the key Practices enumerated in the
adequacy in preventing acts of corruption related to the MCCG 2017 is reported in our Corporate Governance Report
organisation. 2019, which is accessible to the public on PDB’s corporate
website www.mymesra.com.my.
The Board reviews and assesses its own performance and
that of individual Director performance regularly, identifying
areas of strengths and opportunities for improvements. Diverse
perspectives that enables the Company to make informed
decisions that lead to better outcomes is a progressive culture
that we want to create in the Company. Collectively, the
Board possess diverse experience, skills, knowledge and
attributes that enable us to provide the oversight required to
develop and achieve our business strategies and sustainability DATUK MD ARIF MAHMOOD
aspirations. CHAIRMAN
106
CORPORATE GOVERNANCE OVERVIEW STATEMENT
The Board of PDB believes that good corporate governance Malaysia Securities Berhad (Bursa Malaysia), Companies Act
is an indication of the commitment by the Board to achieve 2016 (CA 2016), Malaysian Code on Corporate Governance
the highest standards of professionalism. It strives to ensure 2017 (MCCG 2017) and Corporate Governance Guide – 3rd
that it is practised throughout the Group as a fundamental Edition issued by Bursa Malaysia Berhad, in addition to being
part of discharging its responsibilities to protect and enhance benchmarked against the ASEAN Corporate Governance
shareholders’ value and raise the performance of the Group. Scorecard and other applicable laws and regulations
throughout the year ended 31 December 2019.
This Corporate Governance Overview Statement seeks to
provide investors with vital insights into the corporate PDB has generally complied with the MCCG 2017 for the
governance practices of PDB. In this Statement, the Board period under review. The status of PDB’s application of the
reports on the manner the Group has adopted and applied MCCG 2017 is disclosed in our Corporate Governance Report
the statutory requirements, principles and best practices as which is accessible to the public at PDB’s corporate website
set out in Main Market Listing Requirements (MMLR) of Bursa at www.mymesra.com.my.
OUR GOVERNANCE STRUCTURE

The Board is committed in ensuring that there is a strong and effective system of corporate governance in place to support
the successful execution of the Group strategy. The table below describes PDB’s governance structure, an overview of the
key Committees of the Board and other Management committees.
BOARD OF DIRECTORS
Chairman Non-Independant Independent Non-Executive Senior Independent

Responsible for the orderly Non-Executive Directors Directors (INEDs) Director (SID)
Strategic KPIs, Progress and Implementation
conduct and function of (NINEDs) Provides independent Acts as the point of contact
the Board Provide in-depth knowledge and judgement and views. between Non-Executive Directors
insight from PETRONAS (NEDs) and Chairman as well as
perspective shareholders
• Financial Reporting • Board and Senior Management’s Appointment,

• Risk Management
• Audit Report and Compliance Remuneration and Performance
Board Audit Committee (BAC) Nomination and Remuneration

Board Risk Committee (BRC)
3 INEDs Committee Report (NRC)
5 INEDs
1 NINED 3 INEDs
Internal and External Audit
Managing Director/Chief Executive Officer (MD/CEO)

Responsible for the overall operations of the business, organisational, effectiveness and implementation of the Group’s strategies and policies
Monthly/Quarterly Reporting, Performance and Strategic KPIs
Leadership Team Risk Management and Governance Committee
• Regular reporting/progress updates from respective businesses and Discuss, deliberate and support PDB management on risk
enablers and governance matters
• Advisory to MD/CEO in implementing strategies and business operations
Working Group
Credit Control Committee, HSE Steering Committee, Business Information
Technology Committee, Project Steering Committee
107
HOW THE BOARD OPERATES

Board Charter
In discharging the Board’s duties and responsibilities effectively, the Board is guided by its Board Charter, a document which sets
out the principles and guidelines that are to be applied by the Board. The delegation of authority as set out in the Board Charter
is clear and ensures that the line of authority is aligned with the legal and regulatory requirements.
The Board Charter shall be reviewed and updated from time to time to reflect relevant changes to the policies, procedures and
processes as well as amendments to rules and regulations to ensure the document remains relevant and consistent with the
applicable rules and regulations as well as recommended best practices.
For more information on Board Charter, please refer to PDB’s corporate website at www.mymesra.com.my
Board Balance and Composition

The Board comprises ten members, one of whom holds an Executive Office, as MD/CEO. As at the date of this Statement
and as per best practice, INEDs make up 60% of the Board’s composition.
During the year under review, Dato’ Sri Syed Zainal Abidin Syed Mohamed Tahir resigned as MD/CEO of PDB to allow him
to focus on his role as Vice President, Marketing, Downstream Business in PETRONAS. He still remains as a NINED of PDB.
He was succeeded by Azrul Osman Rani effective 1 January 2020. The profile of Azrul Osman Rani is available on page 93
of this <IR>.
As at the date of this report, the Board’s composition is as follows:
Executive Director Non-Independent Independent

(MD/CEO) Non-Executive Directors Non-Executive Directors
(including Chairman)
10% 30% 60%

Number of Directors: 1/10 Number of Directors: 3/10 Number of Directors: 6/10
The composition of the Board is in line with the requirements of Paragraph 15.02 of the MMLR of Bursa Malaysia and Practice
4.1 of MCCG 2017, by virtue of the fact that 60% of its composition are Independent Directors. The roles of Independent
Directors are crucial particularly in the area of related party transactions where their presence is imperative to protect the
interests of the minority shareholders.
The ten members of the Board are persons of integrity and calibre who have sound knowledge and understanding of PDB’s
business and provide a diversity of breadth in experience and knowledge.
108
The Directors are selected based on their individual merits Principal Roles and Responsibilities of the Board
and experience. The current Board composition comprises The Board is entrusted with the overall governance of PDB,
individuals of diverse backgrounds with expertise and skills, the responsibility to exercise reasonable and proper care of
among others, in the oil and gas industry, economics, PDB’s resources in the best interest of its shareholders as
engineering, commercial, marketing, ‘fast moving consumer well as to safeguard PDB’s assets.
goods’, retail, corporate planning and education. Five of the
Non-Executive Directors (NEDs) have experience in the oil In discharging its functions, the main roles and responsibilities
and gas industry. The current overall Board composition is of the Board are as follows:
adequate in terms of size and diversity of age and gender.
This is to ensure inclusiveness of views as well as to facilitate • To review, approve and monitor the strategic business plans,
effective decision-making and constructive deliberations goals and key policies proposed by the Management to
during its meetings. ensure sustainability and optimisation of long-term returns;
• To ensure that appropriate policies are in place, adopted
The NEDs possess the necessary expertise and experience to effectively and are regularly reviewed;
ensure that the strategies proposed by the Management are
fully deliberated and examined, taking into account the • To review and approve financial statements;
interests of the shareholders and stakeholders. They contribute • To review and manage principal risks and adequacy of PDB’s
to the formulation of policy and decision making through internal control systems including systems for compliance
their expertise and experience. with applicable laws, regulations, rules and guidelines;
The INEDs play a significant role in providing unbiased and • To ensure that there is an appropriate succession plan
independent views, advice and judgement, taking into account for members of the Board and the Leadership Team (LT);
the interests of relevant stakeholders including the minority and
shareholders of PDB. • To be accountable to its shareholders, and to some extent,
accountability towards a wider range of stakeholders
In line with the MMLR of Bursa Malaysia, none of the members affected by PDB’s decision such as employees, suppliers,
of the Board holds more than five directorships in listed customers, the local community and the state/country
companies. Prior to acceptance of other appointment for where PDB is operating.
directorship in other listed companies, the Directors are
required to first notify the Chairman of PDB to ensure that The above roles and responsibilities are clearly set out in the
such appointment would not unduly affect their time Board Charter.
commitment and responsibilities to the Board.
For more information on Profile of Directors, please refer to

pages 92 to 97 of this <IR>
109
Separate Roles of Chairman, Managing Director/Chief Executive Officer and Senior Independent Director
An effective Board is crucial to the long-term prospects and strategic aims of the Company. This is achieved through strong
and open working relationships between the Directors.
Additionally, the Board practices a clear demarcation of duties and responsibilities between Chairman and MD/CEO to ensure
a balance of power and authority in the Board. The positions of Chairman and MD/CEO are held by two different individuals
whilst the SID acts as a point of contact between the NEDs and Chairman as well as the designated contact to whom
shareholders’ concerns may be raised. A short summary of their roles and division of responsibilities is set out below:
CHAIRMAN Roles and responsibilities:
DATUK MD ARIF MAHMOOD • Leading the Board in setting the values and ethical standards of PDB;
The Chairman of PDB is a
• Chairing the Board meetings and stimulating debates on issues and
NINED. The Chairman is primarily
encouraging positive contributions from each Board member;
responsible for the orderly
conduct and function of the • Consulting with the Company Secretary in setting the agenda for Board
Board. meetings and ensuring that all relevant issues are on the agenda;
• Maintaining a relationship of trust with and between the MD/CEO and
Non-Executive Directors;
• Ensuring the provision of accurate, timely and clear information to
Directors;
• Ensuring effective communication with shareholders and relevant
stakeholders;
• Arranging evaluation of performance of Board members, its Committees
and individual Directors, including assessment of the independence of
Independent Directors;
• Ensuring that all Directors are properly briefed on issues arising at Board
meetings and there is sufficient time allowed for discussion on complex
or contentious issues and where appropriate, arranging for informal
meetings beforehand to enable thorough preparations;
• Allowing every Board resolution to be voted on and ensuring the will of
the majority prevails;
• Casting his votes in accordance with the prescribed PDB’s Constitution;
• Ensuring that all Board members, upon taking up their office, are fully
briefed on the terms of their appointment, time commitment, duties and
responsibilities, and the business of PDB; and
• Acting as liaison between the Board and Management, and between the
Board and the MD/CEO.
For more information on Chairman’s profile, please refer to page 92 of this

<IR>
110
MANAGING DIRECTOR/
CHIEF EXECUTIVE OFFICER Roles and responsibilities:
AZRUL OSMAN RANI • Develops and recommends to the Board the long-term strategy and vision
The MD/CEO is responsible for the for PDB and/or Group that will lead to the creation of long-term prosperity
overall operations of the business, and stakeholder value;
organisational effectiveness and the • Develops and recommends to the Board the business plan and budget that
implementation of the Group’s supports PDB’s and/or Group’s long-term strategy;
strategies and policies and is assisted • Fosters a corporate culture that promotes ethical practices, encourages
by the LT in managing the business individual integrity and the fulfillment of PDB’s corporate social responsibilities;
on a day-to-day basis, with whom • Maintains a positive and ethical working environment that is conducive to
he consults regularly. attracting, retaining and motivating a diverse workforce at all levels;
• Recommends suitable management structures and operating authority levels
which include delegations of responsibilities to the Management;
• Ensures an effective LT below the level of the MD/CEO and developing an
appropriate succession plan;
• Formulates and oversees implementation of major corporate policies;
• Accountable to the Board for the financial management and reporting,
including forecasts and budgets of PDB;
• Reports periodically to the Board on the Group’s financial and business
performance;
• Ensures continuous improvement in quality and value of the PDB’s products
and services; and
• Serves as spokesperson for PDB.
For more information on the MD/CEO’s profile, please refer to page 93 of this <IR>
SENIOR INDEPENDENT
DIRECTOR Roles and responsibilities:
LIM BENG CHOON As a SID, Mr Lim Beng Choon acts as the main liaison between the INEDs and
Lim Beng Choon fulfils the criteria the Chairman on matters that may be deemed sensitive and is available for
of an Independent Director pursuant confidential discussions with other NEDs who may have concerns which they
to the MMLR of Bursa Malaysia and believe have not been considered by the Board as a whole. He also provides an
was appointed as the SID of PDB on alternative communication channel for shareholders and stakeholders to convey
12 February 2015. their concerns and raise issues so that these can be channelled to the relevant
parties.
All queries relating to the Group can be channelled to the SID’s email address,
bengchoon.lim@petronas.com.my or directed to the following address:
Lim Beng Choon

Senior Independent Director
PETRONAS Dagangan Berhad
Level 67, Tower 1, PETRONAS Twin Towers
Kuala Lumpur City Centre
50088 Kuala Lumpur Malaysia
For more information on the SID’s profile, please refer to page 93 of this <IR>
111
BOARD DIVERSITY a) independent from Management and free from any business
or other relationship which could interfere with
PDB’s Diversity Policy ensures that the mix and profiles of
independent judgement or the ability to act in the best
our Board members, in terms of age and gender, provide
interest of the Company.
the necessary range of perspectives, experience and expertise
required to achieve effective stewardship. The Board b) not involved in the day-to-day operations of the Company
also supports the country’s aspirational target of 30% other than when collective Board approval is required.
representation of women directors. This mitigates the risk of undue influence from third parties
and allows INEDs to exercise fair judgement.
We believe that a truly diverse and inclusive Board will c) declare their interests or any possible conflict of interest
leverage differences in thought, perspective, knowledge, skill, in any matter tabled prior to the commencement of Board
regional and industry experience, cultural and geographical meetings. Directors are able to ascertain their involvement
background, age and gender, all of which will ensure that in any proposal as the papers are disseminated to them at
PDB retains its competitive advantage. least five business days before each meeting. In a situation
where there is conflict of interest, Directors are required
In this regard, the NRC is empowered to review and evaluate to recuse themselves and abstain from deliberation to allow
the composition and performance of the Board annually, as unbiased and free discussion and decision making. This
well as assessing qualified candidates to occupy Board also holds true for and applies to NINEDs.
positions. As for the composition of the Board, the NRC will
determine the benefits of diversity in order to maintain an
optimum mix of skills, knowledge and experience of the BOARD MEETINGS AND ATTENDANCE
Board. At any given time, the Board may seek to improve
The Board meets at least quarterly with additional meetings
one or more aspects of its diversity and measure the progress,
convened as and when necessary. The Board, Board
accordingly.
Committees and General meetings for the year under review
were scheduled in November 2018 to facilitate the Directors
In line with its effort to create and maintain a diverse Board,
in planning ahead and incorporating the said meetings into
the NRC will:
their respective schedules. Aside from Board meetings, urgent
a) Adhere to the recruitment and sourcing process that matters are also decided via written circular resolutions.
seeks to include diverse candidates, including women
in any director search; At all meetings, the Board practises strong culture of open
b) Assess the appropriate mix of diversity including gender, debate and raises challenging questions. Matters deliberated
age, skills, experience and expertise required on the at Board meetings include among others strategies, business
Board and address gaps, if any; plans and budget, financial and business performance reports,
c) Make recommendations to the Board in relation to the investment decisions, corporate risks reports, changes to the
appointments and maintain an appropriate mix of diversity, organisation structure within the Group, policies, limits of
skills, experience and expertise on the Board; and authority and corporate governance. The respective Chairmen
of BAC, NRC and BRC also update the Board on the
d) Periodically review and report to the Board on
proceedings of their respective Committee meetings. Relevant
requirements in relation to diversity on the Board, if any.
members of the LT attend Board meetings by invitation and
For more information on the Board Diversity Policy, please report to the Board on matters pertinent to their respective
refer to PDB’s corporate website at www.mymesra.com.my areas of responsibility, to present new proposals or to brief
on actions implemented pursuant to recommendations made
by the Board. All proceedings of Board meetings are duly
INDEPENDENCE minuted and signed. Minutes of each Board meeting are
properly kept by the Company Secretary.
Our Board recognises the important contributions that INEDs
make to good corporate governance. All Directors, regardless
The Director’s commitment in carrying out their duties and
of their independent status, are required to act in the best
responsibilities is reflected by their attendance at the Board
interest of the Company and to exercise unfettered and
meetings held during the year. A total of six Board meetings
independent judgement. To date, all six INEDs satisfy the
were held during the year under review and all Directors
following criteria:
complied with the minimum attendance requirement of at
least 50% of the Board meetings pursuant to the MMLR of
Bursa Malaysia.
112
The details of the meetings of the Board, Board Committees and AGM convened during the year under review are set out below:
Meeting Quarter 1, 2019 Quarter 2, 2019 Quarter 3, 2019 Quarter 4, 2019
Annual General Meeting – 25 April 2019 – –
Nomination and 22 January 2019 21 May 2019 – 14 November 2019

Remuneration and
Committee 22 February 2019
Board Audit Committee 19 February 2019 23 May 2019 15 August 2019 15 November 2019
Board Risk Committee – 21 May 2019 21 August 2019 30 October 2019
Board of Directors 26 February 2019 28 May 2019 23 August 2019 4 and 22 November
2019
Board Strategic – – 1 – 4 August 2019

Conversation
Note: The Board Risk Committee was established on 26 February 2019
DIRECTORS’ ATTENDANCE AT BOARD OF DIRECTORS, BOARD COMMITTEES AND ANNUAL GENERAL

MEETING FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 ARE AS FOLLOWS:
Attendance
Board Committees AGM
No. Name of Board Members Designation/Independence BAC NRC BRC
1 Datuk Md Arif Mahmood Chairman, Non-independent Non-

5/6 – – – 3
Executive Director
2 Azrul Osman Rani* Executive Director – – – – –
3 Lim Beng Choon Senior Independent Director 6/6 4/4 4/4 – 3
4 Vimala V. R. Menon Independent Non-Executive Director 6/6 4/4 4/4 3/3 3
5 Datuk Anuar Ahmad Independent Non-Executive Director 6/6 4/4 – 3/3 3
6 Nuraini Ismail Non-Independent Non-Executive

6/6 4/4 – – 3
Director
7 Dato’ Sri Syed Zainal Abidin Syed Non-Independent Non-Executive

6/6 – – – 3
Mohamed Tahir** Director
8 Shafie Shamsuddin Independent Non-Executive Director 6/6 – 4/4 3/3 3
9 Alvin Michael Hew Thai Kheam Independent Non-Executive Director 6/6 – – 3/3 –
10 Nirmala Doraisamy*** Independent Non-Executive Director 2/2 – – 1/1 –
* Azrul Osman Rani was appointed as MD/CEO with effect from 1 January 2020
** Dato’ Sri Syed Zainal Abidin Syed Mohamed Tahir resigned as MD/CEO and was re-designated as NINED with effect from 1 January 2020
*** Nirmala Doraisamy was appointed as INED with effect from 15 October 2019
113
BOARD COMMITTEES Presentations and briefings by the Management and relevant

external consultants, where applicable, are also held at Board
As part of its efforts to ensure the effective discharge of its
meetings to advise the Board. In this regard, relevant
duties, the Board has delegated certain functions to certain
information is furnished and clarifications are given to assist
Committees with their own Terms of Reference (TOR). On
the Board in making a decision.
26 February 2019, the Board approved the formation of the
BRC in line with the MCCG 2017’s Step Up Practice 9.3. The
Access to Board papers is carried out online through a
Chairman of each Committee will report to the Board on
collaborative software which allows the Directors to securely
the deliberations, discussions and outcome of the Committee
access, to read and review Board documents and collaborate
meetings.
with other Directors and the Company Secretary
electronically, anytime and anywhere.
Pursuant to the establishment of the BRC, the BAC’s functions
on risk management were undertaken by the BRC.
The Directors have direct access to the Management and
have unrestricted access to any information relating to the
The reports of these three Committees are set out on pages
Group to enable them to discharge their duties. The Directors
120 to 133 of this <IR>.
also have direct access to the advice and services of the
Company Secretary and are regularly updated on new
statutory and regulatory requirements relating to the duties
BOARD STRATEGIC CONVERSATION
and responsibilities of the Directors. The Directors, whether
The Board Strategic Conversation with the LT of PDB was collectively as a Board or in their individual capacity, may
held on 1 to 4 August 2019 to deliberate on the market seek independent professional advice at PDB’s expense in
outlook, external environment analysis, business strategies furtherance of their duties.
and growth plans.
BOARD EFFECTIVENESS EVALUATION 2019

INFORMATION AND SUPPORT
The Board, through the NRC, reviewed the outcome of Board
Prior to each Board meeting, the agenda and Board papers Effectiveness Evaluation 2019 (BEE) and noted that PDB
encompassing comprehensive qualitative and quantitative continued to be led by an effective, committed and talented
information which include objectives, background, critical Board, helmed by a highly capable and progressive Chairman.
issues, implications, risks, strategic fit, recommendations and The results of the BEE 2019 were presented to the Board in
other pertinent information are circulated to the Directors February 2020 where the Board noted the findings and areas
to enable an informed decision-making by the Board. that necessitated further improvements.
The Board papers are circulated to all Directors at least five

business days prior to each Board meeting. This enables the
Directors to have sufficient time to peruse the Board papers
and seek clarifications or further details from the Management
or the Company Secretary before each meeting. Any Director
may request matters to be included in the agenda. Urgent
papers may be presented and tabled at meetings under the
item “Any Other Business”, subject to the approval of both
the Chairman and MD/CEO.
114
HIGHLIGHTS OF BOARD ACTIVITIES DURING 2019
Strategy
• PDB Growth Strategy
• Business Plan and Budget for FY2020-2024
• Update/Approval on PDB Projects
• 2020 PDB Organisation Structure
Performance
• Quarterly Group Performance
• Audited Financial Statements for FY2018
• Quarterly Financial Results
• Quarterly Interim Dividend
Risk and Internal Controls

• Quarterly PDB Business Risk Report
• PDB Corporate Risk Profile
• Quarterly PDB’s Litigation and Arbitration Cases
• Quarterly Audit Status Report
• PDB Risk Appetite
Governance
• 2018 Annual Report Statements
• Corporate Governance Report to Bursa Malaysia
• Appointment of Independent Non-Executive Director
• Appointment and resignation of MD/CEO
• Indemnity and Directors & Officers Liability Insurance for PDB Group
• Performance Evaluation for Board of Directors and Board Committee Members
• Revision of Board Audit Committee Terms of Reference
• Establishment of Board Risk Committee
• Re-election of Directors at 37th AGM
• Proposed Adoption of a New Constitution of PDB
• Revision to PDB Limits of Authority and Summary of Authority
• Enhanced PDB Risk Policy
115
DIRECTORS’ INDEMNITY
PDB continues to provide and maintain indemnification for its Directors throughout the financial year as allowed under the
CA 2016 to the extent it is insurable under the Directors’ and Officers’ Liability Insurance (D&O) procured by the Company.
Directors and Officers are indemnified against any liability incurred by them in discharging their duties while holding office
as Directors and Officers of the Company.
All Directors may opt to obtain D&O insurance to provide insurance protection (to the extent it is insurable) against
unindemnified liabilities by the Company or uninsured circumstances. The premium to be paid by all Directors is determined
by the insurance company.
ONBOARDING AND CONTINUING DEVELOPMENT PROGRAMME FOR DIRECTORS

All new Directors appointed to the Board received a comprehensive onboarding programme, conducted by members of
the LT covering key areas of the business, including among others the Company’s strategies, business segments and
operations, the corporate governance framework within the Group and key risks of the Company. In addition, the onboarding
includes site visits to terminals and PETRONAS stations to enhance their understanding on PDB’s business operations. New
Directors are also updated on ongoing and potential projects undertaken by the Group. This programme helps the new
Directors to familiarise themselves with the Group’s business. As at the date of this report, PDB conducted numerous
onboarding sessions for the two newly appointed Directors, Nirmala Doraisamy and Azrul Osman Rani. Nirmala Doraisamy
has also attended the Mandatory Accreditation Programme (MAP) as required under the MMLR whilst Azrul Osman Rani will
attend the MAP in March 2020.
In line with Paragraph 15.08 of MMLR, the Directors recognise the importance and value of attending conferences, training
programmes and seminars in order to keep themselves abreast of the development and changes in the industry the Group
operates, as well as update on new statutory and regulatory requirements.
During the year under review, the Directors participated in conferences, seminars and training programmes that covered
areas of corporate governance, finance, global business developments and relevant industry updates in various capacities,
as delegates and/or speakers, details of which are set out below:
No Director Programmes Attended Date
1. Datuk Md Arif Mahmood • World Economic Forum in Africa 2019 – Cape Town, Africa 4 – 6 September 2019
• Amazon Web Services Innovation Leaders Forum – Hanoi 25 – 26 September 2019
• New Silk Road CEO of the Year Awards 2019 – Abu Dhabi 30 September 2019 –
1 October 2019
• TCS Summit Asia Pacific 2019 – Speaker and Participant 30 October 2019
– Sydney, Australia
• Top Leaders Engagement Session with Puan Latheefa Koya, 4 November 2019
Chief Commissioner of Malaysian Anti-Corruption
Commission – Kuala Lumpur
116
2. Dato’ Sri Syed Zainal • Marketing Fast Forward 2019 – Speaker – Kuala Lumpur 27 March 2019
Abidin Syed Mohamed th
• 20 Asia Oil & Gas Conference 2019 – Kuala Lumpur 24 May 2019
Tahir • PETRONAS Continuous Improvement Convention – 30 September 2019
Speaker – Sunway, Selangor
• Women Global Leaders Conference (Speaker) – Houston, 28 October 2019
United States of America
• Kolokium Pendidikan Revolusi Industri 4.0 (Ucaptama Wakil 5 November 2019
Industri) – Putrajaya
• EV Fluid Symposium – Turin, Italy 7 November 2019
3. Lim Beng Choon • Mega Trends and Macroeconomics – Kuala Lumpur 26 June 2019
• Oil and Gas and Upstream Outlook – Kuala Lumpur 26 June 2019
• Geopolitical Outlook – Kuala Lumpur 26 June 2019
• Effective Strategy For Stakeholder Management – Kuala 8 July 2019
Lumpur
• Malaysian Financial Reporting Standards Updates – Kuala 3 December 2019
Lumpur
• Culture Proofing Organisations In The Digital Era : Creating 5 December 2019
Right Culture For Sustainable Growth – Kuala Lumpur
• Economic Sanctions and Export Controls – Kuala Lumpur 5 December 2019
4. Vimala V.R. Menon • 20th Asia Oil and Gas Conference 2019 – Kuala Lumpur 24-25 June 2019
• The Essence Of Independence – Kuala Lumpur 27 June 2019
• PETRONAS Board Excellence Programme: Effective Strategy 8 July 2019
for Stakeholder Management – Kuala Lumpur
Lumpur
5. Datuk Anuar Ahmad • Outlook & Development Of Property Industry in Malaysia 16 January 2019
– Kuala Lumpur
• Amendments To Malaysian Anti-Corruption Commission 16 January 2019
Act 2009 – Kuala Lumpur
• Cyber Security In The Boardroom – Kuala Lumpur 27 June 2019
• Ethical Leadership – Kuala Lumpur 25 July 2019
• Directors And Senior Management Training On Talent 23 September 2019
Management – Kuala Lumpur
• 2020 National Budget Briefing – Kuala Lumpur 18 October 2019
Lumpur
117
6. Nuraini Ismail • Cambridge Energy Research Associate Week 2019 – Texas, 11-14 March 2019
Houston
• Corporate Integrity Advocacy Programme For PETRONAS 28 March 2019
Top Management – Kuala Lumpur
• World Economic Forum Malaysia Energy Roundtable: 10 July 2019
Shaping The Future of Malaysia’s Energy Landscape – Kuala
Lumpur
• PETRONAS 2019 Compliance Conference – Connect, 7 October 2019
Network, Collaborate – Kuala Lumpur
• Asia Petroleum Geoscience Conference & Exhibition 29 October 2019
(APGCE) 2019 – Kuala Lumpur
Lumpur
• Audit Committee Seminar for the Public and Private Sectors 17 December 2019
2019 – Kuala Lumpur
7. Shafie Shamsuddin • Dealing in Listed Securities, Closed Period & Insider Trading 9 December 2019
– Kuala Lumpur
8. Alvin Michael Hew Thai • Business Strategy and Digitalisation - by Jeff Sakal from 24 April 2019
Kheam Amdocs – Kuala Lumpur
• Enterprise Risk Management - by Ernst & Young – Kuala 25 April 2019
Lumpur
• What it takes to win in retail - by Derek Keswakaroon, Bain 2 August 2019
& Company – Kuala Lumpur
• Advanced Analytics – critical capability to win in new retail 2 August 2019
world – Velu Sinha, Bain & Company – Kuala Lumpur
• The 7 Things That Most Executives Get Wrong About Digital 5 November 2019
Transformation – Singapore
• Corporate Culture And How The Board Can Influence – 5 December 2019
Singapore
9. Nirmala Doraisamy • Institute of Corporate Directors Malaysia’s International 14-15 October 2019
(Appointed on Director’s Summit – Kuala Lumpur
15 October 2019) • PDB Onboarding Session For New Director – Kuala Lumpur 17 October 2019
• Corporate Liability Section 17A of the Malaysian Anti- 6 November 2019
Corruption (Amendment Act 2018) – Kuala Lumpur
• Shaping The Boards Of Tomorrow Programme – Kuala 2 December 2019
Lumpur
• PDB Briefing On Key Projects, Information Technology/ 13 December 2019
Digitalisation Projects And Strategies – Kuala Lumpur
• Site Visit To Klang Valley Distribution Terminal – Dengkil 19 December 2019
• Site Visit to PETRONAS Station Jalan Kolam Ayer Lama 19 December 2019
and Walkabout at Common Ground – Kuala Lumpur
118
QUALIFIED AND COMPETENT COMPANY The Company Secretaries ensure that discussions and
SECRETARIES deliberations at the Board and Board Committee meetings
are well documented, and subsequently communicated to
The Company Secretaries of PDB are qualified to act as
the Management for appropriate actions. The Company
company secretary under Section 235 of the Companies Act
Secretaries update the Board on the follow-up of its decisions
2016. One of them has a legal qualification and the other is
and recommendations.
a Fellow of the Malaysian Institute of Chartered Secretaries
and Administrators. Each acts as an advisor to the Board,
The Company Secretaries constantly keep themselves abreast
particularly with regard to PDB’s Constitution and its
of the evolving regulatory changes and developments in
compliance with regulatory requirements, codes, guidance
corporate governance through continuous training. During
and legislations.
the year under review, the Company Secretaries attended
the following training programmes:
No Company Secretary Programmes Attended Date
1. Nur Nadia Mohd • Seminar on Company Secretaries Training Programme Significant 12 February 2019
Nordin 2.0 Part A (CCM) – Kuala Lumpur
• Group Legal In-House Workshop: Negotiations – Kuala Lumpur 3 – 4 July 2019
• SSM National Conference 2019 – Kuala Lumpur 23 – 24 July 2019
• MCCG – Adoption of Practices for Meaningful Corporate 7 August 2019
Governance – Kuala Lumpur
• Legally Speaking: Limits of Authority and Management Framework 28 August 2019
– Kuala Lumpur
2. Yeap Kok Leong • Read Interpret And Analyze Financial Statements For Company 5 April 2019
Directors And Company Secretaries – Kuala Lumpur
• MAICSA Annual Conference 2019: Next Dimension In Governance 2 – 3 July 2019
– Kuala Lumpur
• ADP Partners Executive Convention, Vienna: Placing Global Payroll 6 – 8 November 2019
Center Stage
119

NOMINATION AND REMUNERATION COMMITTEE REPORT
OVERVIEW
This report provides shareholders with valuable insight
“
into the activities of the NRC during the year under
review. As at the date of this report, the NRC is made
up of three INEDs. Dear Valued
Shareholders,
I am pleased
to present the
NRC Report for
TERMS OF REFERENCE
the Financial
The Terms of Reference (TOR) of the NRC which set
out the authority, duties and responsibilities of the
Year Ended 31
NRC are consistent with the requirements of the MMLR December 2019 in
of Bursa Malaysia and the MCCG 2017.
For more information on TOR of the NRC, please refer

to PDB’s corporate website at www.mymesra.com.my
LIM BENG CHOON
Chairman
“
compliance with
Paragraph 15.08A of
the MMLR of Bursa
Malaysia.
COMPOSITION
The NRC comprises exclusively INEDs, in compliance with the requirement of Paragraph 15.08A(1) of the MMLR of Bursa
Malaysia, which provides that the NRC must comprise exclusively non-executive directors, majority of whom are independent
directors. The NRC is chaired by a SID, consistent with Practice 4.7 of MCCG 2017.
As at the date of this report, the composition of the NRC is as follows:
Date of Appointment as
Tenure on the Nomination and
Nomination and Remuneration
Remuneration Committee
Members Committee Member
Lim Beng Choon

Chairman, 7 August 2014 5 years 6 months
Vimala V.R. Menon

Member, 21 February 2017 3 years
Independent Non-Executive Director
Shafie Shamsuddin
Member, 6 February 2018 2 years
120

MEETINGS AND ATTENDANCE DURING THE considered by the NRC, taking into consideration the mix of
FINANCIAL YEAR skills, competencies, experience, integrity, personal attributes
and time commitment required to effectively fulfil his or her
The NRC meetings for the year under review were scheduled
role as a director. Diversity in terms of age and gender is also
in November 2018 to allow the members to plan ahead and
considered during the selection process.
incorporate the NRC meetings into their respective schedules.
During the year under review, PDB engaged a professional
During the year under review the NRC met four times to
recruiting firm and considered recommendations from the
discharge its duties and functions as a committee of the
Board members to assist in the search for new INEDs based
Board. The record of attendance of the NRC members can
on the identified selection criteria approved by the NRC. The
be found on page 113 of this <IR>.
NRC shortlisted several candidates for engagement sessions
to review the suitability of these candidates prior to
At each meeting, the MD/CEO, Head of Human Resources
recommending to the Board for approval.
Management and any other persons deemed necessary by the
NRC were invited to attend to brief and furnish the NRC with
Having conducted all relevant reviews and assessments, the
necessary information and clarification to relevant items on the
NRC had recommended Nirmala Doraisamy to be appointed
agenda. The Company Secretary acts as Secretary to the NRC.
and the Board approved the recommendation by the NRC
effective 15 October 2019.
Each year, the NRC invites all other members of the Board
for its January meeting to discuss the annual performance
In addition, the NRC played a pivotal role in the selection of
of the LT including the MD/CEO.
the successor of the MD/CEO in light of PETRONAS internal
mobility exercise. Upon detailed deliberation, the NRC had
During the year under review, the agenda and meeting papers
recommended to the Board the appointment of Azrul Osman
relevant to the business of the meeting were distributed to
Rani as the new MD/CEO of PDB in place of Dato’ Sri Syed
the NRC members via a secured collaborative software, no
Zainal Abidin Syed Mohamed Tahir. As a result, the Board
less than five business days from the meeting date. This
appointed Azrul Osman Rani as the new MD/CEO effective
software eases the process of distribution of meeting papers
1 January 2020 whilst Dato’ Sri Syed Zainal Abidin Syed
and minimises leakage of sensitive information. It also enables
Mohamed Tahir maintains his position as the NINED of the
the NRC members to have access to the proposal papers
Company effective 1 January 2020.
electronically, anytime and anywhere.
As at the date of this report, 60% of the Board members are
All proceedings of the NRC meetings were duly recorded in
INEDs with 30% comprising women Directors. This is
the minutes of each meeting and the signed minutes of each
consistent with Practices 4.1 and 4.5 of the MCCG 2017,
NRC meeting were properly kept by the Secretary. Minutes
respectively.
of the NRC meeting were tabled for confirmation at the
following NRC meeting, after which they were presented to
The Board appointment process is summarised in the chart below:
the Board for notation.
Circumstances Deliberation by
BOARD APPOINTMENT PROCESS giving rise to the the NRC on the PDB Board
appointment of suitability of the Approval
PDB practises a formal and transparent process on the Directors candidate
appointment of new Directors. The nomination of NINEDs

to the Board is made by PETRONAS being the majority The NRC shall Interview shortlisted
shareholder of the Company. The nomination of INEDs to develop and candidates/
deliberate selection Orientation/
consultation with
the Board may be made via the recommendations from the criteria combining
Chairman of the
Induction
competencies and
Board members and/or through the engagement of a attributes required Board
professional recruiting firm to find the most suitable

candidates to fill any vacant positions. Assess and shortlist Continuous
the potential Training and
Search for
candidates in Annual
In its selection of suitable candidates, the NRC shall develop candidates
consultation with Performance
and deliberate selection criteria based on competencies and the NRC Assessment
attributes required. All nominees to the Board are first
121

DIRECTORS’ RE-ELECTION AND RE-APPOINTMENT BOARD EFFECTIVENESS EVALUATION

The NRC is responsible for recommending to the Board, Every year, under the purview of the NRC, a BEE is undertaken
Directors who are standing for re-election at the AGM to assess the effectiveness of the following:
pursuant to Articles 100 and 107 of PDB’s Constitution.
Article 100 of the Constitution stipulates that the Board shall

have the power to appoint any person to be a Director to fill
a casual vacancy or as an addition to the existing Board, and
The Board as a Whole and
that any Director so appointed shall hold office until the next
The Various Board Committees
following AGM and shall then be eligible for re-election.
Article 107 of the Company’s Constitution provides that one-

third of the Directors of the Company for the time being shall
retire by rotation at an AGM at least once in three years and
shall be eligible for re-election at the AGM.
Contribution of each
The Directors’ rotation list is presented to the NRC for Individual Director
endorsement prior to recommendation to the Board and
thereafter to the shareholders for approval. In assessing the
candidates’ eligibility, the NRC considers their competencies,
commitment, contribution, performance based on the BEE
and their ability to act in the best interest of PDB.
Independence of
The NRC at its meeting held on 14 February 2020 gave its
Independent Directors
endorsement for the following Directors to be considered
for re-election pursuant to Articles 100 and 107 of PDB’s
Constitution at the PDB’s 38th AGM and they have given their During the year under review, the BEE was internally conducted
consent for re-election at the AGM: and the process covered the Board, Board Committees, Peer
and Self Evaluations of the Board members. The BEE 2019
Article 100 Article 107 focused on maximising the effectiveness and performance of
the Board and its Committees in the best interest of PDB. The
• Nirmala Doraisamy • Shafie Shamsuddin BEE results were compiled by an independent third party.
• Azrul Osman Rani • Alvin Michael Hew Thai
The questionnaires on the BEE incorporated were
Kheam
benchmarked based on best practices. The indicators for the
performance of the Board included among others, the Board
composition, conduct of meetings, communication with the
Since 2014, the NRC has implemented a policy whereby Management and stakeholders as well as strategy and planning
INEDs are appointed for a tenure of three years. Further for the Group.
extension of the tenure is subject to the review and
recommendation of the NRC which is subsequently submitted During the year under review, the questionnaires of the BEE
to the Board for consideration. were revised in November 2019, in order to simplify the
assessment process whilst preserving the essence of the
In line with the exemplary practice as recommended by the current areas of assessment. The key changes to the
MCCG 2017, the Board has also adopted a tenure policy questionnaires included the inclusion of the following:
whereby the INEDs total tenure is now capped at nine years.
As at the date of this report, none of the INEDs has served (i) A separate evaluation on the Chairman and the MD/CEO
the Board more than nine years. under the Board Performance segment, in line with the best
practices recommended by the ASEAN Corporate
Governance Scorecard; and
(ii) A new set of evaluation for the BRC under the Board
Committee segment.
122

The following areas were assessed:
AREAS OF BOARD EVALUATION

GROUP DYNAMICS AND EFFECTIVENESS BOARD/BOARD COMMITTEE EFFECTIVENESS
• Overall Board Effectiveness • Board Chairman Evaluation
• Organisation of the Board • MD/CEO Evaluation
• Composition of the Board • Board Audit Committee
• Looking Forward (Succession Planning and Development) • Nomination and Remuneration Committee
• Communications with Shareholders • Board Risk Committee
DIRECTOR SELF/PEER EVALUATION

KNOWLEDGE AND UNDERSTANDING ON:
• Role that a Board plays in governance and as • International businesses
Company Director • Financial discussions
• Vision and Mission • Legal and compliance duties
• Strategic needs and development • Risk management
• Market • Board effectiveness
• Critical success factors • Differentiate strategy/policy issues and operational
• Business risk matters
• Performance measures
SKILLS AND EXPERIENCE PREPARATION FOR BOARD MEETINGS INDEPENDENCE
• Analytical skills • Time commitment • Ability to speak openly and
• Relevant functional insights • Contribution honestly
• Relevant industry insights • Pre-reading of all board papers
BUILDING RELATIONSHIP PROFESSIONAL DEVELOPMENT
• Board colleagues • On-going training and education
• Board and Management
• Display confidence in other Directors’ abilities
• Listen attentively to ideas
BOARD AND BOARD COMMITTEES SUCCESSION PLANNING

EFFECTIVENESS REVIEW
The Board has established a Succession Planning Framework
The results of the BEE 2019 were presented to the NRC in to ensure the orderly identification and selection of new
February 2020 whereby the NRC noted the findings and areas INEDs in the event of an opening on the Board, whether
that necessitated further improvements. The NRC reviewed such opening exists by reason of an anticipated retirement,
the performance of the Board and the Board Committees. the expansion of the size of the Board, or otherwise. The
The NRC noted that the Board is committed to the highest NRC has the responsibility in ensuring appropriate succession
standards of good governance and continues to be seen as planning of Directors and reviewing the Board’s required mix
an excellent Board with strong support from the Management. of skills and experience as well as reviewing the tenure of
The BEE 2019 also revealed that the current composition of INEDs on the Board.
the Board is well-balanced, effective and equipped with the
relevant skills and areas of expertise to steer PDB especially In addition to the Succession Planning for the Directors, the
in its growth strategy. NRC is tasked to oversee the development of a succession
plan for the MD/CEO and LT. During the year under review,
Based on the findings of the BEE, the Board is satisfied with NRC continued to focus on conducting all relevant reviews
the performance and effectiveness of the NRC, BAC and BRC and assessments of the LT positions. The NRC is satisfied
in providing sound advice and recommendations to the Board that there is a sufficient talent pool of potential successors
for financial year 2019. for PDB LT and that for critical positions, external talents will
be recruited if there are no suitable internal talents available.
123

DIRECTORS’ FEES
The Directors’ fees structure which embraces market practices and trends is designed to attract and retain high calibre
Board members and to ensure they are appropriately paid for their time and effort.
The Board has established a formal and transparent Directors’ Remuneration Framework which comprises retainer fees,
meeting allowances and benefits in-kind. In compliance with Section 230(1) of the CA 2016, the resolution on the payment
of the following Directors’ fees from the 37th AGM until conclusion of the next AGM will be tabled at the forthcoming AGM
for shareholders’ approval:
Meeting allowance per attendance

Nomination
Monthly Fees Board Audit and Board Risk
Board
Committee Remuneration Committee
Particulars Committee
Chairman RM24,000 RM3,500 RM3,500 RM3,500 RM3,500

Member RM12,000 RM3,500 RM3,500 RM3,500 RM3,500
Note: Malaysian Resident INEDs are entitled to fuel allowance of RM6,000 per annum
The fees and allowances for NEDs are determined by the Board and are subject to the approval of the shareholders of PDB.
The Director’s fees and meeting allowances for NINEDs who are also employees of PETRONAS are paid directly to PETRONAS.
The presence and participation of the NINEDs gives the Board a deeper insight into PETRONAS’s operations.
The breakdown of the detailed Directors’ fees paid during the year under review is disclosed in the Corporate Governance
Report which is accessible to the public at PDB’s corporate website at www.mymesra.com.my.
The MD/CEO being an Executive Director is not entitled to receive Directors’ fees or meeting allowances.
Both Dato’ Sri Syed Zainal Abidin Syed Mohamed Tahir and Azrul Osman Rani, are employees of PETRONAS and are seconded
to PDB. During the year under review, PDB paid RM1,519,570 being payroll cost and benefits ordinarily incurred in the course
of Dato’ Sri Syed Zainal Abidin Syed Mohamed Tahir’s secondment to PDB.
Dato’ Sri Syed Zainal Abidin Syed Mohamed Tahir served as MD/CEO from 1 June 2018 until 31 December 2019 whilst Azrul
Osman Rani was appointed as MD/CEO on 1 January 2020.
MANAGING DIRECTOR/CHIEF EXECUTIVE OFFICER AND LEADERSHIP TEAM

The remuneration philosophy reflects the Group’s commitment to be aligned to best practices in the areas of remuneration,
retention and reward to ensure that the Group attracts and retains exceptional talent. The remuneration packages and
incentives are regularly evaluated against market-related surveys.
PETRONAS Remuneration Philosophy and Guiding Principles
Competitive and differentiated remuneration to attract and retain talents to drive business needs
• Pay for job and performance • Conformance to statutory requirements
• Competitive within the relevant industry • Affordability of the Company
• Internal equity
124

The MD/CEO and LT are employees of PETRONAS and seconded to the Company. Their remuneration has been benchmarked
against the industry and is aligned with the market.
In addition, their training, succession planning and performance appraisals are aligned to the PETRONAS’s Human Resources
Policies and Strategies. The Board ensures that only suitable personnel with the relevant skills and experiences are appointed
to management positions of PDB.
During the year under review, the NRC deliberated on the MD/CEO and LT’s 2019 scorecard and their performance against
the set targets.
WHAT THE COMMITTEE HAS DONE DURING 2019

During the year under review, the NRC carried out the following activities in discharging its functions and duties:
Board Membership Board Effectiveness Evaluation
• Conducted search, reviewed and nominated INED for • Reviewed and approved the revised BEE questionnaires
Board appointment; for financial year 2019;
• Reviewed and nominated BRC Members; • Assessed the findings for financial year 2018; and
• Reviewed the change of MD/CEO; • Reviewed the follow-up actions on 2018 BEE
• Recommended the Directors standing for re-election recommendations.
at the Annual General Meeting; and
• Identified programmes/events for the continuous Governance
education of the Board members to ensure that they
are up-to-date on new regulations and are conversant Reviewed and endorsed the disclosures in the NRC Report
with industry trends and developments. for the financial year ended 31 December 2019 for
inclusion in the 2019 Integrated Report to ensure that
Senior Management’s Appointment, they were prepared in compliance with the relevant
Remuneration and Performance regulatory requirements and guidelines.
• Reviewed and evaluated the Senior Management’s

performance including MD/CEO for financial year 2018;
• Reviewed the PDB LT and MD/CEO’s Succession
Planning; and
• Reviewed the remuneration framework of the Senior
Management including MD/CEO and the result of the LIM BENG CHOON
benchmarking against the market. CHAIRMAN
NOMINATION AND REMUNERATION COMMITTEE
125

BOARD AUDIT COMMITTEE REPORT
OVERVIEW
This report provides an insight into the activities of the
BAC during the year under review. As at the date of
this report, the BAC is made up of four NEDs.
“ Dear Valued
Shareholders,
On behalf of the
BAC, I am pleased
TERMS OF REFERENCE to present the
The TOR of the BAC which set out the authority, duties BAC Report for
and responsibilities of the BAC are consistent with the the Financial
requirements of the MMLR of Bursa Malaysia and the
Year Ended 31
MCCG 2017.
December 2019 in
The TOR was revised during the year following the
establishment of BRC, whereby the BAC’s functions on
risk management were carved out and placed under
the purview of the BRC whilst other amendments were
VIMALA V.R. MENON
Chairman
“
compliance with
Paragraph 15.15 of
the MMLR of Bursa
made to ensure clarity and to strengthen the TOR. Malaysia.
For more information on TOR of the BAC, please refer
to PDB’s corporate website at www.mymesra.com.my
COMPOSITION
The current composition is in compliance with Paragraph 15.09(1)(b) of the MMLR of Bursa Malaysia where all four BAC
members are NEDs including three Independent Directors who fulfil the criteria of independence as defined in the MMLR
of Bursa Malaysia. None of the Independent Directors has appointed alternate directors.
As at the date of this report, the composition of the BAC is as follows:
Date of Appointment as Tenure on the

Members Board Audit Committee Member Board Audit Committee
Vimala V.R. Menon

Chairman, 18 November 2011 8 years 3 months
Lim Beng Choon

Member, 13 August 2012 7 years 6 months
Datuk Anuar Ahmad

Member, 15 April 2016 3 years 10 months
Nuraini Ismail
Member, 1 October 2013 6 years 4 months
126

The Chairman of the BAC, Vimala V.R. Menon and Nuraini The agenda and meeting papers relevant to the business of
Ismail are both qualified accountants. Vimala V.R. Menon is the meetings were distributed to the BAC members via a
a Member of the Malaysian Institute of Accountants and a secured collaborative software, not less than five business
Fellow of the Institute of Chartered Accountants in England days from the date of each meeting. Not only does this
and Wales whilst Nuraini Ismail is a Fellow of the Association software ease the process of distribution of meeting papers
of Certified Chartered Accountants, United Kingdom. In this and minimise leakage of sensitive information, it also enables
regard, PDB is in compliance with Paragraph 15.09(c)(i) of the Directors to have access to the proposal papers
the MMLR of Bursa Malaysia which requires at least one electronically, anytime and anywhere.
member of the BAC to be a qualified accountant.
Matters deliberated at the BAC meetings included the review
of the Group’s financial statements, quarterly results for the
announcements to Bursa Malaysia, related party transactions
MEETINGS AND ATTENDANCE DURING THE
and recurrent related party transactions, external and internal
FINANCIAL YEAR
audit reports, status of open audit findings together with the
The BAC meetings for the year under review were scheduled agreed corrective actions as well as matters on internal
in November 2018 to allow the members to plan ahead and control. Prior to the establishment of BRC, the BAC also
incorporate the BAC meetings into their respective schedules. reviewed matters relating to risk management.
The BAC meetings were scheduled once every quarter. During All proceedings of the BAC meetings were duly recorded in
the year under review, the BAC met four times in discharging the minutes of each meeting and the signed minutes of each
its duties and functions as a committee of the Board. The BAC meeting were properly kept by the Secretary. Minutes
record of attendance of the BAC members can be found on of the BAC meeting were tabled for confirmation at the
page 113 of this <IR>. following BAC meeting, after which they were presented to
the Board for notation.
To facilitate deliberation of audit issues, the MD/CEO, Chief
Operating Officer (COO), Chief Financial Officer (CFO), Head
of Internal Audit Department (IAD) and External Auditors as CONTINUOUS TRAINING
well as Head of Risk Management Department (RMD) attended
BAC members acknowledged the need for continuous
the BAC meetings and provided the BAC their inputs, advice,
education trainings. During the year under review, all BAC
appropriate relevant information and clarification on relevant
members attended training on the developments in
items on the agenda.
accounting and auditing standards, practices and rules, which
is in line with Practice 8.5 of the MCCG 2017.
The Head of IAD presented the internal audit reports to the
BAC. As and when required, relevant members of the LT were
invited to apprise the BAC on specific issues arising from the
audit findings or other areas impacting the financial results
of the Company. The External Auditors also attended the
BAC meetings to present the external audit plan for the year
and the outcome of the statutory audits conducted on the
Company and its subsidiaries. During the year under review,
the BAC had two private sessions on 19 February 2019 and
15 August 2019 respectively, with the External Auditors without
the presence of the Management.
127

WHAT THE COMMITTEE HAS DONE DURING 2019

Principal activities performed during the year under review were as follows:
Financial Reporting
1. Reviewed the quarterly financial results prior to the approval by the Board, to ensure compliance with the MMLR
of Bursa Malaysia, the applicable financial reporting standards as well as other relevant legal and regulatory
requirements. The reviews and discussions were conducted with the MD/CEO and the CFO of PDB.
2. Reviewed the audited financial statements for the year under review prior to the approval by the Board, to ensure
that they were prepared in accordance with the provisions of the CA 2016 and the applicable financial reporting
standards. The reviews and discussions were conducted with the MD/CEO and the CFO of PDB.
3. Reviewed and deliberated specific key areas affecting the Group’s financial results, and endorsed recommendations
made by Management. The key areas deliberated include assessments on the following areas:
i. Impact on the adoption of new accounting standards for MFRS123: Borrowing Costs and MFRS16: Leases;
ii. Impairment on property, plant and equipment as well as trade and other receivables; and
iii. Accounting treatment on recognition between operating and capital expenditure for new subsidiary,
Setel Ventures Sdn. Bhd.
External Audit
1. Reviewed and recommended the terms of engagement of the External Auditors for the Board’s approval.
2. Reviewed the external audit report for half year financial statements in accordance with the International Standard
on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of
the Entity”.
3. Reviewed and approved the External Auditor’s annual audit plan for the Group, outlining their scope of work.
4. Reviewed the proposed fees for the statutory audit as well as for the non-audit services. The BAC endorsed the
proposed audit fees and the said fees were duly approved by the Board.
5. Conducted external auditors’ assessment in accordance with the newly adopted Framework on External Auditor.
6. Total fees paid to the External Auditors are as follows:
2019 2018
Group Company Group Company

Particulars RM’000 RM’000 RM’000 RM’000
Statutory Audit Fees 684 541 638 520
Non-Audit Fees 347 317 220 220
Percentage of Non-Audit Fees over Statutory Audit Fees 51% 59% 34% 42%
128

Internal Audit Internal Control and Compliance
1. Reviewed and approved the risk- 1. Reviewed the effectiveness of the system of internal controls, taking
based Financial Year 2020 Annual into account the findings from internal and external audit reports.
Audit Plan and budget to ensure
2. Reviewed the Compliance to Anti-Money Laundering and Counter
comprehensiveness of audit
Financing of Terrorism for Electronic Money and Non-Bank Affiliated
coverage, resources and
Charge and Credit Card for Smartpay and Gift Card Framework
competencies to execute the internal
done by a third party.
audit functions effectively.
2. Reviewed the internal audit, special Annual Report

reviews and investigation reports,
recommendations and the relevant The BAC reviewed and endorsed the disclosures on the Corporate
corresponding action plans to Governance Overview Statement, BAC Report, SORMIC and Statement
strengthen PDB’s overall system of of Directors’ Responsibilities in relation to the financial year ended
governance, risk and internal 31 December 2019 for inclusion in the 2019 Integrated Report to ensure
controls. The BAC had also put that they were prepared in compliance with the relevant regulatory
forward various suggestions for requirements and guidelines.
improvement to reinforce the
oversight role and to ensure that These statements are as set out on pages 105 to 147 of this <IR>, respectively.
Management holds individuals
accountable for their internal control,
Risk Monitoring
risk and governance responsibilities.
Prior to the establishment of the BRC in February 2019, the BAC reviewed
3. Monitored the quarterly audit, special and endorsed:
review and investigation findings
i. Company’s critical risks as registered in the Corporate Risk Profile,
status and deliberated the
for the Board’s approval.
rectification actions and timelines
taken by Management to ensure the ii. The adequacy and effectiveness of the risk management practices
control lapses were addressed and through monitoring of the Key Risk Indicators (KRIs) and mitigations
resolved promptly. The BAC also implementation as updated in the quarterly Business Risk Reports (BRR).
deliberated on the justifications given
by Management for extension of
Related Party Transactions
rectification timeline and approved
such request where the justifications The BAC ensured that there were adequate Policies and Procedures in place
were acceptable. to identify and monitor Related Party Transactions/Recurrent Related Party
Transactions (RPTs/RRPTs) such that they were conducted at arm’s length
4. Assessed the performance of the basis, and not detrimental to the interests of the minority shareholders.
Head of IAD and his staff with regard
to their ability to provide independent The BAC performed a quarterly review of all RRPTs entered by the Group
and objective assurance in during the year under review to ensure compliance with PDB’s policies
conformance with recognised and procedures.
international standards.
129

INTERNAL AUDIT FUNCTION IAD continues to adopt a risk-based approach to ensure that
audit plans are prioritised based on the Group’s key risks
The mission of IAD is to enhance and protect the covering critical areas and functions to support business
organisation’s value by providing risk-based and objective strategic objectives. In deriving the audit plan, the IAD gathers
assurance, advice and insights. inputs from various source including:
• Group Risk Profiles and PETRONAS Downstream Emerging
IAD assists the organisation to accomplish its goal by bringing
Risks
a systematic and disciplined approach to evaluating and
• Group Strategy and Objectives and Business Development
improving the effectiveness of risk management, control and
• Materiality/Criticality of business operations
governance processes within the Group.
• Previous audit history
• Feedback and input from BAC and LT
The Head of Internal Audit reports directly to the BAC and
administratively to MD/CEO to ensure impartiality and
During the year under review, IAD performed reviews based
independence in executing its role. It is currently headed by
on the approved internal audit plan and presented the reports
Baba-A Rahman Tiriman who holds a Bachelor Degree in
for the following audits to the BAC:
Business Administration (1st Class Hons) from International
Islamic University, Malaysia. He has spent more than four • Audit on Land Matters and Fixed Assets Management
years in Internal Audit function at PETRONAS Group • Audit on LPG Business Activities
specifically overseeing the downstream business. He had • Audit on Lubricant Business Activities
nine years experience specialising in retail and commercial • Audit on Governance of Joint Facilities Terminal
businesses within the PDB Group. Operations
• Audit on PETRONAS Station Dealership Management
Activities
The Internal Audit function is guided by its Audit Charter as
• Audit on Revenue Recognition from MESRA and Other
approved by the BAC which defines its responsibilities,
Sources of Income
authority and scope of work within the Group.
• Review on Governance Project Management (Non-
Technical)
Internal Audit is guided by Audit Manual as well as the
• Audit on Post Implementation of Centralised Services
International Professional Practices Framework and adopted
• Audit on Operations of PETRONAS Aviation Sdn Bhd and
the five components set out in the Internal Control Integrated
United Fuel Company LLC
Framework issued by the Committee of Sponsoring
• Audit on Risk Management Activities
Organisations of the Treadway Commission (COSO) namely:
• Control Environment The audit reports were forwarded to the Management of the
• Risk Assessment relevant divisions/departments who are responsible to ensure
• Control Activities that the Agreed Corrective Actions are closed satisfactorily
• Information and Communication within the agreed time frame. Any outstanding audit items
• Monitoring Activities are reported to the BAC through the Quarterly Audit Status
Report.
130

The Quality Assurance and Improvement Programme (QAIP) To enhance the auditors’ competencies and their continued
continues to be used to assess the quality of audit processes. professional development, a customised certification
It is an ongoing and periodic assessment that covers the programme has been designed for auditors to enable them
entire spectrum of Internal Audit activities. The QAIP assesses to pursue their careers as certified internal auditors. As at 31
the efficiency and effectiveness of the audit processes and December 2019, two internal auditors have passed the
opportunities for improvement are identified through the Integrated COSO framework certification. Additionally, four
internal and external assessments. The results of the QAIP staff had undergone the exchange programme initiative
are reported to the RMGC and the BAC. within internal audit fraternity and businesses to accelerate
learning exposure across the Group.
The Group continues its commitment to equip the internal
auditors with adequate knowledge to discharge their duties The total costs incurred by the internal audit function of the
and responsibilities. There are a total of 10 internal auditors Company and the Group for the financial year was RM4.0
in PDB with diverse backgrounds and disciplines such as million.
accounting, finance, business management, marketing,
engineering, energy management, commerce and information
BAC EFFECTIVENESS REVIEW AND PERFORMANCE
technology. The internal auditors have sufficient mix of
knowledge, skills and competencies to execute the audit During the year under review, the Board assessed the
plan. performance of the BAC through an annual BEE. The Board
is satisfied that the BAC has discharged its functions, duties
Annually, internal auditors are assessed via individual Online and responsibilities in accordance with its TOR.
Functional Assessment (OFA) to determine the learning and
development needs to further enhance their competencies.
The functional competencies are continuously developed REPORTING TO THE EXCHANGE
based on the established Internal Audit Competency
In 2019, the BAC was of the view that PDB was in compliance
Framework issued by The Institute of Internal Auditors.
with the MMLR of Bursa Malaysia and as such, the reporting
to Bursa Malaysia under Paragraph 15.16 of the MMLR is not
In order to perform their functions effectively, the auditors
required.
undergo continuous trainings to equip themselves with
business acumen and standard practices and leveraging both
from in-house and external accredited training providers.
Online e-learning programmes and continuous on-the-job VIMALA V.R. MENON
observations also act as platforms to assess the capability CHAIRMAN
and competency of the auditors. BOARD AUDIT COMMITTEE
131

BOARD RISK COMMITTEE REPORT
OVERVIEW
The BRC was established on 26 February 2019 to assist
the Board in ensuring the Company has in place a
sound and robust risk management framework and that
such framework has been effectively implemented to
“
Dear Valued
Shareholders,
The establishment
enhance the Company’s ability to achieve its strategic of the BRC was
objectives especially in pursuing its growth agenda.
timely to ensure
In carrying out its oversight responsibilities, each BRC that the Company
member is to provide individual independent opinions has effectively
to the fact-finding, analysis and decision-making implemented its
process of the BRC, based on their expertise,
experience and industrial knowledge. The establishment risk management
of the BRC was timely and is in line with the Step-Up framework, in
Practice 9.3 of the MCCG 2017. pursuing its growth
ALVIN MICHAEL HEW THAI KHEAM
Chairman agenda. This is also
TERMS OF REFERENCE
The TOR of the BRC set out the authority, duties and
responsibilities of the BRC and are accessible on PDB’s
in line with the
Step-Up Practice 9.3
of the MCCG 2017.
“
corporate website at www.mymesra.com.my.
COMPOSITION
The BRC consists of five members who are all Independent Non-Executive Directors including the Chairman. They possess
sound judgement, objectivity, independent attitude, management experience, professionalism, integrity and knowledge on
the industry. None of the BRC members has appointed alternate directors.
As at the date of this report, the composition of the BRC is as follows:
Date of Appointment as Tenure on the

Members Board Risk Committee Member Board Risk Committee
Alvin Michael Hew Thai Kheam

Since inception on
Chairman, 1 year
26 February 2019
Vimala V.R. Menon
Since inception on
Member, 1 year
26 February 2019
Datuk Anuar Ahmad
Since inception on
Member, 1 year
26 February 2019
Shafie Shamsuddin
Since inception on
Member, 1 year
26 February 2019
Nirmala Doraisamy
Member, 15 October 2019 4 months
132

BOARD RISK COMMITTEE REPORT
MEETINGS AND ATTENDANCE DURING THE WHAT THE COMMITTEE HAS DONE DURING 2019
FINANCIAL YEAR
During the year under review, the BRC carried out the
The BRC meetings for the year under review were scheduled following activities in discharging its functions and duties:
immediately after the inception of the BRC in February 2019
to allow the members to plan ahead and incorporate the Risk Appetite
BRC meetings into their respective schedules.
Critically reviewed and endorsed the risk appetite and level
of tolerance that the Group is willing to accept in pursuing
The BRC meetings were scheduled once every quarter. During its strategic objectives.
the year under review, the BRC met three times in discharging
its duties and functions as a committee of the Board. The
Risk Monitoring
record of attendance of the BRC members can be found on
page 113 of this <IR>. • Reviewed and endorsed PDB’s critical risks as registered
in the Corporate Risk Profile, for the Board’s approval.
To facilitate deliberation of risk issues, the MD/CEO, COO,
• Reviewed and endorsed the adequacy and
CFO and Head of Risk Management Department (RMD) effectiveness of the risk management practices
attended the BRC meetings and provided the BRC their inputs, through monitoring of the Key Risk Indicators (KRIs)
advice, appropriate relevant information and clarification on and mitigations implementation as updated in the
relevant items on the agenda. quarterly Business Risk Reports (BRR).
The Head of RMD presented the risk management reports

including updates on risk monitoring and also the corporate Risk Assessment for Decision Making
risk profile to the BRC. As and when required, relevant
Reviewed various business propositions and deliberated
members of the LT were invited to apprise the BRC on
on key risks and mitigation of the proposals. The business
specific issues arising from the strategic proposals. propositions reviewed include:
• Commercial transactions with high complexity and
The agenda and meeting papers relevant to the business of exposure
the meetings were distributed to the BRC members via a
• Key capital projects and new partnerships
secured collaborative software, not less than five business
days from the date of each meeting. Not only does this • New business ventures and/or special projects
software ease the process of distribution of meeting papers • Business expansions and/or new business models
and minimise leakage of sensitive information, it also enables
the Directors to have access to the proposal papers The BRC plays a vital role in reviewing the adequacy and
electronically, anytime and anywhere. effectiveness of risk management processes for PDB. In this
regard, the BRC reviews and challenges the BRR focusing on
Matters deliberated at the BRC meetings included the review the status of KRIs and risk mitigation implementation in
of the Group’s risk appetite, business risk report, strengthening ensuring effective management of risk.
risk culture in PDB, corporate risk profile, matters relating to
risk management as well as business propositions which BRC EFFECTIVENESS REVIEW AND PERFORMANCE
required the BRC’s review and guidance on the risk aspects
2019 saw for the first time an assessment on the performance
thereof.
of the BRC by the Board through the annual BEE. The Board
agreed that the BRC is well structured and represented, with
All proceedings of the BRC meetings were duly recorded in
an appropriate mix of skills, expertise and experience,
the minutes of each meeting and the signed minutes of each contributing to the overall effectiveness of the decision-making
BRC meeting are properly kept by the Secretary. Minutes of process for the Company and the Group. PDB Board is satisfied
the BRC meeting were tabled for confirmation at the following that the BRC has effectively discharged its functions, duties
BRC meeting, after which they were presented to the Board and responsibilities in accordance with the BRC TOR.
for notation.
ALVIN MICHAEL HEW THAI KHEAM

CHAIRMAN
BOARD RISK COMMITTEE
133
RELATIONSHIP WITH SHAREHOLDERS During the AGM, the MD/CEO presents a comprehensive
review of the Group’s performance initiatives and the value
Communications between PDB and Investors
created for shareholders. This review is supported by a visual
The dissemination of timely and accurate information is and graphic presentation of the key points and financial figures.
important for shareholders and investors to enable them to Answers to the queries made by MSWG prior to the AGM are
make informed investment decisions about PDB. The Board also shared with shareholders during the AGM and the same
recognises the importance of effective communication with is uploaded on PDB’s corporate website prior to the AGM day.
PDB’s shareholders and other stakeholders including the
general public. Information on the Group’s business activities At each AGM, shareholders are encouraged and given
and financial performance is disseminated through sufficient opportunity by the Board to raise questions on
announcements to Bursa Malaysia, postings on PDB’s website, issues pertaining to the Annual Report, the resolutions being
press releases, issuance of the Annual Report and where proposed and the business of PDB or the Group in general
required, press conferences. Immediately after the conclusion prior to seeking approval from shareholders on the
of the AGM, PDB will hold a press conference with the media resolutions. Pursuant to Paragraph 8.29A of MMLR of Bursa
and any materials distributed during the press conference are Malaysia, each resolution tabled at an AGM is to be voted
published in PDB’s corporate website at www.mymesra.com. by poll. Since 2017, decisions at PDB’s AGM have been carried
my. out via electronic voting and on a poll. PDB has engaged
independent scrutineers to validate the voting at the AGM
The MD/CEO together with the CFO and the Company’s for each proposal presented to shareholders.
Investor Relations Unit conduct regular engagements with
institutional shareholders and analysts, and hold quarterly analyst The Board, LT and external auditors are present at the AGM
briefings to further explain the Group’s quarterly financial results. to provide answers and clarifications to shareholders.
These engagements promote better understanding of the
Group’s financial performance and operations. Attendance at the Company’s AGM continues to be high as
evidenced by the registration of 1,501 shareholders at its last
PDB actively updates its corporate website www.mymesra. AGM held on 25 April 2019.
com.my with the latest information on the corporate and
business aspects of the Group. Press releases, announcements For more information on minutes of AGMs, please refer to
to Bursa Malaysia, analyst briefings and quarterly results of PDB’s corporate website at www.mymesra.com.my
the Group are also made available on the website and this
helps to promote accessibility of information to PDB’s
ACCOUNTABILITY AND AUDIT
shareholders and other stakeholders.
Financial Reporting
Annual General Meeting The Board is committed to providing a fair and objective
The AGM is the principal forum of open dialogue with assessment of the financial position and prospects of the
shareholders. The notice and agenda of AGM together with Group in the quarterly financial results, annual financial
proxy form are given to shareholders not less than 28 days statements, Annual Report and all other reports or statements
before the AGM, which gives shareholders sufficient time to to shareholders, investors and relevant regulatory authorities.
prepare themselves to attend the AGM or to appoint proxies
to attend and vote on their behalf. Each item of ordinary The Statement by Directors in respect of preparation of the
business included in the notice of the AGM will be accompanied annual audited financial statements is set out on page 198
by an explanatory statement on the effects of the proposed of this <IR>.
resolution.
134
Related Party Transactions Trading on Insider Information

The information relating to Policies and Procedures on On a quarterly basis, the Company Secretary issues a Notice
Related Party Transactions and Conflict of Interests Situations, of Closed Period to Directors and LT, highlighting the
Risk Management processes and Internal Control procedures requirements with regard to dealing in the Company’s shares
can be found in the Board Audit Committee Report, Board during “Closed Period”/”Outside Closed Period” as they are
Risk Committee Report and Statement on Risk Management in possession of price sensitive information relating to PDB.
and Internal Control on pages 126 to 133 and pages 137 to
147 of this <IR>, respectively. During the year under review, there was no trading activity
undertaken by the Board nor the Principal Officers of the
Risk Management and Internal Control Company.
The Board continues to maintain and review its risk
management processes and internal control procedures to Selection of Vendors
ensure a sound system of risk management and internal The Group adopts the PETRONAS tendering process and
control to safeguard shareholders’ investments and the assets governing principles embedded in the PETRONAS Tenders
of the Company and the Group. and Contract Administrative Manual for vendors’ selection.
The Statement on Risk Management and Internal Control Tender Committees have been established to carry out
provides an overview of the risk management and internal independent assessment on bidders’ proposals and to ensure
control within the Group as set out on page 137 to page 147 tendering activities are carried out in a transparent manner.
of this <IR>.
The tendering processes are as follows:
INTEGRITY AND ETHICS i) Tender Plan approval;

ii) Technical Evaluation;
The Board further acknowledges its role in establishing a iii) Commercial Evaluation; and
corporate culture comprising ethical conduct within the iv) Award Recommendation.
Group. In line with this principle, the Board has adopted the
PETRONAS Code of Conduct and Business Ethics, the Additional Compliance Information – Material
Whistleblowing Policy and the Anti-Bribery and Corruption Contracts
Policy. The adoption of these policies is to ensure that the
There were no material contracts or loans entered into by
conduct of business of PDB and its employees is consistently
the Company or its subsidiaries involving Directors’ or major
carried out ethically and with integrity.
shareholders’ interests, either still subsisting at the end of
For more information on CoBE, WBP and ABC, please refer the year ended 31 December 2019 or entered into since the
to pages 148 to 149 of this <IR> end of the previous period, except as disclosed in the audited
financial statements.
Corporate Liability
Taking cognizance of the introduction of Corporate Liability
in the recent amendment to the Malaysian Anti-Corruption
Commission Act 2009 (MACC Act 2009), which would come
into force on 1 June 2020, the Company has taken proactive
actions to ensure that it has adequate procedures in place
designed to prevent associated persons from undertaking
conduct that would trigger the newly introduced Section
17A of the MACC Act, 2009. The Corporate Liability provision
criminalises a company based on illegal actions by the
employee without the presence of adequate procedures, for
the benefit of the company. The Company conducted a
workshop on 10 February 2020 to equip the Directors with
the relevant understanding on their liability and penalties
imposed for the offences, if any.
135
RELATIONSHIP WITH AUDITORS STATEMENT BY THE BOARD ON COMPLIANCE

External Auditors The Board has deliberated, reviewed and approved this
Through the BAC, PDB maintains a professional and Statement and is satisfied that the Group has fulfilled its
transparent relationship with its External Auditors, Messrs obligations under the relevant paragraphs of the MMLR of
KPMG PLT. The BAC met the External Auditors during the Bursa Malaysia, CA 2016, MCCG 2017 and Corporate
year under review to review the scope and adequacy of the Governance Guide – 3rd Edition issued by Bursa Malaysia Berhad
Group’s audit process, the annual financial statements and in addition to being benchmarked against the ASEAN Corporate
their audit findings. At the meeting, the External Auditors Governance Scorecard and other applicable laws and
highlighted to the BAC matters that warranted their attention. regulations throughout the year ended 31 December 2019.
Internal Audit This Statement is made in accordance with a resolution of

the Board of Directors dated 25 February 2020.
PDB’s Internal Audit reports directly to the BAC and has
unrestricted access to the BAC. The Internal Audit function
is independent of the activities or operations of other
operating units. The Internal Audit conducts regular audits
on the effectiveness of internal controls and regulatory
requirements. The audit reports which highlight any findings,
along with the recommendations are tabled to the BAC.
For more information on Internal Audit, please refer to pages DATUK MD ARIF MAHMOOD
130 to 131 of this <IR> CHAIRMAN
136
STATEMENT ON RISK MANAGEMENT

AND INTERNAL CONTROL
PDB has a risk management framework and internal control systems in place to safeguard our assets and
protect our investments.
We aim to manage our business and financial risks effectively to be able to maximise business opportunities.
This Statement on Risk Management and Internal Control (SORMIC) is made in accordance with paragraph 15.26(B) of Bursa
Malaysia’s Main Market Listing Requirements (MMLR) which requires the Board of Directors of public listed companies to
publish a statement about the state of risk management and internal control of the listed issuer as a Group.
RESPONSIBILITY AND ACCOUNTABILITY

The Board is committed to maintaining and continuously improving the Group’s system of risk management and internal control.
The Board acknowledges the importance of having in place a sound risk management system and internal control practices for
good corporate governance with the objective of safeguarding the shareholders’ interest and the Group’s assets. It is cognisant
of the fact that implementation of a sound risk management framework helps the Group to achieve its performance and profitability
targets by incorporating risk information for better decision-making, whilst firm internal controls enable appropriate preventive
measures to manage risks. The Group’s system of risk management and internal control aims to manage and control risks
appropriately. In view of the limitations that are inherent in any system of internal control, this system is designed to manage,
rather than eliminate the risks that hinder the Group from achieving its objectives. Hence, it can only provide reasonable, but not
absolute assurance against material misstatements or losses or the occurrence of unforeseeable circumstances.
RISK OVERSIGHT STRUCTURE

PDB’s risk oversight structure allows for risk information flow which yields effective monitoring of risk management
implementation at all levels. Risks are reviewed at Risk Management and Governance Committee (RMGC) before it is
deliberated at the Board Risk Committee (BRC) and the Board. The Head of Risk and Credit Management Department
(RCMD), as Secretary of RMGC, provides updates on PDB’s overall risk management implementation during the quarterly
RMGC meeting which is chaired by Managing Director/Chief Executive Officer (MD/CEO). The structure also facilitates risk
identification and escalation whilst providing assurance to the Board.
BOARD OF DIRECTORS
Reviews and approves annual corporate plan, which includes overall corporate strategy, operational
plan, marketing plan, human resources plan, financial plan and budget, risk management plan and
information technology plan.
BOARD RISK COMMITTEE BOARD AUDIT COMMITTEE

COMMITTEE
• Reviews the adequacy and effectiveness of • Reviews the effectiveness of internal control
BOARD
LEVEL
the risk management practices systems

• Reviews and endorses the Group’s critical risks
RISK MANAGEMENT AND GOVERNANCE LEADERSHIP TEAM

MANAGEMENT
COMMITTEE • Responsible for the overall management

LEVEL
• Responsible for the overall oversight of risk strategy and policy issues
management and governance activities
CREDIT CONTROL HSE STEERING COMMITTEE BUSINESS INFORMATION

OPERATIONAL
COMMITTEE • Reviews and deliberates HSE TECHNOLOGY COMMITTEE

• Reviews, monitors and performance and risks • Provides strategic direction and
LEVEL
reports credit risk • Tracks and monitors the progress endorsement for Digital and
of closure of HSE incidents and Information Communcation
assurance action items Technology (ICT) investments
across businesses
137
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
In addition to our risk oversight structure, our risk management is backed up by a ‘Three Lines of Defence’ Model that
distinguishes the three groups which are involved in effective risk management. The Group has in place a risk operations
mechanism covering the areas of system, processes, knowledge management and assurance activities.
THREE LINES OF DEFENCE MODEL
First Line of Defence Second Line of Defence Third Line of Defence

Business Line (Risk Owner) Risk Management and Governance Function Internal and External Audit
To establish the identification, To implement and review risk management To provide independent and objective
assessment, treatment and monitoring and control systems assurance on the overall adequacy,
of risks with the assistance of Risk for reporting to the Management integrity and effectiveness of risk
Ambassadors and the Board as well as attest on management and internal control
as focal persons compliance with internal controls systems
Self-Assurance Report Performance and Risk Reports Audit Reports throughout the year
Risk Management is an integral part of PDB’s activities and processes to address risks that may impact the achievement of its
business objectives. The Group has established risk management practices where review and monitoring of critical risks remain
a key focus of the Board. The risk management process is in place to identify, evaluate, manage and monitor the risks. This
process continues for the year under review and up to the date of approval of this statement.
PDB RISK POLICY RISK STRATEGY

The Group’s risk policy provides a clear and consistent PDB has adopted the PETRONAS Resiliency Model in
approach to govern risk management practices. The risk managing risk with three focus areas namely, Enterprise Risk
policy is continuously reviewed to ensure its relevancy in line Management (ERM), Crisis Management (CM) and Business
with the Group’s future aspiration and changing environment. Continuity Management (BCM). These are supported by risk
frameworks and relevant guidelines to govern, guide and
institutionalise risk management practices across the Group.
PETRONAS RESILIENCY MODEL
ENTERPRISE RISK MANAGEMENT

PDB RISK POLICY ERM is a structured and holistic
approach to identify, assess, treat and
PDB is Committed To Become A Risk Resilient monitor risks. The aim is to reduce the
Organisation. likelihood and impact of all identified
risks and to enhance the organisation’s
ability to achieve its strategic
PDB Shall Continuously Strive To Implement: objectives
• Risk management best practices to protect and CRISIS MANAGEMENT

create value within the set boundaries. CM is a comprehensive set of
processes by which organisation
• Risk-based decision-making by providing a RISKS respond and manage crises that
threaten to harm people, environment,
balanced and holistic view of exposure to
assets and reputation
achieve business objectives.
BUSINESS CONTINUITY
MANAGEMENT
Managing risk is everyone’s responsibility.
BCM is a holistic management process
that aims to build the capability of an
organisation to recover and continue
delivery of products or services at
acceptable predefined levels following
a prolonged disruptive incident
138
ENTERPRISE RISK MANAGEMENT (ERM) FRAMEWORK

PDB adheres to the PETRONAS ERM Framework as depicted in the diagram below:
PETRONAS Enterprise Risk Management Framework
GOVERNANCE
• Risk Policy
• Organisation and Structure
• Roles and Responsibilities
CONTEXT SETTING
• External Context
• The ERM Framework • Internal Context
outlines the elements and • Risk Appetite
processes to identify, • Risk Criteria
assess, treat, monitor and
review risks impacting its
business. RISK ASSESSMENT
• It aims to improve the • Risk Identification
ability to reduce the • Risk Analysis
likelihood and/or impact • Risk Evaluation
of identified risks that ERM
may affect the FRAMEWORK
achievement of business RISK TREATMENT
objectives. • Risk Treatment Strategy
• The framework provides • Risk Treatment Plan
a standard and consistent
a p p r o a c h i n
implementing ERM across RISK MONITORING AND
the entity. REVIEW
• Risk Reporting and Monitoring
• Risk Information System
CONTINUAL
IMPROVEMENT
• System Monitoring and Review
• Risk Assurance
• ERM Capability
Risk profiles which consist of identified critical risks and their During the year under review, risk profiling exercises were
corresponding risk mitigations as well as key risk indicators conducted across the Group with involvement from
are reviewed annually based on the ERM process. It allows Management and Subject Matter Experts. In performing the
actions to be taken to ensure that risks are being effectively exercises, various inputs are analysed in setting the context,
managed by respective units, endorsed by the Heads of which includes both internal and external factors as well as
Division or Department and reported to RMGC, BRC and emerging risks that may impact the Group’s businesses and
Board on a quarterly basis. operations. The annual risk profiling and assessment process
are guided by business strategies and plans. On an annual
basis, existing risk profile is reviewed to identify significant
risks to be escalated to the Corporate Risk Profile (CRP).
139
The following structured process within the ERM Framework was adopted:
CONTEXT SETTING
• Define the scope of the risk assessment (i.e. Business Decision/Risk Profile/Project).
• Understand external environment and consider the strategic, organisational/business objectives, KPI, stakeholders’ expectations, preliminary risks.
• Determine the Risk Appetite (The level of risk that an organisation is willing to pursue).
RISK ASSESSMENT
RISK IDENTIFICATION RISK ANALYSIS RISK EVALUATION

• Develop risk descriptions and risk • Identify and assess existing mitigations. • Evaluate the level of the identified risk
statements. • Determine the current risk impact. – High, Medium and Low.
• Assign risk ownership. • Establish current risk rating by using • Evaluate which risks need treatment.
• Identify causes and consequences. the Risk Matrix. • Prioritise risk which requires treatment
implementation.
RISK TREATMENT
Establish Target Risk

Identify Identify new mitigations Determine the
Rating by using the
Risk Treatment Strategy for each identified risk new risk impact
Risk Matrix
RISK MONITORING AND REVIEW

• Identify Key Risk Indicators (i.e. leading and lagging) as triggering mechanism.
• Monitor risk updates through Integrated Enterprise Risk Information System (INTERISK) and ensure Corporate Digital Assurance sign off.
• Quarterly report risk status to RMGC, BRC and Board.
Risk Appetite
The Group has established risk appetite which was endorsed by BRC and approved by the Board. Risk appetite is defined
as the level of risk PDB is willing to accept in pursuing its strategic objectives. The Group’s risk appetite is reflected in Risk
Appetite Statement which articulates the Group’s risk strategy. To support the Risk Appetite, Risk Appetite Statement, Risk
Tolerance and its corresponding Risk Threshold were established to ensure risk undertaken in pursuit of business objectives
are consistently within acceptable level.
Risk Matrix
Almost
certain
As part of ERM, each risk is mapped based on a risk matrix

which specifies the likelihood and impact of the risk. The
likelihood and impact of these risks are assessed and
Likely
evaluated against PDB’s risk appetite and tolerance level.

Likelihood rating states the probability of the risk to happen,
Remote Unlikely Possible
LIKELIHOOD
while impact rating specifies the extent of its impact if the

risk occurs. Both measurements can be expressed qualitatively
or quantitatively.
Key risk indicators and mitigation actions have also been

identified and implemented accordingly. Key risk indicators
are identified to facilitate monitoring of the risks and to
provide an early warning signal on recognised risks. The key
Insignificant Minor Moderate Major Severe risks and mitigation actions are monitored and reported to
IMPACT RMGC, BRC and Board for deliberation and guidance on a
quarterly basis.
Low Medium High Very High
140
CRISIS MANAGEMENT Depending on the severity, the authorities will take over
command and control of response operations, either for
PDB is prepared to manage emergencies and crisis in its
reasons of public safety, national interest or if it is
business operations to minimise impact to People, Environment,
determined by the authorities that PDB is unable to
Assets and Reputation (PEAR).
manage the situation. This is achieved by involving
government emergency protocols where the Unified
PDB Emergency Preparedness and Response Management has
Command (UC) shall be established and a handing over
been developed to ensure that PDB is capable of dealing and
process is executed.
managing crisis and emergency situations for all types of
operations in PDB.
3. PDB Emergency and Crisis Organisation, Roles and
Responsibilities across PDB in managing crisis and issues.
The key elements of the procedure are as follows:
4. Contingency support and plans which consist of mutual
1. PDB’s three-tiered response protocol which provides clear
aid, incident action plan and media response plan are in
demarcation of response control practices and the
place to address specific problems that may be encountered
required capability of emergency/crisis team members.
at site or location of an incident and additional resources
Response priorities during emergency/crisis are to protect
that can be commonly shared and utilised.
and save the People, Environment, Assets and Reputation
(PEAR).
5. Compliance assessment of crisis and disaster preparedness
programmes is as per the PDB HSE Assurance Programme.
2. Linkage and integration of PDB Emergency & Crisis
The objectives of this assessment are to identify gaps and
Response Protocol with host governments as required
incorporate feedback for continuous improvement.
under the National Security Council (NSC) Directives.
Overall Crisis and Emergency Management Structure in PDB
CMT Leader
(MD/CEO) In activation of CMT, MD/
CEO or COO will lead the
Alternate CMT Leader team as CMT Leader.
(COO)
EMT Incident Commander EMT

HODiv (SDD/RBD/LPGBD/CBD)
CEO PLMMSB
Information Advisor
(Head, Strat-Com) Secretariat (HSED)
HSE, Security Advisor

Finance Advisor (CFO) (Head, HSED)
Liaison Advisor Legal Advisor
(Head, Strategy) (Head, Legal)
Human Resource Technical Advisor
Advisor (Head, HRM) (Head, TSD)
Operations Chief Business

Head of Department Planning Chief Logistic Chief
Continuity Chief
(Operations)
OSC PDB Support Team ERT
Members from affected division

HODiv/HOD from Enabler Division
141
BUSINESS CONTINUITY MANAGEMENT (BCM)

PDB implements the PETRONAS Business Continuity Management Framework (BCMF) as a systematic approach for consistent
BCM practices to ensure effective recovery and continuation of business operations during prolonged disruption or crisis.
PETRONAS Business Continuity Management Framework
• Assurance • PETRONAS Risk Oversight

• System Review & Structure
Monitoring • Guiding Principles for
• Capability Building Continual Establishment of BCM Structure
Improvement Governance and Chairmanship
• Operationalisation of BCM
• Roles and Responsibilities in BCM
• T&E Planning,
BUSINESS • Risk Identification,
T&E Execution
Testing & CONTINUITY Business
Risk Analysis and
and T&E Review
Exercising MANAGEMENT Continuity
• Types and Risk Evaluation
(T&E) FRAMEWORK Assessment
frequencies of • Common Business
(BCMF)
T&E Disruption Scenarios
• Key consideration
for T&E
Business Business
Recovery Impact
Strategy Analysis
• Critical Business Function (CBF)
(BRS) (BIA)
• Recovery Strategies • Recovery Time Objective (RTO)
• Business Continuity • Minimum Resource Requirements
Plan (BCP) (MRR)
The BCMF consists of six key elements that make up the During the year, BCP testing and exercise for PDB Group was
basic requirements to implement and operate BCM for an conducted mainly focusing on ICT related systems and
entity. This framework aims to provide a standard and resumption of work at virtual office.
consistent approach across the organisation in achieving key
attributes in business continuity. The Group also conducted Emergency Notification System
(ENS) testing to ensure all critical staff are immediately notified
During the year under review, the Group continues to review in the event of BCP activation across PETRONAS Group.
the Business Recovery Strategy (BRS) of relevant departments
or divisions to ensure validity of the current Business The outcome and findings from the testing activities were
Continuity Plan (BCP). then gathered to identify areas for continual improvement.
142
INTERNAL AUDIT Organisation Structure

The Internal Audit (IA) function includes undertaking reviews An organisation structure, which is aligned to the business
of PDB’s system of internal controls, operations and selected and operational requirements, and with defined roles and
key activities based on risk assessment and in accordance responsibilities, accountability and levels of authority, is in
with the annual internal audit plan which is presented and place to assist in implementing the Group’s strategies and
approved by the Board Audit Committee (BAC). day-to-day business activities.
The key responsibility of the IA function is to assist PDB Group HSE Management System
in accomplishing its goals by bringing a systematic and PDB HSE Management System (HSE MS) is a management
disciplined approach in evaluating and improving the framework that provides guidelines for effective HSE
effectiveness of risk management, internal control and management in PDB operations. The system provides a
governance processes. structured approach in monitoring the overall HSE
implementation and identification of gaps for continual
The IA function conducts a risk-based audit of the Group’s improvement. HSE assurances are conducted as per planned
system of internal controls, its operations and key activities as frequencies (Monthly, Quarterly and Annually) as an integral
per the annual audit plan approved by the BAC. IA as the third part of the HSE MS to review and verify the effectiveness of
line of defence also ensures the effectiveness of the respective HSE risk mitigations.
roles executed by the first and the second line of defence.
Being an important element of HSE MS, Hazard & Effects
The IA maintains its impartiality, proficiency and due Management Process (HEMP) provides assessment of risk
professional care by having its plans and reports directly and identification of the appropriate controls. HEMP ensures
under the purview of the BAC. the hazards and the associated risks inherent in PDB
operations are systematically identified and assessed.
The IA processes and activities are guided by the approved
Internal Audit Charter and it adopts the standards outlined Limits of Authority
in the International Professional Practices Framework (IPPF) The Group has established Limits of Authority (LOA) which
issued by the Institute of Internal Auditors (IIA). In evaluating define the appropriate approving authorities to govern and
an entity’s system of internal control, IA subscribes to the manage business decision process. The LOA set out a clear
Committee of Sponsoring Organisations of the Treadway line of accountability and responsibility which serves as a
Commission (COSO) Internal Control Framework. reference in identifying the approving authority for various
transactions including matters that require the Board’s
The Board and Management are committed to maintaining approval. It specifies the right authority and accountability
an effective internal control environment by enhancing the within the Group and facilitates decision making at the
design of internal control systems to ensure that they are appropriate level in the Group hierarchy.
relevant and effective to promote operational agility while
ensuring good corporate governance and compliance to Corporate Financial Policy
regulatory guidelines.
The Group adopts the PETRONAS Corporate Financial Policy
For more information on the IA functions, please refer to the (CFP) which sets forth the policy for financial management
BAC Report on pages 126 to 131 of this <IR>. activities embedding the principles of financial risk
management. The CFP governs financial risk management
practices across the Group. It prescribes a framework in
KEY ELEMENTS OF INTERNAL CONTROL SYSTEMS which financial risk exposures are identified and managed.
In delivering the Board’s commitment to maintaining a sound
system of internal control, the Board continues to maintain
and implement a strong control structure and environment
for the proper conduct of the Group’s business operations
as follows:
143
Code of Conduct and Business Ethics Related Party Transactions and Conflict of Interest
The Group adopts and practices the PETRONAS Code of Policies and Procedures on Related Party Transactions (RPTs)
Conduct and Business Ethics (CoBE) which emphasises and and Conflict of Interest (COI) Situations (collectively, P&P)
advances the principles of discipline, good conduct, have been established within the Group to promote
professionalism, loyalty, integrity and cohesiveness that are continuous awareness and provide consistent approach to
critical to the success and well-being of the Group. The CoBE all RPTs and Recurrent Related Party Transactions (RRPTs)
contains policy statements on the standards of behaviour or COI situations.
and ethical conduct expected of each individual of the Group.
The Group also expects that contractors, sub-contractors, The said P&P requires the use of various processes to ensure
consultants, agents and representatives and others performing that RPTs/RRPTs are conducted on an arm’s length basis,
work or services for or on behalf of the Group to comply which is consistent with the Group’s normal business practices
with the relevant parts of the CoBE when performing such and policies, and will not be to the detriment of the Group’s
work or services. The CoBE expressly prohibits improper minority shareholders. It aims to provide guidelines under
solicitation, bribery and other corrupt activity not only by which certain transactions and situations must be reviewed
employees and directors but also by third parties performing and endorsed by the various governing parties of the Group
work or services for or on behalf of companies in the and/or disclosed to the regulators and governing bodies.
PETRONAS Group.
It also prescribes the processes required to identify, evaluate,
Included as part of the CoBE is the Anti-Bribery and approve, monitor and report RPTs/RRPTs as well as manage
Corruption Policy which explicitly prohibits the giving and COI. Such processes include identification and screening of
acceptance of bribes, in whatever form, by employees transactions, negotiation of transaction and approval/mandate
including giving and receiving of facilitation payments in all mechanism, monitoring and reporting principles, and renewal
business dealings. or changes in the terms or termination of such dealings. In
principle, the said P&P sets forth the following:
For more information on CoBE, please refer to page 148 of
this <IR>. • All sourcing and sales of the Group’s products, general
merchandise and/or shared facilities/services shall be based
Whistleblowing Policy on market, industry or negotiated pricing formulas and the
terms are not more favourable to the related party than
The Group adopts the PETRONAS Whistleblowing Policy
those generally applied to a third party, in order to ensure
(WBP) which provides an avenue for the Group’s employees
that the transactions are on an arm’s length basis;
and members of the public to disclose any improper conduct,
in accordance with the procedures as provided under the • Database is maintained to capture the list of related parties
WBP. and RPTs/RRPTs which have been entered into;
• If a Director or a related party has an interest in a
Under the WBP, a whistleblower will be accorded with transaction, he or she will abstain from any deliberation
protection of confidentiality of identity, to the extent and decision making at the Board or subsidiary company’s
reasonably practicable. An employee who is an internal Board (as the case may be) in respect of such transaction;
whistleblower will also be protected against any adverse and • The BAC is responsible for ensuring that the policies and
detrimental actions for disclosing any improper conduct procedures relating to RPTs/RRPTs and COI situations are
committed or about to be committed within the Group, to sufficient to ensure that RPTs/RRPTs are carried out on
the extent reasonably practicable, provided that the disclosure an arm’s length basis and not to the detriment of the
is made in good faith. Such protection is accorded even if Group’s minority shareholders;
the investigation later reveals that the whistleblower is
• The Board has the overall responsibility to ensure
mistaken as to the facts and the rules and procedures
involved. The process is undertaken through PETRONAS’s compliance with the established guidelines and procedures
Whistleblowing Committee. to approve and monitor RPTs/RRPTs and COI situations.
The Board and/or BAC may also appoint individuals and
For more information on WBP, please refer to PDB’s corporate committees to examine the RPTs/RRPTs, as deemed
website at www.mymesra.com.my. appropriate;
144
• On an annual basis, all Directors and any related party of Credit Risk Framework and Guidelines
the Group will declare in a written form, designed to elicit PDB has adopted the PETRONAS Credit Risk Framework and
information about current/potential relationships and/or Guidelines to facilitate management of credit risk exposures
COI situations, involving their interest, either directly or from customers. It also allows credit exposure to be tracked
indirectly. All Directors and any related party of the Group as a monitoring and control tool to guide credit risk decisions.
shall also notify in writing of any interest in RPT or COI To reduce its credit risk exposures, PDB applies Credit Risk
situation when it becomes immediately known to them. Management methodology as set in the above-mentioned
• The Directors have completed their declaration of interest guidelines whereby the customers are assessed using the
forms for the financial year under review in line with the PETRONAS Credit Risk Rating System to ensure alignment
P&P; and with the credit assessment process adopted by the PETRONAS
• Bursa Malaysia has granted PDB exemption from having Group. The system evaluates the credit worthiness and assigns
to seek shareholders’ mandate for RRPT with PETRONAS, credit risk ratings to all PDB’s external customers. In addition,
Ministry of Finance and Khazanah and their Group of reviews are conducted on the assigned credit risk ratings of
Companies. The exemption essentially states that the these customers while the trend of the customers’ financials
exempted RRPTs must be transacted on an arm’s length are also analysed to detect early signs of financial distress
basis. and to provide early warning to the Management. Trade
receivables ageing are also deliberated monthly at the PDB
Financial Control Framework Credit Control Committee, where overdue balances, with
certain criteria, are highlighted and actions to be taken agreed.
The Group has implemented a Financial Control Framework
(FCF) to ensure key financial controls are adequate and
Risk Control Self-Assessment
effective at all times. The FCF requires the documentation
of key processes and a structured assessment process to PDB has embarked on a Risk Control Self-Assessment initiative,
identify control gaps and the required mitigation action. a self-assessment of internal controls focusing on process
Annually, each key process owner at various management controls conducted by process owners through testing and
levels is required to provide formal confirmation on the level monitoring. On annual basis, each key process owner at various
of compliance with key controls for their respective business management levels is required to complete and submit a Letter
areas. The FCF thus provides assurance on the quality of the of Assurance which provides confirmation of compliance with
Group’s financial reports. key controls for the areas of the business for which they are
accountable. Subsequently, the MD/CEO and CFO provide
Economic Sanctions and Export Control Policy and overall assurance to the Board on the adequacy and
Guidelines effectiveness of key internal controls of the Group.
PDB adopts and applies the PETRONAS Economic Sanctions

Anti-Money Laundering
and Export Control Policy and Guidelines and is committed
to complying with the relevant economic sanctions and export PDB has established Anti-Money Laundering and Counter
control regulations in the jurisdictions wherever it operates. Financing Terrorism (AML/CFT) Framework in accordance to
Bank Negara Malaysia (BNM) AML/CFT and Targeted Financial
Corporate Privacy Policy Sanction (TFS) for Financial Institutions. The framework
consists of the following key elements which include Risk
PDB has put in place the Corporate Privacy Policy (CPP) to
Based Approach, Customer Risk Profiling, Customer Due
adequately safeguard the privacy and personal data of its
Diligence as well as Suspicious Transaction Monitoring and
employees as well as third parties. This robust CPP and its
Reporting.
related implementation framework enables PDB to meet and
comply with applicable privacy and personal data protection
laws in relevant countries in which PDB operates.
145
Third Party Risk Management Business Plan and Budget

PDB has adopted PETRONAS Third Party Risk Management The Group undertakes an annual planning and budgeting
controls under the legal compliance framework and exercise which includes development of business strategies
established a due diligence tool being the “Know Your for the next five years and the establishment of key
Counterparty (KYC)” process which allows PDB to assess and performance indicators against which the overall performance
safeguard PDB against reputational and legal risks posed by of the Group, including the respective performance of
parties outside the organisation. business segments and companies within the Group, can be
measured and evaluated. Detailed operating and capital
Guidelines for Competition Law expenditure requirements are tabled to the Board for approval
PDB has put in place the Guidelines for Competition Law prior to the commencement of a new financial year. The
which are applicable to all business transactions to manage Group’s performances are reported internally on a monthly
competition law related risks and ensure compliance with basis to the LT. The Group’s quarterly performances are also
the competition laws of every country in which PDB operates. presented to the Board with comparison to approved plans
as well as against prior periods.
Corporate Disclosure Guideline
Employee Performance Management
The Corporate Disclosure Guide (Guide) is established in line
with PDB’s commitment in ensuring effective disclosure of PDB adopts PETRONAS’s Employee Performance Management
corporate information via Bursa Malaysia. It aims to serve as (EPM) that emphasises the importance of continuous
a guidance framework in delivering accurate, timely, engagement with employees in managing their performance
consistent and fair disclosure of information. towards achieving a High Performing Organisation. Its
framework focuses on Coaching, Review and Feedback that
The objective of this Guide is to create awareness on the accelerate the journey towards becoming a High Performance
related obligations under the MMLR of Bursa Malaysia and Organisation; empowering employees to drive and manage
to ensure compliance with legal regulatory requirements on their performance that are aligned with PDB Group’s business
information disclosure. objective and targets.
Data Secrecy Information Technology

PDB develops a Data Secrecy Manual to ensure that the The Group adopts policies which aim to uphold and govern
confidentiality of customers’ personal data is protected and the integrity of the Group’s cybersecurity, data governance
managed effectively. The manual framework consists of the and framework which are in line with PETRONAS Group’s
following key elements which include the roles and policies.
responsibilities, data management, access controls, managing
breaches and training requirements for both employees and The ever changing environments and evolution of information
third party service providers. technology call for continuous reviews, updates,
enhancements and implementation of security measures to
Procurement Guideline protect the Group’s stakeholders as well as the businesses
from the emerging threats of cybersecurity risks. Moving
PETRONAS’s procurement objectives are to ensure timeliness
forward, PETRONAS Cyber Security Enterprise Control
is met and procurement activities are cost-effective while
Framework will provide the assurance that the existing
ensuring compliance with procurement governance. In order
infrastructure and applications vulnerabilities are configured
to support PDB’s operations, the procurement process is
and operated in a secured manner.
guided by PETRONAS Tender & Contract Administrative
Manual and Limits of Authority/Summary of Authority,
All IT investments and implementations for PDB Group is
whichever is applicable.
governed by its Business Information Technology Committee
particularly in the areas of strategic directions including policy
change, IT investment priorities, funding and risk management.
146
Standard Operating Procedures AAPG 3 does not require the External Auditors to consider
The Group adopts Standard Operating Procedures (SOP) whether the Directors’ Statement on Risk Management and
covering PDB’s business and operations, including but not Internal Control covers all risks and controls, or to form an
limited to financial operations, marketing and sales, supply opinion on the adequacy and effectiveness of the Group’s
chain management, human resource management, risk management and internal control system including the
information systems and health, safety and environment. The assessment and opinion by the Board and LT thereon. The
SOPs guide and govern the day-to-day operations and ensure External Auditors are also not required to consider whether
the right controls are in place. The SOPs are reviewed as and the processes described to deal with material internal control
when required to make sure they remain relevant and aspects of any significant problems disclosed in this Annual
effective. Report will, in fact, remedy the problems.
REVIEW OF THIS STATEMENT BY EXTERNAL CONCLUSION

AUDITORS Based on the above, the Board is of the view that the system
The External Auditors have reviewed this Statement on Risk of risk management and internal control instituted throughout
Management and Internal Control in accordance with the the Group is sound and provides a level of confidence on which
International Standard on Assurance Engagements 3000, the Board relies for assurance. During the financial year under
Assurance Engagements Other than Audits or Reviews of review, there was no significant control failure or weakness that
Historical Financial Information as adopted by the Malaysian would result in material losses, contingencies or uncertainties
Institute of Accountants, and Audit and Assurance Practice requiring separate disclosure in this Integrated Report.
Guide 3 (AAPG 3) released in February 2018, Guidance for
Auditors on Engagements to Report on the Statement on The Board and the LT continue to review and strengthen the
Risk Management and Internal Control included in the Annual Group’s risk management and internal control system to
Report issued by the Malaysian Institute of Accountants, for ensure ongoing adequacy and effectiveness of the system
inclusion in the Annual Report of the Group for the year of internal control and risk management practices to meet
ended 31 December 2019. Based on the review by the the changing and challenging operating environment.
External Auditors to the Board, nothing has come to their
attention that causes them to believe that the statement The internal control systems discussed in this Statement do
intended to be included in this Annual Report of the Group, not apply to associate companies which fall under the control
in all material respects: of their majority shareholders, and joint ventures which are
jointly controlled by its respective shareholders. Nonetheless,
(a) has not been prepared in accordance with the disclosures the interest of the Group is safeguarded through PDB
required by Paragraphs 41 and 42 of the Statement on representatives on the Board of the joint ventures and
Risk Management and Internal Control: Guidelines for associate companies.
Directors of Listed Issuers, or
This Statement is made in accordance with a resolution of
(b) is factually inaccurate. the Board of Directors dated 25 February 2020.
147
CORPORATE INTEGRITY AND ETHICS
THE BOARD ACKNOWLEDGES ITS ROLE IN ESTABLISHING A CORPORATE CULTURE WHICH

INCULCATES ETHICAL CONDUCT WITHIN THE GROUP. IN LINE WITH THIS PRINCIPLE, THE
BOARD HAS, INTER ALIA, ADOPTED THE PETRONAS CODE OF CONDUCT AND BUSINESS
ETHICS, THE WHISTLEBLOWING POLICY AND THE ANTI-BRIBERY AND CORRUPTION POLICY.
THE ADOPTION OF THESE POLICIES IS TO ENSURE THAT THE CONDUCT OF BUSINESS OF
PDB AND ITS EMPLOYEES ARE CONSISTENTLY CARRIED OUT ETHICALLY AND WITH INTEGRITY.
PETRONAS CODE OF CONDUCT AND BUSINESS ETHICS

The CoBE contains detailed policy statements on the and its subsidiaries to comply with the relevant parts of the
standards of behaviour and ethical conduct expected of all CoBE when performing such work or services.
employees and directors within the PETRONAS Group
worldwide. The CoBE not only promotes legal and procedural In particular, the CoBE expressly prohibits improper
compliance, but it will also provide a moral compass to solicitation, bribery and other corrupt activity not only by
ensure that the individual’s behaviour is in line with the employees and directors but also by third parties performing
PETRONAS Shared Values of Loyalty, Integrity, Professionalism work or services for or on behalf of companies in the
and Cohesiveness. PETRONAS Group. Acknowledging that organisational integrity
is vital towards establishing a culture that supports long-term
Aligned with PETRONAS, PDB also expects that contractors, success, PDB expects that all employees are to conduct
sub-contractors, consultants, agents, representatives and themselves professionally with the CoBE in mind.
parties performing work or service for or on behalf of PDB
PDB INTEGRITY PROGRAMMES
We place strong emphasis on the importance of integrity and ethics in our business conduct and have been conducting
Integrity Programme for our employees since 2017.
In 2019, we collaborated with PETRONAS Group Integrity Division to continue implementing relevant programmes for
our employees, contractors and Rakan Niaga/Dealers to ensure a cohesive approach towards upholding the highest
standards of integrity.
The following Integrity Programme were conducted in 2019:
Events No. of Sessions No. of Participants

Transformation Journey 2019 for Rakan Niaga 4 64
Kursus ASAS for Rakan Niaga 1 12
PDB Contractors’ Day – PDB Partners Collaboration Towards Excellence 1 89
JPT x HR&You 2019 6 465
For more information on CoBE, please refer to PDB’s corporate website at www.mymesra.com.my
148
CORPORATE INTEGRITY AND ETHICS
ANTI-BRIBERY AND CORRUPTION
With the adoption of the ABC policy from PETRONAS, PDB also practices a zero tolerance policy against all forms of
bribery and corruption. The ABC policy elaborates upon those principles and provides guidance to all employees on
how to deal with improper solicitation, bribery and other corrupt activities and issues that may arise in the course of
conducting business for and on behalf of PDB. The ABC policy is also applicable to all directors, contractors, sub-
contractors, consultants, agents, customers, suppliers, representatives and others performing work or services for or
on behalf of PDB.
For more information on ABC, please refer to PDB’s corporate website at www.mymesra.com.my
WHISTLEBLOWING
PDB has adopted the PETRONAS Whistleblowing Policy which provides an avenue for employees and members of the
public to disclose any improper conduct in accordance with the procedures as provided under the policy and to provide
protection for employees and members of the public who report such allegations without fear of reprisal.
For more information on PETRONAS Whistleblowing Policy, please refer to PDB’s corporate website at www.mymesra.com.my
149
DRIVING SUSTAINABILITY
Sustainability is at the heart of all that we

do at PDB. It goes well beyond
environmental initiatives, encompassing
our strategic direction, integrated value
chain and business pratices. Over the years,
our focus in environmental, economic and
social impacts of our sustainability
initiatives have served as the foundation of
inclusive growth for the nation.
We are always mindful about the impact

that we have on all our stakeholders from
the work that we do. Our focus is to enrich
lives for a sustainable future and hence
creating value for our stakeholders, without
compromising the needs of future
generations.
As we progress along our sustainability

journey, we invest in our six capitals to
become ever more a progressive energy
and solutions partner, ensuring sustainable
business continuity.
SCOPE APPROACH
This Sustainability Statement addresses aspects that are material to our In presenting this Sustainability Statement,
business and present significant impact to our stakeholders from an we have adhered to the Main Market Listing
economic, environmental and social perspective. Relevant sustainability Requirement (MMLR) of Bursa Malaysia under
initiatives carried out by PDB throughout 2019 are also reported. the Amended Listing Requirements for
Sustainability Statement. It has also been
Unless otherwise indicated, our sustainability disclosure follows the scope prepared in reference to GRI Standards.
and boundaries of our <IR>, and covers all of PDB’s operations comprising
Retail, Commercial, LPG, Lubricant as well as Supply and Distribution,
together with the subsidiaries in which we have operational control.
150
PDB’S NEW SUSTAINABILITY FRAMEWORK - ENRICHING LIVES FOR A SUSTAINABLE FUTURE
Economic Environmental Social
Continued Value Creation Safeguard the Environment Positive Social Impact
Our long-term sustainability vision aims to manage our Economic, Environmental and Social (EES) risks and opportunities
to create net positive impact in the long term. This vision serves as the core of our focused sustainability initiatives, with
the United Nations Sustainable Development Goals (UN SDG).
This year, PDB’s Sustainability journey advanced another step. After a series of internal conversations and stakeholder
engagements, we have crafted our new sustainability framework which was approved by our Board of Directors. At PDB,
our focus will be the 8 SDG’s which are directly related to our Sustainability Framework.
OUR SUSTAINABILITY GOVERNANCE
As a member of the PETRONAS Group, our sustainability aspirations are underpinned by PETRONAS’
CoBE as well as Shared Values of Loyalty, Integrity, Professionalism and Cohesiveness. CoBE Section
3.1 highlights that we are committed to sustainable development to help meet the world’s growing
energy needs through economically, environmentally and socially responsible efforts. We also hold
our partners, contractors and suppliers to similar standards of conduct to ensure sustainability
across our value chain. PETRONAS’ Corporate Sustainability Council, led by the Senior Vice President
of Corporate Strategy, oversees the integration of sustainability across the PETRONAS Group,
including PDB.
The PDB MD/CEO and Leadership Team play a leading role in overseeing the management of
sustainability within the organisation and in ensuring sustainability matters are addressed and
integrated throughout our business processes and operations. The expertise of our Board of
Directors is also heard to ensure that our practices are well in place for today and for our long
term sustainability vision.
151
OUR SUSTAINABILITY JOURNEY
Included CSR in PDB’s

2006
Annual Report
Implemented various initiatives throughout the period,

among them:
• Installed solar panels at PETRONAS Station Solaris

Putra and PETRONAS Station Solaris Serdang
• Launched Water for Life and StreetSmart

programmes
Included as a constituent
in the FTSE4Good Bursa 2015
Malaysia Index
Revised PDB Board

Charter to include 2016 • Established PDB Sustainability Committee
sustainability
• PDB Board approved PDB Sustainability Framework

and Material Sustainability Aspects
PDB Board approved • Collaborated with GreenTech Malaysia to provide
PDB Sustainability chargEV facilities at selected PETRONAS stations
2017
Framework and Material • Raised awareness and appreciation of sustainability
Sustainability Aspects across the company
• Improved our position in the FTSE4Good Bursa
Malaysia Index
Board approved new • Review of current programmes to assess their

Sustainability alignment with new long-term vision
2019
Framework and flagship • PDB has reviewed its entire value chain to assess
initiatives opportunities to reduce its environmental footprint
152
Sustainability Framework Sustainability Drivers
We aim to deliver the best economic returns in the form of dividends to our
shareholders. In addition, we also aspire to stimulate the Nation’s economic growth
through taxes to the Government
Continued In our commitment to shape a sustainable economy for the nation, PDB constantly
Value Creation seeks innovative solutions for the mutual benefit of all parties in the ecosystem,
including development of local economies, by engaging with local suppliers and
Drive long-term value creation vendors through our Retail, Commercial, LPG and Lubricant businesses. We
through responsible investments understand that by doing so, we will positively contribute towards creating
and optimum business employment opportunities, as well as the growth and resilience of local entrepreneurs.
partnerships Employment opportunities are made available through businesses appointed to
supply locally-made products for sale at Kedai Mesra or to become one of our
Lubricants’ AutoExpert partners.
SDG’s supported:
We recognise that we have a role to play in positively contributing to climate change

mitigation in the long term, and we have implemented various initiatives to reduce
our carbon footprint. Moving forward, we will be implementing initiatives to support
the New Plastics Economy by introducing more environment-friendly products,
Safeguard the enhancing the energy efficiency of our operations, as well as supporting the reduction
Environment of single-use plastics throughout our stations. We also support the Nation’s aspiration
for renewable energy and continue to contribute to the electric mobility ecosystem.
Collaboratively reduce
environmental impact by We are committed to use water efficiently and we have a set of environmental and
transitioning to lower carbon social criteria which our partners must comply with in order to produce Certified
energy solutions and deploying Sustainable Palm Oil (CSPO).
innovative operations and
technologies SDG’s supported:
Our people are at the heart of our sustainability initiatives. We invest in human capital
through various talent development programmes towards achieving a high performing
workforce, by having highly competent and capable talents to drive value in our
organisation. PDB also takes our community outreach programmes to heart as we
Positive believe that contributing to the well-being of the people and the community in areas
Social Impact where we operate in is the right thing to do. CSR is an important platform through
which we are able to give back to communities which have fuelled our business
Create positive alliances with growth.
the communities where we
operate by protecting and PDB places the highest priority on the health and safety of our workforce and the
adding value to the well-being protection of our assets, communities, environment and all stakeholders as reflected
of employees, partners and in the PDB Health, Safety and Environment (HSE) Policy which sets out the
society Company’s guiding principle in managing risks and hazards relevant to the business
operations.
SDG’s supported:
153
SUSTAINABILITY AND OUR MATERIAL MATTERS
SUSTAINABILITY FRAMEWORK MATERIAL MATTERS
Continued
Value Creation
Financial Performance
Drive long-term value creation
through responsible investments
and optimum business partnerships
Safeguard the
Environment
Collaboratively reduce environmental Health, Safety and Environment
impact by transitioning to lower carbon
energy solutions and deploying
innovative operations and technologies
Health, Safety and Environment
Human Capital
Positive
Social Impact
Create positive alliances with the
communities where we operate by
protecting and adding value to the Governance and Business Ethics
well-being of employees, partners
and society
Social and Relationship Capital
Seamless and Frictionless

Customer Experience
For more information on Material Matters, please refer to page 44 of this <IR>.
154
SUPPORTED
STRATEGIC SUSTAINABILITY DIRECTIVES UN SDG’S
Financial return to stakeholders

Economic opportunities to dealers
Energy efficiency
Managing environmental impact
Resource management
Risk Management
Transport and Process Safety
Contractor and Supplier Management
Emergency preparedness
Health and Well-being
Talent Management
Capability Development
Employee Relations
Workplace Culture and Environment Standard

PETRONAS Cultural Beliefs
Code of Conduct on Human Rights

CSR programmes
Superior customer experience

Customers’ Safety and Health
155
ECONOMIC
As Malaysia’s leading retailer

and marketer of downstream
Dividend paid to Investors Tax paid to Government
petroleum products, PDB 2019: RM844.4 million 2019: RM266.0 million
strives to contribute towards 2018: RM933.8 million 2018: RM388.2 million
the Nation’s economy by being

a progressive energy and
solutions partner, ensuring Payment to Contractors/
sustainable financial Salaries paid to Employees Suppliers/Business Partners
2019: RM264.0 million 2019: RM30,846.0
performance which translates 2018: RM237 million million
to stable returns to 2018: RM27,592.8 million
shareholders as well as
stimulating enriching
socioeconomic opportunities Percentage of Local
Suppliers/Contractors
for the local communities in
2019: 98.0%
areas where we operate. 2018: 99.4%
For more information on the Company's Financial Performance, please

refer to page 76 of this <IR>.
FINANCIAL PERFORMANCE LOCAL ECONOMIC OPPORTUNITIES

We aim to deliver attractive financial PDB supports the local economy by engaging local suppliers and
returns to our shareholders. In vendors through our Retail, Commercial, LPG and Lubricant
addition, we also aspire to stimulate businesses. All our dealers, contractors and suppliers are mostly
the Nation’s economic growth through Malaysian-owned companies which have registered with PETRONAS
taxes to the Government, ensuring and are accredited with the necessary licenses to carry the required
local content in procurement and scope of work. These include our Rakan Niaga operating at more
providing employment opportunities than 1,000 PETRONAS stations nationwide.
for the local population. It is our belief
that positive economic impact is
achieved through mutual growth by
including communities and
stakeholders alike.
156
ECONOMIC
Retail’s Initiative Reach Commercial’s Initiative Reach
> 800 Rakan Niaga > 200 Dealers

nationwide nationwide
Established partnerships with

Developed entrepreneurship and
> 350 local SME Food suppliers
business skills of business partners
nationwide
Appointed and developed a local

Provided platforms
entrepreneur as the sole supplier of
for surrounding communities to
fuel to PETRONAS Refinery and
set-up small scale businesses
Petrochemical Integrated Development
at PETRONAS stations
Project in Pengerang, Johor
LPG’s Initiative Reach Lubricant’s Initiative Reach
> 300 Dealers > 30 MEPs

nationwide nationwide
Created business opportunities Provided entrepreneurial

for 650 sub-dealers at all development and skill
regions, nationwide enhancement of the MEPs
Continuous development and

Franchising the PETRONAS brand to
upgrading of sub-dealers to
60 local automotive SME
become dealers or premier
workshops driving customer footfall
dealers, improving their income
157
ECONOMIC
Local Employment Opportunities
PDB contributes to economic growth by helping to create jobs and supporting local businesses. All our dealers are
encouraged to give back to local communities through job creation nationwide.
Malaysians employed through

• Rakan Niaga as Krew Petronas: >8000
• Commercial Dealers: >2000
• LPG Channel Members: ~1000
• Lubricant Distributors: ~80
Retail LPG
Commercial Lubricants
Our LPG Business supports local economic growth by providing job and business opportunities to locals through our
LPG dealers. In 2019, PDB’s LPG dealership saw an increase of 4% compared to the year before.
Our Premier Dealers employ over 1,000 Malaysians at their premises nationwide. In addition, our extensive distribution
network throughout the country has created business opportunities for more than 650 sub-dealers.
We also continued our “delayering” initiative from last year where eligible sub-dealers are upgraded to become our dealers
hence improving their business returns. During the year under review, in support of closing the job gap for the disabled
and creating an inclusive culture, LPG Business is privileged to have hired 2 disabled persons under our dealership chain.
158
ECONOMIC
KEDAI MESRA ENRICHING LIVES OF

ENTREPRENEURS
We are committed towards ensuring long-term value
creation for all our stakeholders. As we advance in
enriching lives of our partners, we continue to bring to
our Kedai Mesra customers numerous selection of favourite
meals, snacks, drinks, dessert, and other products which
are locally produced by our SME vendors.
Our SME programme which was established over 25 years

ago to support local businesses now has over 350 vendors
supplying to Kedai Mesra across the nation. We take pride
in supporting local businesses including companies which
are owned and run by 100% women and youth
entrepreneurs.
Under our SME programme, we have helped many local

vendors to reach a wider market through our network
of stations. Some of these vendors have market presence
at more than 400 of our Kedai Mesra nationwide. The
growth in revenue for the SME vendors allows for more
employment opportunities, thus strengthening the
domestic economy.
Apart from successfully supplying to our Kedai Mesra, we

are proud that some of the vendors are concurrently
exporting their locally produced products into Vietnam,
New Zealand, and United Arab Emirates.
We believe in long term partnerships with SME vendors

and are constantly looking for opportunities to enhance
and improve the offerings by combining our strengths
to elevate the local business scene while ensuring a
sustainable future for all our stakeholders.
159
ENVIRONMENT
Our environmental stewardship is guided by PDB’s

New Sustainability Framework - Enriching Lives
for a Sustainable Future. We are committed to
reduce our environmental impact by transitioning to
lower carbon energy solutions and deploying
AL
innovative operations & technologies, thus
U
contributing to a sustainable future. VIS
Our environmental drivers are also guided by the
Company’s HSE Policy, which entails a commitment
to managing our environmental impact, increasing
our energy efficiency and managing our resources
responsibly and sustainably.
We are committed to protect the environment we

operate in through full compliance with regulations
and standards as well as robust operational
management. We regularly conduct compliance PETRONAS Climate Change
evaluations and monitoring programmes. We have Position Statement
tools to assess the environmental risks of our
operations, and take the appropriate actions by
adapting our operations and innovate with technology
to manage the impacts associated to our operations We duly recognise our
and products, cooperating to become an even more corporate responsibility as a
progressive energy and solutions partner. player in the global energy
sector to balance the issue
Aspects that are material to us and our stakeholders
include climate change, emission, accidental spills, of climate change with the
waste and water use. We monitor our environmental challenge to sustainably
performance, which enables us to make informed produce affordable and
business decisions around protection of the reliable energy.
environment. We analyse our environmental data to
understand our performance and help identify
potential areas of improvement.
For more information on our Management Approach for the Environment discussed
holistically under HSE, please refer from page 166 to 171 of this <IR>.
160
ENVIRONMENT
Energy Consumption
1,513,367
‘000 GJ
119 127
2017 2018 2019
The increase in 2019 was primarily attributed by the

inclusion of energy consumption at our retail operations.
Only data from terminals were included in previous
years.
ENERGY EFFICIENCY
As the cost of energy continues to rise, electricity
consumption becomes a more significant component in the
cost of our operations.
Our terminal operations, training centre, regional offices and

PETRONAS Stations consumed a total of 1,513,367 GJ of
electricity in 2019. This amount already takes into account
implemented initiatives to improve our energy efficiency. The
reductions in emissions were achieved by installing energy-
saving LED in the forecourts and perimeters of our stations.
LED lights consume 50.0% less electricity than conventional
fluorescent lights, thereby cutting GHG emissions by 50.0%.
This initiative has been incorporated into new station design
for continuous improvement.
For the past few years, we have implemented energy

efficiency initiatives such as VSD at hydrant pumps and
“hybrid” split air conditioning systems at selected distribution
terminals. We found that the VSD reduced electricity
consumption by more than 10.0% as compared to
conventional pumps, whilst the “hybrid” split air conditioning
system reduced energy consumption by about 40.0% through
heat recovery generated by the split unit’s compressor.
161
ENVIRONMENT
MANAGING ENVIRONMENTAL IMPACT

GHG Emissions
Emission Control
Society continues to face the dual challenge of meeting the
world’s growing energy demand, while simultaneously
addressing the risks of climate change. Global urgency around
‘000 MT CO2e
62 64
climate change has warranted us to operate efficiently. PDB 59
has considered the impact of climate change regulation, and
incorporated climate change risks and opportunities into our
business strategy.
9 9.5 10.6
We focus on reducing our emissions via greater operational
2017 2018 2019
efficiencies, in line with PETRONAS’ Climate Change Position
Statement. Scope 1 Scope 2
Reduction in Scope 1 for 2019 is attributed to use of B5 Diesel (5%

Our GHG emissions cover direct (Scope 1) and indirect emissions
biodiesel) in road tankers
(Scope 2). Direct GHG emissions are defined as those from
assets that are owned or controlled by a company. For PDB,
this primarily includes CO2 emissions from our road tankers, Scope 1 – GHG Breakdown
NGV trailers and company-owned vehicles such as forklifts,
bowsers and dispensers. Indirect GHG emissions are those
generated by the consumption of electricity at our terminals,
62
retail stations, regional office buildings and training centre. During 59 56
the year, we developed a methodology to govern data collection
‘000 MT CO2e
for Scope 2 emissions from our PETRONAS stations which

recorded 112,190 MT CO2e. In 2019, our total GHG emissions
measured approximately 181,735 metric tonnes of carbon dioxide
equivalent (CO2e).
3 2 3
During the year under review, the B7 Diesel (which contains 2017 2018 2019
7% biodiesel) sold at all PETRONAS stations progressively Road Tankers, NGV Trailers and ROVR
changed to B10 Diesel (10% biodiesel). This has helped reduce Company Vehicles
as much as 436,023 CO2e from the transportation sector’s

GHG emission, thereby positively contributing to the Malaysian For scope 1, apart from CO2, there are no other types of significant GHG
Government’s commitment to the Paris Agreement. The emitted
Government plans to further increase the biodiesel blend
percentage to 20.0% in the future and PETRONAS will be fully In 2018, an independent verification of our environmental
committed with the change. performance data was conducted by PETRONAS’ Downstream
Business measured against the requirements of PETRONAS
The Government has gazetted the implementation of the Euro Technical Standards which are aligned with ISO 14064 (Part 3).
5 fuel standard for both RON95 and RON97 to come into The exercise provided gap identifications which will guide us
effect in 2025, as part of the Country’s effort to promote in meeting the international requirements in the future.
cleaner energy. PDB is committed to taking a prominent role
towards realising the Government’s greenification agenda in To provide assurance on our methodology and standards
support of Malaysia’s plan to reduce its carbon footprint. As we plan to engage with a third-party independent verification
part of our stewardship of the environment, we leverage in 2020.
PETRONAS’ R&D to develop and market energy-efficient fuel
products. As a result, in December 2019, PETRONAS Primax
95 with Pro-Drive was gradually upgraded to Euro 4M standard,
an improved generation of products with less sulphur emission
and enhanced anti-corrosion which directly improve air quality.
162
ENVIRONMENT
Solar Power Generated (PS Solaris Serdang)
103.9
73
67
Renewable Energy
MWh
PDB supports and contributes towards the Government’s

target to reduce the Nation’s GHG emissions by 45.0%
by 2030 from the 2005 baseline. We demonstrate our
effort by scaling up the installation of solar panels at 6
PETRONAS stations in 2019.
2017 2018 2019
In 2019, the solar panels installed at the station had

The increase in 2019 was attributed by the inclusion of solar panels in 5
generated approximately 103.9 MWh of electricity. new stations.
In support of a low carbon energy landscape and in line

with the Government’s vision, we also provide ChargEV
facilities at 60 PETRONAS Stations. As the stations are
located in strategic positions along the major highways,
this provides convenience to our customers with electric
vehicles to have easier access to charging facilities while
they travel across the Country.
163
ENVIRONMENT
Spills
We have clear control systems to prevent operational spills, on both water and Spills to Environment (>1bbl)
land, with particular emphasis on risk management, operations integrity and
containment capabilities. Asset integrity and process safety management are
integral to the maintenance of our facilities and pipelines.
All our fuel storage and dispensing systems are equipped with secondary
containment, leak detection and monitoring systems to prevent and detect releases 3 2 2
No of Spill
into the environment. Spill and overfill control equipments ensure that our
underground tanks are safe. To enhance our asset integrity, aging components
are replaced through regular maintenance and upgrading programmes.
Emergency oil spill response exercises are carried out as part of our emergency
preparedness and crisis management programme. We leverage on strategic
2017 2018 2019
partnerships with relevant authorities and organisations such as the Petroleum
Industry of Malaysia Mutual Aid Group to enhance our vigilance and ensure faster
response in the event of an oil spill. For more information on spills reduction
initiative, please refer to 'Process Safety'
on page 169 of this <IR>.
We recorded two hydrocarbon spills in 2019, unchanged from last year. We isolated
the source of leak, contained the spill to prevent further escalation and conducted For more information on oils spills response
clean up activities as guided by regulatory requirements. initiatives, please refer to 'Emergency
Preparedness' on page 170 of this <IR>.
Waste
We recognise the need to manage our waste responsibly to meet regulatory requirements. This includes efforts to
reduce the amount of waste generated and to recycle or recover materials where possible, at our terminals.
In 2019, we generated a total of 568.55 MT of hazardous waste consisting primarily of waste oil and sludge from
terminal operations. Over 240.30 MT were recovered mainly from waste oils and 280.70 MT of non-recyclable waste
were disposed. As a responsible company, we continue to collect and analyse our waste data to find opportunities
to minimise waste and increase our recycling and recovery effort.
We already have in place a waste recovery/recycling sourcing strategy for all our terminal operations. Through this
strategy, we target to improve the quantity of recoverable or recyclable wastes such as contaminated filters, used
drums, waste oil by end of 2020.
Hazardous Waste Hazardous Waste Hazardous

Generated Disposed Waste Recovered
680 280
280 281
569 240
210
MT
MT
380
MT
120
2017 2018 2019 2017 2018 2019 2017 2018 2019
Recovery Rate (%)* 55.2 41.1 42.1

*Recovery Rate = Hazardous Waste Recovered / Hazardous Waste Generated
164
ENVIRONMENT
RESOURCE MANAGEMENT
Water
We are committed to use water efficiently. In our terminal
operations, water is essential for cylinder washing, tank
cleaning, maintenance, and conveyor chain lubrication as well
as for general purpose use. Although we are not operating in
water stress areas and water usage is not considered intensive,
we strive to minimise our water footprint.
In 2019, three major initiatives contributed to the reduction

of water usage in our business. We have reduced the amount
of water withdrawal throughout our operations by:
• Reusing water for LPG cylinder washing where appropriate
• Implementing efforts to identify and reduce water leakage
at our operations;
• General reduction of our operational use of water.
We have also installed rainwater harvesting systems at all

four terminals in the Sabah region. Rainwater collected from
We only acquire PME from sources that have been certified
roof gutters around the plant is channeled into a 4,500-litre
by the RSPO
harvest tank and then used for cleaning and gardening. During
the year, we have recorded 77,000 litres of water withdrawal Environmental Supply Chain
from harvested rainwater.
Roundtable on Sustainable Palm Oil (RSPO) has
developed a set of environmental and social criteria
All of our facilities are equipped with oil interceptor system
which companies must comply with in order to
to prevent any unplanned or uncontrolled discharges from
produce Certified Sustainable Palm Oil (CSPO). We
directly entering public drains. All wastewater are treated
have started to implement the policy of responsible
prior to discharge, which are monitored regularly to ensure
sourcing of Palm Methyl Ester (PME), one of the
compliance. Key parameters analysed are Oil and Grease as
components of our biodiesel fuel, by only acquiring
well as COD. During the year, PDB’S LPG Terminals reported
PME from sources that have been certified by the
merely 0.006 MT of Oil and Grease and 0.223 MT of COD
RSPO. RSPO certification provides assurance to
from treated discharges.
consumers that the palm oil is produced to a
sustainable standard, by legal, economically viable,
environmentally appropriate and socially beneficial
Municipal Water
Withdrawal
management and operations.
Environmental standards are also embedded as part

106.6
of our overall HSE Management System requirements
in our procurement procedures and tender
83 84 documents in which we require suppliers and
contractors to establish and implement our HSE plan
that details the practices, procedures and control
‘000 m3
measures for effective HSE management. During the

year, we have conducted 9 Contractor Assurance
activities on our contractors to validate the
compliance towards our requirements.
2017 2018 2019
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SOCIAL
PDB recognises the value and impact

of our business in the sustainability of
the social ecosystem that we operate
in. For PDB to deliver value, remain fit
for the future and generate positive
societal impacts while enriching lives,
our actions, policies and processes
need to be continuously assessed and
refined to adapt to changing times and
address evolving challenges. Hence,
we are committed to operating safely,
responsibly and reliably, and aligning
our practices with acceptable business
norms and industry benchmarks.
MD/CEO engagement with employees
Social Sustainability Aspects that are For more information on PDB’s Environmental aspects, please refer
material to us and our stakeholders to Managing Environmental Impact on page 160 of this <IR>
include:
Safety And Health SAFETY AND HEALTH
HSE Oversight in PDB

Human Capital As one of the key players in the downstream petroleum
products retailing segment, PDB is subject to complex health
and safety laws and regulations at numerous jurisdictional
levels in Malaysia, including laws relating to human exposure
Governance and Business Ethics and the use, handling, storage and disposal of hazardous
materials. PDB places the highest priority on the health and
safety of our workforce and the protection of our assets,
Social and Relationship Capital communities, environment and all stakeholders as reflected
in the PDB Health, Safety and Environment Policy which sets
out the Company’s guiding principle in managing risks and
Seamless and Frictionless hazards relevant to the business operations.
Customer Experience
PDB oversees the governance of the HSE through application
of the HSE Management System. The LT upholds and drives
safety excellence through their leadership values, competencies
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SOCIAL
deliberated in the LT on a monthly basis and discussed in detail during HSE Steering
Committee meetings chaired by the MD/CEO and subsequently reported to the
Board. In addition, HSE management review is conducted as part of benchmarking
against the previous year’s HSE performance and PETRONAS Group’s OPUs
performance as part of learning from others and improvement for the following years’
strategic objectives.
In ensuring health and safety improvements, employees involvement in work-site

HSE Committee meetings take place through deliberation of site-specific HSE
issues, programmes and performance on a monthly basis. The periodic meetings
include participation of both employees and management representatives.
and behaviours. They are responsible for

understanding and mitigating risks as
well as maintaining and assuring
safeguards for the business. The LT
demonstrates their commitment by HSE Assurance in PDB
leading and integrating HSE aspects into HSE assurance at the work site is conducted regularly to assess compliance
business plans and targets. These plans to all health, safety and environment requirements. Furthermore, this first line
and targets are then strategically aligned of assurance will act as first barrier of early detection to prevent incidents.
with the HSE Plan and cascaded to all During the year, all terminals and PETRONAS stations were audited on a
working levels. Through continuous monthly basis by identified focal personnel.
employee engagement, they set clear
expectations, targets and objectives for We also emphasise on HSE compliance by our contractors. In 2019, we
each employee, while themselves conducted assurance assessment based on structured assurance plan for
carrying the highest portion of HSE KPI contractors to ensure we safeguard our operations and interests against any
weightage. regulatory non-compliance and prevent any unwanted incidences.
Our annual PDB HSE scorecard, All findings are analysed to identify their root causes and provide not only a
comprising key performance indicators, holistic approach in gap closure but also sustained implementation.
is developed based on historical statistics
with the aim of improving our safety In addition, the annual HSE MS review is carried out as part of a continual
performance year-on-year, and ultimately improvement cycle. Findings from the management review is used as input
achieving zero incident. HSE risks, to identify HSE strategic objectives and the new HSE focus areas.
incidents, performance and issues are
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SOCIAL
“Jom Patuh & Tegur” – Let’s Comply and Intervene
To achieve a culture of compliance, the organisation practices “Jom Patuh &

Tegur” (JPT), manifested as part of Behavioural Observation. There were also
JPT roadshows led by MD/CEO which were conducted in six different regions.
Safety Performance
This year, the company has achieved an outstanding safety performance: zero fatality and zero LTIF. It is PDB’s best achievement
for the last 9 years. This is testament of our highest commitment to safeguard our valuable workforce and assets by putting
vigorous efforts on strengthening HSE compliance, managing HSE risks and improving HSE monitoring at sites.
There were three Total Reportable Cases involving our operators at terminal operations with minor injuries. All incidents were
investigated and all recommended corrective actions were monitored and tracked for closure. In preventing future incidents,
increased efforts through checking were conducted on similar operations where reoccurrence of incidents may happen. Lessons
learnt from incidents are also shared across the Company, with our contractors and business partners to prevent recurrence.
2017 2018 2019

No. of Fatalities
Employees 0 0 0
Contractors 1 1 0
Fatality Accident Rate (FAR)
Employees 0 0 0
Contractors 24.86 21.73 0
No. of Lost Time Injury (LTI)

Employees 0 2 0
Contractors 3 1 0
Lost Time Injury Frequency
Employees 0 0.69 0
Contractors 0.57 0.43 0
No. of Total Reportable Case

Employees 1 3 3
Contractors 5 0 0
Total Reportable Case Frequency
(TRCF)
Employees 0.35 0.69 0.98
Contractors 1.30 0 0
Total Manhours = 6,741,421 man-hours for PDB employee and contractors, excluding Krew PETRONAS and PIMTCL employee
For more information on PDB’s Environmental aspects, please refer to Managing Environmental Impact on page 160 of this <IR>
Moving forward, we will continue to make sure safety becomes a priority in all our activities, including enhancement of HSE
risk management that leverages on digitalised tools, development of Generative HSE Culture capability at all working levels
and regular syndications with employee on HSE best practices and lessons learnt.
In 2019, 26 employee have participated in the Rakan HSSE programme organised by Group HSSE. The supervisory and
communication skills of our frontline supervisors are constantly improved through a series of Rakan HSSE workshops, which
create HSE consciousness in all aspects of decision-making and also fortify a culture of compliance amongst employee.
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SOCIAL
Risk Management
Considering the high risk environment
present in the retail marketing of petroleum
products, we place great emphasis on
effective risk management to identify and
assess risks, and manage these to levels as
low as reasonably practicable. Various
controls and preventive measures are
implemented based on a risk-based
prioritisation and comprehensive processes
to understand and analyse HSE risks as well
as their impacts on our people, assets,
reputation and environment. Vehicle inspection as part of the Defensive Driving Course conducted
PDB’s assets are also exposed to transportation safety; especially when PDB
The proper risk assessment tools and
embarked on ROVR operations. In order to ensure PDB assets are properly
techniques are used to identify potential
managed and operated, ROVR trucks are equipped with safety standards as
hazards and control the risks in our
per PETRONAS Technical Standards and the operations team is equipped with
operations and activities, which include
the competency to run the operations safely. Among the key safeguards
Hazard Identification (HAZID), Process
introduced for ROVR are stringent selection and upskilling of drivers, route
Hazard Analysis (PHA), Health Risk
safety assessment, delivery site safety assessment and truck safety features
Assessment (HRA), and Environmental Impact
complying with PTS requirements.
Assessment (EIA). This risk-based approach
is applied across our value chain,
PDB also appoints hauliers to transport our products from terminals to customer
encompassing new projects and existing
sites. Hauliers are governed by PDB’s internal Road Transport Operations
operations. As part of annual risk assessment,
Guideline (RTOG). RTOG has laid out 14 modules which covers the whole
this year, we conducted risk assessments
spectrum of safe transportation process. The hauliers are subjected to yearly
for new business ventures i.e. Setel® and
RTOG audits by the Fleet Management team and yearly Contractor HSE
ROVR. In addition, we also completed the
Assurance audits conducted by the Health, Safety and Environment team. In
assessment of our readiness in handling
order to improve safety performance in haulier operations, campaigns and
emergencies in case of fires and oil spills
safety programmes are conducted. Among the major programmes rolled out
i.e. Fire Safety Adequacy Review (FSAR) for
in 2019 was the Fatigue Remedy and Sleep Hygiene (FReSH) programme which
6 major hazard installations and Oil Spill
covered all 800 drivers or Rakan Khidmat Penghantar (RKP). FReSH established
Response Capability Assessment for
a structured platform to coach RKP and educate drivers on fatigue management.
terminals with jetty operations as well as
KLIA Aviation Fuel System (KAFS).
Process Safety
Transport Safety In preventing Major Process Safety Incident with serious impact, PDB applies
Process Safety Principles in designing, building, operating and maintaining our
PDB operations have transportation
facilities.
processes which involve PDB’s personnel,
assets and products.
For the year 2019, PDB focused on reassessing our PSM performance standards
and realignment of practices by adopting Causal Learning approach in identifying
One of our key HSE considerations is PDB
the barrier failure mode in addition to the assessment of adequacy of barrier.
personnel who are on business trips, mostly
sales and terminal operations personnel.
In order to achieve our goal of “Zero Major LOPC” and “As Low As Reasonable
Among the initiatives introduced to manage
Practicable (ALARP)”, realignment of PSM roles and functions across the
their safety while on business trips are
businesses were established including permanent PSM working committees,
defensive driving training for all at-risk
LOPC prevention task force, and technical advice from PETRONAS experts.
drivers, journey management plan process
implementation, selection of safe vehicles
Process safety will continue to be our focus in 2020 in order to strengthen
for company vehicle purchase and
asset integrity.
installation of telematics system to track
safe driving behaviour while driving
company vehicles.
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SOCIAL
Contractor and Supplier HSE Management

It is with utmost importance to PDB that contractors
perform their work safely at our facilities at all times.
To demonstrate our commitment to a safe and effective
Contractor Management, our contractors are strictly
screened for their compliance to the law and our HSE
requirements before being awarded the contracts. In
2019, PDB introduced HSE Evaluation Checklist for
contracts valued RM2 Million and below. We have
addressed our contract risks regardless of the contract
value and strengthened the key HSE requirements in
the contract to ensure smooth execution and HSE
compliance. Specific HSE requirements in contracts are
translated into contractors’ HSE plan prior to work
execution. The HSE risks as per scope of work are also
communicated to our contractors. Actions to mitigate
the risks are translated into the HSE Plan which will be
monitored and audited by the contract owner.
In addition to audits, we communicated with our Tier 3 Integrated Emergency Exercise ‘Strategic Immediate Respond and
contractors through platforms such as PDB Contractor’s Management’ (EX-SIRAM) 2019 between PETRONAS Dagangan Berhad and
Day, HSE Clinics and specific HSE trainings at which we PETRONAS Chemicals Methanol Sdn Bhd
set our standards and expectations with regards to HSE
practices. These engagement sessions also provide our
contractors with the opportunity to upskill their
capabilities and comply to our standards. The HSE
performance of our contractors and suppliers were also
evaluated upon the completion of contracts. Any gaps HIGHLIGHTS OF 2019
are being recorded for future improvements and
consequence management applied for serious non- • A Tier-2 Integrated Emergency Response Exercise with
compliances. We improved operational efficiency a codename EX-SIRAM (Strategic Immediate Respond
through various process simplification initiatives and and Management) was conducted at PETRONAS
leveraged on digital solutions in Permit To Work (PTW)
Chemical Methanol Sdn Bhd (PCMSB) and PDB Labuan
implementation to maintain our cost competitiveness.
Fuel Terminal (PDB LFT) on 16th July 2019 to test the
During the year, PDB embarked on the Contractor implementation of PCMSB and PDB LFT Emergency
Mentorship Programme with selected contractors. This Response Plan and integration response with authorities.
programme is designed to strengthen contract • A total of 5 Tier-1 Functional Exercises were conducted
management and collaboration for sustainable HSE at our terminals, an LPG Premier Dealer, a PETRONAS
Performance by sharing technical expertise, conducting
HSE audits and providing specific HSE training. Station and a road tanker.
• Developed the Emergency Response Plan for ROVR
Emergency Preparedness Operations and Customer Experience Centre to serve
PDB is committed to ensuring readiness for as a guideline for the emergency responders.
emergencies or crisis to minimise the impact on our • Initiated a Fire Safety Adequacy Review Study for 6
people and the environment while safeguarding our Major Hazard Installations to identify critical fire safety
assets and reputation. We place importance on our hazards; assess the adequacy and effectiveness of
readiness for any unexpected emergency situations.
PDB Emergency and Crisis Management Procedure provided safeguards against fire safety hazards; and
specifies the emergency response structure along with confirm the compliance to applicable standards and
clear roles and responsibilities. We developed scenario design basis.
planning for possible high-risk emergency situations. • Developed the Fire Safety Design Philosophy for 2
Periodically, we conducted drills and exercises in terminals as a guide for the selection of equipment and
collaboration with local agencies such as Fire and
Rescue Department, Department of Occupational Safety design of facilities.
and Health, Department of Environment, Hospitals,
Royal Malaysia Police, Port Authority, mutual aid For more information on our Crisis Management, please refer
to SORMIC on page 137 of this <IR>
organisations and Operating Units of PETRONAS (OPU)
to ensure adequacy and effectiveness of controls to
manage emergency scenarios.
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Health And Well-Being
Office Ergonomics
One of the foremost factors that drive employees to deliver excellent results is a safe, comfortable and
pleasant workplace. Acknowledging this, the Company has completed its Workplace for Tomorrow (WFT)
implementation for offices at Twin Towers in 2019. With this new office concept, employees are now provided
with a better workstation set-up with optimised ergonomics features. We continued to strengthen the
ergonomics practices across the Company by providing coaching, training as well as personal ergonomic
assessments for employees who experienced any discomfort or pain.
Sihat Rabu Challenge
M E S T I
fit4health
MOVE
M RIGHT!
Getting off the chair is the first step in
overcoming lifestyle-related illness
EAT
E RIGHT!
We are what we eat.
SLEEP
S RIGHT!
Launching of the Sihat Rabu Challenge at KLCC Park A well-rested mind is a safe and
productive mind
Our employees are one of our most important assets and as such, in
THINK
2019 we stepped-up our efforts in building a culture of health for PDB. T RIGHT!
In line with PETRONAS’ MESTIfit4health campaign, we launched our Mental resillience is the key to
very own Sihat Rabu Challenge. Various fitness and sports related managing stress at the workplace
activities such as brisk walking, cycling, futsal, badminton and Zumba
INDIVIDUAL
are conducted on a weekly basis across the Company aimed at I RIGHT!
improving the well-being of our workforce. The programme also Despite the four elements above,
included sharing sessions by our very own MESTIfit4Health champions healthy living ultimately is a personal
choice
within PDB to guide and motivate employees and get them started
towards a healthier lifestyle. Many other activities have been planned
for 2020 to keep the momentum going and getting all employees to
live a more balanced lifestyle.
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HUMAN CAPITAL
Workforce Development
Our people and our partners are at the core of PDB’s competitive WORKFORCE PROFILE
advantage. They provide us with strength for sustainable growth.
We strive for a high performance culture by attracting the best
GENDER
talent and nurturing their capabilities through continuous
investment in their development.
Male 68.1% Female 31.9%
Our talent management practices are guided by PETRONAS’
People Policies and Procedures as well as strategies that are
aligned to our organisational needs. We also adopt PETRONAS’ ETHNICITY
Global Talent Strategy to facilitate a more robust approach in
87.5% 3.7%
recruiting and managing talent, focusing on three strategic
thrusts of Right Leader, Right Talent and Right Environment, Bumiputera Non Malaysian
while leveraging on the organisation’s Employment Value Thailand Brazil
8.8% Indonesia Syria
Proposition of Trust, Grow and Reward. Philippines Afghanistan
Non Bumiputera Vietnam Australia
PDB celebrates a diverse and inclusive workforce, as we believe Bangladesh Singapore
South Africa
that will enhance our value creation through varied talents,
experiences and expertise. Through our equal opportunity and
non-discrimination hiring policy, we provide equal opportunities
WORKFORCE
for employment and subsequently career advancement to all
employees irrespective of gender, race, religion, age, disability or 88.5% 11.5%
nationality. The PDB LT composition is made up of 33% women. Permanent Contract
During the year under review and as part of our Great Place
To Work Strategic Initiative, PDB had undertaken a partial GENERATION
organisational realignment. The intent is to augment
accountability in line with strategies defined so to provide focus 1.1% 77.0% 18.5% 3.4%
Gen Z Gen Y Gen X Baby
on growth and stepping out, as well as to give clear Boomers
(<22) (23-40) (41-51)
accountability across PDB in reinventing and upscaling new (51>)
business models in order to create future-proof and sustainable
revenue streams.
ATTRITION
To inculcate the conducive work environment and a great place
to work, PDB has also embarked in an office retrofit under the 5.8%
from the total
WFT initiative driven by PETRONAS Group as well as Terminal workforce 3.6% 1.6% 0.7%
Refurbishment exercises to improve the current working (95 employees) Resignation Retirement Others
environment and provide a pleasant workplace to our employees.
In 2019, the exercise was completed at 8 terminals around the RECRUITMENT

country, with 9 terminals planned to complete in 2020.
Generation Ethnicity Gender
4.0% 6.0% 68.0%

Gen Z Gen X Bumiputera Male
(<22) (41-51) 64.5%
23.0%
88.5% 1.5% Non Bumiputera
Gen Y Baby
(23-40) Boomers Female
(51>) 9.0% 35.5%
Non Malaysian
Premises at Kertih Fuel Terminal after WFT retrofit
Data: PDB Group
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Talent Acquisition
In line with our Talent Sourcing policies and procedures, talents are sourced through a wide range of recruitment channels
and are selected based on criteria that focuses on individuals’ experience, knowledge and skills.
We strive towards gender equality in the workplace and are committed to creating an inclusive workplace for women, including
during their pregnancy. Employees who are pregnant seven months or more may leave for home an hour earlier. Fully paid
maternity leave for 90 consecutive calendar days is provided for up to five deliveries throughout a female employee’s service
with the Company. This special time off allows mothers to comfortably observe their confinement period and make the
necessary arrangements for their new-borns’ well-being. Once they return to office, dedicated nursing rooms are available
within our working facilities.
Talent and Capability Development

As part of Employee Value Proposition, we pay Functional Training
close attention to employees’ professional and
personal growth. The organisation identifies with 2713 (83%) Total Training
employees aspirations to further develop their
potential and provide opportunities for them to + = Man-days
enhance their expertise, skills and experience in
order to enjoy an enriching and fulfilling career.
Leadership Training 3250
At PDB, our Capability Framework outlines the
537 (17%)
functional and behavioural capabilities required
to perform particular jobs supported by the
development approach, tools and infrastructure. 2.14 17.13 1203
The development approach adopted for each Average Training Average Training HSE Training
employee typically represents a mix of formal, Man-days Man-hours Man-days
social and experimental learning.
1612 RM5.317 million
No. of PDB Employees (401) and Training
Contractors Attended HSE Training Investment
(1211)
Leadership Development Programme
Leadership Learning Series/

Leadership Excellence
Designed for Leaders who are
transitioning into managerial and senior
management role
Leader’s Speak/Leadership Forum

Internal/External Leaders inspire talent by
sharing their leadership and business
experience, lessons learnt and insights
A Day with Leader

An informal platform for young leaders to
engage and experience experiential
learning with Leaders
A Day with Leader
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Training and Development Programmes for Employees
Internship and Onboarding Programmes

Internship Programme
Designed for undergraduates to
undertake internship for a duration
stipulated by their respective
academic institutions. The platform
provides students with career
development by enhancing their
employability through real work
experience that gives them the
opportunity to explore their interests
and develop professional skills and
competencies. During the year
under review, we have placed 132
students across PDB.
Onboarding Programme
Familiarisation programme to
integrate new or recently
transferred in employees into the
organisation.
Functional and Behavioural Programmes Accelerated Capability

Development opportunities provided to all employees to ensure they are competent and Development (ACD)
capable in performing their job functions. Coaching
Personal coaching and
PETRONAS Competency-based Assessment System knowledge sharing by
Structured skill assessment system for non-executive technical employees that covers discipline resource to
elements of knowledge, skills & attitude. prepare employees for
their ACD assessment.
HSE Competency and Training
Mandatory training for employees and contractors to carry out their duties safely.
Territory Managers
Development
Programme (TMDP)
Structured programme
specifically designed for our
Retail Territory Managers
with the aim to enhance
their capability through on-
the-job coaching and panel
assessment towards
developing Competent,
Credible & Customer
Focused Territory Managers
for PDB.
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Training and Development Programmes for Dealers and Other Partners
Annual Dealers Convention
Along with providing business

opportunities to our dealers, we keep
them up-to-date on the market outlook
and PDB’s strategic direction through our
annual dealers’ conventions. We also
provide insights on the latest market
intelligence and local regulatory
requirements through our capability
development trainings.
Dealers’ Capability Programmes
Serving customers through our extensive

network, our Rakan Niaga upholds the
drive and values that keep PDB ahead of
the game. The Dealers’ Capability
Programmes are specially catered to
ensure that they consistently deliver quality
customer experience at our stations. In
Annual LPG Dealer Convention held in Kota Kinabalu, attended by nearly 200 Premier Dealers
2019, 139 sessions comprising 15 types of
and Dealers nationwide
programmes were held for dealers across
the country.
Succession Management
We undertake a rigorous talent identification and review exercise to build our talent pipeline. Each talent identified is reviewed
under a holistic approach to determine his or her strengths and areas of development to help chart their individual career
plans and mapped against critical positions within PDB or across PETRONAS.
In ensuring uninterrupted operations, we regularly review our succession planning for senior management positions to
ensure availability and readiness of suitable successors at all times. We also develop succession plans for critical positions
and carry out annual reviews on the plans to ensure feasibility of their implementation.
Employee Performance Management (EPM)

Our EPM emphasises the importance of continuous engagement in managing employees
performance towards meeting the Company’s objective of becoming a High Performing
Organisation. The EPM framework focuses on Coaching, Review and Feedback to empower
employees in managing their performance delivery in line with the Company’s business
objectives and targets. Performance results are based on differentiated performance standards
that is linked to reward and consequence management as part of the strategy to motivate
and sustain a High Performance Culture.
To assist employees with performance deficiencies and to provide opportunity to succeed,

a structured process of Performance Improvement Plan is undertaken through continuous
coaching by superiors for constructive review of their performance.
During the year under review, in supporting PDB’s strategic framework that focuses on strengthening the core and looking
into growth opportunities, PDB has undertaken an organisational realignment and refinement to enhance accountability in
line with strategies developed which provided focus and clear accountability across PDB.
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Welfare and Benefits

We adopt PETRONAS’ policies on employees’ welfare and benefits which cover both tangible and non-tangible standardised
benefits for our full-time employees. We provide medical benefits, life insurance, allowances, leaves and other general provisions.
PETRONITA
Orchid Run and Ride is an annual event organised by PETRONITA
166 PDB staff subscribed to PETRONITA, an association for wives and female employees of PETRONAS, with the objective
to unite and foster closer relationships among the employees’ spouses and the female employees of PETRONAS.
Leave without Pay Maternity and Paternity Leave

LWP facilitates employees in managing personal matters The Company provides three months fully paid maternity
that are important and that require them to be away from leave and five days paternity leave.
work for an approved duration after exhausting the
Company’s other leave provisions.
Taken LWP Returned from LWP Maternity Leave Paternity Leave
243 No. of employees 750 No. of

Male Male entitled employees
13 10 entitled
18 Taken leave 87 Taken leave
Female Female 18 Return from leave 87 Return

14 9 from leave
Note: 16.1% of employees taking LWP mentioned a parental reason
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SOCIAL
Pilgrimage Leave
In valuing diversity and inclusiveness, we support and respect employees wanting to fulfil their obligation to
perform pilgrimage and religious rituals through enhancement of the pilgrimage leave provisions as below:
• Hajj-Umrah Leave - Allows permanent Muslim employees to take Hajj-Umrah leave for up to a maximum
of 40 calendar days. This provision is granted once in the employee’s service period with PETRONAS.
Previously, we only provide Hajj leave to our employees.
• Pilgrimage Leave for Other Religions - Allows employees to take pilgrimage leave for up to a maximum
of ten (10) consecutive calendar days.
In 2019, 38 employee took pilgrimage leave.
Transition Programme for Retirees

We run a programme designed specifically for employees approaching retirement to help them manage their
finances, health and time once they retire. It is offered to those employees within three to five years of
retirement, allowing for sufficient time to plan and prepare for leaving employment. In 2019, 42 employee
partook in the programme.
Preventive Health Screening

We pay serious attention to our employees’ health with the provision of preventive health screening to ensure
their fitness to work. This provision has been enhanced and extended to all permanent employees upon
reaching 30 years and above. Previously the screening was provided for employees reaching the age of 40
and above. 145 employee utilised the Preventive Health Screening in 2019.
Flexible Work Options

We believe in assisting our employees to strike a good work-life balance and to facilitate this, the FWO have been put in
place for all non-shift employees across the Group. The FWO comprises of:
Compressed Work Week:

Allowing employees to end their working hours at noon on the 5th day of the week upon completing 39 working hours
for the week.
Flexible working hours:

Allowing employees to choose the time they start and end work while ensuring they complete a minimum eight hours
per day and seven hours on Fridays (or Thursdays for those locations observing weekends on Friday and Saturday).
Leaving Earlier from Work (LEFW) for Pregnant Employees: Allowing female pregnant employees who are in their 28 week
(7 months) onwards of pregnancy to leave work, one (1) hour earlier than the prescribed working hours. This provision is
applicable to all female employees, permanent and Contract Direct Hire.
Working Arrangement for Employee with Dependent(s) affected by contagious diseases: Allowing employee to work from
home up to five (5) working days per occasion in the event that their dependent(s) were affected by contagious disease i.e.
Hand, Foot and Mouth Disease, Influenza A and etc. This provision is only applicable for all Malaysia-based employees with
normal working hours and subject to superior’s approval.
In addition, PDB has introduced a Flexible Working Arrangement since 2016 enabling employees to work from alternate
locations other than the usual/standard place of work, with accessibility to appropriate communication technology. A total
of 135 employees have benefited from Flexible Working Arrangement during the year.
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Employee Relations
PDB believes in building a strong employer-employee relationship based on mutual trust and respect. To increase employee
engagement across the company, we organised various programmes and initiatives to foster an inclusive and equitable
workplace culture.
Townhall sessions and Leader’s Meet
A series of engagement sessions were carried out throughout the year and this includes key
ENGAGEMENT events like PDB Townhall as well as two Leader’s Meet sessions. These engagements were
01 SESSIONS primarily aimed at informing and updating employee on company strategies, plans and initiatives
for the year as well as progress and performance updates. It also serves as a platform to
reaffirm company culture and ensure alignment of employee across all levels.
Long Service Award

EMPLOYEE An annual event is held to recognise and appreciate employees’ commitment, dedication
02 APPRECIATION and contribution to the company. In 2019, 59 employees received their 15, 20 and 25 years
anniversary service awards with PETRONAS.
Majlis Tilawah Al-Quran (MTAQ)

Majlis Tilawah Al-Quran (MTAQ) is an annual PETRONAS corporate event organised by Social
Welfare and Islamic Welfare Bodies (BAKIP) that aims to inculcate the culture of learning,
reading, memorising and appreciating Al-Quran as well as understanding and practicing the
content of the Quran in the context pf career and daily life among PETRONAS staft
With the theme “Memperkasakan Kompetensi Melalui Penghayatan Al-Quran”, PDB organised
its inaugural MTAQ on 31 July 2019 at PDB Training Center Shah Alam. The event was
EMPLOYEE officiated by YBhg Dato’ Sri Haji Syed Zainal Abidin Syed Mohamed Tahir, MD/CEO of PDB.
03 ACTIVITIES There were 10 competing categories that include Hafazan Al-Quran, Taranum Al-Quran,
Kuiz, Murattal, and Nasyid, with 38 participants consisting of employees and their family
members, that made the event a successful one.
Kelab Sukan dan Rekreasi PETRONAS
PDB employees are given the opportunity to join the club to foster close camaraderie among
members, and enhance physical fitness and mental well-being through the sports, recreational,
social and cultural activities organised. In the year under review, about 802 PDB employees
subscribed to Kelab Sukan dan Rekreasi PETRONAS.
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GOVERNANCE AND BUSINESS ETHICS
CoBE PART III

WORKPLACE CULTURE AND ENVIRONMENT
PETRONAS is committed to provide employees, a safe, secure and conducive workplace culture and environment,
where the values of mutual and reciprocal respect, trust and confidence are upheld and actively promoted.
Workplace Culture and Environment One of PETRONAS’ initiatives to maintain We continue to adopt PCB to strengthen
Standard industrial harmony at the workplace is the culture of personal accountability in
Any inappropriate work-related behaviour having a formal platform for employees to delivering results. We believe that an
or conduct such as harassment, bullying, lodge official complaints on issues such as invigorating Company culture will
bribery, corruption, conflict of interest and breach of the terms and conditions of their
transform the organisation and deliver
employment contract, as well as harassment
breach of terms that are not in sustainable, safe, reliable and efficient
and employment discrimination.
accordance with an employee’s performance. The focus is for everyone
obligations as an employee of PETRONAS to embrace these beliefs in their work
We have adopted the PETRONAS
shall be treated as misconduct, due to culture.
Grievance Management process, under
non-compliance with Part IV - Discipline,
which the grievances are managed
Disciplinary Process and Sections of CoBE
according to outlined procedures with the During the year, several programmes
and may be liable for disciplinary action,
aim of having both parties reach an were implemented to ensure our people
subject to requirement of applicable laws. amicable agreement. This approach goes internalised PCB across the organisation.
a long way towards maintaining Power Up Sessions from all divisions in
We pay serious attention to such issues continuous good relations between PDB
as it disrupts our working environment, PDB are a feedback exercise to align
and our employees.
and disturbs the physical, emotional and everyone to the Company’s vision and
psychological well-being of our PETRONAS Cultural Beliefs mission. In addition, numerous
employees. Our policies on work culture inspirational stories were shared in the
and conduct are spelt out in CoBE, which RESULTS MATTER form of posters and videos. Other
is available in multiple languages, and I stretch my limits to deliver programmes include Focused
communicated to all employees through superior results Recognition awarded to unsung heroes
various platforms. during PDB Engagements sessions to
recognise and motivate employees, as
OWN IT!
Alongside CoBE, our People Policies and I own the results and don’t blame well as PDB LT Meetings and surprise
Procedures as well as other manuals others visits from the MD/CEO and LTs.
provide the guidelines and processes in
managing non-compliances and
To increase the participation of PCB
misconduct issues. We encourage FOCUSED EXECUTION
throughout the organisation, we
employees and other stakeholders to I plan, commit and deliver with
discipline leveraged Downstream Business’ PCB
report any observed infringement of our
Challenge and encouraged employees
policies or expected standards of
behaviour through our Whistleblowing to take part in the challenge. 199
channel. Key personnel have been trained NURTURE TRUST Focused Recognition cards were issued
to handle reports on potential misconduct I always keep my promise and build across Downstream Business employees
mutual trust
cases. We have in place structured and numerous feedback were
procedures to conduct investigation into exchanged throughout the challenge.
any allegations and, if there has been any In addition, quarterly profiling of leaders,
TELL ME
non-compliance of our regulations, to I seek, give and act positively providing them with appreciative and
take the necessary follow-through actions. on feedback constructive feedback were done to
ensure the leaders demonstrate the right
Every year, we monitor and investigate PCB behaviour and create positive
the number of non-compliance cases SHARED SUCCESS experience in the organisation.
within PDB. Additionally, PETRONAS I collaborate for the greater good
periodically reviews the effectiveness of of PETRONAS
its CoBE.
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SOCIAL
SOCIAL & RELATIONSHIP CAPITAL

Human Rights
Respecting human rights is entrenched in our DNA in PDB as we recognise that it is our duty to care for the people across
our business and value chain. We acknowledge our responsibility to ensure that the rights of people impacted by our
operations are not compromised, and to avoid complicity in potential human rights violations in our relationships with
dealers, contractors, suppliers and the community.
The PETRONAS’ Human Rights commitment, which is in line

with the UN’s Guiding Principles on Business and Human
Rights, helps guide us in our actions.
The Commitment is applicable to all employees of PETRONAS

Group of Companies, contractors, subcontractors and any
third parties within PETRONAS premises or performing work
and/or business for or on behalf of PETRONAS, in line with
PETRONAS Contractors Code Of Conduct On Human Rights
(CoCHR), which has been incorporated into the General
Terms and Conditions of all new contracts.
Engagement with KAPENAS members
The focus areas under the CoCHR, which vendors are
required to comply, are: freedom of labour; prevention of
For more information on diversity and profile of our workforce,
child labour; wages and benefits; working hours; non- please refer to Workforce Profile on page 172 of this <IR>.
discrimination; freedom of association; humane treatment;
and foreign and migrant workers. The vendors are also
In addition, PDB is also guided by PETRONAS’ Policy on HIV/
required to cascade PETRONAS’ requirements to
AIDS in respecting human rights, dignity and the privacy of
subcontractors in applicable language(s).
persons living with HIV/AIDS. The Policy underpins our
commitment to ensure that no individual is unfairly
Social Risk Assessment
discriminated against or stigmatised on account of his or her
During the year, we continued with our Social Risk Assessment HIV status.
to understand more about the labour and salient human
rights issues. We verified compliance on Human Rights Any inappropriate work-related behaviour or conduct such
elements such as working Krew PETRONAS nationality, as harassment, bullying, conflict of interest and breach of
minimum wages, and working age. We also undertook action terms that are not in accordance with an employee’s
on gaps identified by establishing a platform to monitor valid obligations as an employee of PETRONAS shall be treated
working permits of our Krew PETRONAS. During the year, as misconduct, due to non-compliance with Part IV –
we have trained our Krew PETRONAS to ensure they perform Discipline, Disciplinary Process and Sections of the PETRONAS
their job in a safe manner through PETRONAS Retail HSE CoBE and may be liable for disciplinary action, subject to the
Passport programme. requirements of applicable laws.
Anti-Discrimination We pay serious attention to such issues as they disrupt our

PDB stands strongly against any form of discrimination at the working environment, and upset the physical, emotional and
workplace, whether by gender, race, religion, age, nationality psychological well-being of our employees. Our policies on
or disability as highlighted in PETRONAS’ CoBE. To demonstrate work culture and conduct are spelt out in CoBE, which is
our commitment to anti-discrimination, equal pay is accorded available in multiple languages, and communicated to all
to men and women for the same role and position. employees through various platforms.
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SOCIAL
We encourage employees and other stakeholders to report determine issues with the manning and to come up with
any observed infringement of our policies or expected improvements to the current schedule so as to comply with
standards of behaviour through our Whistleblowing channel. fatigue management requirements.
Key personnel have been trained to handle reports on
potential misconduct cases. We have in place structured Forced and Child Labour
procedures to conduct investigation into any allegation and, As a socially responsible organisation, we do not condone any
if there has been any non-compliance of our regulations, act of forced and child labour, while we are also governed by
take the necessary follow-up actions. the prevailing labour legislation against forced and child labour.
The Company adheres to the Employment Act 1955, Sarawak
One of PETRONAS’ initiatives to maintain industrial harmony Labour Ordinance (ACT A1237) and Sabah Labour Ordinance
at the workplace is by having a formal platform for employees (CAP 67) which states that employment shall be based on
to lodge official complaints on issues such as breach of the contract of service. Hence at PDB, all employment offers are
terms and conditions of their employment contract, as well based on “Offer and Acceptance” whereby individuals enter
as harassment and employment discrimination. We have into contract of service on their own free will, and we expect
adopted the PETRONAS Grievance Management process, under our contractors and dealers to comply to this standard as well,
which grievances are managed according to outlined based on our requirements in the CoCHR.
procedures with the aim of having both parties reach amicable
agreement. This approach goes a long way towards maintaining We also fully comply with the Children and Young Persons
continuous good relations between PDB and our employees. (Employment) Act 1966 in our business operations. We abide
strictly to PETRONAS’ Talent Sourcing Policy and Procedure
Minimum Wage that clearly stipulates guidelines and criteria in hiring individuals
PETRONAS/PDB complies with the minimum wage requirement by not employing children below the legal minimum working
as stipulated by the National Wages Consultative Council. We age. PDB employees and contract personnel must be at least
continuously make efforts in reviewing the salary structure 18 years of age.
while ensuring the requirement of minimum wages by the
Government is met. Apart from that, the salary structure for Freedom of Association and Collective Bargaining
KAPENAS members is also reviewed every three years as part PDB respects the rights of its employees to freedom of
of the negotiation process of the Collective Agreement association, consistent with Article 10 of the Constitution of
between Management and KAPENAS’ representatives. Malaysia, and encourages employees to participate in
voluntary public service, associations and other community
Elimination of Excessive Working Hours activities outside of working hours. At the same time,
We take a positive stand to ensure our employees’ rights are employees are expected to adhere to CoBE Part II G on
not infringed through overwork as it is counterproductive and Conduct Contrary to Duty, i.e. to fulfil their obligation to
unsafe. At PDB, non-shift personnel are encouraged not to serve diligently while involved in such activities or associations.
put in more than 39-hours a week and are entitled to two-
days rest at the end of the week, while personnel who work We support the rights of our employees to collective
shifts have a cap of 42 working hours. bargaining. PETRONAS has five in-house unions with different
entities serving employees in Peninsular Malaysia, Sarawak,
Legally, we are bound by the Employment Act 1955, including Sabah and Labuan. The establishment of these unions is in
the Employment (Limitation of Overtime Work) Regulations line with the Industrial Relations Act 1967. We recognise each
1980 that stipulate a limit of overtime of not more than union as the sole principal and collective bargaining body
104-hours a month. for member employees who are entrusted to uphold the
well-being of employees.
With the help of a tracking tool, we monitor employees’
overtime and ensure the work schedules for shift and non-shift PDB maintains an open and constructive relationship with
employees are properly planned to curb fatigue at work. We KAPENAS through regular engagement for the benefit of the
compensate employees for extra hours put in via special Company and the 488 employees who are union members.
overtime rates, especially for work performed on rest days and During the year under review, three (3) engagement sessions
public holidays. Any requirement to work beyond our overtime were held with KAPENAS which saw the participation of
limits has to be reported to Human Resource Management Management and employees to address concerns pertaining
for proper risk assessment of the jobs. to wages, and terms of work such as working conditions,
occupational safety and health matters as well as benefits.
During the year, PDB piloted fatigue management tracking Agreed outcomes will be incorporated into the Collective
system at our Melaka and Kerteh terminals to help us manage Agreement when it is renewed. PETRONAS renews its
fatigue issue during operations. We also conducted a workshop Collective Agreement with KAPENAS every three years.
on fatigue management for high volume aviation terminals to
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SOCIAL
CORPORATE SOCIAL RESPONSIBILITY

PDB continues to invest in corporate social responsibility impact on the local communities and environment, which
programmes as part of its commitment to give back to the also enhances their personal and professional development.
people and communities residing in areas where we operate To encourage volunteerism, and demonstrate the extent to
in, which have fuelled our growth. Our approach is guided by which PDB values our communities, employees’ participation
the Group’s philosophy of empowering members of these and contributions are recognised by the Company.
communities through educational and social development
programmes, as well as environmental protection. During the year under review, about 160 employees took part
in various programmes.
PDB’s employees are highly encouraged to participate in these
programmes which provide the opportunity to create positive
PETRONAS Coffee Break Campaign
As a company which fuels our customers’ every day

journey, road safety naturally becomes PDB’s highest
priority. With transport accidents continuing to be one
of the top five causes of death in Malaysia, the Campaign
directly supports the Government’s effort in reducing
road accidents by reminding drivers to take regular
breaks and drive safely to their destinations to celebrate
the festivities with their loved ones.
PDB’s Coffee Break Campaign has served over 1 million

The Campaign also partnered with Yamaha for the first time in
cups of complimentary coffee and snacks to its customers
2019 to carry out safety checks for all brands of motorcycles.
during major festive seasons including Chinese New Year,
Hari Raya, Kaamatan and Gawai Festivals, where the roads
typically record higher traffic. Objective Promote road safety awareness and remind
motorists to take a break, refresh and
For the year under review, PDB brought the Campaign rejuvenate with coffee and snacks, before
one step higher by introducing the National Safest Driver continuing on their journey.
Challenge carried out in collaboration with PLUS Mechanism Hand out complimentary coffee and snacks
Highway, Touch ‘n’ Go and Katsana, a company that to customers at participating PETRONAS
manages the Global Positioning System (GPS) tracking stations located along major highways and
and fleet management system. trunk roads. Besides refreshments, the
campaign also offered road safety talks,
The Challenge is conducted via DriveMark, a safety complimentary vehicle inspections and
mobile application which keeps track of driving behaviour health checks.
and rewards safe driving actions with positive scores Impact Over 1.5 million motorists have benefitted
and vice-versa. The Challenge rewarded two grand prize from the Campaign at more than 150
winners with 100,000 Mesra points (equivalent to PETRONAS stations nationwide.
RM1,000), RM1,000 Touch ‘n Go credit, 10,000
PLUSMiles points and RM10,000 DriveMark Personal Inception Year 1998
Accident Coverage for 12 months. 50 special prize Partners Road Safety Department, St. John Ambulance
winners also received 5,000 Mesra points, RM50 Touch Malaysia, Hong Leong Yamaha Motor Sdn
‘n Go credit and RM10,000 DriveMark Personal Accident Bhd, Nestle’ Products Sdn Bhd, Delfi
Coverage for 3 months. Marketing Sdn Bhd, Julie’s Marketing Sdn
Bhd, Mondelez Malaysia Sales Sdn Bhd,
Munchworld Marketing Sdn Bhd, Suntory
Beverage & Food Malaysia Sdn Bhd, Shopee
Mobile Malaysia Sdn Bhd and Dunkin Donuts.
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PETRONAS StreetSmart
To change unsafe driving behaviours calls for a change of mindset, one that prioritises safety first. The PETRONAS StreetSmart
programme is PDB’s grass-root programme aimed at embedding a safety-first mindset amongst the young ones and to
mould these future drivers to be responsible when on the road.
Introduced in 2013, the half-day programme is carried out in collaboration with PETRONAS’ Science Discovery Centre
(PETROSAINS) and Road Safety Department (JKJR), offering dedicated modules involving theoretical and practical approaches
to grasp the importance of staying alert and safe on the road. JKJR further reinforces the message through sharing of
real-life incidents as well as providing road safety tips. Interesting modules related to Science, Technology, Engineering
and Mathematics (STEM) are also crafted to engage students in a fun yet informative approach to better understand topics
related to road safety. Since inception, the programme has positively impacted a total of over 5000 students and garnered
support from close to 500 volunteers.
Objective Promote road safety awareness at grass-root

levels to primary and secondary school
students focusing on tips to stay vigilant and
safe on the road.
Mechanism Half-day programme carried out at schools

nationwide that includes road safety briefing,
hands on practical on safety concepts and
basic first aid skills.
Impact Reached 600 students from six schools.
Inception Year 2013
Partners PETRONAS Science Discovery Centre, Road

Safety Department and St. John Ambulance
Malaysia.
Water for Life

Water is the essence of life. As the country experiences rapid urbanisation, there remains certain rural areas that are without
constant supply of clean water. The programme which started in 2013, has since impacted a total of close to 9000 people
and garnered support from about 900 volunteers.
Through the Water For Life programme, PDB in partnership with Malaysian Nature Society, identifies these areas and assists
the residents by providing a sustainable supply of clean water. The works typically involve installation of water tanks
complete with piping, filtration systems and water pumps. Awareness programmes are also carried out to educate the
residents on water conservation and health risks associated with unclean water consumption.
Objective Supply clean water to rural areas that are affected by unclean water resources or water disruption.
Mechanism Development of necessary infrastructure to enable clean water supply for the communities, which includes
installation of piping, filtration system, expanding dams and water tanks.
Impact Benefitted over 800 residents in two villages and improved the overall hygiene of the area.
Inception Year 2013
Partner Malaysian Nature Society
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Ramadan Community Service

As a yearly tradition, PDB carries out various community service projects during the month of Ramadan leading up to the Hari
Raya Aidil Fitri celebrations. This year, PDB continues to provide PETRONAS liquefied petroleum gas (LPG) cylinders to local
mosques to prepare Bubur Lambuk – a favourite delicacy for the breaking of fast, expanding the number of recipients to 16
mosques nationwide. The contribution was in line with each mosque’s respective needs to prepare food for the community
in celebration of the holy month. Each mosque per state received 15 units of cylinder gas, while Masjid Jamek Kampung Baru
in Kuala Lumpur which caters for a larger community, received 100 units.
PDB also hosted a special iftar at Masjid Ubudiah for the community of Kampung Sungai Raya, Batu 9, Cheras, with 30 less
privileged children from Rumah Bakti Al Kausar in attendance. This was followed by the presentation of 15 cooking gas cylinders
and aprons to the mosque representative as well as duit raya and baju raya to the children.
Professional Training and Education for Growing Entrepreneurs (PROTÉGÉ)

The Professional Training and Education for Growing Entrepreneurs (PROTÉGÉ) programme was launched in 2019 to replace
the Skim Latihan 1 Malaysia (SL1M). Alongside it, PETRONAS’ Graduate Employability Enhancement Scheme (GEES) programme
was established to collaborate with PROTÉGÉ to improve the quality and employment opportunities of Malaysian youth by
providing an experiential learning experience. The PROTÉGÉ-GEES programme aims to equip them with a diverse set of
personal attributes in facilitating the graduates’ transition to work in business/corporate environment. There have been 20
trainees placed in PDB to undergo the classroom training starting from 3 November 2019 until 14 December 2019, and
they will then be assigned to various divisions within PDB as part of their on-job-training from January to June 2020.
Small Change Goes the Distance Campaign

PDB also organised the Small Change Goes the Distance
Campaign in the days leading up to the month of Syawal
from 28 May to 28 June 2019. During this period, PDB
donated 1 sen for every RM1 purchase made by customers
at PETRONAS station’s Kedai Mesra nationwide.
In total, PDB contributed more than RM90,000 to the paediatric

wards of six chosen hospitals including Hospital Ampang KL,
Hospital Raja Perempuan Zainab II Kelantan, Hospital Pulau
Pinang, Hospital Besar Melaka, Hospital Sibu, Sarawak and
Hospital Wanita & Kanak-Kanak, Kota Kinabalu, Sabah. Each
hospital, with Hospital Ampang being the first recipient, received
RM15,000 along with goodie bags for the children warded there
as well as a refurbished ‘Play and Learn’ corner.
Books collected from good Samaritans at designated PETRONAS

stations during the Campaign were also distributed to the wards.
Objective To give back to the less privileged community.
Mechanism Raised funds and book collection through nationwide donation drive. Selected hospitals also received a makeover
of the ‘Play and Learn’ corner.
Impact Benefitted 30 less privileged children and aided local mosques in continuing the yearly Bubur Lambuk cooking
tradition, which are distributed to the local community.
Inception 2019
Year
Partner Nestle Malaysia and Cycle & Carriage Malaysia
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SOCIAL
Commercial Division and 5 commercial customers

collaborated for Chinese New Year Celebrations with Old
Folk Homes in Southern Region
Objective Reaching out to the underprivileged and also

to give back to the society.
Mechanism Lion dance troupe, “yee sang” & handing out

of “ang pow” by the customers.
Impact Positive brand presence and contributing

back to the community.
Partner PDB organised the event & supported by 5

direct customers.
Programme Kembali ke Sekolah Anak-Anak Nelayan in Sandakan

(Sabah), Kuantan (Pahang), Lawas (Sarawak), and Permatang
Pasir (Penang)
Objective Create awareness and brand presence at

surrounding area ie. school and part of
community engagement activities.
Mechanism Sponsorship of back to school items to the

underprivileged kids.
Impact Enriching lives of Anak-Anak Nelayan.
Partner PDB, LKIM and NEKMAT

(Items sponsored by PDB while NEKMAT arranged
the event)
Rakan Niaga in Central Region had worked together to contribute for a Kembali Ke Sekolah Freemarket @
PETRONAS Bandar Manjalara
Objective Create awareness and brand presence

at surrounding area ie. school and part
of community engagement activities.
Mechanism A group of 50 students identified from

B40 families from Sekolah Rendah
Agama Imam AL Ghazali were gifted
with school bags and a new haircut.
Collaboration with multiple vendors
who provided free skills (haircut),
school supplies, clothes and food items
given away during the event.
Impact Positive brand presence and contributing

back to the community with station
dealers. The spirit of giving and sharing
of wealth within the community was
further enhanced.
Partner Rakan Niaga in Central Region.
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SEAMLESS & FRICTIONLESS CUSTOMER EXPERIENCE

SUPERIOR CUSTOMER EXPERIENCE
We are obsessed about Customer Centricity in PDB. We are relentless in having a customer-first mindset to create a seamless
and frictionless customer experience and offering our customers the best experience possible at our stations. We have a
set of initiatives to provide the best experience to win the confidence of our customers and gain their trust in our brand.
Our commitment to our customers is manifested through a four-prong strategy: providing the best safety and health for
our customers; protecting our customers’ data; providing the best station experience with customised offering and omni-
channel communications; and having the highest standard of healthy and safe food offerings at our convenience stations.
CUSTOMERS’ SAFETY AND HEALTH

In treating customers right, we apply strict policies and procedures as we believe that our customers deserve safe, high
quality products and services.
Product Offerings
We also continuously upgrade our Kedai Mesra and expand its offerings to ensure that our customers are never short of
options. In 2019, we were focused on increasing our F&B offerings to transform Kedai Mesra into the place for on-the-go
F&B solutions. We source our products from reliable local vendors to popular brands. We also offer our own branded buns,
Mesra Bites, which contain zero trans fats to cater for customers who are health-conscious. In expanding our offerings, we
ensure that quality and food safety are never compromised and we have a stringent process in place to ensure that our
appointed vendors adhere to these criteria.
Safety Programmes
Retail Business
Go-to-Safety-Point Programme in which the public can go to petrol stations

to seek help during emergencies. It is an on-going initiative organised in
collaboration with the police and local authorities to ensure that our customers
feel safe and secure at our facilities.
Safety signages at PETRONAS stations recommending behaviour that must

be adhered to before, during and after refueling.
Customer with our Mornings@Mesra product
Commercial Business
Risk assessment at customers’ sites covering safety and health aspects.
Product safe handling training to ensure customers have adequate knowledge

on safe handling of petroleum products.
Engagement Sessions with Dealers to keep them abreast on industry best

practices.
Organising engagement between dealers/customers with Authorities for better

regulatory understanding concerning industry requirements.
Off-Loading, HSE Awareness Training & Visit

Felda Investment Company (FIC) Sabah
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SOCIAL
LPG Business
Rigorous cylinder inspection at terminals before reaching our customers to

ensure product safety and reliability.
Complimentary LPG cylinder safety-checks during delivery of gas cylinders

via the Gas PETRONAS Home Delivery hotline and Gas2U app.
Cylinder maintenance to ensure the quality of our cylinders meet the set
standards.
Gas Safety Programmes conducted for local communities in collaboration with

local authorities to raise safety awareness on LPG cylinders.
Product and safety knowledge by Dealers on proper usage and handling of Gas Safety Programme session with local
communities to raise safety awareness on
cylinders through safety talks and inspections.
LPG cylinders
Customers’ Data Privacy • Omni-channel communications to enable customers who

use our digital payment modes:
We continually assess and maintain strong governance practices
in order to gain greater trust and loyalty from our customers. - Setel®, Malaysia’s first mobile application that creates
During the year, we have conducted cyber security assessments seamless on-the-go refuel and retail experience for
on PDB payment channels and other digital assets as defined in PETRONAS customers.
PETRONAS Information Security Standards & Guideline (PISG).
Moving forward, PETRONAS Cyber Security Frameworks and We believe that every feedback counts as we provide other
Standards will provide the assurance that the existing channels including emails, web chats and social media i.e.
infrastructure and applications are configured and operated in Facebook, Instagram and Twitter, hence appealing to our
a secure manner to protect personal information for every customers of multiple demographics. We also continuously look
transactional activity from emerging risks. at new methods to serve our various segments of customers as
modes of communication evolve globally. During the year, we
At operational level, we will continuously enhance our risk worked on improving and upskilling the capabilities of our support
controls and implement specific activities to secure personal team at our contact centre to address customers’ experience
information including: which is also measured through close monitoring of net promoter
scores which inspire us to enhance our business offerings.
• Strict control over customers’ information in our database
with regular updates on latest security fixes; and
• Data breach preparedness process from investigation to
resolution in the event that customers’ privacy is compromised
via Cyber Defence Security Incident Management.
Among others, we adopt best practices on all data management

by adhering to protocols and guidelines provisioned under
Personal Data Protection Act 2010, and the Bank Negara Secrecy
Provisions Act 2013.
Customer Support and Engagement

We value all our customers and build our relationships as we
continuously strive to ensure that the voice of the customer is
analysed, by extending customers’ feedback to relevant units
within the company, and finally reflected in the development of
our products and services.
The constant interactions with our customers have resulted in

some of the following initiatives:
• Customised targeted campaigns that were derived from Setel®, Malaysia’s first mobile application that creates seamless
paying heed to customers’ feedback i.e. Mesra Bonanza, on-the-go refuel and retail experience for PETRONAS customers.
Mornings@Mesra; and
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SUSTAINABILITY PERFORMANCE AT A GLANCE
Material Matters Indicators Unit 2016 2017 2018 2019
Greenhouse Gas Emissions ‘000 MT CO2e 72 71 73.7 183.2**

Total Energy generated from MWh 76 73 67 103.9***
Solar Photovoltaic Installations
Environment and Spill to Environment above 1 Number 3 2 2 2

Climate Change barrel (159 litre)
Hazardous waste disposed ‘000 MT 7 0.12 0.28 0.28
Fatalities Number
• Employees 0 0 0 0
• Contractors 2 1 1 0
Fatality Accident Rate Recordable fatalities per
• Employees 100 million man-hours 0 0 0 0
• Contractors 65.69 24.86 21.73 0
Lost Time Injury Frequency No. of LTI per one
Safety • Employees million man-hours 0.49 0 0.69 0
and Health • Contractors 2.95 0.57 0.43 0
Total Reportable Case No. of Total Reportable
Frequency Case per one million
• Employees man-hours 0.73 0.35 0.69 0.98
• Contractors 3.61 1.3 0 0
Total employees* Number 1,565 1,498 1,380 1,354
Female Employee %
Composition
• Total Workforce 32 32 31 32
• Leadership Team 30 25 27 27
• Board Composition 25 25 25 33
Contract Workforce % 6 6 6 11
Employee Turnover % 12 8 6 6
Manpower Investment* RM Million 223 193 237 264
Human Capital (salaries and benefits
excluding training)
Training Investment* RM Million 4.7 4.4 5.3 5.3
Average Training Man-days Days 2 2.26 2.7 2.14
per employee*
Talent Ratio per Critical Ratio 2.8:1 2.2:1 2.5:1 2.8:1
Positions*
Employees under Collective

Number 594 590 490 488
Bargaining Agreements
Human Rights
Water for Life Output No. of receivers reached 2,000 1,350 900 800
StreetSmart Output No. of receivers reached 900 1,120 1,227 600
Coffee Break Output No. of receivers reached 974,000 1,625,000 1,700,000 1,520,000
Corporate Social
PROTEGE (Previously Skim No. of receivers reached 13 14 15 20
Responsibility
Latihan 1Malaysia)
* Numbers include PDB Company only

** The increase in 2019 was primarily attributed by the inclusion of energy consumption at our retail operations.
*** The increase in 2019 was attributed by the inclusion of solar panels in 5 new stations.
188
FINANCIAL STATEMENTS
190 APPROACHING THE FINANCIAL STATEMENTS
192 FINANCIAL STATEMENTS
• STATEMENT OF DIRECTORS’ RESPONSIBILITY IN RELATION TO THE FINANCIAL STATEMENTS
• DIRECTORS’ REPORT
• STATEMENT BY DIRECTORS
• STATUTORY DECLARATION
• CONSOLIDATED STATEMENT OF FINANCIAL POSITION
• CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
• CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
• CONSOLIDATED STATEMENT OF CASH FLOWS
• STATEMENT OF FINANCIAL POSITION
• STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
• STATEMENT OF CHANGES IN EQUITY
• STATEMENT OF CASH FLOWS
• NOTES TO THE FINANCIAL STATEMENTS
• INDEPENDENT AUDITORS’ REPORT
APPROACHING THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019
The purpose of financial statements is to communicate the Group’s financial information to its stakeholders, especially
shareholders, investors and lenders. In this section we try to help readers who are not familiar with accounting rules and
financial terminologies to understand our financial information, by explaining the functions and relationships between the
essential financial statements: the statement of profit or loss and other comprehensive income, the statement of financial
position and the statement of cash flows. For comprehensive and authoritative definitions and explanations, readers should
turn to the relevant accounting standards, but we hope this section offers useful guidance.
STATEMENT OF PROFIT OR LOSS

STATEMENT OF FINANCIAL STATEMENT
AND OTHER COMPREHENSIVE
POSITION OF CASH FLOWS
INCOME
“A snapshot, taken at a point in

“Financial performance measured
time, of all the assets the company “A report on sources and uses of
by recording the flow of resources
owns and all the claims against cash”
over a period of time”
those assets”
This statement divides the cash flows

into operating, investing and financing
activities. While the operating profit
This statement sums up the Group’s reflects the operating cash flows,
economic resources (non-current certain non-cash charges or credits,
The objective of this statement is to assets and working capital) and owners’ such as depreciation, amortisation,
present all income and expenses equity at a particular point of time, in impairment losses and write-back,
(transactions with non-owners) in a this case, our year end at 31 December mean the operating cash flows and the
performance statement. 2019. It also shows how the economic operating profit are different. Investing
resources contributed by lenders and cash flows are the cash flows arising
shareholders are used in the business. from the purchase or disposal of non-
current assets. Financing cash flows
represent the cash flows between the
Group, its shareholders and lenders.
190
APPROACHING THE FINANCIAL STATEMENTS

The diagram below illustrates the relationships between the statement of profit or loss and other comprehensive income,
the statement of financial position and the statement of cash flows, as well as their links with the Group’s stakeholders.
The Group earns revenue from customers through the deployment of non-current assets and working capital. It also pays
operating expenses to suppliers of goods and services, incurs staff costs and also invests in additional non-current assets.
The net balance of revenue, operating expenses and staff and interest costs is the operating profit. After deducting income
taxes charged by tax authorities, this profit is available for payment for distribution to shareholders as dividends in return
for their contribution of funds to the Group. The Group also invests in subsidiaries and other entities and receives dividend
income from them in return.
Statement of
Profit or Loss Statement of
Statement of
and Other Financial
Cash Flows
Comprehensive Position
Income
Income
Receivables Received
REVENUE Investment
CUSTOMERS WORKING and
Payables CAPITAL Advances
OPERATING ASSOCIATES
Expenses
Paid ACTIVITIES AND JOINT-
VENTURES
SUPPLIERS Dividend
OPERATING received
OF GOODS &
EXPENSES
SERVICES
Investment
NON-CURRENT
ASSETS Purchase of
assets
EMPLOYEES STAFF COSTS Assets INVESTING SUPPLIERS
OF
ACTIVITIES ASSETS
Proceeds on
disposal
FINANCING
LENDERS
COSTS Loan
NON-CURRENT repayment
Borrowing LENDERS
LIABILITIES
TAX INCOME Loan
AUTHORITIES TAXES FINANCING drawdown
= Share ACTIVITIES Dividend

issuance payments
SHAREHOLDERS
PROFIT EQUITY
Proceeds
of shares
issued
191
STATEMENT OF DIRECTORS’ RESPONSIBILITY

IN RELATION TO THE FINANCIAL STATEMENTS
The financial statements of the Group and of the Company as set out on pages 200 to 279, are properly drawn up so as
to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2019 and of the
results of its operations and cash flows for the financial year ended on that date.
The Directors consider the following in preparing the financial statements of the Group and of the Company:
• appropriate accounting policies have been used and are consistently applied;
• reasonable and prudent judgements and estimates have been made;
• all Malaysian Financial Reporting Standards and the Companies Act, 2016 in Malaysia have been followed; and
• prepared on a going concern basis.
The Directors are responsible for ensuring that the accounting and other records and registers required by the Companies
Act, 2016 in Malaysia to be retained by the Group and the Company have been properly kept in accordance with the
provisions of the said Act.
The Directors also have general responsibilities for taking such steps that are reasonably available to them to safeguard the
assets of the Group and of the Company and to prevent and detect fraud and other irregularities.
192
DIRECTORS’ REPORT
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company
for the year ended 31 December 2019.
PRINCIPAL ACTIVITIES
The principal activity of the Company in the course of the financial year remained unchanged as domestic marketing of
petroleum products.
The principal activities of the subsidiaries, associates and joint ventures are stated in Note 32, Note 33 and Note 34 to the
financial statements respectively. There has been no significant change in the nature of these activities during the financial
year.
ULTIMATE HOLDING COMPANY

The holding and ultimate holding company is Petroliam Nasional Berhad (“PETRONAS”), a company incorporated in Malaysia.
SUBSIDIARIES
The details of the Company’s subsidiaries are disclosed in Note 32 to the financial statements.
RESULTS
Group Company
RM’000 RM’000
Profit for the year 837,635 812,715
Attributable to:
Shareholders of the Company 829,535 812,715
Non-controlling interests 8,100 –
837,635 812,715
DIVIDENDS
During the financial year, the amount of dividends paid by the Company were as follows:
a) In respect of the financial year ended 31 December 2018 as reported in the Directors’ Report of that year:
i. An interim dividend of 25.0 sen per ordinary share amounting to RM248,363,500 declared on 26 February 2019
and paid on 28 March 2019;
193
DIRECTORS’ REPORT
DIVIDENDS (CONTINUED)
b) In respect of the financial year ended 31 December 2019:
i. An interim dividend of 15.0 sen per ordinary share amounting to RM149,018,100 declared on 28 May 2019 and
paid on 27 June 2019;
ii. An interim dividend of 14.0 sen per ordinary share amounting to RM139,083,560 declared on 23 August 2019 and
paid on 20 September 2019; and
iii. An interim dividend of 16.0 sen per ordinary share amounting to RM158,952,640 declared on 22 November 2019
and paid on 20 December 2019.
The Directors had on 25 February 2020 declared an interim dividend of 25.0 sen per ordinary share amounting to
RM248,363,500 in respect of the financial year ended 31 December 2019.
In addition, the Directors declared a special dividend of 15.0 sen per ordinary share amounting to RM149,018,100 in respect
of the financial year ended 31 December 2019.
The financial statements for the current financial year do not reflect these declared interim and special dividends. The
dividends will be accounted for in equity as an appropriation of retained profits in the financial year ending 31 December
2020.
Further details on dividends are disclosed in Note 24.
RESERVES AND PROVISIONS

There were no material movements to or from reserves and provisions during the year other than as disclosed in the financial
statements.
DIRECTORS
Directors who served during the financial year until the date of this report are:
Datuk Md Arif bin Mahmood

Azrul bin Osman Rani (appointed on 1 January 2020)
Vimala a/p V.R. Menon
Lim Beng Choon
Datuk Anuar bin Ahmad
Nuraini binti Ismail
Dato’ Sri Syed Zainal Abidin bin Syed Mohamed Tahir
Shafie bin Shamsuddin
Alvin Michael Hew Thai Kheam
Nirmala a/p Doraisamy (appointed on 15 October 2019)
The names of Directors of subsidiaries are available on the Company’s corporate website and the Board deems such information
is included in the Company’s Directors’ Report by such reference and shall form part of the Company’s Directors’ Report.
The Company has been granted a relief order pursuant to Section 255(1) of the Companies Act, 2016 relieving the Company’s
Directors from full compliance to the requirements under Section 253(2) of the Companies Act, 2016.
194
DIRECTORS’ REPORT
DIRECTORS’ INTERESTS
The Directors in office at the end of the year who have interests and deemed interests (including the interests of the spouses
and/or children of the Directors who themselves are not Directors of the Company) in the shares of the Company and of
its related corporations other than wholly-owned subsidiaries as recorded in the Register of Directors’ Shareholdings are as
follows:
Number of ordinary shares in

PETRONAS Chemicals Group Berhad
Balance at Balance at
Name 1.1.2019 Bought Sold 31.12.2019
Datuk Md Arif bin Mahmood 20,000 – – 20,000

Vimala a/p V.R. Menon 20,000 – – 20,000
Nuraini binti Ismail 10,000 – – 10,000
Number of ordinary shares in

PETRONAS Gas Berhad
Balance at Balance at
Name 1.1.2019 Bought Sold 31.12.2019
Nuraini binti Ismail 5,000 – – 5,000
None of the other Directors holding office at 31 December 2019 had any interest in the ordinary shares of the Company
and of its related corporations during the financial year.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any
benefit (other than the benefit included in the aggregate amount of remuneration received or due and receivable by Directors
as shown in Note 25 to the financial statements or the fixed salary of a full time employee of the Company or of the related
corporations), by reason of a contract made by the Company or a related corporation with the Director or with a firm of
which the Director is a member, or with a company in which the Director has a substantial financial interest.
There were no arrangements during and at the end of the financial year which had the objective of enabling Directors of
the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body
corporate.
ISSUE OF SHARES
There were no changes in the issued and paid up capital of the Company during the financial year.
OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year.
195
DIRECTORS’ REPORT
INDEMNITY AND INSURANCE COSTS

During the financial year, PETRONAS and its subsidiaries (hereinafter referred to as “PETRONAS Group”), including the
Company, maintained a Directors’ and Officers’ Liability Insurance in accordance with Section 289 of the Companies Act,
2016. The total insured limit for the Directors and Officers Liability Insurance effected for the Directors and Officers of the
PETRONAS Group was RM1,290 million (2018: RM1,290 million) per occurrence and in the aggregate. The insurance premium
for the Company is RM108,300 (2018: RM102,823).
OTHER STATUTORY INFORMATION

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to
ascertain that:
(i) necessary actions had been taken in relation to the writing off of bad debts and the provisioning of doubtful debt and
satisfied themselves that all known bad debts have been written off and adequate provision made for doubtful debts,
and
(ii) any current assets which were unlikely to be realised in the ordinary course of business, their values as shown in the
accounting records of the Group and of the Company, had been written down to an amount which they might be
expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
(i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the Group
and in the Company inadequate to any substantial extent, or
(ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company
misleading, or
(iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and
of the Company misleading or inappropriate, or
(iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial
statements of the Group and of the Company misleading.
At the date of this report, there does not exist:
(i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which
secures the liabilities of any other person, or
(ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will
or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.
196
DIRECTORS’ REPORT
OTHER STATUTORY INFORMATION (CONTINUED)

In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended
31 December 2019 have not been substantially affected by any item, transaction or event of a material and unusual nature
nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of
this report.
In respect of the Directors or past Directors of the Company, the amount of:
(i) fees and other benefits paid to or receivable by them from the Company or its subsidiary companies as remuneration
for their services to the Company or its subsidiary companies; and
(ii) the estimated money value of any other benefits received or receivable by them otherwise than in cash from the
Company or from any of its subsidiaries.
are disclosed in Note 25 Related Parties Disclosures.
There are no amounts paid to or receivable by any third party in respect of the services provided to the Company or any
of its subsidiary companies by any Director or past Director of the Company.
SIGNIFICANT EVENT
On 9 January 2019, Setel Ventures Sdn. Bhd. (“SETEL”), a wholly owned subsidiary, was incorporated in Malaysia with an
issued share capital of 5,000 ordinary shares of RM1,000 per ordinary share at a total cash consideration of RM5,000,000.
AUDITORS
The auditors, KPMG PLT, have indicated their willingness to accept re-appointment.
The auditors’ remuneration is disclosed in Note 20 to the financial statements.
Signed on behalf of the Board of Directors

in accordance with a resolution of the Directors:
DATUK MD ARIF BIN MAHMOOD AZRUL BIN OSMAN RANI

Director Director
Kuala Lumpur,
Date: 25 February 2020
197
STATEMENT BY DIRECTORS
In the opinion of the Directors, the financial statements set out on pages 200 to 279 are drawn up in accordance with
Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies
Act, 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of
31 December 2019 and of their financial performance and cash flows for the year then ended on that date.
Signed on behalf of the Board of Directors

in accordance with a resolution of the Directors:
DATUK MD ARIF BIN MAHMOOD

Director
AZRUL BIN OSMAN RANI

Director
Kuala Lumpur,
Date: 25 February 2020
198
STATUTORY DECLARATION
I, NORLIWATI BINTI ABDUL WAHAB, the officer primarily responsible for the financial management of PETRONAS Dagangan
Berhad, do solemnly and sincerely declare that the financial statements set out on pages 200 to 279 are, to the best of my
knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by
virtue of provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed

NORLIWATI BINTI ABDUL WAHAB,
I/C No 751108-14-5496, at Kuala Lumpur in
Wilayah Persekutuan on 25 February 2020.
199
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2019
2019 2018
Note RM’000 RM’000
ASSETS
Property, plant and equipment 3 4,134,901 3,335,561
Prepaid lease payments 4 – 492,256
Investments in associates 6 1,456 1,555
Investments in joint ventures 7 21,561 17,135
TOTAL NON-CURRENT ASSETS 4,157,918 3,846,507
Inventories 8 796,819 825,818

Trade and other receivables 9 1,565,011 2,260,569
Fund investment 10 51,004 50,000
Cash and cash equivalents 11 3,425,500 2,187,891
TOTAL CURRENT ASSETS 5,838,334 5,324,278
TOTAL ASSETS 9,996,252 9,170,785
EQUITY
Share capital 12 993,454 993,454
Reserves 13 4,982,490 4,903,651
Total equity attributable to shareholders of the Company 5,975,944 5,897,105

Non-controlling interests 14 35,451 40,135
TOTAL EQUITY 6,011,395 5,937,240
LIABILITIES
Borrowings 15 168,653 29,924
Deferred tax liabilities 16 100,318 124,518
Other long term liabilities and provisions 17 28,473 29,268
TOTAL NON-CURRENT LIABILITIES 297,444 183,710
Trade and other payables 18 3,440,211 2,972,400

Borrowings 15 165,502 25,036
Taxation 81,700 52,399
TOTAL CURRENT LIABILITIES 3,687,413 3,049,835
TOTAL LIABILITIES 3,984,857 3,233,545
TOTAL EQUITY AND LIABILITIES 9,996,252 9,170,785
The notes set out on pages 211 to 279 are an integral part of these financial statements.
200
CONSOLIDATED STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME
2019 2018
Note RM'000 RM'000
(restated)
Revenue 19 30,293,571 30,068,753

Cost of revenue (27,079,646) (27,217,943)
Gross profit 3,213,925 2,850,810

Selling and distribution expenses (1,330,145) (1,013,826)
Administration expenses (1,176,512) (1,083,816)
Other income 439,527 424,901
Operating profit 20 1,146,795 1,178,069

Financing costs 21 (21,812) (4,547)
Share of profit after tax of equity accounted associates and joint ventures 3,889 3,504
Profit before taxation 1,128,872 1,177,026

Tax expense 22 (291,237) (315,567)
Profit for the year 837,635 861,459
Other comprehensive expense

Item that may be reclassified subsequently to profit or loss
Exchange differences arising from translation of financial statements
of foreign operations (731) (18,467)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 836,904 842,992
Profit attributable to:

Non-controlling interests 8,100 11,610
PROFIT FOR THE YEAR 837,635 861,459
Total comprehensive income attributable to:

Non-controlling interests 8,100 11,610
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 836,904 842,992
Basic earnings per ordinary share 23 83.5 sen 85.5 sen
201
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to shareholders of the Company

Non-distributable Distributable
Foreign
currency Non-
Share translation Capital Retained controlling Total
capital reserve reserves profits Total interests equity
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2018 993,454 263 (18,732) 5,024,585 5,999,570 39,025 6,038,595

Exchange difference arising from
translation of financial
statements of foreign
operations – (18,467) – – (18,467) – (18,467)
Total other comprehensive
expense for the year – (18,467) – – (18,467) – (18,467)
Profit for the year – – – 849,849 849,849 11,610 861,459
Total comprehensive
(expense)/income for the year – (18,467) – 849,849 831,382 11,610 842,992
Distribution to shareholders of
the Company
Dividends to shareholders of the
Company 24 – – – (933,847) (933,847) – (933,847)
Dividends to non-controlling
interests (10,500) (10,500)
Total transactions with owners

of the Company – – – (933,847) (933,847) (10,500) (944,347)
At 31 December 2018 993,454 (18,204) (18,732) 4,940,587 5,897,105 40,135 5,937,240
Note 12 Note 13 Note 13 Note 14
202
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(CONTINUED)
Attributable to shareholders of the Company

Non-distributable Distributable
Foreign
currency Non-
Share translation Capital Retained controlling Total
capital reserve reserves profits Total interests equity
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2019
– As previously reported 993,454 (18,204) (18,732) 4,940,587 5,897,105 40,135 5,937,240
– Adjustment on initial
application of MFRS 16,
net of tax 37 – – – (54,547) (54,547) (9,109) (63,656)
At 1 January 2019, restated 993,454 (18,204) (18,732) 4,886,040 5,842,558 31,026 5,873,584
Exchange difference arising from
translation of financial
statements of foreign
operations – (731) – – (731) – (731)
Total other comprehensive
expense for the year – (731) – – (731) – (731)
Profit for the year – – – 829,535 829,535 8,100 837,635
Total comprehensive
(expense)/income for the year – (731) – 829,535 828,804 8,100 836,904
Distribution to shareholders of
the Company
Dividends to shareholders of the
Company 24 – – – (695,418) (695,418) – (695,418)
Dividends to non-controlling
interests – – – – – (3,675) (3,675)
Total transactions with owners

of the Company – – – (695,418) (695,418) (3,675) (699,093)
At 31 December 2019 993,454 (18,935) (18,732) 5,020,157 5,975,944 35,451 6,011,395
Note 12 Note 13 Note 13 Note 14
203
CONSOLIDATED STATEMENT OF CASH FLOWS

2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES

Adjustments for:
Net impairment (write-back)/ losses on:
– Receivables (478) 4,491
Share of profit after tax of equity accounted associates and joint ventures (3,889) (3,504)
Net gain on disposal of property, plant and equipment (18,727) (10,125)
Interest income (121,997) (96,006)
Financing costs 21,812 4,547
Inventories written off 471 –
Property, plant and equipment written off 9,778 8,769
Net unrealised foreign exchange gain (399) (2,323)
Operating profit before changes in working capital 1,486,900 1,424,090

Changes in working capital:
Inventories 28,999 43,423
Trade and other receivables 695,558 (584,618)
Trade and other payables 463,175 (412,930)
Cash generated from operations 2,674,632 469,965

Taxation paid (266,037) (388,161)
Net cash generated from operating activities 2,408,595 81,804
CASH FLOWS FROM INVESTING ACTIVITIES

Interest income 121,997 96,006
Placement of fund investment (1,004) (50,000)
Purchase of property, plant and equipment (460,142) (374,865)
Proceeds from disposal of prepaid lease assets – 716
Proceeds from disposal of property, plant and equipment 31,271 35,662
Dividends received from associates 6 380 –
Dividends received from joint ventures 7 2,250 1,000
Net cash used in investing activities (305,248) (291,481)
204
CONSOLIDATED STATEMENT OF CASH FLOWS

(CONTINUED)
2019 2018
CASH FLOWS FROM FINANCING ACTIVITIES 15

Dividends paid (695,418) (933,847)
Dividends paid to non-controlling interests (3,675) (10,500)
Net (repayment)/drawdown of revolving credit facility (957) 5,729
Repayment of Islamic financing facilities (19,214) (18,305)
Repayment of lease liabilities (124,426) –
Interest paid on revolving credit and term loan (107) (178)
Profit margin paid for Islamic financing facilities (1,841) (2,725)
Interest paid on lease liabilities (18,930) –
Net cash used in financing activities (864,568) (959,826)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 1,238,779 (1,169,503)

NET FOREIGN EXCHANGE DIFFERENCES (1,170) (348)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 2,187,891 3,357,742
CASH AND CASH EQUIVALENTS AT END OF THE YEAR 11 3,425,500 2,187,891
CASH AND CASH EQUIVALENTS

Cash with PETRONAS Integrated Financial Shared Services Centre 3,221,696 1,973,835
Cash and bank balances 50,279 31,584
Deposits placed with licensed banks 153,525 182,472
11 3,425,500 2,187,891
Total cash outflows for leases amounts to RM446,251,000 which comprise of repayment and interest paid in relation to
lease liabilities, short-term lease, low-value assets and variable lease payments.
205
STATEMENT OF FINANCIAL POSITION

2019 2018
ASSETS
Property, plant and equipment 3 3,836,914 3,144,897
Prepaid lease payments 4 – 492,256
Investments in subsidiaries 5 60,010 29,010
Investments in associates 6 530 530
Investments in joint ventures 7 25 25
TOTAL NON-CURRENT ASSETS 3,897,479 3,666,718
Inventories 8 789,694 810,897

Trade and other receivables 9 1,376,002 2,061,662
TOTAL CURRENT ASSETS 5,312,428 4,841,625
TOTAL ASSETS 9,209,907 8,508,343
EQUITY
Share capital 12 993,454 993,454
Reserves 13 4,571,557 4,491,727
TOTAL EQUITY 5,565,011 5,485,181
LIABILITIES
Borrowings 15 82,291 –
Deferred tax liabilities 16 76,350 95,727
Other long term liabilities and provisions 17 27,680 28,777
TOTAL NON-CURRENT LIABILITIES 186,321 124,504
Trade and other payables 18 3,245,170 2,854,988

Borrowings 15 138,406 –
Taxation 74,999 43,670
TOTAL CURRENT LIABILITIES 3,458,575 2,898,658
TOTAL LIABILITIES 3,644,896 3,023,162
TOTAL EQUITY AND LIABILITIES 9,209,907 8,508,343
206
STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME
2019 2018
Revenue 19 29,726,075 29,476,319

Cost of revenue (26,666,919) (26,774,432)
Gross profit 3,059,156 2,701,887

Selling and distribution expenses (1,303,382) (997,004)
Administration expenses (1,097,656) (1,006,050)
Other income 440,307 402,564
Operating profit 20 1,098,425 1,101,397

Financing costs 21 (13,430) (1,644)

Tax expense 22 (272,280) (293,233)
PROFIT FOR THE YEAR REPRESENTING TOTAL

COMPREHENSIVE INCOME FOR THE YEAR 812,715 806,520
207
STATEMENT OF CHANGES IN EQUITY

Attributable to shareholders
of the Company
Non-
distributable Distributable
Share Retained
Note capital profits Total
RM’000 RM’000 RM’000
At 1 January 2018 993,454 4,619,054 5,612,508
Profit for the year representing total comprehensive – 806,520 806,520

income for the year
Dividends paid 24 – (933,847) (933,847)
At 31 December 2018/1 January 2019
– As previously reported 993,454 4,491,727 5,485,181
– Adjustment on initial application of MFRS 16, net of tax 37 – (37,467) (37,467)
At 1 January 2019, restated 993,454 4,454,260 5,447,714
Profit/Total comprehensive income for the year – 812,715 812,715

Dividends paid 24 – (695,418) (695,418)
At 31 December 2019 993,454 4,571,557 5,565,011
Note 12
208
STATEMENT OF CASH FLOWS

2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES

Adjustments for:
Net impairment losses/(write–back) on:
– Receivables (355) 4,293
Net gain on disposal of property, plant and equipment (18,727) (10,125)
Interest income (113,133) (89,226)
Dividend income (9,455) (20,500)
Property, plant and equipment written off 9,778 308
Net unrealised foreign exchange gain (411) (2,271)
Inventories written off 390 –
Financing costs 13,431 1,644
Operating profit before changes in working capital 1,401,142 1,301,439

Changes in working capital:
Inventories 21,203 33,497
Trade and other receivables 685,660 (518,213)
Trade and other payables 387,597 (387,861)
Cash generated from operations 2,495,602 428,862

Taxation paid (248,496) (372,904)
Net cash generated from operating activities 2,247,106 55,958
CASH FLOWS FROM INVESTING ACTIVITIES

Dividends received 9,455 20,500
Interest income 113,133 89,226
Investment in a newly incorporated subsidiary (31,000) –
Purchase of property, plant and equipment (360,858) (366,907)
Proceeds from disposal of prepaid lease assets – 716
Proceeds from disposal of property, plant and equipment 31,111 16,483
Net cash used in investing activities (238,159) (239,982)
CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid 24 (695,418) (933,847)
Repayment of lease liabilities (123,367) –
Interest paid on lease liabilities (12,496) –
Net cash used in financing activities (831,281) (933,847)
209
STATEMENT OF CASH FLOWS

(CONTINUED)
2019 2018
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 1,177,666 (1,117,871)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 1,969,066 3,086,937
CASH AND CASH EQUIVALENTS AT END OF THE YEAR 11 3,146,732 1,969,066
CASH AND CASH EQUIVALENTS

Cash with PETRONAS Integrated Financial Shared Services Centre 3,111,722 1,944,019
Cash and bank balances 35,010 25,047
11 3,146,732 1,969,066
Total cash outflows for leases amounts to RM438,662,000 which comprise of repayment and interest paid in relation to
lease liabilities, short-term lease, low-value assets and variable lease payments.
210
NOTES TO THE FINANCIAL STATEMENTS

31 DECEMBER 2019
1. BASIS OF PREPARATION
1.1 STATEMENT OF COMPLIANCE
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian
Financial Reporting Standards (“MFRS”), International Financial Reporting Standards and the requirements of the
Companies Act, 2016 in Malaysia.
These financial statements also comply with the applicable disclosure provisions of the Listing Requirements of
Bursa Malaysia Securities Berhad.
As of 1 January 2019, the Group and the Company had adopted new MFRS amendments to MFRSs and IC
Interpretations (collectively referred to as “pronouncements”) that have been issued by the Malaysian Accounting
Standards Board (“MASB”) as described fully in Note 35.
MASB has also issued new and revised pronouncements which are not yet effective for the Group and the Company
and therefore, have not been adopted in these financial statements. These pronouncements are set out in Note
36. New and revised pronouncements that are not relevant to the operations of the Group and of the Company
are set out in Note 38.
These financial statements were approved and authorised for issue by the Board of Directors on 25 February 2020.
1.2 BASIS OF MEASUREMENT

The financial statements of the Group and of the Company have been prepared on the historical cost basis except
that, as disclosed in the accounting policies below, certain items are measured at fair value.
1.3 FUNCTIONAL AND PRESENTATION CURRENCY

The individual financial statements of each entity in the Group are prepared using the currency of the primary
economic environment in which the entity operates (“the functional currency”). The Group’s and the Company’s
financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency.
All financial information is presented in Ringgit Malaysia and has been rounded to the nearest thousand, unless
otherwise stated.
1.4 USE OF ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with MFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amounts recognised in the financial statements
are described in the following notes:
(i) Note 3 : Property, plant and equipment;
(ii) Note 15 : Borrowings;
(iii) Note 16 : Deferred tax;
(iv) Note 22 : Tax expense; and
(v) Note 29 : Financial instruments.
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31 DECEMBER 2019
2. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial
statements and have been applied consistently by the Group and the Company, unless otherwise stated.
Arising from the adoption of MFRS 16 Leases, there are changes to the accounting policies applied to lease contracts
entered into by the Group entities and the Company as compared to those adopted in previous financial statements.
The impacts arising from the changes are disclosed in Note 37.
At 1 January 2019, the Group and the Company has also applied the amendments in relation to MFRS 123 Borrowing
Costs arising from the Annual Improvements to MFRS Standards 2015 – 2017 Cycle (“the Annual Improvement”). The
Annual Improvement clarifies that general borrowing includes specific borrowings which no longer have a qualifying
asset. Accordingly, the Group and the Company capitalises borrowing costs for specific borrowing where the qualifying
asset is no longer available, into the general borrowing. In previous years, the borrowing costs for specific borrowing
were expensed off to profit or loss when the qualifying asset is no longer available. Changes in the accounting policies
are disclosed in Note 37.
2.1 BASIS OF CONSOLIDATION
Subsidiaries
Subsidiaries are entities controlled by the Company. The Group controls an entity when it is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. Potential voting rights are considered when assessing control only when such rights are substantive.
The Group considers it has de facto power over an investee when, despite not having the majority of voting rights,
it has the current ability to direct the activities of the investee that significantly affect the investee’s return.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment
losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction
costs.
The financial statements of subsidiaries are included in the consolidated financial statements of the Group from
the date that control commences until the date that control ceases.
All inter-company transactions are eliminated on consolidation and revenue and profits relate to external transactions
only. Unrealised losses resulting from inter-company transactions are also eliminated unless cost cannot be
recovered.
Business combinations
A business combination is a transaction or other event in which an acquirer obtains control of one or more
businesses. Business combinations are accounted for using the acquisition method from the acquisition date,
which is the date on which control is transferred to the Group. The identifiable assets acquired and liabilities
assumed are measured at their fair values at the acquisition date. The cost of an acquisition is measured as the
aggregate of the fair value of the consideration transferred and the amount of any non-controlling interests in the
acquiree. Non-controlling interests are stated either at fair value or at the proportionate share of the acquiree’s
identifiable net assets at the acquisition date.
212

31 DECEMBER 2019
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.1 BASIS OF CONSOLIDATION (CONTINUED)
Business combinations (continued)

When a business combination is achieved in stages, the Group remeasures its previously held non-controlling
equity interest in the acquiree at fair value at the acquisition date, with any resulting gain or loss recognised in the
profit or loss. Increase in the Group’s ownership interest in an existing subsidiary is accounted for as equity
transactions with differences between the fair value of consideration paid and the Group’s proportionate share of
net assets acquired, recognised directly in equity.
The Group measures goodwill as the excess of the cost of an acquisition and the fair value of any previously held
interest in the acquiree over the fair value of the identifiable assets acquired and liabilities assumed at the acquisition
date. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
Transaction costs, other than those associated with the issuance of debt or equity securities, that the Group incurs
in connection with a business combination are expensed as incurred.
Non-controlling interests
Non-controlling interests at the end of the reporting period, being the portion of the net assets of subsidiaries
attributable to equity interests that are not owned by the Company, whether directly or indirectly through subsidiaries,
are presented in the consolidated statement of financial position and statement of changes in equity within equity,
separately from equity attributable to the shareholders of the Company. Non-controlling interests in the results
of the Group are presented in the consolidated statement of profit or loss and other comprehensive income as
an allocation of the profit or loss and total comprehensive income for the year between the non-controlling
interests and shareholders of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests
even if doing so causes the non-controlling interests to have a deficit balance.
The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity
transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share
of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group
reserves.
Loss of control
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary,
any non-controlling interests and other components of equity related to the former subsidiary from the consolidated
statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss.
If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date
that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as fair value through other
comprehensive income financial asset depending on the level of influence retained.
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31 DECEMBER 2019

2.2 ASSOCIATES
Associates are entities in which the Group has significant influence including representation on the Board of
Directors, but not control or joint control, over the financial and operating policies of the investee company.
Associates are accounted for in the consolidated financial statements using the equity method less any impairment
losses, unless it is classified as held for sale or distribution. The consolidated financial statements include the
Group’s share of post-acquisition profits or losses and other comprehensive income of the equity-accounted
associates, after adjustments to align the accounting policies with those of the Group, from the date that significant
influence commences until the date that significant influence ceases.
The Group’s share of post-acquisition reserves and retained profits less losses is added to the carrying value of
the investment in the consolidated statement of financial position. These amounts are taken from the latest audited
financial statements or management financial statements of the associates.
When the Group’s share of post-acquisition losses exceeds its interest in an equity accounted associate, the carrying
amount of that interest (including any long term investments such as loans and advances) is reduced to nil and
the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made
payments on behalf of the associate.
When the Group ceases to have significant influence over an associate, it is accounted for as a disposal of the
entire interest in that associate, with the resulting gain or loss being recognised in the profit or loss. Any retained
interest in the former associate at the date when significant influence is lost is remeasured at fair value and this
amount is regarded as the initial carrying amount of a financial asset.
When the Group’s interest in an associate decreases but does not result in loss of significant influence, any retained
interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss.
Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to
the profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the
related assets and liabilities.
Unrealised profits arising from transactions between the Group and its associates are eliminated to the extent of
the Group’s interests in the associates. Unrealised losses on such transactions are also eliminated partially, unless
cost cannot be recovered.
2.3 JOINT ARRANGEMENTS
Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring
unanimous consent for decisions about the activities that significantly affect the arrangements’ returns.
Joint arrangements are classified as either joint operation or joint venture. A joint arrangement is classified as joint
operation when the Group or the Company has rights to the assets and obligations for the liabilities relating to
an arrangement. The Group and the Company account for each of its share of the assets, liabilities and transactions,
including its share of those held or incurred jointly with the other investors, in relation to the joint operation. A
joint arrangement is classified as joint venture when the Group has rights only to the net assets of the arrangement.
The Group accounts for its interest in the joint venture using the equity method as described in Note 2.2.
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31 DECEMBER 2019

2.4 PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION
Recognition and measurement

Freehold land and projects-in-progress are stated at cost less accumulated impairment losses and are not
depreciated. Other property, plant and equipment are stated at cost less accumulated depreciation and any
accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the assets and any other costs directly
attributable to bringing the assets to working condition for their intended use, and the costs of dismantling and
removing the items and restoring the site on which they are located. The cost of self-constructed assets also
includes the cost of material and direct labour. For qualifying assets, borrowing costs are capitalised in accordance
with the accounting policy on borrowing costs. Purchased software that is integral to the functionality of the
related equipment is capitalised as part of that equipment.
When significant components of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the component will flow
to the Group or the Company and its cost can be measured reliably. The carrying amount of the replaced item
of property, plant and equipment is derecognised with any corresponding gain or loss recognised in the profit or
loss accordingly. The costs of the day-to-day servicing of property, plant and equipment are recognised in the
profit or loss as incurred.
Depreciation
Depreciation for property, plant and equipment other than freehold land and projects-in-progress, is recognised
in the profit or loss on a straight-line basis over the estimated useful lives of each component of an item of
property, plant and equipment. Property, plant and equipment are not depreciated until the assets are ready for
their intended use.
Buildings are depreciated over 20 to 30 years or over the remaining land lease year, whichever is shorter.
The estimated useful lives of the other property, plant and equipment are as follows:
Plant, machinery, tankage and pipeline 6 – 20 years

Office equipment, furniture and fittings 3 – 7 years
Motor vehicles 4 – 10 years
Computer software and hardware 5 years
The depreciable amount is determined after deducting residual value. The residual value, useful life and depreciation
method are reviewed at each financial year end to ensure that the amount, period and method of depreciation
are consistent with previous estimates and the expected pattern of consumption of the future economic benefits
embodied in the items of property, plant and equipment.
215

31 DECEMBER 2019

2.4 PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION (CONTINUED)
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the net carrying
amount is recognised in the profit or loss.
2.5 LEASES
The Group and the Company have applied MFRS 16 Leases using the modified retrospective approach, under
which the cumulative effect of initial application is recognised in retained earnings at 1 January 2019. Accordingly,
the comparative information presented for 2018 has not been restated – i.e. it is presented, as previously reported
under MFRS 117 Leases and related interpretations.
Current financial year

(i) Definition of a lease
A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for
a period of time in exchange for a consideration. To assess whether a contract conveys the right to control
the use of an identified asset, the Group and the Company assess whether:
• the contract involves the use of an identified asset – this may be specified explicitly or implicitly and should
be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier
has a substantive substitution right, then the asset is not identified;
• the customer has the right to obtain substantially all of the economic benefits from use of the asset
throughout the period of use; and
• the customer has the right to direct the use of the asset when it has the decision-making rights that are
most relevant to changing how and for what purpose the asset is used. The customer has the right to
direct the use of the asset if either the customer has the right to operate the asset, or the customer
designed the asset in a way that predetermines how and for what purpose it will be used throughout the
period of use.
At inception or on reassessment of a contract that contains a lease component, the Group and the Company
allocate the consideration in the contract to each lease and non-lease component on the basis of their relative
stand-alone prices.
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31 DECEMBER 2019

2.5 LEASES (CONTINUED)
(ii) Recognition and initial measurement
(a) As a lessee
The Group and the Company recognise a right-of-use asset and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore
the underlying asset or the site on which it is located, less any lease incentives received.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the respective Group entities’ incremental borrowing rate is used. Generally, the
Group entities use their incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
• fixed payments, including in-substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate
as at the commencement date;
• amounts expected to be payable under a residual value guarantee;
• the exercise price under a purchase option that the Group and the Company are reasonably certain
to exercise; and
• penalties for early termination of a lease unless the Group and the Company are reasonably certain
not to early terminate the contract.
The Group and the Company exclude variable lease payments that linked to future performance or usage
of the underlying asset from the lease liability. Instead, these payments are recognised in profit or loss
in the period in which the performance or use occurs.
The Group and the Company assess at lease commencement whether it is reasonably certain to exercise
the extension options in determining the lease term.
The Group and the Company have elected not to recognise right-of-use assets and lease liabilities for
short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group
and the Company recognise the lease payments associated with these leases as an expense on a straight-
line basis over the lease term.
The Group and the Company present right-of-use assets that do not meet the definition of investment
property in ‘property, plant and equipment’ and lease liabilities in ‘borrowings’ in the statement of financial
position.
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31 DECEMBER 2019

(iii) Subsequent measurement
(a) As a lessee
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The
estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant
and equipment. Depreciation of certain right-of-use assets are subsequently capitalised into carrying
amount of other assets whenever they meet the criteria for capitalisation. In addition, the right-of-use
asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the
lease liability.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a
revision of in-substance fixed lease payments, or if there is a change in the Group’s estimate of the
amount expected to be payable under a residual value guarantee, or if the Group changes its assessment
of whether it will exercise a purchase, extension or termination option. The Group will reassess whether
it is reasonably certain to exercise the extension option if there is a significant change in circumstances
within its control.
When the lease liability is remeasured as described in the above paragraph, a corresponding adjustment
is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying
amount of the right-of-use asset has been reduced to zero.
When there is lease modification due to increase in the scope of lease by adding the right-to-use one
or more underlying assets, the Group and the Company assess whether the lease modification shall be
accounted for as a separate lease or similar to reassessment of lease liability. The Group and the Company
account for lease modification as a separate lease when the consideration for the lease increases by an
amount that commensurate with the stand-alone price for the increase in scope and any appropriate
adjustments.
When there is lease modification due to decrease in scope, the Group and the Company decrease the
carrying amount of the right-of-use asset and remeasure the lease liability to reflect the partial or full
termination of the lease. The corresponding gain or loss shall be recognised in profit or loss. Lease liabilities
are remeasured for all other lease modifications with corresponding adjustments to the right-of-use asset.
Previous financial year

Leased assets
A lease arrangement was accounted for as finance or operating lease in accordance with the accounting policy
stated below. When the fulfilment of an arrangement was dependent on the use of a specific asset and the
arrangement conveys a right to use the asset, it was accounted for as a lease in accordance with the accounting
policy below although the arrangement did not take the legal form of a lease.
218

31 DECEMBER 2019

Previous financial year (continued)

Finance lease
A lease was recognised as a finance lease if it transfers substantially all the risks and rewards incidental to ownership
to the Group and the Company. Upon initial recognition, the leased asset was measured at an amount equal to
the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition,
the asset was accounted for in accordance with the accounting policy applicable to that asset. The corresponding
liability was included in the statement of financial position as borrowings.
Minimum lease payments made under finance leases were apportioned between the finance costs and the reduction
of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments
and the fair value of the assets acquired, were recognised in the profit or loss and allocated over the lease term so
as to produce a constant periodic rate of interest on the remaining balance of the liability for each accounting period.
Leasehold land which in substance was a finance lease was classified as property, plant and equipment.
Operating lease
All leases that did not transfer substantially to the Group and the Company all the risks and rewards incidental to
ownership were classified as operating leases and the leased assets were not recognised in the Group’s and the
Company’s statement of financial position.
Payments made under operating leases were recognised as an expense in the profit or loss on a straight-line basis
over the term of the lease. Lease incentives received were recognised as a reduction of rental expense over the
lease term on a straight-line basis. Contingent rentals were charged to profit or loss in the reporting period in
which they are incurred.
Leasehold land which in substance was an operating lease was classified as prepaid lease payments.
Prepaid lease payments

Prepaid rental and leasehold land which in substance was an operating lease were classified as prepaid lease
payments. The payments made on entering into a lease arrangement or acquiring a leasehold land were accounted
for as prepaid lease payments that were amortised over the lease term in accordance with the pattern of benefits
provided.
2.6 INVESTMENTS
Long term investments in subsidiaries, associates and joint ventures are stated at cost less impairment loss, if any,
in the Company’s financial statements unless the investment is classified as held for sale or distribution. The cost
of investments includes transaction costs.
The carrying amount of these investments includes fair value adjustments on shareholder’s loans and advances,
if any (Note 2.7(i)).
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2.7 FINANCIAL INSTRUMENTS
Recognition and initial measurement

A financial instrument is recognised in the statement of financial position when, and only when, the Group or the
Company becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a receivable without a significant financing component) and a financial liability is initially
measured at fair value plus or minus, in the case of a financial instrument not at fair value through profit or loss,
any directly attributable transaction cost incurred at the acquisition or issuance of the financial instrument. A trade
receivable that does not contain a significant financing component, is initially measured at the transaction price.
Classification and subsequent measurement

(i) Financial assets
Financial assets are classified as measured at amortised cost, fair value through other comprehensive income
(“FVOCI”) or fair value through profit or loss (“FVTPL”) as appropriate.
The Group and the Company determine the classification of financial assets at initial recognition and are not
subsequently reclassified unless the Group and the Company changes its business model for managing
financial assets in which case all affected financial assets are reclassified on the first day of the first reporting
period following the change in the business model.
Amortised cost
Amortised cost category comprises financial assets that are held within a business model whose objective is
to hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding. The financial
assets are not designated as fair value through profit or loss.
Subsequent measurement
Subsequent to initial recognition, these financial assets are measured at amortised cost using the effective
interest method (Note 2.7 (iv)). Interest income and foreign exchange gains and losses are recognised in profit
or loss.
(ii) Financial liabilities
The category of financial liabilities at initial recognition is as follows:
Amortised cost
Subsequent to initial recognition, financial liabilities are subsequently measured at amortised cost using the
effective interest method (Note 2.7(iv)).
Gains and losses are recognised in the profit or loss when the liabilities are derecognised as well as through
the amortisation process.
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31 DECEMBER 2019

2.7 FINANCIAL INSTRUMENTS (CONTINUED)
Classification and subsequent measurement (continued)

(iii) Derivative financial instruments
The Group and the Company use derivative financial instruments such as forward rate contracts to manage
certain exposures to fluctuations in foreign currency exchange rates.
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract
is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when
the fair value is positive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in fair value on derivatives during the year are recognised in the
profit or loss.
In general, contracts to sell or purchase non-financial items to meet expected own use requirements are not
accounted for as financial instruments. However, contracts to sell or purchase commodities that can be net
settled or which contain written options are required to be recognised at fair value, with gains and losses
recognised in the profit or loss.
An embedded derivative is recognised separately from the host contract where the host contract is not a
financial asset, and accounted for separately if, and only if, the derivative is not closely related to the economic
characteristics and risks of the host contract and the host contract is not measured at fair value through profit
or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in
accordance with policy applicable to the nature of the host contract.
(iv) Effective interest method

Amortised cost is computed using the effective interest method. This method uses effective interest rate that
exactly discounts estimated future cash receipts or payments through the expected life of the financial
instrument to the net carrying amount of the financial instrument. Amortised cost takes into account any
transaction costs and any discount or premium on settlement.
(v) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial
position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there
is an intention to settle on a net basis or to realise the assets and settle the liabilities simultaneously.
(vi) Amortised cost of financial instruments

Interest income is recognised by applying effective interest rate to the gross carrying amount except for credit
impaired financial assets (Note 2.8 (i)) where effective interest rate is applied to the amortised cost.
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2.7 FINANCIAL INSTRUMENTS (CONTINUED)
Classification and subsequent measurement (continued)

(vii) Derecognition of financial instruments
Financial assets
A financial asset is derecognised when the rights to receive cash flows from the asset have expired or, the
Group and the Company have transferred their rights to receive cash flows from the asset or have assumed
an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through”
arrangement without retaining control of the asset or substantially all the risks and rewards of the asset. On
derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration
received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss
that had been recognised in equity is recognised in the profit or loss, except for equity investments at fair value
through other comprehensive income where the gain or loss are recognised in other comprehensive income.
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired.
On derecognition of a financial liability, the difference between the carrying amount of the financial liabilities
extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in the profit or loss. In the case of waiver of debt from owners,
the gain is recognised in equity as capital reserve.
2.8 IMPAIRMENT
(i) Financial assets

The Group and the Company recognise loss allowances for expected credit losses (“ECL”) on financial assets
measured at amortised cost.
Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit
loss.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition
and when estimating expected credit loss, the Group and the Company consider reasonable and supportable
information that is relevant and available without undue cost or effort. This includes both quantitative and
qualitative information and analysis, based on the Group’s historical experience and informed credit assessment
and including forward-looking information, where applicable.
The Group and the Company assume that the credit risk on a financial asset has increased significantly if it
is past due.
The Group and the Company considers a financial asset to be in default when the borrower is unlikely to pay
its credit obligations in full, without recourse by the Group and the Company to actions such as realising security.
Lifetime expected credit losses are the expected credit losses that result from all possible default events over
the expected life of a financial instrument, while 12 month expected credit losses are the portion of expected
credit losses that result from default events that are possible within the 12 months after the reporting date.
222

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2.8 IMPAIRMENT (CONTINUED)
(i) Financial assets (continued)
The maximum period considered when estimating expected credit losses is the maximum contractual period
over which the Group and the Company are exposed to credit risk.
An impairment loss in respect of financial assets measured at amortised cost is recognised in profit or loss
and the carrying amount of the asset is reduced through the use of an allowance account.
(ii) Other assets
The carrying amounts of other assets, other than inventories and deferred tax assets are reviewed at each
reporting date to determine whether there is any indication of impairment.
If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised if
the carrying amount of an asset or the cash-generating unit to which it belongs exceeds its recoverable
amount. Impairment losses are recognised in the profit or loss.
A cash-generating unit is the smallest identifiable asset group that generates cash flows from continuing use
that are largely independent from other assets and groups. An impairment loss recognised in respect of a
cash-generating unit is allocated first to reduce the carrying amount of any goodwill allocated to the unit
and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis.
The recoverable amount is the greater of the asset’s fair value less cost to sell and its value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined
for the cash-generating unit to which the asset belongs.
Impairment losses are reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment
loss had been recognised.
Reversals of impairment losses are credited to the profit or loss in the year in which the reversals are recognised.
2.9 CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and bank balances, deposits with licensed financial institutions
and highly liquid investments which have an insignificant risk of changes in fair value and are used by the Group
and the Company in the management of their short term commitments. For the purpose of the statements of
cash flows, cash and cash equivalents are presented net of bank overdrafts and deposits restricted, if any.
223

31 DECEMBER 2019

2.10 CONTRACT LIABILITY – PETRONAS MESRA LOYALTY PROGRAMME
PETRONAS Mesra Loyalty Programme is an in-house loyalty programme where members are awarded with
PETRONAS Mesra points at the point of sale made at PETRONAS stations and Kedai Mesra. The monetary value
attributed to the awarded points is treated as contract liability and only recognised as revenue in the profit or
loss upon redemption, cancellation and expiration of the points. Currently, members can redeem the awarded
points for purchase of fuel at PETRONAS stations, items at Kedai Mesra or with selected partners.
Fair value of the contract liability is determined by reference to the monetary value attributable to the awarded
points and the redemption expiry dates.
2.11 INVENTORIES
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary
to make the sale.
Cost of petroleum products includes direct costs and transportation charges necessary to bring the inventories
to their present locations and condition and is determined on a weighted average basis.
Cost of material stores and spares consists of the invoiced value from suppliers.
2.12 PROVISIONS
A provision is recognised if, as a result of a past event, the Group and the Company have a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are determined by discounting the expected future net cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
liability. Where discounting is used, the accretion in the provision due to the passage of time is recognised as
finance cost.
The amount recognised as a provision is the best estimate of the net expenditure required to settle the present
obligation at the reporting date. Provisions are reviewed at each reporting date and adjusted to reflect the current
best estimate.
Possible obligations whose existence will only be confirmed by the occurrence or non-occurrence of one or
more future events not wholly within the control of the Group, are not recognised in the financial statements
but are disclosed as contingent liabilities unless the possibility of an outflow of economic resources is considered
remote.
In particular, information about provisions that have the most significant effect on the amount recognised in the
financial statements is described in Note 17.
2.13 EMPLOYEE BENEFITS
(i) Short term benefits
Wages and salaries, bonuses and social security contributions are recognised as an expense in the year in
which the associated services are rendered by employees of the Group and the Company.
224

31 DECEMBER 2019

2.13 EMPLOYEE BENEFITS (CONTINUED)
(ii) Defined contribution plans
As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees
Provident Fund (“EPF”).
Some of the Group’s foreign subsidiaries make contributions to their respective countries’ statutory pension
schemes and certain other independently administered funds which are defined contribution plans.
Such contributions are recognised as an expense in the profit or loss as incurred.
2.14 TAXATION
Tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the profit
or loss.
(i) Current tax

Current tax expense is the expected tax payable on the taxable income for the year, using the statutory tax
rates at the reporting date, and any adjustment to tax payable in respect of previous years.
(ii) Deferred tax
Deferred tax is provided for, using the liability method, on temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In
principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets
are recognised for all deductible temporary differences, unabsorbed capital allowances, unused tax losses
and other unused tax credits to the extent that it is probable that future taxable profit will be available against
which the deductible temporary differences, unabsorbed capital allowances, unused tax losses and other
unused tax credits can be utilised.
Deferred tax is not recognised for the initial recognition of goodwill and the initial recognition of an asset
or liability in a transaction which is not a business combination and that affects neither accounting nor
taxable profit or loss.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised
or the liability is settled, based on the laws that have been enacted or substantively enacted by the end of
the reporting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or
on different tax entities, where they intend to settle current tax liabilities and assets on a net basis or their
tax assets and liabilities will be realised simultaneously.
Deferred tax asset is reviewed at each reporting date and is reduced to the extent that it is no longer probable
that the future taxable profit will be available against which the related tax benefit can be realised.
225

31 DECEMBER 2019

2.15 FOREIGN CURRENCY TRANSACTIONS
In preparing the financial statements of individual entities in the Group, transactions in currencies other than the
entity’s functional currency (foreign currencies) are translated to the functional currencies at rates of exchange
ruling on the transaction dates.
Monetary assets and liabilities denominated in foreign currencies at the reporting date have been retranslated to
the functional currency at rates ruling on the reporting date.
Non-monetary assets and liabilities denominated in foreign currencies, which are measured at fair value, are
retranslated to the functional currency at the foreign exchange rates ruling at the date when the fair value was
determined. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated.
On consolidation, the assets and liabilities of subsidiaries with functional currencies other than Ringgit Malaysia
are translated into Ringgit Malaysia at the exchange rates ruling at reporting date.
The income and expenses are translated at the exchange rates at the date of the transactions or an average rate
that approximates those rates. All resulting exchange differences are taken to the foreign currency translation
reserve within equity.
In the consolidated financial statements, when settlement of a monetary item receivable from or payable to the
Group’s foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and
losses arising from such a monetary item are considered to form part of a net investment in a foreign operation
and are reclassified to other comprehensive income and accumulated under foreign currency translation reserve
in equity. Upon disposal of the investment, the cumulative exchange differences previously recorded in equity
are reclassified to the consolidated profit or loss.
2.16 BORROWING COSTS AND FOREIGN CURRENCY EXCHANGE DIFFERENCES RELATING TO PROJECTS-IN-
PROGRESS
Borrowing costs which are directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to be prepared for their intended use or sale, are
capitalised as part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for
the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset
for its intended use or sale are in progress. Capitalisation of borrowing costs ceases when all activities necessary
to prepare the qualifying asset for its intended use or sale are completed.
Exchange differences arising from foreign currency borrowings, although regarded as an adjustment to borrowing
costs, are not capitalised but instead recognised in the profit or loss in the period in which they arise.
Current financial year

The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is the weighted
average of borrowings that are outstanding during the year, other than borrowings made specifically for the purpose
of financing a specific qualifying assets, in which the actual borrowing cost incurred on that borrowing less any
investment income on the temporary investment of that borrowings will be capitalised. Borrowing costs incurred
subsequent to the completion a specific qualifying asset are included in the determination of the capitalisation rate.
226

31 DECEMBER 2019

2.16 BORROWING COSTS AND FOREIGN CURRENCY EXCHANGE DIFFERENCES RELATING TO PROJECTS-IN-
PROGRESS (CONTINUED)
Previous financial year
In previous years, borrowing costs incurred subsequent to the completion of a specific qualifying asset were
expensed off to profit or loss.
2.17 REVENUE
Revenue is measured based on the consideration specified in a contract with a customer and exclude amounts
collected on behalf of third parties. The Group or the Company recognises revenue when or as it transfers control
over a product or service to customer. An asset is transferred when (or as) the customer obtains control of the
asset.
An entity transfers control of a good or service over time and, therefore, satisfies a performance obligation and
recognises revenue over time, if one of the following criteria is met:
(a) the customer simultaneously receives and consumes the benefits provided by the entity’s performance as
the entity performs;
(b) the entity’s performance creates or enhances an asset (for example, work-in-progress) that the customer
controls as the asset is created or enhanced; or
(c) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an
enforceable right to payment for performance completed to date.
If a performance obligation is not satisfied over time in accordance with the above criteria, an entity satisfies the
performance obligation and recognises revenue at a point in time.
2.18 FINANCING COSTS
Financing costs comprise interest payable on borrowings and profit sharing margin on Islamic Financing Facilities
as well as accretion in provision of dismantling, removal and restoration costs due to the passage of time.
All interest and other costs incurred in connection with borrowings are expensed as incurred, other than those
capitalised in accordance with the accounting policy stated in Note 2.15. The interest component of finance lease
payments is accounted for in accordance with policy set out in Note 2.5. The financing costs on borrowings are
recognised using the effective profit/interest method.
2.19 EARNINGS PER SHARE
The Group presents basic earnings per ordinary share (“EPS”) data for its ordinary shares.
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the period.
Diluted EPS is determined by adjusting the profit and loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the effects of all dilute potential ordinary shares.
227

31 DECEMBER 2019

2.20 OPERATING SEGMENTS
An operating segment is a component of the Group and the Company that engages in business activities from
which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with
any of the Group’s and the Company’s other components, and for which discrete financial information is available.
An operating segment’s operating results are reviewed regularly by the chief operating decision maker, which is
the Board of Directors of the Company, to make decisions about resources to be allocated to the segment and
to assess the Group’s performance.
2.21 FAIR VALUE MEASUREMENT

Fair value of an asset or a liability, except for lease transactions, is determined as the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either
in the principal market or in the absence of a principal market, in the most advantageous market.
(i) Financial instruments

The fair value of financial instruments that are actively traded in organised financial markets are determined
by reference to quoted market bid prices at the close of business at the end of reporting date. For financial
instruments where there is no active market, fair value is determined using valuation techniques. Such
techniques may include using recent arm’s length market transactions; reference to the current fair value of
another instrument that is substantially the same; discounted cash flow analysis or other valuation models.
(ii) Non-financial assets

For non-financial assets, the fair value measurement takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as
possible. Fair values are categorised into different levels in a fair value hierarchy based on the input used in
the valuation technique as follows:
• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable
input).
The fair value of an asset to be transferred between levels is determined as of the date of the event or change
in circumstances that caused the transfer.
The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change
in circumstances that caused the transfers.
228

31 DECEMBER 2019
3. PROPERTY, PLANT AND EQUIPMENT
At 31.12.2018 Effect of Translation

as previously adoption of At 1.1.2019 Disposals/ exchange At
reported MFRS 16 as restated Additions write-offs Transfers difference 31.12.2019
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At cost:
Own use
Freehold land 1,008,337 – 1,008,337 40 (3,397) 22,587 – 1,027,567
Leasehold land 626,750 (626,750) – – – – – –
Buildings 2,121,545 – 2,121,545 – (24,610) 66,127 – 2,163,062
Plant, machinery,
tankage and pipeline 2,440,889 – 2,440,889 16,440 (49,149) 204,985 – 2,613,165
Office equipment,
furniture and fittings 516,057 – 516,057 4,693 (12,208) 48,263 96 556,901
Motor vehicles 94,038 – 94,038 407 (455) 12,656 248 106,894
Computer hardware
and software 636,911 – 636,911 84,413 (9,460) 12,880 138 724,882
Projects-in-progress 255,038 – 255,038 352,287 (8,718) (406,709) – 191,898
7,699,565 (626,750) 7,072,815 458,280 (107,997) (39,211) 482 7,384,369
Right-of-use
Leasehold land – 1,165,742 1,165,742 1,862 (17,389) 39,211 – 1,189,426
Buildings – 5,479 5,479 1,137 – – – 6,616
Other plant and equipment – 3,360 3,360 – – – – 3,360
Vessels – 166,430 166,430 112,718 – – – 279,148
Motor vehicles – 4,675 4,675 – – – – 4,675
– 1,345,686 1,345,686 115,717 (17,389) 39,211 – 1,483,225
7,699,565 718,936 8,418,501 573,997 (125,386) – 482 8,867,594
229

31 DECEMBER 2019
3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
At 31.12.2018 Effect of Translation

as previously adoption of At 1.1.2019 Charge Disposals/ exchange At
reported MFRS 16 as restated for the year write-offs difference 31.12.2019
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Accumulated depreciation
and impairment losses:
Own use
Freehold land 809 – 809 – – – 809
Leasehold land 113,068 (113,068) – – – – –
Buildings 1,471,613 – 1,471,613 87,919 (22,048) – 1,537,484
Plant, machinery, tankage and pipeline 1,718,230 – 1,718,230 154,530 (45,652) – 1,827,108
Office equipment, furniture and fittings 403,406 – 403,406 32,120 (11,896) 48 423,678
Motor vehicles 80,370 – 80,370 5,128 (455) 163 85,206
Computer hardware and software 576,508 – 576,508 45,704 (9,310) 85 612,987
Projects-in-progress – – – – – – –
4,364,004 (113,068) 4,250,936 325,401 (89,361) 296 4,487,272
Right-of-use
Leasehold land – 113,068 113,068 39,711 (13,703) – 139,076
Buildings – – – 1,261 – – 1,261
Other plant and equipment – – – 1,034 – – 1,034
Vessels – – – 102,297 – – 102,297
Motor vehicles – – – 1,753 – – 1,753
– 113,068 113,068 146,056 (13,703) – 245,421
4,364,004 – 4,364,004 471,457 (103,064) 296 4,732,693
230

31 DECEMBER 2019
Translation
At Disposals/ exchange At
1.1.2018 Additions write-offs Transfers difference 31.12.2018
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At cost:
Freehold land 1,012,366 3,087 (521) (6,595) – 1,008,337
Leasehold land 637,347 380 (1,476) (9,501) – 626,750
Buildings 2,116,559 11 (20,711) 25,686 – 2,121,545
Plant, machinery, tankage and pipeline 2,405,031 11,485 (71,035) 95,395 13 2,440,889
Office equipment, furniture and fittings 502,754 4,085 (4,126) 13,335 9 516,057
Motor vehicles 86,722 314 (1,495) 8,437 60 94,038
Computer hardware and software 658,941 7,123 (37,134) 7,946 35 636,911
Projects-in-progress 113,042 348,380 (286) (206,098) – 255,038
7,532,762 374,865 (136,784) (71,395)* 117 7,699,565
*Amount relates to transfer to Prepaid Lease Payments (Note 4).
Translation
At Charge for Disposals/ exchange At
1.1.2018 the year write-offs Transfers difference 31.12.2018
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Freehold land 809 – – – – 809
Leasehold land 106,186 8,206 (1,324) – – 113,068
Buildings 1,400,993 87,428 (16,808) – – 1,471,613
Plant, machinery, tankage and pipeline 1,621,733 138,767 (41,930) (347) 7 1,718,230
Office equipment, furniture and fittings 377,775 29,293 (4,011) 347 2 403,406
Motor vehicles 74,795 7,050 (1,495) – 20 80,370
Computer hardware and software 578,179 35,227 (36,910) – 12 576,508
4,160,470 305,971 (102,478) – 41 4,364,004
231

31 DECEMBER 2019
At 31.12.2018 Effect of
as previously adoption of At 1.1.2019 Disposals/ At
reported MFRS 16 as restated Additions write-offs Transfers 31.12.2019
Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At cost:
Own use
Freehold land 1,008,337 – 1,008,337 40 (3,397) 22,587 1,027,567
Leasehold land 625,075 (625,075) – – – – –
Buildings 2,094,470 – 2,094,470 – (24,610) 65,903 2,135,763
Plant, machinery, tankage and pipeline 2,043,111 – 2,043,111 15,210 (44,507) 202,176 2,215,990
Office equipment, furniture and fittings 511,338 – 511,338 4,462 (12,055) 47,747 551,492
Motor vehicles 86,273 – 86,273 – (455) 12,656 98,474
Computer hardware and software 619,019 – 619,019 886 (9,449) 11,796 622,252
Projects-in-progress 251,380 – 251,380 338,398 (8,718) (402,076) 178,984
7,239,003 (625,075) 6,613,928 358,996 (103,191) (39,211) 6,830,522
Right-of-use
Leasehold land – 1,125,531 1,125,531 1,862 (17,386) 39,211 1,149,218
Buildings – 311 311 – – – 311
Other plant and equipment – 3,360 3,360 – – – 3,360
Vessels – 166,430 166,430 112,718 – – 279,148
Motor Vehicles – 4,675 4,675 – – – 4,675
– 1,300,307 1,300,307 114,580 (17,386) 39,211 1,436,712
7,239,003 675,232 7,914,235 473,576 (120,577) – 8,267,234
232

31 DECEMBER 2019
At 31.12.2018 Effect of At
as previously adoption of 1.1.2019 Charge for Disposals/ At
reported MFRS 16 as restated the year write-offs 31.12.2019
Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Own use
Freehold land 809 – 809 – – 809
Leasehold land 112,782 (112,782) – – – –
Buildings 1,444,848 – 1,444,848 87,789 (22,048) 1,510,589
Plant, machinery, tankage and pipeline 1,497,645 – 1,497,645 138,778 (41,136) 1,595,287
Office equipment, furniture and fittings 400,707 – 400,707 31,440 (11,770) 420,377
Motor vehicles 73,713 – 73,713 5,097 (455) 78,355
Computer hardware and software 563,602 – 563,602 27,888 (9,303) 582,187
4,094,106 (112,782) 3,981,324 290,992 (84,712) 4,187,604
Right-of-use
Leasehold land – 112,782 112,782 38,346 (13,703) 137,425
Buildings – – – 207 – 207
Other plant and equipment – – – 1,034 – 1,034
Vessels – – – 102,297 – 102,297
Motor Vehicles – – – 1,753 – 1,753
– 112,782 112,782 143,637 (13,703) 242,716
4,094,106 – 4,094,106 434,629 (98,415) 4,430,320
233

31 DECEMBER 2019
At Disposals/ At
1.1.2018 Additions write-offs Transfers 31.12.2018
Company RM’000 RM’000 RM’000 RM’000 RM’000
At cost:
Freehold land 1,012,366 3,087 (521) (6,595) 1,008,337
Leasehold land 635,672 380 (1,476) (9,501) 625,075
Buildings 2,089,484 11 (20,711) 25,686 2,094,470
Plant, machinery, tankage and
pipeline 2,008,274 9,444 (40,061) 65,454 2,043,111
Office equipment, furniture and
fittings 498,949 4,055 (4,121) 12,455 511,338
Motor vehicles 79,331 – (1,495) 8,437 86,273
Computer hardware and software 644,328 6,426 (37,114) 5,379 619,019
Projects-in-progress 80,872 343,504 (286) (172,710) 251,380
7,049,276 366,907 (105,785) (71,395)* 7,239,003
*Amount relates to transfer to Prepaid Lease Payments (Note 4).
At Charge for Disposals/ At

1.1.2018 the year write-offs Transfers 31.12.2018
Accumulated depreciation and

impairment losses:
Freehold land 809 – – – 809
Leasehold land 105,910 8,196 (1,324) – 112,782
Buildings 1,374,983 86,673 (16,808) – 1,444,848
Plant, machinery, tankage and
pipeline 1,416,896 119,354 (38,605) – 1,497,645
Office equipment, furniture and
fittings 376,061 28,653 (4,007) – 400,707
Motor vehicles 69,622 5,586 (1,495) – 73,713
Computer hardware and software 566,625 33,857 (36,880) – 563,602
3,910,906 282,319 (99,119) – 4,094,106
234

31 DECEMBER 2019
Group Company
2019 2018 2019 2018

Carrying amount RM’000 RM’000 RM’000 RM’000
Own use
Freehold land 1,026,758 1,007,528 1,026,758 1,007,528
Leasehold land – 513,682 – 512,293
Buildings 625,578 649,932 625,174 649,622
Plant, machinery, tankage and pipeline 786,057 722,659 620,703 545,466
Office equipment, furniture and fittings 133,223 112,651 131,115 110,631
Motor vehicles 21,688 13,668 20,119 12,560
Computer hardware and software 111,895 60,403 40,065 55,417
Projects-in-progress 191,898 255,038 178,984 251,380
2,897,097 3,335,561 2,642,918 3,144,897
Right-of-use
Leasehold land 1,050,350 – 1,011,793 –
Buildings 5,355 – 104 –
Other plant and equipment 2,326 – 2,326 –
Vessels 176,851 – 176,851 –
Motor Vehicles 2,922 – 2,922 –
1,237,804 – 1,193,996 –
4,134,901 3,335,561 3,836,914 3,144,897
Restrictions of land title
The titles to certain freehold and leasehold land are in the process of being registered in the Company’s name.
3.1 As a lessee
Significant judgements and assumptions in relation to leases
The Group assesses at lease commencement by applying significant judgement whether it is reasonably certain
to exercise the extension options. Group entities consider all facts and circumstances including their past practice
and any cost that will be incurred to change the asset if an option to extend is not taken, to help them determine
the lease term.
The Group also applied judgement and assumptions in determining the incremental borrowing rate of the respective
leases. Group entities first determine the closest available borrowing rates before using significant judgement to
determine the adjustments required to reflect the term, security, value or economic environment of the respective
leases.
235

31 DECEMBER 2019
4. PREPAID LEASE PAYMENTS
Transfer from
At property, plant Charge for At
1.1.2018 Additions and equipment Disposals the year 31.12.2018
Group and Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Leasehold land 20,181 – 2,697 (276) (1,120) 21,482

Prepaid rental 436,640 – 68,698 (440) (34,124) 470,774
456,821 – 71,395 (716) (35,244) 492,256
As at 1 January 2019, the prepaid lease payments balances of RM492,256,000 are reclassified as right-of-use assets
based on the respective underlying assets following the adoption of MFRS 16.
Restrictions of land title
The titles to certain leasehold land are in the process of being registered in the Company’s name.
5. INVESTMENTS IN SUBSIDIARIES
Company
2019 2018
RM’000 RM’000
Unquoted shares at cost 60,010 29,010
On 9 January 2019, SETEL, a wholly owned subsidiary, was incorporated in Malaysia with an issued share capital of
5,000 ordinary shares of RM1,000 per ordinary share at a total cash consideration of RM5,000,000. In addition, during
the year, 26,000 redeemable preference shares of RM1,000 per preference share were subscribed at a total cash
consideration of RM26,000,000.
Details of the subsidiaries are stated in Note 32 to the financial statements.
236

31 DECEMBER 2019
6. INVESTMENTS IN ASSOCIATES
Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Unquoted shares at cost 530 530 530 530
Share of post-acquisition profits and reserves 926 1,025 – –
1,456 1,555 530 530
Dividend received 380 – 380 –
Summary of financial information on associates:
Group
2019 2018
RM’000 RM’000
As at 31 December
Total assets 10,524 9,458
Total liabilities (3,243) (1,680)
Net assets 7,281 7,778
Year ended 31 December

Revenue 17,970 17,011
Total comprehensive income 1,404 995
Details of the associates are stated in Note 33 to the financial statements.
237

31 DECEMBER 2019
7. INVESTMENTS IN JOINT VENTURES
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Unquoted shares at cost 4,121 1,053 25 25

Share of post-acquisition profits and reserves 17,440 16,082 – –
21,561 17,135 25 25
Dividend received 2,250 1,000 2,250 1,000
Summary of financial information on joint ventures:
Group
2019 2018
RM’000 RM’000
As at 31 December
Total assets 124,651 96,992
Total liabilities (69,924) (51,846)
Net assets 54,727 45,146
Year ended 31 December

Revenue 523,303 515,976
Total comprehensive income 8,459 8,968
Details of the joint ventures are stated in Note 34 to the financial statements.
8. INVENTORIES
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Petroleum products 795,288 824,383 789,694 810,897

Stores and spares 1,531 1,435 – –
796,819 825,818 789,694 810,897
Recognised in profit or loss:

Inventories recognised as cost of sales 27,056,978 27,193,713 26,666,906 26,774,432
Write-down to net realisable value 3,060 1,192 – –
Reversal of write-down to net realisable value (1,180) (65) – –
Inventories written off 471 – 390 –
238

31 DECEMBER 2019
9. TRADE AND OTHER RECEIVABLES
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Trade
Amounts due from:
– Holding company 23 183 23 119
– Subsidiaries – – 101 101
– Related companies 98,402 81,194 89,222 78,703
– Associates and joint ventures 5 – 5 –
Trade receivables 1,262,929 1,211,449 1,091,095 1,019,115
Less: Impairment losses (10,469) (10,645) (3,321) (3,292)
1,350,890 1,282,181 1,177,125 1,094,746
Non-trade
Other receivables, deposits and prepayments 103,483 100,217 88,199 90,753
Advances and loans to:
– Associates and joint ventures 851 4,348 851 1,282
Amounts due from:
– Holding company 7,110 198,104 6,546 197,308
– Subsidiaries – – 635 1,899
Subsidy receivables 237,223 801,273 237,223 801,272
Less: Impairment losses (135,911) (136,077) (135,911) (136,077)
214,121 978,388 198,877 966,916
Trade and other receivables 1,565,011 2,260,569 1,376,002 2,061,662
The trade amounts due from holding company, subsidiaries and related companies arose in the normal course of
business.
The non-trade amounts due from holding company, subsidiaries, associates, joint ventures and related companies are
unsecured, interest free and repayable on demand.
239

31 DECEMBER 2019
10. FUND INVESTMENT
Group
2019 2018
RM’000 RM’000
Deposits placed with licensed banks 51,004 50,000
Fund investment consists of deposits placed with licensed banks which typically have a maturity period of more than
3 months.
11. CASH AND CASH EQUIVALENTS
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Cash with PETRONAS Integrated Financial Shared

Services Centre 3,221,696 1,973,835 3,111,722 1,944,019
Cash and bank balances 50,279 31,584 35,010 25,047
Deposits placed with licensed banks 153,525 182,472 – –
3,425,500 2,187,891 3,146,732 1,969,066
A portion of the Group’s and of the Company’s cash and cash equivalents are held in the In-House Account (“IHA”)
managed by PETRONAS Integrated Financial Shared Services Centre (“IFSSC”) to enable more efficient cash management
for the Group and the Company.
Included in cash and cash equivalents of the Group and of the Company are interest-bearing balances amounting to
RM3,409,338,000 (2018: RM2,178,077,000) and RM3,130,339,000 (2018: RM1,959,448,000) respectively.
12. SHARE CAPITAL
Number of shares Amount
2019 2018 2019 2018

Group and Company ’000 ’000 RM’000 RM’000
Issued and fully paid shares with no par value

classified as equity instruments:
Ordinary shares 993,454 993,454 993,454 993,454
The holders of the ordinary share are entitled to receive dividend as declared from time to time and are entitled to
one vote per share at meetings of the Company.
240

31 DECEMBER 2019
13. RESERVES
Capital reserve
Capital reserve arose as a result of business combination of entities under the common control of PETRONAS and
comprises merger deficit.
Merger deficit represents the excess of cost of acquisition over the Group’s interest in the net carrying value of identifiable
net assets, liabilities and contingent liabilities of the acquiree. Merger deficit is classified as part of non-distributable reserves.
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the
financial statements of subsidiaries whose functional currencies are different from that of the Company’s functional
currency as well as foreign currency differences arising from the translation of monetary items that are considered to
form part of a net investment in a foreign operation.
14. NON-CONTROLLING INTERESTS

This consists of the non-controlling interests’ proportion of share capital and reserves of a partly-owned subsidiary.
15. BORROWINGS
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Non-current
Secured
Lease liabilities 158,694 – 82,291 –
Unsecured
Islamic financing facilities 9,959 29,924 – –
Total non-current borrowings 168,653 29,924 82,291 –
Current
Secured
Lease liabilities 140,239 – 138,406 –
Unsecured
Islamic financing facilities 19,797 19,046 – –
Revolving credit facility 5,466 5,990 – –
Total current borrowings 165,502 25,036 138,406 –
Total borrowings 334,155 54,960 220,697 –
241

31 DECEMBER 2019
15. BORROWINGS (CONTINUED)

Terms and debt repayment schedule
Under 1-2 2-5 Over 5

Group Total 1 year years years years
2019 RM’000 RM’000 RM’000 RM’000 RM’000
Secured
Lease liabilities 298,933 140,239 63,252 13,086 82,356
Unsecured
Islamic financing facilities 29,756 19,797 9,959 – –
Revolving credit facility 5,466 5,466 – – –
334,155 165,502 73,211 13,086 82,356

Group Total 1 year years years years
2018 RM’000 RM’000 RM’000 RM’000 RM’000
Unsecured
Islamic financing facilities 48,970 19,046 29,924 – –
Revolving credit facility 5,990 5,990 – – –
54,960 25,036 29,924 – –

Company Total 1 year years years years
2019 RM’000 RM’000 RM’000 RM’000 RM’000
Secured
Lease liabilities 220,697 138,406 61,199 9,848 11,244
Unsecured Islamic financing facilities
The unsecured Islamic financing facilities are governed by the Musharakah Mutanaqisah and Commodity Murabahah
principles and bear a profit margin ranging from 4.27% to 4.68% (2018: 4.27% to 4.68%) per annum with principal
repayment by quarterly instalments until September 2021.
Unsecured revolving credit facility
The unsecured revolving credit facility bears an interest rate of 2.90% (2018: 2.55%) per annum.
Secured lease liabilities
The lease liabilities of the Group and the Company bear interest at rates ranging from 4.19% to 8.43% and 4.19% to
7.80% per annum respectively.
242

31 DECEMBER 2019

Reconciliation of movement of liabilities to cash flows arising from financing activities
Group Company
Borrowings Dividends Borrowings Dividends

RM’000 RM’000 RM’000 RM’000
Balance at 1 January 2019 54,960 – – –

Effect of adoption of MFRS 16 310,435 – 232,277 –
Balance at 1 January 2019, restated 365,395 – 232,277 –

Changes from financing cash flows
Net Repayment of:
– Islamic financing facilities (19,214) – – –
– Revolving credit facility (957) – – –
– Lease liabilities (124,426) – (123,367) –
Interest expenses:
– Revolving credit facility (107) – – –
– Lease liabilities (18,930) – (12,496) –
Profit margin paid for Islamic financing facilities (1,841) – – –
Dividends paid – (695,418) – (695,418)
Dividends paid to non-controlling interest – (3,675) – –
Total changes from financing cash flows (165,475) (699,093) (135,863) (695,418)
The effect of changes in foreign exchange rates 433 – – –
Other changes
– Dividends declared – 699,093 – 695,418
– Finance costs 20,878 – 12,496 –
– Addition of new leases 113,855 – 112,718 –
– Termination of leases (931) – (931) –
Balance at 31 December 2019 334,155 – 220,697 –
243

31 DECEMBER 2019

Reconciliation of movement of liabilities to cash flows arising from financing activities (continued)
Group Company
Borrowings Dividends Dividends

RM’000 RM’000 RM’000
Balance at 1 January 2018 67,275 – –

Changes from financing cash flows
Net (Repayment)/Drawdown of:
– Islamic financing facilities (18,305) – –
– Revolving credit facility 5,729 – –
Interest expense for revolving credit facility (178) – –
Profit margin paid for Islamic financing facilities (2,725) – –
Dividends paid – (933,847) (933,847)
Dividends paid to non-controlling interest – (10,500) –
Total changes from financing cash flows (15,479) (944,347) (933,847)
The effect of changes in foreign exchange rates 261 – –

Other changes
– Dividends declared – 944,347 933,847
– Finance costs 2,903 – –
Balance at 31 December 2018 54,960 – –
244

31 DECEMBER 2019
16. DEFERRED TAX

The components and movements of deferred tax liabilities and assets during the year are as follows:
Adjustments Credited/
on initial (charged)
At application At to profit At
31.12.2018 of MFRS 16 1.1.2019 or loss 31.12.2019
Group RM’000 RM’000 RM’000 RM’000 RM’000
Deferred tax liabilities

Property, plant and equipment (143,021) – (143,021) 4,254 (138,767)
Contract liability – Loyalty
Programme 17,817 – 17,817 3,834 21,651
Lease liabilities – 20,099 20,099 (3,891) 16,208
Expected Credit Loss ("ECL") 686 – 686 (96) 590
(124,518) 20,099 (104,419) 4,101 (100,318)
Credited
At to profit At
1.1.2018 or loss 31.12.2018
Group RM’000 RM’000 RM’000

Property, plant and equipment (150,824) 7,803 (143,021)
Contract liability - Loyalty Programme 10,725 7,092 17,817
Expected Credit Loss ("ECL") 658 28 686
(139,441) 14,923 (124,518)
245

31 DECEMBER 2019
16. DEFERRED TAX (CONTINUED)

The components and movements of deferred tax liabilities and assets during the year are as follows: (continued)
Adjustments Credited/
on initial (charged)
At application At to profit At
31.12.2019 of MFRS 16 1.1.2019 or loss 31.12.2019

Property, plant and equipment (114,047) – (114,047) 7,999 (106,048)
Contract liability - Loyalty
Programme 17,817 – 17,817 3,833 21,650
Lease liabilities – 11,832 11,832 (4,143) 7,689
Expected Credit Loss ("ECL") 503 – 503 (144) 359
(95,727) 11,832 (83,895) 7,545 (76,350)
Credited/
(charged)
At to profit At
1.1.2018 or loss 31.12.2018
Company RM’000 RM’000 RM’000

Property, plant and equipment (121,264) 7,217 (114,047)
Contract liability – Loyalty Programme 10,725 7,092 17,817
Expected Credit Loss ("ECL") 554 (51) 503
(109,985) 14,258 (95,727)
246

31 DECEMBER 2019
17. OTHER LONG TERM LIABILITIES AND PROVISIONS
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Dismantling, removal and restoration costs 27,680 28,777 27,680 28,777

Other long term liabilities 793 491 – –
28,473 29,268 27,680 28,777
Dismantling, removal and restoration costs
The movement of provision for dismantling, removal and restoration costs during the financial year is shown below:
Group and Company
2019 2018
RM’000 RM’000
Balance at 1 January 28,777 30,782

Net changes in provisions (2,031) (3,649)
Unwinding of discount 934 1,644
Balance at 31 December 27,680 28,777
Under provisions of certain land lease agreements, the Company has an obligation to dismantle and remove structures
on certain sites and restore those sites at the end of the lease term to an acceptable condition consistent with the
lease agreement.
For these affected sites, the liabilities for dismantling, removal and restoration costs are recognised at present value of
the compounded future expenditure estimated using existing technology, at current prices and discounted using a real
discount rate.
The present value of the estimated costs is capitalised as part of the asset and the related provisions raised on the date
when the obligation arises. The capitalised cost is depreciated over the expected life of the asset. The increase in the
net present value of the provision for the expected cost is included as finance costs in the profit or loss.
Any change in the present value of the estimated expenditure is reflected as an adjustment to the provision.
While the provision is based on the best estimate of future costs and the economic lives of the affected assets, there
is uncertainty regarding both the amount and timing of incurring these costs. All the estimates are reviewed on an
annual basis or more frequently, where there is indication of a material change.
247

31 DECEMBER 2019
18. TRADE AND OTHER PAYABLES
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Trade
Amounts due to:
– Holding company – 41,138 – 41,138
– Subsidiaries – – 4,268 4,810
– Associates and joint ventures 10 17 10 17
– Related companies 2,308,558 1,934,078 2,269,620 1,879,289
Trade payables 94,314 20,888 72,549 6,325
Contract liability 90,211 74,237 90,211 74,237
2,493,093 2,070,358 2,436,658 2,005,816
Non-trade
Other payables 739,871 772,216 676,572 721,400
Amounts due to:
– Holding company 197,920 114,096 120,261 112,044
– Subsidiaries – – 5,477 –
– Associates and joint ventures 2,674 5,064 2,674 5,064
947,118 902,042 808,512 849,172
Trade and other payables 3,440,211 2,972,400 3,245,170 2,854,988
Contract liability is attributable to the monetary value of the awarded Mesra points under PETRONAS Mesra Loyalty
Programme.
The trade amounts due to the holding company, subsidiaries, associates, joint ventures and related companies arose
in the normal course of business.
The non-trade amounts due to holding company, subsidiaries, associates, joint ventures and related companies are
unsecured, interest free and repayable on demand.
248

31 DECEMBER 2019
19. REVENUE
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Revenue from contracts with customers

Sales of petroleum products 30,266,957 30,048,313 29,726,075 29,476,319
Rendering of services 26,614 20,440 – –
30,293,571 30,068,753 29,726,075 29,476,319
Disaggregation of revenue from contracts with customers
In the following table, revenue is disaggregated by major products/services lines.
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Major products/services lines

- Retail 15,369,819 15,033,532 15,181,299 14,858,440
- Commercial 14,897,138 15,014,781 14,544,776 14,617,879
- Others 26,614 20,440 – –
30,293,571 30,068,753 29,726,075 29,476,319
Revenue derived from petroleum products are predominantly sold to the retail and commercial sectors in Malaysia
which have been disclosed in the Operating Segment (Note 27). The timing and recognition of revenue derived from
petroleum products is recognised at a point in time.
Nature of goods and services
Nature of goods Timing of recognition or method used to Significant payment terms

and services recognise revenue
Retail Revenue is recognised when petroleum products are Payment for the products supplied shall
delivered and accepted by the customers at their be made before delivery, on delivery or
premises/sites or ex-depot. within stipulated credit period.
Commercial Revenue is recognised when petroleum products are Payment for the products supplied shall
delivered and accepted by the customers at their be made on delivery or within stipulated
premises/sites or ex-depot. credit period.
Others Revenue is recognised over time when services are Payment for the services rendered shall
rendered to customer. be made within stipulated credit period.
There are no variable element in consideration, obligation for returns or refunds nor warranty in the provision of the
goods and services by the Group and the Company.
249

31 DECEMBER 2019
20. OPERATING PROFIT
Group Company
2019 2018 2019 2018

Note RM’000 RM’000 RM’000 RM’000
Included in profit for the year are the

following charges:
Amortisation of prepaid lease payments 4 – 35,244 – 35,244
Audit fees:
– KPMG Malaysia 684 638 541 520
– other auditors 116 106 – –
Non Audit fees:
– KPMG Malaysia 347 220 317 220
– other auditors 138 – 138 –
Depreciation of property, plant and
equipment 3 471,457 305,971 434,629 282,319
Expenses relating to short-term leases
(Note (a)) 104,814 – 104,805 –
Expenses relating to leases of low value
assets (Note (b)) 121 – 25 –
Expenses relating to variable lease payments
not included in the measurement of lease
liabilities 197,974 – 197,970 –
Impairment losses on:
– trade receivables 1,038 1,993 822 1,558
– other receivables 562 4,541 562 4,541
Inventories written down to net realisable
value 8 3,060 1,192 – –
Inventories written off 8 471 – 390 –
Net realised loss on foreign exchange – 302 – 275
Property, plant and equipment written off 9,778 8,769 9,778 308
Facility charges:
– plant and equipment 701 4,949 691 4,863
– land and buildings 30,462 34,849 30,031 26,711
Staff costs:
– wages, salaries and others 271,749 244,634 238,327 215,211
– contributions to EPF 33,665 31,950 30,207 29,785
250

31 DECEMBER 2019
20. OPERATING PROFIT (CONTINUED)
Group Company
2019 2018 2019 2018

Note RM’000 RM’000 RM’000 RM’000
and credits:
Net gain on disposal of property,
plant and equipment 18,727 10,125 18,727 10,125
Dividend income:
– subsidiary – – 6,825 19,500
– associate 6 – – 380 –
– joint venture 7 – – 2,250 1,000
Interest income 121,997 96,006 113,133 89,226
Income from rental of premises 864 1,075 – 60
Net unrealised gain on foreign exchange 399 2,323 411 2,271
Net realised gain on foreign exchange 2,593 – 2,658 –
Reversal of write-down of inventories
to net realisable value 8 1,180 65 – –
Write back of impairment losses:
– trade receivables 1,082 2,043 743 1,806
– other receivable 996 – 996 –
a) The Group leases vessels with contract terms of less than 1 year. These leases are short term in nature and the
Group has elected not to recognise right-of-use assets and lease liabilities for these leases.
b) The Group leases various office equipments with contract terms of 1 to 5 years. These leases are low-value in
nature and the Group has elected not to recognise right-of-use assets and lease liabilities for these leases.
21. FINANCING COSTS
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Unwinding of discount
– Provision for dismantling, removal
and restoration costs 934 1,644 934 1,644
Profit margin on Islamic financing facilities 1,841 2,725 – –
Interest on revolving credit facility 107 178 – –
Interest on lease liabilities 18,930 – 12,496 –
21,812 4,547 13,430 1,644
251

31 DECEMBER 2019
22. TAX EXPENSE
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Current tax expense

Current year 310,000 312,941 289,270 289,586
Prior year (14,662) 17,549 (9,445) 17,905
295,338 330,490 279,825 307,491
Deferred tax expense

Reversal of temporary differences (7,292) (14,144) (9,091) (14,751)
Under/(Over) provision in prior year 3,191 (779) 1,546 493
Total deferred tax expense (4,101) (14,923) (7,545) (14,258)
Total tax expense 291,237 315,567 272,280 293,233
A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income
tax expense at the effective income tax rate of the Group and of the Company is as follows:
2019 2018
Group % RM’000 % RM’000
Taxation at Malaysian statutory tax rate 24 270,929 24 282,530

Effect of different tax rates in foreign
jurisdictions – (31) – 190
Effect of net deferred tax assets not recognised 1 6,779 – –
Non-deductible expenses, net of
non-taxable income 2 25,031 1 16,077
27 302,708 25 298,797
(Over)/Under provision in prior year
– current tax expense (1) (14,662) 2 17,549
– deferred tax expense – 3,191 – (779)
Tax expense 26 291,237 27 315,567
252

31 DECEMBER 2019
22. TAX EXPENSE (CONTINUED)
2019 2018
Company % RM’000 % RM’000
Taxation at Malaysian statutory tax rate 24 260,399 24 263,941

Non-deductible expenses, net of
non-taxable income 2 19,780 1 10,894
26 280,179 25 274,835
(Over)/Under provision in prior year
– current tax expense (1) (9,445) 2 17,905
– deferred tax expense – 1,546 – 493
Tax expense 25 272,280 27 293,233
Unrecognised deferred tax assets
The deferred tax assets not recognised in the statement of financial position in respect of the temporary differences
of a subsidiary are as follows:
Group
2019 2018
RM’000 RM’000
Unutilised tax losses carried forward 28,246 –
The unutilised tax losses above in relation to a subsidiary have not been recognised as the Group is uncertain if future
taxable profits of sufficient quantum will be available against which the Group can utilise the benefits therefrom. The
unutilised tax losses carried forward will be limited to 7 years of assessment starting from the year of assessment 2019.
253

31 DECEMBER 2019
23. EARNINGS PER ORDINARY SHARE

Basic earnings per ordinary share
The calculation of basic earnings per ordinary share at 31 December 2019 was based on the profit attributable to
ordinary shareholders and a weighted average number of ordinary shares outstanding calculated as follows:
Group
2019 2018
Profit for the year attributable to shareholders (RM’000) 829,535 849,849
Number of ordinary shares (‘000) 993,454 993,454
Basic earnings per ordinary share (sen) 83.5 85.5
Diluted earnings per ordinary share
No diluted earnings per share is disclosed in these financial statements as there is no potential dilutive ordinary share.
24. DIVIDENDS
Company
2019 2018
In respect of financial year ended 31 December 2018:

Interim dividend of 25.0 sen per ordinary share (2017: 49.0 sen) 248,363 486,792
In respect of financial year ended 31 December 2019:

695,418 933,847
The Directors had, on 25 February 2020, declared an interim dividend of 25.0 sen per ordinary share amounting to
RM248,363,500 and a special dividend of 15.0 sen per ordinary share amounting to RM149,018,100 in respect of the
financial year ended 31 December 2019 which has not been accounted for in the financial statements for the year
ended 31 December 2019.
254

31 DECEMBER 2019
25. RELATED PARTIES DISCLOSURES

Significant transactions with related parties
For the purposes of these financial statements, parties are considered to be related to the Group or the Company if
the Group or the Company has the ability, directly or indirectly, to control or jointly control the party or exercise
significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or
the Company and the party are subject to common control. Related parties may be individuals or other entities.
Related parties also include key management personnel defined as those persons having authority and responsibility
for planning, directing and controlling the activities of the Group either directly or indirectly. The key management
personnel include all the Directors of the Group, and certain members of senior management of the Group.
The Group’s and the Company’s related parties include subsidiaries, associates, joint ventures as well as the holding
company, PETRONAS and its related entities. The Group’s related parties also includes Government of Malaysia and its
related entities as the holding company is wholly-owned by the Government of Malaysia.
Key management personnel compensation
Group and Company
2019 2018
RM’000 RM’000
Directors
– Fees 1,010 891
– Other short term benefits (including estimated monetary
value of benefits-in-kind) 31 18
1,041 909
The Company pays fees to the holding company in relation to services of an Executive Director and also director fees
for certain Non-Executive Directors of the Company as disclosed in the related parties disclosures.
255

31 DECEMBER 2019
25. RELATED PARTIES DISCLOSURES (CONTINUED)

In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the
following transactions with related parties during the financial year:
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Holding company
Purchase of petroleum products – (890,212) – (890,212)
Facility charges (21,313) (17,937) (21,313) (17,937)
Management fees (1,520) (752) (1,520) (752)
Interest income from PETRONAS IFSSC 121,977 96,006 113,133 89,226
Fees for representation in the
Board of Directors* (502) (559) (502) (559)
Information, communication
and technology charges (40,659) (40,588) (39,939) (39,750)
Related companies
Purchases of petroleum products (26,950,776) (27,378,757) (26,637,025) (27,021,156)
Federal and State Government of Malaysia

Sales of petroleum products 306,648 322,090 306,428 322,090
Government of Malaysia’s related entities

* Fees paid directly to holding company in respect of Directors who are appointees of the holding company.
Information regarding outstanding balances arising from related party transactions as at 31 December 2019 is disclosed
in Note 9 and Note 18. The Directors of the Company are of the opinion that the above transactions have been entered
into in the normal course of business and have been established on a commercial basis.
256

31 DECEMBER 2019
26. COMMITMENTS
Outstanding commitments in respect of capital expenditure at the end of the reporting year not provided for in the
financial statements are:
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Property, plant and equipment

Approved and contracted for 34,209 5,407 34,209 3,249
Approved but not contracted for 215,258 12,322 178,450 287
249,467 17,729 212,659 3,536
27. OPERATING SEGMENTS

The Group’s reportable segments comprise of Retail, Commercial and Others. Each reportable segment offers different
products and services and require different marketing strategies. The following summary describes the operations in
each of the Group’s reportable segment:
• Retail – consist of sales and purchases of petroleum products to the retail sector
• Commercial – consist of sales and purchases of petroleum products to the commercial sector
• Others – comprise mainly of aviation fuelling services, technical services and business activities other than
retail and commercial segments.
For each of the reportable segments, the Group chief operating decision maker, which is the Board of Directors of the
Company, reviews internal management reports at least on a quarterly basis.
Performance is measured based on segment profit or loss before tax as included in the internal management reports
that are reviewed by the Company’s Board of Directors. Segment profit is used to measure performance as management
believes that such information is the most relevant in evaluating the results of certain segments relative to other entities
that operate within these industries.
257

31 DECEMBER 2019
27. OPERATING SEGMENTS (CONTINUED)

Revenues derived from petroleum products are predominantly sold to the retail and commercial sectors in Malaysia
which have been disclosed in the operating segment. In this respect, no further disaggregation of revenue is presented.
2019 2018
Retail Commercial Others Group Retail Commercial Others Group

Business Segments RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Revenue 15,369,819 14,897,138 26,614 30,293,571 15,033,532 15,014,781 20,440 30,068,753
Depreciation and amortisation 347,529 94,659 29,269 471,457 285,946 37,897 17,372 341,215
Other income 387,638 47,386 4,503 439,527 317,253 67,676 39,972 424,901
Operating profit 581,894 556,419 8,482 1,146,795 596,075 534,236 47,758 1,178,069
Financing costs (9,354) (4,490) (7,968) (21,812) (1,734) (88) (2,725) (4,547)
Share of profit after tax of
associates and joint ventures 3,889 3,504
Geographical information
There is no disclosure on geographical segment information as the Group’s operations outside of Malaysia are not
material during the year under review.
Major customers
As at 31 December 2019, there are no major customers with revenue that contribute to more than 10 percent of Group
revenue.
258

31 DECEMBER 2019
28. CONTINGENCIES
Group
2019 2018
RM’000 RM’000
Contingent assets
An award in favour of a subsidiary was issued by the arbitrator in 2018 following
an arbitration proceeding, which allowed additional costs and expenses for
restructuring works at one of the subsidiary’s major facility. The quantum to be
paid following the award as of the financial period date is pending settlement
negotiation between the parties. 26,662 26,662
There were no material contingent liabilities since the last consolidated statement of financial position as at 31 December
2018.
29. FINANCIAL INSTRUMENTS

Categories of financial instruments
The table below provides an analysis of financial instruments categorised as Amortised Cost (“AC”).
Total
carrying
Group AC amount
2019 Note RM’000 RM’000
Financial assets
Trade and other receivables* 9 1,507,863 1,507,863
4,984,367 4,984,367
Borrowings 15 (35,222) (35,222)
Trade and other payables* 18 (3,349,770) (3,349,770)
(3,384,992) (3,384,992)
* These balances exclude non-financial instruments balances.
259

31 DECEMBER 2019
29. FINANCIAL INSTRUMENTS (CONTINUED)

Categories of financial instruments (continued)
The table below provides an analysis of financial instruments categorised as Amortised Cost (“AC”). (continued)
Total
carrying
Group AC amount
2018 Note RM’000 RM’000
Financial assets
4,262,742 4,262,742
Borrowings 15 (54,960) (54,960)
(2,953,078) (2,953,078)
Total
carrying
Company AC amount
2019 Note RM’000 RM’000
Financial assets
4,472,649 4,472,649
Financial liability
260

31 DECEMBER 2019

Categories of financial instruments (continued)
Total
carrying
Company AC amount
2018 Note RM’000 RM’000
Financial assets
3,798,729 3,798,729
Financial liability
Financial risk management
The Group and the Company are exposed to various risks that are particular to its core business which consists of
domestic marketing of petroleum products. These risks, which arise in the normal course of the Group’s and the
Company’s business, comprise credit risk, liquidity risk and market risk relating to interest rates and foreign currency
exchange rates.
The Group has policies and guidelines in place that sets the foundation for a consistent approach towards establishing
an effective financial risk management across the Group.
Risk taking activities are undertaken within acceptable level of risk or risk appetite, whereby the risk appetite level reflects
business considerations and capacity to assume such risks. The risk appetite is established at Board level, where relevant,
based on defined methodology and translated into operational thresholds.
The Group and the Company’s goal in risk management are to ensure that the management understands, measures
and monitors the various risks that arise in connection with their operations. Policies and guidelines have been developed
to identify, analyse, appraise and monitor the dynamic risks facing the Group and the Company. Based on this assessment,
the Group and the Company adopt appropriate measures to mitigate these risks in accordance with their view of the
balance between risk and reward.
The main financial risks faced by the Group and the Company arising from the use of financial instruments in their
normal activities are credit risk, liquidity risk and market risk relating to profit margin or interest rate risk and foreign
currency risk.
261

31 DECEMBER 2019

Credit risk
Credit risk is the potential exposure of the Group and of the Company to losses in the event of non-performance by
counterparties. The Group’s and the Company’s exposures to credit risk arise principally from customers and placement
in financial institutions. Credit risks are controlled by individual companies in line with PETRONAS’ policies and guidelines.
Trade and other receivables
Risk management objectives, policies and processes for managing the risk
The Group and the Company minimise credit risk by ensuring that all potential third party counterparties are assessed prior
to registration and entering into new contracts. Existing third party counterparties are also subject to regular reviews, including
re-appraisal and approval of granted limits. The creditworthiness of counterparties is assessed based on an analysis of all
available quantitative and qualitative data regarding business risks and financial standing, together with the review of any
relevant third party and market information. Reports are prepared and presented to the management that cover the Group’s
overall credit exposure against limits and securities, exposure by segment and overall quality of the portfolio.
Depending on the types of transactions and counterparty creditworthiness, the Group and the Company further mitigate
and limit risks related to credit by requiring collateral or other credit enhancements such as cash deposits, letter of
credit, Amanah Saham Bumiputera (“ASB”) and bank guarantees.
The Group uses ageing analysis to monitor the credit quality of the receivables. As at the year end, 94% (2018: 99%)
of gross trade receivables of the Group are within the credit terms.
Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated
at their realisable values. A significant portion of these receivables are regular customers that have been transacting
with the Group.
At each reporting date, the Group or the Company assesses whether any of the trade receivables are credit impaired.
The gross carrying amounts of credit impaired trade receivables are written off (either partially or full) when there is
no realistic prospect of recovery. This is generally the case when the Group or the Company determines that the debtor
does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to
the write-off. Nevertheless, trade receivables that are written off could still be subject to enforcement activities.
Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from trade receivables are represented
by the carrying amounts in the statement of financial position.
At each reporting date, the Group and the Company assesses whether financial assets carried at amortised cost are
credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
– significant financial difficulty of the customer;

– breach of contract such as default; or
– is it probable that the customer will enter bankruptcy or other financial reorganisation.
262

31 DECEMBER 2019

Credit risk (continued)
Trade and other receivables (continued)
Concentration of credit risk
On reporting date, there is a significant concentration of credit risk of the Group arising from an amount owing from
a customer constituting 15% (2018: 10%) of the total trade receivables of the Group, of which all outstanding balances
are current.
In addition, there is a significant concentration of credit risk of the Group being an amount owing from the Government
constituting 70% (2018: 89%) of the total other receivables of the Group relating to subsidies arising from the Automatic
Pricing Mechanism governing the sale of petroleum products.
Recognition and measurement of impairment loss
In managing credit risk of trade receivables, the Group monitors its debtors and takes appropriate actions (including
but not limited to legal actions) to recover long overdue balances.
The Group performs credit rating assessment of all its counterparties in order to measure ECLs of trade receivables for
all segments using the PETRONAS Credit Risk Rating System. This credit rating assessment considers quantitative
assessment using the counterparties’ financial statements or a qualitative assessment of the counterparties’ which
includes but is not limited to their reputation, competitive position, industry and geopolitical outlook.
In determining the ECL, the probability of default assigned to each counterparty is based on their individual credit rating.
This probability of default is derived by benchmarking against available third party and market information, which also
incorporates forward looking information.
Loss given default is the assumption of the proportion of financial asset that cannot be recovered by conversion of
collateral to cash or by legal process, and is assessed based on the Company’s historical experience.
The following table provides information about the exposure to credit risk and ECLs for trade receivables as at
31 December 2019 which are grouped together as they are expected to have similar risk nature.
263

31 DECEMBER 2019

Recognition and measurement of impairment loss (continued)

Group
2019
Gross
carrying Loss Net
amount allowance balance
Credit Risk Rating Note RM’000 RM’000 RM’000
Sovereign rating 56,678 – 56,678

Good rating 983,860 (667) 983,193
Standard rating 310,032 (1,363) 308,669
1,350,570 (2,030) 1,348,540
Credit impaired:
More than 90 days past due 10,789 (8,439) 2,350
10,789 (8,439) 2,350
Representing:
Trade receivables 9 1,361,359 (10,469) 1,350,890
Group
2018
Gross
carrying Loss Net

Good rating 977,015 (664) 976,351
Standard rating 218,175 (1,652) 216,523
1,261,277 (2,316) 1,258,961
Credit impaired:
1,292,826 (10,645) 1,282,181
Representing:
264

31 DECEMBER 2019

Recognition and measurement of impairment loss (continued)

Company
2019
Gross
carrying Loss Net

Good rating 875,783 (532) 875,251
Standard rating 256,244 (1,055) 255,189
1,176,679 (1,587) 1,175,092
Credit impaired:
3,767 (1,734) 2,033
Representing:
Company
2018
Gross
carrying Loss Net

Good rating 852,388 (492) 851,896
Standard rating 195,861 (1,319) 194,542
1,095,772 (1,811) 1,093,961
Credit impaired:
More than 90 days past due 2,266 (1,481) 785
1,098,038 (3,292) 1,094,746
Representing:
265

31 DECEMBER 2019

As at the end of the reporting period, the maximum exposure to credit risk arising from trade receivables is equal to
the carrying amount. The ageing of trade receivables net of impairment amount as at the end of the reporting period
is analysed below:
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
At net
Current 1,281,254 1,208,763 1,162,690 1,076,183
Past due 1 to 30 days 26,831 40,646 6,765 15,224
Past due 31 to 60 days 12,389 8,751 4,359 669
Past due 61 to 90 days 10,840 10,693 1,278 404
Past due more than 90 days 19,576 13,328 2,033 2,266
1,350,890 1,282,181 1,177,125 1,094,746
Representing:
Trade receivables (Note 9) 1,361,359 1,292,826 1,180,446 1,098,038
Less: Impairment losses (Note 9) (10,469) (10,645) (3,321) (3,292)
1,350,890 1,282,181 1,177,125 1,094,746
There are trade receivables where the Group has not recognised any loss allowance as the trade receivables are secured
by collateral and/or other credit enhancements such as cash deposits, letter of credit and bank guarantees.
Trade receivables which are credit impaired amounting to RM10,469,000 are partially collateralised in the form of
financial guarantee by banks. Impairment loss has been provided in excess of the collateral value of the financial
guarantee of RM159,355,000.
266

31 DECEMBER 2019

The movements in the allowance for impairment losses of trade receivables during the year are as follows:
Group Company
2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000
Opening balance 10,645 10,695 3,292 3,540

Impairment losses recognised 1,038 1,993 822 1,558
Write back of impairment (1,082) (2,043) (743) (1,806)
Impairment loss written off (132) – (50) –
Closing balance 10,469 10,645 3,321 3,292
Fund investments
The Group and the Company are also exposed to counterparty credit risk from financial institutions through fund
investment activities which was managed by IFSSC on behalf of the Group comprising primarily money market placement.
These exposures are managed in accordance with existing policies and guidelines that define the parameters within
which the investment activities shall be undertaken in order to achieve the Group’s investment objective of preserving
capital and generating optimal returns above appropriate benchmarks within allowable risk parameters.
Investments are only made with approved counterparties who met the appropriate rating and other relevant criteria,
and within approved credit limits, as stipulated in the policies and guidelines. The treasury function is governed by
counterparty credit risk management framework.
The maximum exposure to credit risk is represented by the carrying amounts in the statements of financial position.
As at the reporting date, the Group and the Company have only invested in short term domestic money market
instrument. In view of the sound credit rating of counterparties, the Group and the Company do not expect any
counterparties to fail to meet its obligation and hence, loss allowance is not provided for.
Liquidity risk
Liquidity risk is the risk that the Group or the Company will not be able to meet its financial obligations as they fall
due. The Group’s and the Company’s exposure to liquidity risk arises primarily from its trade payables and borrowings.
In managing its liquidity risk, the Group and the Company maintain a sufficient cash and liquid marketable assets and
a balance between continuity of funding and flexibility through use of stand-by credit facilities. The Company’s current
credit rating enables it to access banking facilities in excess of current and immediate future requirements of the Group
and of the Company.
267

31 DECEMBER 2019

Liquidity risk (continued)
Maturity analysis
The table below summarises the maturity profile of the Group’s and of the Company’s financial liabilities as at the
reporting date based on undiscounted contractual payments:
Effective
profit margin/
interest rates
Carrying per annum/ Contractual Within More than
amount discount rate cash flows 1 year 1-2 years 2-5 years 5 years
Group RM'000 % RM'000 RM'000 RM'000 RM'000 RM'000
2019
Unsecured Islamic financing
facilities floating rate 29,756 4.27 – 4.68 30,888 20,762 10,126 – –
Unsecured revolving credit
facility fixed rate 5,466 2.90 5,506 5,506 – – –
Lease liabilities 298,933 4.19 – 8.43 446,198 155,359 72,203 43,394 175,242
Trade and other payables 3,349,770 – 3,349,770 3,349,770 – – –
3,683,925 3,832,362 3,531,397 82,329 43,394 175,242
2018
Unsecured Islamic financing
facilities floating rate 48,970 4.27 – 4.68 52,457 19,038 33,419 – –
Unsecured revolving credit facility
fixed rate 5,990 2.55 6,142 6,142 – – –
2,953,078 2,956,717 2,923,298 33,419 – –
268

31 DECEMBER 2019

Liquidity risk (continued)
Maturity analysis (continued)

Effective
profit margin/
interest rates
Carrying per annum/ Contractual Within More than
amount discount rate cash flows 1 year 1-2 years 2-5 years 5 years
Company RM'000 % RM'000 RM'000 RM'000 RM'000 RM'000
2019
Lease liabilities 220,697 4.19 – 7.80 244,354 147,015 63,909 15,254 18,176
3,375,656 3,399,313 3,301,974 63,909 15,254 18,176
2018
Financial liability
Market risk
Market risk is the risk or uncertainty arising from changes in market prices and their impact on the performance of the
business. The market price changes that the Group and the Company are exposed to include interest rates and foreign
currency exchange rates that could affect the value of the Group’s and the Company’s financial assets, liabilities or
expected future cash flows.
Profit margin or interest rate risk

Profit margin or interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market rates.
The Group’s exposure to the risk of changes in cash flow due to changes in profit margin or interest rates relates
primarily to the Islamic financing facilities of a subsidiary with floating profit margin. Short term receivables and payables
are not significantly exposed to interest rate risk.
The Group’s remaining interest-bearing financial assets and financial liabilities, which consist mainly of fixed rate short
term fund placement and short term revolving credit facilities do not have significant exposure to interest rate risk.
All profit or interest rate exposures are monitored and managed proactively in line with PETRONAS’ policies and
guidelines.
As at 31 December 2019, 98% (2018: 89%) of the interest-bearing financial liabilities of the Group are floating rate
instruments.
269

31 DECEMBER 2019

Market risk (continued)
Profit margin risk sensitivity analysis
As at 31 December 2019, it is estimated that a change of 100 basis points in profit margin of the Islamic financing
facilities with all other variables held constant, is not expected to have any significant impact to the Group’s cash flows.
Foreign exchange risk
The Group and the Company are exposed to varying levels of foreign exchange risk when they enter into transactions
that are not denominated in the respective companies’ functional currencies and/or when foreign currency monetary
assets and liabilities are translated at the reporting date. The main underlying economic currencies of the Group’s cash
flows are Ringgit Malaysia and US Dollars. The Company’s funds are managed by IFSSC whereby foreign currency
exposure is typically managed by matching receipts and payment for the same currency and internally hedged with
IFSSC. When deemed necessary and appropriate, the Company, via IFSSC will enter into external hedging to minimise
its exposure to the foreign currency movements.
The Group’s and the Company’s significant exposure to foreign currency risk, based on carrying amounts as at the
reporting date is as follows:
Denominated in USD
2019 2018
RM’000 RM’000
Group
Financial asset
Trade and other receivables 147,372 132,805
Trade and other payables (13,425) (15,508)
Lease liabilities (101,672) –
Net exposure 32,275 117,297
Company
Financial asset
Trade and other receivables 147,315 132,634
Trade and other payables (13,425) (15,508)
Lease liabilities (101,672) –
Net exposure 32,218 117,126
270

31 DECEMBER 2019

Market risk (continued)
Foreign exchange risk (continued)
Sensitivity analysis for a given market variable provided in this note, discloses the effect on profit or loss and equity as
at 31 December 2019 assuming that a reasonably possible change in the relevant market variable had occurred at 31
December 2019 and been applied to the risk exposures in existence at that date to show the effects of reasonably
possible changes in price on profit or loss and equity to the next annual reporting date. Reasonably possible changes
in market variables used in the sensitivity analysis are based on implied volatilities, where available, or historical data
for foreign exchange rates. Reasonably possible changes in interest rates are based on management judgement and
historical experience.
The sensitivity analysis is hypothetical and should not be considered to be predictive of future performance because
the Group’s actual exposure to market prices is constantly changing with changes in the Group’s portfolio of among
others debt and foreign currency contracts. Changes in fair values or cash flows based on a variation in a market
variable cannot be extrapolated because the relationship between the change in market variable and the change in fair
value or cash flows may not be linear. In addition, the effect of a change in a given market variable is calculated
independently of any change in another assumption and mitigating actions that would be taken by the Group. In reality,
changes in one factor may contribute to changes in another, which may magnify or counteract the sensitivities.
The following table demonstrates the indicative pre-tax effects on the profit or loss of applying reasonably foreseeable
market movements in the following currency exchange rates:
2019 2018
Appreciation Effect Appreciation Effect

in foreign on profit in foreign on profit
currency rate or loss currency rate or loss
% RM’000 % RM’000
Group
USD 10 3,227 10 11,730
Company
USD 10 3,222 10 11,713
A depreciation in USD would have had equal but opposite effect, on the basis that all other variables remain constant.
271

31 DECEMBER 2019

Fair value information
The Group’s financial instruments consist of borrowings, cash and cash equivalents, fund investments, trade and other
receivables and trade and other payables.
The carrying amounts of cash and cash equivalents, short term fund investments, receivables and payables and short
term borrowings reasonably approximate their fair values due to the relatively short term nature of these financial
instruments.
The following table analyses financial instruments not carried at fair value for which fair value is disclosed, together
with the carrying amounts shown in the consolidated statement of financial position.
Fair value of financial

instruments not carried
at fair value
Carrying
Level 3 Total amount
Group RM’000 RM’000 RM’000
2019
Islamic financing facilities 28,131 28,131 29,756
Revolving credit facility 5,312 5,312 5,466
33,443 33,443 35,222
2018
Islamic financing facilities 45,528 45,528 48,970
Revolving credit facility 5,841 5,841 5,990
51,369 51,369 54,960
Non-derivative financial instruments

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and
interest cash flows, discounted at the market rate of interest at the end of the reporting period.
272

31 DECEMBER 2019

Gains and losses arising from financial instruments
Reversal/
Interest Interest (impairment
income expense loss) Others Total
Group RM'000 RM'000 RM'000 RM'000 RM'000
2019
Financial assets at amortised
cost 121,997 – (478) 3,777 125,296
Financial liabilities at amortised
cost – (1,948) – (785) (2,733)
Total 121,997 (1,948) (478) 2,992 122,563
2018
cost 96,006 – (4,491) (4,512) 87,003
cost – (2,903) – 6,533 3,630
Total 96,006 (2,903) (4,491) 2,021 90,633
Reversal/
Interest Interest (impairment
income expense loss) Others Total
Company RM'000 RM'000 RM'000 RM'000 RM'000
2019
cost 113,133 – (355) 3,776 116,554
cost – – – (707) (707)
Total 113,133 – (355) 3,069 115,847
2018
cost 89,226 – (4,293) (4,509) 80,424
cost – – – 6,505 6,505
Total 89,226 – (4,293) 1,996 86,929
Others relate to gains and losses arising from financial instruments other than interest income, interest expense and
impairment loss such as realised and unrealised foreign exchange gains or losses.
273

31 DECEMBER 2019
30. CAPITAL MANAGEMENT

The Group defines capital as total equity and debt. The objective of the Group’s capital management is to maintain an
optimal capital structure and ensure availability of funds to support its business and maximise shareholders’ value. As
a subsidiary of Petroliam Nasional Berhad (“PETRONAS”), the Group’s approach in managing capital is set out in the
PETRONAS Group Corporate Financial Policy.
The Group monitors and maintains a prudent level of total debt to total asset ratio to optimise shareholders’ value and
to ensure compliance with covenants under debt and shareholders’ agreements and regulatory requirements, if any.
The debt equity ratio of the Group as at 31 December 2019 is 5.6:100 (2018: 0.9:100).
There were no changes in the Group’s approach to capital management during the year.
Under the requirement of Bursa Malaysia Practice Note No.17/2005, the Group is required to maintain consolidated
shareholders’ equity equal to or not less than 25% of the issued and paid-up capital (excluding treasury shares) and
such shareholders’ equity is not less than RM40 million. The Group has complied with this requirement.
31. HOLDING AND ULTIMATE HOLDING COMPANY

The holding company as well as ultimate holding company is Petroliam Nasional Berhad (“PETRONAS”), a company
incorporated in Malaysia.
274

31 DECEMBER 2019
32. SUBSIDIARIES AND ACTIVITIES
Effective ownership
and voting interest
2019 2018 Principal Activities
Companies incorporated
in Malaysia
Kuala Lumpur Aviation Fuelling 65% 65% To develop, operate, maintain and manage an aviation
System Sdn. Bhd. fueling system at Kuala Lumpur International Airport and
Kuala Lumpur International Airport 2, Sepang.
PETRONAS Lubricants Marketing 100% 100% To market and distribute lubricants.

(Malaysia) Sdn. Bhd.
PETRONAS Aviation Sdn. Bhd. 100% 100% To provide technical consultancy services.
Setel Ventures Sdn. Bhd. 100% – To provide a seamless payment solution.
Company incorporated
in Netherlands
**PDB (Netherlands) B.V. 100% 100% Investment holding company.
Company incorporated
in Thailand
*PETRONAS International 100% 100% To market and distribute lubricants.

Marketing (Thailand) Co., Ltd.1
* Audited by firm of auditors other than KPMG PLT

** Consolidated based on management accounts as the company is exempted from preparing audited financial
statements as allowed by Articles 396 Book 2 of the Dutch Civil Code.
1 Directly owned by PDB (Netherlands) B.V.
275

31 DECEMBER 2019
33. ASSOCIATES AND ACTIVITIES
Effective ownership
and voting interest
Companies incorporated
in Malaysia
*IOT Management Sdn. Bhd. 20% 20% To operate and manage a petroleum storage terminal
with facilities for receipt, storage and delivery of petroleum
products at Senari, Kuching, Sarawak for the users,
PETRONAS Dagangan Berhad and Shell Timur Sdn. Bhd.
*Tanjung Manis Oil Terminal 20% 20% To operate and manage a petroleum storage terminal
Management Sdn. Bhd. with facilities for receipt, storage and delivery of
petroleum products located at Bandar Baru Tanjung
Manis, Mukah, Sarawak for the users, PETRONAS
Dagangan Berhad and Shell Timur Sdn. Bhd.
34. JOINT VENTURES AND ACTIVITIES
Effective ownership
and voting interest
Companies incorporated in
Malaysia
P S Pipeline Sendirian Berhad 50% 50% To maintain and operate the Multi-Product Pipeline and
Klang Valley Distribution Terminal (MPP-KVDT) and the
associated facilities for the transportation of the
petroleum products on behalf of the MPP-KVDT owners/
shareholders.
P S Terminal Sendirian Berhad 50% 50% To operate, manage and maintain the joint facilities –
terminal, depot, warehouse etc. in Tawau and Bintulu
on behalf of the owners, PETRONAS Dagangan Berhad
and Shell Timur Sdn. Bhd.
Company incorporated in
Kingdom of Saudi Arabia
*United Fuel Company Limited 40% 40% To provide support, maintenance and operation services
(Limited Liability Company)2 for airport facilities and gas fuel, storage equipment and
fuel supply to aircrafts in the airports of the Kingdom
of Saudi Arabia.
* Audited by firm of auditors other than KPMG PLT

2 Interest owned by PETRONAS Aviation Sdn. Bhd.
276

31 DECEMBER 2019
35. ADOPTION OF NEW AND REVISED PRONOUNCEMENTS

As of 1 January 2019, the Group and the Company adopted the following pronouncements that have been issued by
the MASB and are applicable as listed below:
Effective for annual periods beginning on or after 1 January 2019

MFRS 16 Leases
Amendments to MFRS 3 Business Combinations (Annual Improvements 2015-2017 Cycle)
Amendments to MFRS 11 Joint Arrangements (Annual Improvements 2015-2017 Cycle)
Amendments to MFRS 112 Income Taxes (Annual Improvements 2015-2017 Cycle)
Amendments to MFRS 123 Borrowing Costs (Annual Improvements 2015-2017 Cycle)
Amendments to MFRS 128 Investment in Associates and Joint Ventures: Long-term Interests in Associates and Joint
Ventures
Amendments to MFRS 119 Employee Benefits: Plan Amendment, Curtailment or Settlement
IC Interpretation 23 Uncertainty over Income Tax Treatments
The principal changes in accounting policies and their effects are set out below:
i. MFRS 16 Leases
Definition of a lease
A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a
period of time in exchange for a consideration. On transition to MFRS 16, the Group and the Company reassessed
all contracts to determine whether the contracts are, or contain a lease at the date of initial application.
As a lessee
MFRS 16 introduces a single, on balance sheet lease accounting for lessees. A lessee recognises a right-of-use asset
representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments.
Where the Group and the Company are a lessee, the Group and the Company applied the requirements of MFRS
16 retrospectively with the cumulative effect of initial application as an adjustment to the opening balance of
retained earnings at 1 January 2019.
At 1 January 2019, for leases that were previously classified as operating lease under MFRS 117, lease liabilities were
measured at the present value of the remaining lease payments, discounted at the Group entities’ incremental
borrowing rate as at 1 January 2019. The Group’s and the Company’s weighted-average rate applied is 4.19% and
8.43% respectively. Right-of-use assets are measured at their carrying amount as if MFRS 16 had been applied since
the commencement date, discounted using the Group entities’ incremental borrowing rate at 1 January 2019.
The Group entities used the following practical expedients when applying MFRS 16 to leases previously classified
as operating lease under MFRS 117:
– applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months
of lease term as at 1 January 2019;
– excluded initial direct costs from measuring the right-of-use asset at the date of initial application; and
– used hindsight when determining the lease term if the contract contains options to extend or terminate the
lease.
277

31 DECEMBER 2019
35. ADOPTION OF NEW AND REVISED PRONOUNCEMENTS (CONTINUED)

i. MFRS 16 Leases (continued)
As a lessee (continued)
For leases that were classified as finance lease under MFRS 117, the carrying amounts of the right-of-use asset at
1 January 2019 are determined to be the same as the carrying amount of the lease asset under MFRS 117 immediately
before that date.
ii. Amendments to MFRS 123 Borrowing Costs (Annual Improvements 2015-2017 Cycle)
In previous years, borrowing costs relating to a specific qualifying assets were capitalised into the cost of the asset.
The capitalisation of borrowing costs ceased when substantially all activities necessary to prepare the qualifying
asset for its intended use or sale were completed. Any borrowing costs incurred subsequently were expensed off
to profit or loss.
Following the amendments, borrowing costs incurred after the completion of the specific qualifying asset is
capitalised into the general borrowings. Capitalisation rate is determined as the weighted average of the borrowing
costs applicable to all borrowings of the Group and the Company outstanding during the period.
The initial application of the above-mentioned pronouncements did not have any material impact to the financial
statements of the Group and the Company except as disclosed in Note 37.
36. PRONOUNCEMENTS YET IN EFFECT

The following pronouncements that have been issued by the Malaysian Accounting Standards Board will become
effective in future financial reporting periods and have not been adopted by the Group and the Company in these
financial statements:
Effective for annual periods beginning on or after 1 January 2020

Amendments to MFRS 3 Business Combinations (Definition of a Business)
Amendments to MFRS 9 Financial Instruments, MFRS 139 Financial Instruments: Recognition and Measurement and
MFRS 7 Financial Instruments: Disclosures – Interest Rate Benchmark Reform
Amendments to MFRS 101 Presentation of Financial Statements (Definition of Material)
Amendments to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors (Definition of Material)
Effective for a date yet to be confirmed

Amendments to MFRS 10 Consolidated Financial Statements: Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture
Amendments to MFRS 128 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
The Group and the Company are expected to apply the abovementioned pronouncements beginning from the respective
dates the pronouncements become effective. The initial application of the abovementioned pronouncements are not
expected to have any material impacts to the financial statements of the Group and the Company.
278

31 DECEMBER 2019
37. IMPACT OF THE ADOPTION OF PRONOUNCEMENTS

Since the Group and the Company applied the requirements of MFRS 16 retrospectively with the cumulative effect of
initial application at 1 January 2019 and amendments to MFRS 123 prospectively, there are no adjustments made to
the prior period presented.
a) Impact of the adoption of MFRS 16 Leases
The following table explains the difference between operating lease commitments disclosed applying MFRS 117
at 31 December 2018, and lease liabilities recognised in the statement of financial position at 1 January 2019.
Group Company
Operating lease commitments at 31 December 2018 as disclosed in

the financial statements 467,752 259,702
Discounted using the incremental borrowing rate at 1 January 2019 311,371 233,141
Recognition exemption for short-term leases (123) (123)
Recognition exemption for leases of low-value assets (813) (741)
Lease liabilities recognised at 1 January 2019 15 310,435 232,277
Adjustments at
1 January 2019
Group Company
RM’000 RM’000
Increase in assets 226,680 182,978

Decrease in equity 63,656 37,467
Increase in lease liabilities 310,435 232,277
Decrease in deferred tax liabilities 20,099 11,832
b) Impact of the adoption of Amendments to MFRS 123 Borrowing Costs (Annual Improvements 2015-2017
Cycle)
The initial application of the above-mentioned pronouncement did not have any material impact to the financial
statements of the Group and the Company.
38. NEW PRONOUNCEMENTS NOT APPLICABLE TO THE GROUP AND THE COMPANY
The MASB has issued a new pronouncement, MFRS 17 Insurance Contracts which is effective for annual periods
beginning on or after 1 January 2021. However, it is not relevant to the operations of the Group and the Company and
hence, no further disclosure is warranted.
279
INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF PETRONAS DAGANGAN BERHAD
(Company No. 198201008499 (88222-D))
(Incorporated in Malaysia)
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

OPINION
We have audited the financial statements of PETRONAS Dagangan Berhad, which comprise the statements of financial
position as at 31 December 2019 of the Group and of the Company, and the statements of profit or loss and other
comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company
for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as
set out on pages 200 to 279.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and
of the Company as at 31 December 2019, and of their financial performance and their cash flows for the year then ended
in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements
of the Companies Act, 2016 in Malaysia.
BASIS FOR OPINION
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on
Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of
the Financial Statements section of our auditors’ report. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
INDEPENDENCE AND OTHER ETHICAL RESPONSIBILITIES
We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct
and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’
Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in
accordance with the By-Laws and the IESBA Code.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the Group and of the Company for the current year. These matters were addressed in the context of our
audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
REVENUE RECOGNITION
Refer to page 227 (Note 2.17 Significant Accounting Policies) and page 249 (Note 19) to the financial statements.
The key audit matter
The main revenue streams of the Group are split into retail and commercial. Revenue recognition is a key audit matter due
to risk that revenue may be overstated arising from pressure faced by the Group in achieving performance targets as revenue
recognition has a direct impact on the results of the Group.
280

(Company No. 198201008499 (88222-D))
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
We performed the following audit procedures, among others, around revenue recognition:
• We tested the design and implementation as well as operating effectiveness of the Group’s controls relevant to recognition
of revenue;
• We assessed whether sales transactions either side of the statement of financial position date as well as credit notes
issued after year end are recognised in the correct period;
• We tested sales transactions recorded to the acknowledged customer delivery orders as an indication of transfer of
control on goods to ascertain validity of sales; and
• We involved our Information Risk Management specialist to test the overall general IT control environment and application
controls relevant to recognition of commercial and retail sales.
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORS’ REPORT THEREON
The Directors of the Company are responsible for the other information. The other information comprises the information
included in the Directors’ Report and Statement on Risk Management and Internal Control (but does not include the financial
statements of the Group and of the Company and our auditors’ report thereon), which we obtained prior to the date of this
auditors’ report, and the remaining parts of the annual report, which are expected to be made available to us after that date.
Our opinion on the financial statements of the Group and of the Company does not cover the other information and we
do not and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the
other information identified above and, in doing so, consider whether the other information is materially inconsistent with
the financial statements of the Group and of the Company or our knowledge obtained in the audit, or otherwise appears
to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this regard.
When we read the remaining parts of the annual report, if we conclude that there is a material misstatement therein, we
are required to communicate the matter to the Directors of the Company and take appropriate actions in accordance with
approved standards on auditing in Malaysia and International Standards on Auditing.
RESPONSIBILITIES OF THE DIRECTORS FOR THE FINANCIAL STATEMENTS

The Directors of the Company are responsible for the preparation of financial statements of the Group and of the Company
that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting
Standards and the requirements of the Companies Act, 2016 in Malaysia. The Directors are also responsible for such internal
control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the
Company that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the
ability of the Group and of the Company to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the
Company or to cease operations, or have no realistic alternative but to do so.
281

(Company No. 198201008499 (88222-D))
AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing,
we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of
the Group and of the Company.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the ability of the Group or of the Company to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of
the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause
the Group or the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company,
including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying
transactions and events in a manner that gives a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision
and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
282

(Company No. 198201008499 (88222-D))
AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit
of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters.
We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our auditors’ report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirements of the Companies Act, 2016 in Malaysia, we report that the subsidiaries of which we
have not acted as auditors are disclosed in Notes 32 to the financial statements.
OTHER MATTER
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies
Act, 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of
this report.
KPMG PLT Vengadesh A/L Jogarajah

(LLP0010081-LCA & AF 0758) Approval Number: 03337/12/2021 J
Chartered Accountants Chartered Accountant
Petaling Jaya
25 February 2020
283
ANALYSIS OF SHAREHOLDINGS
AS AT 20 FEBRUARY 2020
SHARE CAPITAL
Share Capital : RM993,454,000 comprising 993,454,000 ordinary shares

Class of Shares : Ordinary Shares
Voting Rights : One Vote Per Ordinary Share (On A Poll)
DISTRIBUTION OF SHAREHOLDINGS
No. of % of Total No. of % of Total

Size of Holdings Shareholders Shareholders Shares Shares
Less than 100 840 10.97 4,147 0.00

100 – 1,000 1,929 25.19 1,195,037 0.12
1,001 – 10,000 4,134 53.98 11,177,681 1.13
10,001 – 100,000 515 6.72 17,242,383 1.74
100,001 to less than 5% of issued shares 239 3.12 235,587,541 23.71
5% and above of issued shares 2 0.02 728,247,211 73.30
7,659 100.00 993,454,000 100.00
CLASSIFICATION OF SHAREHOLDERS
No. of Shareholders No. of Shares % of Total Shareholdings
Category Malaysian Foreign Malaysian Foreign Malaysian Foreign
• Individual 6,147 67 14,916,071 262,241 1.50 0.03

• Body Corporate
a. Banks/Finance Companies 42 0 103,990,900 0 10.46 0.00
b. Investment Trusts/
Foundation/Charities 1 0 1,400 0 0.00 0.00
c. Other types of companies 182 7 2,644,802 274,797 0.26 0.03
• Government Agencies/Institutions 7 0 7,418,300 0 0.75 0.00
• Nominees 589 617 775,058,157 88,887,332 78.02 8.95
• Others 0 0 0 0 0.00 0.00
6,968 691 904,029,630 89,424,370 90.99 9.01
284
LIST OF SUBSTANTIAL SHAREHOLDERS

Direct Indirect

Substantial Shareholders Shares Shareholding Shares Shareholding
CIMB Group Nominees (Tempatan) Sdn Bhd
(Exempt AN for Petroliam Nasional Berhad) 635,000,400 63.92 Nil Nil
(Exempt AN for Petroliam Nasional Berhad (PRF)) 200,900 0.02 Nil Nil
TOTAL 635,201,300 63.94 Nil Nil
Citigroup Nominees (Tempatan) Sdn Bhd
(Exempt AN for Employees Provident Fund) 103,217,411 10.39 Nil Nil
LIST OF DIRECTORS’ SHAREHOLDINGS

Direct Indirect

No. Name Shares Shareholding Shares Shareholding
1. Datuk Md Arif Mahmood Nil Nil Nil Nil

2. Azrul Osman Rani Nil Nil Nil Nil
3. Lim Beng Choon Nil Nil Nil Nil
4. Vimala V.R. Menon Nil Nil Nil Nil
5. Datuk Anuar Ahmad Nil Nil Nil Nil
6. Nuraini Ismail Nil Nil Nil Nil
7. Dato’ Sri Syed Zainal Abidin Syed Mohamed Tahir Nil Nil Nil Nil
8. Shafie Shamsuddin Nil Nil Nil Nil
9. Alvin Michael Hew Thai Kheam Nil Nil Nil Nil
10. Nirmala Doraisamy Nil Nil Nil Nil
LIST OF LEADERSHIP TEAM’S SHAREHOLDINGS

Direct Indirect

No. Name Shares Shareholding Shares Shareholding
1. Azrul Osman Rani Nil Nil Nil Nil

2. Norliwati Abdul Wahab Nil Nil Nil Nil
3. Wan Yussman Wan Yusof Nil Nil Nil Nil
4. Khalil Jaffri Muhammad Muri Nil Nil Nil Nil
5. Ramzulhakim Ramli Nil Nil Nil Nil
6. Pramela Vallinayagan Nil Nil Nil Nil
7. Hardeep Singh Kirpal Singh Nil Nil Nil Nil
8. Aadrin Azly Nil Nil Nil Nil
9. Mohd Shobri A. Bakar Nil Nil Nil Nil
10. Min Edina Mustapha Kamal Nil Nil Nil Nil
11. Ruziah Azdi Abdul Rahman Nil Nil Nil Nil
12. Naina Mohd Shukri Omar Nil Nil Nil Nil
13. Nur Nadia Mohd Nordin Nil Nil Nil Nil
14. Rosnan Hamzah Nil Nil Nil Nil
15. Mohd Imran M. Ashraf Nil Nil Nil Nil
285
LIST OF 30 LARGEST SHAREHOLDERS

No. of % of Total
Name Shares Shares
1. CIMB GROUP NOMINEES (TEMPATAN) SDN BHD 635,000,400 63.92

EXEMPT AN FOR PETROLIAM NASIONAL BERHAD
2. CITIGROUP NOMINEES (TEMPATAN) SDN BHD 93,246,811 9.39

EMPLOYEES PROVIDENT FUND BOARD
3. AMANAHRAYA TRUSTEES BERHAD 39,199,100 3.95

AMANAH SAHAM BUMIPUTERA

AMANAH SAHAM MALAYSIA

AMANAH SAHAM MALAYSIA 2 - WAWASAN
6. CARTABAN NOMINESS (ASING) SDN BHD 7,557,500 0.76

EXEMPT AN FOR STATE STREET BANK & TRUST COMPANY (WEST CLT OD67)
7. DB (MALAYSIA) NOMINEE (ASING) SDN BHD 6,285,100 0.63

BNYM SA/NV FOR PEOPLE’S BANK OF CHINA (SICL ASIA EM)
8. PERMODALAN NASIONAL BERHAD 5,988,200 0.60
9. PERTUBUHAN KESELAMATAN SOSIAL 5,700,000 0.57

AMANAH SAHAM BUMIPUTERA 2

GREAT EASTERN LIFE ASSURANCE (MALAYSIA) BERHAD (PAR 1)
12. HSBC NOMINEES (ASING) SDN BHD 4,734,640 0.48

JPMCB NA FOR VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND
13. LEMBAGA TABUNG HAJI 4,611,100 0.46
14. CARTABAN NOMINEES (TEMPATAN) SDN BHD 4,560,400 0.46

PAMB FOR PRULINK EQUITY FUND

AMANAH SAHAM MALAYSIA 3

JPMCB NA FOR VANGUARD EMERGING MARKETS STOCK INDEX FUND
286
No. of % of Total
Name Shares Shares

EMPLOYEES PROVIDENT FUND BOARD (AFFIN-HWG)
18. MAYBANK NOMINEES (TEMPATAN) SDN BHD 3,000,000 0.30

MAYBANK TRUSTEES BERHAD FOR PUBLIC ITTIKAL FUND (N14011970240)

PUBLIC ISLAMIC DIVIDEND FUND

AMANAH SAHAM BUMIPUTERA 3 – DIDIK

JPMBL SA FOR ROBECO CAPITAL GROWTH FUNDS

EMPLOYEES PROVIDENT FUND BOARD (CIMB PRIN)

MAYBANK TRUSTEES BERHAD FOR PUBLIC REGULAR SAVINGS FUND
(N14011940100)
24. CARTABAN NOMINEES (ASING) SDN BHD 2,319,000 0.23

GIC PRIVATE LIMITED FOR GOVERNMENT OF SINGAPORE (C)

MTRUSTEE BERHAD FOR PRINCIPAL DALI EQUITY GROWTH FUND
(UT-CIMB-DALI) (419455)

PUBLIC ISLAMIC EQUITY FUND

SETIAUSAHA KERAJAAN PULAU PINANG
28. STATE FINANCIAL SECRETARY SARAWAK 2,000,000 0.20

JPMCB NA FOR BLACKROCK INSTITUTIONAL TRUST COMPANY,
N.A. INVESTMENT FUNDS FOR EMPLOYEE BENEFIT TRUSTS
30. STATE SECRETARY KEDAH INCORPORATED 1,800,000 0.18
287
NET BOOK VALUE OF LAND

AND BUILDINGS OF THE COMPANY
Freehold Leasehold* Total Land Building
Net Book Net Book Net Book Net Book

Value of Value of Value of Value of
Land No. of Area Land No. of Area Land No. of Area Buildings
(RM'000) Lots (sq.ft.) (RM'000) Lots (sq.ft.) (RM'000) Lots (sq.ft.) (RM'000)
CENTRAL 400,968 113 4,174,589 288,040 92 19,662,162 689,008 205 23,836,751 219,634
REGION
NORTHERN 195,334 87 3,741,813 50,975 43 5,728,801 246,309 130 9,470,614 105,604
REGION
SOUTHERN 355,915 139 5,516,397 80,416 44 1,655,018 436,331 183 7,171,415 135,567
REGION
EAST COAST 68,368 37 1,593,158 38,466 53 1,915,981 106,834 90 3,509,138 85,143
REGION
SARAWAK 5,958 3 116,025 25,845 36 1,441,917 31,803 39 1,557,942 44,429
SABAH 215 1 49,223 33,472 37 2,534,198 33,687 38 2,583,421 34,797
Grand Total 1,026,758 380 15,191,205 517,214 305 32,938,077 1,543,972 685 48,129,281 625,174
* This excludes rights-of-use land
288
USAGE OF LAND*
Klang LPG Training

Valley Storage & Multi Centre &
Bulk Distribution Bottling Product Service Service Vacant Grand
Depot Terminal Plant Pipeline Station Station Land Total
CENTRAL REGION – 2 – 1 194 1 7 205

NORTHERN REGION 3 – – – 119 – 8 130
SOUTHERN REGION – – – – 175 – 8 183
EAST COAST REGION – – 1 – 82 – 7 90
SARAWAK 3 – – – 36 – – 39
SABAH 3 – – – 33 – 2 38
Grand Total 9 2 1 1 639 1 32 685
* This represents usage of freehold and leasehold land only, and exclude stations or facilities built on rights-of-use land
289
LIST OF TOP 10 LANDED PROPERTIES

Name of facilities and location Net Book Value (RM)
LUMUT FUEL TERMINAL 11,350,504

Lumut Port Industrial Park, Kg Acheh, 32000 Sitiawan, Perak
PSS JLN KOLAM AYER AMPANG 9,653,064

Lot 36904, Jalan Kolam Air Lama, 68000 Ampang, Kuala Lumpur
PASIR GUDANG LPG BOTTLING PLANT 8,951,300

Lot 108, Lorong Sawit 2, Kawasan Pelabuhan Johor, 81700 Pasir Gudang, Johor
PRAI LPG BOTTLING PLANT 6,086,424

Lot 93, Prai Industrial Area, 13600 Prai, Penang
PSS PLUS/BESRAYA HIGHWAY 5,584,835

KM 305, PLUS Arah Selatan, Lot 896, GRN 46223, Mukim Kajang, 43650 Hulu Langat, Selangor
PSS LEBUHRAYA SILK DENGKIL 5,172,962

Lot 44116, KM 26.8 Lebuhraya Silk (Arah Kajang), 43300 Seri Kembangan, Selangor
PSS JURU LAYBY NORTH BOUND 4,935,550

Lot 4290, MK.6, Lebuhraya Utara Selatan, Perhentian Juru, 14000 Bukit Mertajam, Penang
PSS KM0.7 BESRAYA 4,531,366

KM 0.7, Lebuhraya Sg. Besi, 43300 Seri Kembangan, Selangor
PSS KM 58 KL-KARAK HIGHWAY 4,331,107

Lot 8207 Mukim Bentong, Daerah Bentong, 28400 Bentong, Pahang
MELAKA LPG TERMINAL 3,944,716

Lot 1396-1399 Mukim Sungai Udang, Tangga Batu 76300 Melaka
290
CORPORATE INFORMATION
BOARD AUDIT COMMITTEE

BOARD OF DIRECTORS
Vimala V.R. Menon (Chairman)
Lim Beng Choon
Datuk Md Arif Mahmood
Datuk Anuar Ahmad
Chairman
Nuraini Ismail
Azrul Osman Rani NOMINATION AND REMUNERATION COMMITTEE

Managing Director/Chief Executive Officer Lim Beng Choon (Chairman)
Vimala V.R. Menon
Lim Beng Choon Shafie Shamsuddin
BOARD RISK COMMITTEE
Vimala V.R. Menon Alvin Michael Hew Thai Kheam (Chairman)
Independent Non-Executive Director Vimala V.R. Menon
Datuk Anuar Ahmad
Datuk Anuar Ahmad Shafie Shamsuddin
Independent Non-Executive Director Nirmala Doraisamy
Nuraini Ismail SENIOR INDEPENDENT DIRECTOR

Non-Independent Non-Executive Director Lim Beng Choon
Email: bengchoon.lim@petronas.com.my
Dato’ Sri Syed Zainal Abidin Syed Mohamed Tahir
Non-Independent Non-Executive Director COMPANY SECRETARIES
Nur Nadia Mohd Nordin (LS0009231)
Shafie Shamsuddin Yeap Kok Leong (MAICSA 0862549)
REGISTERED ADDRESS
Alvin Michael Hew Thai Kheam Tower 1, PETRONAS Twin Towers
Independent Non-Executive Director Kuala Lumpur City Centre
50088 Kuala Lumpur
Nirmala Doraisamy Malaysia
Independent Non-Executive Director Tel: (+603) 2051 5000
291
CORPORATE INFORMATION
BUSINESS ADDRESS PRINCIPAL BANKERS

Level 27-32, Tower 1 CIMB Bank Berhad
PETRONAS Twin Towers Malayan Banking Berhad
50088 Kuala Lumpur PLACE OF INCORPORATION AND DOMICILE
Malaysia Malaysia
Tel: (+603) 2051 5000
FORM OF LEGAL ENTITY
INVESTOR RELATIONS Incorporated on 5 August 1982 as a private company limited
Level 31, Tower 1 by shares under the Companies Act, 1965 and converted into
PETRONAS Twin Towers a public company limited by shares on 21 August 1993
50088 Kuala Lumpur STOCK EXCHANGE LISTING
Malaysia Listed on the Main Market of
Tel: (+603) 2331 1909 Bursa Malaysia Securities Berhad
Email: nurasyirin@petronas.com.my Listing date : 8 March 1994
Stock Name : PETDAG
SHARE REGISTRARS Stock Code : 5681
Boardroom Share Registrars Sdn Bhd Stock Sector : Consumer Products and Services
(Registration No.: 199601006647 (378993-D))
11th Floor, Menara Symphony OTHER TICKER CODES:
No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13 Reuters: PETR.KL
46200 Petaling Jaya Bloomberg: PETD.MK
Selangor Darul Ehsan
Malaysia CREDIT RATING
Tel : (+603) 7890 4700 (Helpdesk) Local Rating Agency
Fax : (+603) 7890 4670 Malaysian Rating Corporation Berhad
Email : BSR.Helpdesk@boardroomlimited.com MARC-1/S/AAA/S
AUDITORS WEBSITE
KPMG PLT (LLP0010081-LCA & AF 0758) www.mymesra.com.my
Chartered Accountants
10th Floor, KPMG Tower CUSTOMER SERVICE CENTRE
8, First Avenue, Bandar Utama (Mesralink)
47800 Petaling Jaya Tel : 1-300-88-8181
Selangor Darul Ehsan E-mail : mesralink@petronas.com.my
Malaysia
Tel: (+603) 7721 3388
Fax: (+603) 7721 3399
292
CORPORATE
DIRECTORY
5
3
1 HEAD OFFICE REGIONAL OFFICES

Level 27-32, Tower 1
2 Northern Region 5 Sarawak Region
PETRONAS Twin Towers
Lot No. 93 4th Floor
Prai Industrial Estate Wisma Naim
50088 Kuala Lumpur
13600, Prai, Pulau Pinang Lot 2679, Jalan Rock
Tel : (+603)-2051 5000
Tel : (+604)-390 7291/7201 93200, Kuching, Sarawak
Fax : (+604)-399 0211 Tel : (+6082)-255 200
Fax : (+6082)-412 712
3 Southern Region
2nd Floor
6 Sabah Region
Bangunan PETRONAS
Lot 7AF01-7AF13
Lot 12106, Bandar Baru UDA
Block A, Level 7
Km 7, Jalan Skudai
Karamunsing Complex
81200, Johor Bahru, Johor
88300, Kota Kinabalu, Sabah
Tel : (+607)-233 6000
Tel : (+6088)-525 777
Fax : (+607)-233 6001
4 Eastern Region
A-39 and A-43, 2nd Floor
Jalan Haji Abdul Aziz
25000, Kuantan, Pahang
Tel : (+609)-513 7022/7099
Fax : (+609)-514 4040
293
GRI CONTENT INDEX
GRI Page
Brief Description of the Disclosures
Standards number(s)
Organisational Profile
102-1 Name of the organisation 6
102-2 Activities, brands, products and services 8 to 9
102-3 Location of headquarters 293
102-4 Location of operations 12 to 13
102-5 Ownership and legal form 10
102-6 Markets served 8 to 9
102-7 Scale of the organisation 12, 13, 31,

55, 172
102-8 Information on employees and other workers 172
102-9 Supply chain 14 to 15
102-11 Precautionary Principle or approach 137 to 147
Strategy
102-14 Statement from senior decision-maker 18 to 23
Ethics and Integrity
102-16 Values, principles, standards, and norms of behaviour 7
Governance
102-18 Governance structure 107 to 109
Stakeholder Engagement
102-40 List of stakeholder groups 48 to 49
102-41 Collective bargaining agreements 181
102-42 Identifying and selecting stakeholders 48 to 49
102-43 Approach to stakeholder engagement 48 to 49
102-44 Key topics and concerns raised 48 to 49
294
GRI CONTENT INDEX
GRI Page
Standards number(s)
Reporting Practice
102-45 Entities included in the consolidated financial statements 275 to 276
102-46 Defining report content and topic boundaries 150 to 151
102-47 List of material topics 44 to 47
102-48 Restatements of information 44
102-50 Reporting period 1
102-51 Date of most recent report 1
102-52 Reporting cycle 1
102-55 GRI content index 294 to 296
102-56 External assurance 162, 280 to 283
Management Approach
103-1 Explanation of the material topic and its boundary 44 to 47
103-2 The management approach and its components 44 to 47
103-3 Evaluation of the management approach 44 to 47, 148,

156, 160, 165,
172, 180, 182,
186
Topic-Specific Disclosures
201-1 Direct economic value generated and distributed 156
201-2 Financial implications and other risks and opportunities due to climate change 42, 160
202-2 Proportion of senior management hired from the local community 90, 91,
100 to 103
203-2 Significant indirect economic impacts 157 to 159
204-1 Proportion of spending on local suppliers 156
205-2 Communication and training about anti-corruption policies and procedures 148 to 149
302-1 Energy consumption within the organisation 161
303-1 Water withdrawal by source 165
295
GRI CONTENT INDEX
GRI Page
Standards number(s)
305-1 Direct (Scope 1) GHG emissions 162
305-2 Energy indirect (Scope 2) GHG emissions 162
306-1 Water discharge by quality and destination 165
306-2 Waste by type and disposal method 164
306-3 Significant spills 164
401-1 New employee hires and employee turnover 172
401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees 176 to 177
401-3 Parental leave 176
403-1 Workers representation in formal joint management–worker health and safety committees 167
403-2 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number 168
of work-related fatalities
404-1 Average hours of training per year per employee 173
404-2 Programmes for upgrading employee skills and transition assistance programmes 173 to 175
405-1 Diversity of governance bodies and employees 90, 100 to 103,

172
405-2 Ratio of basic salary and remuneration of women to men 180
413-1 Operations with local community engagement, impact assessments, and development programmes 182 to 185
296
GLOSSARY
<IR> Integrated Report GHG Greenhouse Gas

ABC Anti-Bribery and Corruption GJ GigaJoule
AGM Annual General Meeting Group PETRONAS Dagangan Berhad and its subsidiaries
AIDS Acquired Immune Deficiency Syndrome HEMP Hazards and Effects Management Process
AMG Aufrecht, Melcher and Großaspach HIV Human Immunodeficiency Virus
ASB Asian Supply Base Sdn Bhd HRM Human Resource Management
B2B Business to Business HSE Health, Safety and Environment
B2C Business to Consumer HSE MS Health, Safety and Environment Management System
BAC Board Audit Committee IAD Internal Audit Department
bbl Barrel IIRC International Integrated Reporting Council
BCM Business Continuity Management INED Independent Non-Executive Director
BCMF Business Continuity Management Framework ISO International Standards Organisation
BCP Business Continuity Plans IR Investor Relations
BEE Board Effectiveness Evaluation IT Information Technology
Board The Board of Directors of PDB JV Joint Venture
BRC Board Risk Committee KAPENAS Kesatuan Kakitangan Petroliam Nasional Berhad
BRR Business Risk Reports KLIA Kuala Lumpur International Airport
Bursa Bursa Malaysia Securities Berhad KPI Key Performance Indicator
Malaysia KVDT Klang Valley Distribution Terminal
CA Companies Act LNG Liquefied Natural Gas
CFO Chief Financial Officer LOA Limits of Authority
CMT Crisis Management Team LOPC Loss of Primary Containment
CO2 Carbon Dioxide LPG Liquefied Petroleum Gas
CO2e Carbon Dioxide Equivalent LRT Light Rail Transit
CoBE Code of Conduct and Business Ethics LT Leadership Team
CoCHR Contractors Code of Conduct on Human Rights LWP Leave Without Pay
COI Conflict of Interest MARC Malaysian Rating Corporation Berhad
COSO Committee of Sponsoring Organisations of the MASB Malaysian Accounting Standards Board
Treadway Commission MCCG 2017 Malaysian Code on Corporate Governance 2017
CSR Corporate Social Responsibility MD/CEO Managing Director/Chief Executive Officer
EEVs Energy Efficient Vehicles MEP Market Execution Partners
EMT Emergency Management Team MFRS Malaysian Financial Reporting Standard
EPF Employees Provident Fund Mil Million
EPM Employee Performance Management MMLR Main Market Listing Requirements
EPS Earnings per Share MPP-KVDT Multi-Product Pipeline and Klang Valley Distribution
ERM Enterprise Risk Management Terminal
FBM KLCI FTSE Bursa Malaysia Kuala Lumpur Composite Index MRT Mass Rapid Transit
FCF Financial Control Framework MSWG Minority Shareholders Watch Group
FTSE Financial Times Stock Exchange MT Metric Tonnes
FWO Flexible Work Options MWh Megawatt-hour
GDP Gross Domestic Product NDR(s) Non-Deal Roadshows
297
GLOSSARY
NEDs Non-Executive Directors RM Ringgit Malaysia

NGV Natural Gas Vehicle RMGC Risk Management and Governance Committee
NINED Non-Independent Non-Executive Director RMD Risk Management Department
Nox Nitrogen Oxide RON Research Octane Number
NPS Net Promoter Score RPTs Related Party Transactions
NRC Nomination and Remuneration Committee RRPTs Recurrent Related Party Transactions
PBT Profit Before Tax SDG Sustainable Development Goals
PCB PETRONAS Cultural Beliefs SME Small and Medium Enterprise
PDB PETRONAS Dagangan Berhad SORMIC Statement on Risk Management and Internal Control
PETRONAS Petroliam Nasional Berhad (PETRONAS) Sox Sulphur Oxide
PIMTCL PETRONAS International Marketing (Thailand) Co. Ltd. TOR Terms of Reference
PLMMSB PETRONAS Lubricants Marketing (Malaysia) Sdn Bhd U.S. United States of America
PS PETRONAS Stations UN SDG United Nations Sustainable Development Goals
PST PETRONAS Shell Terminal USD United States Dollar
QAIP Quarterly Assurance and Improvement Programme VSD Variable Speed Drives
R&D Research and Development WBP Whistleblowing Policy
298
NOTICE OF
TH
38 ANNUAL GENERAL MEETING
PETRONAS DAGANGAN BERHAD
Registration No.: 198201008499 (88222-D)
NOTICE IS HEREBY GIVEN THAT the 38th Annual General Meeting (AGM) of PETRONAS Dagangan
Berhad (“the Company”) will be held at Exhibition Hall 1, Ground Floor, Kuala Lumpur Convention
Centre, Jalan Pinang, 50088 Kuala Lumpur, Malaysia on Wednesday, 10 June 2020 at 10.00 a.m.
for the following businesses:
AGENDA
ORDINARY BUSINESS
1. To receive the Audited Financial Statements for the financial year ended 31 December 2019 together
with the Reports of the Directors and Auditors thereon.
Please refer to Explanatory Note A
2. To re-elect the following Directors who were appointed pursuant to Article 100 of the Company’s
Constitution:
(a) Nirmala Doraisamy (Resolution 1)
(b) Azrul Osman Rani (Resolution 2)
Please refer to Explanatory Note B
3. To re-elect the following Directors who retire by rotation pursuant to Article 107 of the Company’s
Constitution:
(a) Shafie Shamsuddin (Resolution 3)
(b) Alvin Michael Hew Thai Kheam (Resolution 4)
Please refer to Explanatory Note B
4. To approve the Directors’ Fees and Allowances payable to the Non-Executive Directors of up to (Resolution 5)
RM2,300,000 with effect from 11 June 2020 until the next AGM of the Company.
Please refer to Explanatory Note C
5. To approve the re-appointment of KPMG PLT, as Auditors of the Company for the financial year (Resolution 6)
ending 31 December 2020 and to authorise the Directors to fix their remuneration.
Please refer to Explanatory Note D
SPECIAL BUSINESS
To consider and, if thought fit, to pass the following Ordinary Resolution pursuant to Article 98 of the
Company’s Constitution:
6. Proposed Increase of Number of Directors (Resolution 7)

“THAT the maximum number of Directors of the Company which is currently fixed at not more
than ten (10) as set out in Article 98 of the Company’s Constitution be hereby increased to twelve
(12) with immediate effect.”
Please refer to Explanatory Note E
7. To transact any other business for which due notice shall have been given in accordance with the
Companies Act 2016 and the Company’s Constitution.
299
NOTICE OF
38TH ANNUAL GENERAL MEETING
FURTHER NOTICE IS HEREBY GIVEN THAT for the purpose of determining a member who shall be entitled to attend and
vote at the forthcoming 38th AGM, the Company shall be requesting the Record of Depositors as at 3 June 2020. Only a
depositor whose name appears on the Record of Depositors as at 3 June 2020 shall be entitled to attend and vote at the
meeting as well as for appointment of proxy(ies) to attend and vote on his/her stead.
BY ORDER OF THE BOARD
NUR NADIA MOHD NORDIN (LS0009231)

YEAP KOK LEONG (MAICSA 0862549)
Company Secretaries
Kuala Lumpur
31 March 2020
NOTES:
Proxy and/or Authorised Representative
1. A member of the Company entitled to attend, participate, speak and vote at the meeting may appoint not more than
two proxies to attend, participate, speak and vote on his behalf provided that the member specifies the proportion of
the member’s shareholdings to be represented by each proxy. There shall be no restriction as to the qualification of
the proxy.
2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories)
Act, 1991 (“SICDA”), it may appoint at least one proxy in respect of each Securities account it holds with ordinary shares
of the Company standing to the credit of the said Securities accounts.
3. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for
the omnibus account, there is no limit to the number of proxies which the exempt authorised nominee may appoint
in respect of each omnibus account it holds. An exempt authorised nominee refers to an authorised nominee defined
under the SICDA which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.
4. Where a member or the authorised nominee appoints two proxies, or where an exempt authorised nominee appoints
two or more proxies, the proportion of shareholdings to be represented by each proxy must be specified in the
instrument appointing the proxies.
5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised
in writing or if the appointer is a corporation either under seal or under the hand of an officer or attorney duly authorised
and must be deposited with Tricor Investor & Issuing House Services Sdn Bhd at Unit 32-01, Level 32, Tower A, Vertical
Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia or the Customer Service
Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur
or alternatively to submit your electronic proxy form via TIIH Online at https://tiih.online not less than 48 hours before
the time fixed for holding the meeting. Please refer to the Annexure of the Proxy Form in the Administrative Details for
submission of electronic proxy form.
6. If the Proxy Form is signed under the hand of an officer duly authorised, it should be accompanied by a statement reading
“signed as authorised officer under Authorisation Document which is still in force, no notice of revocation having been
received”. If the Proxy Form is signed by an attorney duly appointed under a power of attorney, it should be accompanied
by a statement reading “signed under Power of Attorney which is still in force, no notice of revocation having been
received”. A copy of the Authorisation Document or the Power of Attorney, which should be valid in accordance with
the laws of the jurisdiction in which it was created and is exercised, should be enclosed with this Proxy Form.
7. Pursuant to Paragraph 8.29A of Main Market Listing Requirements (MMLR) of Bursa Malaysia Securities Berhad (Bursa
Malaysia), all resolutions set out in the Notice of 38th AGM will be put to vote on a poll.
300
NOTICE OF
TH
38 ANNUAL GENERAL MEETING
8. Explanatory Notes
Note A
Audited Financial Statements for the Financial Year Ended 31 December 2019
The Audited Financial Statements are laid before the shareholders pursuant to the provision of Section 244(2)(a) of the
Companies Act 2016 for discussion only. The Audited Financial Statements do not require shareholders’ approval and
hence, will not be put forward for voting.
Note B
Re-election of Directors who retire in accordance with Article 100 and Article 107 of the Company’s Constitution
Article 100 of the Company’s Constitution provides that the Board shall have power to appoint any person to be a
Director to fill a casual vacancy or as an addition to the existing Board, and that any Director so appointed shall hold
office until the next following AGM and shall then be eligible for re-election.
Article 107 of the Company’s Constitution provides that one-third of the Directors of the Company for the time being
shall retire by rotation at an AGM of the Company provided always that all Directors, shall retire from office once at
least in each three years but shall be eligible for re-election at the AGM. A Director retiring at a meeting shall retain
office until the close of the meeting whether adjourned or not.
At the forthcoming 38th AGM, three Directors will be retiring in accordance with Article 107 of the Company’s Constitution
and they are Dato’ Sri Syed Zainal Abidin Syed Mohamed Tahir, Shafie Shamsuddin and Alvin Michael Hew Thai Kheam.
Whilst Shafie Shamsuddin and Alvin Michael Hew Thai Kheam, being eligible for re-election, have given their consent
for re-election at the AGM, Dato’ Sri Syed Zainal Abidin Syed Mohamed Tahir has expressed his decision to retire at
close of the AGM. In view thereof, Dato’ Sri Syed Zainal Abidin Syed Mohamed Tahir will retire from office upon the
conclusion of the 38th AGM of the Company.
The Board has endorsed the Nomination and Remuneration Committee’s recommendation that the Directors who
retire in accordance with Article 100 and Article 107 of the Company’s Constitution are eligible to stand for re-election.
The profiles of the retiring Directors are set out in the Profile of the Board of Directors on pages 92 to 97 (inclusive)
of the 2019 <IR>.
Note C
Non-Executive Directors’ Fees and Allowances
Pursuant to Section 230(1) of the Companies Act 2016, the fees of the directors, and any benefits payable to the
directors including any compensation for loss of employment of a director or former director of a public company or
a listed company and its subsidiaries, shall be approved at a general meeting.
The fees and allowances structure of the Non-Executive Directors (NEDs) of the Company is as follows:
• Monthly fixed fees for duties as Director/Chairman;

• Meeting allowance for each Board/Board Committee attended; and
• Fuel allowance.
The Directors’ fees and meeting allowances for Non-Independent Non-Executive Directors who are also employees
of Petroliam Nasional Berhad (PETRONAS) are paid directly to PETRONAS.
301
NOTICE OF
38TH ANNUAL GENERAL MEETING
The shareholders at the last AGM held on 25 April 2019 approved the Directors’ fees of up to RM2,300,000 for the
period from 26 April 2019 until the next AGM of the Company. The Directors’ fees and other benefits paid to NEDs for
the said period was RM1,928,997.20.
The Directors’ fees and allowances for the NEDs for the period from 11 June 2020 until the conclusion of the next
AGM of the Company (Mandate Period) are estimated not to exceed RM2,300,000. The calculation is based on the
estimated number of scheduled Board and Board Committees meetings and on assumption that all the NEDs will
remain in office until the next AGM. This resolution is to facilitate payment of the Directors’ fees for the Mandate Period.
The Board will seek shareholders’ approval at the next AGM in the event the Directors’ fees and allowances proposed
are insufficient.
Details of the Directors’ fees and allowances paid to the NEDs for the financial year ended 31 December 2019 are
published in the Corporate Governance Report on PDB’s corporate website at www.mymesra.com.my.
Note D
Re-appointment of Auditors
In May 2019, the Board Audit Committee (BAC) has endorsed the adoption of PETRONAS Framework on External
Auditors (the Framework) for PDB effective June 2019. One of the requirements under the Framework is for the BAC
to carry out annual assessment on the suitability, objectivity, independence and performance of the external auditors
based on the following four key areas:
a. quality of the audit engagement team and services;

b. adequacy of resources;
c. quality of communication and interaction; and
d. independence, objectivity and professional skepticism.
Based on the assessment conducted, KPMG PLT has also met the criteria prescribed by Paragraph 15.21 of the MMLR
of Bursa Malaysia.
The Board at its meeting held on 25 February 2020 recommended the re-appointment of KPMG PLT as the External
Auditors of the Company for the financial year ending 31 December 2020 for approval by the shareholders under
Resolution 6.
Note E
Proposed Increase of Number of Directors
The Ordinary Resolution, if passed, shall allow the Company to increase the number of Board members to be in line
with the dynamic growth of the business of Company and to provide diverse views as well as to facilitate effective
decision-making and constructive deliberation at the Board/Board Committees meetings.
9. Other Information
The Company has engaged independent scrutineers to count, audit and validate the votes for each proposal presented
to shareholders.
302
ADMINISTRATIVE DETAILS
PETRONAS DAGANGAN BERHAD 38TH ANNUAL GENERAL MEETING
REGISTRATION
1) Registration will start at 8.00 a.m. on 10 June 2020 at Exhibition Hall 2, Ground Floor, Kuala Lumpur Convention Centre,
Jalan Pinang, 50088 Kuala Lumpur, Malaysia.
2) Please produce your original MyKad/passport to the registration staff for verification. Please make sure to collect your
MyKad/passport thereafter.
3) Upon verification, you are required to write your name and sign on the Attendance List placed on the registration table.
4) You will also be given an identification wristband with personalised passcode for the voting purpose. No person will
be allowed to enter the meeting hall without the identification wristband. There will be no replacement in the event
that you lose or misplace the identification wristband.
5) No person will be allowed to register on behalf of another person, even with the original MyKad/passport of that person.
6) The registration counter will handle only verification of identity and registration.
7) After registration, please vacate the registration area immediately.
PROXY
8) A member entitled to attend and vote is entitled to appoint proxy/proxies, to attend and vote instead of him. If you are
unable to attend the meeting and wish to appoint a proxy to vote on your behalf, please submit your Proxy Form in
accordance with the notes and instructions printed therein.
9) The appointment of a proxy may be made in hard copy form or by electronic form. If you wish to submit your
appointment in hard copy form, the proxy form must be deposited with Tricor Investor & Issuing House Services Sdn
Bhd at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200
Kuala Lumpur, Malaysia or the Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar
South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur or alternatively to submit your electronic proxy form via TIIH Online
at https://tiih.online not less than 48 hours before the time fixed for holding the meeting. Please refer to the Annexure
of the Proxy Form in the Administrative Details for submission of electronic proxy form.
10) If you wish to attend the meeting yourself, please do not submit any Proxy Form. You will not be allowed to attend
the meeting together with a proxy appointed by you.
11) If you have submitted your Proxy Form prior to the meeting and subsequently decided to attend the meeting yourself,
please proceed to the Help Desk to revoke the appointment of your proxy.
POLL VOTING
12) The voting at the 38th AGM will be conducted by poll in accordance with Paragraph 8.29A of MMLR of Bursa Malaysia.
The Company has appointed Tricor Investor & Issuing House Services Sdn Bhd (Tricor) as Poll Administrator to conduct
the poll by way of electronic voting (e-voting) and Boardroom Share Registrars Sdn Bhd as Scrutineers to verify the
poll results.
13) During the 38th AGM, the Chairman will invite the Poll Administrator to brief you on the e-voting procedures using
smartphone or tablet (voting device).
303
14) Members and proxies who wish to use their own voting device to vote are required to take note of the following
e-voting requirements and procedures:
(a) Download Tricor e-Vote App (Version 1.3.7) onto your voting device before attending the meeting. Tricor e-Vote
App download is available at no cost from Google Play Store or Apple App Store. If you require assistance on how
to download the Tricor e-Vote App, please contact Tricor officers listed in Item 21 below.
(b) When you arrive at the meeting venue, connect to the Wi-Fi network provided by Tricor for use and access to
Tricor e-Vote App:
Username: Tricor_eVote Password: petdag1006
(c) Use the camera function of your voting device to capture the passcode on your wristband to access Tricor e-Vote App.
(d) Once login, you can proceed to vote on the resolutions and submit your votes at any time from 10.30 a.m. but
before the completion of the voting session which will be announced by the Chairman during the meeting.
15) Members and proxies who do not have voting device to submit their votes, they can do so at the voting kiosks. The
Chairman will announce the commencement of voting at the kiosks upon conclusion of the deliberations of all the
businesses transacted at the 38th AGM. Members and proxies will be directed to the kiosks which are equipped with voting
devices and polling officers are stationed to assist. The duration of voting at the kiosks is estimated to be 10 minutes.
16) Upon completion of the voting session for the 38th AGM, the Scrutineers will verify and announce the poll results
followed by the Chairman’s declaration whether the resolutions are duly passed.
REMOTE PARTICIPATION AND VOTING (RPV)
17) Members (individuals only) who are unable or do not wish to be physically present at Kuala Lumpur Convention
Centre will have the option to participate and vote remotely at the 38th AGM via the RPV facilities which are available
on Tricor’s TIIH Online website at https://tiih.online.
18) If you wish to engage in remote participation through live streaming and online remote voting at the 38th AGM using
the RPV facilities, please read and follow the procedures below:
Procedure Action
BEFORE THE AGM DAY
(a) Register as a • Using your computer, access the website at https://tiih.online. Register as a user under the
user with TIIH “e-Services”. Refer to the tutorial guide posted on the homepage for assistance
Online • If you are already a user with TIIH Online, you are not required to register again. You will
receive an e-mail to notify you that the remote participation is available for registration at
TIIH Online.
(b) Submit your • Registration is open from 10.00 a.m. Tuesday, 31 March 2020 up to 10.00 a.m. Monday,
request 8 June 2020.
• Login in with your user ID and password and select the corporate event: “(REGISTRATION)
PETRONAS DAGANGAN 38TH AGM REMOTE PARTICIPATION”.
• Read and agree to the Terms and Conditions and confirm the Declaration.
• Insert the CDS account number and indicate the number of shares.
• Submit to register your remote participation.
• System will send an e-mail to notify that your registration for remote participation is received
and will be verified.
• After verification of your registration against the General Meeting ROD as at 3 June 2020, the
system will send you an e-mail to approve or reject your registration for remote participation.
304
Procedure Action
ON THE AGM DAY
(c) Login to TIIH • Login with your user ID (i.e e-mail address) and password for remote participation at the
Online 38th AGM at any time from 9.40 a.m. i.e. 20 minutes before the commencement of meeting
at 10.00 a.m. on Wednesday, 10 June 2020.
(d) Participate • Select the corporate event: “(LIVE STREAMING MEETING) PETRONAS DAGANGAN 38TH
through Live AGM” to engage in the proceedings of the 38th AGM remotely.
Streaming • If you have any question for the Chairman/Board, you may use the query box to transmit
your question. The Chairman/Board will try to respond to relevant questions submitted by
remote participants during the 38th AGM. If there is time constraint, the responses will be
e-mailed to you at the earliest possible, after the meeting.
• Take note that the quality of the live streaming is dependent on the bandwidth and stability
of the internet connection at the location of the remote participants.
(e) Online • Select the corporate event: “(REMOTE VOTING) PETRONAS DAGANGAN 38TH AGM”.
Remote • Read and agree to the Terms and Conditions and confirm the Declaration.
Voting • Voting session commences from 10.30 a.m. Wednesday, 10 June 2020 until a time when
the Chairman announces the completion of the voting session at the 38th AGM venue.
• Select the CDS account that represents your shareholdings.
• Indicate your votes for the resolutions that are tabled for voting.
• Confirm and submit your votes.
(f) End of Upon the announcement by the Chairman on the closure of the 38th AGM, the Live Streaming
remote will end.
CORONAVIRUS DISEASE (COVID-19) OUTBREAK

19) As you may be aware, the COVID-19 has infected more than 500,000 people globally and there are already 2,161 cases
(as at 27 March 2020) in Malaysia. In view of the COVID-19 outbreak, we advise members to take advantage of the RPV
facilities (in items 17 and 18 above) to attend the 38th AGM remotely as a precautionary measure. You may also consider
appointing Chairman of the meeting as your proxy to attend and vote on your behalf at the forthcoming 38th AGM.
If you have travelled overseas to China, South Korea, Japan, Italy, Iran and other affected countries (as and when
announced by the Ministry of Health) in the past 14 days prior to the date of the 38th AGM or if you are unwell with
sore throat/fever/flu/cough/shortness of breath, please quarantine yourself at home. Under such circumstances, you
are advised to attend the 38th AGM remotely using the RPV facilities.
20) Your safety is the Company’s priority. As a precautionary measure, we will be conducting temperature checks on all
persons upon arrival at the AGM venue. If a member has high temperature or showed symptoms of respiratory illness
such as coughing and sneezing, we would strongly advise him/her not to attend the 38th AGM.
ENQUIRY
21) If you have any enquiry in relation to printed copy, proxy form and RPV facilities prior to the meeting, please contact
the following officers during office hours:
Tricor Investor & Issuing House Services Sdn Bhd Telephone Number
Registration No. 197101000970 (11324-H) General Line 603-2783 9299
Unit 32-01, Level 32, Tower A
• Puan Ros Sakila Bahari 603-2783 9277
Vertical Business Suite, Avenue 3,
Bangsar South No. 8, Jalan Kerinchi • Encik Muhammad Ashraff bin 603-2783 9276
59200 Kuala Lumpur, Malaysia Mohd Khaizan
Fax Number 603-2783 9222
305
HELP DESK
22) Please proceed to the PDB’s Help Desk for any clarification or enquiry.
23) Poll Administrator’s Help Desk will handle the revocation of a proxy’s appointment.
PARKING
24) Please take note that PDB will not be providing cash reimbursement for parking. Instead, you are advised to park at
Kuala Lumpur Convention Centre or Suria KLCC. Please bring your original parking ticket for validation at the counter
in Exhibition Hall 2.
25) By validating the parking ticket, you will not be charged for parking when you leave. Please be advised, that the parking
ticket expires at 3.00 p.m. on 10 June 2020. Any additional costs incurred for parking after 3.00 p.m. will not be borne
by PDB.
26) Please be advised that PDB will not reimburse any parking costs incurred at any other locations. As such, please observe
the abovementioned parking area.
2019 INTEGRATED REPORT
27) PDB’s Integrated Report for the Financial Year 2019 (IR 2019) is available on:
https://www.mymesra.com.my/investor-relations/integrated-reportannual-report-and-financial-performances/integrated-
report-annual-report
28) You may request for a printed copy of the IR 2019 at https://tiih.online by selecting “Request for Annual Report” under
the “Investor Services”. Limited copies of the IR 2019 will be available for collection on a first come first serve basis,
on the date of the 38th AGM.
29) In light of the Malaysian Government’s announcements on 16 March 2020 and 25 March 2020 relating to the Movement
Restriction Order effective 18 March 2020 to 14 April 2020 (or any extension thereof), there may be some delay in the
delivery of the hardcopies of the IR 2019, as requested by the shareholders. The hardcopies will be delivered once they
are made available to the Company.
30) Nevertheless, we hope you would consider the environment before you decide to print the above reports or request
for the printed copy of the IR 2019. The environmental concerns like global warming, deforestation, climate change
and many more affect every human, animal and nation on this planet.
306
ANNEXURE
ELECTRONIC SUBMISSION OF PROXY FORM

VIA TIIH ONLINE
Dear shareholders,
We are pleased to inform that you as a shareholder can have the option to submit your proxy forms by electronic means
through our system, TIIH Online (“e-Proxy”).
TIIH Online is an application that provides an online platform for shareholders (individuals only) to submit document/form
electronically which includes proxy form in paperless form (“e-Submission”). Once you have successfully submitted your
e-Proxy form, you are no longer required to complete and submit the physical proxy form to the company or Tricor office.
To assist you on how to engage with e-Proxy, kindly read and follow the guidance notes which are detailed below:
1. Sign up as user of TIIH Online
Using your computer, access our website at https://tiih.online
Sign up as a user by completing the registration form, registration is free
Upload a softcopy of your MyKad (front and back) or your passport
Administrator will approve your registration within one working day and notify you via email
Activate your account by re-setting your password
Notes: (i) If you are already a user of TIIH Online, you are not required to sign up again
(ii) An email address is allowed to be used once to register as a new user account, and the same email cannot
be used to register another user account
(iii) At this juncture, only individual security holders are offered to register as user and participate in e-Proxy
2. Proceed with submission of e-Proxy
After the release of the Notice of Meeting by the Company, login with your user name (i.e. e-mail address) and
password
Select the corporate event: “Submission of Proxy Form”
Read and agree to the Terms & Conditions and confirm the Declaration
Select/insert the CDS account number and indicate the number of shares for your proxy(s) to vote on your behalf
Appoint your proxy(s) or chairman and insert the required details of your proxy(s)
Indicate your voting instructions – FOR or AGAINST, otherwise your proxy will decide your vote
Review & confirm your proxy(s) appointment
Print e-proxy for your record
Should you need assistance on our e-Submission, please contact us. Thank you.
Tricor Investor & Issuing House Services Sdn Bhd Telephone No: 03-27839299
Unit 32-01, Level 32, Tower A, Vertical Business Suite, Fax No: 03-27839222
Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, E-mail: is.enquiry@my.tricorglobal.com
59200 Kuala Lumpur, Malaysia
307
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PROXY FORM
PETRONAS DAGANGAN BERHAD (Registration No.: 198201008499 (88222-D))
FOR THE 38TH ANNUAL GENERAL MEETING
Number of Ordinary Shares Held
CDS Account Number
I/We NRIC/Passport No./Company No.

(full name in block letters)
of Telephone No.
(full address)
being a member of PETRONAS Dagangan Berhad (the Company) hereby appoint:

Full Name (in block letters) NRIC/Passport No. Proportion of Shareholdings
No. of Shares %
Full Address
and/or (delete as appropriate)

Full Name (in block letters) NRIC/Passport No. Proportion of Shareholdings
No. of Shares %
Full Address
or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the 38th Annual General
Meeting (AGM) of the Company to be held at Exhibition Hall 1, Ground Floor, Kuala Lumpur Convention Centre, Jalan Pinang, 50088
Kuala Lumpur, Malaysia on Wednesday, 10 June 2020 at 10.00 a.m. and at any adjournment thereof.
Resolutions Ordinary Business For Against
1 Re-election of Nirmala a/p Doraisamy as a Director
2 Re-election of Azrul bin Osman Rani as a Director
3 Re-election of Shafie bin Shamsuddin as a Director
4 Re-election of Alvin Michael Hew Thai Kheam as a Director
5 Directors’ Fees and Allowances of up to RM2,300,000 with effect from 11 June 2020 until
the next Annual General Meeting of the Company payable to the Non-Executive Directors
6 Re-appointment of KPMG PLT as Auditors of the Company.
Resolution Special Business For Against
7 Proposed Increase of Number of Directors

* Please refer to the Notice of Annual General Meeting for full details of the proposed Resolutions.
(Please indicate with an “X” in the spaces provided whether you wish your vote to be casted for or against the Resolutions. In the
absence of specific directions, your proxy will vote or abstain as he/she thinks fit)
Date:
Signature(s)/Common Seal of Shareholder(s)
Notes:
1. A member of the Company entitled to attend, participate, speak and vote at the meeting may appoint not more than two proxies to attend, participate, speak and
vote on his behalf provided that the member specifies the proportion of the member’s shareholdings to be represented by each proxy. There shall be no restriction
as to the qualification of the proxy.
2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 (“SICDA”), it may appoint at least
one proxy in respect of each Securities account it holds with ordinary shares of the Company standing to the credit of the said Securities accounts.
3. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for the omnibus account, there is no limit to the
number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to an
authorised nominee defined under the SICDA which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.
4. Where a member or the authorised nominee appoints two proxies, or where an exempt authorised nominee appoints two or more proxies, the proportion of
shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.
5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if the appointer is a corporation
either under seal or under the hand of an officer or attorney duly authorised and must be deposited with Tricor Investor & Issuing House Services Sdn Bhd at Unit
32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia or the Customer Service Centre at
Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur or alternatively to submit your electronic proxy form
via TIIH Online at https://tiih.online not less than 48 hours before the time fixed for holding the meeting. Please refer to the Annexure of the Proxy Form in the
Administrative Details for submission of electronic proxy form.
6. If the Proxy Form is signed under the hand of an officer duly authorised, it should be accompanied by a statement reading “signed as authorised officer under
Authorisation Document which is still in force, no notice of revocation having been received”. If the Proxy Form is signed by an attorney duly appointed under a power
of attorney, it should be accompanied by a statement reading “signed under Power of Attorney which is still in force, no notice of revocation having been received”.
A copy of the Authorisation Document or the Power of Attorney, which should be valid in accordance with the laws of the jurisdiction in which it was created and is
exercised, should be enclosed with this Proxy Form.
7. Pursuant to Paragraph 8.29A of Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all resolutions set out in the Notice of 38th AGM will be put to
vote on a poll.
FOLD HERE
AFFIX STAMP
HERE
Tricor Investor & Issuing House Services Sdn Bhd

Unit 32-01, Level 32, Tower A
Vertical Business Suite, Avenue 3, Bangsar South
No. 8, Jalan Kerinchi, 59200 Kuala Lumpur
Malaysia
FOLD HERE
PETRONAS Dagangan Berhad
198201008499 (88222-D)
Level 27-32, Tower 1, PETRONAS Twin Towers,

Kuala Lumpur City Centre,
50088 Kuala Lumpur
Tel: (03) 2051 5000
www.mymesra.com.my

Petronas Dagangan BHD Ar 2019

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Petronas Dagangan BHD Ar 2019

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PETRONAS DAGANGAN BERHAD INTEGRATED REPORT 2019

“We are committed to add value to our customers

OUR KEY OPERATIONS

VALUE CREATED BY OUR KEY OPERATIONS

WHO WE ARE AND WHAT WE DO

Over and above this, we strive to create

OUR KEY OPERATIONS

OPERATIONAL EXCELLENCE RESULT 2 (OER2) IS A METHODOLOGICAL APPROACH TOWARDS

Embarked on OER2 to improve Operating Improved On-Time Performance Index

Reduced: Maintained Inventory Days at the

Challenges Our Response

OUR KEY OPERATIONS

1. To ensure a. Inaugural Supply and Distribution Division a. Enhanced emergency response

“Our achievements in 2019 are the result of putting the

Recorded higher sales volume Upgraded: Introduced Makan@Mesra

Challenges Our Response

• Focused and targeted marketing campaigns to attract customers

• Increased attractiveness and flexibility of loyalty programmes

• Enhanced offerings and established strategic partnerships

OUR TRANSFORMATION OF PETRONAS STATIONS FOCUSES ON FIVE KEY VALUE PROPOSITIONS

Ensuring a Cleaner, Creating Improving Providing Delivering

c. Introduction of ROVR • 9 ROVR mobile trucks serving B2B

e. Established new strategic partnerships • Secured ~90 new partners

f. Launched Mesra Redemption Portal • Mesra points redeemable with 81

OUTLOOK AND PROSPECTS

“Our Commercial Business continues to build on our strengths and

We offer a wide range of quality fuel solutions Diversify

Maintain long-term partnerships with stakeholders

Volume growth of 4.2%

Revenue (RM Million)

Preserved long-term strategic partnerships

Challenges Our Response

1. Customer’s 1st a. Elevate customer experience by • Improved customer satisfaction and

OUTLOOK AND PROSPECTS

“The LPG Business faced one of its most challenging

Our quality products are offered through the Create

Develop local economies and contribute to the success

Capitalise on technology and innovation to improve on

Safe and reliable products to consumers

Develop high performing and skilled workforce

Expanded dealership network Revenue (RM Million)

Challenges Our Response

Intense market competition • Strengthened and expanded dealership network

• Offered competitive pricing and attractive sales package

• Improved operational efficiency through cost optimisation

1. Redefine customer a. LPG@PS - nationwide rollout to a. LPG@PS – operational at 20 stations

b. Gas2U – continue to improve the b. Gas2U – improved delivery

b. Focus on C50 segment through b. Achieved C50 volume growth of

OUTLOOK AND PROSPECTS

“In 2019, we focused our pursuit towards market

In addition, PDB also markets lubricant products Create

• Remarkable volume growth Launched:

Revenue (RM Million)

Challenges Our Response

• Recruitment of new capable partners and upskilling our partners/dealers

Macro-economic factors • Sharpened our focus to grow the B2B segment

b. Launched Malaysia’s first PETRONAS b. PETRONAS AutoExpert expanded to

c. Strengthened Power brands (Syntium/ c. Achieved better brand visibility and

e. Implemented impactful trade loyalty e. Strong growth for Power Brands in