Transcending Boundaries

Reaching for the highest pinnacle, capturing the wind at its strongest,
the paper fan spins at its fastest, a moment exuding triumphant sheer exhilaration.
In the child lies the fundamental spirit of curiosity in a world that she continues
to explore and discover, and in the fan, an iconic reference to the values of
integrity, teamwork, innovation, excellence and respect for
the individual to which we adhere to, in making it possible.

With a strategy of harnessing available resources, and focused with precision

on growth, the Group ventures in global partnerships to expand its business
internationally.

This is our testament to the future that we have conceived, in the pursuit of
new frontiers that transcend boundaries.
 r e spect f
or
rk i

n
o

d
w innov
i
a

m
v

a
i

e
t
on
du
al
exc

in
el

t
e
l

gr e
itiy ce
n
 Page: Malakoff
corporation

2 Berhad (731568-V)
Annual Report
2007

Our Mission Corporate Values

In striving to enhance stakeholders’ value and achieve our vision, we seek to: • Integrity
• Develop and utilise local expertise; • Teamwork
• Share knowledge and spur the growth of the power and water sectors; and • Innovation
• Promote innovation in all aspects of our business. • Excellence
• Respect for Individual
 Page:

Our vision

To be a LEADING
POWER & WATER PROVIDER
 Page: Malakoff
corporation

4 Berhad (731568-V)
Annual Report
2007

contents
2 Our Mission & Vision Corporate Performance
5 2007 Group Financial & Performance Highlights
40 Statement by Chairman
for Malakoff Corporation Berhad
48 Performance Review by MD/CEO
6 Malakoff Berhad Historical Five-Year
- Asset Performance (Local and International)
Group Financial & Performance Highlights
- Operations & Maintenance (“O&M”)
8 Corporate Profile
- Electricity Distribution and Chilled Water Supply
12 Corporate Information
- Ventures
13 Malakoff Shareholders’
- Project Management
14 Corporate Structure

Directors’ Profiles
16 Board of Directors
18 Profile of Board of Directors
Management Team
27 Organisational Structure
28 Individual Profiles of Key
Members of Management Team
Audit Committee
36 Audit Committee
Corporate Responsibility
72 Corporate Responsibility
- Corporate Governance
- Health, Safety and Environment (“HSE”)
- Human Resources Development
- Enterprise Risk Management (“ERM”)
- Community Investment
Corporate Event Highlights
76 Corporate Event Highlights
Financial Statements
79 Financial Statements
 Page:

2007

* 2007
RM’000
Group financial Revenue 2,701,998
& performance Profit before taxation 323,769
highlights Profit after tax & minority interest 217,297
for malakoff As at 31 August
corporation berhad Paid-up capital 351,344 * On 30 April 2007, Malakoff
Corporation Berhad (formerly
Shareholders’ funds 4,172,439 known as Nucleus Avenue (M)
Berhad) completed its acquisition
Total assets employed 23,457,579 of the securities of all the
subsidiaries and the associate
Per share (sen)
companies of Malakoff Berhad
Earnings 61.8 together with all the assets (other
than cash balance) & liabilities of
Dividend (gross) 9.1 Malakoff Berhad.

Net assets per share (sen) 1188

 Page: Malakoff
corporation

6 Berhad (731568-V)
Annual Report
2007

malakoff berhad historical

five-year group financial & performance Highlights

2006 2005 2004 2003 2002

RM’000 RM’000 RM’000 RM’000 RM’000

Revenue 1,923,235 2,122,003 2,059,078 1,825,013 1,717,462

Profit before taxation 709,953 876,301 742,472 687,494 588,228

Profit after tax & minority interest 442,445 510,642 460,298 441,754 353,591

As at 31 August
Paid-up capital 899,285 893,914 885,961 871,288 858,664

Shareholders’ funds 3,719,053 3,445,801 3,080,100 2,811,285 2,467,135

Total assets employed 15,512,506 14,804,662 12,490,328 7,358,996 6,990,589

Per share (sen)

Earnings 49.3 57.3 52.4 51.1 41.6

Dividend (gross) 30.0 30.0 28.0 25.0 22.0

Net assets per share (sen) 413.6 385.5 347.6 322.6 287.3

Revenue profit after tax & shareholders’

2,122

1,923

3,719
510

minority interest funds

2,059

RM

3,445
million
442 3,719
1,923

460

RM RM
442
441
1,825

million million 3,080

1,717

2,811
353

2,467
2004

2005

2006

2004

2005

2006

2004

2005

2006
2002

2003

2002

2003

2002

2003
 413.6 2006
Page:

385.5 2005
347.6 2004
322.6 2003
287.3 2002
net assets
per share
413.6
sen
49.3 2006
57.3 2005
52.4 2004
51.1 2003
41.6 2002

per share
earnings

49.3
sen
15,512 2006
14,804 2005
12,490 2004
7,358 2003
6,990 2002

total assets

15,512
employed
million
RM
Page: Malakoff
corporation

8 Berhad (731568-V)
Annual Report
2007

CORPORATE
profile
 Page:

Malakoff Corporation Berhad (“Malakoff”) is one of the leading

independent power and water producers based in Asia with an
excellent reputation. Our core business includes power generation,
water desalination and operations & maintenance services.
In Malaysia, we own a gross generating capacity of 5,020 MW
comprising of 6 power stations that run on gas, oil and coal.

Malakoff’s power generation assets are held through a
number of subsidiaries and associate companies:
• Lumut Power Plant through a 93.75% equity interest
in Segari Energy Ventures Sdn Bhd (“SEV”)
• GB3 Power Plant through a 75.0% equity interest in
GB3 Sdn Bhd (“GB3”)
• Electricity distribution activities through Wirazone
Sdn Bhd (“WIRAZONE”), a wholly owned subsidiary
that currently supplies centralised chilled water and
distributes electricity to the landmark Kuala Lumpur
Sentral development (“KL Sentral”), which is set to
become the transportation and communication hub
of Malaysia

• Prai Power Plant through its wholly-owned
subsidiary Prai Power Sdn Bhd (“PPSB”)
• Tanjung Bin Power Plant through a 90.0% equity
interest in Tanjung Bin Power Sdn Bhd (“TBPSB”)
• Port Dickson Power Plant through a 25.0% equity
interest in Port Dickson Power Berhad, via its
wholly-owned subsidiary Hypergantic Sdn Bhd
• Kapar Power Station through a 40.0% equity interest
in Kapar Energy Ventures Sdn Bhd (“KEV”)
Furthermore, Malakoff provides services through its
subsidiary companies:
• Operations and maintenance (“O&M”) services
through wholly-owned subsidiary Teknik Janakuasa
Sdn Bhd (“TJSB”), one of the leading O&M service
providers in Malaysia
• Project management services for in-house and external
projects through Malakoff Engineering Sdn Bhd
(”MESB”), a wholly owned subsidiary by Malakoff
On the international front, we own a net capacity
of 360 MW of power and 213,000 m3 /day of water
desalination. These projects are located in Saudi Arabia,
Jordan, Oman and Algeria.
At Malakoff, we aim to work together with all
stakeholders for productive partnerships. We believe
that long-term partnerships re-enforce our success. As
an asset-centered organisation, we maximise the value
of assets we manage for our shareholders and partners.
We do this by fully understanding the elements of cost,
risk and performance unique to the environment in
which we operate.
Good leadership commands the underlying ability to possess a commitment to
integrity and to be a role model for others to follow.
integrity
 Page: Malakoff
corporation

12 Berhad (731568-V)
Annual Report
2007

Directors
TAN SRI ABDUL HALIM ALI CINDY TAN LER CHIN
Chairman Non-Independent Non-Executive Director

AHMAD JAUHARI YAHYA AZIAN MOHD NOH

Managing Director/Chief Executive Officer Non-Independent Non-Executive Director

HASNI HARUN ANDREW ROWAN IAN YEE

Non-Independent Non-Executive Director Non-Independent Non-Executive Director

YOONG NIM CHEE VIJAY VIJENDRA SETHU

Non-Independent Non-Executive Director Alternate Director to Andrew Rowan Ian Yee

MABEL LEE KHUAN EOI

Non-Independent Non-Executive Director

CORPORATE
INFORMATION
Company Secretaries Registered Office correspondence address
Samantha Yeoh Soo Mei Level 8, Kompleks Antarabangsa, Level 12, Block 3B, Plaza Sentral,
(MAICSA 7032259) Jalan Sultan Ismail, Jalan Stesen Sentral 5,
Sharifah Laila Farina Syed Mohd 50250 Kuala Lumpur 50470 Kuala Lumpur
(LS 0008736)
Tel: +603-2142 4777 Tel: +603-2263 3388
Fax: +603-2148 9887 Fax: +603-2263 3333
Website: www.malakoff.com.my Website: www.malakoff.com.my
Audit Committee members

HASNI HARUN (Chairman) AUDITORS

YOONG NIM CHEE KPMG
AHMAD JAUHARI YAHYA
PRINCIPAL BANKER
Malayan Banking Berhad
Remuneration Committee
members
TAN SRI ABDUL HALIM ALI (Chairman)
Hasni Harun
Cindy Tan Ler Chin
 Page:

13

Malakoff
Shareholders’
30%
Employees
Provident
51% Fund
10%
MMC KUMPULAN WANG
Corporation
Berhad Malakoff PERSARAAN
(Diperbadankan)
Corporation
Berhad 6.5%
2.5% Standard
SEASAF Power
Sdn Bhd Chartered
(formerly known as Private Equity
Premier Unity Sdn Bhd) Limited
 Page: Malakoff
corporation

14 Berhad (731568-V)
Annual Report
2007

Corporate Structure as at 31 December 2007

100%
Teknik Janakuasa Sdn Bhd
100%
Natural Analysis Sdn Bhd
100%
TJSB International Limited
n  100%
100%
io

TJSB International (Shoaiba) Limited

Wirazone Sdn Bhd
r Generat

 20%
 Saudi-Malaysia Operation &
Maintenance Services Company t ribution
Limited is
d

ectricity
we

20%
Al-Imtiyaz Operation &
Po

Maintenance Company Limited

Op e 100%
93.75% ra 
Segari Energy Ventures Sdn Bhd Ma t TJSB Middle East Limited

El
i
io enan

7 5%
100%
ns
nt

GB3 Sdn Bhd

TJSB Global Sdn Bhd
and

1 00%
Prai Power Sdn Bhd
c

90%
e

Tanjung Bin Power Sdn Bhd

s er

4 0%
v

ic
Kapar Energy Ventures Sdn Bhd s e
1 00%
Hypergantic Sdn Bhd
25%
Port Dickson Power Berhad
 Page:

15
100%
Malakoff International Limited
100%
Malakoff Gulf Limited
 40%
 Malaysian Shoaiba Consortium
Offs Sdn Bhd (“MSCSB”)
h o  20%
Saudi-Malaysia Water & Electricity
100%

re
Company Limited (“SAMAWEC”) II
Tuah Utama Sdn Bhd
 12%
Shuaibah Water & Electricity 20%
Company Limited (“SWEC”) II Lekir Bulk Terminal
12% Sdn Bhd
Shuaibah Expansion Holding 5 4%
Company Limited (“SEHCL”) lll
Desa Kilat Sdn Bhd
11.7%
Shuaibah Expansion Project lll 1 00%
Company Limited (“SEPCL”) Transpool Sdn Bhd I
100%
Malakoff Technical (Dhofar) Limited
43.4%
Oman Technical Partners Limited (“OTPL”) lV Others
 43.4%
proj  Salalah Power Holdings Limited (“SPHL”) lV
ec
t  20%
Dhofar Power Company SAOG (“DPC”) lV
M
an

100%
Malakoff AlDjazair Desal Sdn Bhd (“MADSB”)
agemen

70%
Tlemcen Desalination Investment Company SAS (“TDIC”)
35.7%
Almiyah Attilemcania SPA (“AAS”) V
t

100%
Spring Assets Limited I
100%
Malakoff Capital (L) Ltd
100% 100%
Malakoff Engineering Malakoff Jordan Generation Limited (“MJGL”)
Sdn Bhd 25%
Enara Energy Investment Company (“ENARA”)
12.75%
Central Electricity Generating
Company Limited (“CEGCO”) VI
100%
KuwMal Investments Limited

I Dormant
II Malakoff’s effective equity interest of 20% and 12% in SAMAWEC and SWEC,
respectively, is held via Malakoff Gulf Limited which holds 40% equity interest in
MSCSB which in turn holds 50% equity interest in SAMAWEC. SAMAWEC holds 60%
equity interest in SWEC.
lll Malakoff’s effective equity interest of 11.7% in SEPCL is held via Malakoff Gulf Limited which
holds 40% equity interest in MSCSB which in turn holds 50% equity interest in SAMAWEC.
SAMAWEC holds 60% in SEHCL which in turn holds 97.5% equity interest in SEPCL.
IV Malakoff’s effective equity interest of 20% in DPC is held via Malakoff Technical
(Dhofar) Limited which holds a direct 43.4% equity interest in OTPL which in turn
holds 100% equity interest in SPHL. SPHL holds 46% equity interest in DPC, a publicly
traded company listed on the Muscat Securities Market of the Sultanate of Oman.
V Malakoff’s effective equity interest of 35.7% in AAS is held via MADSB which holds
70% equity interest in TDIC which in turn holds 51% equity interest in AAS.
VI Malakoff’s effective equity interest of 12.75% in CEGCO is held via MJGL which holds
25% equity interest in ENARA which in turn holds 51% equity interest in CEGCO.
 Page: Malakoff
corporation

16 Berhad (731568-V)
Annual Report
2007

board of directors

7
8
3
6 4
5
2 1

1. Tan Sri Abdul Halim Ali

Chairman

2. Ahmad Jauhari Yahya

Managing Director/Chief Executive Officer

3. HasNi Harun

4. Mabel Lee Khuan Eoi

5. Vijay Vijendra Sethu

6. Azian Mohd Noh

7. Cindy Tan Ler Chin

8. Yoong Nim Chee

9. Andrew Rowan Ian YEE
(picture not available)
Page:

17
Page: Malakoff
corporation

18 Berhad (731568-V)
Annual Report
2007

profile of board of directors

Tan sri Abdul Halim Ali

chairman

YBhg. Tan Sri Abdul Halim Ali, aged 65, a Malaysian, was appointed to
the Board on 24 May 2007 and appointed as a Chairman of Malakoff
Corporation Berhad (“Malakoff”) on 26 October 2007. He is also
Chairman of the Remuneration Committee of the Board.

He holds a Bachelor of Arts (Honours) degree from the University

of Malaya, Malaysia.

Tan Sri Abdul Halim joined the Malaysian Foreign Service soon after
graduating in 1965. During the next 30 years, his postings included
the Malaysian High Commission in New Delhi, Republic of India, the
Malaysian Consulate in Medan, Sumatra, Republic of Indonesia and
the Malaysian Embassy in Tokyo, Japan. In 1976, he was appointed
Principal Assistant Secretary, Ministry of Foreign Affairs and 3 years
later, was posted to the United Nations in New York, as Malaysia’s
Deputy Permanent Representative. In 1982, he assumed his first
ambassadorial role as the Malaysian Ambassador to the Socialist
Republic of Vietnam, coming back to Kuala Lumpur when he was
appointed Deputy Secretary-General (III), Ministry of Foreign Affairs.
In 1988, he was appointed Ambassador of Malaysia to Austria, where
he also held the position of President Representative to UNIDO, IAEA,
United Nations Office in Vienna, Austria. In 1991, he was named
Deputy of Secretary-General (1), Ministry of Foreign Affairs, before his
appointment as Secretary-General 5 years later. In September 1996,
he was appointed Chief Secretary to the Government, a post he held
until his retirement in January 2001, when he was named Chairman of
EPF. From September 2001 until 4 July 2007 he was the Chairman of
Malakoff Berhad.

Currently, he is the Chairman of Malaysian Building Society Berhad,

a subsidiary of Employees’ Provident Fund (“EPF”) and University of
Technology, Malaysia. He also sits on the boards of ESSO Malaysia
Berhad, IJM Corporation Berhad and LCL Corporation Berhad.

In recognition of his achievements and contribution to the country and

corporate sector, Tan Sri Abdul Halim was conferred a Fellowship by the
Governing Council of the Malaysian Institute of Directors.
 Page:

19

Ahmad Jauhari Yahya

Managing director/chief executive officer

Encik Ahmad Jauhari Yahya, aged 54, a Malaysian, is currently the

Managing Director/Chief Executive Officer of Malakoff Corporation
Berhad (“Malakoff”). He was appointed to the Board on 30 April 2007
and is a member of the Audit Committee of the Board.

He also sits on the Board of Port Dickson Power Berhad, MMC Corporation
Berhad, Aliran Ihsan Resources Berhad, Kapar Energy Ventures Sdn Bhd
and Malakoff AlDjazair Desal Sdn Bhd.

He holds a Bachelor of Science (Honours) degree in Electrical and

Electronic Engineering from University of Nottingham, UK.

During his career, Encik Ahmad Jauhari has managed many large technical
projects and held senior management positions in The New Straits
Times Press (M) Berhad (Director and Senior Group General Manager),
Time Engineering Berhad (Managing Director) and Malaysian Resources
Corporation Berhad (Managing Director, Executive Vice President
and Director).

On the international front, he is also a Director and Chairman of

Executive Committee of Central Electricity Generating Company Limited
(Jordan) and Director of Shuaibah Water & Electricity Company Limited
and Shuaibah Expansion Project Company Limited (Saudi Arabia).

At present, Encik Ahmad Jauhari is the Honorary Vice-President of

Penjanabebas (Association of Independent Power Producers in Malaysia).
 Page: Malakoff
corporation

20 Berhad (731568-V)
Annual Report
2007

profile of board of directors (con’t)

HASNI HARUN
Non-Independent Non-Executive Director

Encik Hasni Harun, aged 51, was appointed to the Board on 24 May
2007 and is the Chairman of the Audit Committee and a member of the
Remuneration Committee of the Board.

He graduated with a Bachelor of Accounting (Honours) degree from the

University of Malaya in 1980, and holds a Master’s degree in Business
Administration from United States International University, San Diego,
California, USA. He is also a member of the Malaysian Institute
of Accountants.

He is presently the Chief Executive Officer, Malaysia of MMC Corporation

Berhad (“MMC”) having been its Group Chief Operating Officer from
January 2007 to February 2008. Prior to joining MMC, he was the Group
Chief Financial Officer of DRB-Hicom Berhad (2006), Managing Director
of RHB Asset Management Sdn Bhd (2001-2006), and Senior General
Manager of the Investment Department at the Employees Provident
Fund Board (1994-2001). He had held several senior positions in the
Accountant General’s Office (1980-1994).

His directorship in other companies include MMC, Zelan Berhad,

Johor Port Berhad, IJM Corporation Berhad, MMC Engineering
Group Berhad and Aliran Ihsan Resources Berhad.
 Page:

21

YOONG NIM CHEE

NON-INDEPENDENT NON-EXECUTIVE DIRECTOR

Mr. Yoong Nim Chee, aged 49, a Malaysian, was appointed to the Board
on 16 May 2006 and is a member of the Audit Committee of the Board.

He holds a Bachelor of Economics in Business Administration degree

from University Malaya. Mr. Yoong has extensive experience in corporate
finance and has worked in senior positions for several merchant banks.
He was the Executive Director of MMC Engineering Group Berhad from
2001-2003 and currently holds the position of Director, Corporate
Affairs of MMC Corporation Berhad.

He is also a board member of Zelan Berhad, Kramat Tin Dredging Berhad

and Integrated Rubber Corporation Berhad.
 Page: Malakoff
corporation

22 Berhad (731568-V)
Annual Report
2007

profile of board of directors (con’t)

mabel Lee Khuan Eoi

Non-Independent Non-Executive Director

Dr. Mabel Lee, 53, a Malaysian, was appointed to the Board on 11

April 2008. She is currently the Senior General Manager of Corporate
Planning at MMC Corporation Berhad (“MMC”). Prior to joining MMC,
she had worked with JP Morgan Chase’s Kuala Lumpur office as Vice
President of its Investment Banking Division.

Mabel is a Chartered Financial Analyst Charterholder and holds a

Bachelor of Accounting (First Class Honours) degree from Universiti
Malaya, MBA (with Distinction) from University of Hull, United Kingdom
and Doctor of Business Administration degree from University of
Newcastle, Australia. She is a member of the Malaysian Institute of
Accountants, an Associate Member with Institut Bank-Bank Malaysia
and a member of the Institute of Chartered Accountants in England and
Wales (“ICAEW”), Corporate Finance Faculty.
 Page:

23

Cindy Tan Ler Chin

Non-Independent Non-Executive Director

Puan Cindy Tan Ler Chin, aged 48, a Malaysian, was appointed to
the Board on 9 August 2007 and is a member of the Remuneration
Committee of the Board.

She holds an Honours Degree in Economics, majoring in statistic, from

Universiti Kebangsaan Malaysia. In 1991, she obtained a Certified
Diploma in Accounting and Finance, accorded by the Chartered
Association of Certified Accountants.

She is currently the General Manager of the Corporate Financing

Department, Investment Division of the Employees’ Provident Fund
(“EPF”). She is also a Director of Malaysia Building Society Berhad,
a subsidiary of EPF.
 Page: Malakoff
corporation

24 Berhad (731568-V)
Annual Report
2007

profile of board of directors (con’t)

AZIAN MOHD NOH

Non-Independent Non-Executive Director

Puan Azian Mohd Noh, aged 55, a Malaysian, was appointed to the
Board on 9 August 2007.

She holds a Master in Business Administration from University

Kebangsaan Malaysia and a Bachelor of Economics (Accounting) from
University of Malaya.

Puan Azian began her career in 1980 as a Treasury Accountant

in the Investment and Loan Division of the Accountant General’s
Department before being appointed as an Accountant in the Ministry
of Public Enterprise in 1981. She joined Kraftangan Malaysia as Senior
Accountant in 1982 until 1985, where she served as Deputy Finance
Director of SIRIM. In 1991, she was appointed as Deputy Director in the
Kumpulan Wang Amanah Pencen (“KWAP”) in the Accountant General’s
Department, a position she held for seven years before becoming a
Director of KWAP in 1997 until 2006. She is currently the Chief Executive
Officer of Kumpulan Wang Persaraan (Diperbadankan).

She also a board member of RHB Berhad and Time DotCom Berhad.
 Page:

25

andrew Rowan Ian yee

Non-Independent Non-Executive Director

Mr. Andrew Rowan Ian Yee, aged 43, an Australian citizen, was appointed
to the Board on 9 August 2007.

He holds a Bachelor of Commerce degree, majoring in Accounting and

a Bachelor of Law degree from the University of New South Wales,
Sydney, Australia. He is also qualified to practice law in Australia.

Mr. Andrew Yee is the joint Chief Executive Officer of Standard Chartered
IL&FS Asia Infrastructure Growth Fund (SCI Asia), based in Singapore.
He joined Standard Chartered’s Principal Finance team in 2007 as
a Managing Director and Head of Infrastructure. He has 19 years of
infrastructure experience gained from positions in investment banking,
industry and private equity.

Prior to joining Standard Chartered and launching SCI Asia, he founded

Renewable Energy Asia Pacific, a renewable energy fund. He was also
Head of Mergers and Acquisitions at InterGen Asia where he participated
in the US$3.3 billion sale of InterGen to a partnership between AIG and
the Ontario Teachers’ Pension Plan during 2004 and 2005. Prior to
InterGen, Andrew was Head of Goldman Sachs Asia’s Energy & Power
advisory team, based in Hong Kong. He was also a Director at Barclays
de Zoete Wedd Australia, an investment banking firm that was acquired
by ABN AMRO in 1997, prior to which he worked in the Corporate
Finance team of Barclays de Zoete Wedd in London.

His deal experience includes the Initial Public Offering of British Sky
Broadcasting, secondary offerings of National Power and PowerGen,
acquisitions of British Coal and Powercor Australia, and the sale of
Australian airports in Melbourne, Brisbane and Perth.
 Page: Malakoff
corporation

26 Berhad (731568-V)
Annual Report
2007

profile of board of directors (con’t)

Vijay Vijendra Sethu

alternate director to andrew Rowan ian yee

Mr. Vijay Vijendra Sethu, aged 44, an Australian citizen, is the Alternate
Director to Mr. Andrew Rowan Ian Yee and was appointed to the Board
on 9 August 2007.

He has a Master of Business Administration from Auckland University

and is a Fellow of the Association of Chartered Certified Accountants
in United Kingdom, an Associate of the New Zealand Society of
Chartered Accountants and a graduate member of Chartered Institute
of Management Accountants in United Kingdom.

He is currently the Chief Executive Officer (“CEO”) of CIMB Standard

Strategic Asset Advisors Sdn Bhd (“SEASAF”). Prior to becoming
the CEO of the SEASAF, Vijay spent four years with Australia New
Zealand (“ANZ”) Investment Bank in Singapore where he was the
Head of Power and later the Executive Director, Head of Project and
Structured Finance for Asia. Prior to joining ANZ Investment Bank in
Singapore, Vijay was the Vice President and Head of Mergers and
Acquisitions for Asia Pacific, Africa and China at Enron International,
Singapore. During his time, he was involved in numerous oil, gas and
power asset reviews. Earlier, Vijay spent 8 years with ANZ Investment
Bank in Melbourne, London and New York. His last position was
Head of Global Structured Finance for the Americas, where the
bank focused particularly on Latin America and successfully
completed several resources, oil, gas and power transactions.
Vijay spent the earlier part of his career with KPMG Peat Marwick in
New Zealand and Exxon in Malaysia.
 Page:

27
organisational Structure

Malakoff Corporation Berhad

Human
Resources
Organisational
& Admin
Development
Department
Department Malakoff
Engineering
Sdn Bhd
IT & Enterprise (“MESB”)
Applications
Department

Asset
Management
MD/CEO’s
Office & Corporate Division
Affairs
Department

MD/CEO
Ahmad Operations
Jauhari Yahya & Maintenance
Division

COMPANY
SECRETARIAL DCEO
Ventures I
DEPARTMENT
Division MOHD RADZUAN
YAHYA

Ventures II
Division Legal
Services
Group Department
Finance &
Accounts
Division
Page: Malakoff
corporation

28 Berhad (731568-V)
Annual Report
2007

Individual Profiles of Key Members of Management Team

1.

2.

1. Ahmad Jauhari Yahya

2. Mohd Radzuan Yahya
 Page:

29

Ahmad Jauhari Yahya

Managing Director/Chief Executive Officer

Encik Ahmad Jauhari Yahya, aged 54, a Malaysian, is currently the Managing Director/
Chief Executive Officer of Malakoff Corporation Berhad (“Malakoff”). He was appointed to
the Board on 30 April 2007 and is a member of the Audit Committee of the Board.

He also sits on the Board of Port Dickson Power Berhad, MMC Corporation Berhad, Aliran Ihsan
Resources Berhad, Kapar Energy Ventures Sdn Bhd and Malakoff AlDjazair Desal Sdn Bhd.

He holds a Bachelor of Science (Honours) degree in Electrical and Electronic Engineering

from University of Nottingham, UK.

During his career, Encik Ahmad Jauhari has managed many large technical projects and
held senior management positions in The New Straits Times Press (M) Berhad (Director
and Senior Group General Manager), Time Engineering Berhad (Managing Director) and
Malaysian Resources Corporation Berhad (Managing Director, Executive Vice President
and Director).

On the international front, he is also a Director and Chairman of Executive Committee of Central
Electricity Generating Company Limited (Jordan) and Director of Shuaibah Water & Electricity
Company Limited and Shuaibah Expansion Project Company Limited (Saudi Arabia).

At present, Encik Ahmad Jauhari is the Honorary Vice-President of Penjanabebas

(Association of Independent Power Producers in Malaysia).

Mohd Radzuan Yahya

Deputy Chief Executive Officer

Encik Mohd Radzuan Yahya, aged 55, is currently the Deputy Chief Executive Officer
(“DCEO”) of Malakoff Corporation Berhad (“Malakoff”). He obtained a Bachelor of
Science degree in Mechanical Engineering from Liverpool University, UK in 1977. He
started his career with National Electricity Board (“NEB”) in 1977 as an Assistant
Operation Engineer at the Prai Power Plant. He was appointed to the position of Boiler
Maintenance Engineer at the Pasir Gudang Power Station between 1981-1984. He was
then transferred to Paka Combined Cycle Power Station as Efficiency and Test Engineer
until 1987. Between 1987 to 1993, he assumed the positions of Senior Shift Charge
Engineer, Senior Mechanical Engineer and Assistant Station Manager at the Port Dickson
Power Station. He joined Teknik Janakuasa Sdn Bhd (“TJSB”) as Plant Manager for
Lumut Power Plant in 1995. In 1998, he was appointed as Chief Operating Officer
(“COO”) of TJSB. In 2000, he was transferred to Segari Energy Ventures Sdn Bhd
(“SEV”) to assume the position of COO of SEV. In 2002, he was transferred to Malakoff
Berhad and promoted to COO and subsequently re-designated to his current position as
the DCEO of Malakoff in April 2006.
 Page: Malakoff
corporation
30 Berhad (731568-V)
Annual Report
2007
Individual Profiles of Key Members of Management Team (cont’d)
Ruswati Othman
Chief Financial Officer/Senior Vice President
Group Finance & Accounts Division
Puan Ruswati Othman, aged 48, obtained her Bachelor of Science degree
in Chemistry and Master of Business Administration degree (majoring in
Accounting and Finance) from University of Bradford, England, UK and
University of Massachusetts, Boston, USA in 1984 and 1988 respectively.
She started her career as executive in the Chemical Division of Behn Meyer
& Co. in 1984. She joined Southern Bank Berhad as an officer in 1989. She
was appointed as Assistant Manager, Corporate Planning and Investments
at Melewar Corporation Berhad/MAA Berhad in 1990. Amongst others, she
was involved in the setting up of an international food chain and a highway
project for the Group. In 1994, she joined Malakoff Berhad as Manager,
Corporate Planning. In 1997, she was promoted to Senior Manager and as
Head, Research and Risk Management Department. She was promoted to
Assistant General Manager, Corporate Finance and Risk Management in 1999
and as General Manager and Head, Corporate Finance and Risk Management
Department in 2000. In 2004, she was promoted to the position of Chief
Financial Officer/Senior Vice President, Group Finance & Accounts Division.
Her present responsibility includes managing the Group Accounts and Treasury
Department and the Corporate and Project Finance Department. She overseas
the overall accounting and reporting functions in Malakoff Corporation Berhad
(“Malakoff”) and heads the Malakoff team for corporate finance exercises
such as equity & debt financing as well as mergers & acquisition and project
finance exercises for companies within the Malakoff Group.
Nor Shakiman Muhammad
Senior Vice President
Operations & Maintenance Division
Ir. Nor Shakiman Muhammad, aged 47, obtained his Bachelor of Science
in Mechanical Engineering from University of Sussex, UK. He started his
career in 1984 with National Electricity Board (“NEB”), subsequently Tenaga
Nasional Berhad (“TNB”) as an Assistant Shift Charge Engineer at 900 MW
Sultan Ismail Power Station Paka Terengganu (“SIPS”). In 1987, he was
appointed as an Assistant Operation Engineer and later appointed as Test
and Efficiency Engineer. In August 1988, he was appointed as Safety and
Training Engineer, which was his last appointment in SIPS. In September
1988, he was employed as Gas Turbine Maintenance Engineer at 910 MW
Connaught Bridge Power Station (“CBPS”) in Klang. He later joined Teknik
Janakuasa Sdn Bhd (“TJSB”) in 1994 as Mechanical Maintenance Manager
and was involved in the project/design review of the Lumut Power Plant
(“LPP”) together with the Owner’s project team. He was promoted to Senior
Mechanical Maintenance Manager in 1996 and subsequently as Assistant
General Manager in 1997. Later, he was promoted to Station Manager in
LPP in 1998 and then promoted to Chief Operating Officer of TJSB in July
2002, before assuming his current position as Senior Vice President of O&M
Division in Malakoff Corporation Berhad (“Malakoff”).
Habib Husin
Senior Vice President
Asset Management Division
Encik Habib Husin, aged 48, obtained his Bachelor in Engineering (Electrical
& Electronics) from University of Wales. He started his career in 1983 as an
Assistant Instrument Maintenance Engineer in Port Dickson Power Station
for Lembaga Letrik Negara (now Tenaga Nasional Berhad). In 1985, he was
transferred to Kapar Power Station (Phase I and II) and was later promoted
to Instrument Maintenance Engineer in 1987. He then joined Sarawak Shell
Berhad as Instrument Engineer in 1990 before moving to ICI Paints (Mal)
Sdn Bhd as Works Engineer in 1992. He joined Malakoff Berhad as Senior
Manager of Technical Audit Department in July 1998. His role is to provide
consultancy service on all engineering and management matters pertaining to
the operations of the Lumut Combined Cycle Power Plant and to constantly
conduct technical and safety due diligence from time to time for new
projects and proposed acquisitions. He has been redesignated and promoted
to Assistant General Manager, Business Organisation & Technical Services
on 1st January 2000. His scope of work in addition to the previous role is
to oversee on the business reorganisation and strengthening the technical
services group to strategise Malakoff Berhad as an international power player.
In September 2001, he was promoted and transferred to General Manager-
Projects in Segari Energy Ventures Sdn Bhd (“SEV”). In July 2004, he was
promoted to Chief Operating Officer (“COO”) in SEV. He was re-designated to
Senior Vice President of Business Operations Division in April 2006. In 2007,
he was re-designated to his current position as Senior Vice President of Asset
Management Division of Malakoff Corporation Berhad (“Malakoff”).
 Page:

31

3.

4.
5.

3. Ruswati Othman
4. Nor Shakiman Muhammad
5. Habib Husin
 Page: Malakoff
corporation

32 Berhad (731568-V)
Annual Report
2007

Individual Profiles of Key Members of Management Team (cont’d)

6. 7.

8.

6. Azizan Lebai Manat

7. Azhari Sulaiman
8. Ernest Navaratnam

Azizan Lebai Manat
Senior Vice President
Malakoff Engineering Sdn Bhd
Encik Azizan Lebai Manat, aged 50, a Malaysian, obtained a Bachelor of
Science degree in Electrical and Electronics Engineering from University
College of Cardiff, Wales, UK and a Master of Business Administration
in Project Management (with Distinction) from University of Dundee,
Scotland, UK in 1982 and 1992, respectively. He is a registered
Professional Engineer with the Board of Engineers, Malaysia and a
member of the Institution of Engineers, Malaysia. He started his career
as a Project Engineer with the National Electricity Board (“NEB”) in 1982.
From 1983 to 1985, he was the Site Resident Engineer responsible for
the control and instrumentation scope of the power station in Connaught
Bridge, Klang, Selangor Darul Ehsan (“Connaught Bridge Power Station”).
Between 1985 to 1988, he worked at the Kapar Power Station (Phases
I and II) project, as a member of the Tenaga Nasional Berhad (“TNB”)
project owner’s site team. Upon completion of the above project in 1988,
he joined the station maintenance team as a Computer Maintenance
Engineer at the Kapar Power Station. In 1991, he was awarded a
scholarship by the NEB to pursue a Masters of Business Administration
degree in Project Management. From 1992 to 1994, he was a Training
Manager at the Human Resource Department of TNB and was responsible
for planning and co-ordinating management training for the TNB group’s
executives. In 1994, he joined TNB Engineering and Consultancy Sdn
Bhd, a wholly-owned subsidiary of TNB. Thereafter in 1996, he joined
Teknik Janakuasa Sdn Bhd (“TJSB”) as Senior Manager, Projects and
was promoted to the position of Assistant General Manager of head
Wirazone Sdn Bhd (“Wirazone”) in 1997. In 2000, he was promoted to
General Manager of WSB and assumed the position of Head of Wirazone
Sdn Bhd. He was transferred to Malakoff Berhad and re-designated
as Head of Corporate Services Division in April 2006. He is currently
the Senior Vice President of Malakoff Engineering Sdn Bhd of Malakoff
Corporation Berhad (“Malakoff”).
Page:
33
azhari sulaiman
Senior Vice President
Ventures I Division
Encik Azhari Sulaiman, aged 48, a Malaysian, holds a Bachelor of Science
in Electrical & Electronic Engineering from University of Technology
Loughborough, England and Masters in Business Administration from
Universiti Malaya. He first joined Lembaga Letrik Negara in September
1983 as a Computer Maintenance Engineer in the Computer Maintenance
Department. In 1986, he was then promoted to Senior Engineer,
Telecontrol, in which, he was involved mainly in the development of
control centrs, repair and maintenance of the National Load Despatch
Centre SCADA/EMS computer system and RTUs. Later in January 1994,
he was transferred to the Business Management unit of the Transmission
Division as the Senior Manager, Commercial. In January 1999, he was
designated as the Head of Energy Procurement Unit before joining
Tanjung Bin Power Sdn Bhd as Chief Operating Officer in August 2004.
He is currently the Senior Vice President of Ventures I Division, Malakoff
Corporation Berhad (“Malakoff”).
Ernest Navaratnam
Senior Vice President
Ventures II Division
Mr. Ernest Navaratnam, aged 44, a Malaysian, holds a Bachelor of
Science in Electrical Engineering from Queen’s University, Canada. He
started his career in 1988 with Tenaga Ewbank Preece Sdn Bhd as
Electrical Engineer/Software Development Engineer. He then joined SMEC
Malaysia in 1992 as Electrical Engineer. SMEC Malaysia is the Malaysian
office for Snowy Mountains Engineering Corporation, Australia. In early
1995, he joined Malakoff Berhad as Senior Project Engineer in April
1995. He was promoted to Project Manager in January 1996 where he
was responsible for coordinating and reviewing the feasibility of projects
assigned for possible augmentation to Malakoff Berhad’s corporate
portfolio. In June 1999, he joined International Power PLC (“IPR”) in the
Kuala Lumpur regional office as their Business Development Manager for
South East Asia. He was subsequently seconded to IPR’s headquarters in
London, England for a period of over 2 years. He then rejoined Malakoff
Berhad in August 2003 as General Manager for International Business
Development. In April 2006, he was re-designated as Vice President,
Region II. He is currently the Senior Vice President of Ventures II,
Malakoff Corporation Berhad (“Malakoff”).
teamwork demonstrates that trust is an integral part of our pursuit towards achieving
a common goal.
teamwork
 Page: Malakoff
corporation

36 Berhad (731568-V)
Annual Report
2007

AUDIT COMMITTEE

PURPOSE
The Audit Committee (“Committee”) was established by Board on 19 November 2007. The primary objectives of the Audit Committee are as follows:
1. To assist the Board in fulfilling its statutory and fiduciary responsibilities in examining and monitoring the Company and its subsidiaries’
(“the Group”) management of business, financial risk processes, accounting and financial reporting practices;

2. To determine the adequacy and effectiveness of the administrative, operational and internal accounting controls of the Group and to
ensure that the Group is operating in accordance with the prescribed procedures, codes of conduct and applicable legal and regulatory
requirements;

3. Serve as an independent and objective party from management in the review of the financial information of the Company and Group
presented by management for the distribution to shareholders and the general public;

4. Provide direction and oversight over the internal and external auditors of the Company to ensure their independence from management;

5. To evaluate the quality of audits conducted by the internal and external auditors on the Company and Group.

MEMBERS
The members of the Committee comprised the following members:
Status of Directorship
Hasni Harun (Chairman) - Non-Executive Director
Yoong Nim Chee - Non-Executive Director
Ahmad Jauhari Yahya - Managing Director/Chief Executive Officer

The Chairman of the Committee is a member of the Malaysian Institute of Accountants.

MEETINGS AND MINUTES

Meetings shall be held at least four (4) times a year or more frequently as circumstances dictate. The Chairman shall call a meeting of the
Committee, if requested to do so by any Audit Committee member, the management or the internal or external auditors. A representative of the
external and internal auditors shall normally be invited to attend the meetings of the Audit Committee. The management shall be represented at
the meetings by the Managing Director/Chief Executive Officer (“CEO”) or in his absence, the Deputy CEO, the Chief Financial Officer and the
Financial Controller of the Company. Other board members may attend Audit Committee meetings upon the invitation of the Audit Committee.

The Chairman of the Audit Committee should engage on a continuous basis with senior management, such as the Chairman, the Managing
Director/CEO, or in his absence, the Deputy CEO, the Chief Financial Officer, the Financial Controller of the Company, the internal auditors and
the external auditors in order to kept informed of matters affecting the Company.

The Audit Committee shall meet at least twice a year with the internal and
external auditors without the attendance of the executive members of the
Committee and the management of the Company. The quorum for a meeting
of the Committee shall be two (2) members present or in their absence,
their alternate directors, both of whom must be non-executive directors.
Minutes of each meeting shall be kept and distributed to each member
of the Committee and of the Board. The Chairman of the Committee shall
report on each meeting to the Board. The Company Secretary shall be the
Secretary of the Committee.
AUTHORITY
The Audit Committee is authorised by the Board:
(a) to investigate any matter within its terms of reference;
(b) to have the resources in order to perform its duties and responsibilities
as set out in its terms of reference;
(c) to have full and unrestricted access to information pertaining to
the Company and the Group including to call on any officers of the
Company and/or the Group in carrying out their duties;
(d) to have direct communication channels to the internal and external
auditors;
(e) to obtain, at the expense of the Company, external legal or other
independent professional advice if it considers necessary; and
(f) to be able to convene meetings with the external auditors and internal
auditors, or both, without the attendance of the executive members
of the Group, other directors and employees of the Company,
whenever deemed necessary.
DUTIES AND RESPONSIBILITIES
The duties and responsibilities of the Committee are as follows:-
(a) To consider the appointment of the external auditor, the audit fee and
any questions of resignation or dismissal;
Page:
37
(b) To discuss with the external auditor before the audit commences, the
nature and scope of the audit;
(c) To review the quarterly and year-end financial statements for
recommendation to the Board;
(d) To discuss problems and reservations arising from the interim and
final audits, and any matter the auditor may wish to discuss (in the
absence of management where necessary);
(e) To review the external auditor’s management letter and management’s
response;
(f) To do the following with respect to the internal audit function:-
• Review the adequacy of the scope, functions, competency and
resources of the internal audit function, and that it has the
necessary authority to carry out its work;
• Review the internal audit programme and results of the
internal audit process and where necessary, ensure that
appropriate action is taken on recommendations of the internal
audit function;
• Review and appraise or assess the performance of members
of the internal audit function/firm carrying out the internal
audit function;
(g) To consider any related party transactions that may arise within the
Group;
(h) To consider the major findings of internal investigations and
management’s response;
(i) To report to the Board at least once a year, the activities of the
Audit Committee and the summary of the activities of the internal
audit function or activity, including the number of meetings held and
the details of attendance of each audit member in respect of the
meetings; and
(j) To consider other topics as defined by the Board.
An open mind continues to think out of the box, never content with the tried and tested,
but challenged to provide fresh solutions, and winning innovation.
inn0vation
Page: Malakoff
corporation

40 Berhad (731568-V)
Annual Report
2007

STATEMENT by CHAIRMAN

dear stakeholders,
2007 has been another good year for Malakoff corporation berhad
(“Malakoff”) both in Malaysia and abroad as we continue to
demonstrate consistent and effective execution of our strategy. The
year has been particularly significant as it marked the completion
of a divestment exercise.

On 30 April 2007, Nucleus Avenue
(M) Bhd, completed its acquisition
of Malakoff’s entire business for a
cash consideration of RM9.3 billion,
giving MMC corporation berhad a 51%
controlling stake.
For the 8 months ended 31 December 2007, the underlying profit
was RM217 million and revenue was RM2,702 million. The increase
in revenue and profit was mainly attributable to Tanjung Bin power
plant, which has a capacity of 2,100 MW.
With the completion of Tanjung Bin Power Plant third 700 MW unit on
31 August 2007, our effective generation capacity in Peninsular
Malaysia increased to 5,020 MW. This further cement’s our position

The process of the privatisation also as the leading Independent Power Producer (“IPP”) in Malaysia.

saw Nucleus Avenue (M) Bhd changed its

name to Malakoff Corporation Berhad.
Having completed my first 8 months
as Chairman under the “new” Malakoff,
I am delighted to be able to report
another “year” of strong progress
for the Group.
The performance of our local assets, which is the major contributor
to the Group’s revenue, remains robust due to the operational
efficiency that far exceeds our contractual obligations. During the
year under review, significant changes were introduced to our local
operations to ensure that sustained improvement and operational
excellence are achieved through the balance of performance
enhancement, risk management and cost optimisation.
 Page:

41

Tan Sri
Abdul Halim Ali
Chairman
 Page: Malakoff
corporation
42 Berhad (731568-V)
Annual Report
2007
STATEMENT by CHAIRMAN (con’t)
As a leading electricity and water producer, we
will continue to provide quality and affordable
power and water that meet or exceed our
customers’ expectations. Over the years to
come, our local assets and operations will
remain as our core business.
Significant milestones were also achieved in
2007 with regard to our ventures overseas.
On 15 July 2007, Malakoff’s consortium partners
entered into a series of agreements with Saudi
Arabia’s Water and Electricity Co. (“WEC”)
for the expansion of Shuaibah Independent
Water and Power Plant (“IWPP”) project to
deliver an extra 150,000 m3 /day of water. This
US$232 million expansion project which will
utilise Reverse Osmosis desalination technology
is expected to deliver water in February 2009.
Meanwhile, the construction of the 900 MW
and 1,030,000 m3 /day Shuaibah IWPP in Saudi
Arabia, which is our first overseas project, is
proceeding well with commercial operations
targeted for July 2009. Malakoff has 12%
indirect stake in Shuaibah IWPP.
The long-term nature of
Malakoff’s investments in
the international market
should enable the Group
to generate growth and
improving returns over
many years.
On 17 October 2007, Malakoff’s consortium
also completed the acquisition of a 51%
interest in Jordan’s C entral Electricit y
Generating Company Limited (“CEGCO” ),
which is Jordan’s largest electricity provider
with a generation capacity of 1,665 MW.
The privatisation of CEGCO, where we have a
12.75% indirect stake, is one of the largest
privatisation exercises in Jordan’s history.
Our participation at Dhofar Power Company
SAOG (“DPC”) in Oman, where we have an
indirect stake of 20% through an acquisition in
2006, has not only provided us with a growth
opportunity in Oman but also an excellent
platform to gain knowledge and experience
in running a transmission and distribution
business. Meanwhile, the development of the
200,000 m3 /day desalination plant located in
Tlemcen, Algeria, where we have a 37.5%
interest, had achieved Financial Closure in
January 2008.

Strategically, Malakoff is doing the right things,
building on its established business in Malaysia
whilst looking for investment opportunities,
principally in the Middle East and South East
Asia. The long-term nature of Malakoff’s
investments in the international market should
enable the Group to generate growth and
improving returns over many years.
We give particular attention to the environment
by investing in technologies which minimise the
environmental impact of our operations. Our
coal-fired Tanjung Bin power plant, for example,
incorporates state-of-the-ar t clean coal
technology such as Electrostatic Precipitators
(“ESP”) and Flue Gas Desulphurisation (“FGD”).
Work is also underway to certify Tanjung Bin
as ISO 14001 compliant by 2009.
We are committed to a high standard of safety and
health at the workplace to minimise or eliminate
lost time incidents and other occupational
health risks. In 2007, efforts were introduced
to enhance and standardise our Health, Safety
and Environment (“HSE”) practices across the
board as well as to work towards achieving the
OHSAS 18001 certification in 2009 for all the
plants that we control, i.e., Tanjung Bin, Lumut
and Prai power plants.
In terms of Communit y Investment, we
continue to promote sporting events at national
and ‘grassroots’ levels under various themes
of charity, voluntarism, sports tourism and
environmental conservatism. In the year under
review, Malakoff organised and supported a
total of at least eight major sporting events
Page:
43
that attracted more than 4,000 athletes and
volunteers from Malaysia and abroad. In terms
of our contributions to charitable causes, be it
social, religious and educational, we continue
to provide financial assistance to the less
privileged, physically challenged, school-going
children and orphans in the communities where
we operate.
A new Board has evolved as a result of the
privatisation exercise and I thank all the new
Board members, with their wealth of experience
and expertise, for sharing their time and insight.
I am confident that this new team will
bring renewed vigour and commitment to
the successful development of Malakoff.
 Page: Malakoff
corporation

44 Berhad (731568-V)
Annual Report
2007

STATEMENT by CHAIRMAN (con’t)

I should also pay tribute to my fellow directors of Malakoff Berhad for the considerable
contribution they had made in support of the Group over the years.

I would also like to thank the Management and all our employees who worked
particularly hard throughout 2007 in responding to the unusually demanding environment.
Their commitment and loyalty had been outstanding.

Looking back at the events that culminated in the privatisation of Malakoff, I have been
impressed and reassured by the caring and responsible way in which the Board, the
Management and the staff have executed the change. On a personal note, I find this an
exciting time to work for Malakoff. The Company is doing well and with its pool of talented
people, its international ambitions is on track to do even better.

Looking forward, we will continue to lay the foundations for long-term success, growth
and value creation in a demanding and changing international business environment.
Our investment strategy will be driven by value and a cost structure that is subjected to rigid
appraisal. Critical thinking and innovation will be the key to our success to break new frontiers
and transcend boundaries. I believe that we have the opportunity to build a truly world class
company if we can keep our focus on what we believe we can achieve.

Tan Sri Abdul Halim Ali

Chairman
Page:

45
Being focused pushes us to excel in everything we do, and in being passionate about
our capabilities, we are determined to pursue excellence and exceed expectations.
excellence
Page: Malakoff
corporation

48 Berhad (731568-V)
Annual Report
2007

performance review by md/ceo

ahmad
jauhari yahya
managing director/
chief executive officer

We are helping to power the
country towards the vision of a
fully industrialised and developed
nation status.
Our theme for this year’s annual report,
Transcending Boundaries, defines the
hard earned success we have achieved
in improving operational efficiency
in the power plants, and the
breakthroughs we have made into the
international arena, which drive our
growth. These achievements attest to
the excellence of our people and
reflect the rigorous execution of
our mission statement.
Page:
49
power generation
Malakoff Corporation Berhad (“Malakoff”)
generates and sells power as an Independent
Power Producer (“IPP”) to Tenaga Nasional
Berhad (“TNB”) for uploading onto the National
Grid, Malaysia. Our plants increased their
substantial contribution to the nation’s total
installed capacity with the commissioning of
the second and third 700 MW units of Tanjung
Bin Power Plant on 28 February 2007 and 31
August 2007, respectively. Our total effective
generation capacity has now increased to 5,020
MW. We are therefore providing approximately
27% of the total installed capacity in Peninsular
Malaysia. Already Malaysia’s leading IPP, our
new overseas investments, presently under
construction, are set to enhance our business
and financial performance.
 Page: Malakoff
corporation

50 Berhad (731568-V)
Annual Report
2007

performance review by md/ceo (con’t)

Asset performance
 Page:

51

Local Assets
Lumut Power Plant
In operation for more than eleven years, the Lumut
Power Plant (“LPP”), with a dependable capacity of
1,303 MW, remains the largest combined cycle power
plant in Malaysia. The plant is held through our
subsidiary, Segari Energy Ventures Sdn Bhd (“SEV”),
in which we hold 93.75 per cent.
 Page: Malakoff
corporation

52 Berhad (731568-V)
Annual Report
2007

performance review by md/ceo (con’t)

Malakoff owns a gross

generating capacity of
5,020 MW comprising of
6 power stations that run
on oil, gas and coal.
 Page:

53

During the financial year under review, LPP maintained its high GB3 Power Plant
performance in terms of availability, reliability and efficiency. The plant
The GB3 Power Plant, also a combined cycle power plant with a dependable
delivered approximately 6,423 GWh of electricity to the National Grid,
capacity of 640 MW, is held through our 75% owned subsidiary, GB3 Sdn
with an average capacity factor of approximately 51.88%. With an
Bhd. The power plant is in its sixth year of operation and is located adjacent
availability of 94.29%, the plant exceeded the 86.0% guaranteed under
to the LPP owned by SEV.
the Power Purchase Agreement (“PPA”) with Tenaga Nasional Berhad
(“TNB”). Having met all the required performance standards set out in
The plant delivered a total of 4,245 GWh of electricity to the National
the PPA, SEV therefore received full capacity payments for the period.
Grid, with an average capacity factor of approximately 76.71%, during
the financial year under review. The plant’s availability was 93.21%,
exceeding the requirement of the PPA of 91.5%.

Local Generation CapAcity

Shareholding X Plant’s Capacity Effective Capacity
Malakoff
90.00%@2,100 MW TBP 1,890 MW 5,020 MW
27%
40.00%@2,420 MW KEV 968 MW

25.00%@440 MW PDP 110 MW TNB & other IPPs

73%
100.00%@350 MW PPSB 350 MW

75.00%@640 MW GB3 480 MW

93.75%@1,303 MW SEV 1,222 MW Malakoff has an effective generation capacity

of 5,020 MW, which accounts for ∼27% of Peninsular
7,253 MW 5,020 MW Malaysia’s total installed capacity.
 Page: Malakoff
corporation
54 Berhad (731568-V)
Annual Report
2007
performance review by md/ceo (con’t)
Prai Power Plant
The Prai Power Plant is a single-shaft combined
cycle power plant with a dependable capacity
of 350 MW. In its fifth year of operation, a total
of 2,426 GWh of electricity was delivered to the
National Grid. During the financial year under
review, the plant recorded an average Capacity
Factor of 70.49%. The plant’s availability was
93.7%, exceeding PPA requirement of 93%.
Being one of the most efficient plants in Malaysia,
Prai Power Plant recorded net efficiency (Lower
Heating Value) of 53.25% during the financial
year under review.
Tanjung Bin Power Plant
Tanjung Bin Power Plant is the first private
coal-fired power plant in Malaysia and one
of the largest independent coal-fired power
plants in South East Asia. It incorporates
the latest clean coal technologies, such as
Electrostatic Precipitators (“ESP”) and Flue Gas
Desulphurisation (“FGD”). Tanjung Bin Power
Plant has a generating capacity of 3 x 700
MW for a total of 2,100 MW. The plant is held
through our subsidiary, Tanjung Bin Power Sdn
Bhd, in which we hold 90%.
Unit 1 started operations on 28 September
2006, and Unit 2 and Unit 3 have successfully
achieved their targeted Scheduled Commercial
Operation Dates on 28 February 2007 and
31 August 2007, respectively.
In 2007, the plant delivered a total of 7,737 GWh
of electricity to the National Grid, with an average
capacity factor of 59.35%. With an availability of
92.55% at the end of 2007, the plant exceeded
the 91% of the PPA requirements.
International ASSETS
Shuaibah
Our first overseas project is the Shuaibah Phase
3 Independent Water and Power Project in the
Kingdom of Saudi Arabia. We are part of a
consortium tasked with designing, constructing,
commissioning and testing a 900 MW and
194 MIGD (Million Imperial Gallons per Day)
crude oil-fired power and desalination plant.
The project is on a build, own and operate
basis under a 20-year Power and Water
Purchase Agreement with the Water and
Electricity Company of Saudi Arabia.
The Project’s construction activities are in full
swing with procurement and manufacturing
on schedule. The first evaporator arrived at
Shuaibah in October 2006 while first steam
turbine for Unit 10 was erected in December
2007. First firing is expected in September
2008 and the project’s Commercial Operation
Date is scheduled in July 2009.
Oman
We have entered the power generation business
in Oman through Oman Technical Partners
Limited (“OTPL”). The consortium members of
OTPL are Malakoff Technical (Dhofar) Limited
(“MTL”) (43.4%), a wholly-owned subsidiary
of Malakoff International Limited (“MIL”), GCC
Energy Fund of Dubai through its subsidiary,
Oman Power Limited (28.3%) and Darbat
Power LLC of Oman (28.3%).
OTPL in turn, is a direct shareholder of Dhofar
Power Company S.A.O.G (“DPC”) with MTL
having an indirect 20.0% equity interest in DPC
after the successful acquisition of the entire
issued and paid-up share capital, comprising
12,000 issued ordinary shares of USD1.00 each
of Salalah Power Holdings Limited (“SPHL”)
from PSEG Global L.L.C of the United States
of America. MTL also became the Technical
Partner of DPC. DPC is a power integrated
company with 239 MW generating asset as well
as the transmission and distribution assets in
the Salalah region of the Government of Oman.
With electricity demand in the Dhofar region
growing at a cumulative annual growth of
about 7% over the past years, this investment
provides much potential for Malakoff’s growth
in the future.
 Page:

55

Jordan The Government of Jordan signed the CEGCO subsidiary of Hyflux Limited of Singapore. The
Share Sale Agreement with ENARA in May consortium received a letter of award in October
Malakoff has footprint in Jordan with recent
2007. In September 2007 CEGCO Transaction 2006 from the government-owned Algerian
stakes acquisition in Central Electricit y
Documents was signed. Further, in October Energy Company (“AEC”) to develop, construct
Generating Company Limited ( “CEGCO” ) .
2007, the sale completion was finally achieved. and operate the seawater desalination plant.
Malakoff has a 25% interest in Enara Energy
The plant will be supplying 200,000 m3/day of
Investment Company (“ENARA”), a consortium
Moving forward, ENAR A plans to develop desalinated water to Algerienne des Eaux under
with Jordan Dubai Capital of Jordan (65%),
other potential opportunities in Jordan and a 25-year concession.
Consolidated Contractors Ltd of Greece (10%)
neighboring countries utilizing CEGCO’s
in the 51% stake in the Jordanian generation
expertise and manpower. The consortium held 51% in the company
assets held by (“CEGCO”).
undertaking the project, with the balance held
Algeria by AEC, MIL and SUL, in turn, held 70% and
CEGCO has 4 major multi-fuel power plants
Another overseas project is the seawater 30% interest respectively in the consortium.
under 4 separate Power Purchase Agreements
desalination plant which is located at Souk Tleta, The Algeria project is scheduled to achieve
(“PPA”) with a fifth PPA governing the balance
Wilaya of Tlemcen, Algeria with a consortium Financial Close in January 2008. The project’s
generation capacity from 4 other small power
comprising our wholly-owned subsidiary, total construction period is scheduled 24 months
plants. Total net generation capacity under
Malakoff International Limited (“MIL”) and from the Financial Close.
CEGCO is 1,665 MW.
Spring Utility Limited (“SUL”), a wholly-owned
 Page: Malakoff
corporation

56 Berhad (731568-V)
Annual Report
2007

performance review by md/ceo (con’t)

Operations &
Maintenance (“O&M”)
 Page:

57

Teknik janakuasa sdn bhd (“tjsb”), a wholly-owned

subsidiary of malakoff corporation berhad (“malakoff”),
was established in 1995. since then TJSB’s experience with
Lumut, GB3, Prai and tanjung bin Power Plants has proven
its capability in operating and maintaining gas-fired and
coal-fired power plants.
 Page: Malakoff
corporation

58 Berhad (731568-V)
Annual Report
2007

performance review by md/ceo (con’t)

O&M Services
Lumut Power Plant (SEV and GB3)
The Lumut Power Plant continued to provide
highly reliable supply to the National Grid
during the financial year under review. The
Availability Factor (“AF”) based on the 365-
day average of SEV Plant was always above
92.0% and the 365-day Unplanned Outage
Rate (“UOR”) of GB3 Plant to date remains as
below 2.0%. Both plants fulfilled all operational
requirements specified in their respective PPAs.
Both plants performed well and met world
industry standards. Both completed their A/B/C
gas turbine inspections as scheduled, utilising
in-house expertise led by the Repair and
Maintenance Services (“RMS”) team. This is an
indication that the transfer of technology from
the Original Equipment Manufacturer (“OEM”)
has been progressing well. These efforts
towards technology transfer will continue.

Caring for Health, Safety and Environment is

always our top priority. We have maintained
zero Lost Time Incident (“LTI”) over the last
3 years. We continue to enhance our pro-
active safety program and since early last
year we have embarked on Process Safety
Risk Management (“PSRM”) leading towards
achieving OHSAS 18000 Certification.
Competency Based Assessment ( “CBA” )
remains our platform to develop our human
capital, including intensive training based on in-
house simulators as well as on-the-job training
(“OJT”). Lumut Power Plant currently has two
fully operational simulators on site for that
purpose.
Prai Power Plant
Prai Power Plant continued to provide highly
reliable supply to the National Grid during
the financial year under review with the VOR
well below the industry standard of 2% ,
and Availability Factor (“AF” ) of 92.91% .
This was mainly due to the reduction in
the number and duration of forced outages as compared
to 2006. Plant initiative on startup reliability study has also
improved the overall plant reliability. Prai Power Plant also
maintained a high Capacity Factor (“CF”) of 79.06% due to
high dispatch throughout 2007, with an average net efficiency
of 53.25%.
Prai Power Plant has embarked on the development of a Plant
Performance Monitoring off-line model through collaboration
through a third party via a Technical Services Agreement (“TSA”).
This initiative will be integral to TJSB’s service portfolio
in providing value-added O&M services to its internal and
external clients.
Prai Power Plant also managed to keep its excellent safety
record by maintaining zero LTI after four maintenance outages
in 2007.
Tanjung Bin Power Plant
Unit No. 2 met the target scheduled Commercial Operation Date
(“COD”) of 28 February 2007, followed by Unit No. 3 on 31
August 2007. After achieving COD, plant operations have been
seamlessly taken over by TJSB, being the O&M subcontractor.
 Page:

59

The smooth transition and proven competencies of TJSB staff are

attributable to the extensive training programmes, supported by the
availability of Tanjung Bin Plant-Specific Simulator, from an early stage of
project development.

A working group on PSRM was formed to consolidate and standardise

health, safety and environmental system practices among the plants
owned by Malakoff. The group will also prepare the plant for certification
to OHSAS 18001 and ISO 14001 by 2009.

The Operational Environmental Monitoring Plan required for the commercial

operation of the plant has been prepared and implemented, reports are
submitted regularly to the state DOE office, and environmental standards
are being met.

The 2007 Contract Year ended with all 3 units of 700 MW generators
in commercial operation with a facility Capacity Factor of 59% and
Availability Factor of 94%. A slightly higher than average Forced Outage
Rate of 4.17% at the end of the year was mainly due to design and erection
related equipment reliability issues that are normally encountered in a new
plant. All these issues are being progressively resolved.
 Page: Malakoff
corporation
60 Berhad (731568-V)
Annual Report
2007
performance review by md/ceo (con’t)
Operations and Technical
TJSB through its Technical Support Group
(“TSG”) team provides support and expertise
to ensure that TJSB’s operated plants are
managed and maintained efficiently and cost-
effectively through the implementation of the
latest O&M tools and methodologies.
Working in conjunction with Asset Management
Division, TJSB has revamped the cost centre
structures for all of Malakoff’s power plants
in order to enhance further the budgeting
process and there by provide better monitoring
on cost accounting. This initiative to manage
and optimise plant life-cycle cost has been
implemented under the SAP application system.
To further manage associated variable costs at
all plants under its O&M portfolio, TJSB has
formed a RMS team that specialises in major
overhaul on boilers, gas and steam turbines
as well as ‘Balance of Plant’ equipment. The
same team has also been providing technical
support to Malakoff’s international business
development projects and will be offered to
other customers as part of TJSB’s long-term
business plan.
The Life Cycle Asset Information Management
System ( “LC A IM” ) initiative which was
started in 2006 for the Tanjung Bin project,
has captured all technical details, drawings,
project documents and the entire O&M manual
into an integrated system named EALIS. The
application will be used by O&M personnel in
the Tanjung Bin Power Plant which will now be
a reference site for LCAIM. EALIS will be added
to the in-house-developed O&M tools which
TJSB intends to market worldwide.
TSG continues to provide Technical and
Management Support Services for the Salalah
Power Plant in Oman as part of its 6-monthly
technical audit service. Two audits have
successfully been completed, including a review
of a blackout incident in the region.
O&M INTERNATIONAL
TJSB is committed to expanding its business
a n d s e e k in g o p p o r t uni t ie s t o p r ov id e
O&M services to third parties locally and
internationally. Outside of Malaysia, the Middle
East and ASEAN regions have been identified
as potential markets for the Company’s
services. To introduce these services and
establish contacts with potential clients, in
2007, TJSB participated in Power Gen Middle
East, the region’s premier conference and
exhibition for the power and water industries
held in Bahrain, the Power Gen Conference and
Exhibition Asia in Bangkok, and the Malaysia
Services Exhibition organised by Matrade in
Sharjah, United Arab Emirates.
On the international front, TJSB will be
co-operator via a sub-contract to a local
company for the Shuaibah Phase 3 Independent
Water and Power Project (“IWPP”) in the
Kingdom of Saudi Arabia. In addition, TJSB
together with Hyflux Limited of Singapore will
be the O&M contractor for a 200,000 m³/day
Sea Water Desalination Plant in Algeria. TJSB
has also been awarded a Manpower Supply
contract for 12 months for major overhauls of
Alstom gas turbine models 13DM and 13E2 for
Aluminium Bahrain (“ALBA”) in Bahrain.
For O&M related services, TJSB has provided
technical advice, simulator training and on-
the-job training services not only to Malaysian
companies but also to various international
companies, including Marmara in Turkey and
GECOL in Libya.
Throughout 2007, TJSB was actively involved in
the preparation and submission of documents
for the following project tenders:
• 8 5 0 M W and 212,0 0 0m³ / day I W P P
Shuqaiq, Saudi Arabia
• 760 MW CCGT Zanjan II Power Plant, Iran
• 500 MW OCGT Erbil Power Plant, Iraq
• Acquisition of Globeleq assets in Egypt and
Asia
• 800 MW Az Zour Emergency Power Plant,
Kuwait
 Page:

61

O&M Business and Experience

O&M Portfolio (through wholly-owned Teknik Janakuasa Sdn Bhd)

Plant Name Configuration Generating Generating COD O&M

Capacity Type Term
Segari Energy Ventures 6x143.3 (GT) 1,303 CCGT (Once-through) 1996 15

Lumut Power Plant (LPP) 2x221.5 (ST) OCGT 2001

GB3 3x143.3 (GT) 651 CCGT (Cooling Tower) 2002 21
(LPP Block 3) 1x221.5 (ST)
Prai Power Plant 1x230 (GT) 350 CCGT (Single-shat) 2003 21
1x120 (ST)
Tanjung Bin Power 3x700 (Coal) 2,100 Coal Fired 2006 25
Total O&M Portfolio 4,404

O&M via Partnership

Souk Tleta, SWRO Plant, Algeria 200,000 m3/day water output IWP 2009 25

O&M via Sub-Contracting

Shuaibah III Water & 1,190.7 MW & 888,000 m3/day IWP 2009 20
Electricity Company water output

Completed O&M Contract

Petronas Centralised Utility Facilities

Gebeng 3x36 (GT) 108 COGEN 1999 5
Kerteh 6x36 (GT) 216 COGEN 1999 5
 Page: Malakoff
corporation

62 Berhad (731568-V)
Annual Report
2007

performance review by md/ceo (con’t)

Electricity distribution
and chilled water
supply
 Page:

63

Malakoff’s wholly-owned subsidiary, Wirazone Sdn Bhd

(“Wirazone”) is the licensed electricity distributor within
the Kuala Lumpur Sentral (“KL Sentral”) development
area. It has held a license from the Energy Commission
to distribute electricity up to 100 MW within the
franchised area since July 2000. Wirazone also supplies
chilled water to the Plaza Sentral Office complex for
air conditioning from a Centralised Chilled Water System
with a cooling capacity of 7,000 Refrigerant Tonnes.
 Page: Malakoff
corporation

64 Berhad (731568-V)
Annual Report
2007

performance review by md/ceo (con’t)

During the year under review, Wirazone’s customer base

increased to 956 accounts from 801 in the previous year.
The peak maximum power demand recorded was 20.4 MW.
The rebound experienced during the year in the property
market improved the take-up of tenancies at Kuala Lumpur
Sentral and boosted the demand for electricity.

Wirazone’s mission is to provide an excellent standard and

distinctive quality of service to its customers. Wirazone’s
commitment is manifested through its Customer Charter
and its Quality Policy under the MS ISO9001:2000 Quality
Management System. The company’s high standard of
technical performance is reflected by its achievement of a
System Average Interruption Duration Index of 2.382 minutes
per customer and System Average Interruption Frequency
Index of 0.002 interruptions per customer recorded during
the year under review.

Electricity sales and total revenue garnered by Wirazone are

expected to be further improved as more customers move
into the KL Sentral area and register to be served. The
next sub-parcel developments nearing completion are Lot N
(office tower), Lot J (offices towers and leisure centre) and
Lot L (condominium). All are slated to be occupied by the
end of 2008.
Page:

65
 Page: Malakoff
corporation

66 Berhad (731568-V)
Annual Report
2007

performance review by md/ceo (con’t)

Ventures
 Page:

67

Malakoff is AN active market player in developing power

and water related projects in the middle east, north
africa, south asia and south east asia.

The Company’s Ventures division has been making gains

into the international market winning projects during
the period under review.
 Page: Malakoff
corporation

68 Berhad (731568-V)
Annual Report
2007

performance review by md/ceo (con’t)

The Shuaibah III project was the first power and desalination
project which the company participated in a consortium made
up of Tenaga Nasional Berhad (Malaysia’s biggest power utility),
Khazanah (Malaysian Government Treasury investment arm) and
Acwa Power Ltd of Saudi Arabia. Following the successful bid and
start of construction of the Shuaibah III project, the consortium
was awarded the Shuaibah III expansion where it was to finance,
design, construct and operate an adjacent 150,000m3/day seawater
desalination plant using the reverse osmosis technology. This
brings the total desalination capacity of the Shuaibah III project
to 1,030,000m3/day.

This expansion project is to be undertaken on
a fast track basis and commercial operation
date is expected in December 2008. The
engineering, procurement and commissioning
(“EPC”) contractor is Doosan of Korea, the
same EPC contractor for the main Shuaibah III
(desalination portion).
Following the success in Shuaibah, the
company submitted a solicited proposal to the
Ministry of Energy and Mines of Algeria for the
development of a 200,000m3/day seawater
desalination using reverse osmosis technology.
The proposal was accepted by the government.
The partner in the investor consortium is Hyflux
Ltd of Singapore while the Algerian Energy
Company, a government owned investment
company, takes up 49% in the special purpose
company developing the project.
The project achieved financial close in January
2008 and construction started immediately
after. The commercial operation date is
expected in January 2010 supplying potable
water to Algerienne des Eaux, the national
water distribution company.
Meanwhile, in Jordan the company continued
its success as part of the winning consortium
called Enara bidding for 51% equity stake in
CEGCO, the power generation company that
once was owned by the government. The
company owns several power plants totaling
1,665 MW in the country. The partners in the
bidding consortium are Jordan Dubai Capital
of Jordan and Consolidated Contractors Ltd
of Greece.
The strength and experience of Malakoff in
operating various types of power plants in
Malaysia was the major factor in clinching the
deal with CEGCO. The government of Jordan
recognized that Enara can tap Malakoff’s
technical and operational experience to move
CEGCO forward successfully.
Jordanian Minister of Finance, as the representative
of the Government of Jordan, signed the CEGCO
Share Sale Agreement with Enara on 19th May
2007. The completion of the takeover was achieved
in October 2007.
In South East Asia, Malakoff is focusing on
development opportunities in countries like
Singapore, Indonesia, Philippines, and Vietnam. The
countries in South East Asia are rich in resources;
some having huge potential for hydro, whilst
others have abundance of coal and gas. Going
forward, the demand for electricity is expected to
remain high given the potential rate of growth and
development in these developing countries.
South East Asia provides the opportunities for
development of the power industry. Challenges
such as regulations, legal framework, off-taker
credit risk, political influence, investors competition
and other factors would need to be addressed
and mitigated. Malakoff is keen to participate with
suitable partners to develop opportunities within
the region for the medium to long term.
In conclusion, Malakoff is an active market
player in developing power and water related
projects in the regions of focus that has been
identified. It is keen to work with partners
whether they are technical or financial
corporations to develop the industry that will
always be growing given the demand for power
and water is always on the rise. We develop
these infrastructures with a long term goal of
benefiting the stakeholders of the project. We
intend to become a major player in the industry
and look forward to many successful projects
in the future with our partners.
 Page:

69

project
Management
The Group’s in-house projects are undertaken by its project
management subsidiary company, Malakoff Engineering
Sdn Bhd (“MESB”). MESB provides project management
services including negotiation and execution of engineering,
procurement and construction contracts, as well as liaising
with sub-contractors, bankers’ engineers and relevant
authorities in ensuring that projects are completed on time,
within budget and meet the quality standards as spelt out by
the specifications.

Amongst the projects successfully managed by MESB were the 1,303 MW Lumut Power Plant, the 640 MW
GB3 Power Plant in Lumut, MNI Co-generation Plant in Mentakab, Juru-Bayan Lepas 275 kV Substations
and Submarine Cables in Penang, 500 kV Transmission Tower Helicopter Erection, District Cooling System &
Electrical Distribution System for KL Sentral and 2,100 MW Tanjung Bin Power Plant in Johor.

Currently MESB provides project management services to the Asset Management Division of Malakoff
Corporation Berhad (“Malakoff”).
respect for individuals means treating others with respect in all aspects of working relationship,
and appreciating the unique contributions they make to our business.
 respect for
individual
Page: Malakoff
corporation

72 Berhad (731568-V)
Annual Report
2007

CORPORATE
responsibility

Corporate Governance
The tenets of corporate governance remain embedded in the Company
even after the privatization exercise of Malakoff Berhad. This is a
demonstration of the Company’s commitment to meet the highest standards
of governance and transparency in the conduct of our business.
The Board of Directors (“Board”) of Malakoff Corporation Berhad
(“Malakoff” ) remains committed in its efforts to implement the
principles and best practices set out in the Malaysian Code on Corporate
Governance (the “Code”). The adoption of good corporate governance is
a fundamental part of the Board’s responsibility to protect and enhance
shareholders’ value and the performance of the Group.
Health, Safety and Environment (“HSE”)
During the year under review, Lumut Power Plant, GB3 Power Plant
and Prai Power Plant achieved zero Lost Time Incident (LTI). This
accomplishment has been consistent over the years and signifies our
commitment to continuously promote a strong safety culture.
The year 2007 also marked significant achievement in HSE-related
activities. Under the Asset & Risk Management (“ARM”) initiative which
was launched in the same year, a HSE Central Committee was formed
to re-look at the HSE management systems across the spread of
Page:
73
generation assets where we have significant control. The objectives of
the Committee include the following:
• To inculcate a safety a culture within the organisation;
• To ensure effective and consistent HSE practices and implementation
across all sites;
• To achieve OHSAS 18000 certification for all sites by 2009; and
• To achieve ISO 14001 for Tanjung Bin Power Plant in 2009.
The base reference points of the Committee’s scope of work are the
OHSAS 18001 standards’ as well as Dupont’s PSRM system for “best
practice” as deemed appropriate.
Significant achievements of the HSE Central Committee include not only
meeting most of the key OHSAS 18001 and ISO 14001 requirements but
also further enhancing the level of HSE awareness and commitment for
both our employees and our contractors through awareness road-shows,
specialised trainings and other HSE-related activities.
For the year under review, the findings of the quarterly environmental
monitoring for all plants that we operate show that we consistently
achieve our environmental performance standards in terms of ambient air
quality, gaseous stack emission, wastewater quality, marine water quality
and noise levels. Our environmental performance remains constantly well
within the minimum levels prescribed by the relevant authorities.
 Page: Malakoff
corporation

74 Berhad (731568-V)
Annual Report
2007

Corporate Responsibility (cont’d)

HUMAN RESOURCEs DEVELOPMENT

The strength of any organisation lies in a competent and well
trained workforce, working cohesively to achieve the organisation’s
objectives. Our business and operational targets have been achieved
through the dedication and skills of our people. Nonetheless, their
knowledge and capabilities need to be constantly enhanced so that
we can maintain our competitive edge and remain at the forefront
of our industry. This is undertaken through a comprehensive staff
training schedule that covers functional and soft skills as well as
on-the-job training, based on proper needs identification.

Following the rapid growth of Malakoff, the Human Resources

Department has devoted its efforts to achieving such aspirations.
As the demands and requirements for skilful and knowledgeable
manpower increases, more specialised training initiatives have been
developed. To date, we have a plant-specific training simulator at
each power plant, providing a platform to simulate realistic power
plant scenarios for effective training and competency assessment of
our plant operators.

Malakoff’s human resources development efforts extend beyond

our own staff. In September 2007, we launched the Executive
Development programme targeted towards fresh graduates to develop
their competencies through training and on the job experience. The
practical understanding and exposure gained in the programme will
assist them in ensuring that they understand the business processes
and strategies in the Group.

We also provide Segari Energy Ventures (“SEV”) scholarships to

deserving undergraduates at Universiti Tenaga Nasional, which aim
to encourage and assist young people in pursuing relevant courses.
Five scholarships were awarded for the academic year 2006/2007,
bringing the total number awarded to 42 since these scholarships
were introduced in 1997.

enterprise risk management (“erm”)
Since 2002, Enterprise Risk Management (“ERM”)
has been treated as a coordinated approach in
assessing and responding to all identified risks
within the Group. ERM was reflected in the broad
policies and procedures which are carried out by
the Group on a periodic basis in order to facilitate
a more integrated risk management approach
aligning strategy, processes, people, technology
and knowledge with the purpose to manage the
risks that the Group faces.
The Board approved the new ERM approach on
November 2007.
The new approach complies with the Australian/
New Zealand Standard on Risk Management
(AS/NZS 4360:2004). The new ERM Approach
also introduced Primar y and Secondar y
Risk Management Units in order to promote
ownership and accountability. For proactive risk
identification, ERM will take into account the
internal and external risk assessment process
as part of the risk inputs.
The new approach also has a clear segregation
between financial, engineering, operational,
strategic and project risks. These risks are in
turn treated as controllable or inherent.
The new ERM Approach will be implemented
in January 2008.
Community investment
The advancement of educational opportunities
has always been a major focus for the group,
as we consider education to be one of the key
avenues for individual success.
Our pledge of RM600,000 towards the three
year Education Development Programme
for Primary and Secondary Schools, which
commenced in May 2003 receive an extension
of another term until the year 2009 cementing
our continued commitment to Education
excellence. Students from selected schools
in Mukim Pengkalan Bharu, Daerah Manjung,
Perak, Prai and Pontian, Johor will benefit
in terms of subsidised costs for tuition,
examination preparatory classes, motivational
courses, study aids, computer facilities and
monitory rewards to outstanding students.
An ongoing educational programme being
supported is the Adopted School Programme,
which provides opportunities for students from
adopted schools within Mukim Pengkalan
Bharu, Perak, Prai and Pontian Johor to visit
places of interest in the country for educational
purposes. Also ongoing is the award of
scholarships to deserving students studying at
Universiti Tenaga Nasional.
Besides education, the Group also fulfills its
social obligations through financial contributions
and sponsorships to worthwhile causes.
Page:
75
We are also involved in sports tourism as the
title sponsor of Powerman Malaysia. We were
involved in this international sport since its
introduction in Malaysia in 2002. This sport
subsequently received the support of the
Olympic Council of Malaysia in March 2004
and was included in the SEA Games 2007.
POWERING FORWARD
We continue to grow our generation capacity
and deliver consistent and reliable services to
our customers. With Tanjung Bin Power Plant
now on stream, our Operations & Maintenance
expertise extends from gas-fired to include
coal-fired plants.
The opportunities overseas are immense and in
many cases in the arid Middle East and North
Africa, the installation of new power generation
is linked with the construction of a desalination
plant to meet the growing demand for potable
water there.
Malakoff is rising to these challenges and
leveraging on its reputation for technical
engineering excellence and delivering power
projects on schedule, to build a profitable future.
Ahmad Jauhari Yahya
Managing Director/Chief Executive Officer
 Page: Malakoff
corporation

76 Berhad (731568-V)
Annual Report
2007

7 January 2007 18 January 2007

Contribution to fire victims
On January 7, 2007, five (5) houses were
totally burn down at Kampung Kayan, Perak
leaving these families homeless. Malakoff have
visited the area and contributed RM2,000 to
the respective victims.
Annual General Meeting
Malakoff Berhad held its 14th Annual General
Meeting at Mutiara Crowne Plaza, Kuala
Lumpur.

2 FEBRUARY 2007 8 march 2007 28 april 2007

MALAKOFF ORPHANAGE VISIT
Malakoff visited “Rumah Limpahan Kasih” in
Puchong on February 2, 2007. Malakoff made
a cash contribution of RM15,000 to upgrade
the facilities at the orphanage.
Bond Holders Meeting malakoff family day 2007
Malakoff Berhad held its Bond Holders Meeting Malakoff staff and family members were
at Mutiara Crowne Plaza, Kuala Lumpur. treated at Genting Highlands Resort for a grand
Annual Dinner.

CORPORATE
event
highlights

30 april 2007
SIGNING CEREMONY MALAKOFF corporation
BERHAD’s TAKE OVER of malakoff berhad
A signing ceremony was held for the completion
of the take over of Malakoff Berhad by Malakoff
Corporation Berhad formerly known as Nucleus
Avenue (M) Bhd.
8 september 2007
Handing over ceremony
Handing over ceremony of Tanjung Bin Power
Plant, Unit III.
Page:
77
1-3 june 2007
Malakoff Charity Ride
The 3 day Charity ride from Putrajaya to Kuantan succeeded in raising
RM46,000 which was donated to PDK Anggerik, PDK Selendang,
Jawatankuasa Pengurusan Nurhidayah, Rumah Tunas Harapan Payung
Seri Sejahtera Seri Menanti, Bengkel Seri Perkasa and CADS Centre.
9 september 2007 11 november 2007
Inaugural “Eco Run” POWERMAN MALAYSIA 2007
The 10km and 21km “Eco Run” was held at Tanjung “Powerman” is an International series of events
Piai, Johor. The run is part of the Company’s held in Europe and America. “Powerman Malaysia
initiative to promote a healthy lifestyle. 2007” was held at Manjung, Perak. Over 600
participants took part in this International event.
Page: Malakoff
corporation

78 Berhad (731568-V)
Annual Report
2007
80 Directors’ Report
84 Statement by Directors
84 Statutory Declaration
85 Report of the Auditors
86 Balance Sheets
88 Income Statements
89 Statements of Changes in Equity
90 Cash Flow Statements
92 Notes to the Financial Statements

Financial
Statements
 Page: Malakoff
corporation

80 Berhad (731568 V)
Annual Report
2007

Directors’ report for the year ended 31 December 2007

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 2007.

Principal activity
The Company is principally engaged in investment holding company and provision of management services to it subsidiaries. The principal activities of the
subsidiaries are shown in Note 6 to the financial statements. There has been no significant change in the nature of these activities during the financial year.

Change of name
On 25 April 2007, the Company had changed its name from Nucleus Avenue (M) Berhad to Malakoff Corporation Berhad.

Results
Group Company

RM’000 RM’000

Profit attributable to:

Shareholders of the Company 217,297 155,884
Minority interest 51,205 -

268,502 155,884

Reserves and provisions

There were no material transfers to or from reserves and provisions during the year under review.

Dividend
Since the end of the previous financial year, the Company paid:
(i) an interim ordinary dividend of approximately 9.1 sen per share less 27% tax totalling RM23,360,000 in respect of the year ended 31 December 2007 which
was paid on 7 December 2007; and

(ii) an interim preference dividend of RM1 per share less 27% tax totalling RM36,640,000 in respect of the year ended 31 December 2007 which was paid on
7 December 2007.
 Page:

81
Directors’ report for the year ended 31 December 2007 (cont’d)

Directors of the Company

The Directors who served since the date of the last report are:

Director Alternate Director

Tan Sri Abdul Halim bin Ali (Chairman)
(appointed as Director on 24 May 2007)
(appointed as Chairman on 26 October 2007)

Ahmad Jauhari bin Yahya (Managing Director/Chief Executive Officer)

(appointed as Director on 30 April 2007)

Feizal Ali Azlan bin Shahrim (appointed on 6 November 2007)

Hasni bin Harun (resigned on 24 May 2007)

Yoong Nim Chee

Hasni bin Harun (appointed on 24 May 2007)
Tan Ler Chin (appointed on 9 August 2007)
Azian binti Mohd Noh (appointed on 9 August 2007)
Andrew Ian Rowan Yee (appointed on 9 August 2007) Vijay Vijendra Sethu (appointed on 9 August 2007)
Dato’ Wira Syed Abdul Jabbar bin Syed Hassan (resigned on 24 May 2007)

Directors’ interests
None of the Directors holding office at 31 December 2007 had any interest in the ordinary shares of the holding company and of its related corporations during
the financial year.

Directors’ benefits
Since the end of the previous period, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included the aggregate
amount of emoluments received or due and receivable by Directors as shown in the financial statements) by reason of a contract made by the Company or a related
company 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 object 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.
 Page: Malakoff
corporation

82 Berhad (731568 V)
Annual Report
2007

Directors’ report for the year ended 31 December 2007 (cont’d)

Issue of shares
During the financial year, the Company issued:
(i) 351,344,028 new ordinary shares of RM1 each at an issue price of RM10 per share for cash for investment purposes.

(ii) 50,192,004 new redeemable convertible preference shares of RM0.10 each at an issue price of RM10 per share for cash for investment purposes.

There were no other 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.

Other statutory information

Before the balance sheets and income statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:
(i) all known bad debts have been written off and adequate provision made for doubtful debts, and

(ii) all current assets have been stated at the lower of cost and net realisable value.

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 Group and in the Company financial statements 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 in 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 and 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 and of the Company that has arisen since the end of the financial year.

No contingent liability or other liability of the Group and of the Company 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 Company to meet its obligations
as and when they fall due.
 Page:

83
Directors’ report for the year ended 31 December 2007 (cont’d)

Other statutory information (cont’d)

In the opinion of the Directors, other than as disclosed in the financial statements, the results of the operations of the Group and of the Company for the financial
year ended 31 December 2007 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.

Significant events
On 30 April 2007, the Company completed its acquisition of the securities of all the subsidiaries and the associate companies of Malakoff Berhad (Malakoff)
together with all the assets of Malakoff (other than cash balance in Malakoff and the above securities) and the transfer, assignment or novation of all liabilities of
Malakoff for a cash consideration of RM9,307,599,771 less any available cash in Malakoff (“Acquisition”).

On the same date, the Company also completed its fund raising exercise through the issue of new ordinary shares of RM1.00 each together with new redeemable
convertible preference shares of RM0.10 each, cumulative non-convertible Islamic Junior Sukuk and Islamic Commercial papers and Medium Term Notes Issuance
Programme (“Senior Sukuk”) to finance the Acquisition.

Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

………………………………………………… Chairman
Tan Sri Abdul Halim bin Ali

………………………………………………… Managing Director/Chief Executive Officer

Ahmad Jauhari bin Yahya

Kuala Lumpur,

Date: 21 February 2008

 Page: Malakoff
corporation

84 Berhad (731568 V)
Annual Report
2007

Statement by Directors pursuant to Section 169(15) of the Companies Act, 1965

In the opinion of the Directors, the financial statements set out on pages 86 to 136 are drawn up in accordance with the provisions of the Companies Act, 1965 and
applicable approved Financial Reporting Standards issued by the Malaysian Accounting Standards Board so as to give a true and fair view of the state of affairs
of the Group and of the Company at 31 December 2007 and of the results of their operations and cash flows for the year ended on that date.

Signed in accordance with a resolution of the Directors:

………………………………………………… Chairman
Tan Sri Abdul Halim bin Ali

………………………………………………… Managing Director/Chief Executive Officer

Ahmad Jauhari bin Yahya

Kuala Lumpur,

Date: 21 February 2008

Statutory declaration pursuant to Section 169(16) of the Companies Act, 1965

I, Ho Chee Sheong, the officer primarily responsible for the financial management of Malakoff Corporation Berhad, do solemnly and sincerely declare that the
financial statements set out on pages 86 to 136 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 the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the above named in Kuala Lumpur on 21 February 2008.

…………………………………………
Ho Chee Sheong

Before me:
 Page:

85
Report of the auditors to the members of Malakoff Corporation Berhad

We have audited the financial statements set out on pages 86 to 136. The preparation of the financial statements is the responsibility of the Company’s Directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you, as a body, in accordance
with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other person for the content of this report.

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the
Directors, as well as evaluating the overall financial statements presentation. We believe our audit provides a reasonable basis for our opinion.

In our opinion:
(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved Financial Reporting
Standards issued by the Malaysian Accounting Standards Board so as to give a true and fair view of:
(i) the state of affairs of the Group and of the Company at 31 December 2007 and the results of their operations and cash flows for the year ended on
that date; and

(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Group and the Company; and

(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and the subsidiaries have been properly
kept in accordance with the provisions of the said Act.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company's financial statements are in form and content
appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations
required by us for those purposes.

The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under subsection
(3) of Section 174 of the Act.

KPMG Foong Mun Kong

Firm Number: AF 0758 Partner
Chartered Accountants Approval Number: 2613/12/08(J)

Kuala Lumpur,

Date: 21 February 2008

 Page: Malakoff
corporation

86 Berhad (731568 V)
Annual Report
2007

Balance sheets at 31 December 2007

Group Company

Note 2007 2007 2006

RM’000 RM’000 RM’000

Assets
Property, plant and equipment 3 10,631,005 38,419 -
Intangible assets 4 6,904,958 - -
Prepaid lease payments 5 112,288 5,516 -
Investment in subsidiaries 6 - 8,128,970 -
Investment in associates 7 1,536,031 1,022,000 -
Other investments 8 - 1,715,897 -
Deferred tax assets 9 10,609 - -

Total non-current assets 19,194,891 10,910,802 -

Receivables, deposits and prepayments 10 1,147,669 602,737 4,640

Inventories 11 488,173 - -
Current tax assets 52,892 51,550 -
Cash and cash equivalents 12 2,573,954 460,493 -

Total current assets 4,262,688 1,114,780 4,640

Total assets 23,457,579 12,025,582 4,640

Equity
Share capital 356,363 356,363 -
Reserves 3,658,997 3,658,997 -
Retained earnings 157,079 95,666 (218)

Total equity attributable to shareholders of the Company 4,172,439 4,111,026 (218)

Minority interest 220,410 - -

Total equity 13 4,392,849 4,111,026 (218)

 Page:

87
Balance sheets at 31 December 2007 (cont’d)

Group Company

Note 2007 2007 2006

RM’000 RM’000 RM’000

Liabilities
Loans and borrowings 14 14,348,464 6,855,028 -
Employee benefits 15 27,280 8,950 -
Deferred tax liabilities 9 2,809,559 - -

Total non-current liabilities 17,185,303 6,863,978 -

Payables and accruals 16 588,340 457,998 4,858

Provision for tax 23,913 - -
Loans and borrowings 14 1,267,174 592,580 -

Total current liabilities 1,879,427 1,050,578 4,858

Total liabilities 19,064,730 7,914,556 4,858

Total equity and liabilities 23,457,579 12,025,582 4,640

The notes on pages 92 to 136 are an integral part of these financial statements.
 Page: Malakoff
corporation

88 Berhad (731568 V)
Annual Report
2007

Income statements for the year ended 31 December 2007

Group Company

Note 30.4.2007 to
31.12.2007 2007 2006
RM’000 RM’000 RM’000

Revenue 17 2,701,998 421,219 -

Cost of sales (1,536,229) - -

Gross profit 1,165,769 421,219 -

Other income 4,219 104 -
Administrative expenses (96,124) (37,500) (218)
Other expenses (106,304) - -

Results from operating activities 967,560 383,823 (218)

Interest income 123,038 214,330 -
Finance costs (762,955) (382,415) -

Operating profit/(loss) 18 327,643 215,738 (218)

Share of loss after tax and minority
interest of equity accounted associates (3,874) - -

Profit/(loss) before tax 323,769 215,738 (218)

Tax expense 20 (55,267) (59,854) -

Profit/(loss) for the year 268,502 155,884 (218)

Attributable to:
Shareholders of the Company 217,297 155,884 (218)
Minority interest 51,205 - -

Profit/(loss) for the year 268,502 155,884 (218)

The notes on pages 92 to 136 are an integral part of these financial statements.
 Page:

89
Statements of changes in equity for the year ended 31 December 2007

____________ Attributable to shareholders of the Company ____________

_________________ Non-distributable ________________ Distributable

(Accumulated
Ordinary Preference Ordinary Preference losses) /
Share Share Share Share Retained Minority
Group Note capital capital premium premium earnings Total interest Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2007 -* - - - (218) (218) - (218)

Profit for the year - - - - 217,297 217,297 51,205 268,502
Shares issued 13 351,344 5,019 3,162,096 496,901 - 4,015,360 - 4,015,360
Acquisition through
business combination 27 - - - - - - 189,285 189,285
Dividends to shareholders 21 - - - - (60,000) (60,000) (20,080) (80,080)

At 31 December 2007 351,344 5,019 3,162,096 496,901 157,079 4,172,439 220,410 4,392,849

* RM2

____________ Attributable to shareholders of the Company _____________

__________________ Non-distributable ___________________ Distributable

(Accumulated
Ordinary Preference Ordinary Preference losses) /
Share Share Share Share Retained
Company Note capital capital premium premium earnings Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At incorporation date -* - - - - -
Loss for the year - - - - (218) (218)

At 31 December 2006/1 January 2007 - - - - (218) (218)

Profit for the year - - - - 155,884 155,884
Shares issued 13 351,344 5,019 3,162,096 496,901 - 4,015,360
Dividends to shareholders 21 - - - - (60,000) (60,000)

At 31 December 2007 351,344 5,019 3,162,096 496,901 95,666 4,111,026

* RM2

The notes on pages 92 to 136 are an integral part of these financial statements
 Page: Malakoff
corporation

90 Berhad (731568 V)
Annual Report
2007

Cash flow statements for the year ended 31 December 2007

Group Company

Note 30.4.2007 to
31.12.2007 2007 2006
RM’000 RM’000 RM’000

Cash flows from operating activities

Profit/(Loss) before tax 323,769 215,738 (218)
Adjustments for:
Amortisation of intangible assets 230,795 - -
Depreciation of property, plant and equipment 375,815 1,329 -
Amortisation of prepaid lease payments 2,986 42 -
Finance costs 762,955 382,415 -
Interest income (123,038) (214,330) -
Share of loss of equity accounted associates 3,874 - -
Allowance for doubtful debts 75,491 - -
Provision for retirement benefits 4,167 696 -

Operating profit/(loss) before changes in working capital 1,656,814 385,890 (218)

Inventories (46,037) - -
Trade and other receivables 40,964 (118,647) (4,640)
Trade and other payables (185,766) (136,554)

Cash generated from operations 1,465,975 130,689 (4,858)

Tax paid (126,869) - -

Net cash from/(used in) operating activities 1,339,106 130,689 (4,858)

Cash flows from investing activities

Dividend received from associated companies 33,475 - -
Investment in associated companies (55,773) - -
Redemption of unsecured loan stocks (525) - -
Interest received 93,243 181,125 -
Purchase of property, plant and equipment (253,331) (2,716) -
Acquisition of business, net of cash acquired 27 (7,211,089) (9,239,344) -

Net cash used in investing activities (7,394,000) (9,060,935) -

 Page:

91
Cash flow statements for the year ended 31 December 2007 (cont’d)

Group Company

Note 30.4.2007 to
31.12.2007 2007 2006
RM’000 RM’000 RM’000

Cash flows from financing activities

Dividends paid (20,080) (60,000) -
Interest paid (819,741) (98,630) -
Issue of shares 4,015,360 4,015,360 -
Repayment of borrowings (1,963,380) (1,878,380) -
Proceeds from borrowings 7,416,689 7,412,389 -
Advance from holding company - - 4,858

Net cash generated from financing activities 8,628,848 9,390,739 4,858

Net increase in cash and cash equivalents 2,573,954 460,493 -

Cash and cash equivalents at beginning of year - - -

Cash and cash equivalents at end of year 2,573,954 460,493 -

(i) Cash and cash equivalents

Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:
Group Company

2007 2007 2006

RM’000 RM’000 RM’000

Cash and bank balances 299,782 31,644 -

Deposits with licensed banks 2,274,172 428,849 -

2,573,954 460,493 -

The notes on pages 92 to 136 are an integral part of these financial statements.
 Page: Malakoff
corporation

92 Berhad (731568 V)
Annual Report
2007

notes to the financial statements

Malakoff Corporation Berhad is a public limited liability company, incorporated and domiciled in Malaysia. The addresses of its registered office and principal
place of business are as follows:
Registered office
Level 8, Kompleks Antarabangsa
Jalan Sultan Ismail
50250 Kuala Lumpur

Principal place of business

Level 12, Block 3B
Plaza Sentral
Jalan Stesen Sentral 5
50470 Kuala Lumpur

The Company is principally engaged in investment holding company and provision of management services to it subsidiaries. The principal activities of the
subsidiaries are shown in Note 6 to the financial statements.

The consolidated financial statements of the Company as at and for the year ended 31 December 2007 comprise the Company and its subsidiaries and the Group’s
interest in associates.

The holding company is MMC Corporation Berhad., a company incorporated in Malaysia and listed on the Main Board of Bursa Malaysia Securities Berhad. The
ultimate holding company is Indra Citra Sdn. Bhd, a company incorporated in Malaysia.

The financial statements were approved by the Board of Directors on 21 February 2008.

1. Basis of preparation
(a) Statement of compliance
The financial statements of the Group and the Company have been prepared in accordance with applicable approved Financial Reporting Standards
(FRS) issued by the Malaysian Accounting Standards Board (MASB), accounting principles generally accepted in Malaysia and the provisions of the
Companies Act, 1965.

The MASB has also issued the following FRSs and Interpretations that are effective for annual years beginning after 1 January 2007, and that have
not been applied in preparing these financial statements:
FRSs/Interpretations Effective date
FRS 107, Cash Flow Statements 1 July 2007
FRS 111, Construction Contracts 1 July 2007
FRS 112, Income Taxes 1 July 2007
FRS 118, Revenue 1 July 2007
FRS 120, Accounting for Government Grants and
Disclosure of Government Assistance 1 July 2007
 Page:

93
Notes to the financial statements (cont’d)

1. Basis of preparation (cont’d)

(a) Statement of compliance (cont’d)
FRSs/Interpretations (cont’d) Effective date
Amendment to FRS 121, The Effects of Changes in
Foreign Exchange Rates - Net Investment in a Foreign Operation 1 July 2007
FRS 134, Interim Financial Reporting 1 July 2007
FRS 137, Provisions, Contingent Liabilities and Contingent Assets 1 July 2007
FRS 139, Financial Instruments: Recognition and Measurement To be announced
IC Interpretation 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities 1 July 2007
IC Interpretation 2, Members’ Shares in Co-operative Entities and Similar Instruments 1 July 2007
IC Interpretation 5, Rights to Interests arising from Decommissioning,
Restoration and Environmental Rehabilitation Funds 1 July 2007
IC Interpretation 6, Liabilities arising from Participating in a Specific Market
- Waste Electrical and Electronic Equipment 1 July 2007
IC Interpretation 7, Applying the Restatement Approach under FRS 129,
Financial Reporting in Hyperinflationary Economies 1 July 2007
IC Interpretation 8, Scope of FRS 2 1 July 2007

The Group and the Company plan to adopt FRS 111, FRS 112, FRS 118 and FRS 137 for the annual period beginning 1 January 2008. The initial
application of these FRSs is not expected to have any material impact on the financial statements of the Group and the Company.

The Group and the Company will adopt FRS 139 once the effective date has been announced. The impact of applying FRS 139 on the financial
statements upon first adoption as required by paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors is not
disclosed by virtue of the exemption given in FRS 139.103AB.

Other FRSs and Interpretations are not applicable to the Group and Company. Hence no further disclosure is warranted.

There are no material effects upon adoption of the new/revised FRSs in 2007.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following assets as explained in their respective accounting
policy notes:
- Property, plant and equipment
- Intangible assets

(c) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency. All financial information presented
in RM has been rounded to the nearest thousand, unless otherwise stated.
 Page: Malakoff
corporation

94 Berhad (731568 V)
Annual Report
2007

notes to the financial statements (cont’d)

1. Basis of preparation (cont’d)

(d) Use of estimates and judgements
The preparation of financial statements 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 year in which the
estimate is revised and in any future years affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the
amounts recognised in the financial statements other than those disclosed in the following notes:
• Note 2 (c) (iii) - residual value of power plant
• Note 4 - intangible assets

2. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these financial statements, and have been applied
consistently by Group entities, unless otherwise stated.

(a) Basis of consolidation

(i) Subsidiaries
Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the ability to exercise
its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential
voting rights that presently are exercisable are taken into account. Subsidiaries are consolidated using the purchase method of accounting.

Under the purchase method of accounting, the financial statements of subsidiaries are included in the consolidated financial statements from
the date that control commences until the date that control ceases.

Investments in subsidiaries are stated in the Company’s balance sheet at cost less any impairment losses, unless the investment is classified
as held for sale (or included in a disposal group that is classified as held for sale).

(ii) Associates
Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and
operating policies.

Associates are accounted for in the consolidated financial statements using the equity method unless it is classified as held for sale (or included
in a disposal group that is classified as held for sale). The consolidated financial statements include the Group’s share of the profit or loss of the
equity accounted associates, after adjustments, if any, to align the accounting policies with those of the Group, from the date that significant
influence commences until the date that significant influence ceases.
 Page:

95
Notes to the financial statements (cont’d)

2. Significant accounting policies (cont’D)

(a) Basis of consolidation (cont’d)
(ii) Associates (cont’d)
When the Group’s share of losses exceeds its interest in an equity accounted associate, the carrying amount of that interest (including any long-
term investments) 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 investee.

Investments in associates are stated in the Company’s balance sheet at cost less any impairment losses, unless the investment is classified as
held for sale (or included in a disposal group that is classified as held for sale).

(iii) Minority interest

Minority interest at the balance sheet date, being the portion of the net identifiable 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 balance sheet and statement
of changes in equity within equity, separately from equity attributable to the equity shareholders of the Company. Minority interest in the results
of the Group are presented on the face of the consolidated income statement as an allocation of the total profit or loss for the year between
minority interest and the equity shareholders of the Company.

Where losses applicable to the minority exceed the minority’s interest in the equity of a subsidiary, the excess, and any further losses applicable
to the minority, are charged against the Group’s interest except to the extent that the minority has a binding obligation to, and is able to, make
additional investment to cover the losses. If the subsidiary subsequently reports profits, the Group’s interest is allocated with all such profits
until the minority’s share of losses previously absorbed by the Group has been recovered.

(iv) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements.

(b) Foreign currency

(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates at the dates of
the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional
currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at
fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency
differences arising on retranslation are recognised in the income statements.

(ii) Operations denominated in functional currencies other than Ringgit Malaysia

The assets and liabilities of operations in functional currencies other than RM, including goodwill and fair value adjustments arising on
acquisition, are translated to RM at exchange rates at the balance sheet date. The income and expenses of foreign operations are translated to
RM at exchange rates at the dates of the transactions.
 Page: Malakoff
corporation

96 Berhad (731568 V)
Annual Report
2007

notes to the financial statements (cont’d)

2. Significant accounting policies (cont’D)

(b) Foreign currency (cont’d)
(ii) Operations denominated in functional currencies other than Ringgit Malaysia (cont’d)
Foreign currency differences are recognised in translation reserve. On disposal, accumulated translation differences are recognised in the
consolidated income statement as part of the gain or loss on sale.

(iii) Net investment in foreign operations

Exchange differences arising from monetary items that in substance form part of the Company’s net investment in foreign operations are
recognised in the Company’s income statement. Such exchange differences are reclassified to equity in the consolidated financial statements.
Deferred exchange differences are recognised in the consolidated income statement upon disposal of the investment.

(c) Property, plant and equipment

(i) Recognition and measurement
Items of property, plant and equipment are stated at cost less any accumulated depreciation and any accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the
asset to working condition for its 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 materials and direct labour and, for qualifying assets, borrowing costs are
capitalised in accordance with the Group’s accounting policy.

The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at acquisition date. The fair
value of property is the estimated amount for which a property could be exchanged between a willing buyer and a willing seller in an arm’s
length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value
of other items of plant and equipment is based on the quoted market prices for similar items.

When significant parts 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.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the
carrying amount of property, plant and equipment and are recognised net within “other income” or “other operating expenses” respectively in the
income statements. When revalued assets are sold, the amounts included in the revaluation surplus reserve are transferred to retained earnings.

(ii) Subsequent costs

The cost of replacing part 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 part will flow to the Group and its cost can be measured reliably. The carrying amount of the
replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statements
as incurred.
 Page:

97
Notes to the financial statements (cont’d)

2. Significant accounting policies (cont’D)

(c) Property, plant and equipment (cont’d)
(iii) Residual value
The management has assessed the residual value of its power plant based on management’s best estimate of the amount that the Group would
obtain from the disposal or continuing use of the power plant at the end of the respective power purchase agreements (“PPA”).

(iv) Depreciation
Depreciation is recognised in the income statements on a straight-line basis over the estimated useful lives of each part of an item of property,
plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. Freehold land is not depreciated.
Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.

The estimated useful lives for the current and comparative periods are as follows:
Buildings 5 years
Power plant 35 years
Plant and machinery 5-25 years
C-inspection costs 3 years
Office equipment and furniture 5 years
Motor vehicles 5 years
Computers 3 years

The depreciable amount is determined after deducting the residual value.

Depreciation methods, useful lives and residual values are reassessed at the balance sheet date.

(d) Leased assets

(i) Finance lease
Leases in terms of which the Group and the Company assumes substantially all the risks and rewards of ownership are classified as finance
leases. Upon initial recognition the leased asset is 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 is accounted for in accordance with the accounting policy applicable to
that asset.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding
liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the
remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining
term of the lease when the lease adjustment is confirmed.
 Page: Malakoff
corporation

98 Berhad (731568 V)
Annual Report
2007

notes to the financial statements (cont’d)

2. Significant accounting policies (cont’D)

(d) Leased assets (cont’d)
(ii) Operating lease
Other leases are operating leases and the leased assets are not recognised on the Group and the Company’s balance sheet.

Leasehold land that normally has an indefinite economic life and title is not expected to pass to the lessee by the end of the lease term is treated
as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted for as prepaid lease payments.

Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease
incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

(e) Intangible assets

(i) Goodwill
Goodwill arises on business combinations and is measured at cost less any accumulated impairment losses.

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities of the acquiree.

Any excess of the Group’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of
acquisition is recognised immediately in income statements.

Goodwill is allocated to cash-generating units and is tested annually for impairment or more frequently if events or changes in circumstances
indicate that it might be impaired.

(ii) Other intangible assets

Intangible assets, other than goodwill, that are acquired by the Group are stated at cost less any accumulated amortisation and any accumulated
impairment losses.

(iii) Amortisation
Other intangible assets are amortised from the date that they are available for use. Amortisation of intangible assets is charged to the income
statements based on the estimated net electrical output and fixed operation and maintenance income over the finite useful lives of the
intangible assets.
 Page:

99
Notes to the financial statements (cont’d)

2. Significant accounting policies (cont’D)

(f) Investments
Long term investments other than in subsidiaries and associates companies are stated at cost. Impairment is made when the Directors are of the view
that there is impairment which is other than temporary.

Long term investments in subsidiaries and associates are stated at cost in the Company, less impairment loss where applicable.

Investment in redeemable preference shares are stated at cost. The premium receivable upon redemption of the redeemable preference shares is
accrued over the tenor of the preference shares.

(g) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average cost and includes
expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. 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.

(h) Receivables
Receivables are initially recognised at their cost when the contractual right to receive cash or another financial asset from another entity is established.

Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.

Receivables are not held for the purpose of trading.

(i) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk
of changes in value. For the purpose of the cash flow statements, cash and cash equivalents are presented net of pledged deposits.

(j) Impairment
The carrying amounts of assets except for financial assets, 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, then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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 the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are
recognised in the income statements. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount
of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a pro rata basis.
 Page: Malakoff
corporation

100 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

2. Significant accounting policies (cont’D)

(j) Impairment (cont’d)
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at
each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is 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 income statements in the year in which the reversals are recognized.

(k) Share capital

Preference share capital
Preference share capital is classified as equity if it is non-redeemable, or is redeemable but only at the Company’s option, and any dividends are
discretionary. Dividends thereon are recognised as distributions within equity. Preference share capital is classified as a liability if it is redeemable
on a specific date or at the option of the shareholders, or if dividend payments are not discretionary. Dividends thereon are recognised as interest
expense in the income statements.

(l) Loans and borrowings

Loans and borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statements
over the period of the loans and borrowings using the effective interest method.

(m) Employee benefits

(i) Short term employee benefits
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an
undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

The Group’s contribution to statutory pension fund is charged to the income statements in the year to which they relate. Once the contributions
have been paid, the Group has no further payment obligations.

(ii) Defined benefit plans

The Group’s net obligation in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have
earned in return for their service in the current and prior periods and that benefit is discounted to determine the present value. The discount
rate is the market yield at the balance sheet date on high quality corporate bonds or government bonds. The calculation is performed by an
actuary using the projected unit credit method.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an expense
in the income statement on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest
immediately, the expense is recognised immediately in the income statement.
 Page:

101
Notes to the financial statements (cont’d)

2. Significant accounting policies (cont’D)

(m) Employee benefits (cont’d)
(ii) Defined benefit plans (con’d)
In calculating the Group’s obligation in respect of a plan, to the extent that any cumulative unrecognised actuarial gain or loss exceeds ten
percent (10%) of the greater of the present value of the defined benefit obligation, that portion is recognised in the income statement over the
expected average remaining working lives of the employees participating in the plan. Otherwise, the actuarial gain or loss is not recognised.

Where the calculation results in a benefit to the Company, the recognised asset is limited to the net total of any unrecognised actuarial losses
and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

An actuarial valuation is conducted by an independent actuary at regular intervals. The last valuation performed was on 31 August 2006.

(n) Provisions
A provision is recognised if, as a result of a past event, the Group has 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
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.

Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed
as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed
by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of
economic benefits is remote.

(o) Payables
Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual obligation to deliver cash or another
financial asset to another entity.

(p) Income recognition

(i) Capacity and energy payments, operation and maintenance charges and project management fees
Revenue is measured at the fair value of the consideration receivable and is recognised in the income statement as it accrues.

(ii) Income from construction contract

As soon as the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognised in the income statements
in proportion to the stage of completion of the contact. Contract revenue includes the initial amount agreed in the contract plus any variations in
contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and can be measured reliably.

The stage of completion is assessed by reference to completion of a physical proportion of the contract work. When the outcome of a
construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely
to be recoverable. An expected loss on a contract is recognised immediately in the income statements.
 Page: Malakoff
corporation

102 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

2. Significant accounting policies (cont’D)

(p) Income recognition
(iii) Dividend income
Dividend income is recognised when the right to receive payment is established.

(q) Interest income and borrowing costs

Interest income is recognised as it accrues, using the effective interest method.

All borrowing costs are recognised in the income statements using the effective interest method, in the period in which they are incurred except to
the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a
substantial period of time to be prepared for its intended use.

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 is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted
or completed.

(r) Tax expense

Tax expense comprises current and deferred tax. Tax expense is recognised in the income statements except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date,
and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities
for reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the
initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit (tax loss). Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when
they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax liability is recognised for all taxable temporary differences.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can
be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.

(s) Segment reporting

A segment is a distinguishable component of the Group that is engaged in providing products or services (business segment), which is subject to risks
and rewards that are different from those of other segments.
 Page:

103
Notes to the financial statements (cont’d)

3. Property, plant and equipment

C - Office
Freehold Work in Power Inspection Plant and equipment Motor
land Buildings progress plant costs machinery and furniture vehicles Computers Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost

At 1 January 2006/
31 December 2006/
1 January 2007 - - - - - - - - - -

Acquisition through
business combination 21,516 27,789 6,525 11,852,161 630,855 39,233 30,465 4,924 25,463 12,638,931

Additions - - 14,377 134,066 91,755 3,847 7,553 430 1,303 253,331

Disposal - - - - - - - (8) - (8)

Reclassification - - (1,574) 1,574 - - - - - -

At 31 December 2007 21,516 27,789 19,328 11,987,801 722,610 43,080 38,018 5,346 26,766 12,892,254

Depreciation

As at 1 January 2006/
31 December 2006/
1 January 2007 - - - - - - - - - -

Acquisition through
business combination - 5,905 - 1,305,019 523,574 8,756 18,967 3,559 19,662 1,885,442

Charge for the year - 893 - 276,360 91,711 870 3,531 266 2,184 375,815

Disposal - - - - - - - (8) - (8)

At 31 December 2007 - 6,798 - 1,581,379 615,285 9,626 22,498 3,817 21,846 2,261,249

Carrying amount

As at 1 January 2006 - - - - - - - - - -

At 31 December 2006/
1 January 2007 - - - - - - - - - -

At 31 December 2007 21,516 20,991 19,328 10,406,422 107,325 33,454 15,520 1,529 4,920 10,631,005
 Page: Malakoff
corporation

104 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

3. Property, plant and equipment (cont’d)

Office
Freehold Work in Plant and equipment Motor
land Buildings progress machinery and furniture vehicles Computers Total
Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost

As at 1 January 2006/ 31 December 2006/

1 January 2007 - - - - - - - -

Acquisition through business combination 21,516 17,055 - 154 2,987 1,080 6,622 49,414

Additions - - 1,888 - 314 152 362 2,716

At 31 December 2007 21,516 17,055 1,888 154 3,301 1,232 6,984 52,130

Depreciation

As at 1 January 2006/31 December 2006/

1 January 2007 - - - - - - - -

Acquisition through business combination - 3,451 - 154 2,541 1,068 5,168 12,382

Charge for the year - 536 - - 225 12 556 1,329

At 31 December 2007 - 3,987 - 154 2,766 1,080 5,724 13,711

Carrying amount

As at 1 January 2006 - - - - - - - -

At 31 December 2006/1 January 2007 - - - - - - - -

At 31 December 2007 21,516 13,068 1,888 - 535 152 1,260 38,419

Security

At 31 December 2007, properties with a carrying amount of RM10,545,304,000 (2006 - Nil) was charged as security for debt securities issued by the subsidiaries (see note
14 - loans and borrowings).

Borrowing costs

Included in property, plant and equipment of the Group is interest capitalised at a rate of 6% to 8.9% per annum (2006 - Nil% per annum) for the year of RM222,222,000
(2006 - Nil).
 Page:

105
Notes to the financial statements (cont’d)

4. Intangible assets

Interest over
Power Purchase
and Operation and
Goodwill Maintenance Agreements

Subsidiaries Associate Total

Group RM’000 RM’000 RM’000 RM’000

Cost
At 1 January 2006 - - - -

At 31 December 2006/At 1 January 2007 - - - -

Acquisitions through business combination 8,232 7,103,796 857,970 7,969,998

At 31 December 2007 8,232 7,103,796 857,970 7,969,998

Amortisation
At 1 January 2006 - - - -

At 31 December 2006/At 1 January 2007 - - - -

Amortisation for the year - 207,070 23,725 230,795

At 31 December 2007 - 207,070 23,725 230,795

Carrying value
At 1 January 2006 - - - -

At 31 December 2006/At 1 January 2007 - - - -

At 31 December 2007 8,232 6,896,726 834,245 7,739,203

(Note 7)
 Page: Malakoff
corporation

106 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

4. Intangible assets (cont’d)

Carrying Amount
Interest over
Power Purchase
and Operation and
Goodwill Maintenance Agreements

Subsidiaries Total
Group RM’000 RM’000 RM’000

At 1 January 2007 - - -

At 31 December 2007 8,232 6,896,726 6,904,958

Intangible assets arising from interest over Power Purchase and Operation and Maintenance Agreements
The Group’s revenue is substantially derived from the generation and sale of electricity energy and generating capacity in Malaysia, which is governed
by the Power Purchase Agreements (“PPA”) (together with the Independent Power Producer (“IPP”) Licence issued by the Ministry of Energy, Water and
Communications) held by the respective power generating subsidiaries and associates. In addition, part of the Group’s revenue is also generated from the
operations and maintenance of the power plants, which is governed by the Operation and Maintenance Agreement (“OMA”) held by the operations and
maintenance subsidiaries.

The Group has identified the cashflows to be generated from the PPA (together with the IPP Licences) and the OMA as Intangible Assets.

The PPAS and the IPP Licences are recognised as a single asset in accordance with FRS138, in view that both are required for the generation and sale of
electricity energy and generating capacity in Malaysia.

There are six (6) PPAs (together with the respective IPP Licences) held respectively by the Group’s power generating subsidiaries of Segari Energy Ventures
Sdn Bhd (“SEV”), GB3 Sdn Bhd (“GB3”), Prai Power Sdn Bhd (“PPSB”) and Tanjung Bin Power Sdn Bhd (“TBP”) and associates Kapar Energy Ventures Sdn
Bhd (“KEV”) and Port Dickson Power Sdn Bhd (“PDP”); and there are four (4) OMAs held by the Group’s operations and maintenance subsidiaries of Teknik
Janakuasa Sdn Bhd (“TJSB”) and Natural Analysis Sdn Bhd (“NASB”).

These PPAS and OMA are the key documents that govern the underlying strength of the Group’s cash flow, which provide for, inter alia, the electricity tariff,
supply, operations and maintenance and all other terms to be met by the Group. Each PPA is tied to one power plant, where its fair value can be separately
accounted for, while the OMAs are held by TJSB and its wholly-owned subsidiary, NASB, of which their fair values can also be accounted for.

Measurement
The fair value of the Intangible Assets arising from the PPAs and OMAs are measured using the Multi-Period Excess Earnings Method (“MEEM”) under the
income method. The underlying rationale in the MEEM is that the fair value of an Intangible Asset represents the present value of the net income after taxes
attributable to the Intangible Asset. The net income attributable to the Intangible Asset is the excess income after charging a fair return on and of all the assets
that are necessary (contributory assets) to realise the net income. The contributory asset charges (“CAC”) are based on the fair value of each contributory
asset and represent the return on and return of the assets. The assumption in calculating the CAC is that the owner of the Intangible Asset “rents” or “leases”
the contributory assets from a hypothetical third party in an arm’s length transaction in order to be able to derive income from the Intangible Asset. The
present value of the expected income attributable to the Intangible Assets less CAC and taxes represents the value of the Intangible Asset.
 Page:

107
Notes to the financial statements (cont’d)

4. Intangible assets (cont’d)

The management had applied the following key assumptions in deriving the present value of the net income after taxes attributable to the Intangible Assets:
• Remaining useful life of PPAs/OMAs 12 - 24 years (in accordance with the respective PPAs)
• Dependable capacity (DC) 350MW - 2,420MW
• Capacity factor 45% - 75% of DC
• Net electrical output (million kW/hour) 2,300 - 11,197
• Capacity Rate (RM/kW/month) 11.61 - 50.00
• Fixed Operating Rate under Revenue (RM/kW/month) 4.00 - 10.50
• Variable Operating Rate under Revenue (RM/kW/month) 0.013 - 0.025
• Fuel price (RM/mBtu) 4.60 - 6.50
• CAC 17.77% - 28.00% of EBITDA

In applying the MEEM valuation methodology, the expected cash flows are discounted to their present value equivalent using a rate of return that reflects
the relative risk of the cashflows, as well as the time value of money. This is calculated by weighing the required returns on debt and equity in proportion to
their assumed percentages. The applied discount rate was 9.09% per annum.

Amortisation
The Intangible Assets with finite useful lives are amortised based on the Net Electrical Output generated from the PPA companies and Fixed Operation and
Maintenance income generated from the OMA companies as management represented that these basis best represents the pattern in which the Intangible
Assets’ future economic benefits are expected to be consumed by the Group. The amortisation is charged to cost of sales in the income statement.

Impairment testing for cash generating units (“CGUs”) containing goodwill

For the purpose of impairment testing, the goodwill amounting to RM8.2 million is allocated to the following CGUs:
RM’000

PPA companies 6,532

OMA companies 1,700

The impairment test of the above CGUs was based on the same cashflows used to fair value the Intangible Assets but without any effect on tax payments
and receipts and a pre tax discount rate was used. The estimated recoverable amount of the CGUs exceeds the carrying amount, including goodwill
allocated. Therefore, there is no impairment on the goodwill.
 Page: Malakoff
corporation

108 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

5. Prepaid lease payments

Leasehold land
Unexpired Unexpired
period period
less than more than
Group 50 years 50 years Total
RM’000 RM’000 RM’000

Cost
At 1 January 2006 - - -

At 31 December 2006/1 January 2007 - - -

Acquisition through business combination 93,137 29,371 122,508

At 31 December 2007 93,137 29,371 122,508

Amortisation
At 1 January 2006 - - -

At 31 December 2006/1 January 2007 - - -

Acquisition through business combination 2,388 4,846 7,234
Amortisation for the year 2,388 598 2,986

At 31 December 2007 4,776 5,444 10,220

Carrying amounts
At 1 January 2006 - - -

At 31 December 2006/1 January 2007 - - -

At 31 December 2007 88,361 23,927 112,288

Security
The leasehold land of the Group amounting to RM6,221,000 (2006:Nil) have been charged as security for debt securities issued by certain subsidiaries.
 Page:

109
Notes to the financial statements (cont’d)

5. Prepaid lease payments (cont’d)

Leasehold land
Unexpired
period
more than
Company 50 years Total
RM’000 RM’000

Cost
At 1 January 2006 - -
At 31 December 2006/1 January 2007 - -
Acquisition through business combination 6,159 6,159

At 31 December 2007 6,159 6,159

Amortisation
At 1 January 2006 - -

At 31 December 2006/1 January 2007 - -

Acquisition through business combination 601 601
Amortisation for the year 42 42

At 31 December 2007 643 643

Carrying amounts
At 1 January 2006 - -

At 31 December 2006/1 January 2007 - -

At 31 December 2007 5,516 5,516

Security
The Company entered into a sale and purchase agreement with a subsidiary for the disposal of certain portions of a leasehold land. The subdivision of the
land was completed in 2006 and the Company is in the process of transferring the land to the subsidiary. The lease was charged as security for certain debt
instruments issued by the subsidiary.
 Page: Malakoff
corporation

110 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

6. Investments in subsidiaries
Company

2007 2006
RM’000 RM’000

At cost:
Unquoted shares 8,128,970 -

8,128,970 -

Details of the subsidiaries are as follows:

Country of Effective
Name incorporation ownership interest Principal activities
2007 2006
% %

Segari Energy Ventures Sdn. Bhd. Malaysia 93.75 - Design, construction, operation and maintenance of
a combined cycle power plant, generation and sale
of electrical energy and generating capacity of
power plant

Teknik Janakuasa Sdn. Bhd. Malaysia 100 - Operation and maintenance of power plants

GB3 Sdn. Bhd. Malaysia 75 - Design, construction, operation and maintenance of

a combined cycle power plant, generation and sale
of electrical energy and generating capacity of
the power plant

Prai Power Sdn. Bhd. Malaysia 100 - Design, construction, operation and maintenance
of a combined cycle power plant, generation and
sale of electrical energy and generating capacity
of the power plant

Tanjung Bin Power Sdn. Bhd. Malaysia 90 - Design, engineering, procurement, construction,
installation and commissioning, testing, operation
and maintenance of 2,100 MW coal fired electricity
generating facilities and sale of electrical energy
and generating capacity of the power plant

Malakoff Engineering Sdn. Bhd. Malaysia 100 - Provision of engineering and project
management services
 Page:

111
Notes to the financial statements (cont’d)

6. Investments in subsidiaries (cont’d)

Details of the subsidiaries are as follows: (cont’d)
Country of Effective
Name incorporation ownership interest Principal activities
2007 2006
% %

Wirazone Sdn. Bhd. Malaysia 100 - Build, own and operate an electricity distribution
system and a centralised chilled water plant system

Hypergantic Sdn. Bhd. Malaysia 100 - Investment holding

Desa Kilat Sdn. Bhd. Malaysia 54 - Land reclamation, development and/or sale of
reclaimed land

Tuah Utama Sdn. Bhd. Malaysia 100 - Investment holding

Transpool Sdn. Bhd. Malaysia 100 - Dormant

Spring Assets Limited British Virgin Islands 100 - Dormant

Malakoff Capital (L) Ltd Malaysia 100 - Dormant

Malakoff International Limited Cayman Islands 100 - Offshore - Investment holding

Subsidiary of Malakoff International Limited

Malakoff Gulf Limited British Virgin Islands 100 - Offshore - Investment holding

Malakoff Technical (Dhofar) Limited British Virgin Islands 100 - Offshore - Investment holding

Malakoff AlDjazair Desal Sdn Bhd Malaysia 100 - Investment holding

Malakoff Jordan Generation Limited British Virgin Islands 100 - Offshore - Investment holding

KuwMal Investments Limited British Virgin Islands 100 - Dormant

Subsidiary of Malakoff AlDjazair Desal Sdn Bhd
Tlemcen Desalination Investment France 70 - Offshore - Investment holding
Company SAS

Subsidiaries of Teknik Janakuasa Sdn Bhd

Natural Analysis Sdn. Bhd. Malaysia 100 - Operation and maintenance of power plant

TJSB International Limited Cayman Islands 100 - Offshore - Investment holding

 Page: Malakoff
corporation

112 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

6. Investments in subsidiaries (cont’d)

Details of the subsidiaries are as follows: (cont’d)
Country of Effective
Name incorporation ownership interest Principal activities
2007 2006
% %

Subsidiaries of TJSB International Limited

TJSB Middle East Limited British Virgin Islands 100 - Offshore - Investment holding

TJSB International (Shoaiba) Limited British Virgin Islands 100 - Offshore - Investment holding

TJSB Global Sdn Bhd Malaysia 100 - Investment holding

7. Investments in associates
Group Company

2007 2007 2006

RM’000 RM’000 RM’000

At cost:
Unquoted shares 97,948 641,770 -
Quoted shares outside Malaysia 55,512 - -
Unquoted preference shares 4,000 - -
Unquoted loan stocks 417,655 380,230 -
Pre-acquisition reserves 130,545 - -
Share of post-acquisition losses (3,874) - -

701,786 1,022,000 -
Add: Intangible assets acquired through
business combination (see Note 4) 857,970 - -
Less: Amortisation of intangible assets (23,725) - -
(see Note 4)

1,536,031 1,022,000 -

Market value:
Quoted shares outside Malaysia 71,995 - -
 Page:

113
Notes to the financial statements (cont’d)

7. Investments in associates (cont’d)

Summary financial information on associates:
Profit / Total Total
Revenues (Loss) assets liabilities
(100%) (100%) (100%) (100%)
RM’000 RM’000 RM’000 RM’000

2007 1,226,680 31,486 5,771,094 5,173,425

Details of associates:
Country of Effective
Name incorporation ownership interest Principal activities
2007 2006
% %

Port Dickson Power Berhad Malaysia 25 - Generation and sale of electricity

Kapar Energy Ventures Sdn. Bhd. Malaysia 40 - Generation and sale of electricity

Lekir Bulk Terminal Sdn. Bhd. Malaysia 20 - Bulk terminal jetty and coal handling services

Malaysian Shoaiba
Consortium Sdn. Bhd. Malaysia 40 - Investment holding

Saudi-MalaysiaWater & Saudi Arabia 20 - Offshore - Investment holding
Electricity Company Limited

Shuaibah Water & Saudi Arabia 12 - Design, construction, commissioning, testing,

Electricity Company Limited ownership, operation and maintenance of oil
fired power generation and water desalination plant

Shuaibah Expansion Holding Saudi Arabia 12 - Drinking water production

Company Limited

Shuaibah Expansion Saudi Arabia 11.7 - Development, construction, possession operation

Project Company Limited and maintenance of Shuaibah expansion project 3
for water product at Shuaibah region, water transport
and sale and all relevant works and activities

Oman Technical Partners Limited British Virgin Islands 43.4 - Offshore - Investment holding

Salalah Power Holdings Limited Bermuda 43.4 - Offshore - Investment holding
 Page: Malakoff
corporation

114 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

7. Investments in associates (cont’d)

Details of associates: (cont’d)
Country of Effective
Name incorporation ownership interest Principal activities
2007 2006
% %

Dhofar Power Company SAOG Oman 20 - Electricity generation, transmission,

distribution in the region of Salalah, Oman

Almiyah Attilemcania SPA Algeria 35.7 - Construction, operation and management of a sea
water desalination plant and marketing the
desalinated water produced

Enara Energy Investment Company Jordan 25 - Offshore - Investment holding

Central Electricity Generating Jordan 12.75 - Generate electrical energy in different
Company Limited regions of Jordan

Al-Imtiaz Operation and Saudi Arabia 20 - Implementation of operation and maintenance
Maintenance Company Limited contracts for stations of electrical power
generation and water desalination

Saudi Malaysia Operation and Saudi Arabia 20 - Operation and maintenance of power
Maintenance Services and water desalination plant
Company Limited

8. Other investments
Company

2007 2006
RM’000 RM’000

Non-current
At cost:
Unquoted unsecured loan stocks in subsidiaries 1,715,897 -

The loan stocks are unsecured, bear interest ranging from 6.0% to 15.0% per annum and are repayable over a period of 28 years.
 Page:

115
Notes to the financial statements (cont’d)

9. Deferred tax assets and liabilities

Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities Net
2007 2007 2007
RM’000 RM’000 RM’000

Group
Property, plant and equipment 244 1,599,909 1,600,153
Provisions (10,853) (30,520) (41,373)
Intangibles - 1,949,052 1,949,052
Unutilised capital allowances - (721,912) (721,912)

Others - 13,030 13,030

Tax (assets)/liabilities (10,609) 2,809,559 2,798,950

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:

Group Company

2007 2007 2006

RM’000 RM’000 RM’000

Deductible temporary differences 6 - -

Tax loss carry-forwards 62,657 - -

62,663 - -

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which
the Group can utilise the benefits there from.
 Page: Malakoff
corporation

116 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

9. Deferred tax assets and liabilities (cont’d)

Movement in temporary differences during the year
Recognised Recognised Acquired
in income in income in business
At statement At statement combinations At
1.1.2006 (note 20) 31.12.2006 (note 20) (note 27) 31.12.2007
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Deferred tax assets

Property, plant and equipment - - - 244 - 244
Provisions - - - (8,909) (1,944) (10,853)

- - - (8,665) (1,944) (10,609)

Deferred tax liabilities

Property, plant and equipment - - - 384,420 1,215,489 1,599,909
Provisions - - - (10,061) (20,459) (30,520)
Intangibles - - - (58,148) 2,007,200 1,949,052
Unutilised capital allowances - - - (357,783) (364,129) (721,912)
Others - - - (3,263) 16,293 13,030

- - - (44,835) 2,854,394 2,809,559

10. Receivables, deposits and prepayments

Group Company

2007 2007 2006

Note RM’000 RM’000 RM’000

Current
Trade
Trade receivables 732,520 - -
Less: Allowance for doubtful debts (75,491) - -

657,029 - -
 Page:

117
Notes to the financial statements (cont’d)

10. Receivables, deposits and prepayments (cont’d)

Group Company

2007 2007 2006

Note RM’000 RM’000 RM’000

Non-trade
Amount due from subsidiaries i - 354,434 -
Amount due from associate ii 160,348 160,348 -
Other receivables 75,007 7,253 -
Deposits 17,310 - -
Prepayments 237,975 80,702 4,640

490,640 602,737 4,640

1,147,669 602,737 4,640

i - Amount due from subsidiaries
The non-trade receivables due from subsidiaries are unsecured, interest free and repayable on demand.

ii - Amount due from associate

The non-trade receivables from associates are interest receivable and subject to the existing terms of the unsecured loan stocks.

11. Inventories
Group Company

2007 2007 2006

RM’000 RM’000 RM’000

Spares and consumables 322,080 - -

Coal 111,011 - -
Diesel fuel 55,082 - -

488,173 - -

All inventories are carried at cost.

 Page: Malakoff
corporation

118 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

12. Cash and cash equivalents

Group Company

2007 2007 2006

RM’000 RM’000 RM’000

Deposits with licensed banks 2,274,172 428,849 -

Cash and bank balances 299,782 31,644 -

2,573,954 460,493 -

Deposits placed with licensed banks pledged for a bank facility

Included in the deposits placed with licensed banks is RM16,780,000 (2006 - Nil) of the Group and the Company pledged for a bank facility granted to the
Group and the Company.

13. Share capital and reserves

Share capital
Group and Company

Number Number
Amount of shares Amount of shares
2007 2007 2006 2006
RM’000 ’000 RM’000 ’000

Authorised:
Ordinary shares of RM1 each 490,000 490,000 490,000 490,000

Redeemable convertible
non cumulative preference shares of RM0.10 each 10,000 100,000 10,000 100,000

Issued and fully paid:

Ordinary shares of RM1 each Issued for cash 351,344 351,344 -* -*

On issue at 31 December 351,344 351,344 -* -*

Redeemable convertible non cumulative preference shares

of RM0.10 each Issued for cash 5,019 50,192 - -

On issue at 31 December 5,019 50,192 - -

* 2 shares of RM1 each

 Page:

119
Notes to the financial statements (cont’d)

13. Share capital and reserves (cont’D)

Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

Redeemable convertible non cumulative preference shares

Holders of redeemable convertible (at the option of the Company in the event the Company is listed on Bursa Malaysia) non-cumulative preference shares
receive a non-cumulative gross dividend of RM1 per share at the Company’s discretion or whenever dividends to ordinary shareholders are declared. They
do not have the right to participate in any additional dividends declared for ordinary shareholders. Preference shares do not carry the right to vote except
for variation of holders’ rights to the class of shares, proposal to wind up and during the winding up of the Company, proposal to reduce the share capital
of the Company and on the proposal for the disposal of the whole Company’s property, business or undertaking. The preference shares shall rank equally
among themselves in all respects and shall rank in senior to the ordinary shares but junior to the Junior Sukuk.

Section 108 tax credit

Subject to agreement by the Inland Revenue Board, the Company has Section 108 tax credit to frank all of its distributable reserves at 31 December 2007
if paid out as dividends.

The Malaysian Budget 2008 introduced a single tier company income tax system with effect from year of assessment 2008. As such, the Section 108 tax
credit as at 31 December 2007 will be available to the Company until such time the credit is fully utilised or upon expiry of the six-year transitional period
on 31 December 2013, whichever is earlier.

14. Loans and borrowings

Group Company

2007 2007 2006

RM’000 RM’000 RM’000

Non-current
Sukuk Ijarah bonds - secured 760,366 - -
Al-Bai Bithamin Ajil (ABBA) bonds - secured 730,000 - -
Al-Istisna bonds - secured 517,353 - -
Istisna medium term notes - secured 5,290,000 - -
Sukuk medium term notes - secured 5,155,028 5,155,028 -
Junior Sukuk - secured 1,700,000 1,700,000 -
Subordinated loan notes - unsecured 195,717 - -

14,348,464 6,855,028 -
 Page: Malakoff
corporation

120 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

14. Loans and borrowings (cont’d)

Group Company

2007 2007 2006

RM’000 RM’000 RM’000

Current
Commercial papers - secured 697,684 592,580 -
Sukuk Ijarah bonds - secured 99,689 - -
ABBA bonds - secured 120,000 - -
Al-Istisna bonds - secured 67,983 - -
Istisna medium term notes - secured 280,000 - -
Subordinated loan notes - unsecured 1,818 - -

1,267,174 592,580 -

Security
The bonds, medium term notes, Junior Sukuk and commercial papers are secured over property, plant and equipment with a carrying amount of
RM10,545,304,000 (2006 - Nil) (see note 3) and prepaid lease payments with a carrying amount of RM6,221,000 (2006 - Nil) (see note 5).

Significant covenants
The borrowings are subject to the fulfilment of the following significant covenants:

1. Sukuk Ijarah bonds issued by a subsidiary

Maintain a Debt/Equity Ratio of not more than 4:1 and a Finance Service Cover Ratio of at least 1.15 times.

2. ABBA bonds and Commercial papers issued by a subsidiary

Maintain the Debt/Equity Ratio to be no greater than 9:1 during post-completion (of power plant) period and ensure that the Debt Service Cover ratio
is not less than 1.25:1 commencing from commercial operation date.

3. Al-Istisna bonds issued by a subsidiary

Maintain a Debt/Equity Ratio of not higher than 4:1 at all times and maintain an Annual Finance Service ratio of not less than 1.4:1 commencing from
the third year of the first issue of the bonds.

4. Istisna medium term notes issued by a subsidiary

Maintain a minimum Debt Service cover ratio of 1.25 times commencing from the second semi-annual profit payments date and the Debt/Equity Ratio
of no more than 4:1.

5. Sukuk medium term notes, Junior Sukuk and Commercial papers issued by the Company
Maintain a Debt/Equity Ratio of no greater than 1.25:1 and Group Debt/Equity ratio to be no greater than 7:1 at all times.
 Page:

121
Notes to the financial statements (cont’d)

14. Loans and borrowings (cont’d)

Terms and debt repayment schedule
Year of Carrying Under 1 1 - 2 2 - 5 Over 5
maturity amount year years years years
Group RM’000 RM’000 RM’000 RM’000 RM’000

2007
Commercial papers
- secured 2008 697,684 697,684 - - -
Sukuk Ijarah bonds
- secured 2008-2012 860,055 99,689 98,787 661,579 -
ABBA bonds
- secured 2008-2014 850,000 120,000 120,000 360,000 250,000
Al-Istisna bonds
- secured 2008-2016 585,336 67,983 65,888 193,403 258,062
Istisna medium term notes
- secured 2008-2018 5,570,000 280,000 490,000 1,660,000 3,140,000
Sukuk medium term notes
- secured 2015-2025 5,155,028 - - - 5,155,028
Junior Sukuk
- secured 2025 1,700,000 - - - 1,700,000
Subordinated loan notes
- unsecured 2008-2031 197,535 1,818 1,818 4,999 188,900

15,615,638 1,267,174 776,493 2,879,981 10,691,990

Year of Carrying Under 1 1 - 2 2 - 5 Over 5

maturity amount year years years years
Company RM’000 RM’000 RM’000 RM’000 RM’000

2007
Commercial papers
- secured 2008 592,580 592,580 - - -
Sukuk medium term notes
- secured 2015-2025 5,155,028 - - - 5,155,028
Junior Sukuk
- secured 2025 1,700,000 - - - 1,700,000

7,447,608 592,580 - - 6,855,028

 Page: Malakoff
corporation

122 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

15. Employee benefits

Retirement benefits
Group Company

2007 2007 2006

RM’000 RM’000 RM’000

Present value of unfunded obligations 27,280 8,950 -

Total employee benefits 27,280 8,950 -

Movement in the present value of the defined benefit obligations

Group Company

2007 2007 2006

RM’000 RM’000 RM’000

Defined benefit obligations at 1 January - - -

Acquired through business combination 23,519 8,328 -
Benefits paid by the plan (406) (74) -
Current service costs and interest (see below) 4,167 696 -

Defined benefit obligations at 31 December 27,280 8,950 -

Expense recognised in the income statements

Group Company

2007 2007 2006

RM’000 RM’000 RM’000

Current service costs 1,883 278 -

Interest on obligation 967 166 -
Transitional liability 1,317 252 -

4,167 696 -

The expense is recognised as administrative expenses in the income statements.

 Page:

123
Notes to the financial statements (cont’d)

15. Employee benefits (cont’d)

Actuarial assumptions
Principal actuarial assumptions at the balance sheet date:
Group Company

2007 2007 2006

Discount rate at 31 December 6.7% 6.7% -

Salary inflation 6.7% 6.7% -
Price inflation 3.5% 3.5% -

Assumed salary inflation rates have a significant effect on the amounts recognised in the income statements. A single percentage point change in assumed
salary inflation trend rates would have the following effects:
Group Company

One One One One

percentage percentage percentage percentage
point point point point
increase decrease increase decrease
RM’000 RM’000 RM’000 RM’000

Effect on the aggregate service and interest cost 447 (374) 114 (97)
Effect on defined benefit obligations 1,954 (1,683) 535 (467)

Historical information
2007 2006 2005 2004 2003
Group RM’000 RM’000 RM’000 RM’000 RM’000

Present value of the defined benefit obligations 27,280 - - - -

Company
Present value of the defined benefit obligations 8,950 - - - -
 Page: Malakoff
corporation

124 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

16. Payables and accruals

Group Company

2007 2007 2006

Note RM’000 RM’000 RM’000

Trade
Trade payables 211,079 - -

Non-trade
Other payables 32,774 84,016 -
Accrued expenses i 344,487 2,773 -
Amount due to holding company ii - - 4,858
Amount due to subsidiaries iii - 371,209 -

377,261 457,998 4,858

588,340 457,998 4,858

i - Accrued expenses
Included in accrued expenses of the Group are interest expense payable of RM189,940,000 and provision for CESS fund of RM32,486,000.

ii - Amount due to holding company

The non-trade payables due to holding company are unsecured, interest free and have no fixed terms of repayment.

iii - Amount due to subsidiaries

The non-trade payables due to subsidiaries are unsecured, interest free and have no fixed terms of repayment.

17. Revenue
30.4.2007 to
31.12.2007 2006
Group RM’000 RM’000

Electricity generation and distribution 2,655,813 -

Interest income on loan stocks from associate 3,002 -
Project management fee 198 -
Rental income from estate 3,496 -
Operation and maintenance fees 39,489 -

2,701,998 -
 Page:

125
Notes to the financial statements (cont’d)

17. Revenue (CONT’D)

2007 2006
Company RM’000 RM’000

Dividends from subsidiaries 412,603 -

Rental income from estate 3,496 -
Management fee from subsidiaries 5,120 -

421,219 -

18. Operating profit/(loss)

Group Company

30.4.2007 to
31.12.2007 2007 2006
RM’000 RM’000 RM’000

Operating profit/(loss) is arrived at after charging:

Allowance for doubtful debts 75,491 - -
Amortisation of prepaid lease payments 2,986 42 -
Amortisation of intangible assets 230,795 - -
Auditors’ remuneration:
- Statutory audit
- KPMG 220 35 -
- Others - - 10
Other services
- KPMG 421 377 -
- Affiliates of KPMG 2,340 1,363 -
Depreciation on property, plant and equipment 375,815 1,329 -
Personnel expenses (including key management personnel):
- Contributions to Employees Provident Fund 6,547 1,927 -
- Expenses related to defined benefit plan 4,167 696 -
- Wages, salaries and others 21,233 6,999 -

and after crediting:

Dividend income from:
- subsidiaries (unquoted) - 412,603 -
Inter - company management fees - 5,120 -
 Page: Malakoff
corporation

126 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

19. Key management personnel compensation

The key management personnel compensations are as follows:
Group Company

30.4.2007 to
31.12.2007 2007 2006
RM’000 RM’000 RM’000

Directors
- Fees 149 149 -
- Meeting allowance 24 24 -
- Remuneration 576 576 -
Other short term employee benefits
(including estimated monetary value of benefits-in-kind) 58 58 -

Total short-term employee benefits 807 807 -

Other key management personnel:

- Short-term employee benefits 2,341 2,341 -

3,148 3,148 -

Other key management personnel comprise persons other than the Directors of Group entities, having authority and responsibility for planning, directing
and controlling the activities of the entity either directly or indirectly.

20. Tax expense

Recognised in the income statements
Group Company

30.4.2007 to
31.12.2007 2007 2006
RM’000 RM’000 RM’000

Total tax expense 55,267 59,854 -

Major components of tax expense include:

Current tax expense

Malaysian - current year 108,767 59,854 -
 Page:

127
Notes to the financial statements (cont’d)

20. Tax expense (cont’d)

Group Company

30.4.2007 to
31.12.2007 2007 2006
RM’000 RM’000 RM’000

Current tax expense (cont’d)

Total current tax 108,767 59,854 -

Deferred tax expense

Origination and reversal of temporary differences 5,339 - -
Effect of change in tax rate (58,839) - -

(53,500) - -

Total tax expense 55,267 59,854 -

Profit for the year 268,502 155,884 -

Total tax expense 55,267 59,854 -

Profit excluding tax 323,769 215,738 -

Tax at Malaysian tax rate of 27% 87,418 58,249 -

(2006 - 28%)
Effect of change in tax rate* (58,839) - -
Effect of share of results of associates 1,046 - -
Effect of deferred tax benefits not recognized 16,919 - -
Non-deductible expenses 8,723 1,605 -

55,267 59,854 -

* W
 ith effect from year of assessment 2007, corporate tax rate is at 27%. The Malaysian Budget 2008 also announced the reduction of corporate tax rate
to 26% with effect from year of assessment 2008 and to 25% with effect from year of assessment 2009 respectively. Consequently deferred tax assets
and liabilities are measured using these tax rates.
 Page: Malakoff
corporation

128 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

21. Dividends
Dividends recognised in the current year by the Company are as follows:
Sen Total
per share amount Date of
2007 (net of tax) RM’000 payment

Interim 2007 - ordinary shares 6.65 23,360 7.12.2007

Interim 2007 - preference shares 73 36,640 7.12.2007

Total amount 60,000

2006

Total amount Nil

After the balance sheet date, the following dividends were proposed by the Directors. These dividends will be recognised in subsequent financial reports
upon approval by the shareholders.
Sen Total
per share amount
(net of tax) RM’000

Final ordinary 11.38 40,000

Total amount 40,000

22. Segment reporting

Segment information is presented in respect of the Group’s business segments. The primary format, business segments, is based on the Group’s management
and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment.

Inter-segment pricing is determined on an arm’s length basis.

Business segments
The Group comprises the following main business segments:
• Asset Management
• Operations and maintenance (O&M)
 Page:

129
Notes to the financial statements (cont’d)

22. Segment reporting (cont’d)

Asset Management O&M Eliminations Consolidated
30.4.2007 to 30.4.2007 to 30.4.2007 to 30.4.2007 to
31.12.2007 31.12.2007 31.12.2007 31.12.2007
RM’000 RM’000 RM’000 RM’000

Business segments
Total external revenue 2,662,509 39,489 - 2,701,998
Inter-segment revenue - 326,850 (326,850) -

Total segment revenue 2,622,509 366,339 (326,850) 2,701,998

Segment results 745,969 221,591 - 967,560

Results from operating activities 967,560

Interest income 123,038
Finance costs (762,955)
Share of loss of equity accounted associates (3,874)
Tax expense (55,267)

Profit for the year 268,502

Asset Management O&M Consolidated

2007 2007 2007
RM’000 RM’000 RM’000

Segment assets 21,135,824 785,724 21,921,548

Investment in associates 1,536,031 - 1,536,031

Total assets 23,457,579

Segment liabilities 18,809,943 254,787 19,064,730

Total liabilities 19,064,730

Capital expenditure 240,221 13,110 253,331

Depreciation 313,325 62,490 375,815

Amortisation of intangible assets 195,415 35,380 230,795

Non-cash expenses other than depreciation and amortization 79,338 3,306 82,644
 Page: Malakoff
corporation

130 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

23. Financial instruments

Exposure to credit, interest rate and currency risks arises in the normal course of the Group’s business. Derivative financial instruments are not used to
hedge exposure to fluctuations in foreign exchange rates and interest rates.

Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers
requiring credit over a certain amount. The Group and the Company do not require collateral in respect of financial assets.

Investments are allowed only in liquid securities and only with counterparties that have a credit rating equal to or better than the Group and the Company.
Given their high credit ratings management does not expect any counterparty to fail to meet their obligations.

At balance sheet date, the Group has a concentration of credit risk in the form of trade debts due from Tenaga Nasional Berhad (TNB), representing
approximately 54% of the total receivables of the Group. The maximum exposures to credit risk for the Group and the Company are represented by the
carrying amount of each financial asset.

Interest rate risk

Interest rate exposure arises from the Group’s and the Company’s borrowings and is managed through the use of fixed and floating rate debts.

The Group and the Company have no material interest rate risk arising from long term interest bearing assets.

The investments in financial assets are mainly short term in nature and they are not held for speculative purposes but mostly placed in fixed deposits. The
placements are short term and therefore their exposure to the effects of future changes in the prevailing level of interest rate is limited.

Effective interest rates and repricing analysis

In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their average effective interest rates at
the balance sheet date and the periods in which they mature, or if earlier, reprice (the effective interest rates and fair values of Islamic financial instruments
are not shown in the table below).
Group Average
effective Less More
interest than 1 - 2 2 - 3 3 -4 4 -5 than
2007 rate Total 1 year years years years years 5 years
% RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Fixed rate instruments

Financial assets
Unsecured subordinated loan notes 6% to 16% 197,535 1,818 1,818 1,818 1,818 1,363 188,900

Cash and cash equivalents 3.53% 2,573,954 2,573,954 - - - - -

 Page:

131
Notes to the financial statements (cont’d)

23. Financial instruments (cont’d)

Effective interest rates and repricing analysis (cont’d)
Company Average
effective Less More
interest than 1 - 2 2 - 3 3 -4 4 -5 than
2007 rate Total 1 year years years years years 5 years
% RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Fixed rate instruments

Financial assets
Cash and cash equivalents 3.53% 460,493 460,493 - - - - -

Foreign currency risk

The Group incurs foreign currency risk on purchases that are denominated in a currency other than Ringgit Malaysia. The currency giving rise to this risk is
primarily the Swiss Franc.

The Group uses forward exchange contracts to hedge its foreign currency risk when necessary. Forward exchange contracts are rolled over at maturity at
market rates where necessary.

In respect of other monetary assets and liabilities held in currencies other than Ringgit Malaysia, the Group ensures that the net exposure is kept to an
acceptable level by buying or selling foreign currencies at spot rates where necessary to address short term imbalances.

Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate
the effects of fluctuations in cash flows.

Fair values
The carrying amounts of cash and cash equivalents, receivables, other payables and short term borrowings, approximate fair values due to the relatively
short term nature of these financial instruments.

It is impracticable to estimate the fair value of the unsecured subordinated loan notes the instruments are issued to the shareholders at negotiated interest rates.
Similarly, it is also impracticable to estimate the fair value of the Company’s investment in unquoted unsecured subordinated loan stocks in its subsidiaries.
 Page: Malakoff
corporation

132 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

24. Capital and other commitments

Group Company

2007 2007 2006

RM’000 RM’000 RM’000

Plant and equipment

Authorised but not contracted for 39,420 1,579 -

25. Contingencies
The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacrifice of economic benefits
will be required or the amount is not capable of reliable measurement.

Contingent liability
Litigation
Segari Energy Ventures Sdn Bhd’s (“SEV”) Power Purchase Agreement with Tenaga Nasional Berhad (“TNB”) contains procedures for determining
inaccuracies of the metering devices used for billing purposes. These devices are owned, operated, maintained and controlled solely by TNB. There
have been certain inaccuracies with the metering devices, which SEV brought to the attention of TNB, as SEV alleged that the inaccuracies caused
underpayments. TNB had carried out tests and claim that the inaccuracies have resulted in alleged overpayments of RM87.5 million.

On 13 December 2007, TNB issued a notice of arbitration to resolve the dispute with SEV.

Contingent asset
Litigation
On 28 March 2007, Prai Power Sdn Bhd (“PPSB”) commenced arbitration proceedings against TNB claiming a sum of approximately RM11,863,000
which PPSB alleged TNB had wrongfully deducted from available capacity payments due and payable to PPSB for the month of November 2006. TNB had
responded stating that that its deductions were in accordance with the Power Purchase Agreement between PPSB and TNB and had filed a counterclaim
against PPSB. TNB had then applied to the arbitral tribunal for leave to amend its Defence and Counterclaim and to file a Rejoinder in the proceedings to
introduce events and matters since June 2003.

During the preliminary meeting for the arbitration held on 16 January 2008, the arbitral tribunal allowed an application by both PPSB and TNB to amend and
re-file the Statement of Claim, Defence and Counterclaim, Reply and Defence to the Counterclaim to include these events and matters from June 2003 into
the proceedings.

PPSB has since issued to TNB, via its solicitors, an amended Statement of Claim revising PPSB’s claim approximately from RM11,863,000 to RM113,713,000.
The additional sum of RM101,850,000 being claimed is the amount due and payable by TNB to PPSB in respect of capacity payments from June 2003 to
October 2006.
 Page:

133
Notes to the financial statements (cont’d)

25. Contingencies (cont’d)

Guarantees (secured)
Group Company

2007 2006 2007 2006

RM’000 RM’000 RM’000 RM’000

Guarantees
- secured 405,122 - 306,035 -

These guarantees mainly consist of guarantees for loans, bid bonds, performance bonds and security deposits for projects.

26. 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 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 or common significant influence. Related parties may be individuals or other entities.

The significant related party transactions of the Group and the Company, other than key management personnel compensation, are as follows:
Group
Transactions Gross balance Net balance
amount for outstanding outstanding
the year ended at at
31 December 31 December 31 December
2007 RM’000 RM’000 RM’000

Holding company
Acquisition of equity interest in Malakoff Berhad from MMC Corporation Berhad 2,047,834 - -

Associated companies
Interest income on unsecured subordinated loan notes 77,631 161,845 161,845

Company subject to common significant influence

Operation and maintenance fee expense 62,540 26,438 26,438
Operation and maintenance subcontract fee income 32,426 28,750 28,750

The terms and conditions for the above transactions are based on negotiated terms. All the amounts outstanding are unsecured and expected to be settled
in cash.
 Page: Malakoff
corporation

134 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

26. Related parties (cont’d)

Company
Transactions Gross balance Net balance
amount for outstanding outstanding
the year ended at at
31 December 31 December 31 December
2007 RM’000 RM’000 RM’000

Holding company
Acqusition of equity interest in Malakoff Berhad from MMC Corporation Berhad 2,047,834 - -

Subsidiaries
Interest income on unsecured subordinated loan notes 130,060 146,346 146,346
Management fee 5,120 - -
Dividends 412,603 - -

Associated companies
Interest income on unsecured subordinated loan notes 74,639 160,348 160,348

The terms and conditions for the above transactions are based on negotiated terms. All the amounts outstanding are unsecured and expected to be settled
with cash.

27. Acquisition of business

Business combination
On 30 April 2007, the Group acquired all the assets and undertakings (other than cash held by Malakoff Berhad) and assume all the disclosed liabilities of
Malakoff Berhad for a total cash consideration of RM9.3 billion satisfied in cash. In the eight months to 31 December 2007, the subsidiaries and associates
contributed profit after tax of RM268 million. If the acquisition had occurred on 1 January 2007, management estimates that consolidated revenue would
have been RM3,824 million and consolidated profit after tax for the year would have been RM296 million.

The acquisition had the following effect on the Group’s assets and liabilities on acquisition date:
Pre-
acquisition Fair Recognised
carrying value values on
amounts adjustments acquisition

Property, plant and equipment 10,753,489 - 10,753,489

Intangible assets - 7,103,796 7,103,796
Prepaid lease rentals 115,274 - 115,274
Investment in associated companies 683,362 857,970 1,541,332
Deferred tax assets 1,944 - 1,944
 Page:

135
Notes to the financial statements (cont’d)

27. Acquisition of business (cont’d)

Business combination (cont’d)
The acquisition had the following effect on the Group’s assets and liabilities on acquisition date:
Pre-
acquisition Fair Recognised
carrying value values on
amounts adjustments acquisition

Inventories 442,135 - 442,135

Receivables, deposits and prepayments 1,217,763 - 1,217,763
Tax recoverable 13,067 - 13,067
Cash and cash equivalents 2,028,255 - 2,028,255
Loans and borrowings (9,811,433) - (9,811,433)
Deferred tax liabilities (847,194) (2,007,200) (2,854,394)
Payables and accruals (1,107,312) - (1,107,312)
Retirement benefits (23,519) - (23,519)
Minority interests (189,285) - (189,285)

Net identifiable assets and liabilities 3,276,546 5,954,566 9,231,112

Goodwill on acquisition 8,232

Consideration paid, (including cost of business combination),

satisfied in cash 9,239,344
Cash acquired (2,028,255)

Net cash outflow 7,211,089

Pre-acquisition carrying amounts were determined based on applicable FRSs immediately before the acquisition. The values of assets, liabilities and
contingent liabilities recognised on acquisition are their estimated fair values.

28. Subsequent event

Development, Construction, Operations of a seawater desalination plant of 200,000m3/day at Souk Tleta, Wilaya of Tlemcen, Algeria
(“the Project”)
The Project, which will be developed by Almiyah Attilemcania SPA, had on 15 January 2008 achieved financial close following its successful financing
from Banque Nationale d’ Algerie. AAS is a 51% subsidiary of Tlemcen Desalination Investment Company SAS(“TDIC”) which in turn is a 70% subsidiary
of Malakoff AlDjazair Desal Sdn Bhd, a wholly - owned subsidiary of Malakoff Corporation Berhad (“Malakoff”). The balance of 49% interest in AAS is
held by Algerian Energy Company SPA. MenaSpring Utility (S) Pte Limited, a wholly-owned subsidiary of Hyflux Limited (“Hyflux”), Singapore holds the
balance 30% interest in TDIC. The effective equity interest for Malakoff in AAS will be 35.7% and is estimated to be up to a maximum of USD20 Million
(approximately RM68 Million).
 Page: Malakoff
corporation

136 Berhad (731568 V)

Annual Report
2007

notes to the financial statements (cont’d)

28. Subsequent event (cont’d)

Development, Construction, Operations of a seawater desalination plant of 200,000m3/day at Souk Tleta, Wilaya of Tlemcen, Algeria
(“the Project”) (cont’d)
The Desalination Plant will be operated and maintained by Hyflux-TJSB Algeria SPA(“OMCO”), in which Malakoff and Hyflux, through their respective
wholly-owned subsidiaries, holds a 49% and 51% equity interest. Malakoff’s interest in OMCO is via TJSB Global Sdn. Bhd. (“TJSB Global”), a wholly-
owned subsidiary of TJSB International Limited, which in turn is a wholly owned subsidiary of Malakoff. TJSB Global has an authorised share capital of
RM100,000 comprising 100,000 ordinary shares of RM1.00 each and an issued and paid up share capital of RM2.00 comprising two ordinary shares of
RM1.00 each.

The Project is estimated to contribute positively to the results of the Group once it is completed.

29. Significant event

On 30 April 2007, the Company completed its acquisition of the securities of all the subsidiaries and the associate companies of Malakoff Berhad (Malakoff)
together with all the assets of Malakoff (other than cash balance in Malakoff and the above securities) and the transfer, assignment or novation of all
liabilities of Malakoff for a cash consideration RM9,307,599,771 less any available cash in Malakoff (“Acquisition”).

On the same date, the Company also completed its fund raising exercise through the issue of new ordinary shares of RM1.00 each together with new
redeemable convertible preference shares of RM0.10 each, cumulative non-convertible Islamic Junior Sukuk and Islamic Commercial papers and Medium
Term Notes Issuance Programme (“Senior Sukuk”) to finance the Acquisition.