Malakoff Corporation Berhad Annual Report 2008 Preparing for the Future

MALAKOFF CORPORATION BERHAD
(731568-V)
Tel : +603-2263 3388

Fax : +603-2263 3333
www.malakoff.com.my
Annual Report 2008
Level 12, Block 3B, Plaza Sentral

Jalan Stesen Sentral 5
50470 Kuala Lumpur
(731568-V)
Preparing
for the Future
Our people is instrumental to the
continued success of Malakoff as we
build our foundations on the strength
of competency.
T h e c o v e r a c k n o w le d g e s t h e
contribution of every man and
woman at Malakoff who have been
instrumental in the journey of
the Group, as we look ahead with
optimism onto the next level of
challenges.
Malakoff
Corporation
Berhad
Annual
report
2008
001
Our Vision
To be a LEADING POWER & WATER Provider
Corporate Values
Integrity
Teamwork
Innovation
Excellence
Respect for Individual
Our MISSION
In striving to enhance stakeholders value and achieve our vision, we seek to:
Develop and utilise local expertise;
Share knowledge and spur the growth of the power and water sectors; and
Promote innovation in all aspects of our business.
Malakoff
Corporation
Berhad
Table
of contents
Annual
report
2008
Audit Committee
Corporate Responsibility
032 Audit Committee
070 Corporate Responsibility

Health, Safety and

Environment (HSE)

Human Resource
Development

Corporate Community
Investment

Enterprise Risk Management
(ERM)

Organisational Development
Corporate Performance
001 Our Mission & Vision
003 Group Financial & Performance
Highlights
004 Corporate Profile
008 Corporate Information
009 Malakoff Shareholders
010 Corporate Structure
Directors Profiles
014 Board of Directors
016 Profile of Board of Directors
Management Team
025 Organisational Structure
026 Individual Profiles of Key

Members of Management Team
002
034 Statement by Chairman

040 Performance Review by MD/CEO

Asset Performance

Operations & Maintenance
(O&M)

Electricity Distribution &
Chilled Water Supply

Ventures

Project Management

Information Technology (IT)

Enterprise Applications
Corporate Event
Highlights
078 Corporate Event Highlights
Financial Statements
083 Financial Statements
Malakoff
Corporation
Berhad
003
Annual
report
2008
group financial
& Performance highlights

2008
RM000
2007
RM000
Revenue
5,121,267
2,701,998
Profit before taxation
318,560
323,769
Profit after tax & minority interest
138,789
217,297
Paid-up capital
351,344
351,344
Shareholders funds
4,191,529
4,172,439
Total assets employed
23,624,275
23,457,579
Earnings
40
62
Dividend (gross)
32
Net assets
1,193
1,188
As at 31 December
Per share (sen)
Revenue
Profit After tax & Minority interest
(Rm Million)
08
07
(RM Million)
5,121
2,702
Shareholders funds
139
217
Total assets employed
(RM Million)
(RM Million)
08
07
4,192
4,172
EarningS per share
08
07
23,624
23,458
net assets per Share
(Sen)
08
07
08
07
(Sen)
40
62
08
07
1,193
1,188
Malakoff
Corporation
Berhad
Annual
report
2008
Corporate
Profile
Malakof f Corporation Berhad

(Malakoff) is one of the leading
independent power and water
producers based in Asia with an
exc e l l e n t r e p u t a t i o n . O u r c o r e
business includes power generation,
water desalination and operations &
maintenance services. In Malaysia, we
own an effective generation capacity
of 5,020 MW comprising of 6 power
stations that run on gas, oil and coal.
004
Malakoff
Corporation
Berhad
Annual
report
2008
005
Furthermore, Malakoff provides services through

its wholly-owned subsidiary companies:
Malakoffs 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)
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%
equit y interest in Por t Dickson Power
Berhad, via its wholly-owned subsidiar y
Hypergantic Sdn Bhd
Kapar Power Station through a 40.0% equity
interest in Kapar Energy Ventures Sdn Bhd
(KEV)
O p er ation s and maintenance (O &M)

ser vices through wholly-owned Teknik
Janakuasa Sdn Bhd (TJSB), one of the
leading O&M service providers in Malaysia
Electricity distribution activities through
W ir azone Sdn Bhd ( W IR A ZONE) a
wholly-owned subsidiar y, that currently
supplies centr alised chilled water and
distributes electricit y to the landmark
Kuala Lumpur Sentral development (KL
Sentr al ), which is set to become the
tr anspor tation and communication hub
of Malaysia
Project management services for in-house
and external projects through Malakoff
Engineer ing (ME SB), a wholly-owned
subsidiary of Malakoff
On the international front, we own a net capacity
of 360 MW of power and 213,000 m 3 /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.
t
aboue
ness
v
i
s
nds the
i
b
e
t
a
h
t
Coh the bedrock
rk is
Teamwo f our diversity
o
strength
Malakoff
Corporation
Berhad
Annual
report
2008
Corporate
Information
Directors
TAN SRI ABDUL HALIM ALI
CINDY TAN LER CHIN
AHMAD JAUHARI YAHYA
DATO AZIAN MOHD NOH
Managing Director/Chief Executive Officer
Non-Independent Non-Executive Director
Datuk HAJI HASNI HARUN
ANDREW ROWAN IAN YEE
YOONG NIM CHEE
VIJAY VIJENDRA SETHU
Chairman
Alternate Director to Andrew Rowan Ian Yee
MABEL LEE KHUAN EOI
Company Secretaries
Registered Office
Samantha Yeoh Soo Mei
Level 8, Kompleks Antarabangsa

Jalan Sultan Ismail
50250 Kuala Lumpur
Tel: +603-2142 4777
Fax: +603-2148 9887
Website: www.malakoff.com.my
(MAICSA 7032259)
Sharifah Laila Farina Syed Mohd

(LS 0008736)
Audit Committee members

Datuk HAJI HASNI HARUN (Chairman)
AUDITORS
YOONG NIM CHEE
KPMG
AHMAD JAUHARI YAHYA

Andrew Rowan Ian Yee
PRINCIPAL BANKER
Malayan Banking Berhad
Remuneration Committee
members
TAN SRI ABDUL HALIM ALI (Chairman)
Datuk HAJI Hasni Harun
Cindy Tan Ler Chin
correspondence address
50470 Kuala Lumpur
Tel: +603-2263 3388
Fax: +603-2263 3333
Website: www.malakoff.com.my
008
Malakoff
Corporation
Berhad
009
Annual
report
2008
Malakoff
shareholders
51%
MMC Corporation Berhad
30%
Employees Provident Fund
10%
Kumpulan Wang Persaraan

(Diperbadankan)
6.5%
Standard Chartered IL & FS Asia

Infrastructure Growth Fund Company
Pte Limited
2.5%
SEASAF Power Sdn Bhd
Malakoff
Corporation
Berhad
010
Annual
report
2008
Corporate
Structure
Power Generation
operations and
Maintenance services
Electricity
Distribution
93.75%
Segari Energy Ventures Sdn Bhd
100%
Teknik Janakuasa Sdn Bhd
100%
Wirazone Sdn Bhd
5%
7
GB3 Sdn Bhd
1 00%
Natural Analysis Sdn Bhd
1 00%
Prai Power Sdn Bhd
1 00%
TJSB International Limited
90%
Tanjung Bin Power Sdn Bhd
0%
4
Kapar Energy Ventures Sdn Bhd
20%
Saudi-Malaysia Operation &
Maintenance Services Company
Limited
1 00%
Hypergantic Sdn Bhd

5%
2
Port Dickson Power Berhad
100%
TJSB International (Shoaiba) Limited
20%
Al-Imtiaz Operation &
Maintenance Company Limited

100%
TJSB Middle East Limited
100%
TJSB Global Sdn Bhd
49%
Hyflux-TJSB Algeria SPA
Malakoff
Corporation
Berhad
Project
Management
011
Annual
report
2008
Offshore
Others
100%
Malakoff Engineering Sdn Bhd
100%
Malakoff International Limited
100%
Tuah Utama Sdn Bhd
1 00%
Malakoff Gulf Limited
40%
Malaysian Shoaiba Consortium
Sdn Bhd (MSCSB)
20%
Saudi-Malaysia Water & Electricity
Company Limited (SAMAWEC) II
12%
Shuaibah Water & Electricity
Company Limited (SWEC) II
100%
MESB Project Management
Sdn Bhd
100%
Malakoff Technical (Dhofar) Limited

20%
Dhofar Power Company SAOG (DPC) lV
70%
Tlemcen Desalination Investment Company SAS (TDIC)
35.7%
Almiyah Attilemcania SPA (AAS) V
100%
Malakoff Jordan Generation Limited (MJGL)
25%
Enara Energy Investment Company (ENARA)

1 00%
Transpool Sdn Bhd I
11.7%
Shuaibah Expansion Project lll
Company Limited (SEPCL)
43.4%
Salalah Power Holdings Limited (SPHL) lV
100%
Malakoff AlDjazair Desal Sdn Bhd (MADSB)

4%
5
Desa Kilat Sdn Bhd
12%
Shuaibah Expansion Holding
Company Limited (SEHCL) lll

43.4%
Oman Technical Partners Limited (OTPL) lV
0%
2
Lekir Bulk
Terminal
Sdn Bhd
12.75%
Central Electricity Generating
Company Limited (CEGCO) VI
100%
Malakoff Ras Azzour Limited
(f.k.a Kuwmal Investments Limited)
100%
Spring Assets Limited I
100%
Malakoff Capital (L) Ltd I
Dormant
II Malakoffs 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 Malakoffs 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 Malakoffs 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 Malakoffs 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 Malakoffs effective equity interest of 12.75% in CEGCO
is held via MJGL which holds 25% equity interest in
ENAR A which in turn holds 51% equit y interest in
CEGCO.
about
adaptability
The winds of change will test
our determination to embrace
challenges by being flexible
Malakoff
Corporation
Berhad
014
Annual
report
2008
Board of
Directors
Tan Sri Abdul Halim Ali

Dato Azian Mohd Noh

Chairman
Datuk Haji HasNi Harun

Mabel Lee Khuan Eoi

Malakoff
Corporation
Berhad
Annual
report
2008
Cindy Tan Ler Chin

Ahmad Jauhari Yahya

Managing Director/
Chief Executive Officer
Yoong Nim Chee

015
Vijay Vijendra Sethu

Andrew Rowan Ian YEE
Malakoff
Corporation
Berhad
Annual
report
2008
016
profile of
board of Directors
YBhg. Tan Sri Abdul Halim Ali, aged 66, was appointed to
the Board of Malakoff Corporation Berhad (Malakoff) on 24
May 2007 and assumed the post of Chairman of the Board on
26 October 2007. He is also Chairman of the Remuneration
Committee.
He holds a Bachelor of Arts (Honours) Degree from the
University of Malaya, Malaysia.
Tan Sri Abdul Halim Ali joined the Malaysian Foreign Service
soon after graduation in 1966. He served in various positions
at the Ministry of Foreign Affairs as well as in Malaysian
diplomatic missions overseas. His early postings included the
Malaysian High Commission in New Delhi, India, the Malaysian
Consulate in Medan of Indonesia and the Malaysian Embassy
in Tokyo, Japan. In 1979 he was posted to the United Nations
in New York, as Malaysias Deputy Permanent Representative.
In 1982, he was appointed as Malaysian Ambassador to the
Socialist Republic of Vietnam, returning to Kuala Lumpur
in 1985 to assume the post of 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 Resident Representative to UNIDO, IAEA and the
United Nations Office in Vienna, Austria. In 1991, he returned
to Malaysia to assume the post of Deputy of SecretaryGeneral (1), Ministry of Foreign Affairs. After a short stint as
Secretary-General of the Ministry, he was appointed Chief
Secretary to the Government in September 1996, a post he
held until his retirement in January 2001. Thereafter he was
appointed Chairman of EPF (January 2001- January 2007)
and Chairman of Malakoff Berhad (September 2001 to 4th
July 2007).
Tan sri Abdul Halim Ali

chairman
Currently, he is also the Chairman of Malaysian Building

Society Berhad, a subsidiary of Employees Provident Fund
(EPF), the University of Technology Malaysia and the
Multimedia Development Corporation Berhad. He also holds
Directorship in ESSO Malaysia Berhad, IJM Corporation
Berhad and LCL Corporation Berhad.
Malakoff
Corporation
Berhad
Annual
report
2008
017
Encik Ahmad Jauhari Yahya, aged 55, 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 is also a member of 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 Electronics Engineering from University of Nottingham, UK.
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 trusted as a Director and
Chairman of Executive Committee of Central Electricity
Generating Company Limited (Jordan) and Director of Shuaibah
Expansion Project Company Limited (Saudi Arabia).
At present, Encik Ahmad Jauhari is the Honorary President of
Penjanabebas (Association of Independent Power Producers
in Malaysia).
Ahmad Jauhari Yahya

Managing director/chief executive officer
Malakoff
Corporation
Berhad
Annual
report
2008
018
profile of board of Directors
Datuk Haji Hasni Harun, aged 52, 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
Masters 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 Generals Office (1980-1994).
His directorships in other companies include MMC, Zelan Berhad,
Johor Port Berhad, IJM Corporation Berhad, MMC Engineering
Group Berhad and Aliran Ihsan Resources Berhad.
Datuk Haji HASNI HARUN

OneMind: Malakoff 08AR_030408_12am
Malakoff
Corporation
Berhad
Annual
report
2008
019
Mr. Yoong Nim Chee, aged 49, a Malaysian was appointed to

the Board on 16 May 2006 and is also a member of the Audit
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 in the finance sector. He was Director, Corporate
Affairs of MMC Corporation Berhad from (2006-2008);
currently he is the Executive Director of Zelan Berhad.
YOONG NIM CHEE

NON-INDEPENDENT NON-EXECUTIVE DIRECTOR
He is also a Board member of Zelan Berhad, Kramat Tin

Dredging Berhad and Integrated Rubber Corporation Berhad.
Malakoff
Corporation
Berhad
Annual
report
2008
020
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 Chases Kuala Lumpur office as Vice President of its
Investment Banking Division.
Dr. Mabel Lee 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
Administr ation degree from Universit y of Newcastle,
Australia.
She is a member of the Malaysian Institute of Accountants,
an Associate Member with Institut Bank-Bank Malaysia, a
member of the Institute of Chartered Accountants in England
and Wales (ICAEW), Corporate Finance Faculty and is a
Certified Business Coach.
Mabel Lee Khuan Eoi

Malakoff
Corporation
Berhad
Annual
report
2008
021
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 Cer tified Diploma in Accounting and
Finance, accorded by the Chartered Association of Certified
Accountants.
She is currently the Head of Treasury Department, Investment
Division of the Employees Provident Fund (EPF). She
is also a Director of Malaysia Building Society Berhad, a
subsidiary of EPF.
Cindy Tan Ler Chin

Malakoff
Corporation
Berhad
Annual
report
2008
022
Dato Azian Mohd Noh, Malaysian, aged 56, was appointed

to the Board of Malakoff Corporation Berhad on 9 August
2007. She is a graduate of Universiti Malaya with Bachelor of
Economics (Honors) Accounts and has a Master in Business
Administration from Universiti Kebangsaan Malaysia. She is
also a member of the Malaysian Institute of Accountants.
Dato Azian started her career as a Treasury Accountant and
served at the Accountant Generals Department and Ministry
of Public Enterprise between 1980 to 1982. She has held
several senior positions at the Accountant Generals Office
prior to her appointment as Director Of Kumpulan Wang
Amanah Pencen (KWAP) in 1991. On 1 March 2007, Dato
Azian was appointed as the first Chief Executive Officer of
Kumpulan Wang Persaraan (Diperbadankan) (Retirement
Fund Incorporated), a newly incorporated statutory body.
Dato Azian also sits on the Boards of Time dotCom Berhad,
Valuecap Sdn Bhd and the Chairman of iVCap Management
Sdn Bhd.
DATO AZIAN MOHD NOH

NON-INDEPENDENT NON-EXECUTIVE DIRECTOR
Malakoff
Corporation
Berhad
Annual
report
2008
023
Mr. Andrew Rowan Ian Yee, aged 44, 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.
Andrew Rowan Ian Yee

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 Chartereds Principal
Finance team in 2007 as a Managing Director and Global
Head of Infrastructure. He has 20 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
Asias Energy & Power advisory team, based in Hong Kong.
He was also a Director of Corporate Finance at Barclays
Australia which was acquired by ABN AMRO in 1997, prior to
which he worked in the Corporate Finance team of Barclays
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.
Malakoff
Corporation
Berhad
Annual
report
2008
024
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.

Alternate director to Andrew Rowan Ian Yee
Malakoff
Corporation
Berhad
025
Annual
report
2008
organisational
structure
MD/CEO
Ahmad Jauhari yahya
DCEO
Mohd Radzuan Yahya
Company Secretarial
department
OPERATIONS & MAINTENANCE
DIVISION
Ventures i Division
ASSET MANAGEMENT DIVISION
Ventures ii Division
Malakoff Engineering
Group Finance &
Accounts Division
HUMAN RESOURCES & ADMIN
DEPARTMENT
Legal Services Department
ORGANISATIONAL
DEVELOPMENT DEPARTMENT
IT & ENTERPRISE
APPLICATIONS DEPARTMENT
MD/CEOS OFFICE & CORPORATE

AFFAIRS DEPARTMENT
Malakoff
Corporation
Berhad
026
Annual
report
2008
individual profiles of
key members of management team
Ahmad Jauhari Yahya
Mohd Radzuan Yahya
Deputy Chief Executive Officer
Encik Ahmad Jauhari Yahya, aged 55, 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
Encik Mohd. Radzuan Yahya, 56, is the Deputy Chief Executive

Officer (DCEO) of Malakoff Corporation Berhad (Malakoff).
He obtained a Bachelor of Science degree in Mechanical
Engineering from Liverpool University, United Kingdom
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 the 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 in April 2006.
He is also a member of 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 Electronics Engineering from University of Nottingham, UK.
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 trusted as a Director and
Chairman of Executive Committee of Central Electricity
Generating Company Limited (Jordan) and Director of Shuaibah
Expansion Project Company Limited (Saudi Arabia).
At present, Encik Ahmad Jauhari is the Honorary President of
Penjanabebas (Association of Independent Power Producers
in Malaysia).
Malakoff
Corporation
Berhad
Annual
report
2008
027
Ruswati Othman
Nordin Kassim
Chief Financial Officer/Senior Vice President

Group Finance & Accounts Division
Senior Vice President

Operations & Maintenance Division
Puan Ruswati Othman, aged 49, obtained her Bachelor

of Science degree in Chemistr y 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 oversees 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.
Encik Nordin Kasim, 49, obtained his Bachelor Science

(Hons) in Electrical Engineering from University of Wales,
United Kingdom. He started his career in 1984 as Electrical
and Instrumentation Engineer with ICI Fer tilizer, ICI
Industrial Chemicals and ICI Agrochemicals (M) Sdn Bhd,
subsidiaries of Chemical Company of Malaysia Berhad. He
was promoted to Maintenance Electrical/Instrument Section
Manager in December 1994. In 1995, he joined BP Chemicals
as Electrical & Instrument Supervisor. In December 1997,
he was re-designated to Deputy Maintenance Manager.
He then joined MEASAT Broadcast Network System in
August 1998 as Maintenance Manager, and later joined
Teknik Janakuasa Sdn Bhd (TJSB) in July 19 9 9 as
Maintenance Manager of the Centralised Utility Facilities
(CUF) in Gebeng, Kuantan. He steered the formation of
Computerized Maintenance Management system, setting
up of Condition Based Monitoring, execution of Reliability
Centered Maintenance analysis, production of maintenance
and operation procedures tailored for ISO9001 requirement,
plant safeguarding procedures, alarm response procedures,
troubleshooting guides and (On-Job-Training) for clients
operation and maintenance personnel. He was promoted to
Plant Manager in 2002. Upon completion of the CUF project
in October 2004, he was transferred to Prai Power Plant
as Plant Manager. In September 2006, he was transferred
to Lumut Power Plant as Plant Manager and subsequently
being promoted and transferred to his current position in
January 2009.
Malakoff
Corporation
Berhad
028
Annual
report
2008
individual profiles of key members of management team
Habib Husin
azhari sulaiman

Asset Management Division

Ventures I Division
Encik Habib Husin, aged 49, 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).
Encik A zhari Sulaiman, aged 49, 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 centres, 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).
Malakoff
Corporation
Berhad
Annual
report
2008
Ernest Navaratnam
Ventures II Division
Mr. Ernest Navaratnam, aged 45, a Malaysian, holds a
Bachelor of Science in Electrical Engineering from Queens
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 Berhads 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 IPRs 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).
029
about
focus
Our focus is imperative in our

ability to stay on the right track, in
driving the objectives of delivery
and results
Malakoff
Corporation
Berhad
Annual
report
2008
032
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
Datuk Haji Hasni Harun - Chairman

- Non-Executive Director
Yoong Nim Chee
- Non-Executive Director
Andrew Rowan Ian Yee - 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 be 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 nonexecutive 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.
Malakoff
Corporation
Berhad
Annual
report
2008
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;
(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 auditors management
letter and managements 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;
(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;
(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;
033
(g) To consider any related party transactions that

may arise within the Group;
(h) To consider the major findings of internal
investigations and managements 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.
Malakoff
Corporation
Berhad
I am pleased to report
that despite what has
been a very difficult
year due to financial
market turbulence,
the Group has
nonetheless achieved a
commendable revenue
of RM5,121 million for
Financial Year (FY) 2008
as compared to RM2,702
million for the 8-month
period in FY2007. On an
annualized basis, the
increase in revenue
amounted to 26%.
Tan sri Abdul Halim Ali
chairman
Annual
report
2008
034
Malakoff
Corporation
Berhad
Annual
report
2008
035
Statement by
chairman
The Groups Profit After Tax & Minority Interest

(PATMI) of RM139 million for FY 2008 is notably
lower as compared to the RM217 million recorded
for FY 2007. This decrease in PATMI was due
to the one-off provision of RM212 million for
the Windfall Profit Levy (WPL) imposed by the
Malaysian Government on Independent Power
Producers (IPPs) and the impairment of RM99
million for intangible assets and goodwill in
relation to our associate company, Kapar Energy
Ventures Sdn Bhd (KEV). Had it not been for
these provision, the Group would have achieved
a much higher and improved PATMI for FY 2008
as compared to FY 2007.
The performance of the local assets that we

control and operate remains robust and continues
to contribute about 95% of the Groups revenue.
Segari Energy Ventures (SEV), GB3, Prai
Power and Tanjung Bin Power maintained high
performance in terms of availability, reliability and
efficiency, meeting all the required performance
standards set out in their respective Power
Purchase Agreements (PPAs). Continuous
improvement strategies are regularly introduced
to our local operations to ensure that operational
and engineering efficiency are sustained in the
long-run. These strategies centre around the
balance of asset performance, prudent risk
mitigation and cost optimization.
Malakoff
Corporation
Berhad
Annual
report
2008
statement by chairman
In terms of our existing overseas investments,

the Dhofar Power Company SAOG (DPC) in
Oman has been contributing profits since our
acquisition of 20 % interest in DPC effective
in November 2006. In the coming year we
expect that our investments in Jordans Central
Electricity Generating Company (CEGCO) and
the Shuaibah IWPP in Saudi Arabia, will also
begin to contribute to overall Groups profits.
Despite the challenges faced this year, Malakoff
has continued to pay good dividends to our
shareholders. Net dividends paid for FY 2008
was RM165 million as compared to RM100 million
paid in FY2007.
Through our Corporate Responsibility (CR)

initiative, we have undertaken comprehensive
programmes to play our part in a wide range of
fields including, developing Malaysian technical
expertise, facilitating community development
through our Corporate Community Investment
(CCI) programmes, inculcating a strong safety
and health culture as well as conserving
the environment.
036
Malakoff
Corporation
Berhad
Annual
report
2008
Being our most valuable asset, we endeavour to

continue to invest in our people through learning
and development programmes that will create
For FY2009, we will commit to stepping up our CR

initiative and anticipate investing approximately
RM10 million on various programmes. Our CCI
programme will also be streamlined under a
single platform called The Malakoff Community
Partnerships (MCP). Of this RM10 million
commitment at least RM3.5 million will be
invested in MCP activities, RM4.8 million on
staff training and development while the balance
will be focused on enhancing our stakeholder
engagement programmes.
value for Malakoff as a business entity as well as

for the employees as individuals. It is clear that
we are able to fulfil our strategic initiatives only
with a competent and dedicated work force.
We are committed to retaining and enhancing
our CR programmes in the coming years as an
integral part of the way we operate. The Group
will continue to invest in further meaningful
platforms that are deemed to bring a positive
impact on society.
The MCP initiative will focus on the following

areas:

Commitment to Community & Education
Commitment to Sports
Commitment to Environment
037
Malakoff
Corporation
Berhad
Annual
report
2008
038
statement by chairman
The MCP aims to celebrate the achievement of

Malakoffs long-term and continuous commitment
to being a responsible and active participant of
the communities in which it operates.
by the Securities Commission. This being a

demonstration of Malakoffs commitment to
meeting the highest standards of openness and
transparency in the conduct of our business.
In terms of our commitment to ensuring a safe

working environment, I am pleased to inform
that our local operations have completed the
standardisation of our Health, Safety and
Environment (HSE) practices. Furthermore, our
endeavour of achieving OHSAS 18001 certification
for the Lumut, Tanjung Bin and Prai power plants
and ISO14001 for the Tanjung Bin power plant in
FY2009, is on track.
Last but not least, I would also like to thank my

fellow Board members, the Management and
Staff of Malakoff who worked particularly hard
throughout 2008 as they rose to the challenges
of an unusually demanding environment.
We remain steadfastly committed to the tenets of

corporate governance despite being a privatelyheld entity and will continue to adhere to the
Corporate Governance requirements as mandated
Given the strong fundamentals of Malakoff

and our more focused strategic direction, I am
confident of the growth prospects for Malakoff
this coming year and going forward.
TAN SRI ABDUL HALIM ALI

Chairman
Malakoff
Corporation
Berhad
Annual
report
2008
039
Malakoff
Corporation
Berhad
040
Annual
report
2008
Malakoff Corporation Berhads strong

management and technical know-how
are reflected in the steady long-term
income flows and increasing value of
our assets. Building upon our domestic
success, we are now taking our people,
technology and processes onto the
international stage.
Ahmad Jauhari Yahya

Managing director/
chief executive officer
Malakoff
Corporation
Berhad
Annual
report
2008
041
Performance
review
By md/ceo
The global financial crisis in FY2008 presented an
In terms of human resource development, we have also taken the opportunity
opportunity for Malakoff to prepare itself for high
to adopt the following measures:
economic activity in the future. In terms of plant

operation, which is one of our core businesses, we
Rolling-out of Career Ladder Programme;
looked at innovative ways on how we do things and
Enhancing of Competency-based Assessment (CBA) Programme; and
these include the following key measures:
Strengthening other human resource development initiatives like
Optimizing of operating costs through cost-
manpower planning, training and re-training.
base analysis;
We believe that with specialized skills and tools, Malakoff will continue to
Rolling-out of plant improvement initiatives;
differentiate itself from others and therefore stay ahead of the competition.
Upgrading of internal processes, in particular,

the application of state-of-the-art O&M tools
and methodologies; and
Enhancing risk management through the
application of new risk assessment tools.
Malakoff
Corporation
Berhad
Annual
report
2008
042
performance review by MD/CEO
Asset
performance
Malakoff
Corporation
Berhad
Annual
report
2008
043
LOCAL ASSETS
We continue to contribute towards the nations
economic development through our core business
activity of generating power for the National Grid. Our
interests in a number of power plants have brought our
effective generation capacity, to a total of 5,020MW. We
are therefore responsible for approximately 25% of the
power generation in Peninsular Malaysia.
Malakoff
Corporation
Berhad
Annual
report
2008
044
Lumut Power Plant

In operation for more than ten years, 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%.
During the financial year under review, LPP
maintained its high performance in terms
of availability, reliability and efficiency.
The plant delivered approximately 4,455 GWh of electricity

to the National Grid, with an average capacity factor of
approximately 39.03%. With an availability of 93.90%,
the plant exceeded the 86.0% guaranteed under the
Power Purchase Agreement (PPA) with Tenaga Nasional
Berhad (TNB).
Malakoff
Corporation
Berhad
045
Annual
report
2008
GB3 Power Plant

GB3 Power Plant (GB3), also a combined cycle
power plant, with a dependable capacity of 640
MW, is held through our 75% owned subsidiary,
GB3 Sdn Bhd. The power plant is in its seventh
year of operation and is located adjacent to LPP,
owned by SEV. The plant delivered a total of
3,694 GWh of electricity to the National Grid,
with an average capacity factor of approximately
65.89%, during the financial year under review.
The plants availability of 91.57%, exceeded the
requirement of the PPA of 91.5%.
Local Generation capacity
Prai Power Plant
Prai Power Plant (PPP) is a single-shaft
combined cycle power plant with a dependable
capacity of 350 MW. In its sixth year of operation,
a total of 2,409 GWh of electricity was delivered to
the National Grid. During the financial year under
review, the plant recorded an average capacity
factor of 78.59%. The plants availability at 93.07%,
exceeded the PPA requirement of 93%. Being one
of the most efficient power plants in Malaysia,
PPP recorded a net efficiency (LHV) of 53.00%
during the financial year under review.
Shareholding X Plants Capacity
90.00%@2,100 MW
TBP
1,890 MW
40.00%@2,420 MW
KEV
968 MW
25.00%@440 MW
PDP
110 MW
100.00%@350 MW
PPSB
350 MW
75.00%@640 MW
GB3
480 MW
93.75%@1,303 MW
SEV
1,222 MW
7,253 MW
Effective Capacity
5,020 MW
27%
Malakoff
5,020 MW
73%
TNB &
other IPPs
Malakoff has an effective generation capacity of

5,020 MW, which accounts about a quarter of
Peninsular Malaysias total installed capacity.
Malakoff
Corporation
Berhad
Annual
report
2008
046
Tanjung Bin Power Plant

Tanjung Bin Power Plant (TBPP) is the first private coal-fired power plant
in Malaysia and one of the largest independent coal-fired power plants in
Southeast Asia. The plant is held through our subsidiary, Tanjung Bin Power
Sdn Bhd, in which we owned 90%. In its third contract year of operation,
TBPP, with a generating capacity of 2100MW, has delivered a total of 10,258
GWh of electricity to the National Grid, with an average capacity factor of
55.76%. Although it recorded an availability of 85.01% at the end of the
third contract year, this is slightly lower than the 91% stated in its PPA
requirements. The slight decrease is considered as normal to a new plant
due to Minor Inspection outage for all three units and DOSH Certificate of
Fitness (CF) renewal requirements.
The respective boilers, turbine generators and associated equipment had
undergone statutory inspections and overhaul in the year 2008.
Using clean coal technology equipment, such as Electrostatic Precipitator
(ESP) and Flue Gas Desulphurization (FGD), allowed the plant to
maintain the boiler emission level within the limit set by the Department of
Environment (DOE).
Malakoff
Corporation
Berhad
Annual
report
2008
047
International Assets
Saudi Arabia
Our first overseas project is the Shuaibah Phase
3 Independent Water and Power Project in the
Kingdom of Saudi Arabia. We are a 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 (PWPA)
with the government of Saudi Arabia.
With electricity demand in the Dhofar region growing at a cumulative

annual growth of about 7%, this investment provides much potential for
Malakoffs growth in the future.
The projects construction is in full swing with

procurement and manufacturing on schedule. The
first evaporator arrived at Shuaibah in October 2006
and the first steam turbine for Unit 10 was erected
in December 2007. Crude oil first firing was done
on 28 November 2008 and the projects Commercial
Operation Date is scheduled in July 2009.
CEGCO has 4 major multi-fuel power plants under 4 separate Power

Purchase Agreements (PPA) with a fifth PPA governing the balance
generation capacity from 4 other small power plants. The total net
generation capacity of CEGCO is 1,665 MW.
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 too has
become the Technical Partner of DPC. DPC is
an integrated power company with a 239 MW
generating asset as well as the transmission and
distribution assets in the Salalah region of Oman.
Jordan
Malakoff has established its presence in Jordan with an acquisition of a
stake in Central Electricity Generation Company (CEGCO). Malakoff has a
25% interest in ENARA, a consortium with Jordan Dubai Capital of Jordan
(65%) and Consolidated Contractors Ltd of Greece (10%), which holds 51% of
the equity in the Jordanian generation assets, held by CEGCO.
The Government of Jordan signed the CEGCO Share Sale Agreement with
ENARA in May 2007 and the CEGCO Transaction Documents in September 2007.
In October 2007, the sale was finally sealed.
Moving forward, ENARA plans to pursue other opportunities in Jordan and
neighbouring countries, utilising CEGCOs expertise and manpower.
Algeria
Another major overseas project underway in Algeria is a seawater
desalination plant located at Souk Tleta, Wilaya of Tlemcen, Algeria which we
are participating in a consortium comprising our wholly-owned subsidiary,
MIL and Spring Utility Limited (SUL), a wholly-owned subsidiary of Hyflux
Limited of Singapore.
The consortium received a letter of award in October 2006 from the
government-owned Algerian Energy Company (AEC) to develop, construct
and operate the seawater desalination plant. The plant will be supplying
200,000 m3/day of desalinated water to LAlgerienne Des Eaux (ADE) under
a 25-year concession.
MIL and SUL hold 70% and 30% interests, respectively, in the consortium. In
turn, the consortium holds a 51% stake in the company undertaking the project,
with the balance held by AEC. The project achieved Financial Closure in January
2008 and is expected to meet the Commercial Operation Date in January 2010.
Malakoff
Corporation
Berhad
Annual
report
2008
Operations
& Maintenance
(o&M)
048
Malakoff
Corporation
Berhad
Annual
report
2008
049
Teknik Janakuasa Sdn Bhd (TJSB)

TJSB, continues to provide support and
expertise to the group, ensuring that
the plants are managed and maintained
efficiently and cost-effectively through the
implementation of the latest O&M tools and
methodologies.
Malakoff
Corporation
Berhad
Annual
report
2008
Lumut Power Plant

The SEV and GB3 Power Plants continue to
provide highly reliable supply to the National
Grid during the financial year under review.
For year 2008, Lumut Power Plant (LPP) has
completed 6 A/B and 4 C-inspections for Gas
Turbine and 1 C-inspection for Steam Turbine. In
all cases, the inspections have been completed
within schedule. SEV Plant has registered
an above average Availability Factor (AF) of
93.9%. In addition, GB3 registered an Unplanned
Outage Rate (UOR) of 1.2% with the average
availability of 91.57%. Both plants have fulfilled
all operational requirements specified in their
respective PPAs and surpassed the world industry
standards on availability and forced outage
rate. Undoubtedly, this is a testimony on the
effectiveness of the planning and usage of O&M
tools and methodology undertaken by TJSB.
Caring for Health, Safety and Environment

(HSE) remains our top priority. At the end of
year 2008, LPP broke a new safety record by
achieving Lost Time Incident (LTI) of more
than 3.2 million manhours. Our proactive safety
program is inline with our Process Safety Risk
Management (PSRM) which we embarked since
last year with the set target of achieving OHSAS
18000 Certification by middle of year 2009.
Competency Based Assessment (CBA) continues
to be our core initiatives in developing our human
capital. Lumut Power Plant in-house simulators
are highly utilised during 2008, providing basic
and advanced technical training both for Operation
050
Malakoff
Corporation
Berhad
Annual
report
2008
and Maintenance staff. Notwithstanding that, soft

skill training which is equally important are also
being organized on regular basis to ensure that
all training aspects are looked into. In year 2008,
each site personnel has undertaken an average
12 training mandays.
Factor (AF) of 93.07%. This was mainly due

to the reduction in the number and duration of
forced outages. Plant initiative on the start up
reliability study has also improved the overall
plant reliability. PPP also maintained a high
Capacity Factor (CF) of 78.59%, due to high
dispatch throughout 2008, with an average of net
efficiency of 53.00%.
Prai Power Plant

Prai Power Plant (PPP) continued to provide
highly reliable supply to the National Grid during
the financial year under review. PPP delivered
2,409 GWh of electricity to TNB throughout the
year.
Meanwhile, the plants reliability has shown
tremendous improvement with the Unscheduled
Outage Rate (UOR) of 1.47%, well below
the industry standard of 2%, and Availability
PPP has also managed to keep its excellent

safety record by maintaining zero LTI for 2024
consecutive days, despite having conducted four
maintenance outages in 2008. The plant has met
all the environmental requirements and limits as
stipulated in the regulations.
051
Malakoff
Corporation
Berhad
Annual
report
2008
052
Tanjung Bin Power Plant

Tanjung Bin Power Plant with a net capacity of
2100MW, consisting of 3 units of 700MW coal fired
generators, started its commercial operation in 2006
for the first unit and 2007 for the second and third
units, continue to provide reliable power supply to
the southern region of Peninsula Malaysia.
In 2008, the plant delivered a total of 10,286 GWh
of electricity to the National Grid with an average
capacity factor of 55.76% and an availability target
of 85.01% at the end of 2008. The various type of
bituminous and sub-bituminous coals consumed
were imported from Australia, South Africa and
Indonesia.
The respective boilers, turbine generators and
associated equipment had undergone statutory
inspections and overhaul in the year 2008. By
using clean coal technology equipment such as
Electrostatic Precipitator (ESP) and Flue Gas
Desulphurization (FGD), the plant is able to
maintain the boiler emission level within the limits
set by the Department Of Environment (DOE).
Meanwhile, Environmental Monitoring Plan has

been fully implemented with regular verification
of emission data of marine water and marine
ecology by third party environmental consultant
with regular submission of trending data and
environmental monitoring report to DOE. The
plants Continuous Emission Monitoring System
(CEMS) had been connected online via the
internet to DOE Server in Johor Bahru in 2008
for the regulators monitoring of compliance.
The Technical Support Group (TSG)
The completion of the Tanjung Bin Automatic
Billing System (ABS) marked the completion of
the 4th project undertaken by TSG to streamline
the billing system of Malakoffs power plants.
Continuous improvement projects such as
upgrading the fuel metering system, reviewing
and revamping the energy metering system are
also actively being pursued.
In addition, our collaboration with Electric Power
Research Institute (EPRI) ensures that the
O&M practices in cycle chemistry are constantly
Malakoff
Corporation
Berhad
Annual
report
2008
benchmarked against the worlds best practices.

Engagement with other consultants such as DNV
for Reliability Based Inspection (RBI) at Tanjung
Bin power plant, and ERA Technology for a Heat
Recovery Steam Generator (HRSG) cyclic study
at Lumut and Prai power plants helped the plant
management to maintain operational risks within
acceptable limits.
On an international front, Repair and Maintenance
(RMS) team managed to secure a contract in
providing manpower for performing 6 C-inspections
in Bahrain. The contract will provide invaluable
experience for TJSB staff in providing services
under a competitive and demanding environment.
TJSB via its holding in SAMAOMCO and AL-Imtiaz
is also overseeing the mobilization phase of O&M
services undertaken by its sub-contractor for the
new IWPP development in Shuaibah.
TSG has acquired additional manpower necessary
in developing a team for a much needed expertise
in desalination technology. With the mobilization
053
of the O&M team for the first desalination plant

in Algeria developed by Malakoff, TSG expertise
will not only be limited to power but will extend
to Water O&M technology.
With respect to O&M-related services, Malakoff has
provided a combined cycle gas turbine plant (CCGT)
and coal-fired plant simulator training to Teknologi
Tenaga Perlis Consortium Sdn Bhd (TTPC) and
Jimah Energy Ventures Sdn Bhd (JEV).
TSG continues to provide Technical and Management
Support Services for Salalah Power Plant in Oman.
In year 2008, one audit was successfully completed
by engaging TJSBs internal staff. The sharing
of knowledge between peers and other O&M
practitioners is continuously being encouraged
within the organization. In 2008, technical papers
were presented by TSG at the local and international
front, at various seminars or conferences to
promote and highlight internal development done
by TJSB. TSG will continue developing its internal
talent in its quest to promote Technical excellence
which it hopes will identify TJSB as a premium
O&M service provider.
Malakoff
Corporation
Berhad
Annual
report
2008
Life Cycle Asset Information Management

System (LCAIM)
The Life Cycle Asset Information Management
System (LCAIM) programme was rolled out
for Tanjung Bin Power Plant, capturing all
the technical details, drawings and project
documents and putting the entire O&M manual
into an integrated system named EALIS. The
EALIS implementation team has captured and
intelligently linked 300,000 objects and equipment
in the plant with 90,000 documentation files. With
an integrated asset information system in place,
O&M personnel will have immediate access to
information and therefore have the information
and tools to set a new standard for operational
excellence in the future.
O&M International
The Companys successful entry into Middle East
and South-East Asia markets has presented us
with the opportunity to expand our O&M business
and presence into the international market. In
2008, TJSB has participated in international events
such as Power Gen Conference and Exhibition
Middle East in Bahrain and Power Gen Conference
and Exhibition Asia in Malaysia with the objectives
to promote TJSBs broad range of services and
establish contacts with potential clients.
TJSB currently operates and maintains up to 4
power plants in Malaysia and 3 power and water
plants located in the Middle East with a combined
generating capacity of more than 6,000MW power
and 1,000,000m3/day water.
In March 2008, TJSB has been awarded with a

5-year Operation and Maintenance Management
Services (OMMS) contract for 800MW Az Zour
Emergency Power Plant in Kuwait. TJSB also signed
a Manpower Supply Agreement (MSA) in December
2008 with PT. Pembangkitan Tenaga Listrik Jawa
Bali Services (PT.PJBS) for this plant.
Another water and power plant that will be
operated and managed by TJSB is the ShuaibahIII Project, located in Saudi Arabia. It is the
worlds largest Independent Water and Power
Plant (IWPP) project with a capacity of 900MW
power & 194 MIGD water.
In addition, together with Hyflux Limited of
Singapore, TJSB will be the O&M Provider
for Souk Tleta Sea Water Desalination Plant
in Algeria. The plant is expected to generate
200,000m3 of fresh water per day.
054
Malakoff
Corporation
Berhad
Annual
report
2008
Both Shuaibah III and Souk Tleta plants will

achieve its commercial operation date on 2009.
Throughout the year of 2008, TJSB is actively

involved in the preparation and submission for
the following projects tender:
On the other hand, TJSB together with Malakoffs

Ventures department are currently working
together on potential projects in the Middle East
(i.e. Ajman power project in UAE, Jazan power and
water project in KSA) and South-East Asia (i.e.
power project in Bangladesh, India, Pakistan).
On O&M-related services, TJSB has provided a
CCGT and coal-fired plant simulator training to
Teknologi Tenaga Perlis Consortium Sdn. Bhd.
(TTPC) and Jimah Energy Ventures Sdn. Bhd.
(JEV) respectively.
1000MW & 1,000,000m3/day IWPP Raz Azzour,

KSA
390MW Al-Qatrana CCGT Power Plant,
Jordan
500MW Salalah CCGT Power Plant, Oman
2000MW Sabiya CCGT Power Plant, Kuwait
370MW King Hussein CCGT Power Plant,
Jordan
1400MW Rabigh Thermal Power Plant, KSA
055
Malakoff
Corporation
Berhad
Annual
report
2008
056
electricity
distribution
& Chilled water
Supply
Malakoff
Corporation
Berhad
Annual
report
2008
Malakoffs wholly-owned subsidiary

Wirazone Sdn Bhd (Wirazone) is the
licensed electricity distributor within
the Kuala Lumpur Sentral (KL Sentral)
development area. Wirazone has
distributed up to 100 MW of electricity
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.
057
Malakoff
Corporation
Berhad
Annual
report
2008
058
Wirazones mission is to be the most customer

responsive and efficient owner and operator of a
reliable district cooling and electricity distribution
network in Malaysia through attention to
customers needs, innovation and teamwork.
Wirazones commitment is manifested through
its Customer Charter and its Quality Policy
under the MS ISO 9001:2000 Quality Management
System. The companys high standard of technical
performance is reflected by its achievement of a
System Average Interruption Duration Index of
7.3 minutes per customer and System Average
Interruption Frequency Index of 0.002 minutes
interruptions per customer recorded as at 31
December 2008.
Another service provided by Wirazone is the Technical and Operation

Service, mainly for major customers. This service, which started at the end
of 2007, has been further improved.
In financial year 2008, the growth in the domestic

and commercial sectors led to a 15% increase of
electricity demand for the KL Sentral area. The
completion of UEM Building, Sooka Sentral and
The Loft Condominium saw customer growth of
45% whereby 427 new customers moved into the
KL Sentral area and registered to be served.
Wirazone also upgraded the telecommunication network in order to provide

for robust and reliable channels of Supervisory Control And Data Acquisition
(SCADA) and an arc protection system for our Main Distribution Substations
1 & 2.
In line with the development of the KL Sentral area and with the aim
of providing high quality power supply, Wirazone has also undertaken
continuous upgrading of the electricity infrastructure. This has included
the construction of Main Distribution Substation No. 2 to cater for power
demand from new development, mainly catering for Lot J (office towers and
leisure centre) and Lot L (condominium).
Further growth is expected when office towers in Lot J are completed and
tenanted in early 2010 which will increase Wirazones revenue potential in
financial year 2010.
Malakoff
Corporation
Berhad
Annual
report
2008
059
Malakoff
Corporation
Berhad
Annual
report
2008
Ventures
060
Malakoff
Corporation
Berhad
Annual
report
2008
Malakoff has established its presence

in the Kingdom of Saudi Arabia (KSA)
through its investments in Shuaibah III
Independent Water and Power Project
(IWPP) and Shuaibah III Expansion
Project.
061
Malakoff
Corporation
Berhad
Annual
report
2008
062
In Algeria, Malakoff, together with Hyflux Ltd

of Singapore and Algerian Energy Company,
a government owned investment corporation,
successfully achieved financial closure for
the development of 200,000 m3/day seawater
desalination plant. Using reverse-osmosis
technology, the project will be supplying potable
water to L Algerienne Des Eaux (ADE), the
national water distribution company and is
expected to commence commercial operations in
January 2010.
Following the completion, of acquisition of 51%
equity stake in Central Electricity Generating
Company (CEGCO), Energy Arabia (Enara) has
embarked upon another project in Jordan. Enara
together with Terna Energy SA and Vector Aeolian
Parks SA, both of Greece, formed a consortium
and submitted a bid in August 2008 for the

development of the 30-40 MW Al-Kamshah Wind
Power Project. The bid has been evaluated by
the Ministry of Energy and Mineral Resources of
Jordan (MEMR) and the consortium was selected
as the first ranked bidder on 23 December 2008.
The project value is estimated at USD98 million.
In South East Asia, Malakoff is active in developing
greenfield and brownfield opportunities in
Singapore, Indonesia, Vietnam and Philippines.
Asset acquisition opportunities in the Philippines
exist as a result of the regulatory ruling to
privatise a majority of the assets owned by the
Power Sector Assets and Liabilities Management
Corporation (PSALM) whilst in Indonesia,
new capacity is required to meet the growth in
demand for electricity in the country.
Malakoff
Corporation
Berhad
Annual
report
2008
At the same time, Malakoff has also been active in

considering opportunities that would enhance the
value of its existing assets in both the upstream and
downstream aspects of the power business, and in
related areas such as desalination, based upon our
initial successes in Saudi Arabia and Algeria.
Moving forward, Malakoff will focus on potential

acquisitions and projects with operations
and maintenance service opportunities. The
Company will also continue to foster effective
institutional relations to improve the Companys
brand recognition in the target investment
countries. This includes building good rapport
with engineering, procurement, and construction
contractors, advisors and potential partners.
Substantial barriers in the region still exist along

with the change in economic climate created
by the credit squeeze. These challenges will
be addressed and mitigated against the project
opportunities identified for development.
063
Malakoff
Corporation
Berhad
Annual
report
2008
project
Management
The Groups in-house projects are undertaken

by its project management subsidiary company,
Malakoff Engineering (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 specified quality standards.
064
Malakoff
Corporation
Berhad
Annual
report
2008
MESB has extensive experience in managing various engineering

projects. Its current projects include water pipeline, warehouse and
coal yard facilities for the Tanjung Bin power plant. With its pool of
competent engineers and personnel, in addition to its core business of
project management, MESB provides other services such as technical
advisory services and contracts management both within and outside
the Malakoff group of companies.
Currently MESB provides management services to the Asset Management
Division of Malakoff Corporation Berhad (Malakoff). Amongst its
on-going projects are the proposed warehouse, coal workshop and
planned coal yard dry storage shed in Tanjung Bin, which will provide
additional facilities for the plant.
065
Malakoff
Corporation
Berhad
Annual
report
2008
Information Technology (IT)

The IT department implemented a secured virtual private network to
improve connectivity and accessibility.
A backup protection strategy was formulated also and implemented
to safeguard critical business information data held by mobile users
whose computing equipment are vulnerable to theft and loss. This
backup strategy has also been deployed to our site offices.
The procurement of IT assets has been centralised at the companys
headquarters for effective control, standardisation and monitoring
of cost. This change has speeded up significantly the selection and
delivery of assets to the users.
Email filtering software was upgraded to manage and monitor spam
and junk email which circulates so per vasively over the internet.
Managing these intrusions strictly is important so as to allow users to
distinguish and respond to important messages promptly.
066
Malakoff
Corporation
Berhad
Annual
report
2008
Enterprise Applications
information arranged from different perspectives

to improve business performance by driving
better decision making.
The number of companies in Malakoff Group

that use SAP has grown from 26 to 28 with the
successful implementation of TJSB Middle East
Limited and Malakoff AlDjazair Desal Sdn Bhd.
Furthermore a three-month migration project,
which went live in July 2008, involved 25 MMC
Corporation Berhad companies being migrated
into Malakoffs SAP server. During 2008, we
therefore increased the number of SAP licenses
from 530 to 730 and our SAP server now hosts
53 companies.
The department utilises SAPs business reporting
tool Business Warehouse to extract data from
the SAP database and present it in an intelligent
and meaningful format. Various reports were
redesigned to provide decision makers with
Continuous Business Process Improvement

(BPI) programmes are scheduled regularly
to improve efficiency. Improving the business
process offer the opportunity to simplify the
process, increases the service level and boosts
the usefulness of the SAP system.
The implementation of an e-helpdesk has
provided SAP users with single point of contact
for SAP services and advice. SAP users from all
locations now log their service request and track
updates on their request status via e-helpdesk.
By improving the communication process and
giving effective resolutions on line, the e-helpdesk
promotes SAP users productivity.
067
about
partnersh
i
ps
Our business a
lliances provide
immense oppo
rtunities for gro
wth
Malakoff
Corporation
Berhad
Corporate
Annual
report
2008
responsibility
070
Malakoff
Corporation
Berhad
Annual
report
2008
071
Work is under way for Tanjung Bin, Lumut and Prai Power Plants to
achieve OHSAS 18001:2007 and for Tanjung Bin Power Plant to achieve
ISO 14001:2004 in 2009.
At Tanjung Bin Power Plant, Environmental Monitoring Plan has been
fully implemented with regular verification of emission data, monitoring
of marine water and marine ecology by third party environmental
consultant with regular submission of trending data and environmental
monitoring report to Department of Environment (DOE). The plants
Continuous Emission Monitoring System (CEMS) is connected online
to DOE server in Johor Bahru via the internet since 2008 for the
regulators monitoring of compliance.
Lumut Power Plant on the other hand, continued to shine with its
excellent HSE record. By the end of Dec 2008, Lumut Power Plant
surpassed the target of 1407 days since commissioning without Lost
Time Injury, and this marked a significant milestone in our continued
effort to promote a safety culture.
Many HSE initiatives have been implemented and improvements can
be seen in our HSE Performance Statistics. Through the structured
implementation of our HSE and Security Management Programme over
the years, we have enhanced the sense of ownership and personal
responsibility for safety and health at the work place.
Health, Safety & Environment

(HSE)
M a l a koff corpor a tion b e rh a d
(m a l a koff ) h a s a long history of
e sta b lishing h e a lth , s a f e ty a nd
environment (HSE) improvement goals.
contin u o u s impro v e m e nt e fforts
re sult ed in signific a nt reductions
in emissions, minimized injuries and
illnesses.
Our HSE Programme encompasses these core elements: management

commitment, accountability, involvement and leadership; training and
education; employee involvement; workplace hazard identification and
analysis; and workplace hazard prevention, elimination and control.
We are also proud of our Contractor Safety Programme at our sites.
Protecting employees, the public, the environment and our physical
plant is part of our fundamental values.
Malakoff
Corporation
Berhad
Annual
report
2008
072
corporate responsibility
HUMAN RESOURCE DEVELOPMENT

The strength of any organization lies in a
competent and well trained workforce, working
cohe si vely to achie ve the or ganiz ations
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.
The Training & Development Section, since its
inception following the rapid growth of Malakoff,
has devoted its effort to achieve such aspirations.
As the demands and requirements for skillful
and know ledgeable manpower increases,
more specialised training initiatives have been
developed. To date, we have 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.
Given the rising global economic challenges, the
Company will invest further in developing the
human capital, the Companys most valuable asset.
This is in line with the Companys ambition to
expand and set up presence in other countries.
Mal akof f s human re source development
efforts extend beyond our own staff. Effective
September 20 0 7, we star ted of fer ing the
Executive Development programme to new
graduates to develop their competencies through
training and working experience. The practical
understanding and exposure gained in the
program will assist them in ensuring that they
would be able to understand the whole business
processes and strategies in the Group.
Corporate Community
Investment
Malakof f s commitment to C SR principles
remains resolute. In 2008, we reaffirmed this by
increasing our efforts in community involvement,
education, charity and sporting events. For the
year under review, Malakoffs total Corporate
Community Investment (CCI) amounted to RM
2 million through donations and sponsorships
to charitable causes, contributions to arts and
cultural heritage, educational support, as well
as the success of our sporting events.
To foster comradeship and instil competitive
spirit amongst Malaysians, Malakoff continued
to sponsor duathlon spor t s , c ycling and
running. Our flagship international sporting
event, Powerman Malaysia, was successfully
held on 21 November 2008 on its 7th year, with
a participation of about 750 duathletes. Our
inaugural 26km Penang Run, which was held on
10 August 2008, and the 12km KL Run, which was
held on 20 December 2008, saw a total of 450
and 2,500 runners, respectively. On the other
hand, the three-legged 6th Malakoff University
Duathlon Series (MUDS) were also successfully
held at Universiti Kebangsaan Malaysia (UKM)
on 19 July 2008, University Malaya (UM) on 26
July 2008 and Universiti Pertahanan Nasional
Malaysia (UPNM) on 2 August 2008. MUDS
2008 saw a combined participation of close to
1,000 participants. MUDS is designed to attract
people, in particular, university students and the
youth to take up interest in endurance sports
like duathtlon.
Malakoff has successfully brought together sports
and charity into a unique annual event called
the Malakoff Annual Charity Ride. On its third
year, the Malakoff Annual Charity Ride attracted
about 70 cyclists which took on a 480km route
from Gombak to Kuala Terengganu. Along the
way, and through the generosity of our business
associates, we were able to raise RM60,000.00
which was distributed to selected charity homes
along the route. Since the inaugural event, the
Malakoff Annual Charity Ride raised a total of
RM154,000.00, which was distributed to rural
community centres, orphanages, schools, old
folks homes, and the handicapped.
Malakoff
Corporation
Berhad
Annual
report
2008
Our Education Fund Programme continued to

support our nine adopted elementary schools in
the municipality of Pontian, Manjung and Seberang
Prai. This support came in the form of upgrading
the schools academic facilities as well as offering
cash rewards for UPSR high achievers to motivate
the students to do well in their studies.
Enterprise Risk Management (ERM)
We also provide SEV scholarships to deserving

undergraduates at Universiti Tenaga Nasional
(UNITEN), which aim to encourage and assist
young people in pursuing relevant courses. As
of 31 December 2008, we have granted up to 47
scholarships.
Next year, we will endeavour to put in more
depth and breadth to our CSR initiatives by
consolidating our existing programmes as well
as identifying new ones.
In 2007, the Groups ERM practices were reviewed

to reflect the current business requirement and
to comply with the Australian/New Zealand
St an d ar d o n R i sk Man a g em ent ( A S / N Z S
4360:2004). The new approach was introduced
to each of the Groups Risk Management Units
from December 2007 until April 2008.
In order to enhance the monitoring and reporting
of the Groups risk profile, we upgraded our
enterprise risk management system by procuring
a new state-of-the art ERM Software.
073
Malakoff
Corporation
Berhad
corporate responsibility
Annual
report
2008
074
Malakoff
Corporation
Berhad
Annual
report
2008
Organisational Development
Malakoff is also mindful of staff retention issues

as evident in the engagement session carried
out company-wide. In this exercise, the staff
were able to express their views toward the
company, and a taskforce spearheaded by the
department worked together on the feedback
given and presented the findings to the companys
management for their response. Generally staff
felt more appreciated as the company took the
time to listen and respond, and encouraged them
to contribute more to the companys productivity.
Organisational Development department was

formed to look into building human capital
capabilities and assist the Management of
Malakoff in promoting continuous improvements
in the company.
Malakoff believes that widespread embodiment
of Leadership behaviour must exist for effective
leadership to take place. Staff at the managerial
level undergoes a Leadership Learning series with
development program on People Management,
Business Acumen and Change Leadership.
These programs are widely implemented to
develop new leaders with the right capabilities
and knowledge through experiential learning
workshops. At the senior management level,
executive coaching is given to the personnel
to instil high performance culture to support
sustainable business growth in the company.
The department also believed that succession
management is important in ensuring business
continuity and to support the Companys growth.
Key positions across the Company were identified
to ensure that these vacancies are filled with
the right people. Potential staff were given
accelerated programmes to prepare them to
take on a bigger challenge, and to be ready to
face higher expectations.
The first survey showed that Malakoffs index

was higher than the Malaysian National Norm,
and we will continuously work towards making
Malakoff the employer of choice.
Ahmad Jauhari bin Yahya

075
about
ce
lien
resince
is the state of
Persevera
collective resolute, in the face
of adversities.
Malakoff
Corporation
Berhad
078
Annual
report
2008
Corporate event
highlights
01
03
02
04
05
01
02
1-2 February 2008
17-19 May 2008
RIDE FROM TG. MALIM TO

CAMERON HIGHLANDS
G roup photo of Mal akof f
Cycling Club at Batu Gajah,
Perak.
Malakoff Charity Ride
03
04
05
7-10 July 2008
19 July 2008
26 July 2008
safety, health and

work 2008 exhibition
Staff in front of the exhibition
Booth.
M ala koff university

Duathlon series 2008
En A hmad Jauhar i Yahy a
with participants of Malakoff
University Duathlon Series
2008 at UKM.

At the star ting line of
Malakoff University
Duathlon Series 2008 held
at UM.
Group photo of cyclists.
Malakoff
Corporation
Berhad
079
Annual
report
2008
corporate event highlights
06
07
08
28 July 2008
02 August 2008
9 August 2008
100 th
Coal Shipment
ceremony at tg. bin
power plant
En Ahmad Jauhari Yahya
signing the commemorative
plaque.

The winner of Mens Open
Category at MUDS UPNM.
WIRAZONEs CUSTOMER DAY

A get-together with lots of
activities for customers.
09
10
11
10 August 2008
15 august 2008
05 September 2008
Malakoff Penang Run

The w inner s of Mal akof f
Penang Run.
Launching of
OHSAS 18001
Deput y CEO, En Mohd
Radzuan Yahya officiating
the launching ceremony.
Majlis buka Puasa

Tan Sr i A bdul Halim A li
handing out donations to
kids from orphanages.
06
07
08
09
10
11
Malakoff
Corporation
Berhad
080
Annual
report
2008
12
13
14
15
16
17
12
13
14
17 October 2008
18-20 october 2008
19 october 2008
T g. B in Power Plant
Hari Raya open House
Orang kampung from Mukim
Serkat and staff mingled
during the open house at
site.
Adopted school
programme
The school children during
t h e ir v i s i t to t h e b r e a d
factory.
Hari Raya open house

Tan Sri Abdul Halim Ali and
E n A h m a d J a u h a r i Ya h y a
handing out duit raya and gifts
to children from the charity
homes and adopted schools.
15
16
17
21-23 october 2008
23 october 2008
24 october 2008
PowerGen Asia 2008

M a l a ko f f s t a f f t h a t a r e
involved in the exhibition.
Lumut Power plant Hari

Raya open house
Staf f enter tained or ang
kampung from Segari during
the open house at site
New Surau at Prai

power plant
and En Mohd Radzuan Yahya
inspecting the interior of
the surau.
Malakoff
Corporation
Berhad
081
Annual
report
2008
18
19
20
09 November 2008
26 November 2008
04 december 2008
powerman malaysia
The winners of Elite Category
at Powerman Malaysia 2008.
L ong T erm S ervice

Award (LTSA) ceremony
for Malakoff HQ
En Mohd Radzuan Yahy a
with the recipients of LTSA
at KL HQ.
Malakoff Breakout Session

Break-out Session at Marriott Putrajaya.
21
22
23
09 december 2008
13 december 2008
21 december 2008
majlis korban aidil adha

En A nuar L azim handing
b a g o f ko r b a n m e a t t o
representative from PDK
Seberang Jaya.
malakoff Corporate
Golf Invitational
Tan Sr i A bdul Halim A li
giving a prize to a winner.
Malakoff KL run
with the winners of Malakoff
Run 2008.
18
19
20
21
22
23
Malakoff
Corporation
Berhad
Annual
report
2008
082
FINANCIAL
STATEMENTS
084 Directors Report
088 Balance Sheets
090 Income Statements
091 Statements of Changes in Equity
092 Cash Flow Statements
094 Notes to the Financial Statements
147 Statement by Directors
147 Statutory Declaration
148 Report of the Auditors
Malakoff
Corporation
Berhad
Annual
report
2008
084
Directors report
for the year ended 31 December 2008
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 2008.
Principal activities
The Company is principally engaged in investment holding and the provision of management services to it subsidiaries whilst the
principal activities of the subsidiaries are as stated in Note 6 to the financial statements. There has been no significant change
in the nature of these activities during the financial year.
Results

Group Company
RM000 RM000
Profit attributable to:
Shareholders of the Company
Minority interest

138,789
51,309
155,543
190,098
155,543
Reserves and provisions

There were no material transfers to or from reserves and provisions during the year under review except as disclosed in the
financial statements.
Dividends
Since the end of the previous financial year, the Company paid:
(i) a
final ordinary dividend of approximately 15.4 sen per ordinary share less tax at 26% totalling RM40,000,000 (11.4 sen net
per ordinary share) in respect of the year ended 31 December 2007 on 2 April 2008;
(ii) a
n interim ordinary dividend of approximately 16.5 sen per share less tax at 26% totalling RM42,857,920 (12.2 sen net per
ordinary share) in respect of the year ended 31 December 2008 on 2 September 2008; and
(iii) a
n interim preference dividend of RM1 per share less tax at 26% totalling RM37,142,080 (74 sen net per share) in respect
of the year ended 31 December 2008 on 2 September 2008.
The final ordinary dividend recommended by the Directors in respect of the year ended 31 December 2008 consist of approximately
2.57 sen per ordinary share less tax at 25% (1.92 sen net per ordinary share) and single tier dividend of approximately 22.27 sen
per ordinary share totalling RM6,769,188 and RM78,230,812 respectively.
Malakoff
Corporation
Berhad
085
Annual
report
2008
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/Director)
Ahmad Jauhari bin Yahya (Managing Director/Chief Executive Officer)
Yoong Nim Chee
Hasni bin Harun
Tan Ler Chin
Azian binti Mohd Noh
Andrew Ian Rowan Yee
Lee Khuan Eoi
(appointed on 11 April 2008)
Ayyaril Karikulath Feizal Ali
(resigned on 11 April 2008)
Azlan bin Shahrim (resigned on 11 April 2008)
Directors interests
None of the Directors holding office at 31 December 2008 had any interest in the ordinary shares of the Company and of its
related corporations during the financial year.
Directors benefits
Since the end of the previous financial year, no Director of the Company has received 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 the Company or any other body corporate.
Issue of shares
There were no changes in the issued and paid-up capital of the Company during the financial year.
Options granted over unissued shares

No options were granted to any person to take up unissued shares of the Company during the year.
Malakoff
Corporation
Berhad
Annual
report
2008
086
directors report
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)
t hat would render the value attributed to the current assets in the Group and in the Company financial statements
misleading, or
iii) w
hich 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 or of the Company that has arisen since the end of the financial year and which
secures the liabilities of any other person, or
ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable
within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may
substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.
In the opinion of the Directors, except for the allowance for impairment of intangible assets amounting to RM99,232,000 and the
windfall tax levy of RM211,666,000 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 2008 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.
Malakoff
Corporation
Berhad
Annual
report
2008
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

Kuala Lumpur,
Date: 19 February 2009
087
Malakoff
Corporation
Berhad
088
Annual
report
2008
Balance sheets
at 31 December 2008

Group Company
Note
2008
2007
2008
2007
RM000 RM000 RM000 RM000
Assets
Property, plant and equipment
Intangible assets
Prepaid lease payments
Investment in subsidiaries
Investment in associates
Other investments
Deferred tax assets
3
4
5
6
7
8
9
10,733,893
6,538,891
107,810

1,379,157

10,973
10,631,005
6,904,958
112,288

1,536,031

10,609
37,402

5,454
8,128,970
1,006,800
1,669,056

38,419
5,516
8,128,970
1,022,000
1,715,897
18,770,724
19,194,891
10,847,682
10,910,802
10
11

12
1,025,841
638,415
124,442
3,064,853
1,147,669
488,173
52,892
2,573,954
622,861

115,664
488,115
602,737
51,550
460,493
Total current assets
4,853,551
4,262,688
1,226,640
1,114,780
Total assets
23,624,275
23,457,579
12,074,322
12,025,582
Total non-current assets

Receivables, deposits and prepayments
Inventories
Current tax assets
Cash and cash equivalents
Equity
Share capital
Reserves
Retained profits
356,363
3,659,298
175,868
356,363
3,658,997
157,079
356,363
3,658,997
131,209
356,363
3,658,997
95,666
Total equity attributable to shareholders of

the Company
4,191,529
4,172,439
4,146,569
4,111,026
Minority interest
288,196
220,410
4,479,725
4,392,849
4,146,569
4,111,026
Total equity
13
Malakoff
Corporation
Berhad
089
Annual
report
2008
balance sheets
at 31 December 2008 (continued)

Group Company
Note
2008
2007
2008
2007
RM000 RM000 RM000 RM000
Liabilities
Loans and borrowings
14
13,917,029
14,348,464
Employee benefits
15
31,277
27,280
6,902,250
10,519
6,855,028
8,950
Deferred tax liabilities
2,785,196
2,809,559
Total non-current liabilities
16,733,502
17,185,303
6,912,769
6,863,978
1,043,321
588,340
423,692
457,998
Payables and accruals
16
Current tax liabilities
14
1,363,473
1,267,174
Total current liabilities
2,411,048
1,879,427
1,014,984
1,050,578
Total liabilities
19,144,550
19,064,730
7,927,753
7,914,556
Total equity and liabilities
23,624,275
23,457,579
12,074,322
12,025,582
4,254
23,913
591,292
The notes on pages 94 to 146 are an integral part of these financial statements.
592,580
Malakoff
Corporation
Berhad
090
Annual
report
2008
Income statements

Group Company
30.4.2007 to
Note
2008
31.12.2007
2008
2007
RM000 RM000 RM000 RM000
Revenue
Cost of sales
17

5,121,267
(3,198,733)
2,701,998
(1,536,229)
564,324

421,219
1,922,534
1,165,769
564,324
421,219
20,130
(145,427)
(435,436)
4,219
(90,645)
(106,304)
12,080
(61,997)

104
(32,021)
Gross profit
Other income
Administrative expenses
Other operating expenses
Results from operating activities
1,361,801
973,039
514,407
389,302
Interest income
Finance costs
123,775
(1,197,816)
123,038
(768,434)
296,841
(581,338)
214,330
(387,894)
Operating profit
18
287,760
327,643
229,910
215,738
Share of profit/(loss) after tax and minority

interest of equity accounted associates
30,800
(3,874)
Profit before tax
318,560
323,769
229,910
215,738
20
(128,462)
(55,267)
(74,367)
(59,854)
190,098
268,502
155,543
155,884
138,789
51,309
217,297
51,205
155,543

155,884
190,098
268,502
155,543
155,884
Tax expense
Profit for the year/period
Attributable to:
Shareholders of the Company
Minority interest
Malakoff
Corporation
Berhad
091
Annual
report
2008
Statements of changes in equity
Attributable to shareholders of the Company

Non-distributable Distributable
Foreign (Accumulated
Ordinary Preference Ordinary Preference Currency
losses)/
Share Share Share Share Translation Retained
Minority
Group Note Capital Capital Premium Premium Reserve
profits Total
interest Total
RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
At 1 January 2007
Profit for the period
Shares issued
Acquisition through
business combination
Dividends to shareholders
At 31 December 2007/
1 January 2008
Profit for the year
Currency translation
differences
Increase in equity interest
in existing subsidiary
At 31 December 2008
(218)
(218)
(218)

13

351,344

5,019

3,162,096

496,901
217,297

217,297
4,015,360
51,205

268,502
4,015,360
27
21

(60,000)

(60,000)
189,285
(20,080)
189,285
(80,080)
351,344
5,019
3,162,096
496,901
157,079
4,172,439
220,410
4,392,849
138,789
138,789
51,309
190,098
301
301
544
845

21

(120,000)

(120,000)
29,811
(13,878)
29,811
(133,878)
351,344
5,019
3,162,096
496,901
301
175,868
4,191,529
288,196
4,479,725
* 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
profits Total
RM000 RM000 RM000 RM000 RM000 RM000
At 1 January 2007
Profit for the year

Shares issued
At 31 December 2007/1 January 2008
Profit for the year
At 31 December 2008
(218)
(218)

13
21

351,344

5,019

3,162,096

496,901

155,884

(60,000)
155,884
4,015,360
(60,000)
351,344
5,019
3,162,096
496,901
95,666
4,111,026
155,543
(120,000)
155,543
(120,000)
351,344
5,019
3,162,096
496,901
131,209
4,146,569

21

Malakoff
Corporation
Berhad
092
Annual
report
2008
Cash flow statements

Group Company
30.4.2007 to
Note
2008
31.12.2007
2008
2007
RM000 RM000 RM000 RM000
Cash flows from operating activities
Profit before tax
Adjustments for:
Allowance for doubtful debts
Amortisation of prepaid lease payments
Amortisation of intangible assets
Depreciation of property, plant and equipment
Finance costs
Interest income
Impairment of intangible assets
Impairment of goodwill
Provision for retirement benefits
Share of (profit)/loss of equity accounted associates
318,560
323,769
229,910
215,738

5
4
3

4
4

36,158
4,478
401,914
442,449
1,197,816
(123,775)
98,373
859
9,812
(30,800)
75,491
2,986
230,795
375,815
768,434
(123,038)

4,167
3,874

62

2,048
581,338
(296,841)

3,675

42
1,329
387,894
(214,330)
696
2,355,844
1,662,293
520,192
391,369
(150,242)
115,481
440,425
(46,037)
40,964
(131,245)

(42,305)
(183,639)
(118,647)
11,386
Cash generated from operations

Tax paid
2,761,508
(243,612)
1,525,975
(126,869)
294,248

284,108
Net cash generated from operating activities
2,517,896
1,399,106
294,248
284,108
3
27

(545,337)

(8,342)
15,200
37,395

139,111
(1,099)
(253,331)
(7,211,089)
(525)

33,475
(55,773)
93,243
(16,780)
(1,031)

62,041

319,022
(1,099)
(2,716)
(9,239,344)
181,125
(16,780)
(363,072)
(7,410,780)
378,933
(9,077,715)
Operating profit before changes in working capital

Changes in working capital:
Inventories
Cash flows from investing activities

Acquisition of property, plant and equipment

Acquisition of business, net of cash acquired
Redemption of unsecured loan stocks
Proceeds from redemption of unsecured loan stocks
Dividend received from associates
Interest received
Increase in deposits pledged
Net cash (used in)/from investing activities
Malakoff
Corporation
Berhad
093
Annual
report
2008
cash flow statements
for the year ended 31 December 2008 (continued)

Group Company
30.4.2007 to
Note
2008
31.12.2007
2008
2007
RM000 RM000 RM000 RM000
Cash flows from financing activities

Dividends paid
Dividends paid to minority shareholders
Interest paid
Issue of shares
Repayment of borrowings
Proceeds from borrowings
(120,000)
(13,878)
(1,151,366)

(673,000)
293,220
(60,000)
(20,080)
(819,741)
4,015,360
(1,963,380)
7,416,689
(120,000)

(526,658)

(60,000)
(252,049)
4,015,360
(1,878,380)
7,412,389
Net cash (used in)/from financing activities
(1,665,024)
8,568,848
(646,658)
9,237,320
Net increase in cash and cash equivalents

Cash and cash equivalents at 1 January
489,800
2,557,174
2,557,174

26,523
443,713
443,713
Cash and cash equivalents at 31 December
3,046,974
2,557,174
470,236
443,713
i)
Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:

Group Company
30.4.2007 to
Note
2008
31.12.2007
2008
2007
RM000 RM000 RM000 RM000

Cash and bank balances

Deposits with licensed banks
12
12
273,564
2,791,289
299,782
2,274,172
3,525
484,590
31,644
428,849

Less: Deposits pledged

12
3,064,853
(17,879)
2,573,954
(16,780)
488,115
(17,879)
460,493
(16,780)
3,046,974
2,557,174
470,236
443,713
Malakoff
Corporation
Berhad
Annual
report
2008
094
Notes to the financial statements

Malakoff Corporation Berhad is a public limited liability company, incorporated and domiciled in Malaysia. The addresses of
the principal place of business and registered office of the Company are as follows:
Principal place of business
Level 12, Block 3B,
Plaza Sentral,
Jalan Stesen Sentral 5,
50470 Kuala Lumpur.
Registered office
Level 8, Kompleks Antarabangsa,
Jalan Sultan Ismail,
50250 Kuala Lumpur.
The consolidated financial statements of the Company as at and for the year ended 31 December 2008 comprise the Company
and its subsidiaries and the Groups interest in associates.
The Company is principally engaged in investment holding and the provision of management services to it subsidiaries whilst
the principal activities of the subsidiaries are as stated in Note 6.
The immediate and ultimate holding companies during the financial year were MMC Corporation Berhad, a company listed on
the Main Board of Bursa Malaysia Securities Berhad and Indra Cita Sdn. Bhd. Both companies were incorporated in Malaysia.
The financial statements were approved by the Board of Directors on 19 February 2009.
1. Basis of preparation

(a) Statement of compliance
he financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting
T
Standards (FRS), accounting principles generally accepted and the Companies Act, 1965 in Malaysia.
The Group and the Company have not applied the following accounting standards (including its consequential
amendments) and interpretations that have been issued by the Malaysian Accounting Standards Board (MASB) but are
not yet effective:
FRSs/Interpretations Effective date
FRS 4, Insurance Contracts
1 January 2010
FRS 7, Financial Instruments: Disclosures
1 January 2010
FRS 8, Operating Segments
1 July 2009
FRS 139, Financial Instruments: Recognition and Measurement
1 January 2010
IC Interpretation 9, Reassessment of Embedded Derivatives
1 January 2010
IC Interpretation 10, Interim Financial Reporting and Impairment
1 January 2010
Malakoff
Corporation
Berhad
Annual
report
2008
notes to the financial statements
095
(continued)
1. Basis of preparation (continued)

(a) Statement of compliance (continued)

The Group and the Company plan to apply FRS 7, FRS 8, FRS 139, IC Interpretation 9 and IC Interpretation 10 from
the annual period beginning 1 January 2010. FRS 4 is not applicable to the Group and the Company.
The impact of applying FRS 7 and 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
exemptions given in the respective FRSs.
FRS 8, Operating Segment
FRS 8, which replaces FRS 114, Segment Reporting, requires the identification and reporting of operating segments
based on internal reports that are regularly reviewed by the entitys chief operating decision maker in order to allocate
resources to the segment and to assess its performance. Currently, the Group presents segment information in
respect of its business segments (see note 22). Under FRS 8, the Group will present segment information in respect
of its operating segments.
The adoption of IC Interpretation 9 and IC Interpretation 10 is not expected to have any material impact on the financial
statements of the Group and the Company.
(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:

Intangible assets
(c) Functional and presentation currency
(d) Use of estimates and judgements
he preparation of financial statements requires management to make judgements, estimates and assumptions that
T
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
stimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
E
recognised in the period in which the estimate is revised and in any future periods affected.
here are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that
T
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
hese financial statements are presented in Ringgit Malaysia (RM), which is the Companys functional currency. All
T
financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated.
Malakoff
Corporation
Berhad
Annual
report
2008
096
(continued)
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.
nder the purchase method of accounting, the financial statements of subsidiaries are included in the
U
consolidated financial statements from the date that control commences until the date that control ceases.
Investments in subsidiaries are stated in the Companys balance sheet at cost less any impairment losses.
(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. The consolidated
financial statements include the Groups 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.
When the Groups 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 Companys balance sheet at cost less any impairment losses.
(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 holders 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 holders of the Company.
Where losses applicable to the minority exceed the minoritys interest in the equity of a subsidiary, the excess,
and any further losses applicable to the minority, are charged against the Groups 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 Groups interest is allocated with all such profits until the minoritys
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.
Malakoff
Corporation
Berhad
Annual
report
2008
097
(continued)
2. Significant accounting policies (continued)

(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. Nonmonetary assets and liabilities denominated in foreign currencies are translated at exchange rates at the dates
of the transactions except for those that are measured at fair value, which 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, are translated to RM at exchange rates at the balance sheet date. The income and expenses of
operations in functional currencies other than RM are translated to RM at exchange rates at the dates of the
transactions.
Foreign currency differences are recognised in translation reserve. On disposal of operations, 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

xchange differences arising from monetary items that in substance form part of the Companys net investment
E
in foreign operations, are recognised in the Companys 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 accumulated depreciation and any accumulated
impairment losses.
ost includes expenditures that are directly attributable to the acquisition of the asset and any other costs
C
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 Groups accounting policy. Purchased software that is integral to the functionality of the
related equipment is capitalised as part of that equipment.
he cost of property, plant and equipment recognised as a result of a business combination is based on fair value
T
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 arms 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.
Malakoff
Corporation
Berhad
098
Annual
report
2008
(continued)

(c) Property, plant and equipment (continued)
(i) Recognition and measurement (continued)

hen significant parts of an item of property, plant and equipment have different useful lives, they are accounted
W
for as separate items (major components) of property, plant and equipment.
ains and losses on disposal of an item of property, plant and equipment are determined by comparing the
G
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

he cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of
T
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.
(iii) Residual value

The residual value of the Groups power plant which is approximately 29% to 40% of its cost is based on
managements 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.
(iv) Depreciation
epreciation is recognised in the income statements on a straight-line basis over the estimated useful lives of
D
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 unless it is reasonably certain that the Group will obtain ownership by the end
of the lease term. Power plant is depreciated over the period of the power purchase agreements. 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
Plant and machinery
C-inspection costs
3 years
Office equipment and furniture
5 years
Motor vehicles
5 years
Computers
3 years
525 years
Depreciation methods, useful lives and residual values are reassessed at the balance sheet date.
Malakoff
Corporation
Berhad
Annual
report
2008
099
(continued)

(d) Leased assets
(i) Finance lease

Leases in terms of which the Group or 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.

(ii) Operating lease

Leases, where the Group does not assume substantially all the risks and rewards of the ownership are classified
as operating leases and the leased assets are not recognised on the Groups 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 statements 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 Groups interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities of the acquiree.
Any excess of the Groups interest in the net fair value of acquirees 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.
Malakoff
Corporation
Berhad
Annual
report
2008
100
(continued)

(e) Intangible assets (continued)
(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.

(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.
(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.
Malakoff
Corporation
Berhad
Annual
report
2008
101
(continued)

(j) Impairment of assets

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
assets 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). The goodwill acquired in a business combination, for the purpose of impairment
testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.
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.
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 assets 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 recognised.
(k) Equity instruments

All equity instruments are stated at cost on initial recognition and are not re-measured subsequently.
Preference share capital

Preference share capital is classified as equity if it is non-redeemable, or is redeemable but only at the Companys
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.
Malakoff
Corporation
Berhad
Annual
report
2008
102
(continued)

(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 Groups 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 Groups net obligation in respect of a defined benefit retirement plans is calculated separately for each plan
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. Any unrecognised past service
costs and the fair value of any plan assets are deducted. The discount rate is the market yield at the reporting
date on high quality corporate bonds or government bonds that have maturity dates approximating the terms of
the Groups obligations and that are denominated in the same currency in which the benefits are expected to
be paid.
The calculation is performed annually by a qualified actuary using the projected unit credit method. When the
calculation results in a benefit to the Group, 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.
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. The Group recognises all actuarial gains and losses arising from defined
benefit plans directly in equity immediately.
In calculating the Groups 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.
When 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 December 2008.
Malakoff
Corporation
Berhad
Annual
report
2008
103
(continued)

(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.
(o) 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.
(p) 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.
(q) Revenue recognition
(i) Capacity and energy payments, operation and maintenance charges and project management fees
evenue is measured at the fair value of the consideration received or receivable and is recognised in the income
R
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 contract. 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.
(iii) Dividend income

Dividend income is recognised when the right to receive payment is established.
Malakoff
Corporation
Berhad
Annual
report
2008
104
(continued)

(r) 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.
(s) 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.
(t) Segment reporting

A segment is a distinguishable component of the Group that is engaged in providing products or services (business
segment), or in providing products or services within a particular economic environment (geographical segment),
which is subject to risks and rewards that are different from those of other segments.
Malakoff
Corporation
Berhad
3.
105
Annual
report
2008
(continued)

Office
C- equipment
Freehold
Work in
Power Inspection Plant and
and
Motor
Group
land Buildings progress
plant
costs machinery furniture vehicles Computers Total
RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
Cost
At 1 January 2007
Acquisition through
Additions
Disposal
Reclassification

21,516

1 January 2008
Additions
Reclassification
At 31 December 2008
27,789

6,525 11,852,161
14,377
134,066

(1,574)
1,574
630,855
91,755

39,233
3,847

30,465
7,553

4,924
430
(8)

25,463 12,638,931
1,303
253,331

(8)

21,516

27,789

19,328 11,987,801
46,270
40,249
(19,957)
1,793
722,610
154,945

43,080
288,574

38,018
11,356
9,683
5,346
240

26,766 12,892,254
3,703
545,337
8,481
21,516
27,789
45,641 12,029,843
877,555
331,654
59,057
5,586
38,950 13,437,591
Depreciation
At 1 January 2007
Acquisition through
Charge for the year
Disposal
5,905
893

1,305,019

276,360

523,574
91,711

8,756
870

18,967
3,531

3,559
266
(8)
19,662 1,885,442
2,184
375,815

(8)
1 January 2008
Charge for the year
6,798
1,341
1,581,379

342,977
615,285
81,977
9,626
2,632
22,498
7,228
3,817
418
21,846 2,261,249
5,876
442,449
At 31 December 2008
8,139
1,924,356
697,262
12,258
29,726
4,235
27,722 2,703,698
Carrying amount
At 1 January 2007
1 January 2008
21,516
20,991
19,328 10,406,422
107,325
33,454
15,520
1,529
4,920 10,631,005
At 31 December 2008
21,516
19,650
45,641 10,105,487
180,293
319,396
29,331
1,351
11,228 10,733,893
Malakoff
Corporation
Berhad
3.
106
Annual
report
2008
(continued)
Property, plant and equipment (continued)
Office
equipment
Freehold
Work in
Plant and
and
Motor
Company
land Buildings
progress machinery
furniture
vehicles Computers Total
RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
Cost
At 1 January 2007
Acquisition through
Additions
21,516

17,055

1,888
154

2,987
314
1,080
152
6,622
362
49,414
2,716
1 January 2008
Additions
Reclassifications
21,516

17,055

1,888

(1,888)
154

3,301
459
1,679
1,232

6,984
572
209
52,130
1,031
At 31 December 2008
21,516
17,055
154
5,439
1,232
7,765
53,161
Depreciation
At 1 January 2007
Acquisition through
Charge for the year
3,451
536
154

2,541
225
1,068
12
5,168
556
12,382
1,329
1 January 2008
Charge for the year
3,987
803
154

2,766
430
1,080
34
5,724
781
13,711
2,048
At 31 December 2008
4,790
154
3,196
1,114
6,505
15,759
1 January 2008
21,516
13,068
1,888
535
152
1,260
38,419
At 31 December 2008
21,516
12,265
2,243
118
1,260
37,402
Carrying amount
At 1 January 2007
Malakoff
Corporation
Berhad
3.
107
Annual
report
2008
(continued)
Property, plant and equipment (continued)
Security
At 31 December 2008, Group properties with a carrying amount of RM10,457,859,000 (2007 RM10,545,304,000) was
charged as security for debt securities issued by the subsidiaries (see note 14 loans and borrowings).
Borrowing costs
In the prior period, included in addition for the period of the Group was interest capitalised at a rate of 6.3% to 8.9% per
annum amounting to RM222,222,000.
4. Intangible assets

Interest over Power
Purchase and Operation and

Goodwill
Maintenance Agreements

Group Subsidiaries Associate Total
RM000 RM000 RM000 RM000
Cost
At 1 January 2007
Acquisition through business combination

8,232

7,103,796

857,970
7,969,998
At 31 December 2007/1 January 2008/

31 December 2008
8,232
7,103,796
857,970
7,969,998

207,070

23,725
230,795

Amortisation for the year
Impairment for the year

859
207,070
365,208

23,725
36,706
98,373
230,795
401,914
99,232
At 31 December 2008
859
572,278
158,804
731,941
1 January 2008
8,232
6,896,726
834,245
7,739,203
At 31 December 2008
7,373
6,531,518
699,166
7,238,057
(Note 7)
Amortisation and impairment losses

At 1 January 2007
Carrying amount
At 1 January 2007
Malakoff
Corporation
Berhad
108
Annual
report
2008
(continued)
4. Intangible assets (continued)

Interest over Power
Purchase and Operation

and Maintenance

Goodwill Agreements
Group
Subsidiaries Total
RM000 RM000 RM000
Carrying amount
At 1 January 2007
At 31 December 2007
8,232
6,896,726
6,904,958
At 31 December 2008
7,373
6,531,518
6,538,891
Intangible assets arising from interest over Power Purchase and Operation and Maintenance Agreements
The Groups 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 Groups revenue is also generated from the operations and maintenance
of the power plant, which is governed by the Operation and Maintenance Agreement (OMA) held by the operations and
maintenance subsidiaries.
The Group has identified the cash flows 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 FRS 138 Intangible Assets 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 Groups 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 Groups operations and maintenance subsidiaries of Teknik
Janakuasa Sdn. Bhd. (TJSB) and Natural Analysis Sdn. Bhd. (NASB).
These PPAs and OMAs are the key documents that govern the underlying strength of the Groups cash flow, which provide
for, inter alia, the electricity tariff, supply, operations and maintenance and all other terms to be met by the subsidiaries
and associates.
Malakoff
Corporation
Berhad
109
Annual
report
2008
(continued)

Measurement
The fair value of the Intangible Assets arising from the PPAs and OMAs were measured using the Multi-Period Excess
Earnings Method (MEEM) under the income method. The underlying rationale in the MEEM was 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 was 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) were 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 was that the owner of the Intangible Asset rents or leases the contributory assets from a hypothetical third
party in an arms 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 represented the value of the Intangible Asset.
The management had applied the following key assumptions in deriving the present value of the net income after taxes
attributable to the Intangible Assets at the acquisition date:

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/mmBtu)
4.60 6.50
CAC
17.77% 28.00% of EBITDA
In applying the MEEM valuation methodology, the expected cash flows were 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 was
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.
Malakoff
Corporation
Berhad
110
Annual
report
2008
(continued)

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 is of the
view that this 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 and interest over Power Purchase and
Operation and Maintenance Agreements
The carrying amounts of the goodwill and the interest over Power Purchase and Operation and Maintenance agreements
are allocated to the following CGUs:

Group
Carrying amount
Allocated Impairment
2008
2007
Goodwill
amount
loss Total
RM000 RM000 RM000 RM000
PPA companies
GB3
PPSB
SEV
TBP
KEV
392
377
1,565
3,159
859

(859)
392
377
1,565
3,159

392
377
1,565
3,159
859
6,352
(859)
5,493
6,352
TJSB
NASB
1,577
303
1,577
303
1,577
303
1,880
1,880
1,880
7,373
8,232
OMA companies
Total goodwill
8,232
(859)
Malakoff
Corporation
Berhad
111
Annual
report
2008
(continued)
Interest over PPA and OMA

Group
Carrying amount
Allocated Impairment
2008
2007

amount
loss Total
RM000 RM000 RM000 RM000
PPA companies
GB3
PPSB
SEV
TBP
KEV
350,139
340,744
1,323,288
3,002,226
797,539

(98,373)
350,139
340,744
1,323,288
3,002,226
699,166
374,080
361,920
1,467,750
3,110,740
834,245
5,813,936
(98,373)
5,715,563
6,148,735
TJSB
NASB
1,475,824
39,297
1,475,824
39,297
1,541,560
40,676
1,515,121
1,515,121
1,582,236
Total interest over PPAs and OMAs

Less: Intangible asset in associate (KEV)
7,329,057
(797,539)
(98,373)
98,373
7,230,684
(699,166)
7,730,971
(834,245)
6,531,518
6,531,518
6,896,726
OMA companies
The impairment test of the above CGUs was based on the expected cash flows 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 7.50% per annum.
Malakoff
Corporation
Berhad
112
Annual
report
2008
(continued)

The management had applied the following key assumptions in deriving the present value of the net cash flow after taxes
attributable to the Intangible Assets:

It is assumed that the terms of the PPAs will remain unchanged throughout the concession period.
It is assumed that the Group will be successful in its appeal to the Ministry of Finance to d efer the application of
single tier dividend.
It is assumed that Section 110 tax credit will be available to the Group.
Remaining useful life of PPAs/OMAs
1 23 years (in accordance with the respective

1
PPAs and OMAs)
Dependable capacity (DC)
350MW 2,420MW (in accordance to the specifications

of the power plant)
Capacity factor
45% 82% of DC
Net electrical output (million kW/hour)
2,300 15,052
Capacity Rate (RM/kW/month)
11.61 50.00
Fixed Operating Rate under Revenue (RM/kW/month)
4.40 10.50
Variable Operating Rate under Revenue (RM/kWh)
0.006 0.031
Fuel price (RM/mmBtu)
13.56 28.20
Variable Operating Rate under Cost (RM/kWh)
0.013 0.031
Fixed Operating Rate under Cost (RM/kW/month)
2.08 7.55
The estimated recoverable amount of all the CGUs exceeds the carrying amount of the goodwill and interest on PPAs/OMAs,
except for the recoverable amount of KEV. Accordingly, an impairment allowance was recognised first to the goodwill and
subsequently to the interest on PPA in relation to KEV, amounting to RM859,000 and RM98,373,000 respectively.
Malakoff
Corporation
Berhad
5.
113
Annual
report
2008
(continued)
Prepaid lease payments

Leasehold land
Unexpired Unexpired

period
period

less than
more than
Group
50 years
50 years Total
RM000 RM000 RM000
Cost
At 1 January 2007

93,137

29,371
122,508
At 31 December 2007/1 January 2008/31 December 2008
93,137
29,371
122,508
At 1 January 2007

2,388
2,388

4,846
598
7,234
2,986

4,776
3,582
5,444
896
10,220
4,478
At 31 December 2008
8,358
6,340
14,698
88,361
23,927
112,288
84,779
23,031
107,810
Amortisation
Carrying amounts
At 1 January 2007
At 31 December 2008
Security
The leasehold land of the Group amounting to RM6,148,000 (2007: RM6,221,000) have been charged as security for debt
securities issued by certain subsidiaries.
Malakoff
Corporation
Berhad
Annual
report
2008
5.
114
(continued)
Prepaid lease payments (continued)
Leasehold land
Unexpired

period more
Company
than 50 years
RM000
Cost
At 1 January 2007
6,159
At 31 December 2007/1 January 2008/31 December 2008
6,159
Amortisation
At 1 January 2007
601
42

643
62
At 31 December 2008
705
Carrying amounts
At 1 January 2007
5,516
At 31 December 2008
5,454
Malakoff
Corporation
Berhad
115
Annual
report
2008
(continued)
6. Investments in subsidiaries
Company

2008
2007
RM000 RM000
At cost:
Unquoted shares
8,128,970
8,128,970
Details of the subsidiaries are as follows:
Effective
Country of
ownership
Name
incorporation
interest

2008
2007

%
%
Teknik Janakuasa Sdn. Bhd.
Malaysia
100
100
Operation and maintenance of power plants
Prai Power Sdn. Bhd.
Malaysia
100
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
Segari Energy Ventures Sdn. Bhd.
Malaysia
93.75
93.75

energy and generating capacity of power
plant
Tanjung Bin Power Sdn. Bhd.
Malaysia
90
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
GB3 Sdn. Bhd.
Malaysia
75
75

energy and generating capacity of the
power plant
Malaysia
100
100
Build, own and operate an electricity

distribution system and a centralised
chilled water plant system
Wirazone Sdn. Bhd.
Malakoff
Corporation
Berhad
116
Annual
report
2008
(continued)
6. Investments in subsidiaries (continued)

Details of the subsidiaries are as follows: (continued)
Effective
Country of
ownership
Name
incorporation
interest

2008
2007

%
%
Malakoff Engineering Sdn. Bhd.
Malaysia
100
100
Provision of engineering and project

management services
Desa Kilat Sdn. Bhd.
Malaysia
54
54
Land reclamation, development and/or

sale of reclaimed land
Hypergantic Sdn. Bhd.
Malaysia
100
100
Investment holding
Tuah Utama Sdn. Bhd.
Malaysia
100
100
Investment holding
Transpool Sdn. Bhd.
Malaysia
100
100
Dormant
Malakoff Capital (L) Ltd
Malaysia
100
100
Dormant
Spring Assets Limited

British Virgin
Islands
100
100
Dormant
Malakoff International Limited

Cayman
Islands
100
100
Offshore Investment holding
Malaysia
100
Subsidiary of Malakoff Engineering Sdn Bhd

MESB Project Management Sdn Bhd
Provision of engineering and project

management services
Subsidiaries of Malakoff International Limited

Malakoff Gulf Limited

British Virgin
Islands
100
100
Malakoff Technical (Dhofar) Limited

British Virgin
Islands
100
100
Malakoff AlDjazair Desal Sdn Bhd
Malaysia
100
100
Investment holding
Malakoff Jordan Generation Limited

British Virgin
Islands
100
100
Malakoff Ras Azzour Limited

(formerly known as KuwMal
Investments Limited)
British Virgin
Islands
100
100
Dormant
Malakoff
Corporation
Berhad
117
Annual
report
2008
(continued)
6. Investments in subsidiaries (continued)

Details of the subsidiaries are as follows: (continued)
Effective
Country of
ownership
Name
incorporation
interest

2008
2007

%
%
Subsidiary of Malakoff AlDjazair Desal Sdn Bhd

Tlemcen Desalination Investment
Company SAS
France
70
70
Algeria

35.7

35.7

Construction, operation and management

f a sea water desalination plant and
o
marketing the desalinated water produced
Natural Analysis Sdn. Bhd.
Malaysia
100
100
Operation and maintenance of power

plant
TJSB International Limited

Cayman
Islands
100
100
TJSB Global Sdn. Bhd.
Malaysia
100
100
Investment holding
TJSB Middle East Limited

British Virgin
Islands
100
100
TJSB International (Shoaiba) Limited

British Virgin
Islands
100
100
Subsidiary of Tlemcen Desalination

Investment Company SAS
Almiyah Attilemcania SPA

Subsidiaries of Teknik Janakuasa Sdn Bhd
Subsidiaries of TJSB International Limited
Malakoff
Corporation
Berhad
118
Annual
report
2008
(continued)
7. Investments in associates

Group Company

2008
2007
2008
2007
RM000 RM000 RM000 RM000
At cost:
Unquoted shares
Quoted shares outside Malaysia
Unquoted preference shares
Unquoted loan stocks
Pre-acquisition reserves
Share of post-acquisition profits/(losses)
97,948
55,512
4,000
402,455
93,150
26,926
97,948
55,512
4,000
417,655
130,545
(3,874)
641,770

365,030

641,770
380,230
679,991
701,786
1,006,800
1,022,000
Add: Intangible assets acquired through

business combination (see Note 4)
857,970
857,970
Less: Amortisation of intangible assets

At 1 January

(23,725)
(36,706)

(23,725)

(60,431)
(98,373)
(23,725)

At 31 December
(158,804)
(23,725)
Carrying amount
699,166
834,245
1,379,157
1,536,031
1,006,800
1,022,000
61,932
71,995
Market value:
Quoted shares outside Malaysia
Summary financial information on associates:

Total Total
Revenues
Profit
assets
liabilities

(100%)
(100%)
(100%)
(100%)
RM000 RM000 RM000 RM000
2008
2,037,207
132,240
6,923,034
6,158,034
2007
1,226,680
31,486
5,771,094
5,173,425
Malakoff
Corporation
Berhad
119
Annual
report
2008
(continued)
7. Investments in associates (continued)

Details of associates:
Effective
Country of
ownership
Name
incorporation
interest

2008
2007

%
%
Port Dickson Power Berhad
Malaysia
25
25
Generation and sale of electricity
Kapar Energy Ventures Sdn. Bhd.
Malaysia
40
40
Generation and sale of electricity
Lekir Bulk Terminal Sdn. Bhd.
Malaysia
20
20
Bulk terminal jetty and coal handling

services
Malaysian Shoaiba Consortium Sdn. Bhd.
Malaysia
40
40
Investment holding
Saudi-Malaysia Water & Electricity

Company Limited
Saudi Arabia
20
20
Shuaibah Water & Electricity

Company Limited
Saudi Arabia

12

12

Design, construction, commissioning,

testing, ownership, operation and
maintenance of oil fired power generation
and water desalination plant.
Shuaibah Expansion Holding

Company Limited
Saudi Arabia
12
12
Drinking water production
Shuaibah Expansion Project

Company Limited
Saudi Arabia

11.7

11.7

Development, construction, possession

peration and maintenance of Shuaibah
o
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
43.4
Bermuda
43.4
43.4
Dhofar Power Company SAOG
Oman
20
20
lectricity generation, transmission,

E
distribution in the region of Salalah,
Oman.
Enara Energy Investment Company
Jordan
25
25
Salalah Power Holdings Limited
Malakoff
Corporation
Berhad
120
Annual
report
2008
(continued)
7. Investments in associates (continued)

Details of associates: (continued)
Effective
Country of
ownership
Name
incorporation
interest

2008
2007

%
%
Central Electricity Generating
Company Limited
Jordan

12.75

12.75

Generate electrical energy in different

regions of Jordan
Al-Imtiaz Operation and

Maintenance Company Limited
Saudi Arabia

20

20

Implementation of operation and

aintenance contracts for stations of
m
electrical power generation and water
desalination
Saudi Malaysia Operation and

Maintenance Services Company
Limited
Saudi Arabia

20

20

Operation and maintenance of power and

water desalination plant
Algeria
49
Operation and maintenance of water

desalination plant
Hyflux-TJSB Algeria SPA
8. Other investments
Company

2008
2007
RM000 RM000
Non-current
At cost:
Unquoted unsecured loan stocks in subsidiaries
1,669,056
1,715,897
The loan stocks are unsecured, bear interest ranging from 6.0% to 15.0% (2007: 6.0% to 15.0%) per annum and are
repayable over a period of 28 years.
Malakoff
Corporation
Berhad
121
Annual
report
2008
(continued)
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

2008
2007
2008
2007
2008
2007
Group RM000 RM000 RM000 RM000 RM000 RM000
Provisions
Intangibles
Unutilised capital allowances
Others
1,870
(12,843)

244
(10,853)

1,724,670
20,423
1,823,785
(780,544)
(3,138)
1,599,909
(30,520)
1,949,052
(721,912)
13,030
1,726,540
7,580
1,823,785
(780,544)
(3,138)
1,600,153
(41,373)
1,949,052
(721,912)
13,030
Tax (assets)/liabilities
(10,973)
(10,609)
2,785,196
2,809,559
2,774,223
2,798,950
Unrecognised deferred tax assets

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

Group Company

2008
2007
2008
2007
RM000 RM000 RM000 RM000
Deductible temporary differences
Tax loss carry-forwards
6
62,657
62,663
In the prior year, deferred tax assets were not recognised in respect of these items because it was not probable that future
taxable profit will be available against which the Group can utilise the benefits there from.
Malakoff
Corporation
Berhad
122
Annual
report
2008
(continued)
9. Deferred tax assets and liabilities (continued)

Movement in temporary differences during the year
Recognised Recognised

in income Acquired
in income
At
statement in business At
statement At
Group
1.1.2007
(note 20) combination
31.12.2007
(note 20) 31.12.2008
RM000 RM000 RM000 RM000 RM000 RM000
Deferred tax assets
Provisions
244
(8,909)

(1,944)
244
(10,853)
1,626
(1,990)
1,870
(12,843)
(8,665)
(1,944)
(10,609)
(364)
(10,973)

Provisions
Intangibles
Unutilised capital allowances
Others
384,420
(10,061)
(58,148)
(357,783)
(3,263)
1,215,489
(20,459)
2,007,200
(364,129)
16,293
1,599,909
(30,520)
1,949,052
(721,912)
13,030
124,761
50,943
(125,267)
(58,632)
(16,168)
1,724,670
20,423
1,823,785
(780,544)
(3,138)
(44,835)
2,854,394
2,809,559
(24,363)
2,785,196
10. Receivables, deposits and prepayments

Group Company
Note
2008
2007
2008
2007
RM000 RM000 RM000 RM000
Current
Trade
Trade receivables
Less: Allowance for doubtful debts
603,106
(111,649)
732,520
(75,491)
491,457
657,029
10.1
10.2

145,012
175,327
29,848
184,197

160,348
75,007
17,310
237,975
398,406
145,012
6,959

72,484
354,434
160,348
7,253
80,702
534,384
490,640
622,861
602,737
1,025,841
1,147,669
622,861
602,737
Non-trade
Amounts due from subsidiaries
Amount due from associate
Other receivables
Deposits
Prepayments
Malakoff
Corporation
Berhad
123
Annual
report
2008
(continued)
10. Receivables, deposits and prepayments (continued)

10.1 Amounts due from subsidiaries

The non-trade receivables due from subsidiaries are unsecured, interest free and repayable on demand.
10.2 Amount due from associate
he non-trade receivable from an associate relates to interest receivable subject to the existing terms of the unsecured
T
loan stocks.
11. Inventories

Group Company

2008
2007
2008
2007
RM000 RM000 RM000 RM000

Spares and consumables

Coal

Diesel fuel
All inventories are carried at cost.
368,543
215,976
53,896
322,080
111,011
55,082
638,415
488,173
12. Cash and cash equivalents

Group Company

2008
2007
2008
2007
RM000 RM000 RM000 RM000

Deposits with licensed banks

Cash and bank balances
2,791,289
273,564
2,274,172
299,782
484,590
3,525
428,849
31,644
3,064,853
2,573,954
488,115
460,493
Deposits placed with licensed banks pledged for a bank facility

Included in the deposits placed with licensed banks is RM17,879,000 (2007 RM16,780,000) of the Group and the Company
pledged for a bank facility granted to the Group and the Company.
Malakoff
Corporation
Berhad
124
Annual
report
2008
(continued)
13. Share capital and reserves
13.1 Share capital

Group and Company
Number Number
Amount
of shares Amount
of shares

2008
2008
2007
2007
RM000
000 RM000
000
Authorised:
Ordinary shares of RM1 each
Redeemable convertible non cumulative
preference shares of RM0.10 each
Issued and fully paid:
Ordinary shares of RM1 each
At beginning of the year
Issued for cash
At end of the year
Redeemable convertible non cumulative
preference shares of RM0.10 each
At beginning of the year
Issued for cash
At end of the year
490,000
490,000
490,000
490,000
10,000
100,000
10,000
100,000
351,344

351,344

351,344
351,344
351,344
351,344
351,344
351,344
5,019

50,192

5,019
50,192
5,019
50,192
5,019
50,192
13.2 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.
13.3 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 Companys
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 Companys
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.
Malakoff
Corporation
Berhad
125
Annual
report
2008
(continued)
13. Share capital and reserves (continued)
13.4 Foreign currency translation reserve

he translation reserve comprises all foreign currency differences arising from the translation of the financial
T
statements of foreign operations as well as from the translation of liabilities that hedge the Companys net investment
in a foreign subsidiary.
13.5 Section 108 tax credit

Subject to agreement by the Inland Revenue Board, the Company has Section 108 tax credit to pay up to RM6,769,188
out of its distributable reserves at 31 December 2008 if paid out as dividends. The remaining dividends declared for
the year ended 31 December 2008 shall be distributed as single tier dividend.
The Finance Act, 2007 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 2008 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

2008
2007
2008
2007
RM000 RM000 RM000 RM000

Non-current
Sukuk Ijarah bonds secured

Al-Bai Bithamin Ajil (ABBA) bonds secured
Al-Istisna bonds secured
Istisna medium term notes secured
Sukuk medium term notes secured
Junior Sukuk secured
Term loan secured
Subordinated loan notes unsecured
672,165
610,000
452,019
4,800,000
5,202,250
1,700,000
293,220
187,375
760,366
730,000
517,353
5,290,000
5,155,028
1,700,000

195,717

5,202,250
1,700,000

5,155,028
1,700,000
13,917,029
14,348,464
6,902,250
6,855,028
591,292
94,378
120,000
65,985
490,000
1,818
697,684
99,689
120,000
67,983
280,000
1,818
591,292

592,580
1,363,473
1,267,174
591,292
592,580
Current

Commercial papers secured

ABBA bonds secured
Malakoff
Corporation
Berhad
Annual
report
2008
126
(continued)
14. Loans and borrowings (continued)

Security
The commercial papers, bonds, medium term notes, Junior Sukuk and term loan are secured over property, plant and
equipment with a carrying amount of RM10,457,859,000 (2007 RM10,545,304,000) (see note 3) and prepaid lease payments
with a carrying amount of RM6,148,000 (2007 RM6,221,000) (see note 5).
Significant covenants
The borrowings are subject to the fulfilment of the following significant covenants:
i)
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.
ii)
ABBA bonds and Commercial papers issued by a subsidiary
aintain the Debt/Equity Ratio to be no greater than 9:1 during post-completion (of power plant) period and ensure
M
that the Debt Service Cover ratio is not less than 1.25:1 commencing from commercial operation date.
iii)
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.
iv)
Istisna medium term notes issued by a subsidiary
aintain a minimum Debt Service cover ratio of 1.25 times commencing from the second semi-annual profit payments
M
date and the Debt/Equity Ratio of no more than 4:1.
v)
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.
vi)
Term loan acquired by a subsidiary
Maintain a Debt Service Cover Ratio of at least 1.05 and Projected Debt Services Cover Ratio of at least 1.05 after the
first payment date.
Malakoff
Corporation
Berhad
127
Annual
report
2008
(continued)

Terms and debt repayment schedule
Year of Carrying Under 1
1 2
2 5 Over 5
Group
maturity
amount
year
years
years
years
RM000 RM000 RM000 RM000 RM000
2008
2009
591,292
591,292
20092012
766,543
94,378
175,618
496,547
ABBA bonds secured
20092014
730,000
120,000
120,000
360,000
130,000
20092016
518,004
65,985
65,894
193,232
192,893
20092018
5,290,000
490,000
510,000
1,740,000
2,550,000
20152025
5,202,250
5,202,250
2025
1,700,000
1,700,000
20102024
20092031
293,220
189,193

1,818
18,256
1,818
116,992
3,181
157,972
182,376
15,280,502
1,363,473
891,586
2,909,952
10,115,491

Term loan secured

2007
2008
20082012
697,684
697,684
860,055
99,689
98,787
661,579
ABBA bonds secured
20082014
850,000
120,000
120,000
360,000
250,000
20082016
585,336
67,983
65,888
193,403
258,062
20082018
5,570,000
280,000
490,000
1,660,000
3,140,000
20152025
5,155,028
5,155,028
2025
1,700,000
1,700,000
197,535
1,818
1,818
4,999
188,900
15,615,638
1,267,174
776,493
2,879,981
10,691,990
Subordinated loan notes unsecured 20082031

Malakoff
Corporation
Berhad
128
Annual
report
2008
(continued)

Terms and debt repayment schedule
Year of Carrying Under 1
1 2
2 5 Over 5
Company
maturity
amount
year
years
years
years
RM000 RM000 RM000 RM000 RM000
2008

2009
20152025
2025
591,292
5,202,250
1,700,000
591,292

5,202,250
1,700,000
7,493,542
591,292
6,902,250
2008
20152025
2025
592,580
5,155,028
1,700,000
592,580

5,155,028
1,700,000
7,447,608
592,580
6,855,028
2007

15. Employee benefits

Retirement benefits

Group Company

2008
2007
2008
2007
RM000 RM000 RM000 RM000

Present value of unfunded obligations

Present value of funded obligations
Unrecognised loss
18,012
21,840
(5,860)
34,863

(7,583)
3,318
9,785
(1,618)
12,134
(3,184)
Total present value of obligations

Fair value of plan assets
33,992
(2,715)
27,280

11,485
(966)
8,950
31,277
27,280
10,519
8,950
During the year, the Group set up a new retirement trust fund (funded plan), Malakoff Retirement Trust Fund, which
provides pension benefits for the employees upon retirement. Three companies in the Group, namely Malakoff Corporation
Berhad, Teknik Janakuasa Sdn. Bhd. and Wirazone Sdn. Bhd. participated in making contributions to the Malakoff
Retirement Trust Fund.
The fair value of the plan assets includes no amount relating to any of the Groups or the Companys own financial
instruments nor any property occupied by, or other assets used by the Group and the Company.
Malakoff
Corporation
Berhad
129
Annual
report
2008
(continued)
15. Employee benefits (continued)

Retirement benefits (continued)
The major categories of plan assets are as follows:

Group Company

2008
2007
2008
2007
RM000 RM000 RM000 RM000
Equities
Repo and call deposits
Interest receivables
1,902
804
9
677
286
3
2,715
966
Movement in the present value of the defined benefit obligations

Group Company

2008
2007
2008
2007
RM000 RM000 RM000 RM000
Defined benefit obligations at 1 January
Acquired through business combination
Benefits paid by the plan
Current service costs and interest (see below)
27,280

(3,100)
9,812

23,519
(406)
4,167
8,950

(1,140)
3,675
8,328
(74)
696
Defined benefit obligations at 31 December
33,992
27,280
11,485
8,950
Movement in the fair value of plan assets

Group Company

2008
2007
2008
2007
RM000 RM000 RM000 RM000
Fair value of plan assets at 1 January
Contributions paid into the plan
Actuarial gain
Expected return on plan assets

2,697
11
7

960
3
3
Fair value of plan assets at 31 December
2,715
966
Malakoff
Corporation
Berhad
130
Annual
report
2008
(continued)

Expense recognised in the income statements

Group Company

2008
2007
2008
2007
RM000 RM000 RM000 RM000
Current service costs
Interest on obligation
Transitional liability
Actuarial losses
Expected return on plan assets
3,225
1,982
4,419
237
(51)
1,883
967
1,317

1,301
671
1,606
97

278
166
252
9,812
4,167
3,675
696
18
Actual return on plan assets
The expense is recognised as an administrative expense in the income statements.

Actuarial assumptions
Principal actuarial assumptions at the balance sheet date:

Group Company
2008
2007
2008
2007
Discount rate at 31 December

Salary inflation
Price inflation
5.8%
6.7%
3.5%
6.7%
6.7%
3.5%
6.7%
6.7%
3.5%
5.8%
6.7%
3.5%
The overall expected long-term rate of return on assets is 6.5%. The expected long-term rate of return is based on the
portfolio as a whole and not on the sum of the returns on individual asset categories. The return is based exclusively on
historical returns, without adjustments.
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
RM000 RM000 RM000 RM000
Effect on the aggregate service and interest cost
Effect on defined benefit obligations
888
4,188
(753)
(3,619)
246
1,189
(212)
(1,042)
Malakoff
Corporation
Berhad
131
Annual
report
2008
(continued)

Historical information

2008
2007
2006
2005
2004
RM000 RM000 RM000 RM000 RM000
Group
Present value of the defined benefit obligations
33,992
(2,715)
27,280

Deficit
31,277
27,280
Present value of the defined benefit obligations

11,485
(966)
8,950

Deficit
10,519
8,950
Company
16. Payables and accruals

Group Company
Note
2008
2007
2008
2007
RM000 RM000 RM000 RM000
Trade
Trade payables
406,725
211,079
25,306
611,290

32,774
344,487

5,309
83,592
334,791
2,773
84,016
371,209
Non-trade
Other payables
Accrued expenses
Amounts due to subsidiaries
16.1
16.2
636,596
377,261
423,692
457,998
1,043,321
588,340
423,692
457,998
16.1 Accrued expenses

I ncluded in accrued expenses of the Group are interest expense payable of RM173,546,000 (2007:189,940,000), provision
for windfall levy RM173,862,000 (2007: Nil) and provision for CESS fund of RM36,606,000 (2007:RM32,486,000).
16.2 Amounts due to subsidiaries

The non-trade payables due to subsidiaries are unsecured, interest free and have no fixed terms of repayment.
Malakoff
Corporation
Berhad
132
Annual
report
2008
(continued)
17. Revenue

Group Company
30.4.2007 to
Note
2008
31.12.2007
2008
2007
RM000 RM000 RM000 RM000
Electricity generation and distribution
Interest income on loan stocks from associate
Project management fee
Rental income from estate
Operation and maintenance fees
Dividends from subsidiaries
Management fees from subsidiaries

4,960,622
4,491

4,644
151,510

2,655,813
3,002
198
3,496
39,489

4,644

532,620
27,060
3,496
412,603
5,120
5,121,267
2,701,998
564,324
421,219
18. Operating profit

Group Company
30.4.2007 to

2008
31.12.2007
2008
2007
RM000 RM000 RM000 RM000
Operating profit is arrived at after charging:
Allowance for doubtful debts
Amortisation of prepaid lease payments
Auditors remuneration:
Statutory audit
KPMG
Other services
KPMG
Affiliates of KPMG
Depreciation of property, plant and equipment
Personnel expenses (including key management personnel):
Contributions to Employees Provident Fund
Expenses related to defined benefit plan
Wages, salaries and others
Windfall profit levy

36,158
4,478
401,914
75,491
2,986
230,795

62

42
245
220
50
35
240
94
442,449
98,373
859
421
2,340
375,815

240
18
2,048

377
1,363
1,329
7,989
9,812
60,568
211,666
6,547
4,167
21,233

2,232
3,675
30,303

1,927
696
6,999
532,620
27,060
412,603
5,120
and after crediting:

Dividend income from:
subsidiaries (unquoted)
Inter-company management fees
Malakoff
Corporation
Berhad
133
Annual
report
2008
(continued)
19. Key management personnel compensation

The key management personnel compensations are as follows:

Group Company
30.4.2007 to

2008
31.12.2007
2008
2007
RM000 RM000 RM000 RM000
Directors
Fees
Meeting allowances
Remuneration
Other short term employee benefits
(including estimated monetary value of benefits-in-kind)
Retention/ex-gratia 2007/2008
342
61
1,546
149
24
576
342
59
1,546
149
24
576
193
5,000
58

193
5,000
58
Total short-term employee benefits
7,142
807
7,140
807
Other key management personnel:

Short-term employee benefits
Retention/ex-gratia 2007/2008
3,185
2,556
2,341

3,185
2,556
2,341
12,883
3,148
12,881
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.
Malakoff
Corporation
Berhad
134
Annual
report
2008
(continued)
20. Tax expense
Recognised in the income statements

Group Company
30.4.2007 to

2008
31.12.2007
2008
2007
RM000 RM000 RM000 RM000
Total tax expense
128,462
55,267
74,367
59,854
Malaysian current year/period

Under provision in prior period
118,392
34,797
108,767

67,611
6,756
59,854
153,189
108,767
74,367
59,854
Origination and reversal of temporary differences

Effect of changes in tax rate*
Over provision in prior period
23,824
(38,089)
(10,462)
5,339
(58,839)

(24,727)
(53,500)
Total tax expense
128,462
55,267
74,367
59,854

Total tax expense
190,098
128,462
268,502
55,267
155,543
74,367
155,884
59,854
Profit excluding tax
318,560
323,769
229,910
215,738
Tax at Malaysian tax rate of 26% (2008 27%)

Effect of change in tax rate*
Effect of share of results of associates
Effect of deferred tax benefits not recognised
Recognition of deferred tax benefits
previously not recognised
Non-deductible expenses
Other items
(Over)/under provision in prior period
current tax
deferred tax
82,826
(38,089)
(8,008)

87,418
(58,839)
1,046
16,919
59,777

58,249
(16,084)
82,489
993

8,723

7,834

1,605
34,797
(10,462)
6,756

128,462
55,267
74,367
59,854
Major components of tax expense include:

Current tax expense
Deferred tax expense
The corporate tax rates are 26% for year of assessment 2008, and 25% for the subsequent years of assessment.
Consequently deferred tax assets and liabilities are measured using these tax rates.
Malakoff
Corporation
Berhad
135
Annual
report
2008
(continued)
21. Dividends

Dividends recognised in the current year by the Company are as follows:
Sen Total

per share
amount Date of

(net of tax) RM000
payment
2008
Final 2007 ordinary shares
Interim 2008 ordinary shares
Interim 2008 preference shares
Total amount
11.40
12.20
74.00
40,000
42,858
37,142
120,000
6.65
73.00
23,360
36,640
60,000
2.4.2008
2.9.2008
2.9.2008
2007
Interim 2007 ordinary shares
Interim 2007 preference shares
Total amount
7.12.2007
7.12.2007
After the balance sheet date, the following dividends were proposed by the Directors. These dividends will be recognised
in subsequent financial reports up on approval by the shareholders.
Sen Total

per share
amount

(net of tax) RM000
Final 2008 ordinary shares
Taxable dividend
Single tier dividend
1.92
22.27
6,769
78,231
24.19
85,000
22. Segment reporting

Segment information is presented in respect of the Groups business segments. The primary format, business segments,
is based on the Groups 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 arms length basis.
Business segments

The Group comprises the following main business segments:
Asset management
Operations and maintenance (O&M)
Malakoff
Corporation
Berhad
136
Annual
report
2008
(continued)
22. Segment reporting (continued)

Asset management O&M Eliminations Consolidated
30.4.2007 to 30.4.2007 to 30.4.2007 to 30.4.2007 to

2008 31.12.2007
2008 31.12.2007
2008
1.12.2007
2008 31.12.2007
RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000
Business segments
Total external revenue
Inter-segment revenue
4,969,757

2,662,509

151,510
415,375
39,489
326,850

(415,375)

(326,850)
5,121,267

2,701,998
Total segment revenue
4,969,757
2,662,509
566,885
366,339
(415,375)
(326,850)
5,121,267
2,701,998
926,061
751,448
435,740
221,591
1,361,801
973,039
1,361,801
123,775
(1,197,816)
973,039
123,038
(768,434)
30,800
(128,462)
(3,874)
(55,267)
190,098
268,502
Segment results
Results from operating
activities
Interest income
Finance costs
Share of profit/(loss) of equity
accounted associates
Tax expense
Asset Management O&M Consolidated

2008
2007
2008
2007
2008
2007
RM000 RM000 RM000 RM000 RM000 RM000
Segment assets
21,374,994
21,135,824
870,124
785,724
22,245,118
21,921,548
1,379,157
1,536,031
1,379,157
1,536,031
23,624,275
23,457,579
Total assets
Segment liabilities
18,891,711
18,809,943
252,839
254,787
19,144,550
19,064,730
Total liabilities
19,144,550
19,064,730
Capital expenditure
543,170
240,221
2,167
13,110
545,337
253,331
Depreciation
437,624
313,325
4,825
62,490
442,449
375,815
327,219
195,415
74,695
35,380
401,914
230,795
98,373
98,373
859
859
43,576
79,338
4,157
3,306
47,733
82,644
Non-cash expenses other than depreciation

and amortisation

Malakoff
Corporation
Berhad
Annual
report
2008
137
(continued)
23. Financial instruments

Exposure to credit, interest rate, foreign currency, and liquidity risks arises in the normal course of the Groups 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 57% (2007: 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 Groups and the Companys 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.
Malakoff
Corporation
Berhad
138
Annual
report
2008
(continued)
23. Financial instruments (continued)
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.
Average

effective Less
More

interest
than
1 2
2 3
3 4
4 5
than
Group Note
rate Total
1 year
years
years
years
years 5 years

% RM000 RM000 RM000 RM000 RM000 RM000 RM000
2008
Fixed rate instruments
Financial assets
Cash and cash
equivalents
12
3.59 3,064,853 3,064,853
Financial liabilities
Commercial papers
14
3.70 4.05
591,292
591,292
Sukuk Ijarah bonds
14
4.50 5.45
766,543
94,378
175,618
227,305
269,242
ABBA bonds
14
6.80 8.00
730,000
120,000
120,000
120,000
120,000
120,000
130,000
Al-Istisna bonds
14
7.70 9.20
518,004
65,985
65,894
65,811
63,744
63,677
192,893
14
6.30 8.90 5,290,000
490,000
510,000
560,000
590,000
590,000 2,550,000
14
5.78 6.98 5,202,250
5,202,250
Istisna medium
term notes
Sukuk medium
term notes
Junior Sukuk
14
9.00 1,700,000
Term loan
14
3.75
293,220
18,256
37,551
38,979
Subordinated loan notes
14 12.00 16.00
189,193
1,818
1,818
1,818
1,363
1,700,000
40,462
157,972
182,376
Malakoff
Corporation
Berhad
139
Annual
report
2008
(continued)
Effective interest rates and repricing analysis (continued)

Average

effective Less
More

interest
than
1 2
2 3
3 4
4 5
than
Group Note
rate Total
1 year
years
years
years
years 5 years

% RM000 RM000 RM000 RM000 RM000 RM000 RM000
2007
Financial assets
Cash and cash
equivalents
12
3.53 2,573,954 2,573,954
14
3.70
Commercial papers
697,684
697,684
Sukuk Ijarah bonds
14
4.30 5.45
860,055
99,689
98,787
174,150
220,938
266,491
ABBA bonds
14
6.50 8.00
850,000
120,000
120,000
120,000
120,000
120,000
250,000
Al-Istisna bonds
14
7.45 9.20
585,336
67,983
65,174
65,122
63,107
258,062
14
6.30 8.90 5,570,000
280,000
510,000
560,000
65,888
Istisna medium
term notes
490,000
590,000 3,140,000
Sukuk medium
term notes
14
5.78 6.98 5,115,028
5,115,028
Junior Sukuk
14
9.00 1,700,000
1,700,000
Subordinated loan notes
14
1,818
1,818
1,818
1,818
6.00 16.00
197,535
1,363
188,900
Malakoff
Corporation
Berhad
140
Annual
report
2008
(continued)

Average

effective Less
More

interest
than
1 2
2 3
3 4
4 5
than
Company Note
rate Total
1 year
years
years
years
years 5 years

% RM000 RM000 RM000 RM000 RM000 RM000 RM000
2008
Financial assets
Cash and cash
equivalents
12
3.41
488,115
488,115
14
3.70 4.05
591,292
591,292
term notes
14
5.78 6.98 5,202,250
5,202,250
Junior Sukuk
14
9.00 1,700,000
1,700,000
12
3.53
460,493
460,493
14
3.70
592,580
592,580
Commercial papers
Sukuk medium
2007
Financial assets
Cash and cash
equivalents
Commercial papers
Sukuk medium
term notes
14
5.78 6.98 5,115,028
5,115,028
Junior Sukuk
14
9.00 1,700,000
1,700,000
Malakoff
Corporation
Berhad
Annual
report
2008
141
(continued)

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
Groups operations and to mitigate the effects of fluctuations in cash flows.
Fair values
Recognised financial instruments

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 as the instruments are issued to
the shareholders of the Company at negotiated interest rates. Similarly, it is also impracticable to estimate the fair value
of the term loan of the Group as the loan is specific for the water project undertaken by a subsidiary in Algeria, for which
there is no comparable market rate.
Unrecognised financial instruments

There were no unrecognised financial instruments in the balance sheet as at 31 December 2008.
Malakoff
Corporation
Berhad
142
Annual
report
2008
(continued)

Fair values (continued)
The fair values of other financial liabilities, together with the carrying amounts shown in the balance sheets, are as
follows.

2008
2007
Carrying Fair Carrying Fair

amount
value
amount
value
RM000 RM000 RM000 RM000
Group
Commercial papers
Sukuk Ijarah bonds
ABBA bonds
Al-Istisna bonds
Istisna medium term notes
Sukuk medium term notes
Junior Sukuk
591,292
766,543
730,000
518,004
5,290,000
5,202,250
1,700,000
592,603
793,724
795,114
570,862
5,773,615
5,556,320
1,777,010
697,684
860,055
850,000
585,336
5,570,000
5,115,028
1,700,000
691,756
904,608
944,648
665,870
6,333,907
5,868,730
1,919,640
591,292
5,202,250
1,700,000
592,603
5,556,320
1,777,010
592,580
5,115,028
1,700,000
588,719
5,868,730
1,919,640
Company
Commercial papers
Sukuk medium term notes
Junior Sukuk
24. Capital and other commitments

Group Company

2008
2007
2008
2007
RM000 RM000 RM000 RM000
Plant and equipment
Authorised but not contracted for
47,827
39,420
642
1,579
Malakoff
Corporation
Berhad
143
Annual
report
2008
(continued)
25. Contingencies
The Directors are of the opinion that provisions are not required in respect of the matters below, as it is not probable that
a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.
Litigation
Dispute between Segari Energy Ventures Sdn. Bhd. (SEV) and Tenaga Nasional Berhad (TNB) in relation to wrongful
set-off of SEVs Billing Statements and the alleged Metering Inaccuracies
On 25 June 2008, SEV filed a statement of claim against TNB claiming for a sum of RM43,692,188 in relation to wrongful
set-off of SEVs billing statements.
On 25 July 2008, TNB filed its defence and counterclaim seeking, among others, in relation to the RM43,692,188 claimed
by SEV, a declaration that the said amounts were lawfully deducted, or alternatively, payment of the said amounts to TNB;
and in respect of the metering inaccuracies, payment of all the amounts of energy payments allegedly received by SEV in
excess of the sum due to SEV, which is to be determined by the arbitral tribunal.
On 25 August 2008, SEV filed its reply and defence to counterclaim and followed by TNB, who filed its own reply to defence
and counterclaim on 24 September 2008.
The date for the hearing has been fixed for 17 August 2009 to 28 August 2009.
Guarantees

Group Company

2008
2007
2008
2007
RM000 RM000 RM000 RM000
Guarantees
secured
405,586
405,122
320,216
306,035
These guarantees mainly consist of guarantees for bid bonds, performance bonds and security deposits for projects.
Malakoff
Corporation
Berhad
144
Annual
report
2008
(continued)
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:

Transactions
Gross balance Net balance

amount for
outstanding
outstanding

the year ended
at
at
Group
31 December
31 December
31 December
RM000 RM000 RM000
2008
Associated companies
Interest income on unsecured subordinated loan notes
29,155
146,509
146,509
(133,709)
115,006
(53,638)
9,882
(53,638)
9,882
Company subject to common significant influence

Operation and maintenance fee expense
Operation and maintenance subcontract fee income
2007
Holding company
Acquisition of equity interest in
Malakoff Berhad from
(2,047,834)
77,631
161,845
161,845
(62,540)
32,426
(26,438)
28,750
(26,438)
28,750
Company subject to common significant influence
Operation and maintenance fee expense
Operation and maintenance subcontract fee income
Malakoff
Corporation
Berhad
145
Annual
report
2008
(continued)
26. Related parties (continued)

Transactions
Gross balance Net balance

amount for
outstanding
outstanding

the year ended
at
at
Company
31 December
31 December
31 December
RM000 RM000 RM000
2008
Subsidiaries
Management fee
Dividends
151,476
27,060
532,620
120,180

120,180
24,664
145,012
145,012
(2,047,834)
130,060
5,120
412,603
146,346

146,346
74,639
160,348
160,348
2007
Holding company
Acqusition of equity interest in Malakoff Berhad from
Subsidiaries
Management fee
Dividends
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.
27. Acquisition of business

Business combination

On 30 April 2007, the Company 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 estimated that consolidated revenue would have been RM3,824
million and consolidated profit after tax for the year ended 31 December 2007 would have been RM296 million.
Malakoff
Corporation
Berhad
146
Annual
report
2008
(continued)
27. Acquisition of business (continued)

The acquisition had the following effect on the Groups assets and liabilities on acquisition date:

Preacquisition Fair Recognised

carrying
value
values on
amounts
adjustments
acquisition

Intangible assets
Prepaid lease rentals
Investment in associated companies
Deferred tax assets
Inventories
Tax recoverable
Retirement benefits
Minority interests
10,753,489

115,274
683,362
1,944
442,135
1,217,763
13,067
2,028,255
(9,811,433)
(847,194)
(1,107,312)
(23,519)
(189,285)

7,103,796

857,970

(2,007,200)

10,753,489
7,103,796
115,274
1,541,332
1,944
442,135
1,217,763
13,067
2,028,255
(9,811,433)
(2,854,394)
(1,107,312)
(23,519)
(189,285)
3,276,546
5,954,566
9,231,112
Net identifiable assets and liabilities

Goodwill on acquisition
8,232
Consideration paid, (including cost of business combination), satisfied in cash

Cash acquired
9,239,344
(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 events

On 4 February 2009, the Companys wholly-owned offshore subsidiary, Malakoff International Limited subscribed to 1,400
shares of BHD 100 each for a subscription amount equivalent to RM1,411,000 in Kingdom Utility Holding Company (KUH),
a company incorporated in Bahrain, representing 33.3% of the total issued and paid-up share capital of KUH.
Malakoff
Corporation
Berhad
Annual
report
2008
147
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 88 to 146 are drawn up in accordance with Financial
Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group
and of the Company at 31 December 2008 and of their financial performance and cash flows for the year then ended.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Chairman
Tan Sri Abdul Halim bin Ali

Kuala Lumpur,
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 88 to 146 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 19 February 2009.
Ho Chee Sheong
Before me:
Malakoff
Corporation
Berhad
Annual
report
2008
148
Independent auditors
Report to the members of Malakoff Corporation Berhad
Report on the Financial Statements

We have audited the financial statements of Malakoff Corporation Berhad, which comprise the balance sheets as at 31 December
2008 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of
the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory
notes, as set out on pages 88 to 146.
Directors Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation and fair presentation of these financial statements in
accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility includes: designing,
implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and
making accounting estimates that are reasonable in the circumstances.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the
Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the
Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as
of 31 December 2008 and of their financial performance and cash flows for the year then ended.
Malakoff
Corporation
Berhad
Annual
report
2008
149
independent auditors
Report to the members of Malakoff Corporation Berhad
Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
a)
I n our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its
subsidiaries have been properly kept in accordance with the provisions of the Act.
b)
e are satisfied that the accounts of the subsidiaries that have been consolidated with the Companys financial statements
W
are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group
and we have received satisfactory information and explanations required by us for those purposes.
c)
ur audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under
O
Section 174(3) of the Act.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act,
1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
KPMG Foong Mun Kong

Firm Number: AF 0758
Approval Number: 2613/12/10(J)
Chartered Accountants
Chartered Accountant
Petaling Jaya, Selangor

THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

(731568-V)
Tel : +603-2263 3388

Fax : +603-2263 3333
www.malakoff.com.my
Annual Report 2008

50470 Kuala Lumpur
(731568-V)

Malakoff Corporation Berhad Annual Report 2008 Preparing for the Future

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MALAKOFF CORPORATION BERHAD

MALAKOFF CORPORATION BERHAD

Tel : +603-2263 3388

Annual Report 2008

Level 12, Block 3B, Plaza Sentral

032 Audit Committee

070 Corporate Responsibility

034 Statement by Chairman

Profit before taxation

Profit after tax & minority interest

Total assets employed

Per share (sen)

Profit After tax & Minority interest

Total assets employed

EarningS per share

net assets per Share

Malakof f Corporation Berhad

Furthermore, Malakoff provides services through

O p er ation s and maintenance (O &M)

CINDY TAN LER CHIN

AHMAD JAUHARI YAHYA

DATO AZIAN MOHD NOH

Managing Director/Chief Executive Officer

Non-Independent Non-Executive Director

Datuk HAJI 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

Non-Independent Non-Executive Director

Alternate Director to Andrew Rowan Ian Yee

MABEL LEE KHUAN EOI

Non-Independent Non-Executive Director

Samantha Yeoh Soo Mei

Level 8, Kompleks Antarabangsa

Sharifah Laila Farina Syed Mohd

Audit Committee members

YOONG NIM CHEE

AHMAD JAUHARI YAHYA

MMC Corporation Berhad

Employees Provident Fund

Kumpulan Wang Persaraan

Standard Chartered IL & FS Asia

SEASAF Power Sdn Bhd

II Malakoffs effective equity interest of 20% and 12% in

Tan Sri Abdul Halim Ali

Datuk Haji HasNi Harun

Cindy Tan Ler Chin

Ahmad Jauhari Yahya

Yoong Nim Chee

Vijay Vijendra Sethu

Tan sri Abdul Halim Ali

Currently, he is also the Chairman of Malaysian Building

Encik Ahmad Jauhari Yahya, aged 55, a Malaysian, is

Ahmad Jauhari Yahya

profile of board of Directors

Datuk Haji Hasni Harun, aged 52, was appointed to the

Datuk Haji HASNI HARUN

OneMind: Malakoff 08AR_030408_12am

Mr. Yoong Nim Chee, aged 49, a Malaysian was appointed to

YOONG NIM CHEE

O p er ation s and maintenance (O &M)

II Malakoffs effective equity interest of 20% and 12% in

(d) To discuss problems and reservations arising

Review the adequacy of the scope,

Review the internal audit programme and

Review and appraise or assess the

(e) to obtain, at the expense of the Company,

(g) To consider any related party transactions that