Transcending Boundaries

Transcription

1

2 Transcending Boundaries Reaching for the highest pinnacle, capturing the wind at its strongest, the paper fan spins at its fastest, a moment exuding triumphant sheer exhilaration. In the child lies the fundamental spirit of curiosity in a world that she continues to explore and discover, and in the fan, an iconic reference to the values of integrity, teamwork, innovation, excellence and respect for the individual to which we adhere to, in making it possible. With a strategy of harnessing available resources, and focused with precision on growth, the Group ventures in global partnerships to expand its business internationally. This is our testament to the future that we have conceived, in the pursuit of new frontiers that transcend boundaries.

3 f o r r e s p e c t i n d i v i d u a l i n n o v a t i o n t e a m w o r k e x c e l l e n c e i t i n t e g r i y

4 Page: Malakoff corporation Berhad ( V) 2 Annual Report 2007 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. Corporate Values Integrity Teamwork Innovation Excellence Respect for Individual

5 Page: 3 Our vision To be a LEADING POWER & WATER PROVIDER

6 Page: 4 Malakoff corporation Berhad ( V) Annual Report 2007 contents 2 Our Mission & Vision Group Financial & Performance Highlights for Malakoff Corporation Berhad 6 Malakoff Berhad Historical Five-Year Group Financial & Performance Highlights 8 Corporate Profile 12 Corporate Information 13 Malakoff Shareholders 14 Corporate Structure Directors Profiles 16 Board of Directors 18 Profile of Board of Directors Management Team 27 Organisational Structure 28 Individual Profiles of Key Members of Management Team Audit Committee 36 Audit Committee Corporate Performance 40 Statement by Chairman 48 Performance Review by MD/CEO - Asset Performance (Local and International) - Operations & Maintenance ( O&M ) - Electricity Distribution and Chilled Water Supply - Ventures - Project Management Corporate Responsibility 72 Corporate Responsibility - Corporate Governance - Health, Safety and Environment ( HSE ) - Human Resources Development - Enterprise Risk Management ( ERM ) - Community Investment Corporate Event Highlights 76 Corporate Event Highlights Financial Statements 79 Financial Statements

7 Page: Group financial & performance highlights for malakoff corporation berhad * 2007 RM 000 Revenue 2,701,998 Profit before taxation 323,769 Profit after tax & minority interest 217,297 As at 31 August Paid-up capital 351,344 Shareholders funds 4,172,439 Total assets employed 23,457,579 Per share (sen) Earnings 61.8 Dividend (gross) 9.1 Net assets per share (sen) 1188 * On 30 April 2007, Malakoff Corporation Berhad (formerly known as Nucleus Avenue (M) Berhad) completed its acquisition of the securities of all the subsidiaries and the associate companies of Malakoff Berhad together with all the assets (other than cash balance) & liabilities of Malakoff Berhad.

8 Page: Malakoff corporation Berhad ( V) 6 Annual Report 2007 malakoff berhad historical five-year group financial & performance Highlights rm 000 RM 000 RM 000 RM 000 RM 000 Revenue 1,923,235 2,122,003 2,059,078 1,825,013 1,717,462 Profit before taxation 709, , , , ,228 Profit after tax & minority interest 442, , , , ,591 As at 31 August Paid-up capital 899, , , , ,664 Shareholders funds 3,719,053 3,445,801 3,080,100 2,811,285 2,467,135 Total assets employed 15,512,506 14,804,662 12,490,328 7,358,996 6,990,589 Per share (sen) Earnings Dividend (gross) Net assets per share (sen) Revenue RM1,923 million 1, , , , , profit after tax & minority interest RM442 million shareholders funds RM3,719 million 2, , , , ,

9 Page: 7 total assets employed RM15,512 million 6, , , , , earnings per share 49.3 sen net assets per share sen

10 Page: Malakoff corporation Berhad ( V) 8 Annual Report 2007 CORPORATE profile

11 Page: 9 Malakoff Corporation Berhad ( Malakoff ) is one of the leading independent power and water producers based in Asia with an excellent reputation. Our core business includes power generation, water desalination and operations & maintenance services. In Malaysia, we own a gross generating capacity of 5,020 MW comprising of 6 power stations that run on gas, oil and coal. Malakoff s power generation assets are held through a number of subsidiaries and associate companies: Lumut Power Plant through a 93.75% equity interest in Segari Energy Ventures Sdn Bhd ( SEV ) GB3 Power Plant through a 75.0% equity interest in GB3 Sdn Bhd ( GB3 ) Prai Power Plant through its wholly-owned subsidiary Prai Power Sdn Bhd ( PPSB ) Tanjung Bin Power Plant through a 90.0% equity interest in Tanjung Bin Power Sdn Bhd ( TBPSB ) Port Dickson Power Plant through a 25.0% equity interest in Port Dickson Power Berhad, via its wholly-owned subsidiary Hypergantic Sdn Bhd Kapar Power Station through a 40.0% equity interest in Kapar Energy Ventures Sdn Bhd ( KEV ) Furthermore, Malakoff provides services through its subsidiary companies: Operations and maintenance ( O&M ) services through wholly-owned subsidiary Teknik Janakuasa Sdn Bhd ( TJSB ), one of the leading O&M service providers in Malaysia Electricity distribution activities through Wirazone Sdn Bhd ( WIRAZONE ), a wholly owned subsidiary that currently supplies centralised chilled water and distributes electricity to the landmark Kuala Lumpur Sentral development ( KL Sentral ), which is set to become the transportation and communication hub of Malaysia Project management services for in-house and external projects through Malakoff Engineering Sdn Bhd ( MESB ), a wholly owned subsidiary by Malakoff On the international front, we own a net capacity of 360 MW of power and 213,000 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.

12 Good leadership commands the underlying ability to possess a commitment to integrity and to be a role model for others to follow.

13 integrity

14 Page: Malakoff corporation Berhad ( V) 12 Annual Report 2007 Directors TAN SRI ABDUL HALIM ALI Chairman AHMAD JAUHARI YAHYA Managing Director/Chief Executive Officer HASNI HARUN Non-Independent Non-Executive Director YOONG NIM CHEE Non-Independent Non-Executive Director CINDY TAN LER CHIN Non-Independent Non-Executive Director AZIAN MOHD NOH Non-Independent Non-Executive Director ANDREW ROWAN IAN YEE Non-Independent Non-Executive Director VIJAY VIJENDRA SETHU Alternate Director to Andrew Rowan Ian Yee MABEL LEE KHUAN EOI Non-Independent Non-Executive Director CORPORATE INFORMATION Company Secretaries Samantha Yeoh Soo Mei (MAICSA ) Sharifah Laila Farina Syed Mohd (LS ) Audit Committee members HASNI HARUN (Chairman) YOONG NIM CHEE AHMAD JAUHARI YAHYA Remuneration Committee members TAN SRI ABDUL HALIM ALI (Chairman) Hasni Harun Cindy Tan Ler Chin Registered Office Level 8, Kompleks Antarabangsa, Jalan Sultan Ismail, Kuala Lumpur Tel: Fax: Website: AUDITORS KPMG PRINCIPAL BANKER Malayan Banking Berhad correspondence address Level 12, Block 3B, Plaza Sentral, Jalan Stesen Sentral 5, Kuala Lumpur Tel: Fax: Website:

15 Page: 13 Malakoff Shareholders 51% MMC Corporation Berhad 2.5% SEASAF Power Sdn Bhd (formerly known as Premier Unity Sdn Bhd) 30% Employees Provident Fund Malakoff Corporation Berhad 6.5% Standard Chartered Private Equity Limited 10% KUMPULAN WANG PERSARAAN (Diperbadankan)

16 Page: Malakoff corporation Berhad ( V) 14 Annual Report 2007 Corporate Structure as at 31 December % Teknik Janakuasa Sdn Bhd 100% Natural Analysis Sdn Bhd 100% TJSB International Limited 93.75% Segari Energy Ventures Sdn Bhd 75% GB3 Sdn Bhd 100% Prai Power Sdn Bhd 90% Tanjung Bin Power Sdn Bhd 40% Kapar Energy Ventures Sdn Bhd Power Generation Operations and Maintenance services 100% TJSB International (Shoaiba) Limited 20% Saudi-Malaysia Operation & Maintenance Services Company Limited 20% Al-Imtiyaz Operation & Maintenance Company Limited 100% TJSB Middle East Limited 100% TJSB Global Sdn Bhd 100% Wirazone Sdn Bhd Electricity distribution 100% Hypergantic Sdn Bhd 25% Port Dickson Power Berhad

17 Page: % Malakoff International Limited 100% Malakoff Gulf Limited project Management 100% Malakoff Engineering Sdn Bhd Offshore 40% Malaysian Shoaiba Consortium Sdn Bhd ( MSCSB ) 20% Saudi-Malaysia Water & Electricity Company Limited ( SAMAWEC ) II 12% Shuaibah Water & Electricity Company Limited ( SWEC ) II 12% Shuaibah Expansion Holding Company Limited ( SEHCL ) lll 11.7% Shuaibah Expansion Project lll Company Limited ( SEPCL ) 100% Malakoff Technical (Dhofar) Limited 43.4% Oman Technical Partners Limited ( OTPL ) lv 43.4% Salalah Power Holdings Limited ( SPHL ) lv 20% Dhofar Power Company SAOG ( DPC ) lv 100% Malakoff AlDjazair Desal Sdn Bhd ( MADSB ) 70% Tlemcen Desalination Investment Company SAS ( TDIC ) 35.7% Almiyah Attilemcania SPA ( AAS ) V 100% Spring Assets Limited I 100% Malakoff Capital (L) Ltd 100% Malakoff Jordan Generation Limited ( MJGL ) 25% Enara Energy Investment Company ( ENARA ) 12.75% Central Electricity Generating Company Limited ( CEGCO ) VI 100% KuwMal Investments Limited 100% Tuah Utama Sdn Bhd 20% Lekir Bulk Terminal Sdn Bhd 54% Desa Kilat Sdn Bhd 100% Transpool Sdn Bhd I Others I II lll Dormant Malakoff s effective equity interest of 20% and 12% in SAMAWEC and SWEC, respectively, is held via Malakoff Gulf Limited which holds 40% equity interest in MSCSB which in turn holds 50% equity interest in SAMAWEC. SAMAWEC holds 60% equity interest in SWEC. Malakoff s effective equity interest of 11.7% in SEPCL is held via Malakoff Gulf Limited which holds 40% equity interest in MSCSB which in turn holds 50% equity interest in SAMAWEC. SAMAWEC holds 60% in SEHCL which in turn holds 97.5% equity interest in SEPCL. IV V VI Malakoff s effective equity interest of 20% in DPC is held via Malakoff Technical (Dhofar) Limited which holds a direct 43.4% equity interest in OTPL which in turn holds 100% equity interest in SPHL. SPHL holds 46% equity interest in DPC, a publicly traded company listed on the Muscat Securities Market of the Sultanate of Oman. Malakoff s effective equity interest of 35.7% in AAS is held via MADSB which holds 70% equity interest in TDIC which in turn holds 51% equity interest in AAS. Malakoff s effective equity interest of 12.75% in CEGCO is held via MJGL which holds 25% equity interest in ENARA which in turn holds 51% equity interest in CEGCO.

18 Page: Malakoff corporation Berhad ( V) 16 Annual Report 2007 board of directors Tan Sri Abdul Halim Ali Chairman 2. Ahmad Jauhari Yahya Managing Director/Chief Executive Officer 3. HasNi Harun 4. Mabel Lee Khuan Eoi 5. Vijay Vijendra Sethu 6. Azian Mohd Noh 7. Cindy Tan Ler Chin 8. Yoong Nim Chee 9. Andrew Rowan Ian YEE (picture not available)

19 Page: 17

20 Page: Malakoff corporation Berhad ( V) 18 Annual Report 2007 profile of board of directors Tan sri Abdul Halim Ali chairman YBhg. Tan Sri Abdul Halim Ali, aged 65, a Malaysian, was appointed to the Board on 24 May 2007 and appointed as a Chairman of Malakoff Corporation Berhad ( Malakoff ) on 26 October He is also Chairman of the Remuneration Committee of the Board. He holds a Bachelor of Arts (Honours) degree from the University of Malaya, Malaysia. Tan Sri Abdul Halim joined the Malaysian Foreign Service soon after graduating in During the next 30 years, his postings included the Malaysian High Commission in New Delhi, Republic of India, the Malaysian Consulate in Medan, Sumatra, Republic of Indonesia and the Malaysian Embassy in Tokyo, Japan. In 1976, he was appointed Principal Assistant Secretary, Ministry of Foreign Affairs and 3 years later, was posted to the United Nations in New York, as Malaysia s Deputy Permanent Representative. In 1982, he assumed his first ambassadorial role as the Malaysian Ambassador to the Socialist Republic of Vietnam, coming back to Kuala Lumpur when he was appointed Deputy Secretary-General (III), Ministry of Foreign Affairs. In 1988, he was appointed Ambassador of Malaysia to Austria, where he also held the position of President Representative to UNIDO, IAEA, United Nations Office in Vienna, Austria. In 1991, he was named Deputy of Secretary-General (1), Ministry of Foreign Affairs, before his appointment as Secretary-General 5 years later. In September 1996, he was appointed Chief Secretary to the Government, a post he held until his retirement in January 2001, when he was named Chairman of EPF. From September 2001 until 4 July 2007 he was the Chairman of Malakoff Berhad. Currently, he is the Chairman of Malaysian Building Society Berhad, a subsidiary of Employees Provident Fund ( EPF ) and University of Technology, Malaysia. He also sits on the boards of ESSO Malaysia Berhad, IJM Corporation Berhad and LCL Corporation Berhad. In recognition of his achievements and contribution to the country and corporate sector, Tan Sri Abdul Halim was conferred a Fellowship by the Governing Council of the Malaysian Institute of Directors.

21 Page: 19 Ahmad Jauhari Yahya Managing director/chief executive officer Encik Ahmad Jauhari Yahya, aged 54, a Malaysian, is currently the Managing Director/Chief Executive Officer of Malakoff Corporation Berhad ( Malakoff ). He was appointed to the Board on 30 April 2007 and is a member of the Audit Committee of the Board. He also sits on the Board of Port Dickson Power Berhad, MMC Corporation Berhad, Aliran Ihsan Resources Berhad, Kapar Energy Ventures Sdn Bhd and Malakoff AlDjazair Desal Sdn Bhd. He holds a Bachelor of Science (Honours) degree in Electrical and Electronic Engineering from University of Nottingham, UK. During his career, Encik Ahmad Jauhari has managed many large technical projects and held senior management positions in The New Straits Times Press (M) Berhad (Director and Senior Group General Manager), Time Engineering Berhad (Managing Director) and Malaysian Resources Corporation Berhad (Managing Director, Executive Vice President and Director). On the international front, he is also a Director and Chairman of Executive Committee of Central Electricity Generating Company Limited (Jordan) and Director of Shuaibah Water & Electricity Company Limited and Shuaibah Expansion Project Company Limited (Saudi Arabia). At present, Encik Ahmad Jauhari is the Honorary Vice-President of Penjanabebas (Association of Independent Power Producers in Malaysia).

22 Page: Malakoff corporation Berhad ( V) 20 Annual Report 2007 profile of board of directors (con t) HASNI HARUN Non-Independent Non-Executive Director Encik Hasni Harun, aged 51, was appointed to the Board on 24 May 2007 and is the Chairman of the Audit Committee and a member of the Remuneration Committee of the Board. He graduated with a Bachelor of Accounting (Honours) degree from the University of Malaya in 1980, and holds a Master s degree in Business Administration from United States International University, San Diego, California, USA. He is also a member of the Malaysian Institute of Accountants. He is presently the Chief Executive Officer, Malaysia of MMC Corporation Berhad ( MMC ) having been its Group Chief Operating Officer from January 2007 to February Prior to joining MMC, he was the Group Chief Financial Officer of DRB-Hicom Berhad (2006), Managing Director of RHB Asset Management Sdn Bhd ( ), and Senior General Manager of the Investment Department at the Employees Provident Fund Board ( ). He had held several senior positions in the Accountant General s Office ( ). His directorship in other companies include MMC, Zelan Berhad, Johor Port Berhad, IJM Corporation Berhad, MMC Engineering Group Berhad and Aliran Ihsan Resources Berhad.

23 Page: 21 YOONG NIM CHEE NON-INDEPENDENT NON-EXECUTIVE DIRECTOR Mr. Yoong Nim Chee, aged 49, a Malaysian, was appointed to the Board on 16 May 2006 and is a member of the Audit Committee of the Board. He holds a Bachelor of Economics in Business Administration degree from University Malaya. Mr. Yoong has extensive experience in corporate finance and has worked in senior positions for several merchant banks. He was the Executive Director of MMC Engineering Group Berhad from and currently holds the position of Director, Corporate Affairs of MMC Corporation Berhad. He is also a board member of Zelan Berhad, Kramat Tin Dredging Berhad and Integrated Rubber Corporation Berhad.

24 Page: Malakoff corporation Berhad ( V) 22 Annual Report 2007 profile of board of directors (con t) mabel Lee Khuan Eoi Non-Independent Non-Executive Director Dr. Mabel Lee, 53, a Malaysian, was appointed to the Board on 11 April She is currently the Senior General Manager of Corporate Planning at MMC Corporation Berhad ( MMC ). Prior to joining MMC, she had worked with JP Morgan Chase s Kuala Lumpur office as Vice President of its Investment Banking Division. Mabel is a Chartered Financial Analyst Charterholder and holds a Bachelor of Accounting (First Class Honours) degree from Universiti Malaya, MBA (with Distinction) from University of Hull, United Kingdom and Doctor of Business Administration degree from University of Newcastle, Australia. She is a member of the Malaysian Institute of Accountants, an Associate Member with Institut Bank-Bank Malaysia and a member of the Institute of Chartered Accountants in England and Wales ( ICAEW ), Corporate Finance Faculty.

25 Page: 23 Cindy Tan Ler Chin Non-Independent Non-Executive Director Puan Cindy Tan Ler Chin, aged 48, a Malaysian, was appointed to the Board on 9 August 2007 and is a member of the Remuneration Committee of the Board. She holds an Honours Degree in Economics, majoring in statistic, from Universiti Kebangsaan Malaysia. In 1991, she obtained a Certified Diploma in Accounting and Finance, accorded by the Chartered Association of Certified Accountants. She is currently the General Manager of the Corporate Financing Department, Investment Division of the Employees Provident Fund ( EPF ). She is also a Director of Malaysia Building Society Berhad, a subsidiary of EPF.

26 Page: Malakoff corporation Berhad ( V) 24 Annual Report 2007 profile of board of directors (con t) AZIAN MOHD NOH Non-Independent Non-Executive Director Puan Azian Mohd Noh, aged 55, a Malaysian, was appointed to the Board on 9 August She holds a Master in Business Administration from University Kebangsaan Malaysia and a Bachelor of Economics (Accounting) from University of Malaya. Puan Azian began her career in 1980 as a Treasury Accountant in the Investment and Loan Division of the Accountant General s Department before being appointed as an Accountant in the Ministry of Public Enterprise in She joined Kraftangan Malaysia as Senior Accountant in 1982 until 1985, where she served as Deputy Finance Director of SIRIM. In 1991, she was appointed as Deputy Director in the Kumpulan Wang Amanah Pencen ( KWAP ) in the Accountant General s Department, a position she held for seven years before becoming a Director of KWAP in 1997 until She is currently the Chief Executive Officer of Kumpulan Wang Persaraan (Diperbadankan). She also a board member of RHB Berhad and Time DotCom Berhad.

27 Page: 25 andrew Rowan Ian yee Non-Independent Non-Executive Director Mr. Andrew Rowan Ian Yee, aged 43, an Australian citizen, was appointed to the Board on 9 August He holds a Bachelor of Commerce degree, majoring in Accounting and a Bachelor of Law degree from the University of New South Wales, Sydney, Australia. He is also qualified to practice law in Australia. Mr. Andrew Yee is the joint Chief Executive Officer of Standard Chartered IL&FS Asia Infrastructure Growth Fund (SCI Asia), based in Singapore. He joined Standard Chartered s Principal Finance team in 2007 as a Managing Director and Head of Infrastructure. He has 19 years of infrastructure experience gained from positions in investment banking, industry and private equity. Prior to joining Standard Chartered and launching SCI Asia, he founded Renewable Energy Asia Pacific, a renewable energy fund. He was also Head of Mergers and Acquisitions at InterGen Asia where he participated in the US$3.3 billion sale of InterGen to a partnership between AIG and the Ontario Teachers Pension Plan during 2004 and Prior to InterGen, Andrew was Head of Goldman Sachs Asia s Energy & Power advisory team, based in Hong Kong. He was also a Director at Barclays de Zoete Wedd Australia, an investment banking firm that was acquired by ABN AMRO in 1997, prior to which he worked in the Corporate Finance team of Barclays de Zoete Wedd in London. His deal experience includes the Initial Public Offering of British Sky Broadcasting, secondary offerings of National Power and PowerGen, acquisitions of British Coal and Powercor Australia, and the sale of Australian airports in Melbourne, Brisbane and Perth.

28 Page: Malakoff corporation Berhad ( V) 26 Annual Report 2007 profile of board of directors (con t) Vijay Vijendra Sethu alternate director to andrew Rowan ian yee Mr. Vijay Vijendra Sethu, aged 44, an Australian citizen, is the Alternate Director to Mr. Andrew Rowan Ian Yee and was appointed to the Board on 9 August 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.

29 Page: 27 organisational Structure Malakoff Corporation Berhad IT & Enterprise Applications Department Organisational Development Department Human Resources & Admin Department Malakoff Engineering Sdn Bhd ( MESB ) MD/CEO s Office & Corporate Affairs Department Asset Management Division MD/CEO Ahmad Jauhari Yahya Operations & Maintenance Division Ventures I Division COMPANY SECRETARIAL DEPARTMENT DCEO MOHD RADZUAN YAHYA Ventures II Division Group Finance & Accounts Division Legal Services Department

30 Page: Malakoff corporation Berhad ( V) 28 Annual Report 2007 Individual Profiles of Key Members of Management Team Ahmad Jauhari Yahya 2. Mohd Radzuan Yahya

31 Page: 29 Ahmad Jauhari Yahya Managing Director/Chief Executive Officer Encik Ahmad Jauhari Yahya, aged 54, a Malaysian, is currently the Managing Director/ Chief Executive Officer of Malakoff Corporation Berhad ( Malakoff ). He was appointed to the Board on 30 April 2007 and is a member of the Audit Committee of the Board. He also sits on the Board of Port Dickson Power Berhad, MMC Corporation Berhad, Aliran Ihsan Resources Berhad, Kapar Energy Ventures Sdn Bhd and Malakoff AlDjazair Desal Sdn Bhd. He holds a Bachelor of Science (Honours) degree in Electrical and Electronic Engineering from University of Nottingham, UK. During his career, Encik Ahmad Jauhari has managed many large technical projects and held senior management positions in The New Straits Times Press (M) Berhad (Director and Senior Group General Manager), Time Engineering Berhad (Managing Director) and Malaysian Resources Corporation Berhad (Managing Director, Executive Vice President and Director). On the international front, he is also a Director and Chairman of Executive Committee of Central Electricity Generating Company Limited (Jordan) and Director of Shuaibah Water & Electricity Company Limited and Shuaibah Expansion Project Company Limited (Saudi Arabia). At present, Encik Ahmad Jauhari is the Honorary Vice-President of Penjanabebas (Association of Independent Power Producers in Malaysia). Mohd Radzuan Yahya Deputy Chief Executive Officer Encik Mohd Radzuan Yahya, aged 55, is currently the Deputy Chief Executive Officer ( DCEO ) of Malakoff Corporation Berhad ( Malakoff ). He obtained a Bachelor of Science degree in Mechanical Engineering from Liverpool University, UK in 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 He was then transferred to Paka Combined Cycle Power Station as Efficiency and Test Engineer until Between 1987 to 1993, he assumed the positions of Senior Shift Charge Engineer, Senior Mechanical Engineer and Assistant Station Manager at the Port Dickson Power Station. He joined Teknik Janakuasa Sdn Bhd ( TJSB ) as Plant Manager for Lumut Power Plant in In 1998, he was appointed as Chief Operating Officer ( COO ) of TJSB. In 2000, he was transferred to Segari Energy Ventures Sdn Bhd ( SEV ) to assume the position of COO of SEV. In 2002, he was transferred to Malakoff Berhad and promoted to COO and subsequently re-designated to his current position as the DCEO of Malakoff in April 2006.

32 Page: Malakoff corporation Berhad ( V) 30 Annual Report 2007 Individual Profiles of Key Members of Management Team (cont d) Ruswati Othman Chief Financial Officer/Senior Vice President Group Finance & Accounts Division Puan Ruswati Othman, aged 48, obtained her Bachelor of Science degree in Chemistry and Master of Business Administration degree (majoring in Accounting and Finance) from University of Bradford, England, UK and University of Massachusetts, Boston, USA in 1984 and 1988 respectively. She started her career as executive in the Chemical Division of Behn Meyer & Co. in She joined Southern Bank Berhad as an officer in She was appointed as Assistant Manager, Corporate Planning and Investments at Melewar Corporation Berhad/MAA Berhad in 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 In 2004, she was promoted to the position of Chief Financial Officer/Senior Vice President, Group Finance & Accounts Division. Her present responsibility includes managing the Group Accounts and Treasury Department and the Corporate and Project Finance Department. She overseas the overall accounting and reporting functions in Malakoff Corporation Berhad ( Malakoff ) and heads the Malakoff team for corporate finance exercises such as equity & debt financing as well as mergers & acquisition and project finance exercises for companies within the Malakoff Group. Nor Shakiman Muhammad Senior Vice President Operations & Maintenance Division Ir. Nor Shakiman Muhammad, aged 47, obtained his Bachelor of Science in Mechanical Engineering from University of Sussex, UK. He started his career in 1984 with National Electricity Board ( NEB ), subsequently Tenaga Nasional Berhad ( TNB ) as an Assistant Shift Charge Engineer at 900 MW Sultan Ismail Power Station Paka Terengganu ( SIPS ). In 1987, he was appointed as an Assistant Operation Engineer and later appointed as Test and Efficiency Engineer. In August 1988, he was appointed as Safety and Training Engineer, which was his last appointment in SIPS. In September 1988, he was employed as Gas Turbine Maintenance Engineer at 910 MW Connaught Bridge Power Station ( CBPS ) in Klang. He later joined Teknik Janakuasa Sdn Bhd ( TJSB ) in 1994 as Mechanical Maintenance Manager and was involved in the project/design review of the Lumut Power Plant ( LPP ) together with the Owner s project team. He was promoted to Senior Mechanical Maintenance Manager in 1996 and subsequently as Assistant General Manager in Later, he was promoted to Station Manager in LPP in 1998 and then promoted to Chief Operating Officer of TJSB in July 2002, before assuming his current position as Senior Vice President of O&M Division in Malakoff Corporation Berhad ( Malakoff ). Habib Husin Senior Vice President Asset Management Division Encik Habib Husin, aged 48, obtained his Bachelor in Engineering (Electrical & Electronics) from University of Wales. He started his career in 1983 as an Assistant Instrument Maintenance Engineer in Port Dickson Power Station for Lembaga Letrik Negara (now Tenaga Nasional Berhad). In 1985, he was transferred to Kapar Power Station (Phase I and II) and was later promoted to Instrument Maintenance Engineer in He then joined Sarawak Shell Berhad as Instrument Engineer in 1990 before moving to ICI Paints (Mal) Sdn Bhd as Works Engineer in He joined Malakoff Berhad as Senior Manager of Technical Audit Department in July 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 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 In 2007, he was re-designated to his current position as Senior Vice President of Asset Management Division of Malakoff Corporation Berhad ( Malakoff ).

33 Page: Ruswati Othman 4. Nor Shakiman Muhammad 5. Habib Husin

34 Page: Malakoff corporation Berhad ( V) 32 Annual Report 2007 Individual Profiles of Key Members of Management Team (cont d) Azizan Lebai Manat 7. Azhari Sulaiman 8. Ernest Navaratnam

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

36 teamwork demonstrates that trust is an integral part of our pursuit towards achieving a common goal.

37 teamwork

38 Page: Malakoff corporation Berhad ( V) 36 Annual Report 2007 AUDIT COMMITTEE PURPOSE The Audit Committee ( Committee ) was established by Board on 19 November The primary objectives of the Audit Committee are as follows: 1. To assist the Board in fulfilling its statutory and fiduciary responsibilities in examining and monitoring the Company and its subsidiaries ( the Group ) management of business, financial risk processes, accounting and financial reporting practices; 2. To determine the adequacy and effectiveness of the administrative, operational and internal accounting controls of the Group and to ensure that the Group is operating in accordance with the prescribed procedures, codes of conduct and applicable legal and regulatory requirements; 3. Serve as an independent and objective party from management in the review of the financial information of the Company and Group presented by management for the distribution to shareholders and the general public; 4. Provide direction and oversight over the internal and external auditors of the Company to ensure their independence from management; 5. To evaluate the quality of audits conducted by the internal and external auditors on the Company and Group. MEMBERS The members of the Committee comprised the following members: Status of Directorship Hasni Harun (Chairman) - Non-Executive Director Yoong Nim Chee - Non-Executive Director Ahmad Jauhari Yahya - Managing Director/Chief Executive Officer The Chairman of the Committee is a member of the Malaysian Institute of Accountants. MEETINGS AND MINUTES Meetings shall be held at least four (4) times a year or more frequently as circumstances dictate. The Chairman shall call a meeting of the Committee, if requested to do so by any Audit Committee member, the management or the internal or external auditors. A representative of the external and internal auditors shall normally be invited to attend the meetings of the Audit Committee. The management shall be represented at the meetings by the Managing Director/Chief Executive Officer ( CEO ) or in his absence, the Deputy CEO, the Chief Financial Officer and the Financial Controller of the Company. Other board members may attend Audit Committee meetings upon the invitation of the Audit Committee. The Chairman of the Audit Committee should engage on a continuous basis with senior management, such as the Chairman, the Managing Director/CEO, or in his absence, the Deputy CEO, the Chief Financial Officer, the Financial Controller of the Company, the internal auditors and the external auditors in order to kept informed of matters affecting the Company.

39 Page: 37 The Audit Committee shall meet at least twice a year with the internal and external auditors without the attendance of the executive members of the Committee and the management of the Company. The quorum for a meeting of the Committee shall be two (2) members present or in their absence, their alternate directors, both of whom must be non-executive directors. Minutes of each meeting shall be kept and distributed to each member of the Committee and of the Board. The Chairman of the Committee shall report on each meeting to the Board. The Company Secretary shall be the Secretary of the Committee. AUTHORITY The Audit Committee is authorised by the Board: (a) to investigate any matter within its terms of reference; (b) (c) (d) (e) (f) to have the resources in order to perform its duties and responsibilities as set out in its terms of reference; 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; to have direct communication channels to the internal and external auditors; to obtain, at the expense of the Company, external legal or other independent professional advice if it considers necessary; and 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) (c) (d) (e) (f) (g) (h) (i) (j) To discuss with the external auditor before the audit commences, the nature and scope of the audit; To review the quarterly and year-end financial statements for recommendation to the Board; 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); To review the external auditor s management letter and management s response; 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; To consider any related party transactions that may arise within the Group; To consider the major findings of internal investigations and management s response; 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 To consider other topics as defined by the Board.

40 An open mind continues to think out of the box, never content with the tried and tested, but challenged to provide fresh solutions, and winning innovation.

41 inn0vation

42 Page: Malakoff corporation Berhad ( V) 40 Annual Report 2007 STATEMENT by CHAIRMAN dear stakeholders, 2007 has been another good year for Malakoff corporation berhad ( Malakoff ) both in Malaysia and abroad as we continue to demonstrate consistent and effective execution of our strategy. The year has been particularly significant as it marked the completion of a divestment exercise. On 30 April 2007, Nucleus Avenue (M) Bhd, completed its acquisition of Malakoff s entire business for a cash consideration of RM9.3 billion, giving MMC corporation berhad a 51% controlling stake. The process of the privatisation also saw Nucleus Avenue (M) Bhd changed its name to Malakoff Corporation Berhad. Having completed my first 8 months as Chairman under the new Malakoff, I am delighted to be able to report another year of strong progress for the Group. For the 8 months ended 31 December 2007, the underlying profit was RM217 million and revenue was RM2,702 million. The increase in revenue and profit was mainly attributable to Tanjung Bin power plant, which has a capacity of 2,100 MW. With the completion of Tanjung Bin Power Plant third 700 MW unit on 31 August 2007, our effective generation capacity in Peninsular Malaysia increased to 5,020 MW. This further cement s our position as the leading Independent Power Producer ( IPP ) in Malaysia. The performance of our local assets, which is the major contributor to the Group s revenue, remains robust due to the operational efficiency that far exceeds our contractual obligations. During the year under review, significant changes were introduced to our local operations to ensure that sustained improvement and operational excellence are achieved through the balance of performance enhancement, risk management and cost optimisation.

43 Tan Sri Abdul Halim Ali Chairman Page: 41

44 Page: Malakoff corporation Berhad ( V) 42 Annual Report 2007 STATEMENT by CHAIRMAN (con t) The long-term nature of Malakoff s investments in the international market should enable the Group to generate growth and improving returns over many years. As a leading electricity and water producer, we will continue to provide quality and affordable power and water that meet or exceed our customers expectations. Over the years to come, our local assets and operations will remain as our core business. Significant milestones were also achieved in 2007 with regard to our ventures overseas. On 17 October 2007, Malakoff s consortium also completed the acquisition of a 51% interest in Jordan s Central Electricity Generating Company Limited ( CEGCO ), which is Jordan s largest electricity provider with a generation capacity of 1,665 MW. The privatisation of CEGCO, where we have a 12.75% indirect stake, is one of the largest privatisation exercises in Jordan s history. On 15 July 2007, Malakoff s consortium partners entered into a series of agreements with Saudi Arabia s Water and Electricity Co. ( WEC ) for the expansion of Shuaibah Independent Water and Power Plant ( IWPP ) project to deliver an extra 150,000 m 3 /day of water. This US$232 million expansion project which will utilise Reverse Osmosis desalination technology is expected to deliver water in February Meanwhile, the construction of the 900 MW and 1,030,000 m 3 /day Shuaibah IWPP in Saudi Arabia, which is our first overseas project, is proceeding well with commercial operations targeted for July Malakoff has 12% indirect stake in Shuaibah IWPP. Our participation at Dhofar Power Company SAOG ( DPC ) in Oman, where we have an indirect stake of 20% through an acquisition in 2006, has not only provided us with a growth opportunity in Oman but also an excellent platform to gain knowledge and experience in running a transmission and distribution business. Meanwhile, the development of the 200,000 m 3 /day desalination plant located in Tlemcen, Algeria, where we have a 37.5% interest, had achieved Financial Closure in January 2008.

45 Page: 43 Strategically, Malakoff is doing the right things, building on its established business in Malaysia whilst looking for investment opportunities, principally in the Middle East and South East Asia. The long-term nature of Malakoff s investments in the international market should enable the Group to generate growth and improving returns over many years. We give particular attention to the environment by investing in technologies which minimise the environmental impact of our operations. Our coal-fired Tanjung Bin power plant, for example, incorporates state-of-the-art clean coal technology such as Electrostatic Precipitators ( ESP ) and Flue Gas Desulphurisation ( FGD ). Work is also underway to certify Tanjung Bin as ISO compliant by We are committed to a high standard of safety and health at the workplace to minimise or eliminate lost time incidents and other occupational health risks. In 2007, efforts were introduced to enhance and standardise our Health, Safety and Environment ( HSE ) practices across the board as well as to work towards achieving the OHSAS certification in 2009 for all the plants that we control, i.e., Tanjung Bin, Lumut and Prai power plants. In terms of Community Investment, we continue to promote sporting events at national and grassroots levels under various themes of charity, voluntarism, sports tourism and environmental conservatism. In the year under review, Malakoff organised and supported a total of at least eight major sporting events that attracted more than 4,000 athletes and volunteers from Malaysia and abroad. In terms of our contributions to charitable causes, be it social, religious and educational, we continue to provide financial assistance to the less privileged, physically challenged, school-going children and orphans in the communities where we operate. A new Board has evolved as a result of the privatisation exercise and I thank all the new Board members, with their wealth of experience and expertise, for sharing their time and insight. I am confident that this new team will bring renewed vigour and commitment to the successful development of Malakoff.

46 Page: Malakoff corporation Berhad ( V) 44 Annual Report 2007 STATEMENT by CHAIRMAN (con t) I should also pay tribute to my fellow directors of Malakoff Berhad for the considerable contribution they had made in support of the Group over the years. I would also like to thank the Management and all our employees who worked particularly hard throughout 2007 in responding to the unusually demanding environment. Their commitment and loyalty had been outstanding. Looking back at the events that culminated in the privatisation of Malakoff, I have been impressed and reassured by the caring and responsible way in which the Board, the Management and the staff have executed the change. On a personal note, I find this an exciting time to work for Malakoff. The Company is doing well and with its pool of talented people, its international ambitions is on track to do even better. Looking forward, we will continue to lay the foundations for long-term success, growth and value creation in a demanding and changing international business environment. Our investment strategy will be driven by value and a cost structure that is subjected to rigid appraisal. Critical thinking and innovation will be the key to our success to break new frontiers and transcend boundaries. I believe that we have the opportunity to build a truly world class company if we can keep our focus on what we believe we can achieve. Tan Sri Abdul Halim Ali Chairman

47 Page: 45

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

49 excellence

50 Page: Malakoff corporation Berhad ( V) 48 Annual Report 2007 performance review by md/ceo ahmad jauhari yahya managing director/ chief executive officer

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

52 Page: Malakoff corporation Berhad ( V) 50 Annual Report 2007 performance review by md/ceo (con t) Asset performance

53 Page: 51 Local Assets Lumut Power Plant In operation for more than eleven years, the Lumut Power Plant ( LPP ), with a dependable capacity of 1,303 MW, remains the largest combined cycle power plant in Malaysia. The plant is held through our subsidiary, Segari Energy Ventures Sdn Bhd ( SEV ), in which we hold per cent.

54 Page: Malakoff corporation Berhad ( V) 52 Annual Report 2007 performance review by md/ceo (con t) Malakoff owns a gross generating capacity of 5,020 MW comprising of 6 power stations that run on oil, gas and coal.

55 Page: 53 During the financial year under review, LPP maintained its high performance in terms of availability, reliability and efficiency. The plant delivered approximately 6,423 GWh of electricity to the National Grid, with an average capacity factor of approximately 51.88%. With an availability of 94.29%, the plant exceeded the 86.0% guaranteed under the Power Purchase Agreement ( PPA ) with Tenaga Nasional Berhad ( TNB ). Having met all the required performance standards set out in the PPA, SEV therefore received full capacity payments for the period. GB3 Power Plant The GB3 Power Plant, 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 sixth year of operation and is located adjacent to the LPP owned by SEV. The plant delivered a total of 4,245 GWh of electricity to the National Grid, with an average capacity factor of approximately 76.71%, during the financial year under review. The plant s availability was 93.21%, exceeding the requirement of the PPA of 91.5%. Local Generation CapAcity Shareholding X Plant s Capacity effective Capacity 90.00%@2,100 MW TBP 1,890 MW 40.00%@2,420 MW KEV 968 MW 25.00%@440 MW PDP 110 MW %@350 MW PPSB 350 MW Malakoff 5,020 MW 27% TNB & other IPPs 73% 75.00%@640 MW GB3 480 MW 93.75%@1,303 MW SEV 1,222 MW 7,253 Mw 5,020 MW Malakoff has an effective generation capacity of 5,020 MW, which accounts for 27% of Peninsular Malaysia s total installed capacity.

56 Page: Malakoff corporation Berhad ( V) 54 Annual Report 2007 performance review by md/ceo (con t) Prai Power Plant The Prai Power Plant is a single-shaft combined cycle power plant with a dependable capacity of 350 MW. In its fifth year of operation, a total of 2,426 GWh of electricity was delivered to the National Grid. During the financial year under review, the plant recorded an average Capacity Factor of 70.49%. The plant s availability was 93.7%, exceeding PPA requirement of 93%. Being one of the most efficient plants in Malaysia, Prai Power Plant recorded net efficiency (Lower Heating Value) of 53.25% during the financial year under review. Tanjung Bin Power Plant Tanjung Bin Power Plant is the first private coal-fired power plant in Malaysia and one of the largest independent coal-fired power plants in South East Asia. It incorporates the latest clean coal technologies, such as Electrostatic Precipitators ( ESP ) and Flue Gas Desulphurisation ( FGD ). Tanjung Bin Power Plant has a generating capacity of 3 x 700 MW for a total of 2,100 MW. The plant is held through our subsidiary, Tanjung Bin Power Sdn Bhd, in which we hold 90%. Unit 1 started operations on 28 September 2006, and Unit 2 and Unit 3 have successfully achieved their targeted Scheduled Commercial Operation Dates on 28 February 2007 and 31 August 2007, respectively. In 2007, the plant delivered a total of 7,737 GWh of electricity to the National Grid, with an average capacity factor of 59.35%. With an availability of 92.55% at the end of 2007, the plant exceeded the 91% of the PPA requirements. International ASSETS Shuaibah Our first overseas project is the Shuaibah Phase 3 Independent Water and Power Project in the Kingdom of Saudi Arabia. We are part of a consortium tasked with designing, constructing, commissioning and testing a 900 MW and 194 MIGD (Million Imperial Gallons per Day) crude oil-fired power and desalination plant. The project is on a build, own and operate basis under a 20-year Power and Water Purchase Agreement with the Water and Electricity Company of Saudi Arabia. The Project s construction activities are in full swing with procurement and manufacturing on schedule. The first evaporator arrived at Shuaibah in October 2006 while first steam turbine for Unit 10 was erected in December First firing is expected in September 2008 and the project s Commercial Operation Date is scheduled in July Oman We have entered the power generation business in Oman through Oman Technical Partners Limited ( OTPL ). The consortium members of OTPL are Malakoff Technical (Dhofar) Limited ( MTL ) (43.4%), a wholly-owned subsidiary of Malakoff International Limited ( MIL ), GCC Energy Fund of Dubai through its subsidiary, Oman Power Limited (28.3%) and Darbat Power LLC of Oman (28.3%). OTPL in turn, is a direct shareholder of Dhofar Power Company S.A.O.G ( DPC ) with MTL having an indirect 20.0% equity interest in DPC after the successful acquisition of the entire issued and paid-up share capital, comprising 12,000 issued ordinary shares of USD1.00 each of Salalah Power Holdings Limited ( SPHL ) from PSEG Global L.L.C of the United States of America. MTL also became the Technical Partner of DPC. DPC is a power integrated company with 239 MW generating asset as well as the transmission and distribution assets in the Salalah region of the Government of Oman. With electricity demand in the Dhofar region growing at a cumulative annual growth of about 7% over the past years, this investment provides much potential for Malakoff s growth in the future.

57 Page: 55 Jordan Malakoff has footprint in Jordan with recent stakes acquisition in Central Electricity Generating Company Limited ( CEGCO ). Malakoff has a 25% interest in Enara Energy Investment Company ( ENARA ), a consortium with Jordan Dubai Capital of Jordan (65%), Consolidated Contractors Ltd of Greece (10%) in the 51% stake in the Jordanian generation assets held by ( CEGCO ). 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. Total net generation capacity under CEGCO is 1,665 MW. The Government of Jordan signed the CEGCO Share Sale Agreement with ENARA in May In September 2007 CEGCO Transaction Documents was signed. Further, in October 2007, the sale completion was finally achieved. Moving forward, ENARA plans to develop other potential opportunities in Jordan and neighboring countries utilizing CEGCO s expertise and manpower. Algeria Another overseas project is the seawater desalination plant which is located at Souk Tleta, Wilaya of Tlemcen, Algeria with a consortium comprising our wholly-owned subsidiary, Malakoff International Limited ( 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 Algerienne des Eaux under a 25-year concession. The consortium held 51% in the company undertaking the project, with the balance held by AEC, MIL and SUL, in turn, held 70% and 30% interest respectively in the consortium. The Algeria project is scheduled to achieve Financial Close in January The project s total construction period is scheduled 24 months from the Financial Close.

58 Page: Malakoff corporation Berhad ( V) 56 Annual Report 2007 performance review by md/ceo (con t) Operations & Maintenance ( O&M )

59 Teknik janakuasa sdn bhd ( tjsb ), a wholly-owned subsidiary of malakoff corporation berhad ( malakoff ), was established in since then TJSB s experience with Lumut, GB3, Prai and tanjung bin Power Plants has proven its capability in operating and maintaining gas-fired and coal-fired power plants. Page: 57

60 Page: Malakoff corporation Berhad ( V) 58 Annual Report 2007 performance review by md/ceo (con t) O&M Services Lumut Power Plant (SEV and GB3) The Lumut Power Plant continued to provide highly reliable supply to the National Grid during the financial year under review. The Availability Factor ( AF ) based on the 365- day average of SEV Plant was always above 92.0% and the 365-day Unplanned Outage Rate ( UOR ) of GB3 Plant to date remains as below 2.0%. Both plants fulfilled all operational requirements specified in their respective PPAs. Both plants performed well and met world industry standards. Both completed their A/B/C gas turbine inspections as scheduled, utilising in-house expertise led by the Repair and Maintenance Services ( RMS ) team. This is an indication that the transfer of technology from the Original Equipment Manufacturer ( OEM ) has been progressing well. These efforts towards technology transfer will continue. Caring for Health, Safety and Environment is always our top priority. We have maintained zero Lost Time Incident ( LTI ) over the last 3 years. We continue to enhance our proactive safety program and since early last year we have embarked on Process Safety Risk Management ( PSRM ) leading towards achieving OHSAS Certification. Competency Based Assessment ( CBA ) remains our platform to develop our human capital, including intensive training based on inhouse simulators as well as on-the-job training ( OJT ). Lumut Power Plant currently has two fully operational simulators on site for that purpose. Prai Power Plant Prai Power Plant continued to provide highly reliable supply to the National Grid during the financial year under review with the VOR well below the industry standard of 2%, and Availability Factor ( AF ) of 92.91%. This was mainly due to the reduction in the number and duration of forced outages as compared to Plant initiative on startup reliability study has also improved the overall plant reliability. Prai Power Plant also maintained a high Capacity Factor ( CF ) of 79.06% due to high dispatch throughout 2007, with an average net efficiency of 53.25%. Prai Power Plant has embarked on the development of a Plant Performance Monitoring off-line model through collaboration through a third party via a Technical Services Agreement ( TSA ). This initiative will be integral to TJSB s service portfolio in providing value-added O&M services to its internal and external clients. Prai Power Plant also managed to keep its excellent safety record by maintaining zero LTI after four maintenance outages in Tanjung Bin Power Plant Unit No. 2 met the target scheduled Commercial Operation Date ( COD ) of 28 February 2007, followed by Unit No. 3 on 31 August After achieving COD, plant operations have been seamlessly taken over by TJSB, being the O&M subcontractor.

61 Page: 59 The smooth transition and proven competencies of TJSB staff are attributable to the extensive training programmes, supported by the availability of Tanjung Bin Plant-Specific Simulator, from an early stage of project development. A working group on PSRM was formed to consolidate and standardise health, safety and environmental system practices among the plants owned by Malakoff. The group will also prepare the plant for certification to OHSAS and ISO by The Operational Environmental Monitoring Plan required for the commercial operation of the plant has been prepared and implemented, reports are submitted regularly to the state DOE office, and environmental standards are being met. The 2007 Contract Year ended with all 3 units of 700 MW generators in commercial operation with a facility Capacity Factor of 59% and Availability Factor of 94%. A slightly higher than average Forced Outage Rate of 4.17% at the end of the year was mainly due to design and erection related equipment reliability issues that are normally encountered in a new plant. All these issues are being progressively resolved.

62 Page: Malakoff corporation Berhad ( V) 60 Annual Report 2007 performance review by md/ceo (con t) Operations and Technical TJSB through its Technical Support Group ( TSG ) team provides support and expertise to ensure that TJSB s operated plants are managed and maintained efficiently and costeffectively through the implementation of the latest O&M tools and methodologies. Working in conjunction with Asset Management Division, TJSB has revamped the cost centre structures for all of Malakoff s power plants in order to enhance further the budgeting process and there by provide better monitoring on cost accounting. This initiative to manage and optimise plant life-cycle cost has been implemented under the SAP application system. To further manage associated variable costs at all plants under its O&M portfolio, TJSB has formed a RMS team that specialises in major overhaul on boilers, gas and steam turbines as well as Balance of Plant equipment. The same team has also been providing technical support to Malakoff s international business development projects and will be offered to other customers as part of TJSB s long-term business plan. The Life Cycle Asset Information Management System ( LCAIM ) initiative which was started in 2006 for the Tanjung Bin project, has captured all technical details, drawings, project documents and the entire O&M manual into an integrated system named EALIS. The application will be used by O&M personnel in the Tanjung Bin Power Plant which will now be a reference site for LCAIM. EALIS will be added to the in-house-developed O&M tools which TJSB intends to market worldwide. TSG continues to provide Technical and Management Support Services for the Salalah Power Plant in Oman as part of its 6-monthly technical audit service. Two audits have successfully been completed, including a review of a blackout incident in the region. O&M INTERNATIONAL TJSB is committed to expanding its business and seeking opportunities to provide O&M services to third parties locally and internationally. Outside of Malaysia, the Middle East and ASEAN regions have been identified as potential markets for the Company s services. To introduce these services and establish contacts with potential clients, in 2007, TJSB participated in Power Gen Middle East, the region s premier conference and exhibition for the power and water industries held in Bahrain, the Power Gen Conference and Exhibition Asia in Bangkok, and the Malaysia Services Exhibition organised by Matrade in Sharjah, United Arab Emirates. On the international front, TJSB will be co-operator via a sub-contract to a local company for the Shuaibah Phase 3 Independent Water and Power Project ( IWPP ) in the Kingdom of Saudi Arabia. In addition, TJSB together with Hyflux Limited of Singapore will be the O&M contractor for a 200,000 m³/day Sea Water Desalination Plant in Algeria. TJSB has also been awarded a Manpower Supply contract for 12 months for major overhauls of Alstom gas turbine models 13DM and 13E2 for Aluminium Bahrain ( ALBA ) in Bahrain. For O&M related services, TJSB has provided technical advice, simulator training and onthe-job training services not only to Malaysian companies but also to various international companies, including Marmara in Turkey and GECOL in Libya. Throughout 2007, TJSB was actively involved in the preparation and submission of documents for the following project tenders: 850 MW and 212,000m³/day IWPP Shuqaiq, Saudi Arabia 760 MW CCGT Zanjan II Power Plant, Iran 500 MW OCGT Erbil Power Plant, Iraq Acquisition of Globeleq assets in Egypt and Asia 800 MW Az Zour Emergency Power Plant, Kuwait

63 Page: 61 O&M Business and Experience O&M Portfolio (through wholly-owned Teknik Janakuasa Sdn Bhd) Plant Name Configuration Generating Generating COD O&M C capacity Type Term Segari Energy Ventures 6x143.3 (GT) 1,303 CCGT (Once-through) Lumut Power Plant (LPP) 2x221.5 (ST) OCGT 2001 GB3 3x143.3 (GT) 651 CCGT (Cooling Tower) (LPP Block 3) 1x221.5 (ST) Prai Power Plant 1x230 (GT) 350 CCGT (Single-shat) x120 (ST) Tanjung Bin Power 3x700 (Coal) 2,100 Coal Fired Total O&M Portfolio 4,404 O&M via Partnership Souk Tleta, SWRO Plant, Algeria 200,000 m3/day water output IWP O&M via Sub-Contracting Shuaibah III Water & 1,190.7 MW & 888,000 m3/day IWP Electricity Company water output Completed O&M Contract Petronas Centralised Utility Facilities Gebeng 3x36 (GT) 108 COGEN Kerteh 6x36 (GT) 216 COGEN

64 Page: Malakoff corporation Berhad ( V) 62 Annual Report 2007 performance review by md/ceo (con t) Electricity distribution and chilled water supply

65 Malakoff s wholly-owned subsidiary, Wirazone Sdn Bhd ( Wirazone ) is the licensed electricity distributor within the Kuala Lumpur Sentral ( KL Sentral ) development area. It has held a license from the Energy Commission to distribute electricity up to 100 MW within the franchised area since July Wirazone also supplies chilled water to the Plaza Sentral Office complex for air conditioning from a Centralised Chilled Water System with a cooling capacity of 7,000 Refrigerant Tonnes. Page: 63

66 Page: Malakoff corporation Berhad ( V) 64 Annual Report 2007 performance review by md/ceo (con t) During the year under review, Wirazone s customer base increased to 956 accounts from 801 in the previous year. The peak maximum power demand recorded was 20.4 MW. The rebound experienced during the year in the property market improved the take-up of tenancies at Kuala Lumpur Sentral and boosted the demand for electricity. Wirazone s mission is to provide an excellent standard and distinctive quality of service to its customers. Wirazone s commitment is manifested through its Customer Charter and its Quality Policy under the MS ISO9001:2000 Quality Management System. The company s high standard of technical performance is reflected by its achievement of a System Average Interruption Duration Index of minutes per customer and System Average Interruption Frequency Index of interruptions per customer recorded during the year under review. Electricity sales and total revenue garnered by Wirazone are expected to be further improved as more customers move into the KL Sentral area and register to be served. The next sub-parcel developments nearing completion are Lot N (office tower), Lot J (offices towers and leisure centre) and Lot L (condominium). All are slated to be occupied by the end of 2008.

67 Page: 65

68 Page: Malakoff corporation Berhad ( V) 66 Annual Report 2007 performance review by md/ceo (con t) Ventures

69 Page: 67 Malakoff is AN active market player in developing power and water related projects in the middle east, north africa, south asia and south east asia. The Company s Ventures division has been making gains into the international market winning projects during the period under review.

70 Page: Malakoff corporation Berhad ( V) 68 Annual Report 2007 performance review by md/ceo (con t) The Shuaibah III project was the first power and desalination project which the company participated in a consortium made up of Tenaga Nasional Berhad (Malaysia s biggest power utility), Khazanah (Malaysian Government Treasury investment arm) and Acwa Power Ltd of Saudi Arabia. Following the successful bid and start of construction of the Shuaibah III project, the consortium was awarded the Shuaibah III expansion where it was to finance, design, construct and operate an adjacent 150,000m3/day seawater desalination plant using the reverse osmosis technology. This brings the total desalination capacity of the Shuaibah III project to 1,030,000m3/day. This expansion project is to be undertaken on a fast track basis and commercial operation date is expected in December The engineering, procurement and commissioning ( EPC ) contractor is Doosan of Korea, the same EPC contractor for the main Shuaibah III (desalination portion). Following the success in Shuaibah, the company submitted a solicited proposal to the Ministry of Energy and Mines of Algeria for the development of a 200,000m3/day seawater desalination using reverse osmosis technology. The proposal was accepted by the government. The partner in the investor consortium is Hyflux Ltd of Singapore while the Algerian Energy Company, a government owned investment company, takes up 49% in the special purpose company developing the project. The project achieved financial close in January 2008 and construction started immediately after. The commercial operation date is expected in January 2010 supplying potable water to Algerienne des Eaux, the national water distribution company. Meanwhile, in Jordan the company continued its success as part of the winning consortium called Enara bidding for 51% equity stake in CEGCO, the power generation company that once was owned by the government. The company owns several power plants totaling 1,665 MW in the country. The partners in the bidding consortium are Jordan Dubai Capital of Jordan and Consolidated Contractors Ltd of Greece. The strength and experience of Malakoff in operating various types of power plants in Malaysia was the major factor in clinching the deal with CEGCO. The government of Jordan recognized that Enara can tap Malakoff s technical and operational experience to move CEGCO forward successfully. Jordanian Minister of Finance, as the representative of the Government of Jordan, signed the CEGCO Share Sale Agreement with Enara on 19th May The completion of the takeover was achieved in October In South East Asia, Malakoff is focusing on development opportunities in countries like Singapore, Indonesia, Philippines, and Vietnam. The countries in South East Asia are rich in resources; some having huge potential for hydro, whilst others have abundance of coal and gas. Going forward, the demand for electricity is expected to remain high given the potential rate of growth and development in these developing countries. South East Asia provides the opportunities for development of the power industry. Challenges such as regulations, legal framework, off-taker credit risk, political influence, investors competition and other factors would need to be addressed and mitigated. Malakoff is keen to participate with suitable partners to develop opportunities within the region for the medium to long term. In conclusion, Malakoff is an active market player in developing power and water related projects in the regions of focus that has been identified. It is keen to work with partners whether they are technical or financial corporations to develop the industry that will always be growing given the demand for power and water is always on the rise. We develop these infrastructures with a long term goal of benefiting the stakeholders of the project. We intend to become a major player in the industry and look forward to many successful projects in the future with our partners.

71 Page: 69 project Management The Group s in-house projects are undertaken by its project management subsidiary company, Malakoff Engineering Sdn Bhd ( MESB ). MESB provides project management services including negotiation and execution of engineering, procurement and construction contracts, as well as liaising with sub-contractors, bankers engineers and relevant authorities in ensuring that projects are completed on time, within budget and meet the quality standards as spelt out by the specifications. Amongst the projects successfully managed by MESB were the 1,303 MW Lumut Power Plant, the 640 MW GB3 Power Plant in Lumut, MNI Co-generation Plant in Mentakab, Juru-Bayan Lepas 275 kv Substations and Submarine Cables in Penang, 500 kv Transmission Tower Helicopter Erection, District Cooling System & Electrical Distribution System for KL Sentral and 2,100 MW Tanjung Bin Power Plant in Johor. Currently MESB provides project management services to the Asset Management Division of Malakoff Corporation Berhad ( Malakoff ).

72 respect for individuals means treating others with respect in all aspects of working relationship, and appreciating the unique contributions they make to our business.

73 respect for individual

74 Page: 72 Malakoff corporation Berhad ( V) Annual Report 2007 CORPORATE responsibility

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

76 Page: 74 Malakoff corporation Berhad ( V) Annual Report 2007 Corporate Responsibility (cont d) HUMAN RESOURCEs DEVELOPMENT The strength of any organisation lies in a competent and well trained workforce, working cohesively to achieve the organisation s objectives. Our business and operational targets have been achieved through the dedication and skills of our people. Nonetheless, their knowledge and capabilities need to be constantly enhanced so that we can maintain our competitive edge and remain at the forefront of our industry. This is undertaken through a comprehensive staff training schedule that covers functional and soft skills as well as on-the-job training, based on proper needs identification. Following the rapid growth of Malakoff, the Human Resources Department has devoted its efforts to achieving such aspirations. As the demands and requirements for skilful and knowledgeable manpower increases, more specialised training initiatives have been developed. To date, we have a plant-specific training simulator at each power plant, providing a platform to simulate realistic power plant scenarios for effective training and competency assessment of our plant operators. Malakoff s human resources development efforts extend beyond our own staff. In September 2007, we launched the Executive Development programme targeted towards fresh graduates to develop their competencies through training and on the job experience. The practical understanding and exposure gained in the programme will assist them in ensuring that they understand the business processes and strategies in the Group. We also provide Segari Energy Ventures ( SEV ) scholarships to deserving undergraduates at Universiti Tenaga Nasional, which aim to encourage and assist young people in pursuing relevant courses. Five scholarships were awarded for the academic year 2006/2007, bringing the total number awarded to 42 since these scholarships were introduced in 1997.

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

78 Page: Malakoff corporation Berhad ( V) 76 Annual Report January 2007 Contribution to fire victims On January 7, 2007, five (5) houses were totally burn down at Kampung Kayan, Perak leaving these families homeless. Malakoff have visited the area and contributed RM2,000 to the respective victims. 18 January 2007 Annual General Meeting Malakoff Berhad held its 14th Annual General Meeting at Mutiara Crowne Plaza, Kuala Lumpur. 2 FEBRUARY 2007 MALAKOFF ORPHANAGE VISIT Malakoff visited Rumah Limpahan Kasih in Puchong on February 2, Malakoff made a cash contribution of RM15,000 to upgrade the facilities at the orphanage. 8 march 2007 Bond Holders Meeting Malakoff Berhad held its Bond Holders Meeting at Mutiara Crowne Plaza, Kuala Lumpur. 28 april 2007 malakoff family day 2007 Malakoff staff and family members were treated at Genting Highlands Resort for a grand Annual Dinner. CORPORATE event highlights

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

80 Page: Malakoff corporation Berhad ( V) 78 Annual Report 2007

81 80 Directors Report 84 Statement by Directors 84 Statutory Declaration 85 Report of the Auditors 86 Balance Sheets 88 Income Statements 89 Statements of Changes in Equity 90 Cash Flow Statements 92 Notes to the Financial Statements Financial Statements

82 Page: Malakoff corporation Berhad ( V) 80 Annual Report 2007 Directors report for the year ended 31 December 2007 The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the year ended 31 December Principal activity The Company is principally engaged in investment holding company and provision of management services to it subsidiaries. The principal activities of the subsidiaries are shown in Note 6 to the financial statements. There has been no significant change in the nature of these activities during the financial year. Change of name On 25 April 2007, the Company had changed its name from Nucleus Avenue (M) Berhad to Malakoff Corporation Berhad. Results Group Company R rm 000 RM 000 Profit attributable to: Shareholders of the Company 217, ,884 Minority interest 51, , ,884 Reserves and provisions There were no material transfers to or from reserves and provisions during the year under review. Dividend Since the end of the previous financial year, the Company paid: (i) an interim ordinary dividend of approximately 9.1 sen per share less 27% tax totalling RM23,360,000 in respect of the year ended 31 December 2007 which was paid on 7 December 2007; and (ii) an interim preference dividend of RM1 per share less 27% tax totalling RM36,640,000 in respect of the year ended 31 December 2007 which was paid on 7 December 2007.

83 Page: 81 Directors report for the year ended 31 December 2007 (cont d) Directors of the Company The Directors who served since the date of the last report are: Director Tan Sri Abdul Halim bin Ali (Chairman) (appointed as Director on 24 May 2007) (appointed as Chairman on 26 October 2007) alternate Director Ahmad Jauhari bin Yahya (Managing Director/Chief Executive Officer) (appointed as Director on 30 April 2007) Feizal Ali Azlan bin Shahrim (appointed on 6 November 2007) Hasni bin Harun (resigned on 24 May 2007) Yoong Nim Chee Hasni bin Harun (appointed on 24 May 2007) Tan Ler Chin (appointed on 9 August 2007) Azian binti Mohd Noh (appointed on 9 August 2007) Andrew Ian Rowan Yee (appointed on 9 August 2007) Vijay Vijendra Sethu (appointed on 9 August 2007) Dato Wira Syed Abdul Jabbar bin Syed Hassan (resigned on 24 May 2007) Directors interests None of the Directors holding office at 31 December 2007 had any interest in the ordinary shares of the holding company and of its related corporations during the financial year. Directors benefits Since the end of the previous period, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements) by reason of a contract made by the Company or a related company with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest. There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

84 Page: Malakoff corporation Berhad ( V) 82 Annual Report 2007 Directors report for the year ended 31 December 2007 (cont d) Issue of shares During the financial year, the Company issued: (i) 351,344,028 new ordinary shares of RM1 each at an issue price of RM10 per share for cash for investment purposes. (ii) 50,192,004 new redeemable convertible preference shares of RM0.10 each at an issue price of RM10 per share for cash for investment purposes. There were no other changes in the issued and paid-up capital of the Company during the financial year. Options granted over unissued shares No options were granted to any person to take up unissued shares of the Company during the financial year. Other statutory information Before the balance sheets and income statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that: (i) all known bad debts have been written off and adequate provision made for doubtful debts, and (ii) all current assets have been stated at the lower of cost and net realisable value. At the date of this report, the Directors are not aware of any circumstances: (i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the Group and in the Company inadequate to any substantial extent, or (ii) (iii) (iv) that would render the value attributed to the current assets in the Group and in the Company financial statements misleading, or which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or not otherwise dealt with in this report or in the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading. At the date of this report, there does not exist: (i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or (ii) any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year. No contingent liability or other liability of the Group and of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Company to meet its obligations as and when they fall due.

85 Page: 83 Directors report for the year ended 31 December 2007 (cont d) Other statutory information (cont d) In the opinion of the Directors, other than as disclosed in the financial statements, the results of the operations of the Group and of the Company for the financial year ended 31 December 2007 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report. Significant events On 30 April 2007, the Company completed its acquisition of the securities of all the subsidiaries and the associate companies of Malakoff Berhad (Malakoff) together with all the assets of Malakoff (other than cash balance in Malakoff and the above securities) and the transfer, assignment or novation of all liabilities of Malakoff for a cash consideration of RM9,307,599,771 less any available cash in Malakoff ( Acquisition ). On the same date, the Company also completed its fund raising exercise through the issue of new ordinary shares of RM1.00 each together with new redeemable convertible preference shares of RM0.10 each, cumulative non-convertible Islamic Junior Sukuk and Islamic Commercial papers and Medium Term Notes Issuance Programme ( Senior Sukuk ) to finance the Acquisition. Auditors The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors: Chairman Tan Sri Abdul Halim bin Ali Managing Director/Chief Executive Officer Ahmad Jauhari bin Yahya Kuala Lumpur, Date: 21 February 2008

86 Page: Malakoff corporation Berhad ( V) 84 Annual Report 2007 Statement by Directors pursuant to Section 169(15) of the Companies Act, 1965 In the opinion of the Directors, the financial statements set out on pages 86 to 136 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved Financial Reporting Standards issued by the Malaysian Accounting Standards Board so as to give a true and fair view of the state of affairs of the Group and of the Company at 31 December 2007 and of the results of their operations and cash flows for the year ended on that date. Signed in accordance with a resolution of the Directors: Chairman Tan Sri Abdul Halim bin Ali Managing Director/Chief Executive Officer Ahmad Jauhari bin Yahya Kuala Lumpur, Date: 21 February 2008 Statutory declaration pursuant to Section 169(16) of the Companies Act, 1965 I, Ho Chee Sheong, the officer primarily responsible for the financial management of Malakoff Corporation Berhad, do solemnly and sincerely declare that the financial statements set out on pages 86 to 136 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, Subscribed and solemnly declared by the above named in Kuala Lumpur on 21 February Ho Chee Sheong Before me: