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2008 Malakoff Annual Report

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2008 Malakoff Annual Report Powered By Docstoc
					PreParing
for the future
Our people is instrumental to the
continued success of Malakoff as we
build our foundations on the strength
of competency.

T h e c o v e r a c k n o w le d g e s t h e
contribution of every man and
woman at Malakoff who have been
instrumental in the journey of
the Group, as we look ahead with
optimism onto the next level of
challenges.
                                                                          001
Malakoff                             annual
Corporation                          report
Berhad                               2008




Our Vision
TO be a LeaDING POWeR & WaTeR PROvIDeR



COrPOrate Values
  Integrity
  Teamwork
  Innovation
  excellence
  Respect for Individual




Our Mission
In striving to enhance stakeholders’ value and achieve our vision, we seek to:
  Develop and utilise local expertise;
  Share knowledge and spur the growth of the power and water sectors; and
  Promote innovation in all aspects of our business.
                                                                                             002
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table                               auDit COMMittee                          COrPOrate resPOnsibility

of contents                         032 audit Committee                      070 Corporate Responsibility
                                                                                     Health, Safety and
                                    COrPOrate PerfOrManCe                            environment (“HSe”)
                                                                                     Human Resource
001 Our Mission & vision            034 Statement by Chairman
                                                                                     Development
003 Group Financial & Performance   040 Performance Review by MD/CeO
                                                                                     Corporate Community
    Highlights                               asset Performance
                                                                                     Investment
004 Corporate Profile                        Operations & Maintenance
                                                                                     enterprise Risk Management
008 Corporate Information                    (“O&M”)
                                                                                     (“eRM”)
009 Malakoff Shareholders’                   electricity Distribution &              Organisational Development
010 Corporate Structure                      Chilled Water Supply
                                             ventures                        COrPOrate event
DireCtOrs’ PrOfiles                          Project Management              HigHligHts
                                             Information Technology (“IT”)
014 board of Directors                                                       078 Corporate event Highlights
                                             enterprise applications
016 Profile of board of Directors
                                                                             finanCial stateMents
ManageMent teaM
                                                                             083 Financial Statements
025 Organisational Structure
026 Individual Profiles of Key
    Members of Management Team
                                                                                    003
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grOuP finanCial
& PerforMance highlights
	                                                  	                  	   	           2008	        2007
	                                                  	                  	   	         RM’000	      RM’000

Revenue                                                                         5,121,267       2,701,998

Profit before taxation                                                              318,560      323,769

Profit after tax & minority interest                                                138,789      217,297

as at 31 December
Paid-up capital                                                                     351,344      351,344

Shareholders’ funds                                                             4,191,529      4,172,439

Total assets employed                                                         23,624,275      23,457,579

Per share (sen)
earnings                                                                                40               62

Dividend (gross)                                                                        32                9

Net assets                                                                            1,193            1,188



    revenue                                            PrOfit after tax & MinOrity interest
    (RM Million)                                       (RM Million)




      08                               5,121             08                   139


      07                 2,702                           07                                      217




    sHareHOlDers’ funDs                                tOtal assets eMPlOyeD
    (RM Million)                                       (RM Million)




      08                               4,192             08                                   23,624


      07                               4,172             07                                   23,458



    earnings Per sHare                                 net assets Per sHare
    (Sen)                                              (Sen)




      08                          40                     08                                     1,193


      07                                  62             07                                    1,188
                                                            004
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COrPOrate
Profile



      Malakof f Corporation berhad
      (“Malakoff”) is one of the leading
      independent power and water
      producers based in asia with an
      exc e l l e n t r e p u t a t i o n . O u r c o r e
      business includes power generation,
      water desalination and operations &
      maintenance services. in Malaysia, we
      own an effective generation capacity
      of 5,020 MW comprising of 6 power
      stations that run on gas, oil and coal.
                                                                                         005
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                                                               Furthermore, Malakoff provides services through
                                                               its wholly-owned subsidiary companies:
                                                                  O p er ation s and maintenance (“O &M”)
              Malakoff’s power generation assets are held         ser vices through wholly-owned Teknik
              through a number of subsidiaries and associate      Janakuasa Sdn bhd (“TJSb”), one of the
              companies:                                          leading O&M service providers in Malaysia
                 Lumut Power Plant through a 93.75% equity
                 interest in Segari energy ventures Sdn bhd       electricity distribution activities through
                 (“Sev”)                                          W ir azone Sdn bhd (“ W IR a ZONe”) a
                                                                  wholly-owned subsidiar y, that currently
                 Gb3 Power Plant through a 75.0% equity           supplies centr alised chilled water and
                 interest in Gb3 Sdn bhd (“Gb3”)                  distributes electricit y to the landmark
                                                                  Kuala Lumpur Sentral development (“KL
                 Prai Power Plant through its wholly-owned        Sentr al ”), which is set to become the
                 subsidiary Prai Power Sdn bhd (“PPSb”)           tr anspor tation and communication hub
                                                                  of Malaysia
                 Tanjung bin Power Plant through a 90.0%
                 equity interest in Tanjung bin Power Sdn         Project management services for in-house
                 bhd (“TbPSb”)                                    and external projects through Malakoff
                                                                  engineer ing (“Me Sb”), a wholly-owned
                 Port Dickson Power Plant through a 25.0%         subsidiary of Malakoff
                 equit y interest in Por t Dickson Power
                 berhad, via its wholly-owned subsidiar y      On the international front, we own a net capacity
                 Hypergantic Sdn bhd                           of 360 MW of power and 213,000 m 3 /day of
                                                               water desalination. These projects are located
                 Kapar Power Station through a 40.0% equity    in Saudi arabia, Jordan, Oman and algeria.
                 interest in Kapar energy ventures Sdn bhd
                 (“Kev”)                                       at Malakoff, we aim to work together with all
                                                               stakeholders for productive partnerships. We
                                                               believe that long-term partnerships re-enforce
                                                               our success. as an asset-centered organisation,
                                                               we maximise the value of assets we manage for
                                                               our shareholders and partners. We do this by
                                                               fully understanding the elements of cost, risk
                                                               and performance unique to the environment in
                                                               which we operate.
                t
            aboueness
   etsbevck that binds the
      i ro
Coh he d  rk is
  Teamwo f our diversity
           o
  strength
                                                                                         008
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Berhad                                      2008




Corporate
InformatIon


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

AHMAD JAUHARI YAHYA                         DATO’ AZIAN MOHD NOH
Managing Director/Chief Executive Officer   Non-Independent Non-Executive Director

DATUk HAJI HASNI HARUN                      ANDREW ROWAN IAN YEE
Non-Independent Non-Executive Director      Non-Independent Non-Executive Director

YOONG NIM CHEE                              VIJAY VIJENDRA SETHU
Non-Independent Non-Executive Director      Alternate Director to Andrew Rowan Ian Yee

MABEL LEE kHUAN EOI
Non-Independent Non-Executive Director




Company seCretaries                         registereD offiCe
SAMANthA YEOh SOO MEI                       Level 8, kompleks Antarabangsa
(MAICSA 7032259)                            Jalan Sultan Ismail
ShARIfAh LAILA fARINA SYED MOhD             50250 kuala Lumpur
(LS 0008736)
                                            tel: +603-2142 4777
                                            fax: +603-2148 9887
                                            website: www.malakoff.com.my

auDit Committee members
DAtuk hAJI hASNI hARuN (Chairman)           auDitors
YOONG NIM ChEE                              kPMG
AhMAD JAuhARI YAhYA
ANDREw ROwAN IAN YEE                        prinCipaL banKer
                                            Malayan Banking Berhad

remuneration Committee
members                                     CorresponDenCe aDDress
tAN SRI ABDuL hALIM ALI (Chairman)          Level 12, Block 3B, Plaza Sentral
DAtuk hAJI hASNI hARuN                      Jalan Stesen Sentral 5
                                            50470 kuala Lumpur
CINDY tAN LER ChIN
                                            tel: +603-2263 3388
                                            fax: +603-2263 3333
                                            website: www.malakoff.com.my
                                      009
Malakoff      annual
Corporation   report
Berhad        2008




maLaKoff
shareholders’
                       51%
                       MMC CORpORATION BERHAD


                       30%
                       EMpLOYEES pROVIDENT FUND


                       10%
                       kUMpULAN WANG pERSARAAN
                       (Diperbadankan)


                       6.5%
                       STANDARD CHARTERED IL & FS ASIA
                       INFRASTRUCTURE GROWTH FUND COMpANY
                       pTE LIMITED


                       2.5%
                       SEASAF pOWER SDN BHD
                                                                                       010
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COrPOrate
structure




                                  OPeratiOns anD                                   eleCtriCity
 POWer generatiOn                 MaintenanCe serviCes                             DistributiOn



 93.75%                           100%                                             100%
 Segari energy ventures Sdn bhd   Teknik Janakuasa Sdn bhd                         Wirazone Sdn bhd
 	 5%	
 7                                	     1
                                        	 00%	
 Gb3 Sdn bhd                            Natural analysis Sdn bhd
 1
 	 00%	                           	     1
                                        	 00%	
 Prai Power Sdn bhd                     TJSb International Limited
 90%                              	     	   100%	
 Tanjung bin Power Sdn bhd                  TJSb International (Shoaiba) Limited
 4
 	 0%	                            	     	   	   20%	
 Kapar energy ventures Sdn bhd                  Saudi-Malaysia Operation &
                                                Maintenance Services Company
 	 00%	
 1
                                                Limited
 Hypergantic Sdn bhd
 	   	 5%	
     2                            	     	   	   20%
     Port Dickson Power berhad                  al-Imtiaz Operation &
                                                Maintenance Company Limited
                                  	     	   100%	
                                            TJSb Middle east Limited

                                  	     	   100%	
                                            TJSb Global Sdn bhd

                                                49%	
                                  	     	   	   Hyflux-TJSb algeria SPa
                                                                                                                               011
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Berhad                                                      2008




 PrOjeCt
 ManageMent                                        OffsHOre                                                                OtHers



 100%                                               100%                                                                   100%
 Malakoff engineering Sdn bhd                       Malakoff International Limited                                         Tuah utama Sdn bhd
 	       100%	                                      	   	 00%	
                                                        1                                                                  	    2
                                                                                                                                	 0%	
 	       	 eSb Project Management
         M                                              Malakoff Gulf Limited                                                   Lekir bulk
         Sdn bhd                                    	   	    40%	                                                               Terminal
                                                             Malaysian Shoaiba Consortium                                        Sdn bhd
                                                             Sdn bhd (“MSCSb”)
                                                                                                                           5
                                                                                                                           	 4%	
                                                    	   	    	   20%	                                                      Desa Kilat Sdn bhd
                                                                 Saudi-Malaysia Water & electricity
                                                                 Company Limited (“SaMaWeC”) II                            1
                                                                                                                           	 00%	
                                                    	   	    	   	   12%	                                                  Transpool Sdn bhd I
                                                                     Shuaibah Water & electricity
                                                                     Company Limited (“SWeC”) II
                                                    	   	    	   	   12%
                                                                     Shuaibah expansion Holding
                                                                     Company Limited (“SeHCL”) lll
     100%                                           	   	    	   	   	   11.7%
     Malakoff Technical (Dhofar) Limited                                 Shuaibah expansion Project lll
     	    	 3.4%	
          4                                                              Company Limited (“SePCL”)
          Oman Technical Partners Limited (“OTPL”) lv
     	    	   43.4%	
              Salalah Power Holdings Limited (“SPHL”) lv
     	    	   	   20%	
                                                                                 I     Dormant
                  Dhofar Power Company SaOG (“DPC”) lv
                                                                                 II    Malakoff’s effective equity interest of 20% and 12% in
     100%                                                                              SAMAWEC and SWEC, respectively, is held via Malakoff
     Malakoff alDjazair Desal Sdn bhd (“MaDSb”)                                        Gulf Limited which holds 40% equity interest in MSCSB
                                                                                       which in turn holds 50% equity interest in SAMAWEC.
     	    70%
                                                                                       SAMAWEC holds 60% equity interest in SWEC.
          Tlemcen Desalination Investment Company SaS (“TDIC”)
                                                                                 lll   Malakoff’s effective equity interest of 11.7% in SEPCL is
     	    	   35.7%                                                                    held via Malakoff Gulf Limited which holds 40% equity
              almiyah attilemcania SPa (“aaS”) v                                       interest in MSCSB which in turn holds 50% equity interest
                                                                                       in SAMAWEC. SAMAWEC holds 60% in SEHCL which in turn
     100%                                                                              holds 97.5% equity interest in SEPCL.
     Malakoff Jordan Generation Limited (“MJGL”)                                 IV    Malakoff’s effective equity interest of 20% in DPC is
     	    25%                                                                          held via Malakoff Technical (Dhofar) Limited which
          enara energy Investment Company (“eNaRa”)                                    holds a direct 43.4% equity interest in OTPL which in
                                                                                       turn holds 100% equity interest in SPHL. SPHL holds
     	    	   12.75%                                                                   46% equity interest in DPC, a publicly traded company
              Central electricity Generating                                           listed on the Muscat Securities Market of the Sultanate
              Company Limited (“CeGCO”) vI                                             of Oman.

     100%                                                                        V     Malakoff’s effective equity interest of 35.7% in AAS is
                                                                                       held via MADSB which holds 70% equity interest in
     Malakoff Ras azzour Limited
                                                                                       TDIC which in turn holds 51% equity interest in AAS.
     (f.k.a Kuwmal Investments Limited)
                                                                                 VI    Malakoff’s effective equity interest of 12.75% in CEGCO
     100%                                                                              is held via MJGL which holds 25% equity interest in
     Spring assets Limited I                                                           ENAR A which in turn holds 51% equit y interest in
                                                                                       CEGCO.
     100%
     Malakoff Capital (L) Ltd I
           about
adaptability
 The winds of change will test
 our determination to embrace
 challenges by being flexible
                                                                                    014
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   bOarD Of
   directors




                       TaN SRI abDuL HaLIM aLI
                       Chairman                    DaTuK HaJI HaSNI HaRuN
DaTO’ aZIaN MOHD NOH

                                                                            MabeL Lee KHuaN eOI
                                                                                015
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 Berhad                               2008




CINDY TaN LeR CHIN                        aHMaD JauHaRI YaHYa       vIJaY vIJeNDRa SeTHu
                                          Managing Director/
                                          Chief executive Officer
                     YOONG NIM CHee                                            aNDReW ROWaN IaN Yee
                                                                                016
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Berhad                         2008




PrOfile Of
board of directors


                                        Ybhg. Tan Sri abdul Halim ali, aged 66, was appointed to
                                        the board of Malakoff Corporation berhad (“Malakoff”) on 24
                                        May 2007 and assumed the post of Chairman of the board on
                                        26 October 2007. He is also Chairman of the Remuneration
                                        Committee.

                                        He holds a bachelor of arts (Honours) Degree from the
                                        university of Malaya, Malaysia.

                                        Tan Sri abdul Halim ali joined the Malaysian Foreign Service
                                        soon after graduation in 1966. He served in various positions
                                        at the Ministry of Foreign affairs as well as in Malaysian
                                        diplomatic missions overseas. His early postings included the
                                        Malaysian High Commission in New Delhi, India, the Malaysian
                                        Consulate in Medan of Indonesia and the Malaysian embassy
                                        in Tokyo, Japan. In 1979 he was posted to the united Nations
                                        in New York, as Malaysia’s Deputy Permanent Representative.
                                        In 1982, he was appointed as Malaysian ambassador to the
                                        Socialist Republic of vietnam, returning to Kuala Lumpur
                                        in 1985 to assume the post of Deputy Secretary-General
                                        (III), Ministry of Foreign affairs. In 1988, he was appointed
                                        ambassador of Malaysia to austria, where he also held the
                                        position of Resident Representative to uNIDO, Iaea and the
                                        united Nations Office in vienna, austria. In 1991, he returned
                                        to Malaysia to assume the post of Deputy of Secretary-
                                        General (1), Ministry of Foreign affairs. after a short stint as
                                        Secretary-General of the Ministry, he was appointed Chief
                                        Secretary to the Government in September 1996, a post he
                                        held until his retirement in January 2001. Thereafter he was
                                        appointed Chairman of ePF (January 2001- January 2007)
                                        and Chairman of Malakoff berhad (September 2001 to 4th
                                        July 2007).

                                        Currently, he is also the Chairman of Malaysian building
          tan sri abDul HaliM ali
                                        Society berhad, a subsidiary of employees Provident Fund
                           CHaIRMaN     (“ePF”), the university of Technology Malaysia and the
                                        Multimedia Development Corporation berhad. He also holds
                                        Directorship in eSSO Malaysia berhad, IJM Corporation
                                        berhad and LCL Corporation berhad.
                                                                                            017
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Berhad                                              2008




encik ahmad Jauhari Yahya, aged 55, a Malaysian, is
currently the Managing Director/Chief executive Officer of
Malakoff Corporation berhad (“Malakoff”). He was appointed
to the board on 30 april 2007 and is a member of the audit
Committee of the board.

He is also a member of the board of Port Dickson Power
berhad, MMC Corporation berhad, aliran Ihsan Resources
berhad, Kapar energy ventures Sdn bhd and Malakoff
alDjazair Desal Sdn bhd.

                                                                 aHMaD jauHari yaHya
He holds a bachelor of Science (Honours) degree in electrical
                                                                 MaNaGING DIReCTOR/CHIeF exeCuTIve OFFICeR
and electronics engineering from university of Nottingham, uK.

encik ahmad Jauhari has managed many large technical
projects and held senior management positions in The New
Straits Times Press (M) berhad (Director and Senior Group
General Manager), Time engineering berhad (Managing
Director) and Malaysian Resources Corporation berhad
(Managing Director, executive vice President and Director).

On the international front, he is trusted as a Director and
Chairman of executive Committee of Central electricity
Generating Company Limited (Jordan) and Director of Shuaibah
expansion Project Company Limited (Saudi arabia).

at present, encik ahmad Jauhari is the Honorary President of
Penjanabebas (association of Independent Power Producers
in Malaysia).
                                                                                          018
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Berhad                                   2008




profile of board of directors




                                                  Datuk Haji Hasni Harun, aged 52, was appointed to the
                                                  board on 24 May 2007 and is the Chairman of the audit
                                                  Committee and a member of the Remuneration Committee
                                                  of the board.

                                                  He graduated with a bachelor of accounting (Honours)
                                                  degree from the university of Malaya in 1980, and holds a
                                                  Master’s degree in business administration from united
                                                  States International university, San Diego, California, uSa. He
                                                  is also a member of the Malaysian Institute of accountants.

                                                  He is presently the Chief executive Officer, Malaysia of MMC
                                                  Corporation berhad (“MMC”) having been its Group Chief
                                                  Operating Officer from January 2007 to February 2008. Prior
                                                  to joining MMC, he was the Group Chief Financial Officer
                                                  of DRb-Hicom berhad (2006), Managing Director of RHb
                                                  asset Management Sdn bhd (2001-2006), and Senior General
                                                  Manager of the Investment Department at the employees
                                                  Provident Fund board (1994-2001). He had held several senior
                                                  positions in the accountant General’s Office (1980-1994).

                                                  His directorships in other companies include MMC, Zelan berhad,
                                                  Johor Port berhad, IJM Corporation berhad, MMC engineering
                                                  Group berhad and aliran Ihsan Resources berhad.




          DatuK Haji Hasni Harun
        NON-INDePeNDeNT NON-exeCuTIve DIReCTOR




OneMind: Malakoff 08AR_030408_12am
                                                                                      019
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Berhad                                  2008




                                                 Mr. Yoong Nim Chee, aged 49, a Malaysian was appointed to
                                                 the board on 16 May 2006 and is also a member of the audit
                                                 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 in the finance sector. He was Director, Corporate
                                                 affairs of MMC Corporation berhad from (2006-2008);
                                                 currently he is the executive Director of Zelan berhad.

                     yOOng niM CHee
                                                 He is also a board member of Zelan berhad, Kramat Tin
       NON-INDePeNDeNT NON-exeCuTIve DIReCTOR
                                                 Dredging berhad and Integrated Rubber Corporation berhad.
                                                                                        020
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Corporation                              report
Berhad                                   2008




profile of board of directors




                                                  Dr. Mabel Lee, 53, a Malaysian, was appointed to the
                                                  board on 11 april 2008. She is currently the Senior General
                                                  Manager of Corporate Planning at MMC Corporation berhad
                                                  (“MMC”). Prior to joining MMC, she had worked with JP
                                                  Morgan Chase’s Kuala Lumpur office as vice President of its
                                                  Investment banking Division.

                                                  Dr. Mabel Lee is a Chartered Financial analyst Charterholder
                                                  and holds a bachelor of accounting (First Class Honours)
                                                  degree from universiti Malaya, Mba (with Distinction) from
                                                  university of Hull, united Kingdom and Doctor of business
                                                  administr ation degree from universit y of Newcastle,
                                                  australia.

                                                  She is a member of the Malaysian Institute of accountants,
                                                  an associate Member with Institut bank-bank Malaysia, a
                                                  member of the Institute of Chartered accountants in england
                                                  and Wales (“ICaeW”), Corporate Finance Faculty and is a
                                                  Certified business Coach.




                   Mabel lee KHuan eOi
        NON-INDePeNDeNT NON-exeCuTIve DIReCTOR




OneMind: Malakoff 08AR_030408_12am
                                                                                       021
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Berhad                                  2008




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

                                                 She holds an Honours Degree in economics, majoring in
                                                 statistic, from universiti Kebangsaan Malaysia. In 1991,
                                                 she obtained a Cer tified Diploma in accounting and
                                                 Finance, accorded by the Chartered association of Certified
                                                 accountants.

                                                 She is currently the Head of Treasury Department, Investment
                                                 Division of the employees Provident Fund (“ePF”). She
                                                 is also a Director of Malaysia building Society berhad, a
                                                 subsidiary of ePF.




                CinDy tan ler CHin
       NON-INDePeNDeNT NON-exeCuTIve DIReCTOR
                                                                                       022
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Berhad                                  2008




profile of board of directors




                                                 Dato’ azian Mohd Noh, Malaysian, aged 56, was appointed
                                                 to the board of Malakoff Corporation berhad on 9 august
                                                 2007. She is a graduate of universiti Malaya with bachelor of
                                                 economics (Honors) accounts and has a Master in business
                                                 administration from universiti Kebangsaan Malaysia. She is
                                                 also a member of the Malaysian Institute of accountants.

                                                 Dato’ azian started her career as a Treasury accountant and
                                                 served at the accountant General’s Department and Ministry
                                                 of Public enterprise between 1980 to 1982. She has held
                                                 several senior positions at the accountant General’s Office
                                                 prior to her appointment as Director Of Kumpulan Wang
                                                 amanah Pencen (KWaP) in 1991. On 1 March 2007, Dato’
                                                 azian was appointed as the first Chief executive Officer of
                                                 Kumpulan Wang Persaraan (Diperbadankan) (Retirement
                                                 Fund Incorporated), a newly incorporated statutory body.

                                                 Dato’ azian also sits on the boards of Time dotCom berhad,
                                                 valuecap Sdn bhd and the Chairman of ivCap Management
                                                 Sdn bhd.




              DatO’ aZian MOHD nOH
       NON-INDePeNDeNT NON-exeCuTIve DIReCTOR
                                                                                         023
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Berhad                                  2008




                                                 Mr. andrew Rowan Ian Yee, aged 44, an australian citizen,
                                                 was appointed to the board on 9 august 2007.

                                                 He holds a bachelor of Commerce degree, majoring in
                                                 accounting and a bachelor of Law degree from the university
                                                 of New South Wales, Sydney, australia. He is also qualified
                                                 to practice law in australia.

                                                 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
              anDreW rOWan ian yee
                                                 Finance team in 2007 as a Managing Director and Global
       NON-INDePeNDeNT NON-exeCuTIve DIReCTOR
                                                 Head of Infrastructure. He has 20 years of infrastructure
                                                 experience gained from positions in investment banking,
                                                 industry and private equity.

                                                 Prior to joining Standard Chartered and launching SCI asia,
                                                 he founded Renewable energy asia Pacific, a renewable
                                                 energy fund. He was also Head of Mergers and acquisitions
                                                 at InterGen asia where he participated in the uS$3.3 billion
                                                 sale of InterGen to a partnership between aIG and the
                                                 Ontario Teachers’ Pension Plan during 2004 and 2005.
                                                 Prior to InterGen, andrew was Head of Goldman Sachs
                                                 asia’s energy & Power advisory team, based in Hong Kong.
                                                 He was also a Director of Corporate Finance at barclays
                                                 australia which was acquired by abN aMRO in 1997, prior to
                                                 which he worked in the Corporate Finance team of barclays
                                                 in London.

                                                 His deal experience includes the Initial Public Offering of
                                                 british Sky broadcasting, secondary offerings of National
                                                 Power and PowerGen, acquisitions of british Coal and
                                                 Powercor australia, and the sale of australian airports in
                                                 Melbourne, brisbane and Perth.
                                                                                       024
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Berhad                                  2008




profile of board of directors




                                                 Mr. vijay vijendra Sethu, aged 44, an australian citizen, is
                                                 the alternate Director to Mr. andrew Rowan Ian Yee and was
                                                 appointed to the board on 9 august 2007.

                                                 He has a Master of business administration from auckland
                                                 university and is a Fellow of the association of Chartered
                                                 Certified accountants in united Kingdom, an associate of
                                                 the New Zealand Society of Chartered accountants and a
                                                 graduate member of Chartered Institute of Management
                                                 accountants in united Kingdom.

                                                 He is currently the Chief executive Officer (“CeO”) of CIMb
                                                 Standard Strategic asset advisors Sdn bhd (“SeaSaF”).
                                                 Prior to becoming the CeO of the SeaSaF, vijay spent four
                                                 years with australia New Zealand (“aNZ”) Investment bank
                                                 in Singapore where he was the Head of Power and later
                                                 the executive Director, Head of Project and Structured
                                                 Finance for asia. Prior to joining aNZ Investment bank in
                                                 Singapore, vijay was the vice President and Head of Mergers
                                                 and acquisitions for asia Pacific, africa and China at enron
                                                 International, Singapore. During his time, he was involved
                                                 in numerous oil, gas and power asset reviews. earlier, vijay
                                                 spent 8 years with aNZ Investment bank in Melbourne,
                                                 London and New York. His last position was Head of Global
                                                 Structured Finance for the americas, where the bank focused
                                                 particularly on Latin america and successfully completed
                                                 several resources, oil, gas and power transactions. vijay
                                                 spent the earlier part of his career with KPMG Peat Marwick
                                                 in New Zealand and exxon in Malaysia.




                vijay vijenDra setHu
   aLTeRNaTe DIReCTOR TO aNDReW ROWaN IaN Yee




OneMind: Malakoff 08AR_030408_12am
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OrganisatiOnal
structure
                                                 MD/CeO
                                            AhmAd JAuhAri yAhyA


            DCeO
      mohd rAdzuAn yAhyA

                                                                                  CompAny SeCretAriAl
                                                                                      depArtment

              operAtionS & mAintenAnCe
                       diViSion


                                                                  VentureS i diViSion


              ASSet mAnAGement diViSion


                                                                  VentureS ii diViSion


                mAlAkoFF enGineerinG

                                                                   Group FinAnCe &
                                                                  ACCountS diViSion

               humAn reSourCeS & Admin
                     depArtment

                                                           leGAl SerViCeS depArtment


                   orGAniSAtionAl
               deVelopment depArtment




                    it & enterpriSe
               AppliCAtionS depArtment




              md/Ceo’S oFFiCe & CorporAte
                  AFFAirS depArtment
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Berhad                                                2008




inDiviDual PrOfiles Of
key MeMbers of ManageMent teaM




          ahMad Jauhari YahYa                                               Mohd radzuan YahYa
          Managing Director/Chief executive Officer                             Deputy Chief executive Officer

encik ahmad Jauhari Yahya, aged 55, a Malaysian, is              encik Mohd. Radzuan Yahya, 56, is the Deputy Chief executive
currently the Managing Director/Chief executive Officer of       Officer (“DCeO”) of Malakoff Corporation berhad (“Malakoff”).
Malakoff Corporation berhad (“Malakoff”). He was appointed       He obtained a bachelor of Science degree in Mechanical
to the board on 30 april 2007 and is a member of the audit       engineering from Liverpool university, united Kingdom
Committee of the board.                                          in 1977. He started his career with National electricity
                                                                 board (“Neb”) in 1977 as an assistant Operation engineer
He is also a member of the board of Port Dickson Power           at the Prai Power Plant. He was appointed to the position
berhad, MMC Corporation berhad, aliran Ihsan Resources           of boiler Maintenance engineer at the Pasir Gudang Power
berhad, Kapar energy ventures Sdn bhd and Malakoff               Station between 1981 – 1984. He was then transferred to
alDjazair Desal Sdn bhd.                                         Paka Combined Cycle Power Station as efficiency and Test
                                                                 engineer until 1987. between 1987 to 1993, he assumed the
He holds a bachelor of Science (Honours) degree in electrical    positions of Senior Shift Charge engineer, Senior Mechanical
and electronics engineering from university of Nottingham, uK.   engineer and assistant Station Manager at the Port Dickson
                                                                 Power Station. He joined Teknik Janakuasa Sdn bhd (“TJSb”)
encik ahmad Jauhari has managed many large technical             as Plant Manager for the Lumut Power Plant in 1995. In 1998,
projects and held senior management positions in The New         he was appointed as Chief Operating Officer (“COO”) of TJSb.
Straits Times Press (M) berhad (Director and Senior Group        In 2000, he was transferred to Segari energy ventures Sdn
General Manager), Time engineering berhad (Managing              bhd (“Sev”) to assume the position of COO of Sev. In 2002,
Director) and Malaysian Resources Corporation berhad             he was transferred to Malakoff berhad and promoted to COO
(Managing Director, executive vice President and Director).      and subsequently re-designated to his current position as
                                                                 the DCeO in april 2006.
On the international front, he is trusted as a Director and
Chairman of executive Committee of Central electricity
Generating Company Limited (Jordan) and Director of Shuaibah
expansion Project Company Limited (Saudi arabia).

at present, encik ahmad Jauhari is the Honorary President of
Penjanabebas (association of Independent Power Producers
in Malaysia).
                                                                                                      027
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Berhad                                              2008




               ruswati othMan                                                     nordin kassiM
        Chief Financial Officer/Senior vice President                              Senior vice President
             Group Finance & accounts Division                               Operations & Maintenance Division

Puan Ruswati Othman, aged 49, obtained her bachelor              encik Nordin Kasim, 49, obtained his bachelor Science
of Science degree in Chemistr y and Master of business           (Hons) in electrical engineering from university of Wales,
administration degree (majoring in accounting and Finance)       united Kingdom. He started his career in 1984 as electrical
from university of bradford, england, uK and university of       and Instrumentation engineer with ICI Fer tilizer, ICI
Massachusetts, boston, uSa in 1984 and 1988 respectively.        Industrial Chemicals and ICI agrochemicals (M) Sdn bhd,
She started her career as executive in the Chemical Division     subsidiaries of Chemical Company of Malaysia berhad. He
of behn Meyer & Co. in 1984. She joined Southern bank            was promoted to Maintenance electrical/Instrument Section
berhad as an officer in 1989. She was appointed as assistant     Manager in December 1994. In 1995, he joined bP Chemicals
Manager, Corporate Planning and Investments at Melewar           as electrical & Instrument Supervisor. In December 1997,
Corporation berhad/Maa berhad in 1990. amongst others,           he was re-designated to Deputy Maintenance Manager.
she was involved in the setting up of an international food      He then joined Me aSaT broadcast Network System in
chain and a highway project for the Group. In 1994, she joined   august 1998 as Maintenance Manager, and later joined
Malakoff berhad as Manager, Corporate Planning. In 1997,         Teknik Janakuasa Sdn bhd (“TJSb”) in July 19 9 9 as
she was promoted to Senior Manager and as Head, Research         Maintenance Manager of the Centralised utility Facilities
and Risk Management Department. She was promoted to              (“CuF”) in Gebeng, Kuantan. He steered the formation of
assistant General Manager, Corporate Finance and Risk            Computerized Maintenance Management system, setting
Management in 1999 and as General Manager and Head,              up of Condition based Monitoring, execution of Reliability
Corporate Finance and Risk Management Department in 2000.        Centered Maintenance analysis, production of maintenance
In 2004, she was promoted to the position of Chief Financial     and operation procedures tailored for ISO9001 requirement,
Officer/Senior vice President, Group Finance & accounts          plant safeguarding procedures, alarm response procedures,
Division. Her present responsibility includes managing the       troubleshooting guides and (On-Job-Training) for client’s
Group accounts and Treasury Department and the Corporate         operation and maintenance personnel. He was promoted to
and Project Finance Department. She oversees the overall         Plant Manager in 2002. upon completion of the CuF project
accounting and reporting functions in Malakoff Corporation       in October 2004, he was transferred to Prai Power Plant
berhad (“Malakoff”) and heads the Malakoff team for corporate    as Plant Manager. In September 2006, he was transferred
finance exercises such as equity & debt financing as well as     to Lumut Power Plant as Plant Manager and subsequently
mergers & acquisition and project finance exercises for          being promoted and transferred to his current position in
companies within the Malakoff Group.                             January 2009.
                                                                                                       028
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Berhad                                                2008




individual profiles of key members of management team




                     haBiB husin                                                 azhari sulaiMan
                   Senior vice President                                             Senior vice President
                 asset Management Division                                            ventures I Division

encik Habib Husin, aged 49, obtained his bachelor in               encik a zhari Sulaiman, aged 49, a Malaysian, holds a
engineering (electrical & electronics) from university of Wales.   bachelor of Science in electrical & electronic engineering
He started his career in 1983 as an assistant Instrument           from university of Technology Loughborough, england and
Maintenance engineer in Port Dickson Power Station for             Masters in business administration from universiti Malaya.
Lembaga Letrik Negara (now Tenaga Nasional berhad). In             He first joined Lembaga Letrik Negara in September 1983
1985, he was transferred to Kapar Power Station (Phase I           as a Computer Maintenance engineer in the Computer
and II) and was later promoted to Instrument Maintenance           Maintenance Department. In 1986, he was then promoted
engineer in 1987. He then joined Sarawak Shell berhad as           to Senior engineer, Telecontrol, in which, he was involved
Instrument engineer in 1990 before moving to ICI Paints (Mal)      mainly in the development of control centres, repair and
Sdn bhd as Works engineer in 1992. He joined Malakoff berhad       maintenance of the National Load Despatch Centre SCaDa/
as Senior Manager of Technical audit Department in July 1998.      eMS computer system and RTus. Later in January 1994, he
His role is to provide consultancy service on all engineering      was transferred to the business Management unit of the
and management matters pertaining to the operations of             Transmission Division as the Senior Manager, Commercial.
the Lumut Combined Cycle Power Plant and to constantly             In January 1999, he was designated as the Head of energy
conduct technical and safety due diligence from time to time       Procurement unit before joining Tanjung bin Power Sdn bhd
for new projects and proposed acquisitions. He has been            as Chief Operating Officer in august 2004. He is currently
redesignated and promoted to assistant General Manager,            the Senior vice President of ventures I Division, Malakoff
business Organisation & Technical Services on 1st January          Corporation berhad (“Malakoff”).
2000. His scope of work in addition to the previous role is
to oversee on the business reorganisation and strengthening
the technical services group to strategise Malakoff berhad
as an international power player. In September 2001, he was
promoted and transferred to General Manager-Projects in
Segari energy ventures Sdn bhd (“Sev”). In July 2004, he was
promoted to Chief Operating Officer (“COO”) in Sev. He was
re-designated to Senior vice President of business Operations
Division in april 2006. In 2007, he was re-designated to his
current position as Senior vice President of asset Management
Division of Malakoff Corporation berhad (“Malakoff”).
                                                                  029
Malakoff                                             annual
Corporation                                          report
Berhad                                               2008




              ernest navaratnaM
                    Senior vice President
                     ventures II Division

Mr. ernest Navaratnam, aged 45, a Malaysian, holds a
bachelor of Science in electrical engineering from Queen’s
university, Canada. He started his career in 1988 with Tenaga
ewbank Preece Sdn bhd as electrical engineer/Software
Development engineer. He then joined SMeC Malaysia in 1992
as electrical engineer. SMeC Malaysia is the Malaysian office
for Snowy Mountains engineering Corporation, australia.
In early 1995, he joined Malakoff berhad as Senior Project
engineer in april 1995. He was promoted to Project Manager
in January 1996 where he was responsible for coordinating
and reviewing the feasibility of projects assigned for possible
augmentation to Malakoff berhad’s corporate portfolio. In
June 1999, he joined International Power PLC (“IPR”) in the
Kuala Lumpur regional office as their business Development
Manager for South east asia. He was subsequently seconded
to IPR’s headquarters in London, england for a period of over
2 years. He then rejoined Malakoff berhad in august 2003 as
General Manager for International business Development. In
april 2006, he was re-designated as vice President, Region
II. He is currently the Senior vice President of ventures II,
Malakoff Corporation berhad (“Malakoff”).
      about
   foCus
Our focus is imperative in our
ability to stay on the right track, in
driving the objectives of delivery
and results
                                                                                                              032
Malakoff                                                 annual
Corporation                                              report
Berhad                                                   2008




audit committee


PurPOse                                                     The Chairman of the Committee is a member of the
The audit Committee (“Committee”) was established           Malaysian Institute of accountants.
by board on 19 November 2007. The primary
objectives of the audit Committee are as follows:
                                                            Meetings anD Minutes
1.   To assist the board in fulfilling its statutory        Meetings shall be held at least four (4) times a year
     and fiduciary responsibilities in examining and        or more frequently as circumstances dictate. The
     monitoring the Company and its subsidiaries’           Chairman shall call a meeting of the Committee, if
     (“the Group”) management of business, financial        requested to do so by any audit Committee member,
     risk processes, accounting and financial               the management or the internal or external auditors.
     reporting practices;                                   a representative of the external and internal auditors
                                                            shall normally be invited to attend the meetings
2.   To determine the adequacy and effectiveness            of the audit Committee. The management shall
     of the administrative, operational and internal        be represented at the meetings by the Managing
     accounting controls of the Group and to ensure         Director/Chief executive Officer (“CeO”) or in his
     that the Group is operating in accordance with         absence, the Deputy CeO, the Chief Financial Officer
     the prescribed procedures, codes of conduct and        and the Financial Controller of the Company. Other
     applicable legal and regulatory requirements;          board members may attend audit Committee meetings
                                                            upon the invitation of the audit Committee.
3.   Serve as an independent and objective party
     from management in the review of the financial         The Chairman of the audit Committee should engage
     information of the Company and Group                   on a continuous basis with senior management, such
     presented by management for the distribution           as the Chairman, the Managing Director/CeO, or in his
     to shareholders and the general public;                absence, the Deputy CeO, the Chief Financial Officer,
                                                            the Financial Controller of the Company, the internal
4.   Provide direction and oversight over the internal      auditors and the external auditors in order to be kept
     and external auditors of the Company to ensure         informed of matters affecting the Company.
     their independence from management;
                                                            The audit Committee shall meet at least twice a
5.   To evaluate the quality of audits conducted            year with the internal and external auditors without
     by the internal and external auditors on the           the attendance of the executive members of the
     Company and Group.                                     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,
MeMbers                                                     their alternate directors, both of whom must be non-
The members of the Committee comprised the                  executive directors.
following members:
                     Status	 of	 Directorship               Minutes of each meeting shall be kept and distributed
                                                            to each member of the Committee and of the board.
Datuk Haji Hasni Harun - Chairman
                                                            The Chairman of the Committee shall report on each
                       - Non-executive Director
                                                            meeting to the board. The Company Secretary shall
Yoong Nim Chee          - Non-executive Director            be the Secretary of the Committee.
andrew Rowan Ian Yee - Non-executive Director
ahmad Jauhari Yahya     - Managing Director/Chief
                          executive Officer
                                                                                                            033
Malakoff                                              annual
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Berhad                                                2008




autHOrity                                                (d)   To discuss problems and reservations arising
The audit Committee is authorised by the board:                from the interim and final audits, and any
                                                               matter the auditor may wish to discuss (in the
(a)   to investigate any matter within its terms of            absence of management where necessary);
      reference;
                                                         (e)   To review the external auditor’s management
(b)   to have the resources in order to perform its            letter and management’s response;
      duties and responsibilities as set out in its
      terms of reference;                                (f)   To do the following with respect to the internal
                                                               audit function:-
(c)   to have full and unrestricted access to
      information pertaining to the Company and the            •    Review the adequacy of the scope,
      Group including to call on any officers of the                functions, competency and resources of
      Company and/or the Group in carrying out their                the internal audit function, and that it has
      duties;                                                       the necessary authority to carry out its
                                                                    work;
(d)   to have direct communication channels to the
      internal and external auditors;                          •    Review the internal audit programme and
                                                                    results of the internal audit process and
(e)   to obtain, at the expense of the Company,                     where necessary, ensure that appropriate
      external legal or other independent professional              action is taken on recommendations of the
      advice if it considers necessary; and                         internal audit function;


(f)   to be able to convene meetings with the external         •    Review and appraise or assess the
      auditors and internal auditors, or both, without              performance of members of the internal
      the attendance of the executive members of the                audit function/firm carrying out the internal
      Group, other directors and employees of the                   audit function;
      Company, whenever deemed necessary.
                                                         (g)   To consider any related party transactions that
                                                               may arise within the Group;
Duties anD resPOnsibilities
                                                         (h)   To consider the major findings of internal
The duties and responsibilities of the Committee are           investigations and management’s response;
as follows:-
                                                         (i)   To report to the board at least once a year,
(a)   To consider the appointment of the external              the activities of the audit Committee and
      auditor, the audit fee and any questions of              the summary of the activities of the internal
      resignation or dismissal;                                audit function or activity, including the number
                                                               of meetings held and the details of attendance
(b)   To discuss with the external auditor before              of each audit member in respect of the meetings;
      the audit commences, the nature and scope of             and
      the audit;
                                                         (j)   To consider other topics as defined by the
(c)   To review the quarterly and year-end financial           board.
      statements for recommendation to the board;
                                    034
Malakoff                   annual
Corporation                report
Berhad                     2008




i aM Pleased to rePort
that desPite what has
been a Very difficult
year due to financial
Market turbulence,
the grouP has
nonetheless achieVed a
coMMendable reVenue
of rM5,121 Million for
financial year (fy) 2008
as coMPared to rM2,702
Million for the 8-Month
Period in fy2007. on an
annualized basis, the
increase in reVenue
aMounted to 26%.

tan sri abDul HaliM ali
CHaIRMaN
                                                                                              035
Malakoff                                annual
Corporation                             report
Berhad                                  2008




stateMent by
chairMan




              The Group’s Profit after Tax & Minority Interest    The performance of the local assets that we
              (“PaTMI”) of RM139 million for FY 2008 is notably   control and operate remains robust and continues
              lower as compared to the RM217 million recorded     to contribute about 95% of the Group’s revenue.
              for FY 2007. This decrease in PaTMI was due         Segari energy ventures (“Sev”), Gb3, Prai
              to the one-off provision of RM212 million for       Power and Tanjung bin Power maintained high
              the Windfall Profit Levy (“WPL”) imposed by the     performance in terms of availability, reliability and
              Malaysian Government on Independent Power           efficiency, meeting all the required performance
              Producers (“IPPs”) and the impairment of RM99       standards set out in their respective Power
              million for intangible assets and goodwill in       Purchase agreements (“PPas”). Continuous
              relation to our associate company, Kapar energy     improvement strategies are regularly introduced
              ventures Sdn bhd (“Kev”). Had it not been for       to our local operations to ensure that operational
              these provision, the Group would have achieved      and engineering efficiency are sustained in the
              a much higher and improved PaTMI for FY 2008        long-run. These strategies centre around the
              as compared to FY 2007.                             balance of asset performance, prudent risk
                                                                  mitigation and cost optimization.
                                                                                                      036
Malakoff                                           annual
Corporation                                        report
Berhad                                             2008




statement by chairman



In terms of our existing overseas investments,     Through our Corporate Responsibility (“CR”)
the Dhofar Power Company SaOG (“DPC”) in           initiative, we have undertaken comprehensive
Oman has been contributing profits since our       programmes to play our part in a wide range of
acquisition of 20 % interest in DPC effective      fields including, developing Malaysian technical
in November 2006. In the coming year we            expertise, facilitating community development
expect that our investments in Jordan’s Central    through our Corporate Community Investment
electricity Generating Company (“CeGCO”) and
                                                   (“CCI”) programmes, inculcating a strong safety
the Shuaibah IWPP in Saudi arabia, will also
                                                   and health culture as well as conserving
begin to contribute to overall Group’s profits.
                                                   the environment.
Despite the challenges faced this year, Malakoff
has continued to pay good dividends to our
shareholders. Net dividends paid for FY 2008
was RM165 million as compared to RM100 million
paid in FY2007.
                                                                                                           037
Malakoff                                               annual
Corporation                                            report
Berhad                                                 2008




being our most valuable asset, we endeavour to         For FY2009, we will commit to stepping up our CR
continue to invest in our people through learning      initiative and anticipate investing approximately
and development programmes that will create            RM10 million on various programmes. Our CCI
value for Malakoff as a business entity as well as     programme will also be streamlined under a
for the employees as individuals. It is clear that     single platform called The Malakoff Community
we are able to fulfil our strategic initiatives only   Partnerships (“MCP”). Of this RM10 million
with a competent and dedicated work force.             commitment at least RM3.5 million will be
                                                       invested in MCP activities, RM4.8 million on
We are committed to retaining and enhancing            staff training and development while the balance
our CR programmes in the coming years as an            will be focused on enhancing our stakeholder
integral part of the way we operate. The Group         engagement programmes.
will continue to invest in further meaningful
platforms that are deemed to bring a positive          The MCP initiative will focus on the following
impact on society.                                     areas:

                                                       •    Commitment to Community & education
                                                       •    Commitment to Sports
                                                       •    Commitment to environment
                                                                                           038
Malakoff                               annual
Corporation                            report
Berhad                                 2008




statement by chairman




              The MCP aims to celebrate the achievement of       by the Securities Commission. This being a
              Malakoff’s long-term and continuous commitment     demonstration of Malakoff’s commitment to
              to being a responsible and active participant of   meeting the highest standards of openness and
              the communities in which it operates.              transparency in the conduct of our business.

              In terms of our commitment to ensuring a safe      Last but not least, I would also like to thank my
              working environment, I am pleased to inform        fellow board members, the Management and
              that our local operations have completed the       Staff of Malakoff who worked particularly hard
              standardisation of our Health, Safety and          throughout 2008 as they rose to the challenges
              environment (“HSe”) practices. Furthermore, our    of an unusually demanding environment.
              endeavour of achieving OHSaS 18001 certification
              for the Lumut, Tanjung bin and Prai power plants   Given the strong fundamentals of Malakoff
              and ISO14001 for the Tanjung bin power plant in    and our more focused strategic direction, I am
              FY2009, is on track.                               confident of the growth prospects for Malakoff’
                                                                 this coming year and going forward.
              We remain steadfastly committed to the tenets of
              corporate governance despite being a privately-
              held entity and will continue to adhere to the     TAN	 SRI	 ABDUL	 HALIM	 ALI
              Corporate Governance requirements as mandated      Chairman
                       039
Malakoff      annual
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Berhad        2008
                                                     040
Malakoff          annual
Corporation       report
Berhad            2008




              Malakoff corPoration berhad’s strong
              ManageMent and technical know-how
              are reflected in the steady long-terM
              incoMe flows and increasing Value of
              our assets. building uPon our doMestic
              success, we are now taking our PeoPle,
              technology and Processes onto the
              international stage.




                           aHMaD jauHari yaHya
                           MaNaGING DIReCTOR/
                           CHIeF exeCuTIve OFFICeR
                                                                                                             041
Malakoff                                               annual
Corporation                                            report
Berhad                                                 2008




PerforMance
reView                                            by MD/CeO

The global financial crisis in FY2008 presented an     In terms of human resource development, we have also taken the opportunity
opportunity for Malakoff to prepare itself for high    to adopt the following measures:
economic activity in the future. In terms of plant
                                                       •    Rolling-out of Career Ladder Programme;
operation, which is one of our core businesses, we
looked at innovative ways on how we do things and      •    enhancing of Competency-based assessment (“Cba”) Programme; and
these include the following key measures:              •    Strengthening other human resource development initiatives like
                                                            manpower planning, training and re-training.
•    Optimizing of operating costs through cost-
     base analysis;                                    We believe that with specialized skills and tools, Malakoff will continue to
•    Rolling-out of plant improvement initiatives;     differentiate itself from others and therefore stay ahead of the competition.

•    upgrading of internal processes, in particular,
     the application of state-of-the-art O&M tools
     and methodologies; and

•    enhancing risk management through the
     application of new risk assessment tools.
                                  042
Malakoff                 annual
Corporation              report
Berhad                   2008




performance review by Md/ceo




              asset
              PerforMance
                                                         043
Malakoff                    annual
Corporation                 report
Berhad                      2008




              lOCal assets
              we continue to contribute towards the nation’s
              econoMic deVeloPMent through our core business
              actiVity of generating Power for the national grid. our
              interests in a nuMber of Power Plants haVe brought our
              effectiVe generation caPacity, to a total of 5,020Mw. we
              are therefore resPonsible for aPProxiMately 25% of the
              Power generation in Peninsular Malaysia.
                                                                                                        044
Malakoff                                            annual
Corporation                                         report
Berhad                                              2008




performance review by Md/ceo




              lumut Power Plant                                  The plant delivered approximately 4,455 GWh of electricity
                                                                 to the National Grid, with an average capacity factor of
              In operation for more than ten years, Lumut
                                                                 approximately 39.03%. With an availability of 93.90%,
              Power Plant (“LPP”), with a dependable capacity
                                                                 the plant exceeded the 86.0% guaranteed under the
              of 1,303 MW, remains the largest combined
                                                                 Power Purchase agreement (“PPa”) with Tenaga Nasional
              cycle power plant in Malaysia. The plant is held
                                                                 berhad (“TNb”).
              through our subsidiary, Segari energy ventures
              Sdn bhd (“Sev”), in which we hold 93.75%.

              During the financial year under review, LPP
              maintained its high performance in terms
              of availability, reliability and efficiency.
                                                                                                             045
Malakoff                                                   annual
Corporation                                                report
Berhad                                                     2008




gb3 Power Plant
Gb3 Power Plant (“Gb3”), also a combined cycle
power plant, with a dependable capacity of 640
MW, is held through our 75% owned subsidiary,
Gb3 Sdn bhd. The power plant is in its seventh
year of operation and is located adjacent to LPP,
owned by Sev. The plant delivered a total of
3,694 GWh of electricity to the National Grid,
with an average capacity factor of approximately
65.89%, during the financial year under review.
The plant’s availability of 91.57%, exceeded the
requirement of the PPa of 91.5%.
                                                           lOCal generatiOn CaPaCity
Prai Power Plant
Prai Power Plant (“PPP”) is a single-shaft                 	    Shareholding	 X	 plant’s	 Capacity	    	     Effective	 Capacity
combined cycle power plant with a dependable
capacity of 350 MW. In its sixth year of operation,                            90.00%@2,100 MW        TBp    1,890 MW
a total of 2,409 GWh of electricity was delivered to
the National Grid. During the financial year under                            40.00%@2,420 MW         kEV    968 MW
review, the plant recorded an average capacity
factor of 78.59%. The plant’s availability at 93.07%,                           25.00%@440 MW         pDp    110 MW
exceeded the PPa requirement of 93%. being one
of the most efficient power plants in Malaysia,                                100.00%@350 MW         ppSB   350 MW
PPP recorded a net efficiency (“LHv”) of 53.00%
during the financial year under review.                                         75.00%@640 MW         GB3    480 MW

                                                                               93.75%@1,303 MW        SEV    1,222 MW

                                                                                        7,253 MW             5,020 MW




                                               27%
                                               Malakoff
                                                               73%
                                               5,020	 MW
                                                               TNB	 &
                                                               other	 Ipps

                                                                              Malakoff has an effective generation capacity of
                                                                              5,020 MW, which accounts about a quarter of
                                                                              Peninsular Malaysia’s total installed capacity.
                                                                              046
Malakoff                 annual
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Berhad                   2008




performance review by Md/ceo




                         tanjung bin Power Plant
                         Tanjung bin Power Plant (“TbPP”) is the first private coal-fired power plant
                         in Malaysia and one of the largest independent coal-fired power plants in
                         Southeast asia. The plant is held through our subsidiary, Tanjung bin Power
                         Sdn bhd, in which we owned 90%. In its third contract year of operation,
                         TbPP, with a generating capacity of 2100MW, has delivered a total of 10,258
                         GWh of electricity to the National Grid, with an average capacity factor of
                         55.76%. although it recorded an availability of 85.01% at the end of the
                         third contract year, this is slightly lower than the 91% stated in its PPa
                         requirements. The slight decrease is considered as normal to a new plant
                         due to Minor Inspection outage for all three units and DOSH Certificate of
                         Fitness (“CF”) renewal requirements.

                         The respective boilers, turbine generators and associated equipment had
                         undergone statutory inspections and overhaul in the year 2008.

                         using clean coal technology equipment, such as electrostatic Precipitator
                         (“eSP”) and Flue Gas Desulphurization (“FGD”), allowed the plant to
                         maintain the boiler emission level within the limit set by the Department of
                         environment (“DOe”).
                                                                                                              047
Malakoff                                               annual
Corporation                                            report
Berhad                                                 2008




internatiOnal assets
saudi arabia
Our first overseas project is the Shuaibah Phase       With electricity demand in the Dhofar region growing at a cumulative
3 Independent Water and Power Project in the           annual growth of about 7%, this investment provides much potential for
Kingdom of Saudi arabia. We are a part of a            Malakoff’s growth in the future.
consortium tasked with designing, constructing,
commissioning and testing a 900 MW and 194 MIGD        jordan
(“Million Imperial Gallons per Day”) crude oil-fired   Malakoff has established its presence in Jordan with an acquisition of a
power and desalination plant. The project is on a      stake in Central electricity Generation Company (“CeGCO”). Malakoff has a
“build, Own and Operate” basis under a 20-year         25% interest in eNaRa, a consortium with Jordan Dubai Capital of Jordan
Power and Water Purchase agreement (“PWPa”)            (65%) and Consolidated Contractors Ltd of Greece (10%), which holds 51% of
with the government of Saudi arabia.                   the equity in the Jordanian generation assets, held by CeGCO.

The project’s construction is in full swing with       CeGCO has 4 major multi-fuel power plants under 4 separate Power
procurement and manufacturing on schedule. The         Purchase agreements (“PPa”) with a fifth PPa governing the balance
first evaporator arrived at Shuaibah in October 2006   generation capacity from 4 other small power plants. The total net
and the first steam turbine for unit 10 was erected    generation capacity of CeGCO is 1,665 MW.
in December 2007. Crude oil first firing was done
on 28 November 2008 and the project’s Commercial       The Government of Jordan signed the CeGCO Share Sale agreement with
Operation Date is scheduled in July 2009.              eNaRa in May 2007 and the CeGCO Transaction Documents in September 2007.
                                                       In October 2007, the sale was finally sealed.
Oman
We have entered the power generation business in       Moving forward, eNaRa plans to pursue other opportunities in Jordan and
Oman through Oman Technical Partners Limited           neighbouring countries, utilising CeGCO’s expertise and manpower.
(“OTPL”). The consortium members of OTPL
are Malakoff Technical (Dhofar) Limited (“MTL”)        algeria
(43.4%), a wholly-owned subsidiary of Malakoff         another major overseas project underway in algeria is a seawater
International Limited (“MIL”), GCC energy Fund of      desalination plant located at Souk Tleta, Wilaya of Tlemcen, algeria which we
Dubai through its subsidiary, Oman Power Limited       are participating in a consortium comprising our wholly-owned subsidiary,
(28.3%) and Darbat Power LLC of Oman (28.3%).          MIL and Spring utility Limited (“SuL”), a wholly-owned subsidiary of Hyflux
                                                       Limited of Singapore.
OTPL in turn, is a direct shareholder of Dhofar
Power Company S.a.O.G (“DPC”) with MTL having          The consortium received a letter of award in October 2006 from the
an indirect 20.0% equity interest in DPC after the     government-owned algerian energy Company (“aeC”) to develop, construct
successful acquisition of the entire issued and        and operate the seawater desalination plant. The plant will be supplying
paid-up share capital, comprising 12,000 issued        200,000 m3/day of desalinated water to L’algerienne Des eaux (“aDe”) under
ordinary shares of uSD1.00 each of Salalah Power       a 25-year concession.
Holdings Limited (“SPHL”) from PSeG Global L.L.C
of the united States of america. MTL too has           MIL and SuL hold 70% and 30% interests, respectively, in the consortium. In
become the Technical Partner of DPC. DPC is            turn, the consortium holds a 51% stake in the company undertaking the project,
an integrated power company with a 239 MW              with the balance held by aeC. The project achieved Financial Closure in January
generating asset as well as the transmission and       2008 and is expected to meet the Commercial Operation Date in January 2010.
distribution assets in the Salalah region of Oman.
                                  048
Malakoff                 annual
Corporation              report
Berhad                   2008




performance review by Md/ceo




              OPeratiOns
              & MaintenanCe
              (“o&M”)
                                                         049
Malakoff                    annual
Corporation                 report
Berhad                      2008




              teKniK janaKuasa sDn bHD (“tjsb”)
              tJsb, continues to ProVide suPPort and
              exPertise to the grouP, ensuring that
              the Plants are Managed and Maintained
              efficiently and cost-effectiVely through the
              iMPleMentation of the latest o&M tools and
              Methodologies.
                                                                                                          050
Malakoff                                             annual
Corporation                                          report
Berhad                                               2008




performance review by Md/ceo



lumut Power Plant                                    Caring for Health, Safety and environment
The Sev and Gb3 Power Plants continue to             (“HSe”) remains our top priority. at the end of
provide highly reliable supply to the National       year 2008, LPP broke a new safety record by
Grid during the financial year under review.         achieving Lost Time Incident (“LTI”) of more
For year 2008, Lumut Power Plant (“LPP”) has         than 3.2 million manhours. Our proactive safety
completed 6 a/b and 4 C-inspections for Gas          program is inline with our Process Safety Risk
Turbine and 1 C-inspection for Steam Turbine. In     Management (“PSRM”) which we embarked since
all cases, the inspections have been completed       last year with the set target of achieving OHSaS
within schedule. Sev Plant has registered            18000 Certification by middle of year 2009.
an above average availability Factor (“aF”) of
93.9%. In addition, Gb3 registered an unplanned      Competency based assessment (“Cba”) continues
Outage Rate (“uOR”) of 1.2% with the average         to be our core initiatives in developing our human
availability of 91.57%. both plants have fulfilled   capital. Lumut Power Plant in-house simulators
all operational requirements specified in their      are highly utilised during 2008, providing basic
respective PPas and surpassed the world industry     and advanced technical training both for Operation
standards on availability and forced outage
rate. undoubtedly, this is a testimony on the
effectiveness of the planning and usage of O&M
tools and methodology undertaken by TJSb.
                                                                                                         051
Malakoff                                              annual
Corporation                                           report
Berhad                                                2008




and Maintenance staff. Notwithstanding that, soft     Factor (“aF”) of 93.07%. This was mainly due
skill training which is equally important are also    to the reduction in the number and duration of
being organized on regular basis to ensure that       forced outages. Plant initiative on the start up
all training aspects are looked into. In year 2008,   reliability study has also improved the overall
each site personnel has undertaken an average         plant reliability. PPP also maintained a high
12 training mandays.                                  Capacity Factor (“CF”) of 78.59%, due to high
                                                      dispatch throughout 2008, with an average of net
Prai Power Plant                                      efficiency of 53.00%.
Prai Power Plant (“PPP”) continued to provide
highly reliable supply to the National Grid during    PPP has also managed to keep its excellent
the financial year under review. PPP delivered        safety record by maintaining zero LTI for 2024
2,409 GWh of electricity to TNb throughout the        consecutive days, despite having conducted four
year.                                                 maintenance outages in 2008. The plant has met
                                                      all the environmental requirements and limits as
Meanwhile, the plant’s reliability has shown          stipulated in the regulations.
tremendous improvement with the unscheduled
Outage Rate (“uOR”) of 1.47%, well below
the industry standard of 2%, and availability
                                                                                               052
Malakoff                                 annual
Corporation                              report
Berhad                                   2008




performance review by Md/ceo




              tanjung bin Power Plant                                Meanwhile, environmental Monitoring Plan has
              Tanjung bin Power Plant with a net capacity of         been fully implemented with regular verification
              2100MW, consisting of 3 units of 700MW coal fired      of emission data of marine water and marine
              generators, started its commercial operation in 2006   ecology by third party environmental consultant
              for the first unit and 2007 for the second and third   with regular submission of trending data and
              units, continue to provide reliable power supply to    environmental monitoring report to DOe. The
              the southern region of Peninsula Malaysia.             plant’s Continuous emission Monitoring System
                                                                     (“CeMS”) had been connected online via the
              In 2008, the plant delivered a total of 10,286 GWh     internet to DOe Server in Johor bahru in 2008
              of electricity to the National Grid with an average    for the regulator‘s monitoring of compliance.
              capacity factor of 55.76% and an availability target
              of 85.01% at the end of 2008. The various type of      the technical support group (“tsg”)
              bituminous and sub-bituminous coals consumed           The completion of the Tanjung bin automatic
              were imported from australia, South africa and         billing System (“abS”) marked the completion of
              Indonesia.                                             the 4th project undertaken by TSG to streamline
                                                                     the billing system of Malakoff’s power plants.
              The respective boilers, turbine generators and         Continuous improvement projects such as
              associated equipment had undergone statutory           upgrading the fuel metering system, reviewing
              inspections and overhaul in the year 2008. by          and revamping the energy metering system are
              using clean coal technology equipment such as          also actively being pursued.
              electrostatic Precipitator (“eSP”) and Flue Gas
              Desulphurization (“FGD”), the plant is able to         In addition, our collaboration with electric Power
              maintain the boiler emission level within the limits   Research Institute (“ePRI”) ensures that the
              set by the Department Of environment (“DOe”).          O&M practices in cycle chemistry are constantly
                                                                                               053
Malakoff                                 annual
Corporation                              report
Berhad                                   2008




              benchmarked against the world’s best practices.       of the O&M team for the first desalination plant
              engagement with other consultants such as DNv         in algeria developed by Malakoff, TSG expertise
              for Reliability based Inspection (“RbI”) at Tanjung   will not only be limited to power but will extend
              bin power plant, and eRa Technology for a Heat        to Water O&M technology.
              Recovery Steam Generator (“HRSG”) cyclic study
              at Lumut and Prai power plants helped the plant       With respect to O&M-related services, Malakoff has
              management to maintain operational risks within       provided a combined cycle gas turbine plant (“CCGT”)
              acceptable limits.                                    and coal-fired plant simulator training to Teknologi
                                                                    Tenaga Perlis Consortium Sdn bhd (“TTPC”) and
              On an international front, Repair and Maintenance     Jimah energy ventures Sdn bhd (“Jev”).
              (“RMS”) team managed to secure a contract in
              providing manpower for performing 6 C-inspections     TSG continues to provide Technical and Management
              in bahrain. The contract will provide invaluable      Support Services for Salalah Power Plant in Oman.
              experience for TJSb staff in providing services       In year 2008, one audit was successfully completed
              under a competitive and demanding environment.        by engaging TJSb’s internal staff. The sharing
              TJSb via its holding in SaMaOMCO and aL-Imtiaz        of knowledge between peers and other O&M
              is also overseeing the mobilization phase of O&M      practitioners is continuously being encouraged
              services undertaken by its sub-contractor for the     within the organization. In 2008, technical papers
              new IWPP development in Shuaibah.                     were presented by TSG at the local and international
                                                                    front, at various seminars or conferences to
              TSG has acquired additional manpower necessary        promote and highlight internal development done
              in developing a team for a much needed expertise      by TJSb. TSG will continue developing its internal
              in desalination technology. With the mobilization     talent in its quest to promote Technical excellence
                                                                    which it hopes will identify TJSb as a premium
                                                                    O&M service provider.
                                                                                                          054
Malakoff                                              annual
Corporation                                           report
Berhad                                                2008




performance review by Md/ceo




life Cycle asset information Management
system (“lCaiM”)
The Life Cycle asset Information Management
System (“LCaIM”) programme was rolled out
for Tanjung bin Power Plant, capturing all
the technical details, drawings and project
documents and putting the entire O&M manual
into an integrated system named eaLIS. The
eaLIS implementation team has captured and
intelligently linked 300,000 objects and equipment
in the plant with 90,000 documentation files. With
an integrated asset information system in place,
O&M personnel will have immediate access to
                                                      In March 2008, TJSb has been awarded with a
information and therefore have the information
                                                      5-year Operation and Maintenance Management
and tools to set a new standard for operational
                                                      Services (“OMMS”) contract for 800MW az Zour
excellence in the future.
                                                      emergency Power Plant in Kuwait. TJSb also signed
                                                      a Manpower Supply agreement (“MSa”) in December
O&M international
                                                      2008 with PT. Pembangkitan Tenaga Listrik Jawa
The Company’s successful entry into Middle east       bali Services (“PT.PJbS”) for this plant.
and South-east asia markets has presented us
with the opportunity to expand our O&M business       another water and power plant that will be
and presence into the international market. In        operated and managed by TJSb is the Shuaibah-
2008, TJSb has participated in international events   III Project, located in Saudi arabia. It is the
such as Power Gen Conference and exhibition           world’s largest Independent Water and Power
Middle east in bahrain and Power Gen Conference       Plant (“IWPP”) project with a capacity of 900MW
and exhibition asia in Malaysia with the objectives   power & 194 MIGD water.
to promote TJSb’s broad range of services and
establish contacts with potential clients.            In addition, together with Hyflux Limited of
                                                      Singapore, TJSb will be the O&M Provider
TJSb currently operates and maintains up to 4         for Souk Tleta Sea Water Desalination Plant
power plants in Malaysia and 3 power and water        in algeria. The plant is expected to generate
plants located in the Middle east with a combined     200,000m3 of fresh water per day.
generating capacity of more than 6,000MW power
and 1,000,000m3/day water.
                                                                                                     055
Malakoff                                            annual
Corporation                                         report
Berhad                                              2008




both Shuaibah III and Souk Tleta plants will        Throughout the year of 2008, TJSb is actively
achieve its commercial operation date on 2009.      involved in the preparation and submission for
                                                    the following projects tender:
On the other hand, TJSb together with Malakoff’s
ventures department are currently working           •   1000MW & 1,000,000m3/day IWPP Raz azzour,
together on potential projects in the Middle east       KSa
(i.e. ajman power project in uae, Jazan power and   •   390MW al-Qatrana CCGT Power Plant,
water project in KSa) and South-east asia (i.e.         Jordan
power project in bangladesh, India, Pakistan).
                                                    •   500MW Salalah CCGT Power Plant, Oman
On O&M-related services, TJSb has provided a        •   2000MW Sabiya CCGT Power Plant, Kuwait
CCGT and coal-fired plant simulator training to     •   370MW King Hussein CCGT Power Plant,
Teknologi Tenaga Perlis Consortium Sdn. bhd.            Jordan
(“TTPC”) and Jimah energy ventures Sdn. bhd.
(“Jev”) respectively.                               •   1400MW Rabigh Thermal Power Plant, KSa
                                  056
Malakoff                 annual
Corporation              report
Berhad                   2008




performance review by Md/ceo




              electricity
              DistributiOn
              & CHilleD Water
              suPPly
                                                          057
Malakoff                    annual
Corporation                 report
Berhad                      2008




              Malakoff’s wholly-owned subsidiary
              wirazone sdn bhd (“wirazone”) is the
              licensed electricity distributor within
              the kuala luMPur sentral (“kl sentral”)
              deVeloPMent area. wirazone has
              distributed uP to 100 Mw of electricity
              since July 2000. wirazone also suPPlies
              chilled water to the Plaza sentral office
              coMPlex for air conditioning froM a
              centralised chilled water systeM with
              a cooling caPacity of 7,000 refrigerant
              tonnes.
                                                                                                              058
Malakoff                                                 annual
Corporation                                              report
Berhad                                                   2008




performance review by Md/ceo




Wirazone’s mission is to be the most customer
responsive and efficient owner and operator of a
reliable district cooling and electricity distribution
network in Malaysia through attention to
customers’ needs, innovation and teamwork.

Wirazone’s commitment is manifested through              another service provided by Wirazone is the Technical and Operation
its Customer Charter and its Quality Policy              Service, mainly for major customers. This service, which started at the end
under the MS ISO 9001:2000 Quality Management            of 2007, has been further improved.
System. The company’s high standard of technical
performance is reflected by its achievement of a         In line with the development of the KL Sentral area and with the aim
System average Interruption Duration Index of            of providing high quality power supply, Wirazone has also undertaken
7.3 minutes per customer and System average              continuous upgrading of the electricity infrastructure. This has included
Interruption Frequency Index of 0.002 minutes            the construction of Main Distribution Substation No. 2 to cater for power
interruptions per customer recorded as at 31             demand from new development, mainly catering for Lot J (office towers and
December 2008.                                           leisure centre) and Lot L (condominium).


In financial year 2008, the growth in the domestic       Wirazone also upgraded the telecommunication network in order to provide
and commercial sectors led to a 15% increase of          for robust and reliable channels of Supervisory Control and Data acquisition
electricity demand for the KL Sentral area. The          (“SCaDa”) and an arc protection system for our Main Distribution Substations
completion of ueM building, Sooka Sentral and            1 & 2.
The Loft Condominium saw customer growth of
45% whereby 427 new customers moved into the             Further growth is expected when office towers in Lot J are completed and
KL Sentral area and registered to be served.             tenanted in early 2010 which will increase Wirazone’s revenue potential in
                                                         financial year 2010.
                       059
Malakoff      annual
Corporation   report
Berhad        2008
                                  060
Malakoff                 annual
Corporation              report
Berhad                   2008




performance review by Md/ceo




              Ventures
                                                        061
Malakoff                    annual
Corporation                 report
Berhad                      2008




              Malakoff has established its Presence
              in the kingdoM of saudi arabia (“ksa”)
              through its inVestMents in shuaibah iii
              indePendent water and Power ProJect
              (“iwPP”) and shuaibah iii exPansion
              ProJect.
                                                                                             062
Malakoff                                annual
Corporation                             report
Berhad                                  2008




performance review by Md/ceo




              In algeria, Malakoff, together with Hyflux Ltd      and submitted a bid in august 2008 for the
              of Singapore and algerian energy Company,           development of the 30-40 MW al-Kamshah Wind
              a government owned investment corporation,          Power Project. The bid has been evaluated by
              successfully achieved financial closure for         the Ministry of energy and Mineral Resources of
              the development of 200,000 m3/day seawater          Jordan (“MeMR”) and the consortium was selected
              desalination plant. using reverse-osmosis           as the first ranked bidder on 23 December 2008.
              technology, the project will be supplying potable   The project value is estimated at uSD98 million.
              water to L’ algerienne Des eaux (“aDe”), the
              national water distribution company and is          In South east asia, Malakoff is active in developing
              expected to commence commercial operations in       greenfield and brownfield opportunities in
              January 2010.                                       Singapore, Indonesia, vietnam and Philippines.
                                                                  asset acquisition opportunities in the Philippines
              Following the completion, of acquisition of 51%     exist as a result of the regulatory ruling to
              equity stake in Central electricity Generating      privatise a majority of the assets owned by the
              Company (“CeGCO”), energy arabia (“enara”) has      Power Sector assets and Liabilities Management
              embarked upon another project in Jordan. enara      Corporation (“PSaLM”) whilst in Indonesia,
              together with Terna energy Sa and vector aeolian    new capacity is required to meet the growth in
              Parks Sa, both of Greece, formed a consortium       demand for electricity in the country.
                                                                                                           063
Malakoff                                                annual
Corporation                                             report
Berhad                                                  2008




at the same time, Malakoff has also been active in      Moving forward, Malakoff will focus on potential
considering opportunities that would enhance the        acquisitions and projects with operations
value of its existing assets in both the upstream and   and maintenance service opportunities. The
downstream aspects of the power business, and in        Company will also continue to foster effective
related areas such as desalination, based upon our      institutional relations to improve the Company’s
initial successes in Saudi arabia and algeria.          brand recognition in the target investment
                                                        countries. This includes building good rapport
Substantial barriers in the region still exist along    with engineering, procurement, and construction
with the change in economic climate created             contractors, advisors and potential partners.
by the credit squeeze. These challenges will
be addressed and mitigated against the project
opportunities identified for development.
                                                           064
Malakoff                     annual
Corporation                  report
Berhad                       2008




performance review by Md/ceo




PrOjeCt
ManageMent
the grouP’s in-house ProJects are undertaken
by its ProJect ManageMent subsidiary coMPany,
Malakoff engineering (“Mesb”). Mesb ProVides
ProJect ManageMent serVices including negotiation
and execution of engineering, ProcureMent and
construction contracts, as well as liaising with
sub-contractors, banker’s engineers and releVant
authorities, in ensuring that ProJects are coMPleted
on tiMe, within budget, and sPecified quality standards.
                                                                         065
Malakoff                                          annual
Corporation                                       report
Berhad                                            2008




MeSb has extensive experience in managing various engineering
projects. Its current projects include water pipeline, warehouse and
coal yard facilities for the Tanjung bin power plant. With its pool of
competent engineers and personnel, in addition to its core business of
project management, MeSb provides other services such as technical
advisory services and contracts management both within and outside
the Malakoff group of companies.

Currently MeSb provides management services to the asset Management
Division of Malakoff Corporation berhad (“Malakoff”). amongst its
on-going projects are the proposed warehouse, coal workshop and
planned coal yard dry storage shed in Tanjung bin, which will provide
additional facilities for the plant.
                                                                          066
Malakoff                                           annual
Corporation                                        report
Berhad                                             2008




performance review by Md/ceo



infOrMatiOn teCHnOlOgy (“it”)
The IT department implemented a secured virtual private network to
improve connectivity and accessibility.

a backup protection strategy was formulated also and implemented
to safeguard critical business information data held by mobile users
whose computing equipment are vulnerable to theft and loss. This
backup strategy has also been deployed to our site offices.

The procurement of IT assets has been centralised at the company’s
headquarters for effective control, standardisation and monitoring
of cost. This change has speeded up significantly the selection and
delivery of assets to the users.

email filtering software was upgraded to manage and monitor spam
and junk email which circulates so per vasively over the internet.
Managing these intrusions strictly is important so as to allow users to
distinguish and respond to important messages promptly.
                                                                                                           067
Malakoff                                            annual
Corporation                                         report
Berhad                                              2008




enterPrise aPPliCatiOns                             information arranged from different perspectives
The number of companies in Malakoff Group           to improve business performance by driving
that use SaP has grown from 26 to 28 with the       better decision making.
successful implementation of TJSb Middle east
Limited and Malakoff alDjazair Desal Sdn bhd.       Continuous business Process Improvement
                                                    (“bPI”) programmes are scheduled regularly
Furthermore a three-month migration project,        to improve efficiency. Improving the business
which went “live” in July 2008, involved 25 MMC     process offer the opportunity to simplify the
Corporation berhad companies being migrated         process, increases the service level and boosts
into Malakoff’s SaP server. During 2008, we         the usefulness of the SaP system.
therefore increased the number of SaP licenses
from 530 to 730 and our SaP server now hosts        The implementation of an e-helpdesk has
53 companies.                                       provided SaP users with single point of contact
                                                    for SaP services and advice. SaP users from all
The department utilises SaP’s business reporting    locations now log their service request and track
tool business Warehouse to extract data from        updates on their request status via e-helpdesk.
the SaP database and present it in an intelligent   by improving the communication process and
and meaningful format. various reports were         giving effective resolutions on line, the e-helpdesk
redesigned to provide decision makers with          promotes SaP users’ productivity.
          about
partnersh
          i
 Our business a
                lliances provide
                                  ps
 immense oppo
               rtunities for gro
                                 wth
                       070
Malakoff      annual
Corporation   report
Berhad        2008




COrPOrate
resPonsibility
                                                                                                           071
Malakoff                                                annual
Corporation                                             report
Berhad                                                  2008




                                                          Work is under way for Tanjung bin, Lumut and Prai Power Plants to
                                                          achieve OHSaS 18001:2007 and for Tanjung bin Power Plant to achieve
                                                          ISO 14001:2004 in 2009.

                                                          at Tanjung bin Power Plant, environmental Monitoring Plan has been
                                                          fully implemented with regular verification of emission data, monitoring
                                                          of marine water and marine ecology by third party environmental
                                                          consultant with regular submission of trending data and environmental
                                                          monitoring report to Department of environment (“DOe”). The plant’s
                                                          Continuous emission Monitoring System (“CeMS”) is connected online
                                                          to DOe server in Johor bahru via the internet since 2008 for the
                                                          regulator’s monitoring of compliance.

                                                          Lumut Power Plant on the other hand, continued to shine with its
                                                          excellent HSe record. by the end of Dec 2008, Lumut Power Plant
                                                          surpassed the target of 1407 days since commissioning without Lost
                                                          Time Injury, and this marked a significant milestone in our continued
                                                          effort to promote a safety culture.

                                                          Many HSe initiatives have been implemented and improvements can
                                                          be seen in our HSe Performance Statistics. Through the structured
                                                          implementation of our HSe and Security Management Programme over
                                                          the years, we have enhanced the sense of ownership and personal
                                                          responsibility for safety and health at the work place.

                                                          Our HSe Programme encompasses these core elements: management
                                                          commitment, accountability, involvement and leadership; training and
HealtH, safety & envirOnMent                              education; employee involvement; workplace hazard identification and
(“Hse”)                                                   analysis; and workplace hazard prevention, elimination and control.
M a L a KOF F CORP OR aT ION beRH a D
(“M a L a KOFF ”) H a S a LONG HIS TORY OF                We are also proud of our Contractor Safety Programme at our sites.
e S Ta b L I S H I N G H e a LT H , S a F e T Y a N D     Protecting employees, the public, the environment and our physical
eNvIRONMeNT (HSe) IMPROveMeNT GOaLS.                      plant is part of our fundamental values.
CONTINuOuS IMPROveMeNT eFFORTS
Re SuLT eD IN SIGNIFIC a N T ReDuC T IONS
IN eMISSIONS, MINIMIZeD INJuRIeS aND
ILLNeSSeS.
                                                                                               072
Malakoff                                  annual
Corporation                               report
Berhad                                    2008




corporate responsibility



               HuMan resOurCe DevelOPMent                            COrPOrate COMMunity
                                                                     investMent
               The strength of any organization lies in a
               competent and well trained workforce, working         Malakof f ’s commitment to C SR principles
               cohe si vely to achie ve the or ganiz ation’s         remains resolute. In 2008, we reaffirmed this by
               objectives. Our business and operational targets      increasing our efforts in community involvement,
               have been achieved through the dedication and         education, charity and sporting events. For the
               skills of our people. Nonetheless, their knowledge    year under review, Malakoff’s total Corporate
               and capabilities need to be constantly enhanced       Community Investment (“CCI”) amounted to RM
               so that we can maintain our competitive edge          2 million through donations and sponsorships
               and remain at the forefront of our industry. This     to charitable causes, contributions to arts and
               is undertaken through a comprehensive staff           cultural heritage, educational support, as well
               training schedule that covers functional and          as the success of our sporting events.
               soft skills as well as on-the-job training, based
               on proper needs identification.                       To foster comradeship and instil competitive
                                                                     spirit amongst Malaysians, Malakoff continued
               The Training & Development Section, since its         to sponsor duathlon spor t s , c ycling and
               inception following the rapid growth of Malakoff,     running. Our flagship international sporting
               has devoted its effort to achieve such aspirations.   event, Powerman Malaysia, was successfully
               as the demands and requirements for skillful          held on 21 November 2008 on its 7th year, with
               and know ledgeable manpower increases,                a participation of about 750 duathletes. Our
               more specialised training initiatives have been       inaugural 26km Penang Run, which was held on
               developed. To date, we have plant-specific            10 august 2008, and the 12km KL Run, which was
               training simulator at each power plant, providing     held on 20 December 2008, saw a total of 450
               a platform to simulate realistic power plant          and 2,500 runners, respectively. On the other
               scenarios for effective training and competency       hand, the three-legged 6th Malakoff university
               assessment of our plant operators.                    Duathlon Series (MuDS) were also successfully
                                                                     held at universiti Kebangsaan Malaysia (“uKM”)
               Given the rising global economic challenges, the      on 19 July 2008, university Malaya (“uM”) on 26
               Company will invest further in developing the         July 2008 and universiti Pertahanan Nasional
               human capital, the Company’s most valuable asset.     Malaysia (“uPNM”) on 2 august 2008. MuDS
               This is in line with the Company’s ambition to        2008 saw a combined participation of close to
               expand and set up presence in other countries.        1,000 participants. MuDS is designed to attract
                                                                     people, in particular, university students and the
               Mal akof f ’s human re source development             youth to take up interest in endurance sports
               efforts extend beyond our own staff. effective        like duathtlon.
               September 20 0 7, we star ted of fer ing the
               executive Development programme to new                Malakoff has successfully brought together sports
               graduates to develop their competencies through       and charity into a unique annual event called
               training and working experience. The practical        the Malakoff annual Charity Ride. On its third
               understanding and exposure gained in the              year, the Malakoff annual Charity Ride attracted
               program will assist them in ensuring that they        about 70 cyclists which took on a 480km route
               would be able to understand the whole business        from Gombak to Kuala Terengganu. along the
               processes and strategies in the Group.                way, and through the generosity of our business
                                                                     associates, we were able to raise RM60,000.00
                                                                     which was distributed to selected charity homes
                                                                     along the route. Since the inaugural event, the
                                                                     Malakoff annual Charity Ride raised a total of
                                                                     RM154,000.00, which was distributed to rural
                                                                     community centres, orphanages, schools, old
                                                                     folks homes, and the handicapped.
                                                                                                              073
Malakoff                                               annual
Corporation                                            report
Berhad                                                 2008




Our education Fund Programme continued to              enterPrise risK ManageMent (“erM”)
support our nine adopted elementary schools in         In 2007, the Group’s eRM practices were reviewed
the municipality of Pontian, Manjung and Seberang      to reflect the current business requirement and
Prai. This support came in the form of upgrading       to comply with the australian/New Zealand
the schools’ academic facilities as well as offering   St an d ar d o n R i sk Man a g em ent ( a S / N Z S
cash rewards for uPSR high achievers to motivate       4360:2004). The new approach was introduced
the students to do well in their studies.              to each of the Group’s Risk Management units
                                                       from December 2007 until april 2008.
We also provide Sev scholarships to deserving
undergraduates at universiti Tenaga Nasional
                                                       In order to enhance the monitoring and reporting
(“uNITeN”), which aim to encourage and assist
                                                       of the Group’s risk profile, we upgraded our
young people in pursuing relevant courses. as
                                                       enterprise risk management system by procuring
of 31 December 2008, we have granted up to 47
scholarships.                                          a new state-of-the art eRM Software.


Next year, we will endeavour to put in more
“depth and breadth” to our CSR initiatives by
consolidating our existing programmes as well
as identifying new ones.
                                    074
Malakoff                   annual
Corporation                report
Berhad                     2008




corporate responsibility
                                                                                                         075
Malakoff                                            annual
Corporation                                         report
Berhad                                              2008




OrganisatiOnal DevelOPMent                          Malakoff is also mindful of staff retention issues
Organisational Development department was           as evident in the engagement session carried
formed to look into building human capital          out company-wide. In this exercise, the staff
capabilities and assist the Management of           were able to express their views toward the
Malakoff in promoting continuous improvements       company, and a taskforce spearheaded by the
in the company.                                     department worked together on the feedback
                                                    given and presented the findings to the company’s
Malakoff believes that widespread embodiment        management for their response. Generally staff
of Leadership behaviour must exist for effective    felt more appreciated as the company took the
leadership to take place. Staff at the managerial   time to listen and respond, and encouraged them
level undergoes a Leadership Learning series with   to contribute more to the company’s productivity.
development program on People Management,
business acumen and Change Leadership.              The first survey showed that Malakoff’s index
                                                    was higher than the Malaysian National Norm,
These programs are widely implemented to            and we will continuously work towards making
develop new leaders with the right capabilities     Malakoff the employer of choice.
and knowledge through experiential learning
workshops. at the senior management level,
executive coaching is given to the personnel
to instil high performance culture to support       AHMAD	 JAUHARI	 BIN	 YAHYA
sustainable business growth in the company.         Managing Director/Chief executive Officer


The department also believed that succession
management is important in ensuring business
continuity and to support the Company’s growth.
Key positions across the Company were identified
to ensure that these vacancies are filled with
the right people. Potential staff were given
accelerated programmes to prepare them to
take on a bigger challenge, and to be ready to
face higher expectations.
        about
resince isenCe
    li state of
          the
 Persevera
 collective resolute, in the face
 of adversities.
                                                                                                         078
Malakoff                                     annual
Corporation                                  report
Berhad                                       2008




COrPOrate event
highlights




                                                           01                                     02
                                                           1-2 february 2008                      17-19 May 2008
                                                           RIDE	 FROM	 TG.	 MALIM	 TO	            MALAkOFF	 CHARITY	 RIDE
                                                           CAMERON	 HIGHLANDS                     Group photo of cyclists.
                                                           Group photo of Mal akof f
                                                           Cycling Club at batu Gajah,
                                                           Perak.




                        03                                 04                                     05
                        7-10 july 2008                     19 july 2008                           26 july 2008
                        SAFETY,	 HEALTH	 AND	              M A L A kO F F	 U N I V E R S I T Y	   M A L A kO F F	 U N I V E R S I T Y	
  01               02   WORk	 2008	 EXHIBITION             DUATHLON	 SERIES	 2008                 DUATHLON	 SERIES	 2008
                        Staff in front of the exhibition   en a hmad Jauhar i Yahy a              at the star ting line of
                        booth.                             with participants of Malakoff          Malakoff university
  03          04   05
                                                           university Duathlon Series             Duathlon Series 2008 held
                                                           2008 at uKM.                           at uM.
                                                                                                   079
Malakoff                                             annual
Corporation                                          report
Berhad                                               2008




corporate event highlights




06                            07                                     08
28 july 2008                  02 august 2008                         9 august 2008
100 TH	 COAL	 SHIpMENT	       M A L A kO F F	 U N I V E R S I T Y	   WIRAZONE’S	 CUSTOMER	 DAY
CEREMONY	 AT	 TG.	 BIN	       DUATHLON	 SERIES	 2008                 a get-together with lots of
pOWER	 pLANT                  The winner of Men’s Open               activities for customers.
en ahmad Jauhari Yahya        Category at MuDS uPNM.
signing the commemorative
plaque.



09                            10                                     11
10 august 2008                15 august 2008                         05 sePteMber 2008
MALAkOFF	 pENANG	 RUN         LAUNCHING	 OF	 	                       MAJLIS	 BUkA	 pUASA
The w inner s of Mal akof f   OHSAS	 18001                           Tan Sr i a bdul Halim a li     06   07   08
Penang Run.                   Deput y CeO, en Mohd                   handing out donations to
                              Radzuan Yahya officiating              kids from orphanages.
                                                                                                    09   10   11
                              the launching ceremony.
                                                                                                                080
Malakoff                                         annual
Corporation                                      report
Berhad                                           2008




corporate event highlights




                        12                                       13                                      14
                        17 OCtOber 2008                          18-20 OCtOber 2008                      19 OCtOber 2008
                        T G.	 B I N	 p O W E R	 p L A N T	       ADOpTED	 SCHOOL	                        HARI	 RAYA	 OpEN	 HOUSE
                        HARI	 RAYA	 OpEN	 HOUSE                  pROGRAMME                               Tan Sri abdul Halim ali and
                        Orang kampung from Mukim                 The school children during              e n a h m a d J a u h a r i Ya h y a
                        Serkat and staff mingled                 t h e ir v i s i t to t h e b r e a d   handing out duit raya and gifts
                        during the open house at                 factory.                                to children from the charity
                        site.                                                                            homes and adopted schools.



                        15                                       16                                      17
                        21-23 OCtOber 2008                       23 OCtOber 2008                         24 OCtOber 2008
                        pOWERGEN	 ASIA	 2008                     LUMUT	pOWER	pLANT	HARI	                 NEW	 SURAU	 AT	 pRAI	
  12          13   14   M a l a ko f f s t a f f t h a t a r e   RAYA	 OpEN	 HOUSE                       pOWER	 pLANT
                        involved in the exhibition.              Staf f enter tained or ang              en ahmad Jauhari Yahya
                                                                 kampung from Segari during              and en Mohd Radzuan Yahya
  15          16   17
                                                                 the open house at site                  inspecting the interior of
                                                                                                         the surau.
                                                                                                             081
Malakoff                                                 annual
Corporation                                              report
Berhad                                                   2008




corporate event highlights




18                                 19                                   20
09 nOveMber 2008                   26 nOveMber 2008                     04 DeCeMber 2008
pOWERMAN	 MALAYSIA                 L O N G 	 T E R M 	 S E R V I C E	   MALAkOFF	 BREAkOUT	 SESSION
The winners of elite Category      AWARD	 (LTSA)	 CEREMONY	             break-out Session at Marriott Putrajaya.
at Powerman Malaysia 2008.         FOR	 MALAkOFF	 HQ
                                   en Mohd Radzuan Yahy a
                                   with the recipients of LTSa
                                   at KL HQ.



21                                 22                                   23
09 DeCeMber 2008                   13 DeCeMber 2008                     21 DeCeMber 2008
MAJLIS	 kORBAN	 AIDIL	 ADHA        MALAkOFF	 CORpORATE	                 MALAkOFF	 kL	 RUN
en a nuar L azim handing           GOLF	 INVITATIONAL                   en ahmad Jauhari Yahya                     18   19   20
b a g o f ko r b a n m e a t t o   Tan Sr i a bdul Halim a li           with the winners of Malakoff
representative from PDK            giving a prize to a winner.          Run 2008.
                                                                                                                   21   22   23
Seberang Jaya.
                       082
Malakoff      annual
Corporation   report
Berhad        2008
FINANCIAL
STATEMENTS

084	 Directors’	 Report
088	 Balance	 Sheets
090 	Income	 Statements
091	 Statements	 of	 Changes	 in	 Equity
092	 Cash	 Flow	 Statements
094	 Notes	 to	 the	 Financial	 Statements
147	 	 tatement	 by	 Directors	
     S
147	 	 tatutory	 Declaration
     S
148	 Report	 of	 the	 Auditors
                                                                                                                            084
Malakoff                                                      annual
Corporation                                                   report
Berhad                                                        2008




DIreCtors’ rEporT
for the year ended 31 December 2008


The	 Directors	 have	 pleasure	 in	 submitting	 their	 report	 and	 the	 audited	 financial	 statements	 of	 the	 Group	 and	 of	 the	 Company	 for	
the	 year	 ended	 31	 December	 2008.



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



results
                                                                                                                           Group         company
                                                                                                                          rM’000          rM’000

Profit	 attributable	 to:
    Shareholders	 of	 the	 Company	                                                                                       138,789	          155,543
    Minority	 interest	                                                                                                    51,309	                –

	     	     	     	                                                                                                       190,098	          155,543




reserves and Provisions
There	 were	 no	 material	 transfers	 to	 or	 from	 reserves	 and	 provisions	 during	 the	 year	 under	 review	 except	 as	 disclosed	 in	 the	
financial	 statements.



dividends
Since	 the	 end	 of	 the	 previous	 financial	 year,	 the	 Company	 paid:

       a
(i)	 	 	 	 final	 ordinary	 dividend	 of	 approximately	 15.4	 sen	 per	 ordinary	 share	 less	 tax	 at	 26%	 totalling	 RM40,000,000	 (11.4	 sen	 net	
       per	 ordinary	 share)	 in	 respect	 of	 the	 year	 ended	 31	 December	 2007	 on	 2	 April	 2008;

        a
(ii)	 	 	 n	 interim	 ordinary	 dividend	 of	 approximately	 16.5	 sen	 per	 share	 less	 tax	 at	 26%	 totalling	 RM42,857,920	 (12.2	 sen	 net	 per	
        ordinary	 share)	 in	 respect	 of	 the	 year	 ended	 31	 December	 2008	 on	 2	 September	 2008;	 and

         a
(iii)	 	 	 n	 interim	 preference	 dividend	 of	 RM1	 per	 share	 less	 tax	 at	 26%	 totalling	 RM37,142,080	 (74	 sen	 net	 per	 share)	 in	 respect	
         of	 the	 year	 ended	 31	 December	 2008	 on	 2	 September	 2008.

The	final	ordinary	dividend	recommended	by	the	Directors	in	respect	of	the	year	ended	31	December	2008	consist	of	approximately	
2.57	 sen	 per	 ordinary	 share	 less	 tax	 at	 25%	 (1.92	 sen	 net	 per	 ordinary	 share)	 and	 single	 tier	 dividend	 of	 approximately	 22.27	 sen	
per	 ordinary	 share	 totalling	 RM6,769,188	 and	 RM78,230,812	 respectively.
                                                                                                                          085
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




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

director                                                                                    alternate director

Tan	 Sri	 Abdul	 Halim	 bin	 Ali	 (Chairman/Director)
Ahmad	 Jauhari	 bin	 Yahya	 (Managing	 Director/Chief	 Executive	 Officer)	
Yoong	 Nim	 Chee
Hasni	 bin	 Harun	
Tan	 Ler	 Chin
Azian	 binti	 Mohd	 Noh	
Andrew	 Ian	 Rowan	 Yee	 	                                                                  Vijay	 Vijendra	 Sethu	
Lee	 Khuan	 Eoi	
  (appointed	 on	 11	 April	 2008)
Ayyaril	 Karikulath	 Feizal	 Ali	 	                                                         Azlan	 bin	 Shahrim	 (resigned	 on	 11	 April	 2008)
  (resigned	 on	 11	 April	 2008)




directors’ interests
None	 of	 the	 Directors	 holding	 office	 at	 31	 December	 2008	 had	 any	 interest	 in	 the	 ordinary	 shares	 of	 the	 Company	 and	 of	 its	
related	 corporations	 during	 the	 financial	 year.



directors’ benefits
Since	 the	 end	 of	 the	 previous	 financial	 year,	 no	 Director	 of	 the	 Company	 has	 received	 nor	 become	 entitled	 to	 receive	 any	 benefit	
(other	 than	 a	 benefit	 included	 the	 aggregate	 amount	 of	 emoluments	 received	 or	 due	 and	 receivable	 by	 Directors	 as	 shown	 in	
the	 financial	 statements)	 by	 reason	 of	 a	 contract	 made	 by	 the	 Company	 or	 a	 related	 company	 with	 the	 Director	 or	 with	 a	 firm	
of	 which	 the	 Director	 is	 a	 member,	 or	 with	 a	 company	 in	 which	 the	 Director	 has	 a	 substantial	 financial	 interest.

There	 were	 no	 arrangements	 during	 and	 at	 the	 end	 of	 the	 financial	 year	 which	 had	 the	 object	 of	 enabling	 Directors	 of	 the	
Company	 to	 acquire	 benefits	 by	 means	 of	 the	 acquisition	 of	 shares	 in	 the	 Company	 or	 any	 other	 body	 corporate.


issue of shares
There	 were	 no	 changes	 in	 the	 issued	 and	 paid-up	 capital	 of	 the	 Company	 during	 the	 financial	 year.


oPtions Granted over unissued shares
No	 options	 were	 granted	 to	 any	 person	 to	 take	 up	 unissued	 shares	 of	 the	 Company	 during	 the	 year.
                                                                                                                             086
Malakoff                                                       annual
Corporation                                                    report
Berhad                                                         2008




directors’ report
for the year ended 31 December 2008



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)	    t
       	 hat	 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)	   	 hat	 would	 render	 the	 value	 attributed	 to	 the	 current	 assets	 in	 the	 Group	 and	 in	 the	 Company	 financial	 statements	
       t
       misleading,	 or

        w
iii)	 	 	 hich	 have	 arisen	 which	 render	 adherence	 to	 the	 existing	 method	 of	 valuation	 of	 assets	 or	 liabilities	 of	 the	 Group	 and	 of	
        the	 Company	 misleading	 or	 inappropriate,	 or

iv)	   	 ot	 otherwise	 dealt	 with	 in	 this	 report	 or	 in	 the	 financial	 statements,	 that	 would	 render	 any	 amount	 stated	 in	 the	 financial	
       n
       statements	 of	 the	 Group	 and	 of	 the	 Company	 misleading.

At	 the	 date	 of	 this	 report,	 there	 does	 not	 exist:

i)	    	 ny	 charge	 on	 the	 assets	 of	 the	 Group	 or	 of	 the	 Company	 that	 has	 arisen	 since	 the	 end	 of	 the	 financial	 year	 and	 which	
       a
       secures	 the	 liabilities	 of	 any	 other	 person,	 or	

	 ii)	 any	 contingent	 liability	 in	 respect	 of	 the	 Group	 or	 of	 the	 Company	 that	 has	 arisen	 since	 the	 end	 of	 the	 financial	 year.

No	 contingent	 liability	 or	 other	 liability	 of	 any	 company	 in	 the	 Group	 has	 become	 enforceable,	 or	 is	 likely	 to	 become	 enforceable	
within	 the	 period	 of	 twelve	 months	 after	 the	 end	 of	 the	 financial	 year	 which,	 in	 the	 opinion	 of	 the	 Directors,	 will	 or	 may	
substantially	 affect	 the	 ability	 of	 the	 Group	 and	 of	 the	 Company	 to	 meet	 their	 obligations	 as	 and	 when	 they	 fall	 due.

In	 the	 opinion	 of	 the	 Directors,	 except	 for	 the	 allowance	 for	 impairment	 of	 intangible	 assets	 amounting	 to	 RM99,232,000	 and	 the	
windfall	 tax	 levy	 of	 RM211,666,000	 as	 disclosed	 in	 the	 financial	 statements,	 the	 results	 of	 the	 operations	 of	 the	 Group	 and	 of	 the	
Company	 for	 the	 financial	 year	 ended	 31	 December	 2008	 have	 not	 been	 substantially	 affected	 by	 any	 item,	 transaction	 or	 event	
of	 a	 material	 and	 unusual	 nature	 nor	 has	 any	 such	 item,	 transaction	 or	 event	 occurred	 in	 the	 interval	 between	 the	 end	 of	 that	
financial	 year	 and	 the	 date	 of	 this	 report.
                                                                                                              087
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




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

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




…………………………………………………	 Chairman
tan sri abdul halim bin ali




…………………………………………………	 Managing	 Director/Chief	 Executive	 Officer
ahmad Jauhari bin yahya

Kuala	 Lumpur,

Date:	 19	 February	 2009
                                                                                                    088
Malakoff                                       annual
Corporation                                    report
Berhad                                         2008




BALANCe ShEETS
at 31 December 2008


                                                                        Group                          company
                                                        note         2008       2007                 2008        2007
                                                                   rM’000     rM’000               rM’000      rM’000

assets
  Property,	 plant	 and	 equipment	                      3	    	 10,733,893	     10,631,005	        37,402	        38,419	
  Intangible	 assets	                                    4	       6,538,891	 	    6,904,958	             –	             –
  Prepaid	 lease	 payments	                              5	         107,810	        112,288	         5,454	         5,516	
  Investment	 in	 subsidiaries	                          6	               –	              –	     8,128,970	     8,128,970	
  Investment	 in	 associates	                            7	       1,379,157	 	    1,536,031	     1,006,800	     1,022,000	
  Other	 investments	                                    8	               –	              –	     1,669,056	     1,715,897	
  Deferred	 tax	 assets	                                 9	          10,973	         10,609	             –	             –

total non-current assets                                        18,770,724	      19,194,891	    10,847,682	    10,910,802	

  Receivables,	 deposits	 and	 prepayments	              10	     1,025,841	       1,147,669	      622,861	       602,737
  Inventories	                                           11	       638,415	         488,173	            –	             –
  Current	 tax	 assets	                                   	        124,442	          52,892	      115,664	        51,550
  Cash	 and	 cash	 equivalents	                          12	     3,064,853	       2,573,954	      488,115	       460,493

total current assets	                                     	      4,853,551	       4,262,688	     1,226,640	     1,114,780

total assets	                                             	    	 23,624,275	     23,457,579	    12,074,322	    12,025,582

equity
  Share	 capital	                                         	        356,363	        	 356,363	       356,363	      356,363
  Reserves	                                               	      3,659,298	 	     3,658,997	     3,658,997	     3,658,997
  Retained	 profits	                                      	        175,868	          157,079	     	 131,209	       95,666

total equity attributable to shareholders of
  the company	                                            	      4,191,529	      	 4,172,439	    4,146,569	     4,111,026
Minority interest	                                        	        288,196	        	 220,410	             –	            –

total equity	                                            13	     4,479,725	       4,392,849	     4,146,569	     4,111,026
                                                                                                              089
Malakoff                                               annual
Corporation                                            report
Berhad                                                 2008




balance sheets
at 31 December 2008 (continued)



                                                                                 Group                           company
                                                                note          2008       2007                  2008        2007
                                                                            rM’000     rM’000                rM’000      rM’000

liabilities

  Loans	 and	 borrowings	                                        14	    	 13,917,029	   14,348,464	        6,902,250	 	    6,855,028
  Employee	 benefits	                                            15	         31,277	        27,280	           10,519	          8,950
  Deferred	 tax	 liabilities	                                    9	       2,785,196	     2,809,559	                	 –	            –


total non-current liabilities	                                    	      16,733,502	    17,185,303	        6,912,769	      6,863,978	


  Payables	 and	 accruals	                                       16	      1,043,321	      	 588,340	         423,692	       457,998
  Current	 tax	 liabilities	                                      	           4,254	       	 23,913	 	              –	             –
  Loans	 and	 borrowings	                                        14	     	 1,363,473	    1,267,174	          591,292	 	     592,580


total current liabilities	                                        	       2,411,048	     1,879,427	        1,014,984	      1,050,578


total liabilities	                                                	      19,144,550	    19,064,730	        7,927,753	      7,914,556


total equity and liabilities	                                     	      23,624,275	    23,457,579	      	 12,074,322	    12,025,582




                          the notes on pages 94 to 146 are an integral part of these financial statements.
                                                                                                          090
Malakoff                                               annual
Corporation                                            report
Berhad                                                 2008




INCome STATEMENTS
for the year ended 31 December 2008


                                                                                 Group                        company
                                                                                    30.4.2007 to
                                                                note          2008   31.12.2007           2008            2007
                                                                            rM’000       rM’000         rM’000          rM’000

Revenue	                                                         17	      5,121,267	    	 2,701,998	    564,324	        421,219
Cost	 of	 sales	                                                  	      (3,198,733)	   (1,536,229)	          –	              –

Gross profit	                                                     		      1,922,534	    1,165,769	      564,324	        421,219
Other	 income	                                                    	          20,130	          4,219	      12,080	           104
Administrative	 expenses	                                         	        (145,427)	     	 (90,645)	    (61,997)	      (32,021)
Other	 operating	 expenses	                                       	        (435,436)	     (106,304)	           –	             –

results from operating activities	                                	       1,361,801	      973,039	      514,407	        389,302
Interest	 income	                                                 	         123,775	        123,038	     296,841	     214,330
Finance	 costs	                                                   	      (1,197,816)	    	 (768,434)	   (581,338)	   (387,894)

operating profit	                                               18	         287,760	      327,643	      229,910	        215,738
Share	 of	 profit/(loss)	 after	 tax	 and	 minority	
  interest	 of	 equity	 accounted	 associates	                    	          30,800	        (3,874)	           –	             –

Profit before tax	                                                	         318,560	      323,769	      229,910	        215,738
Tax	 expense	                                                   20	        (128,462)	      (55,267)	     (74,367)	      (59,854)

Profit for the year/period	                                       	         190,098	      268,502	      155,543	        155,884

attributable to:
  Shareholders	 of	 the	 Company	                                 	        	 138,789	     217,297	      155,543	        155,884
  Minority	 interest	                                             	           51,309	      51,205	            –	              –

Profit for the year/period	                                       	         190,098	      268,502	      155,543	        155,884




                          the notes on pages 94 to 146 are an integral part of these financial statements.
                                                                                                                                          091
Malakoff                                                            annual
Corporation                                                         report
Berhad                                                              2008




stAtemeNts of chANgES iN EquiTy
for the year ended 31 December 2008


                                       –––––––––––––attributable to shareholders of the company–––––––––––––
                                       ––––––––––––––––––non-distributable––––––––––––––––––– distributable
                                                                                          foreign (accumulated
                                        ordinary Preference     ordinary Preference      currency      losses)/
                                           share      share        share       share translation     retained                               Minority
Group                             note    capital    capital   Premium      Premium       reserve      profits                total         interest            total
                                         rM’000     rM’000       rM’000      rM’000        rM’000     rM’000                rM’000           rM’000           rM’000

at 1 January 2007	                  	           *	             –	           –	         –	          –	            (218)	          (218)	                –	        (218)
Profit	 for	 the	 period	           	           –	          –	              –	         –	          –	     217,297	          217,297	          51,205	         268,502
Shares	 issued	                    13	    351,344	      5,019	      3,162,096	   496,901	          –	           –	        4,015,360	               –	       4,015,360
Acquisition	 through	
   business	 combination	          27	          –	             –	           –	         –	          –	               –	            –	         189,285	        189,285
Dividends	 to	 shareholders	       21	          –	             –	           –	         –	          –	         (60,000)	     (60,000)	        (20,080)	       (80,080)

at 31 december 2007/
   1 January 2008	                  	     351,344	      5,019	      3,162,096	   496,901	          –	     157,079	        4,172,439	         220,410	       4,392,849
Profit	 for	 the	 year	             	           –	             –	           –	         –	          –	     138,789	         138,789	           51,309	        190,098
Currency	 translation	
   differences	                     	           –	             –	           –	         –	        301	               –	           301	            544	            845
Increase	 in	 equity	 interest
   in	 existing	 subsidiary	        	           –	             –	           –	         –	          –	            –	               –	           29,811	         29,811
Dividends	 to	 shareholders	       21	          –	             –	           –	         –	          –	     (120,000)	       (120,000)	         (13,878)	      (133,878)	

at 31 december 2008	                	     351,344	      5,019	      3,162,096	   496,901	        301	     175,868	        4,191,529	         288,196	       4,479,725	

*	 RM2

	                                                            ––––––––––––attributable to shareholders of the company––––––––––––
                                                             –––––––––––––––––non-distributable––––––––––––––––– distributable
                                                                                                                     (accumulated
                                                               ordinary   Preference         ordinary     Preference        losses)/
                                                                  share          share         share           share      retained
company                                                 note     capital        capital     premium         premium         profits                            total
                                                                rM’000         rM’000         rM’000         rM’000        rM’000                            rM’000

at 1 January 2007	                                        	                 –	              –	           –	                 –	                (218)	             (218)
Profit	 for	 the	 year	                                   	                –	            –	              –	                 –	            155,884	            155,884
Shares	 issued	                                          13	         351,344	        5,019	      3,162,096	           496,901	                  –	          4,015,360
Dividends	 to	 shareholders	                             21	               –	            –	              –	                 –	            (60,000)	           (60,000)

at 31 december 2007/1 January 2008	                       	          351,344	        5,019	      3,162,096	           496,901	             95,666	          4,111,026
Profit	 for	 the	 year	                                   	                 –	              –	           –	                 –	             155,543	           155,543
Dividends	 to	 shareholders	                             21	                –	              –	           –	                 –	            (120,000)	         (120,000)

at 31 december 2008	                                      	          351,344	        5,019	      3,162,096	           496,901	            131,209	          4,146,569

	


                                 the notes on pages 94 to 146 are an integral part of these financial statements.
                                                                                                                 092
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




CAsh FLow STATEMENTS
for the year ended 31 December 2008


                                                                                    Group                            company
                                                                                       30.4.2007 to
                                                                      note       2008   31.12.2007               2008            2007
                                                                               rM’000       rM’000             rM’000          rM’000

cash flows from operating activities
    Profit	 before	 tax	                                               	      	 318,560	        323,769	       229,910	        215,738
    Adjustments	 for:
      Allowance	 for	 doubtful	 debts	                                  	        36,158	          75,491	             –	              –
      Amortisation	 of	 prepaid	 lease	 payments	                      5	         4,478	          	 2,986	           62	             42
      Amortisation	 of	 intangible	 assets	                            4	       401,914	       	 230,795	             –	              –
      Depreciation	 of	 property,	 plant	 and	 equipment	              3	     	 442,449	         375,815	         2,048	          1,329
      Finance	 costs	                                                   	    1,197,816	          768,434	       581,338	        387,894
      Interest	 income	                                                 	     (123,775)	      	 (123,038)	     (296,841)	      (214,330)
      Impairment	 of	 intangible	 assets	                              4	        98,373	                –	            –	              –
      Impairment	 of	 goodwill	                                        4	           859	                –	            –	              –
      Provision	 for	 retirement	 benefits	                             	         9,812	            4,167	        3,675	            696
      Share	 of	 (profit)/loss	 of	 equity	 accounted	 associates	     	        (30,800)	           3,874	            –	              –

	   Operating	 profit	 before	 changes	 in	 working	 capital	 	        	     2,355,844	 	     1,662,293	       520,192	        391,369
	   Changes	 in	 working	 capital:
	   Inventories	                                                       	      (150,242)	         (46,037)	            –	              –
	   Receivables,	 deposits	 and	 prepayments	                          	       115,481	           40,964	       (42,305)	      (118,647)
	   Payables	 and	 accruals	                                           	       440,425	       	 (131,245)	     (183,639)	        11,386

	 Cash	 generated	 from	 operations	                                   	     2,761,508	       1,525,975	       294,248	        284,108
	 Tax	 paid	                                                           	      (243,612)	       (126,869)	            –	              –

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

cash flows from investing activities
	   Acquisition	 of	 property,	 plant	 and	 equipment	                 3	     (545,337)	       	 (253,331)	     (1,031)	         (2,716)	
	   Acquisition	 of	 business,	 net	 of	 cash	 acquired	              27	            –	     	 (7,211,089)	           –	      (9,239,344)
	   Redemption	 of	 unsecured	 loan	 stocks	                           	        (8,342)	              (525)	         –	               –
	   Proceeds	 from	 redemption	 of	 unsecured	 loan	 stocks	           	        15,200	                  –	     62,041	               –
	   Dividend	 received	 from	 associates	                              	        37,395	             33,475	          –	               –
	   Investment	 in	 associates	                                        	             –	          	 (55,773)	         –	               –
	   Interest	 received	                                                	       139,111	           	 93,243	    319,022	         181,125
	   Increase	 in	 deposits	 pledged	                                   	        (1,099)	           (16,780)	    (1,099)	        (16,780)

net cash (used in)/from investing activities	                          		    	 (363,072)	   	 (7,410,780)	     378,933	     	 (9,077,715)
                                                                                                                      093
Malakoff                                                    annual
Corporation                                                 report
Berhad                                                      2008




cash flow statements
for the year ended 31 December 2008 (continued)



                                                                                         Group                            company
                                                                                            30.4.2007 to
                                                                     note             2008   31.12.2007               2008               2007
                                                                                    rM’000       rM’000             rM’000             rM’000

cash flows from financing activities
	     Dividends	 paid	                                                 	          	 (120,000)	         (60,000)	   (120,000)	        (60,000)
	     Dividends	 paid	 to	 minority	 shareholders	                     	             (13,878)	         (20,080)	           –	              –
	     Interest	 paid	                                                  	         (1,151,366)	       	 (819,741)	   (526,658)	 	     (252,049)
	     Issue	 of	 shares	                                               	                   –	       4,015,360	             –	      4,015,360
	     Repayment	 of	 borrowings	                                       	          	 (673,000)	   	 (1,963,380)	            –	     (1,878,380)
	     Proceeds	 from	 borrowings	                                      	             293,220	       7,416,689	           	 –	      7,412,389

net cash (used in)/from financing activities	                          	         (1,665,024)	     8,568,848	       (646,658)	     9,237,320

net increase in cash and cash equivalents	                             	            489,800	      2,557,174	          26,523	          443,713
cash and cash equivalents at 1 January	                                	          2,557,174	              –	       	 443,713	                –

cash and cash equivalents at 31 december	                              	          3,046,974	      2,557,174	        470,236	           443,713



i)	      Cash	 and	 cash	 equivalents

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

                                                                                         Group                            company
                                                                                            30.4.2007 to
                                                                     note             2008   31.12.2007               2008               2007
                                                                                    rM’000       rM’000             rM’000             rM’000

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

	        	    	    	                                                   	          3,064,853	      2,573,954	        488,115	           460,493
	        Less:	 Deposits	 pledged	                                    12	           (17,879)	       (16,780)	       (17,879)	          (16,780)

	        	    	     	                                                  	          3,046,974	      2,557,174	        470,236	           443,713




                            the notes on pages 94 to 146 are an integral part of these financial statements.
                                                                                                                     094
Malakoff                                                  annual
Corporation                                               report
Berhad                                                    2008




Notes to the fiNANciAl STATEMENTS


Malakoff	 Corporation	 Berhad	 is	 a	 public	 limited	 liability	 company,	 incorporated	 and	 domiciled	 in	 Malaysia.	 The	 addresses	 of	
the	 principal	 place	 of	 business	 and	 registered	 office	 of	 the	 Company	 are	 as	 follows:

Principal place of business
Level	 12,	 Block	 3B,
Plaza	 Sentral,
Jalan	 Stesen	 Sentral	 5,
50470	 Kuala	 Lumpur.

registered office
Level	 8,	 Kompleks	 Antarabangsa,
Jalan	 Sultan	 Ismail,
50250	 Kuala	 Lumpur.

The	 consolidated	 financial	 statements	 of	 the	 Company	 as	 at	 and	 for	 the	 year	 ended	 31	 December	 2008	 comprise	 the	 Company	
and	 its	 subsidiaries	 and	 the	 Group’s	 interest	 in	 associates.

The	 Company	 is	 principally	 engaged	 in	 investment	 holding	 and	 the	 provision	 of	 management	 services	 to	 it	 subsidiaries	 whilst	
the	 principal	 activities	 of	 the	 subsidiaries	 are	 as	 stated	 in	 Note	 6.

The	 immediate	 and	 ultimate	 holding	 companies	 during	 the	 financial	 year	 were	 MMC	 Corporation	 Berhad,	 a	 company	 listed	 on	
the	 Main	 Board	 of	 Bursa	 Malaysia	 Securities	 Berhad	 and	 Indra	 Cita	 Sdn.	 Bhd.	 Both	 companies	 were	 incorporated	 in	 Malaysia.

The	 financial	 statements	 were	 approved	 by	 the	 Board	 of	 Directors	 on	 19	 February	 2009.



1.   basis of PreParation
	    (a)   statement of compliance
	    	     T
           	 he	 financial	 statements	 of	 the	 Group	 and	 of	 the	 Company	 have	 been	 prepared	 in	 accordance	 with	 Financial	 Reporting	
           Standards	 (FRS),	 accounting	 principles	 generally	 accepted	 and	 the	 Companies	 Act,	 1965	 in	 Malaysia.

	    	     T
           	 he	 Group	 and	 the	 Company	 have	 not	 applied	 the	 following	 accounting	 standards	 (including	 its	 consequential	
           amendments)	 and	 interpretations	 that	 have	 been	 issued	 by	 the	 Malaysian	 Accounting	 Standards	 Board	 (MASB)	 but	 are	
           not	 yet	 effective:

           frss/interpretations                                                                                          effective date

           FRS	 4,	 Insurance	 Contracts	 	                                                                              1	 January	 2010
           FRS	 7,	 Financial	 Instruments:	 Disclosures	                                                                1	 January	 2010
           FRS	 8,	 Operating	 Segments	                                                                                 1	 July	 2009
           FRS	 139,	 Financial	 Instruments:	 Recognition	 and	 Measurement	                                            1	 January	 2010
           IC	 Interpretation	 9,	 Reassessment	 of	 Embedded	 Derivatives	                                              1	 January	 2010
           IC	 Interpretation	 10,	 Interim	 Financial	 Reporting	 and	 Impairment	                                      1	 January	 2010
                                                                                                                       095
Malakoff                                                        annual
Corporation                                                     report
Berhad                                                          2008




notes to the financial statements                                      (continued)




1.   basis of PreParation (continued)
	    (a)   statement of compliance (continued)
           The	 Group	 and	 the	 Company	 plan	 to	 apply	 FRS	 7,	 FRS	 8,	 FRS	 139,	 IC	 Interpretation	 9	 and	 IC	 Interpretation	 10	 from	
           the	 annual	 period	 beginning	 1	 January	 2010.	 FRS	 4	 is	 not	 applicable	 to	 the	 Group	 and	 the	 Company.

           The	 impact	 of	 applying	 FRS	 7	 and	 FRS	 139	 on	 the	 financial	 statements	 upon	 first	 adoption	 as	 required	 by	 paragraph	
           30(b)	 of	 FRS	 108,	 Accounting	 Policies,	 Changes	 in	 Accounting	 Estimates	 and	 Errors	 is	 not	 disclosed	 by	 virtue	 of	 the	
           exemptions	 given	 in	 the	 respective	 FRSs.

           FRS	 8,	 Operating	 Segment
           FRS	 8,	 which	 replaces	 FRS	 114,	 Segment	 Reporting,	 requires	 the	 identification	 and	 reporting	 of	 operating	 segments	
           based	on	internal	reports	that	are	regularly	reviewed	by	the	entity’s	chief	operating	decision	maker	in	order	to	allocate	
           resources	 to	 the	 segment	 and	 to	 assess	 its	 performance.	 Currently,	 the	 Group	 presents	 segment	 information	 in	
           respect	 of	 its	 business	 segments	 (see	 note	 22).	 Under	 FRS	 8,	 the	 Group	 will	 present	 segment	 information	 in	 respect	
           of	 its	 operating	 segments.

           The	adoption	of	IC	Interpretation	9	and	IC	Interpretation	10	is	not	expected	to	have	any	material	impact	on	the	financial	
           statements	 of	 the	 Group	 and	 the	 Company.

     (b)   basis of measurement
           The	 financial	 statements	 have	 been	 prepared	 on	 the	 historical	 cost	 basis	 except	 for	 the	 following	 assets	 as	 explained	
           in	 their	 respective	 accounting	 policy	 notes:

           –	 	   Property,	 plant	 and	 equipment
           –	     Intangible	 assets

     (c)   functional and presentation currency
	    	     T
           	 hese	 financial	 statements	 are	 presented	 in	 Ringgit	 Malaysia	 (RM),	 which	 is	 the	 Company’s	 functional	 currency.	 All	
           financial	 information	 presented	 in	 RM	 has	 been	 rounded	 to	 the	 nearest	 thousand,	 unless	 otherwise	 stated.

     (d)   use of estimates and judgements
	    	     T
           	 he	 preparation	 of	 financial	 statements	 requires	 management	 to	 make	 judgements,	 estimates	 and	 assumptions	 that	
           affect	 the	 application	 of	 accounting	 policies	 and	 the	 reported	 amounts	 of	 assets,	 liabilities,	 income	 and	 expenses.	
           Actual	 results	 may	 differ	 from	 these	 estimates.

	    	     	 stimates	 and	 underlying	 assumptions	 are	 reviewed	 on	 an	 ongoing	 basis.	 Revisions	 to	 accounting	 estimates	 are	
           E
           recognised	 in	 the	 period	 in	 which	 the	 estimate	 is	 revised	 and	 in	 any	 future	 periods	 affected.

	    	     T
           	 here	 are	 no	 significant	 areas	 of	 estimation	 uncertainty	 and	 critical	 judgements	 in	 applying	 accounting	 policies	 that	
           have	 significant	 effect	 on	 the	 amounts	 recognised	 in	 the	 financial	 statements	 other	 than	 those	 disclosed	 in	 the	
           following	 notes:

	    	     •	     Note	 2	 (c)	 (iii)	 –	 residual	 value	 of	 power	 plant
	    	     •	     Note	 4	 –	 intangible	 assets
                                                                                                                          096
Malakoff                                                    annual
Corporation                                                 report
Berhad                                                      2008




notes to the financial statements                                  (continued)




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

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

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

     	     	     Investments	 in	 subsidiaries	 are	 stated	 in	 the	 Company’s	 balance	 sheet	 at	 cost	 less	 any	 impairment	 losses.

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

                 Associates	 are	 accounted	 for	 in	 the	 consolidated	 financial	 statements	 using	 the	 equity	 method.	 The	 consolidated	
                 financial	 statements	 include	 the	 Group’s	 share	 of	 the	 profit	 or	 loss	 of	 the	 equity	 accounted	 associates,	 after	
                 adjustments,	 if	 any,	 to	 align	 the	 accounting	 policies	 with	 those	 of	 the	 Group,	 from	 the	 date	 that	 significant	
                 influence	 commences	 until	 the	 date	 that	 significant	 influence	 ceases.

                 When	 the	 Group’s	 share	 of	 losses	 exceeds	 its	 interest	 in	 an	 equity	 accounted	 associate,	 the	 carrying	 amount	
                 of	 that	 interest	 (including	 any	 long-term	 investments)	 is	 reduced	 to	 nil	 and	 the	 recognition	 of	 further	 losses	
                 is	 discontinued	 except	 to	 the	 extent	 that	 the	 Group	 has	 an	 obligation	 or	 has	 made	 payments	 on	 behalf	 of	 the	
                 investee.

                 Investments	 in	 associates	 are	 stated	 in	 the	 Company’s	 balance	 sheet	 at	 cost	 less	 any	 impairment	 losses.

           (iii) Minority interest
                 Minority	 interest	 at	 the	 balance	 sheet	 date,	 being	 the	 portion	 of	 the	 net	 identifiable	 assets	 of	 subsidiaries	
                 attributable	 to	 equity	 interests	 that	 are	 not	 owned	 by	 the	 Company,	 whether	 directly	 or	 indirectly	 through	
                 subsidiaries,	 are	 presented	 in	 the	 consolidated	 balance	 sheet	 and	 statement	 of	 changes	 in	 equity	 within	 equity,	
                 separately	 from	 equity	 attributable	 to	 the	 equity	 holders	 of	 the	 Company.	 Minority	 interest	 in	 the	 results	 of	 the	
                 Group	 are	 presented	 on	 the	 face	 of	 the	 consolidated	 income	 statement	 as	 an	 allocation	 of	 the	 total	 profit	 or	 loss	
                 for	 the	 year	 between	 minority	 interest	 and	 the	 equity	 holders	 of	 the	 Company.

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

           (iv) transactions eliminated on consolidation
                 Intra-group	 balances	 and	 transactions,	 and	 any	 unrealised	 income	 and	 expenses	 arising	 from	 intra-group	
                 transactions,	 are	 eliminated	 in	 preparing	 the	 consolidated	 financial	 statements.
                                                                                                                           097
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




notes to the financial statements                                   (continued)




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

           (ii)   operations denominated in functional currencies other than ringgit Malaysia
	    	     	      T
                  	 he	 assets	 and	 liabilities	 of	 operations	 in	 functional	 currencies	 other	 than	 RM,	 including	 goodwill	 and	 fair	 value	
                  adjustments,	 are	 translated	 to	 RM	 at	 exchange	 rates	 at	 the	 balance	 sheet	 date.	 The	 income	 and	 expenses	 of	
                  operations	 in	 functional	 currencies	 other	 than	 RM	 are	 translated	 to	 RM	 at	 exchange	 rates	 at	 the	 dates	 of	 the	
                  transactions.

	    	     	      F
                  	 oreign	 currency	 differences	 are	 recognised	 in	 translation	 reserve.	 On	 disposal	 of	 operations,	 accumulated	
                  translation	 differences	 are	 recognised	 in	 the	 consolidated	 income	 statement	 as	 part	 of	 the	 gain	 or	 loss	 on	 sale.

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

     (c)   Property, plant and equipment	
           (i)    recognition and measurement
           	      I
                  	 tems	 of	 property,	 plant	 and	 equipment	 are	 stated	 at	 cost	 less	 accumulated	 depreciation	 and	 any	 accumulated	
                  impairment	 losses.

                  C
                  	 ost	 includes	 expenditures	 that	 are	 directly	 attributable	 to	 the	 acquisition	 of	 the	 asset	 and	 any	 other	 costs	
                  directly	 attributable	 to	 bringing	 the	 asset	 to	 working	 condition	 for	 its	 intended	 use,	 and	 the	 costs	 of	 dismantling	
                  and	 removing	 the	 items	 and	 restoring	 the	 site	 on	 which	 they	 are	 located.	 The	 cost	 of	 self-constructed	 assets	
                  also	 includes	 the	 cost	 of	 materials	 and	 direct	 labour	 and,	 for	 qualifying	 assets,	 borrowing	 costs	 are	 capitalised	
                  in	 accordance	 with	 the	 Group’s	 accounting	 policy.	 Purchased	 software	 that	 is	 integral	 to	 the	 functionality	 of	 the	
                  related	 equipment	 is	 capitalised	 as	 part	 of	 that	 equipment.

                  T
                  	 he	cost	of	property,	plant	and	equipment	recognised	as	a	result	of	a	business	combination	is	based	on	fair	value	
                  at	 acquisition	 date.	 The	 fair	 value	 of	 property	 is	 the	 estimated	 amount	 for	 which	 a	 property	 could	 be	 exchanged	
                  between	 a	 willing	 buyer	 and	 a	 willing	 seller	 in	 an	 arm’s	 length	 transaction	 after	 proper	 marketing	 wherein	 the	
                  parties	 had	 each	 acted	 knowledgeably,	 prudently	 and	 without	 compulsion.	 The	 fair	 value	 of	 other	 items	 of	 plant	
                  and	 equipment	 is	 based	 on	 the	 quoted	 market	 prices	 for	 similar	 items.
                                                                                                                           098
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




notes to the financial statements                                   (continued)




2.   siGnificant accountinG Policies (continued)
     (c)   Property, plant and equipment	 (continued)
           (i)    recognition and measurement (continued)
                  	 hen	significant	parts	of	an	item	of	property,	plant	and	equipment	have	different	useful	lives,	they	are	accounted	
                  W
                  for	 as	 separate	 items	 (major	 components)	 of	 property,	 plant	 and	 equipment.

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

           (ii)   subsequent costs
                  T
                  	 he	 cost	 of	 replacing	 part	 of	 an	 item	 of	 property,	 plant	 and	 equipment	 is	 recognised	 in	 the	 carrying	 amount	 of	
                  the	 item	 if	 it	 is	 probable	 that	 the	 future	 economic	 benefits	 embodied	 within	 the	 part	 will	 flow	 to	 the	 Group	 and	
                  its	 cost	 can	 be	 measured	 reliably.	 The	 carrying	 amount	 of	 the	 replaced	 part	 is	 derecognised.	 The	 costs	 of	 the	
                  day-to-day	 servicing	 of	 property,	 plant	 and	 equipment	 are	 recognised	 in	 the	 income	 statements	 as	 incurred.

           (iii) residual value
                  	 he	 residual	 value	 of	 the	 Group’s	 power	 plant	 which	 is	 approximately	 29%	 to	 40%	 of	 its	 cost	 is	 based	 on	
                  T
                  management’s	 best	 estimate	 of	 the	 amount	 that	 the	 Group	 would	 obtain	 from	 the	 disposal	 or	 continuing	 use	 of	
                  the	 power	 plant	 at	 the	 end	 of	 the	 respective	 power	 purchase	 agreements.

           (iv) depreciation
                  D
                  	 epreciation	 is	 recognised	 in	 the	 income	 statements	 on	 a	 straight-line	 basis	 over	 the	 estimated	 useful	 lives	 of	
                  each	 part	 of	 an	 item	 of	 property,	 plant	 and	 equipment.	 Leased	 assets	 are	 depreciated	 over	 the	 shorter	 of	 the	
                  lease	 term	 and	 their	 useful	 lives	 unless	 it	 is	 reasonably	 certain	 that	 the	 Group	 will	 obtain	 ownership	 by	 the	 end	
                  of	 the	 lease	 term.	 Power	 plant	 is	 depreciated	 over	 the	 period	 of	 the	 power	 purchase	 agreements.	 Freehold	 land	
                  is	 not	 depreciated.	 Property,	 plant	 and	 equipment	 under	 construction	 are	 not	 depreciated	 until	 the	 assets	 are	
                  ready	 for	 their	 intended	 use.

                  The	 estimated	 useful	 lives	 for	 the	 current	 and	 comparative	 periods	 are	 as	 follows:

                  •	    Buildings	                                                     5	 years
                  •	    Plant	 and	 machinery	                                     5–25	 years
                  •	    C-inspection	 costs	                                           3	 years
                  •	    Office	 equipment	 and	 furniture	                             5	 years
                  •	    Motor	 vehicles	                                               5	 years
                  •	    Computers	                                                     3	 years

                  Depreciation	 methods,	 useful	 lives	 and	 residual	 values	 are	 reassessed	 at	 the	 balance	 sheet	 date.
                                                                                                                              099
Malakoff                                                       annual
Corporation                                                    report
Berhad                                                         2008




notes to the financial statements                                     (continued)




2.   siGnificant accountinG Policies (continued)
     (d)   leased assets
           (i)    finance lease
                  L
                  	 eases	 in	 terms	 of	 which	 the	 Group	 or	 the	 Company	 assumes	 substantially	 all	 the	 risks	 and	 rewards	 of	
                  ownership	 are	 classified	 as	 finance	 leases.	 Upon	 initial	 recognition	 the	 leased	 asset	 is	 measured	 at	 an	 amount	
                  equal	 to	 the	 lower	 of	 its	 fair	 value	 and	 the	 present	 value	 of	 the	 minimum	 lease	 payments.	 Subsequent	 to	 initial	
                  recognition,	 the	 asset	 is	 accounted	 for	 in	 accordance	 with	 the	 accounting	 policy	 applicable	 to	 that	 asset.

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

		   	     (ii)   operating lease
                  Leases,	 where	 the	 Group	 does	 not	 assume	 substantially	 all	 the	 risks	 and	 rewards	 of	 the	 ownership	 are	 classified	
                  as	 operating	 leases	 and	 the	 leased	 assets	 are	 not	 recognised	 on	 the	 Group’s	 balance	 sheet.	

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

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

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

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

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

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



	
                                                                                                                         100
Malakoff                                                    annual
Corporation                                                 report
Berhad                                                      2008




notes to the financial statements                                  (continued)




2.   siGnificant accountinG Policies (continued)
     (e)   intangible assets (continued)
           (ii)   other intangible assets
                  Intangible	 assets,	 other	 than	 goodwill,	 that	 are	 acquired	 by	 the	 Group	 are	 stated	 at	 cost	 less	 any	 accumulated	
                  amortisation	 and	 any	 accumulated	 impairment	 losses.

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

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

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

     (g)   inventories
           Inventories	 are	 measured	 at	 the	 lower	 of	 cost	 and	 net	 realisable	 value.	 The	 cost	 of	 inventories	 is	 based	 on	 the	
           weighted	 average	 cost	 and	 includes	 expenditure	 incurred	 in	 acquiring	 the	 inventories	 and	 bringing	 them	 to	 their	
           existing	 location	 and	 condition.	 Net	 realisable	 value	 is	 the	 estimated	 selling	 price	 in	 the	 ordinary	 course	 of	 business,	
           less	 the	 estimated	 costs	 of	 completion	 and	 the	 estimated	 costs	 necessary	 to	 make	 the	 sale.

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

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

           Receivables	 are	 not	 held	 for	 the	 purpose	 of	 trading.

     (i)   cash and cash equivalents	
           Cash	 and	 cash	 equivalents	 consist	 of	 cash	 on	 hand,	 balances	 and	 deposits	 with	 banks	 and	 highly	 liquid	 investments	
           which	 have	 an	 insignificant	 risk	 of	 changes	 in	 value.	 For	 the	 purpose	 of	 the	 cash	 flow	 statements,	 cash	 and	 cash	
           equivalents	 are	 presented	 net	 of	 pledged	 deposits.
                                                                                                                            101
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




notes to the financial statements                                   (continued)




2.   siGnificant accountinG Policies (continued)
     (j)   impairment of assets
           The	 carrying	 amounts	 of	 assets	 except	 for	 financial	 assets,	 inventories	 and	 deferred	 tax	 assets	 are	 reviewed	 at	 each	
           reporting	 date	 to	 determine	 whether	 there	 is	 any	 indication	 of	 impairment.	 If	 any	 such	 indication	 exists,	 then	 the	
           asset’s	 recoverable	 amount	 is	 estimated.	

           The	 recoverable	 amount	 of	 an	 asset	 or	 cash-generating	 unit	 is	 the	 greater	 of	 its	 value	 in	 use	 and	 its	 fair	 value	 less	
           costs	 to	 sell.	 In	 assessing	 value	 in	 use,	 the	 estimated	 future	 cash	 flows	 are	 discounted	 to	 their	 present	 value	 using	 a	
           pre-tax	 discount	 rate	 that	 reflects	 current	 market	 assessments	 of	 the	 time	 value	 of	 money	 and	 the	 risks	 specific	 to	
           the	 asset.	 For	 the	 purpose	 of	 impairment	 testing,	 assets	 are	 grouped	 together	 into	 the	 smallest	 group	 of	 assets	 that	
           generates	 cash	 inflows	 from	 continuing	 use	 that	 are	 largely	 independent	 of	 the	 cash	 inflows	 of	 other	 assets	 or	 groups	
           of	assets	(the	“cash-generating	unit”).	The	goodwill	acquired	in	a	business	combination,	for	the	purpose	of	impairment	
           testing,	 is	 allocated	 to	 cash-generating	 units	 that	 are	 expected	 to	 benefit	 from	 the	 synergies	 of	 the	 combination.

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

           An	 impairment	 loss	 in	 respect	 of	 goodwill	 is	 not	 reversed.	 In	 respect	 of	 other	 assets,	 impairment	 losses	 recognised	
           in	 prior	 periods	 are	 assessed	 at	 each	 reporting	 date	 for	 any	 indications	 that	 the	 loss	 has	 decreased	 or	 no	 longer	
           exists.	 An	 impairment	 loss	 is	 reversed	 if	 there	 has	 been	 a	 change	 in	 the	 estimates	 used	 to	 determine	 the	 recoverable	
           amount.	 An	 impairment	 loss	 is	 reversed	 only	 to	 the	 extent	 that	 the	 asset’s	 carrying	 amount	 does	 not	 exceed	 the	
           carrying	amount	that	would	have	been	determined,	net	of	depreciation	or	amortisation,	if	no	impairment	loss	had	been	
           recognised.	 Reversals	 of	 impairment	 losses	 are	 credited	 to	 the	 income	 statements	 in	 the	 year	 in	 which	 the	 reversals	
           are	 recognised.

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

     (l)   loans and borrowings
           Loans	 and	 borrowings	 are	 stated	 at	 amortised	 cost	 with	 any	 difference	 between	 cost	 and	 redemption	 value	  	
                                                                                                                                    	
           being	 recognised	 in	 the	 income	 statements	 over	 the	 period	 of	 the	 loans	 and	 borrowings	 using	 the	 effective	
           interest	 method.
                                                                                                                           102
Malakoff                                                   annual
Corporation                                                report
Berhad                                                     2008




notes to the financial statements                                  (continued)




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

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

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

          (ii) defined benefit plans
               The	 Group’s	 net	 obligation	 in	 respect	 of	 a	 defined	 benefit	 retirement	 plans	 is	 calculated	 separately	 for	 each	 plan	
               by	 estimating	 the	 amount	 of	 future	 benefit	 that	 employees	 have	 earned	 in	 return	 for	 their	 service	 in	 the	 current	
               and	 prior	 periods	 and	 that	 benefit	 is	 discounted	 to	 determine	 the	 present	 value.	 Any	 unrecognised	 past	 service	
               costs	 and	 the	 fair	 value	 of	 any	 plan	 assets	 are	 deducted.	 The	 discount	 rate	 is	 the	 market	 yield	 at	 the	 reporting	
               date	 on	 high	 quality	 corporate	 bonds	 or	 government	 bonds	 that	 have	 maturity	 dates	 approximating	 the	 terms	 of	
               the	 Group’s	 obligations	 and	 that	 are	 denominated	 in	 the	 same	 currency	 in	 which	 the	 benefits	 are	 expected	 to	
               be	 paid.
	
               The	 calculation	 is	 performed	 annually	 by	 a	 qualified	 actuary	 using	 the	 projected	 unit	 credit	 method.	 When	 the	
               calculation	 results	 in	 a	 benefit	 to	 the	 Group,	 the	 recognised	 asset	 is	 limited	 to	 the	 net	 total	 of	 any	 unrecognised	
               actuarial	 losses	 and	 past	 service	 costs	 and	 the	 present	 value	 of	 any	 future	 refunds	 from	 the	 plan	 or	 reductions	
               in	 future	 contributions	 to	 the	 plan.

               When	 the	 benefits	 of	 a	 plan	 are	 improved,	 the	 portion	 of	 the	 increased	 benefit	 relating	 to	 past	 service	 by	
               employees	 is	 recognised	 as	 an	 expense	 in	 the	 income	 statement	 on	 a	 straight-line	 basis	 over	 the	 average	 period	
               until	 the	 benefits	 become	 vested.	 To	 the	 extent	 that	 the	 benefits	 vest	 immediately,	 the	 expense	 is	 recognised	
               immediately	 in	 the	 income	 statement.	 The	 Group	 recognises	 all	 actuarial	 gains	 and	 losses	 arising	 from	 defined	
               benefit	 plans	 directly	 in	 equity	 immediately.

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

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

               An	 actuarial	 valuation	 is	 conducted	 by	 an	 independent	 actuary	 at	 regular	 intervals.	 The	 last	 valuation	 performed	
               was	 on	 31	 December	 2008.
                                                                                                                           103
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




notes to the financial statements                                   (continued)




2.   siGnificant accountinG Policies (continued)
     (n)   Provisions
           A	 provision	 is	 recognised	 if,	 as	 a	 result	 of	 a	 past	 event,	 the	 Group	 has	 a	 present	 legal	 or	 constructive	 obligation	
           that	 can	 be	 estimated	 reliably,	 and	 it	 is	 probable	 that	 an	 outflow	 of	 economic	 benefits	 will	 be	 required	 to	 settle	 the	
           obligation.	 Provisions	 are	 determined	 by	 discounting	 the	 expected	 future	 cash	 flows	 at	 a	 pre-tax	 rate	 that	 reflects	
           current	 market	 assessments	 of	 the	 time	 value	 of	 money	 and	 the	 risks	 specific	 to	 the	 liability.

	    (o)   contingent liabilities
           Where	 it	 is	 not	 probable	 that	 an	 outflow	 of	 economic	 benefits	 will	 be	 required,	 or	 the	 amount	 cannot	 be	 estimated	
           reliably,	 the	 obligation	 is	 disclosed	 as	 a	 contingent	 liability,	 unless	 the	 probability	 of	 outflow	 of	 economic	 benefits	 is	
           remote.	

           Possible	 obligations,	 whose	 existence	 will	 only	 be	 confirmed	 by	 the	 occurrence	 or	 non-occurrence	 of	 one	 or	 more	 future	
           events	 are	 also	 disclosed	 as	 contingent	 liabilities	 unless	 the	 probability	 of	 outflow	 of	 economic	 benefits	 is	 remote.

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

     (q)   revenue recognition
           (i)    capacity and energy payments, operation and maintenance charges and project management fees
                  R
                  	 evenue	is	measured	at	the	fair	value	of	the	consideration	received	or	receivable	and	is	recognised	in	the	income	
                  statement	 as	 it	 accrues.

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

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

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




notes to the financial statements                                    (continued)




2.   siGnificant accountinG Policies (continued)
     (r)   interest income and borrowing costs
           Interest	 income	 is	 recognised	 as	 it	 accrues,	 using	 the	 effective	 interest	 method.

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

           The	 capitalisation	 of	 borrowing	 costs	 as	 part	 of	 the	 cost	 of	 a	 qualifying	 asset	 commences	 when	 expenditure	 for	 the	
           asset	 is	 being	 incurred,	 borrowing	 costs	 are	 being	 incurred	 and	 activities	 that	 are	 necessary	 to	 prepare	 the	 asset	 for	
           its	 intended	 use	 or	 sale	 are	 in	 progress.	 Capitalisation	 of	 borrowing	 costs	 is	 suspended	 or	 ceases	 when	 substantially	
           all	 the	 activities	 necessary	 to	 prepare	 the	 qualifying	 asset	 for	 its	 intended	 use	 or	 sale	 are	 interrupted	 or	 completed.

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

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

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

           Deferred	 tax	 liability	 is	 recognised	 for	 all	 taxable	 temporary	 differences.

           A	 deferred	 tax	 asset	 is	 recognised	 to	 the	 extent	 that	 it	 is	 probable	 that	 future	 taxable	 profits	 will	 be	 available	 against	
           which	 temporary	 difference	 can	 be	 utilised.	 Deferred	 tax	 assets	 are	 reviewed	 at	 each	 reporting	 date	 and	 are	 reduced	
           to	 the	 extent	 that	 it	 is	 no	 longer	 probable	 that	 the	 related	 tax	 benefit	 will	 be	 realised.
           	
     (t)   segment reporting
           A	 segment	 is	 a	 distinguishable	 component	 of	 the	 Group	 that	 is	 engaged	 in	 providing	 products	 or	 services	 (business	
           segment),	 or	 in	 providing	 products	 or	 services	 within	 a	 particular	 economic	 environment	 (geographical	 segment),	
           which	 is	 subject	 to	 risks	 and	 rewards	 that	 are	 different	 from	 those	 of	 other	 segments.
                                                                                                                       105
Malakoff                                                    annual
Corporation                                                 report
Berhad                                                      2008




notes to the financial statements                                  (continued)




3.   ProPerty, Plant and equiPMent
                                                                                                    office
                                                                                  c-           equipment
                                freehold               Work in      Power inspection Plant and        and         Motor
     Group                        land   buildings    progress       plant     costs machinery furniture        vehicles computers       total
                                 rM’000   rM’000       rM’000      rM’000    rM’000    rM’000     rM’000         rM’000     rM’000     rM’000

     cost
     At	 1	 January	 2007	         –	            –	          –	          –	          –	          –	        –	         –	         –	          –
     Acquisition	 through
       business	 combination	    21,516	    27,789	      6,525	 11,852,161	   630,855	      39,233	   30,465	     4,924	    25,463	 12,638,931
     Additions	                    –	            –	     14,377	    134,066	    91,755	       3,847	    7,553	       430	     1,303	    253,331
     Disposal	                      –	           –	          –	          –	         –	           –	        –	        (8)	        –	         (8)
     Reclassification	              –	           –	     (1,574)	 	   1,574	         –	           –	        –	         –	         –	          –

     At	 31	 December	 2007/
       1	 January	 2008	        	 21,516	   27,789	     19,328	 11,987,801	   722,610	      43,080	   38,018	     5,346	    26,766	 12,892,254
     Additions	                     –	           –	     46,270	     40,249	   154,945	     288,574	   11,356	       240	     3,703	    545,337
     Reclassification	              –	           –	    (19,957)	     1,793	         –	           –	    9,683	         –	     8,481	          –

     At	 31	 December	 2008	     21,516	    27,789	     45,641	 12,029,843	   877,555	     331,654	   59,057	     5,586	    38,950	 13,437,591

     depreciation
     At	 1	 January	 2007	         –	            –	          –	          –	          –	          –	        –	         –	         –	          –
     Acquisition	 through
       business	 combination	      –	        5,905	          –	 1,305,019	    523,574	       8,756	   18,967	     3,559	    19,662	 1,885,442
     Charge	 for	 the	 year	       –	          893	          –	   276,360	     91,711	         870	    3,531	       266	     2,184	   375,815
     Disposal	                     –	            –	          –	         –	          –	           –	        –	        (8)	        –	        (8)

     At	 31	 December	 2007/
       1	 January	 2008	           –	        6,798	          –	 1,581,379	    615,285	       9,626	   22,498	     3,817	    21,846	 2,261,249
     Charge	 for	 the	 year	       –	        1,341	          –	   342,977	     81,977	 	     2,632	    7,228	       418	     5,876	   442,449

     At	 31	 December	 2008	       –	        8,139	          –	 1,924,356	    697,262	      12,258	   29,726	     4,235	    27,722	 2,703,698

     carrying amount
     At	 1	 January	 2007	         –	            –	          –	          –	          –	          –	        –	         –	         –	          –

     At	 31	 December	 2007/
       1	 January	 2008	         21,516	    20,991	     19,328	 10,406,422	   107,325	      33,454	   15,520	     1,529	     4,920	 10,631,005

     At	 31	 December	 2008	     21,516	    19,650	     45,641	 10,105,487	   180,293	     319,396	   29,331	     1,351	    11,228	 10,733,893
                                                                                                                     106
Malakoff                                                      annual
Corporation                                                   report
Berhad                                                        2008




notes to the financial statements                                  (continued)




3.   ProPerty, Plant and equiPMent	 (continued)
	                                                                                               office
                                                                                           equipment
                                 freehold                        Work in      Plant and           and      Motor
     company                         land      buildings        progress      machinery     furniture    vehicles   computers      total
                                  rM’000        rM’000           rM’000         rM’000        rM’000      rM’000       rM’000    rM’000

     cost
     At	 1	 January	 2007	               –	            –	               –	            –	            –	         –	           –	        –
     Acquisition	 through	
        business	 combination	     21,516	       17,055	               –	           154	        2,987	     1,080	       6,622	    49,414
     Additions	                         –	            –	           1,888	             –	          314	       152	         362	     2,716

     At	 31	 December	 2007/	
        1	 January	 2008	         	 21,516	      17,055	            1,888	          154	        3,301	     1,232	       6,984	    52,130
     Additions	                          –	           –	                –	            –	          459	         –	         572	     1,031
     Reclassifications	                  –	           –	           (1,888)	           –	        1,679	         –	         209	         –

     At	 31	 December	 2008	       21,516	       17,055	                –	          154	        5,439	     1,232	       7,765	    53,161

     depreciation
     At	 1	 January	 2007	               –	            –	               –	            –	            –	         –	           –	        –
     Acquisition	 through	
      business	 combination	             –	        3,451	               –	          154	        2,541	     1,068	       5,168	    12,382
     Charge	 for	 the	 year	             –	          536	 	             –	            –	          225	        12	         556	     1,329

     At	 31	 December	 2007/
      1	 January	 2008	                 	 –	       3,987	               –	          154	        2,766	     1,080	       5,724	    13,711
     Charge	 for	 the	 year	              –	         803	               –	            –	          430	        34	         781	     2,048

     At	 31	 December	 2008	             –	        4,790	               –	          154	        3,196	     1,114	       6,505	    15,759

     carrying amount
     At	 1	 January	 2007	               –	            –	               –	            –	            –	         –	           –	        –

     At	 31	 December	 2007/
        1	 January	 2008	          21,516	       13,068	           1,888	             –	          535	       152	       1,260	    38,419

     At	 31	 December	 2008	       21,516	       12,265	                –	            –	        2,243	       118	       1,260	    37,402
                                                                                                                             107
Malakoff                                                      annual
Corporation                                                   report
Berhad                                                        2008




notes to the financial statements                                    (continued)




3.   ProPerty, Plant and equiPMent	 (continued)
     security
     At	 31	 December	 2008,	 Group	 properties	 with	 a	 carrying	 amount	 of	 RM10,457,859,000	 (2007	 –	 RM10,545,304,000)	 was	
     charged	 as	 security	 for	 debt	 securities	 issued	 by	 the	 subsidiaries	 (see	 note	 14	 –	 loans	 and	 borrowings).

     borrowing costs
     In	 the	 prior	 period,	 included	 in	 addition	 for	 the	 period	 of	 the	 Group	 was	 interest	 capitalised	 at	 a	 rate	 of	 6.3%	 to	 8.9%	 per	
     annum	 amounting	 to	 RM222,222,000.



4.   intanGible assets
                                                                                                   interest over Power
                                                                                               Purchase and operation and
                                                                                      Goodwill   Maintenance agreements
     Group                                                                                     subsidiaries     associate                     total
                                                                                       rM’000      rM’000         rM’000                    rM’000

     cost
     At	 1	 January	 2007	                                                                    –	               –	                –	               –
     Acquisition	 through	 business	 combination	                                         8,232	       7,103,796	          857,970	       7,969,998

     At	 31	 December	 2007/1	 January	 2008/
       31	 December	 2008	                                                                8,232	       7,103,796	          857,970	       7,969,998

     amortisation and impairment losses
     At	 1	 January	 2007	                                                                     –	              –	                –	               –
     Amortisation	 for	 the	 year	                                                             –	        207,070	           23,725	         230,795

     At	 31	 December	 2007/1	 January	 2008	                                                 –	         207,070	           23,725	         230,795
     Amortisation	 for	 the	 year	                                                            –	         365,208	           36,706	         401,914
     Impairment	 for	 the	 year	                                                            859	               –	           98,373	          99,232

     At	 31	 December	 2008	                                                                859	 	       572,278	          158,804	         731,941

     carrying amount
     At	 1	 January	 2007	                                                                     –	                –	               –	                –

     At	 31	 December	 2007/
       1	 January	 2008	                                                                  8,232	       6,896,726	          834,245	       7,739,203

	    At	 31	 December	 2008	                                                              7,373	       6,531,518	          699,166	       7,238,057

	    	      	    	                                                       	                       	                	        (Note	 7)
	
                                                                                                                          108
Malakoff                                                    annual
Corporation                                                 report
Berhad                                                      2008




notes to the financial statements                                  (continued)




4.   intanGible assets (continued)
                                                                                                        interest over Power
                                                                                                      Purchase and operation
                                                                                                          and Maintenance
                                                                                             Goodwill       agreements
     Group                                                                                                 subsidiaries                     total
                                                                                              rM’000            rM’000                    rM’000

     carrying amount
     At	 1	 January	 2007	                                                                            –	                   –	                    –

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

     At	 31	 December	 2008	                                                                     7,373	           6,531,518	           6,538,891



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

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

     The	 PPAs	 and	 the	 IPP	 Licences	 are	 recognised	 as	 a	 single	 asset	 in	 accordance	 with	 FRS	 138	 Intangible	 Assets	 in	 view	 that	
     both	 are	 required	 for	 the	 generation	 and	 sale	 of	 electricity	 energy	 and	 generating	 capacity	 in	 Malaysia.

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

     These	 PPAs	 and	 OMAs	 are	 the	 key	 documents	 that	 govern	 the	 underlying	 strength	 of	 the	 Group’s	 cash	 flow,	 which	 provide	
     for,	 inter	 alia,	 the	 electricity	 tariff,	 supply,	 operations	 and	 maintenance	 and	 all	 other	 terms	 to	 be	 met	 by	 the	 subsidiaries	
     and	 associates.	

	
                                                                                                                           109
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




notes to the financial statements                                   (continued)




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

     The	 management	 had	 applied	 the	 following	 key assumptions	 in	 deriving	 the	 present	 value	 of	 the	 net	 income	 after	 taxes	
     attributable	 to	 the	 Intangible	 Assets	 at	 the	 acquisition	 date:

     •	    Remaining	 useful	 life	 of	 PPAs/OMAs	                                                                 	
                                                                                  12	 –	 24	 years	 (in	 accordance	 with	 the	 respective	 PPAs)

     •	    Dependable	 capacity	 (DC)	                                            350MW	 –	 2,420MW

     •	    Capacity	 factor	                                                      45%	 –	 75%	 of	 DC

     •	    Net	 electrical	 output	 (million	 kW/hour)	                           2,300	 –	 11,197

     •	    Capacity	 Rate	 (RM/kW/month)	                                         11.61	 –	 50.00	

     •	    Fixed	 Operating	 Rate	 under	 Revenue	 (RM/kW/	 month)	               4.00	 –	 10.50

     •	    Variable	 Operating	 Rate	 under	 Revenue	 (RM/kW/	 month)	 	          0.013	 –	 0.025

     •	    Fuel	 price	 (RM/mmBtu)	                                               4.60	 –	 6.50

     •	    CAC	 	                                                                 17.77%	 –	 28.00%	 of	 EBITDA

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




	
                                                                                                                      110
Malakoff                                                  annual
Corporation                                               report
Berhad                                                    2008




notes to the financial statements                                (continued)




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

     impairment testing for cash generating units (“cGus”) containing goodwill and interest over Power Purchase and
     operation and Maintenance agreements
     The	 carrying	 amounts	 of	 the	 goodwill	 and	 the	 interest	 over	 Power	 Purchase	 and	 Operation	 and	 Maintenance	 agreements	
     are	 allocated	 to	 the	 following	 CGUs:

                                                                                                                          Group
                                                                                                                     carrying amount
                                                                                 allocated       impairment           2008         2007
     Goodwill                                                                      amount               loss          total
                                                                                   rM’000           rM’000          rM’000       rM’000

     PPa companies
     –	 GB3	                                                                            392	               –	            392	             392
     –	 PPSB	                                                                           377	               –	            377	             377
     –	 SEV	                                                                          1,565	               –	          1,565	           1,565
     –	 TBP	                                                                          3,159	               –	          3,159	           3,159
     –	 KEV	                                                                            859	 	          (859)	             –	             859

     	    	                                                                           6,352	            (859)	         5,493	           6,352

     oMa companies
     –	 TJSB	                                                                         1,577	               –	          1,577	           1,577
     –	 NASB	                                                                           303	               –	            303	             303

     	    	                                                                           1,880	               –	          1,880	           1,880

     Total	 goodwill	                                                                 8,232	            (859)	 	       7,373	           8,232
                                                                                                                               111
Malakoff                                                       annual
Corporation                                                    report
Berhad                                                         2008




notes to the financial statements                                     (continued)




4.   intanGible assets (continued)
     interest over PPa and oMa
                                                                                                                                   Group
                                                                                                                              carrying amount
                                                                                       allocated      impairment               2008         2007
                                                                                         amount              loss              total
                                                                                         rM’000          rM’000              rM’000       rM’000

     PPa companies
     –	 GB3	                                                                             350,139	                 –	         350,139	          374,080
     –	 PPSB	                                                                            340,744	                 –	         340,744	          361,920
     –	 SEV	                                                                           1,323,288	                 –	       1,323,288	        1,467,750
     –	 TBP	                                                                           3,002,226	                 –	       3,002,226	        3,110,740
     –	 KEV	                                                                             797,539	           (98,373)	        699,166	          834,245

     	                                                                                 5,813,936	           (98,373)	      5,715,563	        6,148,735

     oMa companies
     –	 TJSB	                                                                          1,475,824	                  –	      1,475,824	        1,541,560
     –	 NASB	                                                                             39,297	                  –	         39,297	           40,676

     	                                                                                 1,515,121	                  –	      1,515,121	        1,582,236

     Total	 interest	 over	 PPAs	 and	 OMAs	                                           7,329,057	           (98,373)	      7,230,684	        7,730,971
     Less:	 Intangible	 asset	 in	 associate	 (KEV)	                                    (797,539)	           98,373	        (699,166)	        (834,245)

     	                                                                                 6,531,518	                  –	      6,531,518	        6,896,726



     The	 impairment	 test	 of	 the	 above	 CGUs	 was	 based	 on	 the	 expected	 cash	 flows	 discounted	 to	 their	 present	 value	 equivalent	
     using	 a	 rate	 of	 return	 that	 reflects	 the	 relative	 risk	 of	 the	 cashflows,	 as	 well	 as	 the	 time	 value	 of	 money.	 This	 is	 calculated	
     by	 weighing	 the	 required	 returns	 on	 debt	 and	 equity	 in	 proportion	 to	 their	 assumed	 percentages.	 The	 applied	 discount	 rate	
     was	 7.50%	 per	 annum.
                                                                                                                          112
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




notes to the financial statements                                   (continued)




4.   intanGible assets (continued)
     The	 management	 had	 applied	 the	 following	 key assumptions	 in	 deriving	 the	 present	 value	 of	 the	 net	 cash	 flow	 after	 taxes	
     attributable	 to	 the	 Intangible	 Assets:

     •	                                                                                               c
          It	 is	 assumed	 that	 the	 terms	 of	 the	 PPAs	 will	 remain	 unchanged	 throughout	 the	 	 oncession	 period.
     •	   I                                                                                                              d
          	 t	 is	 assumed	 that	 the	 Group	 will	 be	 successful	 in	 its	 appeal	 to	 the	 Ministry	 of	 Finance	 to	 	 efer	 the	 application	 of	
          single	 tier	 dividend.
     •	   I
          	 t	 is	 assumed	 that	 Section	 110	 tax	 credit	 will	 be	 available	 to	 the	 Group.
     •	   R
          	 emaining	 useful	 life	 of	 PPAs/OMAs	                                    1                                                        	
                                                                                      	 1	 –	 23	 years	 (in	 accordance	 with	 the	 respective	
                                                                                      PPAs	 and	 OMAs)
     •	   D
          	 ependable	 capacity	 (DC)	                                                3                                    t
                                                                                      	 50MW	 –	 2,420MW	 (in	 accordance	 	 o	 the	 specifications	
                                                                                                      p
                                                                                      of	 the	 power	 	 lant)
     •	   C
          	 apacity	 factor	                                                          45%	 –	 82%	 of	 DC
     •	   N
          	 et	 electrical	 output	 (million	 kW/hour)	                               2,300	 –	 15,052
     •	   C
          	 apacity	 Rate	 (RM/kW/month)	                                             11.61	 –	 50.00	
     •	   F
          	 ixed	 Operating	 Rate	 under	 Revenue	 (RM/kW/month)	                     4.40	 –	 10.50
     •	   	 ariable	 Operating	 Rate	 under	 Revenue	 (RM/kWh)	 	
          V                                                                           0.006	 –	 0.031
     •	   F
          	 uel	 price	 (RM/mmBtu)	                                                   13.56	 –	 28.20
     •	   V
          	 ariable	 Operating	 Rate	 under	 Cost	 (RM/kWh)	 	                        0.013	 –	 0.031
     •	   F
          	 ixed	 Operating	 Rate	 under	 Cost	 (RM/kW/month)	                       2
                                                                                     	 .08	 –	 7.55

     The	estimated	recoverable	amount	of	all	the	CGUs	exceeds	the	carrying	amount	of	the	goodwill	and	interest	on	PPAs/OMAs,	
     except	 for	 the	 recoverable	 amount	 of	 KEV.	 Accordingly,	 an	 impairment	 allowance	 was	 recognised	 first	 to	 the	 goodwill	 and	
     subsequently	 to	 the	 interest	 on	 PPA	 in	 relation	 to	 KEV,	 amounting	 to	 RM859,000	 and	 RM98,373,000	 respectively.
	
                                                                                                                 113
Malakoff                                                annual
Corporation                                             report
Berhad                                                  2008




notes to the financial statements                              (continued)




5.   PrePaid lease PayMents
                                                                                                leasehold land
                                                                                            unexpired     unexpired
                                                                                                period        period
                                                                                             less than   more than
     Group                                                                                    50 years     50 years              total
                                                                                               rM’000        rM’000            rM’000

     cost
     At	 1	 January	 2007	                                                                           –	              –	              –
     Acquisition	 through	 business	 combination	                                               93,137	         29,371	        122,508

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

     amortisation
     At	 1	 January	 2007	                                                                            –	             –	              –
     Acquisition	 through	 business	 combination	                                                 2,388	         4,846	          7,234
     Amortisation	 for	 the	 year	                                                                2,388	           598	          2,986

     At	 31	 December	 2007/1	 January	 2008	                                                     4,776	         5,444	         10,220
     Amortisation	 for	 the	 year	                                                                3,582	           896	          4,478

     At	 31	 December	 2008	                                                                      8,358	         6,340	         14,698

     carrying amounts
     At	 1	 January	 2007	                                        	                     	             –	              –	             –

     At	 31	 December	 2007/1	 January	 2008	                                                   88,361	         23,927	        112,288

     At	 31	 December	 2008	                                                                    84,779	         23,031	        107,810



     security
     The	 leasehold	 land	 of	 the	 Group	 amounting	 to	 RM6,148,000	 (2007:	 RM6,221,000)	 have	 been	 charged	 as	 security	 for	 debt	
     securities	 issued	 by	 certain	 subsidiaries.
                                                                         114
Malakoff                                             annual
Corporation                                          report
Berhad                                               2008




notes to the financial statements                          (continued)




5.   PrePaid lease PayMents	 (continued)
                                                                           leasehold land
                                                                                unexpired
                                                                              period more
     company                                                                than 50 years
                                                                                   rM’000

     cost
     At	 1	 January	 2007	                                                              –
     Acquisition	 through	 business	 combination	                                   6,159

     At	 31	 December	 2007/1	 January	 2008/31	 December	 2008	                    6,159

     amortisation
     At	 1	 January	 2007	                                                             –
     Acquisition	 through	 business	 combination	                                    601
     Amortisation	 for	 the	 year	                                                    42

     At	 31	 December	 2007/1	 January	 2008	                                        643
     Amortisation	 for	 the	 year	                                                    62

     At	 31	 December	 2008	                                                         705

     carrying amounts
     At	 1	 January	 2007	                                                              –

     At	 31	 December	 2007/1	 January	 2008	                                       5,516	

     At	 31	 December	 2008	                                                        5,454
                                                                                                                     115
Malakoff                                                       annual
Corporation                                                    report
Berhad                                                         2008




notes to the financial statements                                     (continued)




6.   investMents in subsidiaries
                                                                                                                        company
                                                                                                                      2008        2007
                                                                                                                    rM’000      rM’000

     At	 cost:
       Unquoted	 shares	                                                                                         8,128,970	        8,128,970



     	Details	 of	 the	 subsidiaries	 are	 as	 follows:

                                                                              effective
                                                       country of             ownership
     name                                            incorporation             interest      Principal activities
                                                                            2008     2007
                                                                              %        %

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

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

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

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

     	GB3	 Sdn.	 Bhd.	                                    Malaysia	         75	      75	     D
                                                                                             	 esign,	 construction,	 operation	 and	
                                                                                             maintenance	 of	 a	 combined	 cycle	 power	
                                                                                             plant,	 generation	 and	 sale	 of	 electrical	
                                                                                             energy	 and	 generating	 capacity	 of	 the	
                                                                                             power	 plant

	    Wirazone	 Sdn.	 Bhd.	                                Malaysia	        100	      100	    B
                                                                                             	 uild,	 own	 and	 operate	 an	 electricity	
                                                                                             distribution	 system	 and	 a	 centralised	
                                                                                             chilled	 water	 plant	 system
                                                                                                                       116
Malakoff                                                    annual
Corporation                                                 report
Berhad                                                      2008




notes to the financial statements                                     (continued)




6.   investMents in subsidiaries (continued)
     Details	 of	 the	 subsidiaries	 are	 as	 follows:	 (continued)

                                                                                effective
                                                       country of              ownership
     name                                            incorporation              interest        Principal activities
                                                                             2008      2007
                                                                               %         %

	    Malakoff	 Engineering	 Sdn.	 Bhd.	                  Malaysia	            100	     100	     P
                                                                                                	 rovision	 of	 engineering	 and	 project	
                                                                                                management	 services

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

	    Hypergantic	 Sdn.	 Bhd.	                            Malaysia	            100	     100	     Investment	 holding

	    Tuah	 Utama	 Sdn.	 Bhd.	                            Malaysia	            100	     100	     Investment	 holding

	    Transpool	 Sdn.	 Bhd.	                              Malaysia	            100	     100	     Dormant

	    Malakoff	 Capital	 (L)	 Ltd	                        Malaysia	            100	     100	     Dormant

	    Spring	 Assets	 Limited	                          British	 Virgin	       100	     100	     Dormant
	    	    	     	                                         Islands

	    Malakoff	 International	 Limited	                    Cayman	             100	     100	     Offshore	 –	 Investment	 holding
	    	   	      	                                         Islands

     subsidiary of Malakoff engineering sdn bhd
	    MESB	 Project	 Management	 Sdn	 Bhd	                Malaysia	            100	      –	      P
                                                                                                	 rovision	 of	 engineering	 and	 project	
                                                                                                management	 services

     subsidiaries of Malakoff international limited
	    Malakoff	 Gulf	 Limited	                          British	 Virgin	       100	     100	     Offshore	 –	 Investment	 holding
	    	   	      	                                         Islands

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

	    Malakoff	 AlDjazair	 Desal	 Sdn	 Bhd	               Malaysia	            100	     100	 	   Investment	 holding

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

	    Malakoff	 Ras	 Azzour	 Limited	                   British	 Virgin	       100	     100	 	   Dormant
      (formerly	 known	 as	 KuwMal	                       Islands
      Investments	 Limited)	
                                                                                                                      117
Malakoff                                                    annual
Corporation                                                 report
Berhad                                                      2008




notes to the financial statements                                     (continued)




6.   investMents in subsidiaries	 (continued)
     Details	 of	 the	 subsidiaries	 are	 as	 follows:	 (continued)

                                                                                effective
                                                       country of              ownership
     name                                            incorporation              interest       Principal activities
                                                                             2008      2007
                                                                               %         %

     subsidiary of Malakoff aldjazair desal sdn bhd
     Tlemcen	 Desalination	 Investment	                   France	              70	     70	 	   	 ffshore	 –	 Investment	 holding
                                                                                               O
       Company	 SAS
       	
     subsidiary of tlemcen desalination
       investment company sas
     Almiyah	 Attilemcania	 SPA	                          Algeria	            35.7	    35.7	   	 onstruction,	 operation	 and	 management
                                                                                               C
     	    	    	                                             	                  	        	     o
                                                                                               	 f	 a	 sea	 water	 desalination	 plant	 and	
                                                                                               marketing	 the	 desalinated	 water	 produced

     subsidiaries of teknik Janakuasa sdn bhd
     Natural	 Analysis	 Sdn.	 Bhd.	                      Malaysia	            100	     100	    O
                                                                                               	 peration	 and	 maintenance	 of	 power	
                                                                                               plant

     TJSB	 International	 Limited	                        Cayman	             100	     100	    Offshore	 –	 Investment	 holding
     	   	      	                                         Islands

     TJSB	 Global	 Sdn.	 Bhd.	                           Malaysia	            100	     100	    Investment	 holding

     subsidiaries of tJsb international limited
     TJSB	 Middle	 East	 Limited	                      British	 Virgin	       100	     100	    	 Offshore	 –	 Investment	 holding
     	   	     	                                          Islands

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




	
                                                                                                         118
Malakoff                                               annual
Corporation                                            report
Berhad                                                 2008




notes to the financial statements                           (continued)




7.   investMents in associates
                                                                                Group                      company
                                                                             2008       2007             2008        2007
                                                                           rM’000     rM’000           rM’000      rM’000

     At	 cost:
      Unquoted	 shares	                                                     97,948	       97,948	      641,770	      641,770
      Quoted	 shares	 outside	 Malaysia	                                    55,512	       55,512	            –	            –
      Unquoted	 preference	 shares	                                          4,000	        4,000	            –	            –
      Unquoted	 loan	 stocks	                                              402,455	      417,655	      365,030	      380,230
      Pre-acquisition	 reserves	                                            93,150	      130,545	            –	            –
      Share	 of	 post-acquisition	 profits/(losses)	                        26,926	       (3,874)	           –	            –

                                                                           679,991	      701,786	     1,006,800	   1,022,000

     Add:	 	 Intangible	 assets	 acquired	 through	
     	       business	 combination	 (see	 Note	 4)	                        857,970	      857,970	             –	           –

            	
     Less:	 Amortisation	 of	 intangible	 assets
     	      At	 1	 January	                                                 (23,725)	           –	            –	           –
     	      Amortisation	 for	 the	 year	                                   (36,706)	     (23,725)	           –	           –

     	    	   	                                                             (60,431)	     (23,725)	           –	           –
     	    Impairment	 of	 intangible	 assets	                               (98,373)	           –	            –	           –

     	    At	 31	 December	                                                (158,804)	     (23,725)	           –	           –

     	    Carrying	 amount	                                                699,166	      834,245	             –	           –

     	    	     	                                                         1,379,157	    1,536,031	    1,006,800	   1,022,000

     Market	 value:
     Quoted	 shares	 outside	 Malaysia	                                     61,932	       71,995	             –	           –



     summary financial information on associates:
                                                                                                         total          total
                                                                          revenues         Profit       assets     liabilities
                                                                             (100%)       (100%)        (100%)         (100%)
                                                                            rM’000       rM’000        rM’000         rM’000

     2008	                                                                2,037,207	     132,240	     6,923,034	   6,158,034

     2007	                                                                1,226,680	      31,486	     5,771,094	   5,173,425
                                                                                                                  119
Malakoff                                                 annual
Corporation                                              report
Berhad                                                   2008




notes to the financial statements                               (continued)




7.   investMents in associates	 (continued)
     details of associates:
                                                                          effective
                                                     country of          ownership
     name                                          incorporation          interest         Principal activities
                                                                       2008      2007
                                                                         %         %

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

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

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

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

     Saudi-Malaysia	 Water	 &	 Electricity	         Saudi	 Arabia	       20	      20	      	 ffshore	 –	 Investment	 holding
                                                                                           O
      Company	 Limited

     Shuaibah	 Water	 &	 Electricity	               Saudi	 Arabia	       12	      12	      Design,	 construction,	 commissioning,
      Company	 Limited	                                    	              	        	       	 esting,	 ownership,	 operation	 and	
                                                                                           t
                                                                                           maintenance	 of	 oil	 fired	 power	 generation	
                                                                                           and	 water	 desalination	 plant.

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

     Shuaibah	 Expansion	 Project	                  Saudi	 Arabia	      11.7	    11.7	     	 evelopment,	 construction,	 possession	
                                                                                           D
      Company	 Limited	                                    	              	        	       o
                                                                                           	 peration	 and	 maintenance	 of	 Shuaibah	
                                                                                           expansion	 project	 3	 for	 water	 product	 at	
                                                                                           Shuaibah	 region,	 water	 transport	 and	 sale	
                                                                                           and	 all	 relevant	 works	 and	 activities.

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

     Salalah	 Power	 Holdings	 Limited	               Bermuda	          43.4	    43.4	 	   Offshore	 –	 Investment	 holding

     Dhofar	 Power	 Company	 SAOG	                      Oman	           20	       20	      E
                                                                                           	 lectricity	 generation,	 transmission,	
                                                                                           distribution	 in	 the	 region	 of	 Salalah,	
                                                                                           Oman.

     Enara	 Energy	 Investment	 Company	               Jordan	          25	       25	      Offshore	 –	 Investment	 holding
                                                                                                                  120
Malakoff                                               annual
Corporation                                            report
Berhad                                                 2008




notes to the financial statements                             (continued)




7.   investMents in associates	 (continued)
     details of associates: (continued)

                                                                         effective
                                                    country of          ownership
     name                                         incorporation          interest          Principal activities
                                                                      2008      2007
                                                                        %         %

     Central	 Electricity	 Generating	                Jordan	         12.75	     12.75	    G
                                                                                           	 enerate	 electrical	 energy	 in	 different
      Company	 Limited	                                  	              	          		      regions	 of	 Jordan

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

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

     Hyflux-TJSB	 Algeria	 SPA	                       Algeria	         49	         –	      O
                                                                                           	 peration	 and	 maintenance	 of	 water	
                                                                                           desalination	 plant




8.   other investMents
                                                                                                                    company
                                                                                                                  2008        2007
                                                                                                                rM’000      rM’000

     non-current
     At	 cost:
      Unquoted	 unsecured	 loan	 stocks	 in	 subsidiaries	                                                   1,669,056	       1,715,897



	    T
     	 he	 loan	 stocks	 are	 unsecured,	 bear	 interest	 ranging	 from	 6.0%	 to	 15.0%	 (2007:	 6.0%	 to	 15.0%)	 per	 annum	 and	 are	
     repayable	 over	 a	 period	 of	 28	 years.
                                                                                                                           121
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




notes to the financial statements                                   (continued)




9.   deferred tax assets and liabilities
     recognised deferred tax assets and liabilities
	    Deferred	 tax	 assets	 and	 liabilities	 are	 attributable	 to	 the	 following:

                                                           assets                           liabilities                               net
                                                      2008          2007                  2008            2007             2008                2007
     Group                                          rM’000        rM’000                rM’000          rM’000           rM’000              rM’000

     Property,	 plant	 and	 equipment	                 1,870	             244	         1,724,670	     1,599,909	       1,726,540	           1,600,153	
     Provisions	                                     (12,843)	        (10,853)	           20,423	       (30,520)	          7,580	             (41,373)
     Intangibles	                                          –	               –	         1,823,785	     1,949,052	       1,823,785	           1,949,052	
     Unutilised	 capital	 allowances	                      –	               –	          (780,544)	     (721,912)	       (780,544)	           (721,912)	
     Others	                                               –	               –	            (3,138)	       13,030	          (3,138)	             13,030

     Tax	 (assets)/liabilities	                      (10,973)	        (10,609)	        2,785,196	     2,809,559	       2,774,223	           2,798,950



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

                                                                                             Group                           company
                                                                                          2008       2007                  2008        2007
                                                                                        rM’000     rM’000                rM’000      rM’000

     Deductible	 temporary	 differences	                                                       –	             6	                 –	                 –
     Tax	 loss	 carry-forwards	                                                                –	        62,657	                 –	                 –

                                                                                               –	        62,663	                 –	                 –



     In	 the	 prior	 year,	 deferred	 tax	 assets	 were	 not	 recognised	 in	 respect	 of	 these	 items	 because	 it	 was	 not	 probable	 that	 future	
     taxable	 profit	 will	 be	 available	 against	 which	 the	 Group	 can	 utilise	 the	 benefits	 there	 from.
	
                                                                                                             122
Malakoff                                              annual
Corporation                                           report
Berhad                                                2008




notes to the financial statements                           (continued)




9.   deferred tax assets and liabilities	 (continued)
     Movement in temporary differences during the year

                                                          recognised                                    recognised
                                                           in income      acquired                       in income
                                                     at    statement in business                 at      statement              at
     Group                                     1.1.2007      (note 20) combination       31.12.2007        (note 20)    31.12.2008
                                                rM’000        rM’000       rM’000           rM’000          rM’000         rM’000

     deferred tax assets
     Property,	 plant	 and	 equipment	               –	            244	            –	           244	          1,626	         1,870
     Provisions		                                    –	         (8,909)	      (1,944)	      (10,853)	        (1,990)	      (12,843)

     	    	     	                                    –	         (8,665)	      (1,944)	      (10,609)	          (364)	      (10,973)

     deferred tax liabilities
     Property,	 plant	 and	 equipment	               –	       384,420	     1,215,489	     1,599,909	        124,761	     1,724,670
     Provisions		                                    –	       (10,061)	      (20,459)	      (30,520)	        50,943	        20,423
     Intangibles	                                    –	       (58,148)	    2,007,200	     1,949,052	       (125,267)	    1,823,785
     Unutilised	 capital	 allowances	                –	      (357,783)	     (364,129)	     (721,912)	       (58,632)	     (780,544)
     Others	 	                                       –	        (3,263)	       16,293	        13,030	        (16,168)	       (3,138)

     	    	     	                                    –	        (44,835)	   2,854,394	     2,809,559	        (24,363)	    2,785,196




10. receivables, dePosits and PrePayMents
                                                                                 Group                          company
                                                               note           2008       2007                 2008        2007
                                                                            rM’000     rM’000               rM’000      rM’000

     current
     trade
     Trade	 receivables	                                         	           603,106	       732,520	              –	             –
     Less:	 Allowance	 for	 doubtful	 debts	                     	          (111,649)	      (75,491)	             –	             –

     	                                                           	          491,457	        657,029	              –	             –

     non-trade
     Amounts	 due	 from	 subsidiaries	                         10.1	              –	              –	       398,406	        354,434
     Amount	 due	 from	 associate	                             10.2	        145,012	        160,348	       145,012	        160,348
     Other	 receivables	                                         	          175,327	         75,007	         6,959	          7,253
     Deposits	                                                   	           29,848	         17,310	             –	              –
     Prepayments	                                                	          184,197	        237,975	        72,484	         80,702

	                                                                	          534,384	        490,640	       622,861	        602,737

	                                                                	         1,025,841	     1,147,669	       622,861	        602,737
                                                                                                                   123
Malakoff                                                annual
Corporation                                             report
Berhad                                                  2008




notes to the financial statements                              (continued)




10. receivables, dePosits and PrePayMents	 (continued)
    10.1 amounts due from subsidiaries
    	     The	 non-trade	 receivables	 due	 from	 subsidiaries	 are	 unsecured,	 interest	 free	 and	 repayable	 on	 demand.

    10.2 amount due from associate
	   	     T
          	 he	non-trade	receivable	from	an	associate	relates	to	interest	receivable	subject	to	the	existing	terms	of	the	unsecured	
          loan	 stocks.



11. inventories
                                                                                      Group                          company
                                                                                   2008       2007                 2008        2007
                                                                                 rM’000     rM’000               rM’000      rM’000

	   Spares	 and	 consumables	                                                   368,543	         322,080	               –	              –
	   Coal		     	                                                                215,976	         111,011	               –	              –
	   Diesel	 fuel	                                                                53,896	          55,082	               –	              –

	                                                                  	            638,415	         488,173	               –	              –



	   All	 inventories	 are	 carried	 at	 cost.



12. cash and cash equivalents
                                                                                      Group                          company
                                                                                   2008       2007                 2008        2007
                                                                                 rM’000     rM’000               rM’000      rM’000

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

	   	     	     	                                                              3,064,853	      2,573,954	        488,115	        460,493



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




notes to the financial statements                                 (continued)




13. share caPital and reserves
    13.1 share capital
                                                                                                     Group and company
                                                                                                    number                             number
                                                                                    amount         of shares     amount               of shares
                                                                                      2008              2008        2007                   2007
                                                                                    rM’000              ’000      rM’000                   ’000

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

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

         Issued	 and	 fully	 paid:
           Ordinary	 shares	 of	 RM1	 each
             At	 beginning	 of	 the	 year	                                           351,344	         351,344	               –	               –
             Issued	 for	 cash	                                                            –	               –	         351,344	         351,344

                At	 end	 of	 the	 year	                                              351,344	         351,344	         351,344	         351,344

              Redeemable	 convertible	 non	 cumulative	
                preference	 shares	 of	 RM0.10	 each	
                At	 beginning	 of	 the	 year	                                          5,019	          50,192	 	              –	               –
                Issued	 for	 cash	                                                         –	               –	            5,019	          50,192	

                At	 end	 of	 the	 year	                                                5,019	          50,192	            5,019	          50,192	



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

    13.3 redeemable convertible non cumulative preference shares
    	    H
         	 olders	of	redeemable	convertible	(at	the	option	of	the	Company	in	the	event	the	Company	is	listed	on	Bursa	Malaysia)	
         non-cumulative	 preference	 shares	 receive	 a	 non-cumulative	 gross	 dividend	 of	 RM1	 per	 share	 at	 the	 Company’s	
         discretion	 or	 whenever	 dividends	 to	 ordinary	 shareholders	 are	 declared.	 They	 do	 not	 have	 the	 right	 to	 participate	 in	
         any	 additional	 dividends	 declared	 for	 ordinary	 shareholders.	 Preference	 shares	 do	 not	 carry	 the	 right	 to	 vote	 except	
         for	 variation	 of	 holders’	 rights	 to	 the	 class	 of	 shares,	 proposal	 to	 wind	 up	 and	 during	 the	 winding	 up	 of	 the	 Company,	
         proposal	 to	 reduce	 the	 share	 capital	 of	 the	 Company	 and	 on	 the	 proposal	 for	 the	 disposal	 of	 the	 whole	 Company’s	
         property,	 business	 or	 undertaking.	 The	 preference	 shares	 shall	 rank	 equally	 among	 themselves	 in	 all	 respects	 and	
         shall	 rank	 in	 senior	 to	 the	 ordinary	 shares	 but	 junior	 to	 the	 Junior	 Sukuk.
                                                                                                                     125
Malakoff                                                 annual
Corporation                                              report
Berhad                                                   2008




notes to the financial statements                               (continued)




13. share caPital and reserves	 (continued)
    13.4 foreign currency translation reserve
    	    T
         	 he	 translation	 reserve	 comprises	 all	 foreign	 currency	 differences	 arising	 from	 the	 translation	 of	 the	 financial	
         statements	of	foreign	operations	as	well	as	from	the	translation	of	liabilities	that	hedge	the	Company’s	net	investment	
         in	 a	 foreign	 subsidiary.

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

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

	
14. loans and borroWinGs
                                                                                       Group                           company
                                                                                    2008       2007                  2008        2007
                                                                                  rM’000     rM’000                rM’000      rM’000

	   non-current
	   Sukuk	 Ijarah	 bonds	 –	 secured	                                             672,165	        760,366	               –	               –
	   Al-Bai	 Bithamin	 Ajil	 (ABBA)	 bonds	 –	 secured	                            610,000	        730,000	               –	               –
	   Al-Istisna	 bonds	 –	 secured	                                                452,019	        517,353	               –	               –
	   Istisna	 medium	 term	 notes	 –	 secured	                                   4,800,000	      5,290,000	               –	               –
	   Sukuk	 medium	 term	 notes	 –	 secured	                                     5,202,250	      5,155,028	       5,202,250	       5,155,028
	   Junior	 Sukuk	 –	 secured	                                                  1,700,000	      1,700,000	       1,700,000	       1,700,000
	   Term	 loan	 –	 secured	                                                       293,220	              –	               –	               –
	   Subordinated	 loan	 notes	 –	 unsecured	                                      187,375	        195,717	               –	               –

	   	    	     	                                                              13,917,029	      14,348,464	       6,902,250	       6,855,028	

    current
	   Commercial	 papers	 –	 secured	                                               591,292	        697,684	         591,292	         592,580	
	   Sukuk	 Ijarah	 bonds	 –	 secured	                                              94,378	         99,689	               –	               –
	   ABBA	 bonds	 –	 secured	                                                      120,000	        120,000	               –	               –	
	   Al-Istisna	 bonds	 –	 secured	                                                 65,985	         67,983	               –	               –	
	   Istisna	 medium	 term	 notes	 –	 secured	                                     490,000	        280,000	               –	               –
	   Subordinated	 loan	 notes	 –	 unsecured	                                        1,818	          1,818	               –	               –

	   	    	     	                                                                1,363,473	      1,267,174	         591,292	         592,580
                                                                                                                              126
Malakoff                                                       annual
Corporation                                                    report
Berhad                                                         2008




notes to the financial statements                                     (continued)




14. loans and borroWinGs	 (continued)
    security
    The	 commercial	 papers,	 bonds,	 medium	 term	 notes,	 Junior	 Sukuk	 and	 term	 loan	 are	 secured	 over	 property,	 plant	 and	
    equipment	with	a	carrying	amount	of	RM10,457,859,000	(2007	–	RM10,545,304,000)	(see	note	3)	and	prepaid	lease	payments	
    with	 a	 carrying	 amount	 of	 RM6,148,000	 (2007	 –	 RM6,221,000)	 (see	 note	 5).

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

    i)	     Sukuk	 Ijarah	 bonds	 issued	 by	 a	 subsidiary

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

    ii)	    ABBA	 bonds	 and	 Commercial	 papers	 issued	 by	 a	 subsidiary

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

    iii)	   Al-Istisna	 bonds	 issued	 by	 a	 subsidiary

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

    iv)	    Istisna	 medium	 term	 notes	 issued	 by	 a	 subsidiary

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

    v)	     Sukuk	 medium	 term	 notes,	 Junior	 Sukuk	 and	 Commercial	 papers	 issued	 by	 the	 Company

    	       M
            	 aintain	 a	 Debt/Equity	 Ratio	 of	 no	 greater	 than	 1.25:1	 and	 Group	 Debt/Equity	 ratio	 to	 be	 no	 greater	 than	 7:1	 at	 all	
            times.

    vi)	    Term	 loan	 acquired	 by	 a	 subsidiary

    	       M
            	 aintain	 a	 Debt	 Service	 Cover	 Ratio	 of	 at	 least	 1.05	 and	 Projected	 Debt	 Services	 Cover	 Ratio	 of	 at	 least	 1.05	 after	 the	
            first	 payment	 date.
                                                                                                              127
Malakoff                                              annual
Corporation                                           report
Berhad                                                2008




notes to the financial statements                              (continued)




14. loans and borroWinGs	 (continued)
    terms and debt repayment schedule
                                                  year of        carrying        under 1        1–2           2–5           over 5
    Group                                        maturity         amount            year        years         years          years
                                                                  rM’000          rM’000       rM’000        rM’000         rM’000

    2008

    Commercial	 papers	 –	 secured	                  2009	         591,292	      591,292	             –	            –	            –
    Sukuk	 Ijarah	 bonds	 –	 secured	           2009–2012	 	       766,543	        94,378	     175,618	      496,547	             –
    ABBA	 bonds	 –	 secured	                    2009–2014	         730,000	      120,000	      120,000	      360,000	       130,000
    Al-Istisna	 bonds	 –	 secured	              2009–2016	         518,004	        65,985	      65,894	      193,232	       192,893
    Istisna	 medium	 term	 notes	 –	 secured	   2009–2018	       5,290,000	      490,000	      510,000	    1,740,000	     2,550,000
    Sukuk	 medium	 term	 notes	 –	 secured	     2015–2025	       5,202,250	             –	            –	            –	    5,202,250
    Junior	 Sukuk	 –	 secured	 	                     2025	       1,700,000	             –	            –	            –	    1,700,000
    Term	 loan–	 secured	 	                     2010–2024	         293,220	             –	      18,256	      116,992	       157,972
    Subordinated	 loan	 notes	 –	 unsecured	    2009–2031	         189,193	         1,818	       1,818	        3,181	       182,376

    	                                                     	     15,280,502	     1,363,473	    	 891,586	   	 2,909,952	 	 10,115,491

    2007

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

    	                                                     	     15,615,638	     1,267,174	    776,493	     2,879,981	    10,691,990
                                                                                                                 128
Malakoff                                                annual
Corporation                                             report
Berhad                                                  2008




notes to the financial statements                               (continued)




14. loans and borroWinGs	 (continued)
    terms and debt repayment schedule
                                                   year of        carrying       under 1          1–2            2–5           over 5
    company                                       maturity         amount           year          years          years          years
                                                                   rM’000         rM’000         rM’000         rM’000         rM’000

    2008
    Commercial	 papers	 –	 secured	                   2009	         591,292	      591,292	              –	             –	            –
    Sukuk	 medium	 term	 notes	 –	 secured	      2015–2025	       5,202,250	            –	              –	             –	    5,202,250
    Junior	 Sukuk	 –	 secured	 	                      2025	       1,700,000	            –	              –	             –	    1,700,000

    	                                                       	     7,493,542	      591,292	              –	             –	    6,902,250

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

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

	

15. eMPloyee benefits
    retirement benefits
                                                                                    Group                          company
                                                                                 2008       2007                 2008        2007
                                                                               rM’000     rM’000               rM’000      rM’000

	   Present	 value	 of	 unfunded	 obligations	                                   18,012	         34,863	          3,318	         12,134
	   Present	 value	 of	 funded	 obligations	                                     21,840	              –	          9,785	              –
	   Unrecognised	 loss	                                                          (5,860)	        (7,583)	        (1,618)	        (3,184)	

	   Total	 present	 value	 of	 obligations	                                      33,992	         27,280	         11,485	          8,950
	   Fair	 value	 of	 plan	 assets	                                               (2,715)	 	           –	           (966)	             –

	   	      	   	                                                                 31,277	         27,280	         10,519	          8,950



    During	 the	 year,	 the	 Group	 set	 up	 a	 new	 retirement	 trust	 fund	 (funded	 plan),	 Malakoff	 Retirement	 Trust	 Fund,	 which	
    provides	 pension	 benefits	 for	 the	 employees	 upon	 retirement.	 Three	 companies	 in	 the	 Group,	 namely	 Malakoff	 Corporation	
    Berhad,	 Teknik	 Janakuasa	 Sdn.	 Bhd.	 and	 Wirazone	 Sdn.	 Bhd.	 participated	 in	 making	 contributions	 to	 the	 Malakoff	
    Retirement	 Trust	 Fund.

    The	 fair	 value	 of	 the	 plan	 assets	 includes	 no	 amount	 relating	 to	 any	 of	 the	 Group’s	 or	 the	 Company’s	 own	 financial	
    instruments	 nor	 any	 property	 occupied	 by,	 or	 other	 assets	 used	 by	 the	 Group	 and	 the	 Company.
                                                                                                        129
Malakoff                                                    annual
Corporation                                                 report
Berhad                                                      2008




notes to the financial statements                                 (continued)




15. eMPloyee benefits	 (continued)
    retirement benefits	 (continued)
    The	 major	 categories	 of	 plan	 assets	 are	 as	 follows:

                                                                                     Group                 company
                                                                                  2008       2007        2008        2007
                                                                                rM’000     rM’000      rM’000      rM’000

    Equities	                                                                    1,902	          –	       677	          –
    Repo	 and	 call	 deposits	                                                     804	          –	       286	          –
    Interest	 receivables	                                                           9	          –	         3	          –

    	                                                                            2,715	          –	       966	          –



    Movement in the present value of the defined benefit obligations

                                                                                     Group                 company
                                                                                  2008       2007        2008        2007
                                                                                rM’000     rM’000      rM’000      rM’000

    Defined	 benefit	 obligations	 at	 1	 January	 	                            27,280	          –	     	 8,950	        –
    Acquired	 through	 business	 combination	                                        –	     23,519	           –	    8,328
    Benefits	 paid	 by	 the	 plan	                                              (3,100)	      (406)	    (1,140)	      (74)
    Current	 service	 costs	 and	 interest	 (see	 below)	                        9,812	      4,167	       3,675	      696

    Defined	 benefit	 obligations	 at	 31	 December	                            33,992	     27,280	    11,485	      8,950



    Movement in the fair value of plan assets

                                                                                     Group                 company
                                                                                  2008       2007        2008        2007
                                                                                rM’000     rM’000      rM’000      rM’000

    Fair	 value	 of	 plan	 assets	 at	 1	 January	 	                                 –	          –	         –	          –
    Contributions	 paid	 into	 the	 plan	                                        2,697	          –	       960	          –
    Actuarial	 gain	                                                                11	          –	         3	          –
    Expected	 return	 on	 plan	 assets	                                              7	          –	         3	          –

    Fair	 value	 of	 plan	 assets	 at	 31	 December	                             2,715	          –	       966	          –
                                                                                                                        130
Malakoff                                                   annual
Corporation                                                report
Berhad                                                     2008




notes to the financial statements                                 (continued)




15. eMPloyee benefits	 (continued)
    expense recognised in the income statements
                                                                                         Group                            company
                                                                                      2008       2007                   2008        2007
                                                                                    rM’000     rM’000                 rM’000      rM’000

    Current	 service	 costs	 	                                                         3,225	          1,883	           1,301	             278
    Interest	 on	 obligation	 	                                                        1,982	            967	             671	             166
    Transitional	 liability	                                                           4,419	          1,317	           1,606	             252
    Actuarial	 losses	                                                                   237	              –	              97	               –
    Expected	 return	 on	 plan	 assets	                                                  (51)	             –	               –	               –

    	                                                                                  9,812	          4,167	           3,675	             696

    Actual	 return	 on	 plan	 assets	                                                     18	               –	               6	               –



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

    actuarial assumptions
    Principal	 actuarial	 assumptions	 at	 the	 balance	 sheet	 date:

                                                                                          Group                            company
                                                                                       2008             2007             2008             2007

    Discount	 rate	 at	 31	 December	 	                                                5.8%	            6.7%	            5.8%	            6.7%
    Salary	 inflation	                                                                 6.7%	            6.7%	            6.7%	            6.7%
    Price	 inflation	                                                                  3.5%	            3.5%	            3.5%	            3.5%



    The	 overall	 expected	 long-term	 rate	 of	 return	 on	 assets	 is	 6.5%.	 The	 expected	 long-term	 rate	 of	 return	 is	 based	 on	 the	
    portfolio	 as	 a	 whole	 and	 not	 on	 the	 sum	 of	 the	 returns	 on	 individual	 asset	 categories.	 The	 return	 is	 based	 exclusively	 on	
    historical	 returns,	 without	 adjustments.

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

                                                                                          Group                            company
                                                                                       one           one                 one          one
                                                                                percentage    percentage          percentage   percentage
                                                                                      point         point               point        point
                                                                                  increase      decrease            increase     decrease
                                                                                   rM’000        rM’000              rM’000        rM’000

    Effect	 on	 the	 aggregate	 service	 and	 interest	 cost	                           888	             (753)	           246	             (212)
    Effect	 on	 defined	 benefit	 obligations	                                        4,188	           (3,619)	         1,189	           (1,042)
                                                                                                                    131
Malakoff                                                  annual
Corporation                                               report
Berhad                                                    2008




notes to the financial statements                               (continued)




15. eMPloyee benefits	 (continued)
    historical information
                                                                     2008          2007             2006            2005            2004
                                                                   rM’000        rM’000           rM’000          rM’000          rM’000

    Group
    Present	 value	 of	 the	 defined	 benefit	 obligations	        33,992	        27,280	                –	              –	               –
    Fair	 value	 of	 plan	 assets	                                 (2,715)	            –	                –	              –	               –

    Deficit	                                                       31,277	        27,280	                –	              –	               –

    company
    Present	 value	 of	 the	 defined	 benefit	 obligations	        11,485	          8,950	               –	              –	               –
    Fair	 value	 of	 plan	 assets	                                   (966)	             –	               –	              –	               –

    Deficit	                                                       10,519	          8,950	               –	              –	               –




16. Payables and accruals
                                                                                      Group                           company
                                                                   note            2008       2007                  2008        2007
                                                                                 rM’000     rM’000                rM’000      rM’000

    trade
    Trade	 payables	                                                             406,725	        211,079	                –	               –

    non-trade
    Other	 payables	                                                              25,306	         32,774	           5,309	          2,773
    Accrued	 expenses	                                             16.1	         611,290	        344,487	          83,592	         84,016
    Amounts	 due	 to	 subsidiaries	                                16.2	               –	              –	         334,791	        371,209

    	     	    	                                                                 636,596	        377,261	         423,692	        457,998

    	     	    	                                                               1,043,321	        588,340	         423,692	        457,998



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

    16.2 amounts due to subsidiaries
    	     The	 non-trade	 payables	 due	 to	 subsidiaries	 are	 unsecured,	 interest	 free	 and	 have	 no	 fixed	 terms	 of	 repayment.
                                                                                                           132
Malakoff                                                   annual
Corporation                                                report
Berhad                                                     2008




notes to the financial statements                               (continued)




17. revenue
                                                                                    Group                      company
                                                                                       30.4.2007 to
                                                                    note         2008   31.12.2007          2008           2007
                                                                               rM’000       rM’000        rM’000         rM’000

    Electricity	 generation	 and	 distribution	                      	        4,960,622	   2,655,813	 	         –	             –
    Interest	 income	 on	 loan	 stocks	 from	 associate	                          4,491	       3,002	           –	             –
    Project	 management	 fee	                                                         –	         198	           –	             –
    Rental	 income	 from	 estate	                                                 4,644	       3,496	       4,644	         3,496
    Operation	 and	 maintenance	 fees	                                          151,510	      39,489	           –	             –
    Dividends	 from	 subsidiaries	                                                    –	           –	     532,620	       412,603
    Management	 fees	 from	 subsidiaries	                                             –	           –	      27,060	         5,120

	   	      	    	                                                             5,121,267	   2,701,998	     564,324	       421,219



18. oPeratinG Profit
                                                                                    Group                      company
                                                                                       30.4.2007 to
                                                                                 2008   31.12.2007          2008           2007
                                                                               rM’000       rM’000        rM’000         rM’000

    operating profit is arrived at after charging:
         Allowance	 for	 doubtful	 debts	                                       36,158	      75,491	            –	            –
         Amortisation	 of	 prepaid	 lease	 payments	                             4,478	       2,986	           62	           42
         Amortisation	 of	 intangible	 assets	                                 401,914	     230,795	            –	            –
         Auditors’	 remuneration:
            –	 Statutory	 audit	
              –	 KPMG	                                                             245	          220	          50	           35
            –	 Other	 services
              –	 KPMG	                                                             240	         421	          240	           377
              –	 Affiliates	 of	 KPMG	                                              94	       2,340	           18	         1,363
        Depreciation	 of	 property,	 plant	 and	 equipment	                    442,449	     375,815	        2,048	         1,329
        Impairment	 of	 intangible	 assets	                                     98,373	           –	            –	             –
        Impairment	 of	 goodwill	                                                  859	           –	            –	             –
        Personnel	 expenses	 (including	 key	 management	 personnel):
            –	 Contributions	 to	 Employees	 Provident	 Fund	                    7,989	        6,547	       2,232	         1,927
            –	 Expenses	 related	 to	 defined	 benefit	 plan	                    9,812	        4,167	       3,675	           696
            –	 Wages,	 salaries	 and	 others	                                   60,568	       21,233	      30,303	         6,999
        Windfall	 profit	 levy	                                                211,666	            –	           –	             –

    and after crediting:
        Dividend	 income	 from:
            –	 subsidiaries	 (unquoted)	                                              –	            –	    532,620	       412,603
        Inter-company	 management	 fees	                                              –	            –	     27,060	         5,120
                                                                                                           133
Malakoff                                               annual
Corporation                                            report
Berhad                                                 2008




notes to the financial statements                             (continued)




19. Key ManaGeMent Personnel coMPensation
	   The	 key	 management	 personnel	 compensations	 are	 as	 follows:

                                                                                 Group                         company
                                                                                    30.4.2007 to
                                                                              2008   31.12.2007             2008           2007
                                                                            rM’000       rM’000           rM’000         rM’000

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

    Total	 short-term	 employee	 benefits	                                    7,142	           807	         7,140	           807
    Other	 key	 management	 personnel:
      –	 Short-term	 employee	 benefits	                                      3,185	         2,341	         3,185	         2,341
      –	 Retention/ex-gratia	 2007/2008	                                      2,556	             –	         2,556	             –

    	                                                                        12,883	         3,148	        12,881	         3,148



    Other	 key	 management	 personnel	 comprise	 persons	 other	 than	 the	 Directors	 of	 Group	 entities,	 having	 authority	 and	
    responsibility	 for	 planning,	 directing	 and	 controlling	 the	 activities	 of	 the	 entity	 either	 directly	 or	 indirectly.
                                                                                                             134
Malakoff                                                       annual
Corporation                                                    report
Berhad                                                         2008




notes to the financial statements                                   (continued)




20. tax exPense
     recognised in the income statements
                                                                                       Group                     company
                                                                                          30.4.2007 to
                                                                                    2008   31.12.2007         2008           2007
                                                                                  rM’000       rM’000       rM’000         rM’000

     Total	 tax	 expense	                                                         128,462	      55,267	      74,367	        59,854

     Major	 components	 of	 tax	 expense	 include:
     current tax expense
     Malaysian	 –	 current	 year/period	                                          118,392	     108,767	      67,611	        59,854
     Under	 provision	 in	 prior	 period	                                          34,797	           –	       6,756	             –

     	                                                                            153,189	     108,767	      74,367	        59,854

     deferred tax expense
     Origination	 and	 reversal	 of	 temporary	 differences	                       23,824	        5,339	          –	             –
     Effect	 of	 changes	 in	 tax	 rate*	                                         (38,089)	   	 (58,839)	         –	             –
     Over	 provision	 in	 prior	 period	                                          (10,462)	           –	          –	             –

     	                                                                            (24,727)	    (53,500)	          –	             –

     Total	 tax	 expense	                                                         128,462	      55,267	      74,367	        59,854

     Profit	 for	 the	 year/period	                                               190,098	     268,502	     155,543	       155,884
     Total	 tax	 expense	                                                         128,462	      55,267	      74,367	        59,854

     Profit	 excluding	 tax	 	                                                    318,560	     323,769	     229,910	       215,738

     Tax	 at	 Malaysian	 tax	 rate	 of	 26%	 (2008	 –	 27%)	                       82,826	      87,418	      59,777	        58,249
     Effect	 of	 change	 in	 tax	 rate*	                                          (38,089)	    (58,839)	          –	             –
     Effect	 of	 share	 of	 results	 of	 associates	                               (8,008)	      1,046	           –	             –
     Effect	 of	 deferred	 tax	 benefits	 not	 recognised	                              –	      16,919	           –	             –
     Recognition	 of	 deferred	 tax	 benefits
     previously	 not	 recognised	                                                 (16,084)	          –	           –	             –
     Non-deductible	 expenses	                                                     82,489	       8,723	       7,834	         1,605
     Other	 items	                                                                    993	           –	           –	             –
     (Over)/under	 provision	 in	 prior	 period
       –	 current	 tax	                                                            34,797	            –	      6,756	            –
       –	 deferred	 tax	                                                          (10,462)	           –	          –	            –

     	                                                                            128,462	      55,267	      74,367	        59,854

	
*	   T
     	 he	 corporate	 tax	 rates	 are	 26%	 for	 year	 of	 assessment	 2008,	 and	 25%	 for	 the	 subsequent	 years	 of	 assessment.	
     Consequently	 deferred	 tax	 assets	 and	 liabilities	 are	 measured	 using	 these	 tax	 rates.
                                                                                                                     135
Malakoff                                                 annual
Corporation                                              report
Berhad                                                   2008




notes to the financial statements                               (continued)




21. dividends
	   Dividends	 recognised	 in	 the	 current	 year	 by	 the	 Company	 are	 as	 follows:
                                                                                                      sen            total
                                                                                                per share          amount          date of
                                                                                               (net of tax)        rM’000         payment

    2008
    Final	 2007	 –	 ordinary	 shares	                                                                11.40	         40,000	        2.4.2008
    Interim	 2008	 –	 ordinary	 shares	                                                              12.20	         42,858	        2.9.2008
    Interim	 2008	 –	 preference	 shares	                                                            74.00	         37,142	        2.9.2008

    Total	 amount	                                                                                         	       120,000

    2007
    Interim	 2007	 –	 ordinary	 shares	                                                               6.65	         23,360	       7.12.2007
    Interim	 2007	 –	 preference	 shares	                                                            73.00	         36,640	       7.12.2007

    Total	 amount	                                                                                         	        60,000


    After	 the	 balance	 sheet	 date,	 the	 following	 dividends	 were	 proposed	 by	 the	 Directors.	 These	 dividends	 will	 be	 recognised	
    in	 subsequent	 financial	 reports	 up	 on	 approval	 by	 the	 shareholders.

                                                                                                                       sen               total
                                                                                                                 per share             amount
                                                                                                                (net of tax)           rM’000

    Final	 2008	 –	 ordinary	 shares	
      Taxable	 dividend	                                                                                               1.92	             6,769
      Single	 tier	 dividend	                                                                                         22.27	            78,231

    	      	    	                                                                                                     24.19	            85,000



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

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

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

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

    business segments
	   The	 Group	 comprises	 the	 following	 main	 business	 segments:

	   •	     Asset	 management
	   •	     Operations	 and	 maintenance	 (O&M)
                                                                                                                                 136
Malakoff                                                            annual
Corporation                                                         report
Berhad                                                              2008




notes to the financial statements                                        (continued)




22. seGMent rePortinG (continued)
    	                                       asset management                 o&M                     eliminations                   consolidated
                                                    30.4.2007 to               30.4.2007 to               30.4.2007 to                    30.4.2007 to
                                              2008 31.12.2007            2008 31.12.2007            2008     1.12.2007              2008 31.12.2007
                                            rM’000       rM’000        rM’000       rM’000        rM’000       rM’000             rM’000       rM’000

    business segments
    Total	 external	 revenue	           4,969,757	     2,662,509	      151,510	        39,489	           –	             –	       5,121,267	     2,701,998
    Inter-segment	 revenue	                     –	             –	      415,375	       326,850	    (415,375)	     (326,850)	              –	             –

    total segment revenue	              4,969,757	     2,662,509	      566,885	       366,339	    (415,375)	     (326,850)	      5,121,267	     2,701,998

    segment results	                        926,061	     751,448	      435,740	       221,591	           –	                –	    1,361,801	      973,039

    Results	 from	 operating	
       activities	                                                                                                               1,361,801	       973,039
    Interest	 income	                                                                                                              123,775	       123,038
    Finance	 costs	                                                                                                             (1,197,816)	     (768,434)
    Share	 of	 profit/(loss)	 of	 equity	
       accounted	 associates	                                                                                                       30,800	        (3,874)
    Tax	 expense	                                                                                                                 (128,462)	      (55,267)

    Profit for the year/period	                                                                                             	     190,098	       268,502


                                                                        asset Management                       o&M                   consolidated
                                                                         2008        2007           2008               2007         2008         2007
                                                                       rM’000      rM’000         rM’000             rM’000       rM’000      rM’000

    segment assets	                                                  21,374,994	    21,135,824	   870,124	           785,724	   22,245,118	    21,921,548
    Investment	 in	 associates	                                       1,379,157	     1,536,031	          –	                –	    1,379,157	     1,536,031

    Total	 assets	                                                                                                          	   23,624,275	    23,457,579

    Segment	 liabilities	                          	            	    18,891,711	    18,809,943	   252,839	           254,787	   19,144,550	    19,064,730

    Total	 liabilities	                            	            	               	             	           	                 	   19,144,550	    19,064,730

    Capital	 expenditure	                          	            	      543,170	       240,221	       2,167	           13,110	     545,337	       253,331

    Depreciation	                                  	            	      437,624	       313,325	       4,825	           62,490	     442,449	       375,815

    Amortisation	 of	 intangible	 assets	          	            	      327,219	       195,415	     74,695	            35,380	     401,914	       230,795

    Impairment	 of	 intangible	 assets	            	            	        98,373	             –	          –	                –	       98,373	             –

    Impairment	 of	 goodwill	                      	            	            859	            –	          –	                –	         859	              –

    Non-cash	 expenses	 other	 than	 depreciation	
      and	 amortisation	                   	                    	        43,576	        79,338	      4,157	            3,306	       47,733	       82,644
                                                                                                                        137
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




notes to the financial statements                                   (continued)




23. financial instruMents

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


    credit risk

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


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


    At	 balance	 sheet	 date,	 the	 Group	 has	 a	 concentration	 of	 credit	 risk	 in	 the	 form	 of	 trade	 debts	 due	 from	 Tenaga	 Nasional	
    Berhad	 (TNB),	 representing	 approximately	 57%	 (2007:	 54%)	 of	 the	 total	 receivables	 of	 the	 Group.	 The	 maximum	 exposures	
    to	 credit	 risk	 for	 the	 Group	 and	 the	 Company	 are	 represented	 by	 the	 carrying	 amount	 of	 each	 financial	 asset.


    interest rate risk

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


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


    The	 investments	 in	 financial	 assets	 are	 mainly	 short	 term	 in	 nature	 and	 they	 are	 not	 held	 for	 speculative	 purposes	 but	
    mostly	 placed	 in	 fixed	 deposits.	 The	 placements	 are	 short	 term	 and	 therefore	 their	 exposure	 to	 the	 effects	 of	 future	
    changes	 in	 the	 prevailing	 level	 of	 interest	 rate	 is	 limited.
    	
                                                                                                                          138
Malakoff                                                    annual
Corporation                                                 report
Berhad                                                      2008




notes to the financial statements                                (continued)




23. financial instruMents (continued)
    effective interest rates and repricing analysis
    In	 respect	 of	 interest-earning	 financial	 assets	 and	 interest-bearing	 financial	 liabilities,	 the	 following	 table	 indicates	 their	
    average	 effective	 interest	 rates	 at	 the	 balance	 sheet	 date	 and	 the	 periods	 in	 which	 they	 mature,	 or	 if	 earlier.

                                             average
                                             effective                     less                                                          More
                                              interest                     than      1–2          2–3           3 –4         4 –5         than
    Group                        note             rate        total      1 year      years        years        years        years      5 years
                                                    %       rM’000      rM’000      rM’000       rM’000       rM’000       rM’000      rM’000

    2008

    fixed rate instruments
    Financial	 assets
    Cash	 and	 cash	
      equivalents	                12	              3.59	 3,064,853	 3,064,853	             –	           –	           –	          –	           –


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




notes to the financial statements                              (continued)




23. financial instruMents (continued)
    effective interest rates and repricing analysis (continued)

                                            average
                                            effective                   less                                                       More
                                             interest                   than       1–2          2–3         3 –4        4 –5        than
    Group                        note            rate       total     1 year       years        years      years       years     5 years
                                                   %      rM’000     rM’000       rM’000       rM’000     rM’000      rM’000     rM’000

    2007

    fixed rate instruments
    Financial	 assets
    Cash	 and	 cash	
      equivalents	                12	            3.53	 2,573,954	 2,573,954	             –	          –	         –	          –	        –


    fixed rate instruments

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




notes to the financial statements                         (continued)




23. financial instruMents (continued)
                                      average
                                      effective                    less                                                 More
                                       interest                    than       1–2       2–3        3 –4       4 –5       than
    company                  note          rate        total     1 year       years     years     years      years    5 years
                                             %       rM’000     rM’000       rM’000    rM’000    rM’000     rM’000    rM’000

    2008

    fixed rate instruments
    Financial	 assets
    Cash	 and	 cash	
      equivalents	            12	           3.41	    488,115	   488,115	          –	        –	        –	         –	        –

    fixed rate instruments
    Financial	 liabilities
    Commercial	 papers	       14	   3.70	 –	 4.05	   591,292	   591,292	          –	        –	        –	         –	        –
    Sukuk	 medium	
      term	 notes	            14	   5.78	 –	 6.98	 5,202,250	           –	        –	        –	        –	         –	 5,202,250
    Junior	 Sukuk	            14	           9.00	 1,700,000	            –	        –	        –	        –	         –	 1,700,000

    2007

    fixed rate instruments
    Financial	 assets
    Cash	 and	 cash
      equivalents	            12	           3.53	    460,493	   460,493	          –	        –	        –	         –	        –

    fixed rate instruments
    Financial	 liabilities
    Commercial	 papers	       14	           3.70	    592,580	   592,580	          –	        –	        –	         –	        –
    Sukuk	 medium	
      term	 notes	            14	   5.78	 –	 6.98	 5,115,028	           –	        –	        –	        –	         –	 5,115,028
    Junior	 Sukuk	            14	           9.00	 1,700,000	            –	        –	        –	        –	         –	 1,700,000
                                                                                                                            141
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




notes to the financial statements                                   (continued)




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

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

    In	 respect	 of	 other	 monetary	 assets	 and	 liabilities	 held	 in	 currencies	 other	 than	 Ringgit	 Malaysia,	 the	 Group	 ensures	 that	
    the	 net	 exposure	 is	 kept	 to	 an	 acceptable	 level	 by	 buying	 or	 selling	 foreign	 currencies	 at	 spot	 rates	 where	 necessary	 to	
    address	 short	 term	 imbalances.
    	
    liquidity risk
    The	 Group	 monitors	 and	 maintains	 a	 level	 of	 cash	 and	 cash	 equivalents	 deemed	 adequate	 by	 management	 to	 finance	 the	
    Group’s	 operations	 and	 to	 mitigate	 the	 effects	 of	 fluctuations	 in	 cash	 flows.

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

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

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




notes to the financial statements                              (continued)




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

                                                                                       2008                             2007
                                                                               carrying            fair         carrying           fair
                                                                                amount            value          amount           value
                                                                                rM’000           rM’000          rM’000          rM’000

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

    company
    Financial	 liabilities
    Commercial	 papers	                                                          591,292	        592,603	        592,580	        588,719
    Sukuk	 medium	 term	 notes	                                                5,202,250	      5,556,320	      5,115,028	      5,868,730
    Junior	 Sukuk	                                                             1,700,000	      1,777,010	      1,700,000	      1,919,640




24. caPital and other coMMitMents
                                                                                      Group                          company
                                                                                   2008       2007                 2008        2007
                                                                                 rM’000     rM’000               rM’000      rM’000

    Plant and equipment
    Authorised	 but	 not	 contracted	 for	                         	              47,827	         39,420	            642	           1,579
                                                                                                                            143
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




notes to the financial statements                                   (continued)




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

    litigation
    Dispute	 between	 Segari	 Energy	 Ventures	 Sdn.	 Bhd.	 (“SEV”)	 and	 Tenaga	 Nasional	 Berhad	 (“TNB”)	 in	 relation	 to	 wrongful	
    set-off	 of	 SEV’s	 Billing	 Statements	 and	 the	 alleged	 Metering	 Inaccuracies

    On	 25	 June	 2008,	 SEV	 filed	 a	 statement	 of	 claim	 against	 TNB	 claiming	 for	 a	 sum	 of	 RM43,692,188	 in	 relation	 to	 wrongful	
    set-off	 of	 SEV’s	 billing	 statements.

    On	 25	 July	 2008,	 TNB	 filed	 its	 defence	 and	 counterclaim	 seeking,	 among	 others,	 in	 relation	 to	 the	 RM43,692,188	 claimed	
    by	 SEV,	 a	 declaration	 that	 the	 said	 amounts	 were	 lawfully	 deducted,	 or	 alternatively,	 payment	 of	 the	 said	 amounts	 to	 TNB;	
    and	 in	 respect	 of	 the	 metering	 inaccuracies,	 payment	 of	 all	 the	 amounts	 of	 energy	 payments	 allegedly	 received	 by	 SEV	 in	
    excess	 of	 the	 sum	 due	 to	 SEV,	 which	 is	 to	 be	 determined	 by	 the	 arbitral	 tribunal.	

    On	 25	 August	 2008,	 SEV	 filed	 its	 reply	 and	 defence	 to	 counterclaim	 and	 followed	 by	 TNB,	 who	 filed	 its	 own	 reply	 to	 defence	
    and	 counterclaim	 on	 24	 September	 2008.	

    The	 date	 for	 the	 hearing	 has	 been	 fixed	 for	 17	 August	 2009	 to	 28	 August	 2009.	

    Guarantees
                                                                                            Group                             company
                                                                                         2008       2007                    2008        2007
                                                                                       rM’000     rM’000                  rM’000      rM’000

    Guarantees
      –	 secured	                                                                      405,586	         405,122	          320,216	         306,035



    These	 guarantees	 mainly	 consist	 of	 guarantees	 for	 bid	 bonds,	 performance	 bonds	 and	 security	 deposits	 for	 projects.
                                                                                                                         144
Malakoff                                                   annual
Corporation                                                report
Berhad                                                     2008




notes to the financial statements                                 (continued)




26. related Parties
    For	 the	 purposes	 of	 these	 financial	 statements,	 parties	 are	 considered	 to	 be	 related	 to	 the	 Group	 or	 the	 Company	 if	 the	
    Group	 or	 the	 Company	 has	 the	 ability,	 directly	 or	 indirectly,	 to	 control	 the	 party	 or	 exercise	 significant	 influence	 over	 the	
    party	 in	 making	 financial	 and	 operating	 decisions,	 or	 vice	 versa,	 or	 where	 the	 Group	 or	 the	 Company	 and	 the	 party	 are	
    subject	 to	 common	 control	 or	 common	 significant	 influence.	 Related	 parties	 may	 be	 individuals	 or	 other	 entities.	

    The	 significant	 related	 party	 transactions	 of	 the	 Group	 and	 the	 Company,	 other	 than	 key	 management	 personnel	
    compensation,	 are	 as	 follows:

                                                                                      transactions         Gross balance          net balance
                                                                                        amount for           outstanding          outstanding
                                                                                    the year ended                    at                   at
    Group                                                                             31 december           31 december          31 december
                                                                                            rM’000               rM’000               rM’000

    2008
    associated companies
    Interest	 income	 on	 unsecured	 subordinated	 loan	 notes	                                29,155	             146,509	             146,509

    company subject to common significant influence
    Operation	 and	 maintenance	 fee	 expense	                                               (133,709)	             (53,638)	            (53,638)
    Operation	 and	 maintenance	 subcontract	 fee	 income	                                    115,006	                9,882	               9,882

    2007
    holding company
    Acquisition	 of	 equity	 interest	 in	
        Malakoff	 Berhad	 from	
        MMC	 Corporation	 Berhad	                                                          (2,047,834)	                   –	                    –

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

    company subject to common significant influence
    Operation	 and	 maintenance	 fee	 expense	                                                (62,540)	             (26,438)	            (26,438)
    Operation	 and	 maintenance	 subcontract	 fee	 income	                                     32,426	               28,750	              28,750

    	
                                                                                                                         145
Malakoff                                                   annual
Corporation                                                report
Berhad                                                     2008




notes to the financial statements                                  (continued)




26. related Parties (continued)
                                                                                      transactions         Gross balance           net balance
                                                                                        amount for           outstanding           outstanding
                                                                                    the year ended                    at                    at
    company                                                                           31 december           31 december           31 december
                                                                                            rM’000               rM’000                rM’000

    2008
    subsidiaries
    Interest	 income	 on	 unsecured	 subordinated	 loan	 notes	                               151,476	             120,180	              120,180
    Management	 fee	                                                                           27,060	                   –	 	                  –	
    Dividends	                                                                                532,620	                   –	 	                  –	
    associated companies
    Interest	 income	 on	 unsecured	 subordinated	 loan	 notes	                                24,664	             145,012	              145,012

    2007
    holding company
    Acqusition	 of	 equity	 interest	 in	 Malakoff	 Berhad	 from
    MMC	 Corporation	 Berhad	                                                              (2,047,834)	                   –	                   	–
    subsidiaries
    Interest	 income	 on	 unsecured	 subordinated	 loan	 notes	                               130,060	             146,346	              146,346
    Management	 fee	                                                                            5,120	                   –	                   	–
    Dividends	                                                                                412,603	                   –	                   	–
    associated companies
    Interest	 income	 on	 unsecured	 subordinated	 loan	 notes	                                74,639	             160,348	              160,348

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



27. acquisition of business
    business combination
	   O
    	 n	 30	 April	 2007,	 the	 Company	 acquired	 all	 the	 assets	 and	 undertakings	 (other	 than	 cash	 held	 by	 Malakoff	 Berhad)	 and	
    assume	 all	 the	 disclosed	 liabilities	 of	 Malakoff	 Berhad	 for	 a	 total	 cash	 consideration	 of	 RM9.3	 billion	 satisfied	 in	 cash.	 In	
    the	 eight	 months	 to	 31	 December	 2007,	 the	 subsidiaries	 and	 associates	 contributed	 profit	 after	 tax	 of	 RM268	 million.	 If	 the	
    acquisition	 had	 occurred	 on	 1	 January	 2007,	 management	 estimated	 that	 consolidated	 revenue	 would	 have	 been	 RM3,824	
    million	 and	 consolidated	 profit	 after	 tax	 for	 the	 year	 ended	 31	 December	 2007	 would	 have	 been	 RM296	 million.
                                                                                                                        146
Malakoff                                                   annual
Corporation                                                report
Berhad                                                     2008




notes to the financial statements                                 (continued)




27. acquisition of business (continued)
    The	 acquisition	 had	 the	 following	 effect	 on	 the	 Group’s	 assets	 and	 liabilities	 on	 acquisition	 date:

                                                                                               Pre-
                                                                                         acquisition                fair       recognised
                                                                                           carrying                value        values on
                                                                                           amounts           adjustments       acquisition

    Property,	 plant	 and	 equipment	                                                     10,753,489	                    –	     10,753,489
    Intangible	 assets	                                                                            –	            7,103,796	      7,103,796
    Prepaid	 lease	 rentals	                                                                 115,274	                    –	        115,274
    Investment	 in	 associated	 companies	                                                   683,362	              857,970	      1,541,332
    Deferred	 tax	 assets	                                                                     1,944	                    –	          1,944
    Inventories	                                                                             442,135	                    –	        442,135
    Receivables,	 deposits	 and	 prepayments	                                              1,217,763	                    –	      1,217,763
    Tax	 recoverable	                                                                         13,067	                    –	         13,067
    Cash	 and	 cash	 equivalents	                                                          2,028,255	                    –	      2,028,255
    Loans	 and	 borrowings	                                                               (9,811,433)	                   –	     (9,811,433)
    Deferred	 tax	 liabilities	                                                             (847,194)	          (2,007,200)	    (2,854,394)
    Payables	 and	 accruals	                                                              (1,107,312)	                   –	     (1,107,312)
    Retirement	 benefits	                                                                    (23,519)	                   –	        (23,519)
    Minority	 interests	                                                                    (189,285)	                   –	       (189,285)

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

    Goodwill	 on	 acquisition	                                                                                                       8,232

    Consideration	 paid,	 (including	 cost	 of	 business	 combination),	 satisfied	 in	 cash	                                    9,239,344
    Cash	 acquired	                                                                                                             (2,028,255)

    Net	 cash	 outflow	                                                                                                          7,211,089



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



28. subsequent events
    On	 4	 February	 2009,	 the	 Company’s	 wholly-owned	 offshore	 subsidiary,	 Malakoff	 International	 Limited	 subscribed	 to	 1,400	
    shares	 of	 BHD	 100	 each	 for	 a	 subscription	 amount	 equivalent	 to	 RM1,411,000	 in	 Kingdom	 Utility	 Holding	 Company	 (“KUH”),	
    a	 company	 incorporated	 in	 Bahrain,	 representing	 33.3%	 of	 the	 total	 issued	 and	 paid-up	 share	 capital	 of	 KUH.
                                                                                                                           147
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




stAtemeNt by DirEcTorS
pursuant to Section 169(15) of the companies Act, 1965


In	 the	 opinion	 of	 the	 Directors,	 the	 financial	 statements	 set	 out	 on	 pages	 88	 to	 146	 are	 drawn	 up	 in	 accordance	 with	 Financial	
Reporting	Standards	and	the	Companies	Act,	1965	in	Malaysia	so	as	to	give	a	true	and	fair	view	of	the	financial	position	of	the	Group	
and	 of	 the	 Company	 at	 31	 December	 2008	 and	 of	 their	 financial	 performance	 and	 cash	 flows	 for	 the	 year	 then	 ended.

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




…………………………………………………	 Chairman
tan sri abdul halim bin ali




…………………………………………………	 Managing	 Director/Chief	 Executive	 Officer
ahmad Jauhari bin yahya

Kuala	 Lumpur,

Date:	 19	 February	 2009




stAtutory DEclArATioN
pursuant to Section 169(16) of the companies Act, 1965
	
I,	 ho chee sheong,	 the	 officer	 primarily	 responsible	 for	 the	 financial	 management	 of	 Malakoff	 Corporation	 Berhad,	 do	 solemnly	
and	 sincerely	 declare	 that	 the	 financial	 statements	 set	 out	 on	 pages	 88	 to	 146	 are,	 to	 the	 best	 of	 my	 knowledge	 and	 belief,	 correct	
and	 I	 make	 this	 solemn	 declaration	 conscientiously	 believing	 the	 same	 to	 be	 true,	 and	 by	 virtue	 of	 the	 provisions	 of	 the	 Statutory	
Declarations	 Act,	 1960.

Subscribed	 and	 solemnly	 declared	 by	 the	 above	 named	 in	 Kuala	 Lumpur	 on	 19	 February	 2009.




…………………………………………
ho chee sheong


Before	 me:
                                                                                                                             148
Malakoff                                                      annual
Corporation                                                   report
Berhad                                                        2008




INDepeNDeNt AuDiTorS’
report to the members of malakoff Corporation Berhad


report on the financial statements

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


Directors’	 Responsibility	 for	 the	 Financial	 Statements
The	 Directors	 of	 the	 Company	 are	 responsible	 for	 the	 preparation	 and	 fair	 presentation	 of	 these	 financial	 statements	 in	
accordance	 with	 Financial	 Reporting	 Standards	 and	 the	 Companies	 Act,	 1965	 in	 Malaysia.	 This	 responsibility	 includes:	 designing,	
implementing	 and	 maintaining	 internal	 control	 relevant	 to	 the	 preparation	 and	 fair	 presentation	 of	 financial	 statements	 that	 are	
free	 from	 material	 misstatement,	 whether	 due	 to	 fraud	 or	 error;	 selecting	 and	 applying	 appropriate	 accounting	 policies;	 and	
making	 accounting	 estimates	 that	 are	 reasonable	 in	 the	 circumstances.


Auditors’	 Responsibility
Our	responsibility	is	to	express	an	opinion	on	these	financial	statements	based	on	our	audit.	We	conducted	our	audit	in	accordance	
with	approved	standards	on	auditing	in	Malaysia.	Those	standards	require	that	we	comply	with	ethical	requirements	and	plan	and	
perform	 the	 audit	 to	 obtain	 reasonable	 assurance	 whether	 the	 financial	 statements	 are	 free	 from	 material	 misstatement.	


An	 audit	 involves	 performing	 procedures	 to	 obtain	 audit	 evidence	 about	 the	 amounts	 and	 disclosures	 in	 the	 financial	 statements.	
The	 procedures	 selected	 depend	 on	 our	 judgment,	 including	 the	 assessment	 of	 risks	 of	 material	 misstatement	 of	 the	 financial	
statements,	 whether	 due	 to	 fraud	 or	 error.	 In	 making	 those	 risk	 assessments,	 we	 consider	 internal	 control	 relevant	 to	 the	
Company’s	 preparation	 and	 fair	 presentation	 of	 the	 financial	 statements	 in	 order	 to	 design	 audit	 procedures	 that	 are	 appropriate	
in	the	circumstances,	but	not	for	the	purpose	of	expressing	an	opinion	on	the	effectiveness	of	the	Company’s	internal	control.	An	
audit	 also	 includes	 evaluating	 the	 appropriateness	 of	 accounting	 policies	 used	 and	 the	 reasonableness	 of	 accounting	 estimates	
made	 by	 the	 Directors,	 as	 well	 as	 evaluating	 the	 overall	 presentation	 of	 the	 financial	 statements.


We	 believe	 that	 the	 audit	 evidence	 we	 have	 obtained	 is	 sufficient	 and	 appropriate	 to	 provide	 a	 basis	 for	 our	 audit	 opinion.
	
Opinion
In	 our	 opinion,	 the	 financial	 statements	 have	 been	 properly	 drawn	 up	 in	 accordance	 with	 Financial	 Reporting	 Standards	 and	 the	
Companies	 Act,	 1965	 in	 Malaysia	 so	 as	 to	 give	 a	 true	 and	 fair	 view	 of	 the	 financial	 position	 of	 the	 Group	 and	 of	 the	 Company	 as	
of	 31	 December	 2008	 and	 of	 their	 financial	 performance	 and	 cash	 flows	 for	 the	 year	 then	 ended.
                                                                                                                          149
Malakoff                                                     annual
Corporation                                                  report
Berhad                                                       2008




independent auditors’
report to the members of malakoff Corporation Berhad



report on other legal and regulatory requirements
In	 accordance	 with	 the	 requirements	 of	 the	 Companies	 Act,	 1965	 in	 Malaysia,	 we	 also	 report	 the	 following:

a)	   I
      	 n	 our	 opinion,	 the	 accounting	 and	 other	 records	 and	 the	 registers	 required	 by	 the	 Act	 to	 be	 kept	 by	 the	 Company	 and	 its	
      subsidiaries	 have	 been	 properly	 kept	 in	 accordance	 with	 the	 provisions	 of	 the	 Act.

b)	   	 e	 are	 satisfied	 that	 the	 accounts	 of	 the	 subsidiaries	 that	 have	 been	 consolidated	 with	 the	 Company’s	 financial	 statements	
      W
      are	in	form	and	content	appropriate	and	proper	for	the	purposes	of	the	preparation	of	the	financial	statements	of	the	Group	
      and	 we	 have	 received	 satisfactory	 information	 and	 explanations	 required	 by	 us	 for	 those	 purposes.

c)	   O
      	 ur	audit	reports	on	the	accounts	of	the	subsidiaries	did	not	contain	any	qualification	or	any	adverse	comment	made	under	
      Section	 174(3)	 of	 the	 Act.



other Matters


This	 report	 is	 made	 solely	 to	 the	 members	 of	 the	 Company,	 as	 a	 body,	 in	 accordance	 with	 Section	 174	 of	 the	 Companies	 Act,	
1965	 in	 Malaysia	 and	 for	 no	 other	 purpose.	 We	 do	 not	 assume	 responsibility	 to	 any	 other	 person	 for	 the	 content	 of	 this	 report.




KPMG                                                                                 foong Mun Kong
Firm	 Number:	 AF	 0758	                                                             Approval	 Number:	 2613/12/10(J)
Chartered	 Accountants	                                                              Chartered	 Accountant



Petaling	 Jaya,	 Selangor

Date:	 19	 February	 2009
THIS	 PAGE	 HAS	 BEEN	 INTENTIONALLY	 LEFT	 BLANK	
MALAKOFF CORPORATION BERHAD         (731568-V)

Level 12, Block 3B, Plaza Sentral       Tel : +603-2263 3388   www.malakoff.com.my
Jalan Stesen Sentral 5                  Fax : +603-2263 3333
50470 Kuala Lumpur

				
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