better future

TOGETHER FOR A

ANNUAL REPORT 2020

 MALAKOFF CORPORATION BERHAD

ABOUT THIS REPORT

Malakoff Corporation Berhad’s (“Malakoff”) Annual Report 2020 has been developed to
present a comprehensive account of our business activities and outcomes for the Financial
Year Ended 31 December 2020 (“FY2020”), in line with our commitment to create value for
all stakeholders by ensuring sustainable long-term business growth.

BOUNDARY AND REPORTING PERIOD

REPORTING PHILOSOPHY AND
APPROACH
This Annual Report refers to the period covering 1 January 2020 to 31 December 2020, unless
otherwise indicated, and:
This Annual Report provides
information on the business
• Refers to all activities of Malakoff, including principal subsidiaries;
environment Malakoff operated
• Addresses all operations of Malakoff; and
within, challenges encountered and
• Unless otherwise specified, reports on quantitative and qualitative data for a three-year period on
our response to these through the
all indicators presented in order to highlight trends and changes in performance.
operationalisation of our strategy,
and risk management and mitigation
REPORTING FRAMEWORKS
actions. It presents highlights of
our achievements within our core
This Annual Report is aimed at a broad audience of stakeholders, that include but not limited to our
business segments of Power
employees, local communities, shareholders, customers, Government authorities, law enforcement
Generation and Water Desalination,
agencies, rating agencies and financial institutions, as well as contractors and suppliers. Our
Operations & Maintenance (“O&M”),
disclosures adhere to the requirements of the Malaysian Code on Corporate Governance 2017
Electricity Distribution & Chilled Water
(“MCCG 2017”), the Companies Act 2016 and the Main Market Listing Requirements (“MMLR”) of
Supply, and Waste Management &
Bursa Malaysia Securities Berhad (“Bursa Malaysia”). Our Sustainability Statement has been prepared
Environmental Services.
in accordance to the Global Reporting Initiative (“GRI”) Standards 2016: Core Option, Bursa Malaysia
FTSE4Good Index and Bursa Malaysia Sustainability Reporting Guidelines (2nd Edition).
In preparing this Annual Report,
we have adhered to the highest
The Report has been developed with oversight by the Board of Directors, who have given their collective
standards of corporate governance
assurance and approval for its content. Our financial reporting is audited by an independent third
and ethics, by ensuring that all
party, KPMG PLT who also audited our Financial Statements and approved them free of qualification.
information is presented in an
accountable and transparent manner.
This Report should be read in conjunction with our Corporate Governance Report.
Through this Annual Report, we have
endeavoured to provide a balanced
The hard copy of this Report is available to all stakeholders upon request. A soft copy is publicly
and comprehensive account and www.malakoff.com.my
available on our website.
analysis of our strategy, performance
and prospects in relation to financial,
FORWARD-LOOKING STATEMENTS
economic, social, environmental and
governance issues that affect our
Throughout this Annual Report, we present forward-looking statements in relation to our future outlook
business and all stakeholders. Our
and prospects. Forward-looking statements should be taken with a degree of caution as they are
sustainability performance presents
reliant on various events, risks, uncertainties and other factors beyond our control. These statements
material topics that affect the
can be identified through the use of key words such as “believes”, “intend”, “will”, “plans”, “outlook”
long-term development of our
and other similar words in conjunction with discussions on future operating or financial performance.
business, and takes into account any
significant impacts our operations
may have on the Economic, FEEDBACK
Environmental and Social (“EES”)
aspects of our business footprint. We welcome all inquiries, comments and feedback on our Annual Report. This is in line with
our corporate objective of practicing open and transparent lines of communication with all
our stakeholders. We will take into account all feedback received to improve our reporting
outcomes in the future.

All communication can be directed to the following channels:

+603 2263 3388 [email protected]
 ANNUAL REPORT 2020

INSIDE THIS REPORT

ABOUT THIS REPORT

SECTION 1 ABOUT US

We Are Malakoff 2
Domestic and International Footprint 4
Corporate Structure 6
Corporate Information 8
Financial Statistics 9

SECTION 2 OUR PERFORMANCE

Chairman’s Statement 12
Management Discussion & Analysis 16
TOGETHER FOR A Sustainability Statement 38
BETTER FUTURE
SECTION 3 OUR LEADERSHIP
All the most meaningful journeys are done with
those that matter the most. Here at Malakoff, Board of Directors’ Profile 66
we firmly believe in progressing into the future Senior Leadership Profiles 70
hand-in-hand with our valued stakeholders.
We have embedded our belief into every SECTION 4 GOVERNANCE STATEMENTS
facet of our business. Our power plants are
fuelling industries and communities as they Corporate Governance Overview Statement 77
go about daily activities and lives to build Board Audit Committee Report 92
promising futures for their business growth Statement of Risk Management and Internal Control 97
and families. Malakoff’s expansion into the Additional Compliance Information 101
renewable energy sector demonstrates our
commitment to contribute to the global call
SECTION 5 FINANCIAL PERFORMANCE 104
for action to combat climate change and bring
about a greener future. Through our waste
management & environmental services, we are SECTION 6 OTHER INFORMATION
providing Malaysians from all walks of life an
opportunity to contribute towards a sustainable List of Properties 264
community by participating in the 5R (Refuse, Share Price Movement and Financial Calendar 280
Reduce, Reuse, Repurpose and Recycle) Shareholdings Statistics 281
efforts. Together, with all our stakeholders, GRI Content Index 285
we are continuing on course with our journey
Notice of 15th Annual General Meeting 292
for A Better Future.
Administrative Details 299
* Proxy Form

15 th Fully Virtual Meeting at Date & Time

Broadcast Venue Wednesday, 28 April 2021
Boardroom, Level 7, Block 4 10.00 A.M.
Plaza Sentral, Jalan Stesen Sentral 5
ANNUAL GENERAL 50470 Kuala Lumpur
MEETING
Malakoff Corporation Berhad | Annual Report 2020

SECTION 1 ABOUT US

WE ARE MALAKOFF

A Multinational Power and Water Company

& the Largest Independent Power Producer in Malaysia

Listed on Bursa
Incorporated on Malaysia for the second Total employees of
time since

9 October 1975 May 2015 3,981

(as at 31 December 2020)

VISION

To be a premier global power and water company

MISSION

ABOUT US Aspiring to become the preferred employer of choice

Deliver superior shareholder value

Sought after as a partner

Sustaining best in class operating discipline

Earning respect as a good corporate citizen

CORPORATE VALUES

Integrity Teamwork Innovation

Harmony Excellence

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 Malakoff Corporation Berhad | Annual Report 2020

ABOUT US SECTION 1

WE ARE MALAKOFF

CORE BUSINESS SEGMENTS

Power Generation and Water Desalination Operations & Maintenance

Please refer to more information on page 26. Please refer to more information on page 32.

Electricity Distribution & Chilled Water Supply Waste Management & Environmental Services
Please refer to more information on page 34. Please refer to more information on page 36.

CRITICAL STRENGTH

Project License to Strong

Financial
Development Operate Governance
Discipline
& Execution Power Plants Structure

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 1 ABOUT US

DOMESTIC AND INTERNATIONAL FOOTPRINT

AS AT 22 FEBRUARY 2021

Malakoff operates in 4 countries around the world

6,410 MW 472,975 m /day 3

4,145 tonnes/day
Total Effective Power Total Effective Water Total Solid Waste
Generation Capacity Production Capacity Management Volume*

INTERNATIONAL FOOTPRINT

Al-Hidd IWPP

Effective Capacity: 372 MW

Effective Capacity: 164,000 m /day 3

Shuaibah Phase 3 IWPP

Bahrain
Effective Capacity: 216 MW
Oman
Effective Capacity: 211,200 m /day 3
Saudi Arabia

Shuaibah Phase 3 Expansion IWP

Effective Capacity: 35,700 m /day 3

Al-Ghubrah IWP

Effective Capacity: 62,075 m /day 3

Notes: IWP - Independent Water Project IWPP - Independent Water and Power Project * inclusive of Concession and Non-Concession Areas

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 Malakoff Corporation Berhad | Annual Report 2020

ABOUT US SECTION 1

DOMESTIC AND INTERNATIONAL FOOTPRINT

AS AT 22 FEBRUARY 2021

8
Power Generation
4
Water Desalination
3
Solid Waste
Plants Plants Management
Concession Areas

DOMESTIC FOOTPRINT

Prai Power Plant

Effective Capacity: 350 MW

Penang

SEV Power Plant

Perak
Effective Capacity: 1,222 MW

GB3 Power Plant

Selangor
Effective Capacity: 480 MW

Kapar Power Plant

Effective Capacity: 880 MW

Johor

Tanjung Bin Power Plant

Malaysia Effective Capacity: 1,890 MW

Tanjung Bin Energy Power Plant

Solid Waste Management
Concession Areas:
Effective Capacity: 1,000 MW
Kuala Lumpur: 2,600 tonnes/day
W.P. Putrajaya: 150 tonnes/day
Pahang: 1,100 tonnes/day

Non-Concession Areas: 295 tonnes/day

Power Water Waste Management

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 1 ABOUT US

CORPORATE STRUCTURE
AS AT 22 FEBRUARY 2021

OPERATIONS AND MAINTENANCE

POWER GENERATION PROJECT MANAGEMENT
SERVICES

93.75% Segari Energy Ventures Sdn Bhd 100% Malakoff Power Berhad 100% Malakoff Engineering Sdn Bhd

100% Tanjung Bin O&M Berhad 100% MESB Project Management

75% GB3 Sdn Bhd Sdn Bhd I

100% PDP O&M Sdn Bhd

100% Prai Power Sdn Bhd ELECTRICITY DISTRIBUTION

100% Malakoff Technical Solutions
Sdn Bhd
90% Tanjung Bin Power Sdn Bhd (formerly known as Teknik
Janakuasa Sdn Bhd) 100% Malakoff Utilities Sdn Bhd

100% Natural Analysis Sdn Bhd I

40% Kapar Energy Ventures Sdn Bhd

100% TJSB Services Sdn Bhd OTHERS

100% Hypergantic Sdn Bhd
100% TJSB International Limited
100% Tuah Utama Sdn Bhd
100% Port Dickson Power Berhad
100% TJSB International
(Shoaiba) Limited 60% Green Biogas Sdn Bhd

100% Tanjung Bin Energy Sdn Bhd

20% Saudi-Malaysia 100% Malakoff Radiance Sdn Bhd
Operation &
Maintenance
65% Lubuk Paku Hidro Sdn Bhd
100% Tanjung Bin Energy Services Company
Issuer Berhad Limited
20%
65% Batu Bor Hidro Sdn Bhd
20% Al-Imtiaz Operation
& Maintenance
Company Limited 60% Southern Biogas Sdn Bhd

100% TJSB Middle East Limited 54% Desa Kilat Sdn Bhd

35% Muscat City Desalination

Operation and 100% Malakoff R&D Sdn Bhd
Maintenance Company
LLC 100% Tunas Pancar Sdn Bhd

100% TJSB Global Sdn Bhd

97.37% Alam Flora Sdn Bhd

49% Hyflux-TJSB Algeria SPA

97.37% Alam Flora Environmental
Solutions Sdn Bhd
95% PT. Teknik Janakuasa (formerly known as
DRB-HICOM Environmental
Services Sdn Bhd)
51% TJZ Suria Sdn Bhd
100% Silver Solar Sdn Bhd

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 Malakoff Corporation Berhad | Annual Report 2020

ABOUT US SECTION 1

CORPORATE STRUCTURE
AS AT 22 FEBRUARY 2021

The percentage of shareholdings in the

INTERNATIONAL
diagram represents effective equity interest
of Malakoff in the respective companies

100% Radiant Summit Global Limited I. Dormant

100% Spring Assets Limited I 100% Malakoff Hidd Holding II. Malakoff’s effective equity interest
Company Limited (“MHHCL”)
of 40% and 24% in SAMAWEC and
100% Malakoff Capital (L) Ltd I SWEC respectively is held via MGL
57.14% Malakoff Summit Hidd Holding
and DIL which respectively holds
Company Limited (“MSHHCL”)
100% Malakoff International Limited (“MIL”) 40% equity interest in MSCSB which

40% Hidd Power Company in turn holds 50% equity interest in

B.S.C (c) (“HPC”) VI SAMAWEC. SAMAWEC holds 60%
100% Malakoff Gulf Limited (“MGL”) equity interest in SWEC.
100% Malakoff AlDjazair Desal
100% Desaru Investments Sdn Bhd (“MADSB”) III. Malakoff’s effective equity interest
(Caymans Isl) Limited
of 23.8% in SEPCO is held via MGL
(“DIL”)
70% Tlemcen Desalination
and DIL which respectively holds
40% Malaysian Shoaiba Investment Company SAS
Consortium Sdn Bhd (“TDIC”) 40% equity interest in MSCSB which
40% (“MSCSB”) in turn holds 50% equity interest in
35.7% Almiyah Attilemcania SPA SAMAWEC. SAMAWEC holds 60%
40% Saudi-Malaysia Water (“AAS”) V in SEHCO which in turn holds 97.5%
& Electricity Company equity interest in SEPCO. SAMAWEC
Limited (“SAMAWEC”) II 100% Pacific Goldtree Sdn Bhd also holds a direct equity interest of
1% in SEPCO.
24% Shuaibah Water &
Electricity Company
100% Skyfirst Power Sdn Bhd
Limited (“SWEC”) II IV. Malakoff’s effective equity interest
of 43.48% in SPHL is held via MTDL
24% Shuaibah Expansion which holds a direct 43.48% equity
Holding Company
interest in OTPL which in turn holds
Limited (“SEHCO”) III
100% equity interest in SPHL.
23.4% Shuaibah Expansion
Project Company V. Malakoff’s effective equity interest
0.4% Limited (“SEPCO”) III
of 35.7% in AAS is held via MADSB
which holds 70% equity interest in
100% Malakoff Technical (Dhofar) TDIC which in turn holds 51% equity
Limited (“MTDL”) interest in AAS.

43.48% Oman Technical Partners

VI. Malakoff’s effective interest of 40% in
Limited (“OTPL”)
HPC is held via MHHCL which holds
43.48% Salalah Power Holdings 57.14% equity interest in MSHHCL
Limited (“SPHL”) IV which in turn holds 70% equity interest
in HPC.
100% Malakoff Oman Desalination
Company Limited
VII. MCDC is a company listed on the

32.5% Muscat City Desalination Muscat Securities Market since

Company S.A.O.G (“MCDC”) VII 2 January 2018.

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 1 ABOUT US

CORPORATE INFORMATION

BOARD OF DIRECTORS

DATUK HAJI HASNI HARUN DATUK OOI TEIK HUAT

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

ANWAR SYAHRIN ABDUL AJIB DATUK DR. SYED MUHAMAD SYED ABDUL KADIR
Managing Director/Chief Executive Officer Independent Non-Executive Director

DATO’ SRI CHE KHALIB MOHAMAD NOH DATUK IDRIS ABDULLAH

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

CINDY TAN LER CHIN DATUK ROZIMI REMELI

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

COMPANY SECRETARIES BOARD RISK AND INVESTMENT PRINCIPAL BANKERS

COMMITTEE
Noor Raniz Mat Nor CIMB Bank Berhad
(MAICSA 7061903) Datuk Idris Abdullah Malayan Banking Berhad
Independent Non-Executive Director RHB Bank Berhad
Cheryl Rinai Kalip (Chairman) AmBank (M) Berhad
(LS 0008258)
Cindy Tan Ler Chin SHARE REGISTRAR
BOARD AUDIT COMMITTEE Non-Independent Non-Executive Director
Boardroom Share Registrars Sdn Bhd
Datuk Dr. Syed Muhamad Syed Abdul Kadir Datuk Dr. Syed Muhamad Syed Abdul Kadir Registration No: 199601006647 (378993-D)
Independent Non-Executive Director Independent Non-Executive Director 11th Floor, Menara Symphony
(Chairman) No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13
Datuk Rozimi Remeli 46200 Petaling Jaya
Datuk Ooi Teik Huat Independent Non-Executive Director Selangor Darul Ehsan
Non-Independent Non-Executive Director Tel : +603-7890 4700
BOARD PROCUREMENT COMMITTEE Fax : +603-7890 4670
Datuk Idris Abdullah
Independent Non-Executive Director Datuk Rozimi Remeli COMPANY ADDRESS
Independent Non-Executive Director
Datuk Rozimi Remeli (Chairman) Level 7, Block 4, Plaza Sentral
Independent Non-Executive Director Jalan Stesen Sentral 5
Cindy Tan Ler Chin 50470 Kuala Lumpur
BOARD NOMINATION AND Non-Independent Non-Executive Director Tel : +603-2263 3388
REMUNERATION COMMITTEE Fax : +603-2263 3333
Datuk Ooi Teik Huat Website : www.malakoff.com.my
Datuk Haji Hasni Harun Non-Independent Non-Executive Director
Independent Non-Executive Director REGISTERED OFFICE
(Chairman) AUDITORS
Level 12, Block 4, Plaza Sentral
Dato’ Sri Che Khalib Mohamad Noh KPMG PLT Jalan Stesen Sentral 5
Non-Independent Non-Executive Director Level 10, KPMG Tower 50470 Kuala Lumpur
No. 8, First Avenue Tel : +603-2263 3388
Datuk Dr. Syed Muhamad Syed Abdul Kadir Bandar Utama, Fax : +603-2263 3333
Independent Non-Executive Director 47800 Petaling Jaya
Selangor Darul Ehsan
Datuk Idris Abdullah
Independent Non-Executive Director

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 Malakoff Corporation Berhad | Annual Report 2020

ABOUT US SECTION 1

FINANCIAL STATISTICS

Group
2020 2019 2018 2017 2016
RM’000 RM’000 RM’000 RM’000 RM’000
(Restated)

KEY OPERATING RESULTS

Revenue 6,276,308 7,422,2721 7,348,230 7,130,440 6,098,420
Earnings before interest, taxes, depreciation and 2,266,557 2,415,655 1
2,430,386 2,722,062 2,871,278
amortisation (EBITDA)
Profit before tax (PBT) 444,599 534,0471 559,173 574,506 637,541
Net profit attributable to owners of the Company 286,581 323,396 274,433 295,931 355,463
(PATMI)

KEY BALANCE SHEET ITEMS

Property, plant and equipment 12,391,428 12,881,334 13,443,183 13,976,303 14,604,469
Cash and cash equivalents 1,062,600 2,745,389 1,515,147 2,355,529 3,006,802
Other investments (deposit placements with 3,378,157 2,509,476 3,582,478 2,641,829 1,403,801
more than 3 months maturity)
Total assets 24,188,723 26,538,975 28,982,069 29,879,856 30,263,536
Total borrowings 10,882,094 12,398,145 15,200,432 15,830,981 17,536,848
Total liabilities 17,744,012 19,863,728 22,317,615 23,001,336 24,132,241
Share capital 5,693,055 5,693,055 5,693,055 5,693,055 2
500,000
(Accumulated losses)/Retained profits (348,468) (237,857) (82,425) (19,007) 112,335
Shareholders’ equity 5,307,909 5,509,731 5,644,768 5,852,950 5,915,712

SHARES INFORMATION
Basic earnings per share (sen)3 5.86 6.62 5.56 5.92 7.11
Diluted earnings per share (sen) 3
5.86 6.62 5.56 5.92 7.11
Dividend (sen) 5.10 6.55 5.60 6.20 7.00
Net assets per share (RM) 4
1.09 1.13 1.15 1.17 1.18

FINANCIAL RATIOS
Return on assets (%) 1.18 1.22 0.95 0.99 1.17
Return on equity (%) 5.40 5.87 4.86 5.06 6.01
EBITDA margin (%) 36.11 32.55 33.07 38.18 47.08

1
2019 key operating results include the results of Malakoff Australia Pty. Ltd (“MAPL”) group presented as discontinued operations in
the Financial Statements.
2
In accordance with section 618(2) of the Companies Act 2016, all amount outstanding to the credit of the Company’s share premium
and capital redemption reserves accounts have been consolidated into share capital account.
3
Based on weighted average number of ordinary shares of 4,886,961,300 (2019: 4,887,313,000; 2018: 4,932,031,000; 2017: 4,999,937,000;
2016: 5,000,000,000).
4
Based on number of ordinary shares of 4,886,961,300 (2019: 4,886,961,300; 2018: 4,888,221,000; 2017: 4,998,175,600; 2016: 5,000,000,000).

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 1 ABOUT US

FINANCIAL STATISTICS

REVENUE (RM billion) EBITDA (RM billion)

2.9
7.3 7.4
7.1 2.7
7.0
2.5 2.4 2.4
6.3
6.1 2.3
6.0

2.0
5.0

4.0 1.5

3.0
1.0

2.0

0.5
1.0

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

PATMI (RM million) TOTAL ASSETS (RM billion)

355.5
350 30.3 29.9
30 29.0
323.4*
26.5*
300 295.9
286.6 24.2
274.4 25

250
20

200

15
150

10
100

5
50

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

* Following completion of the purchase price allocation for the acquisitions of a subsidiary and a joint venture as disclosed in Note 43 of the financial statements.

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 Malakoff Corporation Berhad | Annual Report 2020

ABOUT US SECTION 1

FINANCIAL STATISTICS

GEARING RATIO (x)

3.0 2.9

2.5 2.3 2.3

2.1
2.0 1.9 Gross
1.7
1.6
1.5 Net
1.5
1.1
1.0
1.0

Year
2016 2017 2018 2019 2020

DEBT MATURITY (%)

10.0% 54.0% 10.0% 54.0% 10.0% 57.0% 9.0% 53.0% 11.0% 53.0%

11.0% 12.0% 12.0% 12.0% 11.0%

2016 2017 2018 2019 2020

25.0% 24.0% 21.0% 26.0% 25.0%

Within 1 year 1 - 2 years 2 - 5 years > 5 years

DEBT PROFILE BY FOREIGN CURRENCY (%) DEBT PROFILE BY INTEREST RATE TERMS (%)

3.1% 2.4% 2.7% 6.7% 3.7%

94.5% 97.3% 93.3% 96.3%

2019 2020 2019 2020

Ringgit Malaysia Australian Dollar US Dollar Fixed Rate Floating Rate

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 2 OUR PERFORMANCE

CHAIRMAN’S STATEMENT

DEAR
SHAREHOLDERS,
On behalf of the Board of Directors (“the Board”), I am
pleased to present to you Malakoff Corporation Berhad’s
(“Malakoff” or “the Group”) Annual Report 2020 and
audited financial statements for the financial year ended
31 December 2020 (“FY2020”).

Despite the intense and unprecedented challenges that

the world faced as a result of the Covid-19 pandemic,
Malakoff continued on course with measures and plans we
had charted within the ambit of its three Strategic Pillars to
record a resilient performance in FY2020. We have relied
on our robust business fundamentals to continue to create
sustainable value for our ecosystem of stakeholders, as we
focused on growing our profitability.

RESILIENT BUSINESS MODEL

2020 has been one of the most challenging years thus

far, as both businesses and communities grappled with
the far-reaching impacts of the Covid-19 pandemic. In
Malaysia, the Government announced a Movement
Control Order (“MCO”) on 18 March 2020 which resulted
in the shutdown of industries and businesses, except
for those considered as essential services. As an energy
provider, the Group was considered as an “essential
services” business, and therefore continued with its
operations throughout various cycles of the MCO.

The Group responded in a timely manner to the new norm

by implementing its Business Continuity Plan (“BCP”),
across all its business units, which outlined their responses
and recovery activities during the crisis to ensure the
continuity of business functions and operations. We also
relied on the Pandemic Response Procedure, which was
the Standard Operating Procedures (“SOPs”) to manage
the Covid-19 outbreak at our offices and plants. We
developed SOPs that laid out comprehensive preventive
measures to safeguard the well-being of our workers who
were required to continue with onsite work throughout
the pandemic.

The nationwide lockdown had led to a reduction in

commercial demand for energy, which unfortunately
was not offset by the increase in demand from the
residential segment. Against this difficult landscape,
the Group’s FY2020 revenue reduced by 15.44%

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 Malakoff Corporation Berhad | Annual Report 2020

OUR PERFORMANCE SECTION 2

CHAIRMAN’S STATEMENT

REVENUE PATMI DIVIDEND

(RM million) (RM million) (sen)

6,276.31 286.58 5.10

Year-on-Year (“YoY”) to RM6,276.31 million. This was mainly Bor Hidro Sdn Bhd and Lubuk Paku Hidro Sdn Bhd by the Sustainable
due to lower energy payments from Tanjung Bin Power Sdn Energy Development Authority (“SEDA”) in December 2019, these SPVs
Bhd (“TBP”) and Tanjung Bin Energy Sdn Bhd (“TBE”) coal have now entered into its respective Renewable Energy Power Purchase
plants as a result of a reduction in the Applicable Coal Price Agreement (“REPPA”) with Tenaga Nasional Berhad (“TNB”) with a
(“ACP”). The decline in revenue was also attributed to lower targeted project completion date of April 2025. We were also successful
energy payments from Segari Energy Ventures Sdn Bhd (“SEV”) in the bid for a second biogas power plant in Johor by our subsidiary,
gas plant which was impacted by a decrease in the dispatch Southern Biogas Sdn Bhd (“SBSB”) in November 2020.
factor. However, these were partially cushioned by revenue
contribution from Alam Flora Sdn Bhd (“Alam Flora”), the newly DIVIDENDS
acquired subsidiary. Profit After Tax and Minority Interests
(“PATMI”) reduced by 11.39% YoY to RM286.58 million as At the Group’s half-year results, the Board declared an interim dividend
a result of the absence of one-off gains from the Macarthur of 2.80 sen per ordinary share, which was paid in October 2020.
Windfarm (”Macarthur”) disposal and the re-measurement
of investment upon acquisition of an additional 12.0% equity Given the resilient performance of the Company throughout the year
interest in Shuaibah Phase 3 Independent Water and Power under exceptional circumstances, the Board has approved a final
Project (”IWPP”). Both transactions were completed in FY2019. dividend of 2.30 sen per ordinary share. The final dividend will be paid
in June 2021. This distribution will bring the total dividends in respect
Malakoff’s diversified business portfolio, which encompasses of FY2020 to 5.10 sen per ordinary share, translating to a total dividend
power and water production, now includes waste management payout of RM249.24 million.
& environmental services, a key business sector undertaken
by its subsidiary Alam Flora. In FY2020, Alam Flora was able The Board remains committed in delivering sustainable dividends, in line
to leverage on its expertise in offering cleaning services within with the Group’s dividend policy of distributing not less than 70.0% of
its concession areas of Kuala Lumpur, Putrajaya and Pahang, its consolidated PATMI.
by successfully pivoting its business model to capture new
opportunities in providing disinfection and sanitisation services STRENGTHENING CORPORATE GOVERNANCE
to assist the Government in containing the spread of the
Covid-19 pandemic. Malakoff has always maintained an unswerving commitment to the
highest levels of good corporate governance. With FY2020 presenting
Since inception, the Group has been at the forefront of a host of challenges on several fronts, the Board stepped up on its
contributing towards powering national growth through its governance function to maintain strict overview of all matters relating to
power generation plants in Malaysia. In line with energy trends the strategic growth of the Group.
that are redefining the world towards a low carbon economy and
a greener future that mitigates the impacts of climate change, A key move during the year was enhancing our governance and integrity
we are firmly committed to transitioning our business to the in line with the new Section 17A of the Malaysian Anti-Corruption
lower carbon world, and develop solutions aligned with our Commission Act. Section 17A came into effect in June 2020, imposing
sustainability ambitions. corporate liability for commercial organisations. We have established
an Integrity and Governance Unit (“IGU”) which is responsible for the
A key expansion strategy Malakoff is focusing on to provide implementation of the integrity and anti-bribery function and provides
clean energy solutions is venturing into the Renewable Energy independent reporting to the Board of Directors on these matters.
(“RE”) segment. We secured three key rooftop solar projects
during the year, the 2.66 MW project for Johor Port Berhad on
We were certified by SIRIM for ISO 37001:2016 Anti-Bribery Management
10 June 2020, the 4.93 MW project for Northport (Malaysia)
System (“ABMS”) in November 2020. As part of the move towards
Berhad on 4 September 2020, and the 2.34 MW project for
obtaining the certification, we conducted Corruption Risk Assessment
PMB Properties Sdn Bhd on 30 October 2020. Following the
Workshops for all our business units and power plants, to identify any
Feed-In-Tariff (“FiT”) approvals for two small hydro projects that
gaps and further enhance the existing control measures.
were awarded to our Special Purpose Vehicles (“SPVs”) Batu

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SECTION 2 OUR PERFORMANCE

CHAIRMAN’S STATEMENT

DRIVING OUR SUSTAINABILITY AGENDA announced by the Government as part of the Conditional MCO (“CMCO”)
Relief Claim. The RM2.48 million claim which was approved by the EC,
As a responsible and sustainable business, Malakoff has been taking was subsequently distributed to all MUSB customers, to provide them
positive steps towards mitigating its business’ environmental impact. some financial relief during economically trying times.
In order to combat the effects of climate change, cleaner energy is an
imperative for the future we are gearing towards. The Group’s focus on AWARDS AND ACCOLADES
RE growth is premised in answering this sustainability need.
In FY2020, the Group was honoured with a spectrum of awards,
Alam Flora’s addition into the fold has further strengthened the Group’s testament to its ability to create sustainable value, whilst maintaining the
ability to deliver on its sustainability agenda. As one of the leading highest standards of operational excellence.
integrated environmental management companies in Malaysia, Alam
Flora and its subsidiary, Alam Flora Environmental Solutions Sdn Bhd Malakoff won a total of four awards at the Alpha Southeast Asia’s 10th
(“AFES”, formerly known as DRB-HICOM Environmental Services Sdn Annual Institutional Investor Corporate Awards 2020. The Group emerged
Bhd), have been steadily implementing various green initiatives and as the winner in the ‘Most Improved Investor Relations’ and ‘Best Strategic
programmes that embrace environmentally friendly cleaning activities, Corporate Social Responsibility’ categories, and clinched second place
encourage the public to recycle, and promote the growth of the circular in the ‘Most Organised Investor Relations’ and ‘Best Senior Management
economy. Our efforts support the Government’s National Cleanliness IR Support’ categories, making it one of the top winners from Malaysia.
Policy, as well as national targets that have been set for recycling. The awards were based on the first and only investor poll in Southeast
Asia, with votes coming from institutional investors and analysts
Among the key initiatives in FY2020 was the launch of the Fasiliti Inovasi across the region as well as the United States and Europe. The awards
Kitar Semula (“FIKS”) in Putrajaya. A first of its kind in Malaysia, FIKS recognise the Group’s stellar performance and leadership in financial
is a 5R (Refuse, Reduce, Reuse, Recycle and Recovery) awareness and management, investor relations, corporate governance and CSR.
education centre which also houses an Integrated Recycling Facility (“IRF”)
that functions to collect and segregate recyclable waste such as papers, Malakoff was also honoured with two Gold Awards at the Regional
plastics, aluminium and even used cooking oil, for repurposing activities. Innovation Showcase on Team Excellence (“RISTEx”) 2020 organised
As part of its Waste-to-Energy (“WTE”) initiatives, the IRF also processes by Malaysia Productivity Corporation (“MPC”) on 30 September 2020.
food waste into biofuel, using the ‘anaerobic digestion’ process. The awards were in recognition of two of our plant projects, namely
TBP Minor Outage Cost Optimisation and Lumut Power Plant (“LPP”)
Leveraging on FIKS’ sustainability efforts, Alam Flora has also developed Inventory Value Optimisation. The recognition is indeed timely as we
an integrated waste management model for Malaysia Airport Holdings have been at the forefront of conducting several operational efficiency
Berhad (“MAHB”), being one of its sustainability partners. Tons of waste initiatives Group-wide. These two projects were also recognised at the
collected daily from the Kuala Lumpur International Airport (“KLIA”), are Annual Productivity and Innovation Conference and Exposition 2020
sent to its Material Recovery Facility (“MRF”) for recyclable waste recovery held on 27 November 2020, where we received 5 STAR Awards.
and other recycling purposes. Through these innovative solutions,
Malakoff is contributing towards a greener future for all. We intend to Validating our exemplary health and safety culture, Malakoff received
maintain our momentum in this space, and moving into the future, will be a number of recognitions at the Malaysian Society of Occupational
focusing on WTE as another source of green energy. Safety and Health Awards 2020 in October. Prai Power Sdn Bhd (“Prai”)
obtained the ‘Gold Merit’ award, while LPP received the ‘Gold Class I’
CONTRIBUTING TO OUR COMMUNITIES award. As for TBP and TBE, both were awarded with the ‘Gold Class II’
award.
The Covid-19 pandemic had adverse impacts on our communities, as the
economic recession has led to many businesses floundering and people Meanwhile, Alam Flora was honoured with the ‘Best Practices Award
losing their employment. As part of its Corporate Social Responsibility 2020 Malaysia Waste Management Company of The Year (Asia Pacific)’,
(“CSR”) commitment, the Group has always maintained its efforts to by renowned global research and consulting firm, Frost and Sullivan.
contribute towards uplifting the lives of communities in need. In FY2020, Alam Flora was also bestowed with two awards at the Global Business
we continued to channel our philanthropic donations to disadvantaged Leadership Awards 2020 organised by the Asia Pacific Business Council
and needy communities, by providing them with essential items such as for Sustainability and its international partner, Institute of Sustainability.
food, face masks and sanitisers. To show our appreciation towards the Alam Flora was conferred with the ‘Excellence in Waste Management’
medical front liners who put themselves at risk to attend to the health award while its subsidiary AFES was honoured with the ‘Excellence in
needs of the nation, we also made donations and contributions in kind Facilities Management’ award.
to front liners at Hospital Sg Buloh.
Adding to this, Alam Flora won the River of Life Public Outreach
On another front, our wholly owned subsidiary Malakoff Utilities Sdn Programme Phase 5 Award 2020 under the ‘Industry, Corporate and
Bhd (“MUSB”) applied for and received the Financial Operation Discount Developers’ category. The award was presented by the Department of

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 Malakoff Corporation Berhad | Annual Report 2020

OUR PERFORMANCE SECTION 2

CHAIRMAN’S STATEMENT

• Most Improved Investor Relations (1st Place) ACKNOWLEDGEMENTS

• Best Strategic Corporate Social On behalf of the Board, I would like to take
Responsibility (1st Place) this opportunity to convey our gratitude to
• Most Organised Investor Relations (2nd Place) our previous Chief Executive Officer (“CEO”),
Dato’ Ahmad Fuaad Kenali for his years of
• Best Senior Management Investor Relations
service at Malakoff. Dato’Ahmad Fuaad has
Support (2nd Place) left the Group effective 31 October 2020 in
Alpha Southeast Asia’s 10th Annual Institutional Investor order to pursue other career opportunities.
Corporate Awards 2020 Taking his place is our new Managing
Director/Chief Executive Officer (“MD/
• 5 STAR Awards CEO”) Encik Anwar Syahrin Abdul Ajib,
By the Annual Productivity and Innovation Conference and whom I would like to welcome on board to
Exposition 2020 the Malakoff family. We look forward to his
leadership, as he leverages on his business
• Best Practices Award 2020 acumen and industry insights to propel the
Malaysia Waste Management Company Group forward in its growth trajectory.

of The Year (Asia Pacific) We also wish to record our deepest

By Frost and Sullivan
appreciation to our valued shareholders and
stakeholders, especially governmental and
regulatory authorities, for their sustained
Irrigation and Drainage (“DID”) Malaysia and the Global Environment Centre (“GEC”) during support and trust in the Group. To all Warga
a virtual awards ceremony held on 9 November 2020. The award recognises Alam Flora’s Malakoff, we thank you from the bottom
contribution to enhancing, protecting and contributing positive impact environmentally of our hearts for your perseverance and
towards the River of Life initiative. dedication to your job, especially during
the challenging circumstances that FY2020
PROSPECTS presented.

As we head into FY2021, we are hopeful that the dissemination of vaccines throughout the On behalf of the Group, I would like to record
world and in Malaysia will lead to an uptick in the global economy. The World Bank has my sincere appreciation to my fellow Board
projected 6.70% growth for Malaysia in the year ahead, to bounce back from an economic members, for their continued commitment
contraction of 5.80% in 2020. RE has been identified as one of the key areas of growth in to steer the Group forward through stormy
the energy industry, both internationally as well as within Malaysia. The demand for power waters, by sharing their valuable insights and
will continue to increase, as consumption increases in the longer term. Within Malaysia, the perspectives.
number of WTE plants are also set to expand, as the Government has announced its target
of six WTE plants in the country by 2025. The Group firmly believes that it is well
positioned to sustain its future growth in the
Leveraging on our stellar reputation in the market place as a sustainable energy player, the years to come, based on the strength of its
Group will capture opportunities available in the next normal. Among the new growth areas, business fundamentals and its organisational
we will focus our strategic expansion in securing bids for RE and WTE plants. As for our fortitude. We look forward to continuing
international business especially in the Middle East and North Africa (“MENA”) region, we with our value creation journey with all our
will continue to explore and pursue potential investments in the power and water industry stakeholders.
which will provide lucrative returns.
Thank you and wasalam.
Complementing our business development drive is our continued focus on strengthening
our risk management approach to augment our business resilience. In order to continue
creating value within our operations and for our stakeholders, we will maintain strict focus DATUK HAJI HASNI HARUN
on our cost savings and operations optimisation programmes. Chairman

We remain optimistic that our focused strategic execution will continue to build long-term
and meaningful value for our shareholders and stakeholders.

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SECTION 2 OUR PERFORMANCE

MANAGEMENT DISCUSSION & ANALYSIS

DEAR
SHAREHOLDERS,
The Group recorded a satisfactory
performance for FY2020, demonstrating its
business resilience in the face of adverse
headwinds that arose as a result of the
Covid-19 pandemic during the year. Our
robust business fundamentals enabled us
to maintain our positive growth trajectory,
as we continued with our endeavours
to create sustainable value to ensure
long-term business growth and profitability.

Notwithstanding the challenging business

environment, the Group posted a revenue
and PATMI of RM6,276.31 million and
RM286.58 million, respectively for FY2020
driven by the maiden full-year contribution
from Alam Flora and higher contribution
from its associates.

Our steady performance across both our

international and domestic operations was
the outcome of our focused approach in
furthering our strategy towards achieving
our vision to be a premier global power and
water company. Our strategic business
decisions and operational improvements
have augmented our business
fundamentals, whilst contributing to our
A CHALLENGING OPERATING LANDSCAPE
long-term business sustainability.

The Covid-19 pandemic has caused enormous uncertainties in terms of public health
and safety. Global lockdowns led to the closure of almost all industrial operations
as well as public and business premises, except for those designated within the
category of “essential services”. The global economy spiralled into a depression,
with Gross Domestic Product (“GDP”) contracting by 3.50%1 according to the
International Monetary Fund.

In the international power industry, global energy demand significantly dropped

by 6.0% YoY, with lockdowns resulting in weaker electricity demand in both the
industrial and commercial sectors. Wholesale electricity prices were lower across the
board, increasing pressure on power generating companies worldwide. Disruptions
in the global supply chain led to delays in the progress of RE projects due to a lack
of availability of equipment as well as capital. There were also constraints in terms
of workers’ travel due to restrictions in movement.

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OUR PERFORMANCE SECTION 2

MANAGEMENT DISCUSSION & ANALYSIS

PBT EBITDA Earnings Per Share

(RM million) (RM million) (sen)

444.60 2,266.56 5.86

Closer to home, the overall electricity consumption Notwithstanding the short-term impacts of the pandemic,
in Peninsular Malaysia fell by 4.90% in 2020 as within the global power industry, three key trends have
businesses halted their economic activities in emerged that are shaping sectoral transformation.
adherence to the Government’s stay-at-home These comprise decarbonisation, the greater utilisation of
directive. While residential demand for electricity decentralised energy networks, and digitalisation. The move
increased with people spending more time at towards decarbonisation is fuelled by climate change concerns,
home as they pivoted to Work From Home (“WFH”) along with power generation companies seeking lower operating
arrangements implemented by companies in line costs as they pivot towards a more sustainable business model.
with social distancing requirements and movement In the international landscape, distributed energy networks are
restriction orders, the rise in residential demand was becoming increasingly decentralised, with consumers preferring
outweighed by the significant slump in commercial to manage their own energy portfolio.
and industrial demand. By the third quarter of
FY2020, energy demand started normalising Through advanced technologies rolled out under the Fourth
as regional economies slowly started resuming Industrial Revolution (“IR 4.0”), automation is now playing a much
business and social activities, as lockdowns eased. greater role as power companies leverage on analytics to manage
demand-supply metrics and chains. As a result of these trends,
Despite these multi-faceted challenges, Malakoff it is estimated that by 2050, the share of RE in overall electricity
was not substantially impacted by the pandemic, as generation will rise to 85.0% from 20.0% in 2017, mostly through
the Group was designated as an “essential services” growth in solar and wind power generation2. The pandemic has
provider by the Government during the MCO accelerated the shift towards RE, in line with aspirations for a
period that was initially announced in March 2020. low carbon economy. As a result of this, the very nature of the
However, there were some operational impacts power value chain is being redefined, encompassing electricity
as a result of the potential risk of infection and generation, distribution and global trade.
travel restrictions. In particular, travel restrictions
affected Scheduled Outage works planned for In Malaysia, SEDA has outlined the National Renewable Energy
the year, placing limitations in terms of obtaining Policy to achieve 20.0% RE capacity mix by 2025. SEDA is
local resources, equipment, chemical supplies and driving this through a variety of different programmes, such as
technical expertise. In order to minimise the risk of implementing Enhanced Net Energy Metering (“NEM”), Large
infection, Malakoff implemented Split-Team Working Scale Solar (“LSS”) Programmes and establishing RE Facilitation
(“STW”) and WFH arrangements for its employees Programmes within the country. Towards strengthening the
at its headquarters in Kuala Lumpur (“KLHQ”) transition towards RE, SEDA has also laid out the Renewable
and its power plants in Prai, Lumut and Tanjung Energy Transition Roadmap (“RETR”) 2035 as the strategic
Bin aside from those who are directly involved in roadmap to achieve this objective. As at end FY2020, the
operations. The Group implemented strict SOPs in domestic power mix was approximately 42.0% for coal, 40.0%
adherence to the Government guidelines issued to for gas, 9.0% for RE, 8.0% for hydro and 1.0% for others3.
contain the spread of the virus.

Sources:
1
IMF World Economic Outlook Update, Jan 2021
2
IRENA
3
EC’s 2019 Generation Development Plan

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ENSURING BUSINESS CONTINUITY

On 18 March 2020, the Malaysian Government announced the MCO, the first in various ongoing cycles of lockdowns and movement
restrictions that were implemented to ensure public health and safety. All business and industrial premises were ordered to be closed
down, except for those considered as “essential services” providers, of which Malakoff was one of them.

The Group responded swiftly to the change in circumstances by forming the Covid-19 Task Force as part of its BCP. We prioritised the
safety and well-being of our employees and their families in the new normal, as we continued with our plant operations to generate power
for the nation, as well as provide waste management and public cleaning services. While our power plants and waste collection services
operated as usual, the reduction in electricity demand affected the dispatch of electricity during this period.

In addition to maintaining its solid waste management activities, Alam Flora was also actively involved in providing sanitisation and
disinfection services to support the Government’s efforts to contain the spread of the Covid-19 pandemic.

COVID-19 TASK FORCE

What We Did to Safeguard Our Employees

Malakoff formed the Covid-19 Task force as soon as the
National Security Council announced the MCO on 18 March
We implemented STW arrangements for all employees located at
2020. Members of the Task Force comprised representatives
our headquarters in KLHQ who either held supporting roles or were
from a cross-section of departments, namely Health, Safety,
not directly involved in our operations and projects. STW involved
Security and Environment (“HSSE”), Risk Management,
segregating employees into different working teams, that would rotate
Corporate Communications, Human Capital, Business Process
between working at the office and WFH. The scheduling of the teams
Improvement and Plant Operations, to ensure that the Group
and their rotations was managed by the respective Heads of Divisions/
would be able to identify and assess Covid-19 related risks in
Departments based on their business requirements. The Heads of
a holistic manner throughout the entire organisation, and across
Divisions/Departments were required to submit their respective split
all aspects of its business and operations. The Task Force was
teams’ plan and schedule to the Human Capital Division for record and
responsible for Malakoff’s Covid-19 response and management
reference purposes.
approach which included the following aspects:

Employees on STW and WFH arrangements were subject to normal

Monitor and update the working hours in accordance with our Employee Handbook and were
development of Covid-19 cases in required to do so in adherence to the WFH guidelines developed. Should
areas of our operation any critical need arise, Management made it clear to employees that
they would be required to return to the office during the WFH period.
Review the adequacy of existing Online meetings and work collaborations were effected through
Business Continuity Plans in light Microsoft Teams which was utilised to share documents, conduct
of the impacts of the Covid-19 discussions, meetings, online training sessions, webinars and other
pandemic, including manpower business communication purposes. Training and support for Microsoft
planning and work arrangements Teams’ was provided by Microsoft’s support teams, as coordinated by
the Information Technology (“IT”) Department.
Implemented Pandemic
Response Procedures which Additionally, we also enhanced our HSSE initiatives to ensure the health
included: and safety of our employees. These included awareness programmes
• Covid-19 Prevention at the and work guidelines such as “HSSE Alert: A Quick Reminder In
Workplace
The Workplace During Covid-19” and “HSSE Awareness: A Novel
• Covid-19 Social Distancing
Coronavirus Outbreak Alert and Work Guidelines During CMCO”, among
Advisory
others. Our Corporate Communications Department also provided daily
• Covid-19 Contact Tracing
Procedure Covid-19 updates to our employees to increase awareness and remind
employees on the SOPs and preventive measures.

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OUR PERFORMANCE SECTION 2

MANAGEMENT DISCUSSION & ANALYSIS

FINANCIAL REVIEW due to the absence of KEV’s share of losses and better earnings
from Shuaibah following the increase in the Group’s indirect equity
In FY2020, Malakoff’s revenue declined by 15.44% YoY to interest from 12.0% to 24.0%. Additionally, we had registered
RM6,276.31 million, as a result of lower energy payments from TBP a full-year contribution from our newly acquired subsidiary
and TBE coal plants on the back of a reduction in the Applicable Alam Flora.
Coal Price (“ACP”). Revenue was also impacted by lower energy
payments from the SEV gas plant which was impacted by a Correspondingly, the Group’s earnings per share decreased
decrease in the dispatch factor. However, these were partially by 11.48% YoY to 5.86 sen per share. We continued with our
cushioned by revenue contribution from Alam Flora, the newly focused approach towards prudent cost management. The Group
acquired subsidiary. maintained a resilient balance sheet as a result of stringent capital
management to maintain its gearing at healthy levels of 1.7x for
The Group’s PATMI for the year under review declined by 11.39% Gross Gearing Ratio and 1.0x for Net Gearing Ratio. Our cash
YoY to RM286.58 million due to the absence of one-off gains from balance remains strong at RM4.44 billion as at 31 December 2020.
the disposal of Macarthur and the re-measurement of investment
upon acquisition of an additonal 12.0% equity interest in Shuaibah The majority of our capital expenditure for the year was spent
Phase 3 IWPP. These were partially offset by the absence of the on the maintenance of the SEV, Prai and TBP power plants, at
effects of net impairment loss on the carrying value of the Group’s approximately RM206.50 million, while another RM196.30 million
investment in its 40.0%-owned associate Kapar Energy Ventures was spent mainly on replacing assets and plant improvement
Sdn Bhd (“KEV”) in December 2019. It was also moderated by initiatives at TBP as well as purchase of land for planned
higher contributions from associates and joint ventures primarily RE projects.

Our Revenue Mix in FY2020

Our overall revenue is derived from Power Generation and Distribution, Service Concession Agreements and Others. Revenue
within the Power Generation and Distribution consist of Capacity Income, Energy Income, Daily Utilisation Payment and Revenue
from MUSB. As for Others segment, this is largely presented by Finance Lease Income, Rental Income and O&M Fees.

Revenue (%) Capacity Income (%) Energy Income (%)

Total: Total: Total: Total: Total: Total:

RM7,422.3 million RM6,276.3 million RM2,116.9 million RM2,078.5 million RM4,748.7 million RM3,151.1 million

2.0% 1.1% 0.1%

13.2% 17.7%
29.3% 28.8% 25.1%

0.3%

55.6%
96.9% 46.8% 47.6%
65.9%
86.7%
2.6% 2.8%
7.3% 6.1%
10.0% 11.0% 21.3% 1.3%
6.3% 6.5% 1.3%
6.4%
2019* 2020 2019 2020 2019 2020

Electricity Generation and Distribution

Revenue from Waste Management & SEV Power Plant GB3 Power Plant Prai Power Plant
Environmental Services Tanjung Bin Power Plant PD Power Plant Tanjung Bin Energy Power Plant
Others

* FY2019 revenue includes MAPL group financial results which is presented as discontinued operations in the financial statements.

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SECTION 2 OUR PERFORMANCE

MANAGEMENT DISCUSSION & ANALYSIS

ACHIEVING OUR STRATEGIC OBJECTIVES

The Group has crafted three Strategic Pillars that guide it towards achieving its vision to become a premier global power and water
company, namely, Focusing on Operational Excellence, Achieving Sustainable Growth and Strengthening Fundamentals. In line with this,
we have set ourselves strategic targets of achieving 10,000 MW of power generation capacity, 1,000,000 m3/day of water production
capacity, 1,000 MW of RE capacity and 10,000 tonnes/day of solid waste management volume.

STRATEGIC PILLARS

In FY2020, the Group continued to execute its strategic business plan as outlined by the three Strategic
Pillars. We refined our strategy in response to the risks and impacts of the Covid-19 pandemic, to
fortify our value creation abilities within our three Strategic Pillars as follows:

To achieve optimal performance of our assets through:

• Enhancement of operational capabilities
• Turnaround of underperforming assets
• Operational cost savings
Focusing on • Zero Loss Time Injury (“LTI”)
Operational
• Strict Covid-19 SOPs and Preventive Measures
Excellence

1 To sustain earnings growth through catalytic new projects:

• Actively pursue conventional power assets
TO BE A 2 Achieving
• Grow RE portfolio
Sustainable • Expand Waste Management & Environmental Services
PREMIER
GLOBAL
3 Growth • Identify new high growth areas and sectors
• Unlock value via asset monetisation
POWER
AND WATER
To bolster internal processes and organisational capabilities via:
COMPANY • Strengthening of SOPs and procurement processes
Strengthening • Employing Lean Six Sigma (“6 Sigma”) and E-Auction for
Fundamentals
cost savings
• Optimal capital structure
• High performance culture

LONG-TERM ASPIRATIONAL TARGETS

Power Water Renewable Energy Solid Waste Management

10,000 MW 1,000,000 m3/day 1,000 MW 10,000 tonnes/day

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OUR PERFORMANCE SECTION 2

MANAGEMENT DISCUSSION & ANALYSIS

Our Key Achievements in FY2020

As outlined in the table below, we have recorded a number of significant achievements during the year in line with our strategic objectives.

Please refer to the Operational Review within this Management Discussion & Analysis (“MD&A”) section and our Sustainability
Statement on page 38 of this Annual Report.

FOCUSING ON OPERATIONAL EXCELLENCE ACHIEVING SUSTAINABLE GROWTH

• Implementation of various initiatives to ensure continuous • Secured FiT approval from SEDA for the development of a
improvements in plant availability and reliability: 2.40 MW biogas power plant in Ulu Sebol, Johor
- Adopted state-of-the-art tools such as Condition • Acquisition of 71.44 Ha of land located at Alor Gajah,
Based Maintenance, Reliability Centred Maintenance Melaka for future development of power projects
and Root Cause Analysis in failure investigations to • Successfully secured several rooftop Solar Power
avoid recurrences Purchase Agreements (“SPPAs”) for a total of 9.93 MW,
- Conducted Reliability Centred Spares, Risk Based expected to be completed in the third quarter of 2021 as
Inspection, Process Safety Management, and Hazard follows:
and Operability Study - Johor Port Berhad - 2.66 MW
- Conducted forced outage management benchmarking - Northport (Malaysia) Berhad - 4.93 MW
activities for all our plants - PMB Properties Sdn Bhd - 2.34 MW
• Operational Cost Optimisation through structured • Alam Flora successfully completed the development of a
initiatives across all plants resulted in operational cost Port Recovery Facility at Northport, with a capacity of 400
savings of RM19.60 million tonnes/month
• Embedded innovative new technology within our waste • Malakoff Technical Solutions Sdn Bhd (“MTSSB”, formerly
management & environmental services segment to record known as Teknik Janakuasa Sdn Bhd) successfully
cost savings and increase productivity and efficiency secured an O&M contract for Q-Sentral’s solar rooftop
• Achieved Zero LTI for overall operations in FY2020

STRENGTHENING FUNDAMENTALS

• The Group entered into a collaboration with a renowned US-based research institute to keep abreast of technological
advancements, best practices and to minimise technical risks associated with plant operations
• Successfully completed the 6 Sigma Green Belt Batch 2 training at TBP
• Launched our third cohort of the Management Development Programme (“MDP”) in September 2020, with a total of 20
participants from TBP and TBE
• Organised the Malakoff Technical Conference (“MATECON”) 2020 through a virtual platform
• Launched the Executive Development Programme at Alam Flora in July 2020, with a total of 18 executives participating
• Implemented 20 cost-savings projects Group-wide including:
- Warehouse Value Optimisation - District Cooling Plant Ratio Improvement
- Minor Overhaul Cost Optimisation - Preventive Maintenance Programme
- Routine Maintenance Cost Improvement - Continuous Blowdown Optimisation
• Carried out strategic cost containment through 6 Sigma and E-Auction, resulting in savings of RM9.0 million and
RM14.40 million, respectively
• Successfully achieved ISO 37001 Anti-Bribery Management System certification for the Group
• Improved our Employee Engagement (Response Rate) from 76.0% in FY2019 to 97.0% in FY2020

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STRENGTHENING OUR RISK ASSESSMENTS AND MITIGATIONS

Bearing in mind the extremely challenging landscape that Malakoff operated within in FY2020, we continuously assessed the impacts of
the operating environment as well as the Covid-19 pandemic on our business during the year, to ensure the sustenance of our operations
in line with our strategic imperatives and organisational priorities. The table below outlines key risks and mitigations identified for the
Group.

Please refer to the Statement of Risk Management and Internal Control (“SORMIC”) on page 97 to 100 of this Annual Report.

Area Key Risks and Challenges How We Mitigated Against Them

• Covid-19 Pandemic • Implementation of policy and procedures

• Limited new local projects or plants in accordance with the Business Continuity
• Regulatory and policy changes Management Policy and Framework
Industry • Uncertainty on Malaysian Electricity • Aggressively pursued the RE expansion
Supply Industry (“MESI”) 2.0 strategy
• Continued close engagements with key
stakeholders

• A few Power Purchase Agreements • Bid for new projects and pursued Mergers
(“PPAs”) are expected to expire with no and Acquisitions (“M&A”) opportunities
possibility of being extended • Diversification of service lines
• Limited overseas expansion opportunities • Evaluated projects in accordance with the
Strategic
• Challenges in forming a strong partnership Group’s investment policies and expected
to bid for overseas projects returns
• Stiff competition by strong industry
players for new projects

• Earnings growth • Sustained stable cash flows

• Sustainable dividend payout • Undertook aggressive cost saving
• High borrowings and tax initiatives
Financial
• Increasing costs • Maintained healthy balance sheet and
optimal capital structure
• Practiced tax efficiency

• Managing ageing assets • Continuously reviewed operational strategy

• Manpower planning due to expiring • Implemented Plant Improvement
Operational PPAs Programmes
• Changes in operating landscape • Conducted impairment of non-performing
assets
• Manpower optimisation

• Greater concerns surrounding coal • Pursue growth via RE projects and Waste
Environmental, Social operations and climate change Management & Environmental Services
and Governance • Management of bottom ash at our • Strict adherence to emission regulations
(“ESG”) plants and improvements in plant efficiency

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OUR PERFORMANCE SECTION 2

MANAGEMENT DISCUSSION & ANALYSIS

FY2021 MARKET OUTLOOK

As we advance into the future, we are cautiously optimistic of a

better year ahead with the potential production and distribution
of vaccines scheduled to begin worldwide in the first quarter of
FY2021. As global infection rates begin to stabilise, movement
and travel restrictions will correspondingly ease, to spur the
rejuvenation of the domestic and global economy.

Within the energy sector, the multinational investment

bank and financial services company Goldman Sachs has
forecasted that RE projects will become the largest area of
energy spending in 2021, with investments in the clean energy
sector to hit USD16.0 trillion by 2030. There is no doubt that
RE is the energy of the future, both on the international as well
as the domestic stage.

In Malaysia, RE is expected to account for 20.0% of the

capacity mix by 2025, a significant increase from 9.0% in
2020. Conversely, coal-based power is expected to reduce to
29.0% in 2030, from 42.0% in 2020. According to the EC’s
Report on Peninsular Malaysia Generation Development Plan
2019 (2020 – 2030) published in February 2020, it is envisaged
that in Malaysia, electricity demand will average at 1.80% in
terms of annual growth and an additional 9,321 MW will be
required in terms of new capacity to meet this demand growth.
The reserve margin is projected to reach below 25.0% by 2030.

Within our international MENA footprint, we are witnessing rapid

growth in the regional demand for power, due to exponential
population growth coupled with increased activities in the
industrial and construction segments. Therefore, there is a
greater need to meet the region’s minimum reserve margin of There are sizeable opportunities within the waste and environmental
15.0% in line with increased consumption demands. services sector in Malaysia, with the Government announcing its
intention to have six WTE plants in the country by 2025. Under the
Additionally, MENA’s water desalination sector is expected to 12th Malaysia Plan (2020 – 2025), the target is to close 14 non-sanitary
hit USD4.30 billion by 2022. According to Siemens Middle East landfills, and build five sanitary landfills along with 29 transfer stations.
Outlook 2035, annual power demand is expected to grow at The 12th Malaysia Plan has also set a recycling rate of 40.0% by 2025,
the average rate of 3.30% in the region, with a total additional from 30.67% in 2020. All these objectives and targets will be met
capacity of 277 GW required by then. With the region as one through a comprehensive National Cleanliness Policy.
of the most water-stressed in the world, the water desalination
sector will continue to thrive, with a five-year growth of 37.0% With these developments in mind, there are opportunities for Alam
forecasted for seawater desalination market in Gulf Cooperation Flora to avail of within the municipal, industrial hazardous and medical
Council (“GCC”) countries between 2021 and 2025. hazardous waste sectors in Malaysia. The municipal solid waste and
industrial hazardous waste sectors account for over 60.0% of the
country’s total waste market value, with medical hazardous waste
expected to grow the fastest in the medium-term future.

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MANAGEMENT DISCUSSION & ANALYSIS

OUR MOVING FORWARD STRATEGY

As we move into the new landscape in a post-Covid-19 world,

Malakoff will leverage on the strength and expertise we have
garnered since our inception to sustain our strategic growth and
long-term profitability. Our core strengths lie in the extensive
experience we possess in developing and managing power
generation and water desalination plants, as well as the rich
capability and wide experience we have in operating and
maintaining these facilities. We will leverage on our proven track
record, along with our technical and commercial insights, to
effectively participate in bidding exercises for greenfield and
brownfield projects, as well as acquisition of existing power and
water desalination assets that will complement our business
capabilities and strengthen our capacities. As a result of our
diversification into the waste management & environmental
services sector through the acquisition of Alam Flora in 2019,
we have augmented our core strengths, to enable more seamless
and synergistic collaborations between the Group and its
subsidiary for potential projects in the future, especially those
within the WTE space.

Bearing in mind these factors, the Group has identified four key
focus areas to chart its future growth as follows:

To pursue growth opportunities in the

conventional power generation and
water production segments, both done
domestically and overseas

To expand the Group’s RE portfolio,

particulary in solar, small hydro, biogas and
WTE

The Group will continue to explore potential greenfield and

To grow the Waste Management & brownfield power generation and water desalination assets in
Environmental Services sector, both in the Malaysia as well as other high growth countries and regions.
concession and non-concession businesses
Expansion in the RE segment will be a key priority as the Group
pursues solar, small hydro, biogas and WTE projects, in line with
To explore new, high growth areas, in line the Government’s target to increase the country’s RE capacity mix
with key trends identified in the energy sector to 20.0% by 2025.

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OUR PERFORMANCE SECTION 2

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ACKNOWLEDGEMENTS

As we come out of what has been an

extremely challenging year, I would like to
take this opportunity to thank each and
every one of our stakeholders, including
our employees, local communities,
shareholders, customers, authorities as
well as bankers. In particular, our gratitude
to the Government and various regulators
and local authorities who worked closely
with us to keep our business running
as an “essential services” sector. Your
continued faith and trust, and generous
support, has been instrumental in
ensuring our continued success, through
both good and challenging times.

On behalf of everyone at Malakoff,

I would also like to thank my predecessor,
Dato’ Ahmad Fuaad Mohd Kenali for his
leadership and invaluable contributions
to the Group.

As we move into 2021, we are imbued

with a renewed sense of optimism and
hope, and reaffirm our commitment to
push Malakoff to even greater heights, as
we capture new opportunities to ensure
the sustainable growth and development
of our company.

ANWAR SYAHRIN ABDUL AJIB

Waste Management & Environmental Services provides significant growth potential Managing Director/
across key segments and the Group will leverage on Alam Flora’s capabilities to Chief Executive Officer
capitalise on the broader opportunities that exist along the value chain, particularly
in industrial hazardous waste, material recovery, recycling and e-waste.

The Group will ramp up its existing capabilities to prepare itself to be a key player in
high growth areas in line with future market reforms, while leveraging on emerging
technologies, digitalisation and analytics to drive performance.

We remain confident that our purpose-driven future strategic plans will augment
Malakoff’s long-term business sustainability and profitability, as we continue to
create value for all our stakeholders.

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POWER GENERATION AND

WATER DESALINATION

OPERATIONS &
MAINTENANCE

ELECTRICITY DISTRIBUTION &

CHILLED WATER SUPPLY

WASTE MANAGEMENT &

ENVIRONMENTAL SERVICES

In FY2020, Malakoff continued to operate as

normal despite the prolonged lockdown due to
its role as an “essential services” provider. We
generated 37,204.42 GWh of power in 2020,
which was 5.68% lower than in 2019 due to
the impact of the MCO. Unfortunately, we were
also faced with some challenges at our power
generation plants which resulted in some
Forced Outages that involved the breakdown
of machinery, where we encountered difficulties
to source suitable spare parts and equipment
for repair works. We had to ensure the ongoing
reliability of all our plants, especially those that
were aged. We implemented measures relating
to plant operations, fuel consumption, machinery
upgrades, and refurbishment plans to improve
our plant reliability.
Full-Year of Operations Successfully upgraded the OHSAS
At our water production facilities, our focus without any LTI and Loss 18001 Occupational Health and
Safety Management System to
was on sustaining a continuous supply of water Time Accident (“LTA”)
production and delivery, whilst ensuring that the for all assets ISO 45001 Occupational Health
water was safe for consumption in accordance and Safety (OH&S) in 2020
to water quality levels stated in our contracts.
We also improved the efficiency of our water
islands by incorporating new sustainable
technology into our operations.

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OUR PERFORMANCE SECTION 2

MANAGEMENT DISCUSSION & ANALYSIS

DOMESTIC OPERATIONS

Domestic IPP Operations

Malakoff is Malaysia’s largest Independent Power Producer (“IPP”), with a generating capacity of 5,822
MW. The electricity we generate accounts for a total of 23.50% of Peninsular Malaysia’s total power
generation. In FY2020, our domestic IPP operations contributed 84.82% to our total Group revenue.

Throughout FY2020, our coal-fired power plants continued with its sustainable and reliable
performance, on the back of improvements we had made to plant operations. TBP’s Equivalent
Availability Factor (“EAF”) increased from 81.54% in 2019 to 92.03% in 2020 and TBE’s 2020 EAF
was higher at 90.23% against 72.28% in 2019, both due to lower planned and unplanned outages in
the year under review compared to the previous year.

Our gas-fired plants recorded a generally high EAF throughout the year on the back of lower planned
and unplanned outages during the year under review, save for Prai Power Plant which underwent
planned outages for Hot Gas Path Inspection (“HGPI”) during the beginning of the year.

All plants recorded low Capacity Factor in FY2020 as compared to our earlier target. This resulted
from lower grid demand, following the closure of several economic sectors due to the pandemic.
Following the resumption of industrial manufacturing and public sector activities in June 2020 once
the MCO restrictions eased, we recorded an uptake in energy demand from the off-taker for our
gas-fired plants.

PENANG
Prai Power Plant

PERAK
SEV Power Plant
GB3 Power Plant

SELANGOR
Kapar Power Plant

JOHOR
Tanjung Bin Power Plant
Tanjung Bin Energy Power Plant

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SECTION 2 OUR PERFORMANCE

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Total Effective Power Generation in FY2020

Plant Location Plant Type PPA Generating Effective Effective

Expiration Capacity Equity Capacity
(MW) Participation (MW)
Prai Power Plant Penang CCGT 2024 350 100.0% 350
SEV Power Plant Perak CCGT 2027 1,303 93.8% 1,222
GB3 Power Plant Perak CCGT 2022 640 75.0% 480
Tanjung Bin Power Plant Johor Coal 2031 2,100 90.0% 1,890
Tanjung Bin Energy Power Plant Johor Coal 2041 1,000 100.0% 1,000
Kapar Power Plant (“GF1-3”) Selangor Multi-fuel 2029 2,200 40.0% 880

Note: CCGT - Combine Cycle Gas Turbine

Equivalent Availability Factor in FY2020 (%)

100 94.5
93.7 91.7 92.5 92.0 90.2 94.2
85.8 85.8 88.2
84.2 84.2 81.5
80
70.4 72.3 74.5
65.8
60.9
60

40

20

2018 2019 2020

Capacity Factor in FY2020 (%)

100

84.6 86.4
80.5 80.5
80
68.0
64.0 62.6
60 55.5
50.2
45.4 56.6
40 36.4
32.0 32.3

19.6 19.6
20
7.7 9.6

2018 2019 2020

Prai Power Plant SEV Power Plant GB3 Power Plant

Plant
Tanjung Bin Power Plant Tanjung Bin Energy Power Plant Kapar Power Plant (“GF1-3”) Note: GF - Generating Facility

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OUR PERFORMANCE SECTION 2

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Electricity Sold and Generated in FY2020

Power Generated (GWh) Electricity Sold (GWh)

Plant 2018 2019 2020 2018 2019 2020
Prai Power Plant 1,686.8 1,934.2 613.9 1,662.6 1,901.0 603.2
SEV Power Plant 3,711.3 4,190.8 905.0 3,651.5 4,151.4 877.4
GB3 Power Plant 1,136.7 1,845.6 558.8 1,101.1 1,807.8 539.1
Tanjung Bin Power Plant 16,390.6 15,593.3 16,767.4 15,566.2 14,808.4 15,913.9
Tanjung Bin Energy Power Plant 5,861.6 6,243.9 7,459.7 5,609.0 5,955.9 7,045.9
Kapar Power Plant (“GF1-3”) 10,715.1 9,635.6 10,899.6 9,966.0 9,028.0 10,193.1
Total 39,502.1 39,443.4 37,204.4 37,556.4 37,652.5 35,172.6

Domestic Renewable Energy Operations

In line with global energy trends, Malakoff has identified RE as one of the key areas that will drive our sustainable future growth. Our
RE projects and developments are primarily within the areas of solar, small hydro, biogas and WTE. We had also established Malakoff
Radiance Sdn Bhd in 2019 to aggressively venture into potential rooftop solar projects with various commercial and industrial sector
customers.

We have enhanced and upskilled our employees’ capabilities, competencies and expertise in the area of RE through training and
certifications such as Registered Electrical Manager, Green RE Manager and Green Building Index (“GBI”) Facilitator. This has enabled
the Group to propose energy efficiency initiatives to its existing base of clients, thus adding value to RE projects. We also continued to
participate in tenders and submitted proposals during the year to potential clients, in our quest to expand this segment of our business.

In FY2020, despite the challenging business landscape, the Group maintained its strategic growth journey through project wins and
successful business development opportunities as depicted in the table below.

RE Project Type Key Wins in FY2020

• Our 60.0%-owned indirect subsidiary, SBSB, obtained FiT approval from SEDA on 18 November 2020 to
undertake the development of a 2.40 MW Biogas Power Plant in Ulu Sebol, Kota Tinggi, Johor. SBSB is
currently conducting preparatory work to initiate the project implementation stage in order to secure financial
closure by July 2021.
• We have progressed with the 2.40 MW biogas project at Sg Kachur Palm Oil Mill, Johor where the FiT from
Biogas SEDA was successfully secured by Green Biogas Sdn Bhd (“GBSB”), a 60.0% indirect subsidiary of Malakoff, in
December 2019. The Engineering, Procurement and Construction (“EPC”) contract was awarded to a contractor
in March 2020. The original targeted date for completion was December 2021. However, due to the enforcement
of the MCO which has caused delays to the project, an application for extension of time has been sent to SEDA.

• Two of our SPVs were awarded with FiT approval for two small hydro projects by SEDA in December 2019.
These were our 65.0%-owned SPVs Batu Bor Hidro Sdn Bhd and Lubuk Paku Hidro Sdn Bhd, where both had
secured FiT for hydro projects with capacities of 30.0 MW and 25.0 MW respectively, located along Sg Pahang.
Since then, the SPVs have entered into REPPA with TNB. Currently, project development activities such as
finalising the EPC contract, land matters, securing financing, conducting Environmental Impact Assessment
Small hydro (“EIA”) study, and obtaining the development order and the Water Rights Agreement (“WRA”) are ongoing. As
a result of the MCO, there were some delays encountered on the project. However, an extension of time for a
period of 114 days has been granted by SEDA. The targeted date for project completion is April 2025.

• The Group entered into three SPPAs as follows:

- Johor Port Berhad on 10 June 2020 with 2.66 MW
- Northport (Malaysia) Berhad on 4 September 2020 with 4.93 MW
Rooftop solar - PMB Properties Sdn Bhd on 30 October 2020 with 2.34 MW

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SECTION 2 OUR PERFORMANCE

MANAGEMENT DISCUSSION & ANALYSIS

INTERNATIONAL OPERATIONS

We maintained positive traction on our international assets in FY2020. The Shuaibah Phase 3 IWPP recorded a slight reduction in power
generation mainly due to operational conditions and Scheduled Outages. The Shuaibah Phase 3 Expansion International Water Project
(“Shuaibah Phase 3 Expansion IWP”) performed sustainably throughout the year, maintaining its performance from the previous year. As for
Al-Hidd IWPP, there was a slight drop in power generation for the year due to Scheduled Outages. The plant also recorded higher
water production during the year under review, with no occurrence of any major outages. The Al-Ghubrah IWP maintained sustainable
performance throughout FY2020, in line with its performance in FY2019.

International Operations in FY2020

Plant Location Plant Type PPA/WPA/ Generating Capacity Effective Effective Capacity
PWPA Equity in FY2020
Expiration Participation
Shuaibah Phase 3 Saudi Arabia Water & 2030 Water: 880,000 m³/day 24.0% Water: 211,200 m³/day
IWPP Power Power: 900 MW Power: 216 MW
Shuaibah Phase 3 Saudi Arabia Water 2029 Water: 150,000 m³/day 23.8% Water: 35,700 m³/day
Expansion IWP
Al-Hidd IWPP Bahrain Water & 2027 Water: 410,000 m³/day 40.0% Water: 164,000 m³/day
Power Power : 929 MW Power: 372 MW
Al-Ghubrah IWP Oman Water 2034 Water: 191,000 m3/day 32.5% Water: 62,075 m³/day

Note: PPA - Power Purchase Agreement WPA - Water Purchase Agreement PWPA - Power and Water Purchase Agreement

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OUR PERFORMANCE SECTION 2

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SAUDI ARABIA BAHRAIN

• Shuaibah Phase 3 IWPP Al-Hidd IWPP
• Shuaibah Phase 3 Expansion IWP

OMAN
Al-Ghubrah IWP

Equivalent Availability Factor in FY2020 (%)

100 96.8 96.1 96.8 97.7

93.6 93.0 95.1 93.4 95.2
92.8 94.5 94.0 93.8 93.5
90.0 88.0 88.6 88.8

80

60

40

20

2018 2019 2020

Capacity Factor in FY2020 (%)

100 95.6 97.0 97.0

94.5 92.8 92.8
90.8 91.8 92.3 93.3
86.0 87.9 87.9 87.6 86.3

80 75.1
73.1 70.8

60

40

20

2018 2019 2020

Shuaibah Phase 3 IWPP – Power Shuaibah Phase 3 IWPP – Water Shuaibah Phase 3 Expansion IWP – Water
Plant
Al-Hidd IWPP – Power Al-Hidd IWPP – Water Al-Ghubrah IWP – Water

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POWER GENERATION AND WATER

DESALINATION

OPERATIONS &
MAINTENANCE

ELECTRICITY DISTRIBUTION &

CHILLED WATER SUPPLY

WASTE MANAGEMENT &

ENVIRONMENTAL SERVICES

The Group established its O&M division in order

to manage its own plants to ensure consistent
and uninterrupted energy and water delivery to its
base of customers. This approach also ensured
we were able to maximise our value, as well as
centralise our plant operations and maintenance
strategy. Our O&M division has built a substantial
bank of experience and knowledge in managing
Combined Cycle Gas Turbine (“CCGT”), Open
As at FY2020, Malakoff, via MTSSB is a registered energy services company, with a
Cycle Gas Turbine (“OCGT”) and coal-fired power
suite of O&M services as follows:
plants as well as multi-stage flash desalination
plants, reverse osmosis plants and multi-effect
distillation and cogeneration plants. O&M for CCGT, OCGT and coal-fired power plants, water
desalination plants and solar photovoltaic plants
With its strong track record of proven skills, the
Group has ventured to market its O&M services
Providing technical and simulator training - certified by
to other power and water asset operators, thus
the Human Resource Development Fund (“HRDF”) as a
diversifying the Group’s revenue stream. Our
technical training provider in the O&M field that offers training
O&M services are provided through our wholly-
programmes and a competency development consultancy,
owned subsidiaries, Malakoff Power Berhad
along with comprehensive programmes on public technical
(“MPower”), Tanjung Bin O&M Berhad (“TBOM”)
and MTSSB. We have been steadily building our courses relating to the power industry
reputation and credibility in the marketplace,
gaining recognition as an O&M service leader Maintenance, Repair and Overhaul (“MRO”) services –
within our niche. MPower and TBOM provides providing scheduled and ad-hoc maintenance services,
O&M services for the Group’s power plants in including both minor and major overhaul services for thermal
Malaysia, while MTSSB extends its services to and gas turbines
the Group’s associates, joint venture partners as
well as third party clients, both domestically and
internationally.

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Received
Fully Took Over First Foray into
Energy Services
ZEC Solar’s Rooftop Company (ESCO) status
O&M Solar O&M from Energy Commission

There were a number of projects that were postponed in two of our main target markets, namely Indonesia
and Bangladesh. In Indonesia, the implementation of the new 35.0 GW plant up programme was deferred.
The estimated date of completion on all related projects were also duly postponed to a later date.
The plant simulator project was halted as a result of the requirement for social distancing. MRO activities
at Cambodia Energy Limited were also impacted due to quarantine and screening requirements. In 2020,
MTSSB took over ZEC Solar’s O&M from the EPC Contractor, CMEC-Mattan, for full scale solar photovoltaic
O&M services.

In FY2020, our O&M division was able to record the following achievements within its main service areas.

O&M Area Key Wins in FY2020

• Laid the groundwork to embark into sustainable energy solutions, namely in

the field of energy audits
• Embarked on plans to introduce plant operability review as one of the O&M
related services
• Ventured into O&M of rooftop solar at Q-Sentral building in Kuala Lumpur
Domestic and • First foray into O&M for LSS at ZEC Solar Kota Tinggi Farm in Kulai, Johor
International O&M • Both these ventures signify a milestone for the O&M business which has now
Business expanded to include both conventional and RE power generation
• Embarked on exploring international opportunities in O&M services in Laos
and Myanmar

• Continued to ensure that technical specialists were available to provide the

required technical support for our clients
• Continued to provide field maintenance services including electrical,
mechanical and water chemistry to all types of electro-mechanical rotating
machines, static equipment and power equipment
• Expanded our MRO services to adjacent industries such as oil and gas, and
port facilities
• Secured Hydraulic Workpack contract at Jimah Energy Ventures
MRO
• Secured electrical inspection and services for all Petronas stations in the
central region
• Secured contract for generator inspection at Nur Power Plant
• Secured online partial discharge monitoring contract at Tenaga Perlis
Consortium (“TTPC”)
• Secured the rootcause analysis contract at Port of Tanjung Pelepas

• Completed the following public courses:

- Transformer and Generator Training
- Theoretical and On-job training for Kimanis Power Plant’s operator
Technical Training - Heat Recovery Steam Generator (“HRSG”) Inspection Course

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SECTION 2 OUR PERFORMANCE

MANAGEMENT DISCUSSION & ANALYSIS

POWER GENERATION AND WATER

DESALINATION

OPERATIONS &
MAINTENANCE

ELECTRICITY DISTRIBUTION
& CHILLED WATER SUPPLY

WASTE MANAGEMENT &

ENVIRONMENTAL SERVICES

MUSB is a wholly owned subsidiary of Malakoff,

and is one of the leading electricity distribution
and district cooling plant infrastructure owners
and operators in Malaysia. MUSB holds the
exclusive license to distribute electricity
within Kuala Lumpur Sentral (“KL Sentral”), a
prestigious 72-acre development in the centre of
Kuala Lumpur, with a licensed capacity to meet
offtake of up to 153.0 MW.

In FY2020, MUSB’s revenue was significantly

affected by the Covid-19 pandemic, and it
consequently recorded a 18.0% decline in Continuous improvement of every critical
1
revenue YoY. During the year, MUSB received the business function
Financial Operation Discount announced by the
Government as part of the CMCO Relief Claim,
which was approved by the EC for approximately
RM2.48 million. These funds were distributed to
all MUSB customers during the CMCO period. 3
STRATEGIC
2
Implementation of a Long-term Rehabilitation
Plan for the District Cooling Plant
Notwithstanding the challenging operating AREAS
environment, MUSB retained its focus on the
following strategic areas in FY2020
Continuous improvement of our Customer
3
Charter

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MANAGEMENT DISCUSSION & ANALYSIS

MUSB had commenced the supply of chilled Number of Customer

water to KL Sentral in 2001. In 2011, MUSB
upgraded to the latest Thermal Energy Storage 4,000
(“TES”) technology. The district cooling supply 3,590 3,508
3,443
which delivers to multiple blocks of combined
commercial and office spaces has a capacity of 3,000
2,722
17,000 Initialise Refrigeration Tonne (“RT”) with a
Long Term Rehabilitation Plan in place to ensure
2,000
the district cooling plant is utilising the latest
technology in its operations.
1,000
We continued to expand our customer base in
tandem with the ongoing development of KL
Sentral as a business and transportation hub. 2017 2018 2019 2020
Although our customers decreased from 3,590 in
FY2019 to 3,508 in FY2020 due to the impact of
Covid-19 pandemic and the various iterations of MUSB had also conducted a key engagement exercise during the
the MCO, our customer base had registered a year by launching the bi-annual Customer Satisfaction Survey,
28.88% increase as compared to FY2017 due to in compliance with ISO 9001:2015. As a result, in 2020, MUSB
our continuous improvement over the years. received a total of 1,578 responses and achieved Customer
Satisfaction Index of 98.50%. The comparison table below shows
For instance, as part of new innovation of details of the survey scope and improvements from the previous
our operations process, we had deployed the survey conducted in 2018.
Robotic Process Automation (“RPA”) system to
enable our customers to access their bills via
e-mail in July 2020.

2018 Total Average 2020 Total Average

Categories
Satisfaction Satisfaction

94.0% Customer Care Experience 100.0%

82.0% Billing Experience 99.8%

81.0% Technical Experience 94.5%

91.0% Inquiries & Complaints Experience 100.0%

348.0% Total Overall Satisfaction 394.3%

87.0% Average Satisfaction 98.5%

MUSB continues to gain its customers’ trust and confidence with the ISO 9001:2015 certification, which reflects
adherence to international standards on quality management systems.

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SECTION 2 OUR PERFORMANCE

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POWER GENERATION AND WATER

DESALINATION

OPERATIONS &
MAINTENANCE

ELECTRICITY DISTRIBUTION &

CHILLED WATER SUPPLY

WASTE MANAGEMENT &

ENVIRONMENTAL SERVICES

The Group’s acquisition of Alam Flora in

December 2019 for a sum of RM869.0 million
marked its expansion into the high growth Waste
Management & Environmental Services sector.
In FY2020, Alam Flora recorded its maiden
full-year of revenue contribution to Malakoff,
which has boosted the Group’s income
generation abilities.

IMPACT OF COVID-19 AND OPPORTUNITIES

THAT AROSE

The Covid-19 pandemic did not significantly

impact Alam Flora, as it was considered an
“essential services” provider by the Government
during the MCO implemented on 18 March
2020. Alam Flora continued providing waste requirements, while ensuring our operational continuity. Alam Flora established the
management and public cleansing services in its Crisis Recovery Committee to coordinate and consolidate all information regarding
concession areas. It also pivoted its business to Covid-19 including the issuance of updated SOPs and prevention plans.
provide Covid-19 disinfection and sanitisation
services for the Government. As work continued A key achievement in FY2020 was Alam Flora’s ability to leverage on its sanitisation
for the company, we had to ensure the safety of expertise and knowledge to provide Covid-19 disinfection services by working with
our workforce to protect them from the risk of the local authorities. Alam Flora’s services were provided as part of the Government’s
Covid-19 infection. In line with this, we provided multi-agency effort to disinfect Covid-19 hotspots throughout the country to contain
our workers with Personal Protective Equipment the outbreak. Our expertise was sought by the Government and Alam Flora workers
(“PPE”) such as face masks, hand sanitisers were part of the front liners who put their skills to good use for the benefit of the
and thermometers to record their temperature. nation. The disinfection services we provided included the use of High Pressure
We also issued rotation STW arrangements for Jetter, Tailgate and Triton vehicles to disinfect public roads.
our support staff in line with social distancing

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MANAGEMENT DISCUSSION & ANALYSIS

Total Solid Waste

Number of Vehicles Management Volume
1,500 4,145 tonnes/day
CONTRIBUTING TOWARDS A GREENER FUTURE ENHANCING OUR OFFERINGS THROUGH
DIGITALISATION
In July 2020, Alam Flora launched the Innovative
Recycling Facility, FIKS in Putrajaya, the country’s first During the year, we focused on digitalisation initiatives
ever awareness and education centre focusing on waste to enhance our business through the adoption of IR 4.0
management and recycling. FIKS aims to promote technologies. In particular, we adopted a technology
5R (Refuse, Reduce, Reuse, Recycle and Recovery) to that remotely monitors and pinpoints the location of
all Malaysians, as well as to help reduce the amount of all our operational vehicles by using the Automated
recyclable waste sent to landfills. Vehicle Locating System (“AVLS”) and Global Positioning
System (“GPS”) technology. This system enables live
Housed within the FIKS campus is the IRF where 24/7 monitoring to ensure that all activities are done
all recyclable items are sorted, treated and sent according to schedule.
for the recovery process. Besides supporting the
Government’s goal of achieving a recycling rate of Additionally, we have developed two main products which
35.0% by 2025, FIKS also supports Perbadanan incorporates cloud-based web applications, namely
Putrajaya’s mission to become a Green City within the mflora™ TELEMATICS and mflora™ SUPERVISORS for
same period. the use of in-house and private contractors under Alam
Flora. This move has increased our productivity and
Various initiatives and programme were initiated by efficiency, and enabled us cost savings of RM600,000
Alam Flora in support of the Government’s National per annum.
Cleanliness Policy which includes embracing
environmentally friendly cleaning activities, Waste Generation in FY2020 (000 tonnes)
encouraging recycling and promoting the circular
economy. Among the programmes initiated were: 1,000
876.4
869.1 811.6
• Improvement in quality of service and a better 800
environment by using eco-friendly equipment
• Introduction of the RewardsS@S programme to 600
complement the existing Buy Back Centres (“BBC”)
in KL, Putrajaya and Pahang, and to encourage 400
members of the public to take up recycling
• Introduction of wealth-sharing initiatives by AFES 200
termed ‘ECO-Duta’ in order to stimulate recycling
• Introduction of the country’s first ‘Port Reception
Facilities’ which handles waste from sea vessels 2018 2019 2020
docking at Northport
As at end FY2020, there was a total of 811,564 tonnes
• Continuation of the Recovery Used Cooking Oil
of waste generated denoting a 7.98% reduction from
(“RUCO”) project
FY2019, due to a reduction in commercial waste as
business activities declined during the MCO.

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MD/CEO’S MESSAGE
GRI 102-14, 102-15

DEAR
SHAREHOLDERS,
Despite the intense challenges we faced
as a result of the Covid-19 pandemic,
Malakoff remained true to our value
creation ideals, and continued with
its sustainability centred programmes
and initiatives to create meaningful and
tangible benefits for our ecosystem of
stakeholders.

Our sustainability agenda demonstrates

our commitment towards being a
business that practises the principles
of sustainable development, in line
with contributing to the United Nations’
Sustainable Development Goals
(“SDGs”). Malakoff’s sustainability
agenda is underlined by the global
mega trends that are shaping the
global power industry, most notably the
energy transition shift towards clean
energy sources in line with combating
the impacts of climate change.

The future is rapidly shifting towards a world of electric vehicles, digitalisation and
grid-scale energy storage, all key trends that are having an even greater impact on the
power sector. The global move towards greener energy is being led by the adoption
of new technologies that are enabling more sustainable power generation operations.
These changes in power generation and consumption will in turn impact the energy
value chain in terms of distribution, storage and protection.

Technological innovation, RE deployment, new energy regulations and changing

consumer behaviour are driving national energy policies. Coupled with this are
increasing stakeholder expectations for greater levels of disclosure in terms of
corporate sustainability reporting and performance measurements, as investors,
communities and other stakeholder groups gear towards a more sustainable and
eco-friendly future.

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Combating climate change, developing greener

energy solutions and promoting the circular economy
are all issues which are close to Malakoff’s heart,
and represent the integral focus of our sustainability
agenda. We have actualised our sustainability beliefs
and commitment by embedding sustainability into our
business strategy, as well as implementing concrete
actions, programmes and measures throughout the
Group. Additionally, we are deeply committed to
helping communities with their journey towards a
greener and more sustainable future, by providing
them platforms they can use to contribute to
eco-friendly and environmental initiatives.

I am pleased to present to you our account of

our sustainability journey in FY2020 with our
Sustainability Statement. This Statement provides a
transparent narrative of how the Group is supporting
the national Government’s agenda towards achieving
20.0% RE generation by 2025 and promoting the
circular economy, as we maintain our focus on
ensuring optimised operations that provide both
reliable and continuous energy supply whilst we
minimise our business’ impact on the environment.
It also provides an account of our employee-facing
initiatives, as well as the measures we have in place
SUSTAINABILITY GOVERNANCE
to build a strong and ethical governance culture
GRI 102-11, 102-18, 102-19, 102-20, 102-32, 102-49
Group-wide.
Malakoff’s sustainability agenda is driven by a robust governance
On behalf of the Group, I would like to express our
structure that ensures all material topics are identified, monitored,
collective appreciation to all our stakeholders for
assessed and deliberated in a holistic manner throughout the
their continued interest and support towards our
Group. Our robust Group-wide governance framework enables
sustainability agenda.
high levels of accountability, internal controls, risk mitigation,
oversight and management of EES related matters.

Anwar Syahrin Abdul Ajib

Our sustainability ethos is centered on our commitment towards
Managing Director/Chief Executive Officer
the highest level of corporate governance, as denoted by our
accountability, transparency, due diligence, independence,
robust risk management policies, anti-corruption and anti-bribery
policies, and the development of a corporate culture based on
uncompromising business ethics.

The Board and Senior Management form the apex of our

governance structure. This sets a strong tone from the top,
with the Board and Senior Management having direct oversight
on all sustainability-related matters. This top down approach
has been the driving force behind Malakoff’s sustainability
oriented organisational culture as an essential component of the
Group’s DNA.

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Lines of reporting and accountability have been drawn for All EES matters have been integrated into the Group’s business
sustainability-related issues to be escalated up the chain strategies, as deliberated upon by the Board and Senior Management.
of command, to facilitate strategic decision making, and Operational decisions are made in line with the Board and Senior
the identification and implementation of action plans and Management directives, which seek to balance the Group’s business
programmes that are effectively implemented at ground level. objectives against EES matters and our stakeholder perspectives.

The Sustainability Working Group (“SWG”) plays a vital role in In addition to our formalised governance structure, Malakoff’s
monitoring, gathering data and providing regular sustainability sustainability governance is also premised upon the following policies
reports to the Head of Strategy and Communication and procedures:
Division, who reports directly to the MD/CEO. Heads of • Board Charter (inclusive of Terms of Reference (“TOR”) for all
Divisions/Departments are required to authorise all inputs and respective Board Committees)
performance disclosures, which are then verified by the SWG • Group Anti-Bribery Policy (“AB Policy”)
to ensure compliance with the MMLR of Bursa Malaysia. We • Whistle-blowing Policy
have also strived to meet global benchmarks by following the • Procurement Policy
GRI Standards on sustainability reporting. • Environmental Policy
• IT Governance and Security Policy

BOARD OF DIRECTORS

MD/CEO

HEAD OF STRATEGY & COMMUNICATION DIVISION

SUSTAINABILITY WORKING GROUP

Group Finance Business Investment Business Process Information

HSSE
& Accounts Development Development & Improvement Technology
Department
Division Division Management Division Department Department

Strategy & Operations & Project Risk Management Group

Local Generation Human Capital
Communication Management & Integrity Internal Audit
Division Division
Division Services Division Department Department

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STAKEHOLDER ENGAGEMENT
GRI 102-21, 102-40, 102-42, 102-43, 102-44, 102-48

We conduct our stakeholder engagements in order to identify and address their concerns, especially with regards to sustainability-related
matters. Our stakeholder ecosystem comprises both internal and external stakeholders who play a significant role in the continuity of
our business operations. We believe our focused stakeholder engagements enable us to proactively address EES matters that have a
material impact on our business.

In FY2020, we conducted the following stakeholder engagements:

Stakeholder Group Description Engagement Channels Material Topics

Employees Individuals who are hired by an employer to • Townhalls M14 Employee Engagement &
do a specific job, barters his or her skills, • Virtual meetings Well-being
knowledge, experience, and contribution in • Surveys M15 Occupational Safety and
exchange for compensation from an employer • Company intranet/ Health
newsletters M18 Effective Communication

Local A group of interacting people living in a • Surveys M13 Community Investment &
Communities common location • Community events Development
• Interviews M9 Natural Disaster/Pandemic
M14 Employee Engagement &
Well-being
Shareholders/ Also referred to as a stockholder, is a person, • Virtual meetings/ M9 Natural Disaster/Pandemic
Investors company, or institution that owns at least one briefings M2 Strategy Implementation
share of a company’s stock, which is known • AGM M1 Economic Performance
as equity/a person or organisation that puts • Quarterly/annual
money into financial schemes, property, etc. reports
with the expectation of achieving a profit • Website updates
Customers The individuals and businesses that purchase • Virtual engagements M6 RE
goods and services from another business • Surveys M9 Natural Disaster/Pandemic
• Social engagement M13 Community Investment &
activities Development
Government Any governmental entity, department, • Surveys M5 Governance, Ethics and
Authorities commission, board, agency or instrumentality, • Corporate events Integrity
and any court, tribunal or judicial or arbitral • Dialogues M4 Regulatory Compliance
body, whether federal, state, local or foreign M13 Community Investment &
Development
Law Enforcement Numerous law enforcement agencies which • Surveys M7 Energy Sources
Agencies generally comes under the direct purview • Virtual meetings M2 Strategic Implementation
of the Royal Malaysia Police, the main M3 Operational Excellence
Government agency entrusted with the
maintenance of law and order in the country
Rating Agencies A company that assesses the financial strength • Surveys M3 Operational Excellence
and Financial of companies and Government entities, • Virtual meetings/ M1 Economic Performance
Institutions especially their ability to meet principal and briefings M2 Strategic Implementation
interest payments on their debts/a company
engaged in the business of dealing with financial
and monetary transactions such as deposits,
loans, investments, and currency exchange
Contractors and The party that exist on the other side of the • New vendors M3 Operational Excellence
Vendors procurement value chain. The party that is registration M2 Strategy Implementation
contractually bound to deliver the Supplies, • Vendors registration M9 Natural Disaster/Pandemic
Works or Consultancy Services in accordance updates
with the terms of the Contract

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MATERIALITY
GRI 102-29, 102-31, 102-33, 102-34, 102-47

In FY2020, we reviewed and confirmed our material topics and aspects based on the availability of new information as well as the latest
feedback and perspectives obtained from our stakeholders.

The Group’s Heads of Divisions/Departments captured the relevant data, which is then provided to the SWG for further analysis and
disclosure. Through this process, we were able to continuously assess our list of material topics and aspects, and make adjustments
where necessary. We have categorised our material topics into EES themes, respectively.

M9

M1

M14
M18 M15 M3 M2
Significance to Stakeholders

M4

M6 M5

M8 M13

M11 M10

M7
M17
M12
M16

Significance to Malakoff

ECONOMIC ENVIRONMENT SOCIAL

What It Means to Us What It Means to Us What It Means to Us

Various aspects of governance, Impact and approach towards the Strategies on social issues, including talent
operations, growth and profitability environment management, diversity and performance

Top 6 Material Topics Top 6 Material Topics Top 6 Material Topics

M1 Economic Performance M7 Energy Sources M13 Community Investment & Development
M2 Strategy Implementation M8 Waste Management M14 Employee Engagement & Well-being
M3 Operational Excellence M9 Natural Disaster/Pandemic M15 Occupational Health and Safety
M4 Regulatory Compliance M10 Biodiversity Impact M16 Talent Management
M5 Governance, Ethics and Integrity M11 Water Management M17 Human Rights and Labour Relations
M6 RE M12 Energy Consumption M18 Effective Communication

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ECONOMIC
GRI 200, 102-11, 103-1, 103-2, 103-3

We believe that good REGULATORY COMPLIANCE

governance is an essential GRI 307-1

component of any We believe in ensuring strict regulatory compliance with all the various legislations
successful organisation. pertaining to the power sector. In FY2020, Malakoff continued with its stellar track record
on regulatory compliance, recording zero incidents of non-compliance pertaining to
It is the key driver guiding environmental, social, legal, and health and safety regulations. This was the result of our
the Group and its people comprehensive operating procedures, processes and frameworks that were developed
towards achieving their and implemented to ensure strict compliance with all the relevant laws, regulations and
other requirements.
business objectives and
goals, thus providing the We have a regulatory compliance management system in place, which consists of
foundations for a high a series of internal audits that are conducted regularly across the Group. The audits
include the Quality, Health, Safety and Environment (“QHSE”) Audit and the Group’s
performing organisation HSSE Audit and Inspection. Through the outcomes of the audits, we are able to assess
that preserves and our compliance and performance levels, identify gaps and solutions, and implement
strengthens stakeholder these accordingly.

confidence.

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In FY2020, we conducted a total of five audits as follows: COMPLIANCE WITH NEW ENVIRONMENTAL QUALITY (CLEAN
AIR REGULATIONS) 2014
• TBP for two days from 23 - 24 June 2020 GRI 307-1
• TBE for two days from 25 - 26 June 2020
• LPP for two days on 29 - 30 June 2020 The Group has maintained its strict compliance of emission levels as
• Prai for two days from 2 - 3 July 2020 provided by the Environmental Quality (Clean Air Regulations) 2014
• KLHQ for one day on 15 July 2020 (“CAR 2014”). We monitor our Hydrogen Fluoride (“HF”), Hydrogen
Chloride (“HCl”) and Polychlorinated Dibenzodioxins (“PCDD”)/
All the audit findings have been identified and appropriate actions Polychlorinated Dibenzofurans (“PCDF”) emission levels in line with
were taken for further improvements. CAR 2014 requirements. We have also ensured compliance with
the lower limits of Carbon Monoxide (“CO”) and Mercury (“Hg”)
Our Occupational Safety and Health (“OSH”) policies have been emissions for coal plants, along with the new emission limits of CO
developed in compliance with the relevant legislation. Our policies and opacity monitoring for gas plants as stipulated in CAR 2014.
aim to foster a preventive based workplace health and safety Compliance to the emission regulations are managed through each
culture. We continuously review, update and improve on our OSH plants’ Environmental Management Plan. As at end of December
policies to ensure its relevance and effectiveness. Our reviews and 2020, no non-compliance notices were issued by the Department of
improvements take into account the feedback and concerns raised Environment (“DOE”) to any of Malakoff’s plants.
by our stakeholders, especially our employees. During the year, we
have achieved a successful transition from OHSAS 18001:2008 to
ISO 45001:2018 – OHSMS.

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ANTI-BRIBERY COMPLIANCE For FY2020, four cases were reported through the Whistle-blowing
GRI 102-16, 102-17, 205-2 channel and appropriate actions were taken in accordance with
the Policy.
In line with the Group Anti-Bribery Policy and the requirements of
the new Section 17A of the Malaysian Anti-Corruption Commission
The salient terms of the Whistle-blowing Policy are available
(“MACC”) (Amendment) Act 2018, we established IGU which on our corporate website at:
provides independent reporting to the Board on integrity related
http://www.malakoff.com.my/About-Us/Whistleblowing-Policy/
matters. In November 2020, Malakoff successfully obtained
certification from SIRIM for ISO 37001:2016 ABMS. Currently,
Malakoff has 37 trained ABMS auditors to carry out ABMS Audits SECURITY OF SUPPLY AND PLANT SECURITY
in order to ensure compliance among our staff and business
GRI 201-1, 203-1
associates who deal directly and indirectly with Malakoff Group.
Energy security is an issue that plays a huge role in the
During the year, we conducted a series of online Bribery Risk socio-economic development of a country. The continuous and
Assessment Workshops for all business units. These sessions uninterrupted supply of energy through the National Grid is required
were conducted as part of our efforts to continuously improve to power industries, businesses and homes. In order to ensure
and further identify and assess the potential bribery risks for that Malakoff is able to deliver on its promise of continuous and
the company and its current controls and mitigation plans. uninterrupted energy supply, we have in place Scheduled Outage
Additionally, two of our employees attended the Certified Integrity plans that are collaboratively reviewed with the Grid System
Officer (“CeIO”) Programme for the private sector that was Operator on a regular basis to ensure that our plants are available
organised by the Malaysian Anti-Corruption Academy (“MACA”) on to support the national grid system without compromising on plant
22 September - 15 October 2020. integrity, as stipulated in the PPA.

WHISTLE-BLOWING POLICY In FY2020, all of our plants were successfully audited by the Jabatan
GRI 205-3 Sasar Penting Negara (“JSPN”). Recommendations were given
to strengthen security at critical plants categorised as “Sasaran
The Whistle-blowing Policy sets out avenues for employees and Penting Keutamaan Satu”. JSPN oversees infrastructure that is
third parties dealing with the Group with proper procedure to considered to be of national importance to maintain the security
disclose cases of improper conduct such as criminal offences, of the country and the economy. We continued to implement our
fraud, corruption, breach of Group Policies and Code of Conduct operations and maintenance initiatives in line with optimising our
or other malpractices. plants’ availability and performance reliability.

A Whistle-blower is assured confidentiality of identity, to the To ensure continuous improvements in plant availability and
extent that is reasonably practicable. This includes protecting the reliability, we have implemented various O&M initiatives and
Whistle-blowers from detrimental actions that may result from the adopted state-of-the-art tools such as Condition Based
disclosure of improper conduct, provided that the disclosure is Maintenance, Reliability Centered Maintenance, Root Cause
made in good faith. The Whistle-blowing Policy is also to ensure Analysis in failure investigations to avoid recurrences, Reliability
that fair treatment is provided to both the Whistle-blower and the Centered Spares, Risk-Based Inspection, Process Safety
alleged wrongdoer when a disclosure of improper conduct is made. Management, and Hazard and Operability Study. We also
conducted Forced Outage Management, and benchmarking
Disclosure of improper conduct can be made verbally or in writing activities for all the plants to ensure that the initiatives and its
to the Chairman of the Board Audit Committee through a letter or outcomes are on the right track.
via e-mail to [email protected].

The Chief Internal Auditor is responsible for the administration, Please refer to the MD&A section on page 28 of this Annual
Report for detailed disclosure on Malakoff Plant Equivalent
interpretation and application of the Whistle-blowing Policy. Any
Availability Factor.
amendment to the Policy shall be effected by the Chief Internal
Auditor, and is subject to the final approval of the MD/CEO, the
Board Audit Committee and the Board of Directors.

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INFORMATION SECURITY STRATEGIC BUSINESS DEVELOPMENT

GRI 201-1, 203-1 GRI 201-1, 203-1

Cyber security has become a crucial element of the security Our strategic business development agenda is strictly aligned with
of an organisation, as increasingly more company confidential our vision to be a premier global power and water company. In
data and business processes are accessible remotely through line with this, we have set ourselves strategic targets of achieving
Cloud and/or online. In FY2020, with WFH measures effected 10,000 MW of power generation capacity, 1,000,000 m3/day of water
by organisations to maintain business continuity throughout the production capacity, 1,000 MW of RE capacity and 10,000 tonnes/day
Covid-19 pandemic, there was an even greater shift to online of solid waste management volume.
platforms and technologies as key enablers keeping business
operations running. In FY2020, we remained on course with our strategic endeavours
through various business development initiatives. These include
To address ongoing cyber security concerns and to ensure a submitting tenders and bids for RE projects, as well as securing new
robust and resilient network architecture, we have in place an IT contracts throughout our various businesses.
Governance and Cyber Security Framework that was developed
according to international standards and best practices which Please refer to the MD&A section on page 20 of this Annual
utilises a holistic approach in managing cyber risks. Based on Report for detailed disclosure on our business development
the framework, we continue to strengthen our existing cyber plans, key highlights for FY2020 and our future business and
defence technologies equipped with Artificial Intelligence (“AI”) strategic orientation.
based software to detect and respond to unknown threats.
Malakoff has also invested in an asset and automated patch
BUSINESS PROCESS IMPROVEMENT
management solution to ensure timely update of security
patches, implemented Privilege Access Management (“PAM”), GRI 201-1
Enterprise Mobile Management (“EMM”) and Vulnerability
Malakoff practices continuous business process improvement which
Management (“VM”) solutions as part of our cyber defence
involves identifying, analysing and improving existing business
improvements. As we move into 2021 and our quest to achieve
processes to optimise our performance, meet best practice standards,
greater cyber resilience, we will be embarking on the Phase III
and improve the user experience for customers and end-users. In
of the Cybersecurity Enhancement Programme and implement
FY2020, we recorded a number of achievements during the year in
proactive cyber security solutions that will enhance our cyber
terms of BPI, with 20 process improvement projects implemented
security capabilities.
Group-wide.

As for our digitalisation programme which is in line with the

This included coordinating the implementation of the Alam Flora
Government’s call to meet the challenges of IR 4.0, Malakoff
Process Integration. As a new subsidiary of the Group, Alam Flora’s core
plans to extend the RPA programme following the successful
administrative and support service processes such as Procurement, IT,
roll-out of the pilot phase in 2020 and the implementation of
Human Capital, Finance, and Risk Management, are now in line with the
mobile applications. This programme will increase productivity
Group’s practices and approach. This was captured by reviewing all the
by eliminating repetitive tasks, and improve accuracy and
relevant processes and documentation.
speed. We will also seek to enhance the way we engage with our
stakeholders, namely our customers, through a new customer
Among others, we enhanced the procurement process with respect to
portal and mobile applications that will offer more information
compliance to ABMS requirements such as the declaration of conflict
and convenience, such as online payment, billing information,
of interest and vendor due diligence. Alignment of the procurement
and real-time announcements.
process between Malakoff and Alam Flora has been successfully
completed through a joint effort between both Procurement and BPI
Moving into the year ahead, beyond accomplishing our 2021
Departments through a series of briefings, trainings and gap analysis
IT Strategic Plans, we also aim to facilitate the effective and
sessions. In FY2020, Malakoff managed to record savings of RM14.40
equitable use of IT resources, improve overall efficiency to create
million as a result of the implementation of E-Auction through I-Valua.
optimal value and continue maintaining our ISO 27001:2013
Information Security Management System (ISMS) certification in
Additionally, as the Group shifted to WFH in light of the Covid-19
preserving the Confidentiality (C), Integrity (I) and Availability (A)
pandemic, we concurrently moved to utilise virtual platforms such as
of the company’s information, and there retain our resilience.
Microsoft Teams to enable this smooth transition for our workforce.

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LEAN SIX SIGMA OPERATIONAL EXCELLENCE

GRI 201-1 GRI 201-1

We have consistently relied on the 6 Sigma approach As the first strategic pillar of our business strategy, Achieving Operational
to collaboratively improve our performance. In FY2020, Excellence is a key priority for the Group. Ensuring the operational excellence
we continued to implement measures identified under of our plants is key towards providing a continuous and reliable supply of
the LSS Project Implementation. These involved two electricity to our customers. Malakoff has developed a culture of continuous
key projects, namely Inventory Optimisation by the LPP improvement to drive our operational excellence capabilities as overseen by the
Team, and Minor Outage Optimisation by the TBP Team. Engineering Department, Local Generation Division (“LGD”).

As a result of various 6 Sigma initiatives, we achieved This involves processes and measures that have been implemented to
RM9.0 million in cost savings during the year. We identify performance gaps, forecast potential risks, and conduct remedial and
participated in the Regional Innovation Showcase corrective actions. These are affected through periodic performance reviews
on Team Excellence 2020 organised by MPC on 3-4 carried out throughout the year, as well as quarterly reviews that are done to
September 2020 which showcased these two projects. identify gaps and operational issues. Based on the outcomes of our reviews,
The projects also qualified for the Annual Productivity we then schedule plant outages and implement rectification plans accordingly.
and innovation Conference and Exposition 2020
organised by MPC on 17-19 November 2020. In FY2020, LGD continued to lend its engineering expertise in various aspects of
O&M such as risk management, failure prevention, strategic planning, and cost
GREEN 5S optimisation to achieve our performance targets. The Division also manages the
GRI 201-1 power plants’ operational and performance (thermal and emissions) activities
and process improvements.
Having introduced the Green 5S (“G5S”) Guideline in
FY2019, in FY2020 we continued to gain traction with For local power plants, we set thermal efficiency goals for execution with
this initiative. G5S is an initiative launched by SIRIM to a dedicated thermal performance monitoring programme consisting of
promote the concept of “Go Green” in Malaysia. It is also performance gap identification, remedy plans and potential risk forecasts.
key to implementing initiatives centred on health and Periodic performance is being done internally, by LGD throughout the year.
safety, towards ensuring high productivity, promoting The periodic review identifies gaps and potential operational issues. It also
a green environment and deriving energy efficiencies. helps our plants to properly plan tasks to rectify any defects and schedule the
Moving into 2021, BPI will continue to implement the required outage.
current initiatives, policy and strategies.

Thermal Performance in FY2020 (%)

60
51.6 51.6 50.0
50 46.7 47.2 47.1 47.4 46.3 46.4
Tanjung Bin Power Plant
40 39.2 39.4 37.7 Tanjung Bin Energy Power Plant
36.9 36.4 36.0
GB3 Power Plant
30
Prai Power Plant
20 SEV Power Plant

10

2018 2019 2020

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RENEWABLE ENERGY
GRI 201-1, 201-2

The generation of electricity is one of Malakoff’s main activities. As part of its commitment to mitigate the impacts of climate change, the
Group has committed to transition towards a cleaner energy future by developing RE assets within the areas of solar, small hydro, biogas
and WTE. This is in line with our desire to be an energy-efficient manufacturer and in support of the Government’s target to achieve 20.0%
RE capacity in the national energy mix by 2025.

In FY2020, we continued to grow our base of RE assets as follows:

• Obtained FiT approval from SEDA on 18 November 2020 to undertake the development of a 2.40 MW
Biogas Biogas Power Plant in Ulu Sebol, Kota Tinggi, Johor

• Progressed with two small hydro projects with capacities of 25.0 MW and 30.0 MW located along
Small hydro
Sg Pahang, which we had obtained FiT in December 2019

• Entered into SPPA as follows:

- Johor Port Berhad on 10 June 2020 of 2.66 MW.
Rooftop solar
- Northport (Malaysia) Berhad on 4 September 2020 of 4.93 MW.
- PMB Properties Sdn Bhd on 30 October 2020 of 2.34 MW.

Moving into FY2021, we are preparing to venture into the WTE segment besides continuning to explore potential acquisition or joint
venture in RE projects, both locally and abroad.

Please refer to the MD&A section on page 29 of this Annual Report for RE development activities.

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ENVIRONMENTAL
GRI 300, 201-2, 307-1

As the largest IPP in Malaysia,

Malakoff is keenly aware of its
corporate responsibility in leading
the vanguard to mitigate climate
change. We have embedded a holistic
environmental management approach
throughout all aspects of our
business that focuses on preventing
environmental degradation and
minimising our business’ impacts on
the environment.

Leveraging on innovation and technology, we use our

industry insights to identify new solutions to environmental
issues, that strike at the heart of concerns raised by our
various stakeholder groups. Our goal is to meet society’s
expectations for sustainable development and a greener
future, as we transition our business into a clean energy
provider.

The environmental management of our operations employs a three pronged approach as follows:

GOVERNING NATURAL RESOURCES

WASTE MANAGEMENT
ENVIRONMENTAL MATTERS MANAGEMENT

Protecting the environment in which The nature of our business requires We seek to practice optimal waste
we operate is one of our key priorities us to utilise natural resources, mainly management including reducing waste
to maintain business sustainability. In fuel and water, on a large scale. generation within our businesses and
view of the importance of environmental These resources are essential to its safe disposal, where applicable. All
conservation, our LGD is certified generate electricity, and we are aware waste and effluents generated from the
with ISO 14001:2015 Environmental of the importance of managing our Group’s power plants are managed,
Management System. Our consumption not just for business disposed and/or discharged as per the
environmental performance is overseen sustainability, but the impact that it relevant regulatory requirements.
by the Environmental Management has on the environment. Our natural
Committee (“EMC”), which comprises resource management is in compliance
the Environmental Performance with ISO 14001:2015.
Monitoring Committee (“EPMC”)
and the Environmental Regulatory
Compliance Monitoring Committee
(“ERCMC”).

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SECTION 2 OUR PERFORMANCE

SUSTAINABILITY STATEMENT

EMISSIONS MANAGEMENT ENERGY CONSUMPTION AND EFFICIENCY

GRI 305-2, 305-5 GRI 301-1, 302-1, 302-4

In line with our efforts to combat climate change, Energy Consumption at Our Plants
Malakoff has in place an emissions management system
which strives to reduce greenhouse gas (“GHG”) and In FY2020, the Group sustained its efforts to consume scarce resources in a
non-GHG emissions throughout all our plants. These responsible manner by focusing on initiatives that would enhance its plants’
emissions are the consequence of the consumption of energy intensity. Thus, we reduced our wastage as much as possible and
fuel such as coal and gas, as well as the combustion improved the overall operational efficiency of our plants through optimisation
processes. We ensure the strictest compliance with all initiatives. The coal selection process we utilise which is in alignment with
pertinent regulations. the CSTA has also resulted in greater efficiencies in terms of plants’ energy
consumption.
All our plants enforce an emissions-control equipment
maintenance schedule to ensure their optimal Beginning August 2020, LGD through the 6 Sigma initiative, optimised the Prai
operational efficiency. This approach has enabled the import energy by shutting down the Boiler Feed Pump (“BFP”) and Cooling
Group to comply with all the prescribed emission limits. Water Pump (“CWP”) after the plant had been on standby for 24 hours.
In addition, we provide regular emissions data reports In 2020, the successful implementation of the initiative resulted in standby
to the DOE as facilitated by our Continuous Emissions operating cost savings of RM1.70 million, and import energy gain savings of
Monitoring System (“CEMS”). RM0.39 million.

We also developed a more detailed plan on the TBP Energy Efficiency Pilot
In order to manage our non-GHG emissions, our coal
Project, which we plan to implement in the near term future.
plants are equipped with particulate matter (“PM”)
reduction equipment. In particular, TBP is equipped
with an electrostatic precipitator while TBE has a fabric
filters. Besides that, there is a Flue Gas Desulphurisation Coal Consumption (million MT)
(“FGD”) in place to reduce Sulfur Oxide (“SOx”)
8
emissions, and stage combustion to reduce Nitrogen 6.3 6.4
5.9 Tanjung Bin
Oxide (“NOx”) emissions. 6 Power Plant
4 3.2 Tanjung
In order to minimise our coal emissions, we have 2.5 2.5 Bin Energy
2 Power Plant
implemented a stringent coal selection process that
is aligned with the Coal Supply and Transportation
2018 2019 2020
Agreement (“CSTA”). Our plant process optimisation
initiatives as well as green initiatives such as Gas Consumption (million GJ)
3R (Reduce, Reuse, Recycle) programmes aim to reduce
GHG emissions throughout our operations. 34.5
35
30.5
Throughout 2020, we have continuously focused
on maintaining the reliability of our emission control SEV Power
Plant
equipment to ensure continuous compliance to the 25
GB3 Power
regulations.
Plant
Prai Power
Considering its abundant reserves and competitive 15.2
15 14.6 Plant
12.8
pricing, coal will likely maintain its market dominance PD Power
as the biggest single source of energy for electricity 9.3 Plant
7.4
production globally, despite the growing concern
5 4.5 4.8
on Carbon Dioxide (“CO2”) emissions. Our strategy
is to move towards balancing our energy mix, which 0.2 0.1
means shifting our focus towards RE for the middle to 2018 2019 2020
long-term horizon. In the meantime, we have deployed Note: Lower natural gas consumption at gas fired power plants in 2020 were due to
advanced and clean technologies which will help to lower electricity demand from the Offtaker/TNB.
significantly reduce emissions.

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 Malakoff Corporation Berhad | Annual Report 2020

OUR PERFORMANCE SECTION 2

SUSTAINABILITY STATEMENT

Energy Consumption at Our Office Premises

At our office premises, we have in place various initiatives in order to manage our energy consumption. We continued to gain traction
with our LED light replacement programme, which we kickstarted in FY2019 throughout all offices at KLHQ, the Malakoff Academy of
Excellence (“MAX”) training centre as well as other office building owned by MUSB. As a result of the installation of LED lightings during
the year at Level 7 to Level 13 at KLHQ, MAX and MUSB buildings, we have gained average monthly electricity savings of approximately
13.0%. Motion sensors have been successfully installed in the toilets at KLHQ to optimise energy usage in these areas in line with our
ambition to be have a greener work environment.

Import Power Consumption in FY2020 (GWh)

19.8 19.4
20.0
Tanjung Bin Power Plant

15.0 Tanjung Bin Energy Power Plant

13.1
12.1
11.2 SEV Power Plant
9.8
10.0 8.8
8.1 GB3 Power Plant
7.6

5.5 5.9 5.8 Prai Power Plant

5.0 4.6
3.7
2.0

2018 2019 2020

The company continued to support energy efficiency initiatives, in (“REEMs”) which is required under the Efficient Management of
line with the Government’s aim to ensure productive energy usage Electrical Energy Regulation 2008 (“EMEER 2008”), Certified
in the country. Energy Manager (“CEM”) and Green Building Index Facilitator.

As a continuation to the successful implementation of the previous We have submitted an Energy Audit proposal to Proton Tanjung
LED lamps replacement, a similar initiative was intended to be Malim (“Proton”) for its chiller plants. We are expecting to conduct
implemented at TBP. The proposed area for the energy efficiency the energy audit followed by the implementation of energy
implementation covers the new ash pond, main warehouse, and conservation measures to help Proton to reduce their energy
turbine hall. consumption. Additionally, we are also exploring energy efficiency
related service opportunities with Senai Airport and Pos Aviation.
The company has also embarked on exploring potential
opportunities to implement of energy efficiency at Wisma Budiman, We are also embracing the proposed Energy Efficiency and
Proton Manufacturing Plant and Plaza Sentral with the objective Conservation Act (“EECA”) which is currently at the stage of drafting
of providing comprehensive solutions on energy optimisation and and collecting public views. We would expect that the EECA will be
potential savings on electricity consumption. tabled to parliament and will be gazetted to encourage sustainable
development. By having energy efficiency capabilities, Malakoff
To increase Malakoff’s internal expertise and upskilling of internal would be future proofed to embrace the upcoming changes in the
resources, the company’s key personnel have also attained relevant sector.
certificants such as the Registered Electrical Energy Managers

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SECTION 2 OUR PERFORMANCE

SUSTAINABILITY STATEMENT

WATER USE IMPACT

GRI 303-1, 303-3

In line with our commitment to responsibly manage our consumption of

scarce resources, our water management initiatives aim to reduce the
impact of our operations’ use of water. The Group’s plants generally
utilise seawater in its cooling down process, and raw water to replace
water and steam that is dispersed to the air during the electricity
generation process.

Our raw water supply is obtained from the respective state water
supply networks that our plants are located in. These are Perbadanan
Bekalan Air Pulau Pinang (“PBAPP”), Syarikat Air Johor (“SAJ”) and As for LPP, in order to minimise demineralised water wastage,
Lembaga Air Perak (“LAP”). We have also installed rainwater harvesting we have been shutting down the blowdown manual valves
systems at TBP. when the unit is on standby. Other proactive actions we have
taken include continuously monitoring the water and steam
In FY2020, we recorded a reduction of approximately 8.0% in annual pipeline integrity, undertaking scheduled replacements,
water costs, contributed by lower dispatch and water conservation ensuring all drain valves are shut tightly and controlling water
initiatives. These included the management of ash pond water at TBP. usage especially for cleaning and housekeeping purposes in
order to achieve optimum levels.
We embarked on a feasibility study on the implementation of a
desalination (reverse osmosis) plant at TBP which would supply Our plants’ raw water consumption correlates with the Capacity
50.0% of service water required. The study is currently ongoing, and Factor. During the year, our CCGT plants comprising Prai,
we expect to complete it in FY2021. SEV and GB3 Sdn Bhd (“GB3”) power plants registered lower
Capacity Factor due to Covid-19 pandemic related impacts.
At TBE, we implemented a plant improvement initiative to channel This led to a reduction in raw water consumption for FY2020.
wastewater from the boiler sump, drained from the main process area Both TBE and TBP recorded higher Capacity Factor in 2020 as
to the boiler submerged scraper conveyor system. Additionally, we compared to 2019.
have also initiated a valve repair exercise on our steam and feedwater
Please refer to the MD&A section on page 27 for Domestic
line to minimise any leakages and wastages. This is a common practice IPP Operations.
throughout the Malakoff fleet.

Raw Water Consumption in FY2020 (m3)

223,731.0 217,804.0 159,365.0

356,567.0 349,824.0 490,110.9
369,781.0 438,123.0 188,649.5

2018 2019 2020

Total: 2,579,721.0 Total: 2,637,297.0 Total: 2,471,631.4

1,629,642.0 1,631,546.0 1,633,506.0

Prai Power Plant (PBAPP) Lumut Power Plant (LAP)

Plant (Source)
Tanjung Bin Power Plant (SAJ) Tanjung Bin Energy Power Plant (SAJ)

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 Malakoff Corporation Berhad | Annual Report 2020

OUR PERFORMANCE SECTION 2

SUSTAINABILITY STATEMENT

WASTE MANAGEMENT
GRI 301-2, 306-2

The nature of our business as an IPP results in waste by-products

due to our plant operations. This comprises mostly of fly ash and
bottom ash which form during the coal combustion process.

In order to responsibly manage our plants’ waste, we conduct

regular assessments of our waste management processes, and
identify and implement new waste management methods in order
to reduce and recycle scheduled waste generated from our plant
operations. This is particularly important to ensure that we are
able to reduce and, as much as possible, eliminate ground, water
and air contamination that may arise from our coal ash disposal
process. As such, we have in place properly managed disposal
channels, that conform to regulatory requirements.

One of the sustainability initiatives we have in place is the

third party offtake agreement relating to the recycling of ash
At TBP, we had engaged a third-party assessor to assist in the
generated from TBP into construction material such as sand
development of Life Cycle Assessment of Waste. However, this
replacement, as practiced in developed nations such as Japan and
was put on hold due to the Covid-19 pandemic.
countries in Europe. TBP and TBE are coal-fired power plants that
have a combined generation capacity of 3,100 MW that produce
In FY2020, we sent all our waste oil to approved DOE premises for
about 45,000 MT of fly ash and 8,000 MT of bottom ash every
recovery purposes as follows:
month. We have a coal ash disposal procedure that helps us
manage our ground, water and air contamination as we recognise
Plant Recovery Purposes
the risks associated with coal ash disposal from our coal-fired
power plants. Prai Power Plant From a total of 77.88 MT waste generated,
63.55 MT of waste oil was sent to approved
In addition, the internal waste (domestic waste) and internally DOE premises for recovery (filtration and
generated scheduled waste such as used lube oil, distillate and reused for another oil product).
contaminated solid waste are collected by appointed approved Lumut Power Plant LPP generated 9.71 MT of waste oil, of which
domestic contractors and sent for either landfill or incineration 8.69 MT was sent to the prescribed premises.
disposal. The balance will be carried forward to the
2021 inventory.
Besides propagating sound environmental practices that contribute Tanjung Bin Power TBP generated and disposed 51.55 MT of
towards the mitigation of climate change, our efforts to recycle Plant spent lubricating oil/waste oil and 15.13 MT
coal ash has reduced the need for us to build a new ash pond. of spent hydraulic oil to prescribed premises.
Tanjung Bin TBE generated and disposed 4.72 MT
In FY2020, the Life Cycle Assessment tool was used for Energy Power of waste oil and 0.40 MT of oily water to
environmental assessment of Scheduled Waste Management at Plant prescribed premises.
TBE. The aim was to analyse and evaluate any potential alternatives
to 3R (Reduce, Reuse, Recycle) current scheduled wastes rather We ensure full compliance with all the relevant environmental
than disposal which leads to adverse environmental impacts and regulations and standards when we dispose of our effluents and
incurs cost to the company. The life cycle assessment of the current other waste materials. All the scheduled waste maintenance sites
scheduled wastes in TBE was conducted and compared with four that Prai, LPP, TBP and TBE power plants utilised, were in full
typical type of treatment namely, Reduce, Reuse, Recycle and compliance with the Environmental Quality Act (“EQA”) (Scheduled
Disposal. The potential method of treatment was obtained based Waste) Regulations 2005. Scheduled waste was disposed via
on sources of generated waste. During the assessment, current licensed contractors with Prescribed Premises in accordance to
and potential actions and challenges were identified to reduce and DOE regulations.
minimise environmental and cost impacts for further evaluation.

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SECTION 2 OUR PERFORMANCE

SUSTAINABILITY STATEMENT

SOCIAL
GRI 400, 103-1, 103-2, 103-3

At Malakoff, people are very important to organisation. We view our human capital as one
of our greatest strengths, in driving our business journey towards achieving our vision of
becoming a premier global power and water company. As for our communities, they are
key to our social licence to operate.

DIVERSITY AND EQUAL OPPORTUNITIES We have a zero tolerance policy towards discrimination in any
GRI 401-1, 405-1, 406-1 form, be it of ethnicity, gender, age, disability or status. Health and
safety is our utmost priority, and we are continuously upgrading
We believe in employing a diverse workforce, who have a significant our health and safety protocols to protect our employees’
range of skills, experience and expertise, that are complemented well-being.
by their unique perspectives and insights, in carrying out their job
functions and role every single day. Our employees are the life Our skilled workforce is a pivotal part of Malakoff’s business.
force of our organisation, and we believe in providing them with We believe that our engaged, diverse, and innovation driven
the supporting tools and mechanisms they require to develop employees contribute to the success of the Group. Over the past
their talent, upskill themselves and manage their work-life balance three years, we have implemented a manpower optimisation
effectively. programme that enables us to effectively manage overhead
costs moving forward.
Malakoff is an equal opportunities employer, with hiring policies and
career advancement opportunities that are merit-based. We foster In FY2020, the numbers of employees increased from 942 to 3,981
fair recruitment practices by embracing diversity and inclusion in as a result of the inclusion of our newly acquired subsidiary, Alam
the workforce and offer employees fair compensation and benefits. Flora. The ratio of male to female employees remained at 84:16.

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 Malakoff Corporation Berhad | Annual Report 2020

OUR PERFORMANCE SECTION 2

SUSTAINABILITY STATEMENT

Our Employees

Total Number of Employees Number of New Hires

549
3,981*
4,000
500

3,000

>100% 300
2,000 3.0%

1,024 994
1,000
100 79
51

2018 2019 2020 2018 2019 2020

*Note: Increase in headcount number in 2020 due to the acquisition of Alam Flora in December 2019

Nationality, Gender Distribution and Age Group (%)

15.8 84.2 16.0 84.0 16.2 83.8

0.1 0.1
100 99.9 99.9

2018 2019 2020

Total: 1,024 Total: 994 Total: 3,981

53.2 46.8 55.1 44.9 50.6 49.4

Nationality: Local Foreign Gender: Male Female Age: 35 and below Above 35

Employment Type (%) Employee Group

9.5 10.8 19.4 3,500

3,096

90.5 89.2
80.6 2,500
Executive & Above

Contract Non-Executive

Permanent 1,500

885
654 615
500 370 379

2018 2019 2020 2018 2019 2020

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SECTION 2 OUR PERFORMANCE

SUSTAINABILITY STATEMENT

Employee by Job Category Years of Service in 2020

370 366 243 38

1,337 709
2018 7

379 347 227 34

2019 7
2020
Total: 3,981
3,096 555 287 34
2020 9

952
983

Job Category vs Gender in 2020

<1 year
2,676 416 209 27
1-5 years
Male 9
6-10 years

421 168 48 >10 years

Female 7

Top Management Senior Management Middle Management Executive Non-Executive

HUMAN CAPITAL FRAMEWORK

Our Human Capital Framework has been developed in alignment with our business strategy, to ensure that our people are best positioned
to deliver on our expectations of their performance. Our Human Capital Framework comprises the following four key aspects:

• Manpower analysis and benchmarking for Malakoff and Alam Flora

Optimise Manpower
• Manpower optimisation in Malakoff and Alam Flora to remain efficient and lean, based on business needs
and Cost
• Continuously monitoring manpower costs

• Implement Leadership/Management Development Programmes

Strengthen • Identification of successors for CEO-2 and CEO-3 critical positions
Capabilities • Leadership readiness assessments for successors and potential talents
• Facilitate and monitor the performance of successors and potential talents

• Continuously improve SOPs

Improve Operational
• Enhance Human Capital system to improve its service delivery
Efficiency
• Improve employee interaction through engagement programmes

• Inculcate Performance Management Process and Key Performance Indicators (“KPIs”)

Performance • Knowledge sharing by subject matter experts/project leaders
Culture • Encourage employees’ participation in business improvement initiatives/innovation

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OUR PERFORMANCE SECTION 2

SUSTAINABILITY STATEMENT

EMPLOYEE WELFARE
GRI 401-2, 404-2, 404-3

Total Number of We provide a wide range of welfare and benefits to our workers based on our organisational
Employees belief that engenders employee satisfaction, and thus promotes an efficient, healthy, loyal
and satisfied labour force. Among the various benefits we provide our people are paid leave,
medical benefits and various other employment related benefits.
3,337
All our employees are given annual job appraisals, and they have the right to raise any
issues or concerns through a clearly defined grievance mechanism process that has been
644
developed and managed by the Group’s Human Capital Division.

In addition to health and insurance benefits, we provide our employees with allowances
and overtime payments. We also provide for employee’s bereavement and wreath, and an

23 Participants
employee education assistance programme. In FY2020, we expanded our employee benefits
by organising an Influenza Vaccination Programme in January 2020 for all our employees.
The vaccinations were conducted onsite at all our plants and office premises nationwide.
completed 6 Sigma Programme We conducted the vaccination programme in order to safeguard our people’s health by
minimising the risk of infection during the influenza outbreak as part of Malakoff Employees
Wellness programme.

97.0%
Employee Engagement
(Response Rate)

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SECTION 2 OUR PERFORMANCE

SUSTAINABILITY STATEMENT

SUPPORTING OUR PEOPLE THROUGH COVID-19

GRI 402-1

FY2020 was an intensely challenging year for our people, as they put themselves at risk in order to provide continuous power for the
nation. To support our people through these trying times, we implemented the following initiatives.

Daily Workplace Temperature Screening Effected Work From Home Measures

In compliance with the SOPs imposed by the Government as a We effected WFH measures for employees with job
preventive measure during the Covid-19 pandemic, we made functions that could be performed remotely from their home.
it compulsory for all employees to scan and register their body All engagements, meetings, trainings and awareness session
temperature before entering the workplace. The Workplace were conducted through online Microsoft Teams.
Temperature Screening booth was located at receptionist and
front desk at all locations. For KLHQ employees in supporting roles, or for those who
were not directly involved in operations and projects, the
Webinar/Health Talk Series Management implemented the STW arrangement. STW
involved employees being split into different working groups
The Human Capital Division organised a series of online which would rotate between working in the office and WFH.
webinars to educate and create awareness amongst our The scheduling of the groups and rotations would be managed
employees of issues surrounding the Covid-19 pandemic. The by the respective Heads of Divisions/Departments based on
webinars that were rolled out were as follows: business requirements. Employees on the STW and WFH
arrangements would be subject to normal working hours in
• Managing Transition After Covid-19 accordance with our Employee Handbook.
• How to Stay Competitive at the Workplace to Avoid Being
Laid-off Conducted COVID-19 Drills at Our Plants
• Looking Great After Covid-19
• Preparing Mentally For Post-MCO (Return To Workplace) At our plants, we conducted Covid-19 drills to ensure our
• Adapting with Covid-19: Our New Normal preparedness should an employee is tested positive with
• Acupressure for Self-Healing and General Wellness Covid-19. We also provided daily updates of new cases
• Dengue Amid Covid-19 (Truths and Myths) reported nationwide.
• Simple Routines to Combat other Work-Related Aches
and Pains Please refer to our MD&A on page 18 of this Annual
Report for more information on support we provided for
Covid-19 Screening Program our employees, as well as our WFH arrangements.

To keep our people safe and assure them that we had their
interests at heart, the Human Capital Division organised
Covid-19 tests for our workforce under the SOCSO Prihatin
Screening Programme (“PSP”). Conducted in June 2020 at all
our locations, the screening was conducted by “BP Healthcare
- Doctor2U” which was the SOCSO appointed service provider.
None of our employees tested positive for Covid-19.

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OUR PERFORMANCE SECTION 2

SUSTAINABILITY STATEMENT

Leave Benefits
GRI 401-3

All our employees are entitled to a range of different types of paid leave benefits, including marriage, Hajj leave and study/exam leave.
We offer paid maternity leave of up to 60 days for our female employees, and paternity leave of three days for new fathers.

Employee Engagement

We believe that a highly engaged workforce is more likely to include discretionary effort in conducting their jobs, and form the basis of
a harmonious and productive workplace. In FY2020, the Covid-19 pandemic placed some restrictions on our employee engagement
activities. Nevertheless, we conducted two main employee engagement activities during the year as follows:

Management Get Together – Malakoff and Alam Flora Human Capital Roadshow

Malakoff organised a Management Get Together with Alam Flora In October 2020, Malakoff’s Human Capital Division
on 18 September 2020 at Holiday Inn Kuala Lumpur, Glenmarie. A organised a roadshow at TBP as part of the annual
total of 35 management committee members from both companies engagement conducted with our plant-based employees.
attended the event. The objective of the programme was to foster a Among the topics that were discussed at the roadshow
good relationship, with it forming an ice breaking session between were employees claims, Competency Allowance Procedure,
the management committee of Malakoff and Alam Flora. The leave entitlement, benefit claims, Personal Information
highlight of the event was the corporate presentation by Dato’ Ahmad Update via SAP Adobe, SOCSO claims, employee exit form
Fuaad Kenali, the previous CEO of Malakoff, followed by Dato’ Haji and process, retirement benefit scheme/gratuity, contract
Mohd Zain Hj Hassan, CEO of Alam Flora, respectively. The event renewal and loan applications. The event was well received
subsequently continued with the introduction of each management by our staff.
member from both companies.

Employee Engagement Survey

The Human Capital Division had organised a series The main objectives of the Group’s Employee Engagement Survey were as
of internal surveys throughout FY2020 in order to follows:
obtain our employees’ feedback. We organised these
surveys as we believe that in order to create a great • To provide insights to the level of employee engagement and
company culture and making Malakoff a great place to disengagement within the organisation and its subsidiaries
work, we should enhance our employee engagement • To identify strengths and weaknesses for opportunities of improvement
activities and outcomes. Among the surveys that we • To provide data to support organisational development through
conducted were : enhanced employee engagement
• To build clear links of survey findings to Malakoff’s KPIs and outcomes
• Employee Provident Fund (“EPF”) Survey 2020
• PMCare Awareness and Satisfaction Survey Conducted from 16-27 November 2020, the online survey consisted of
Feedback 2020 56 multiple choice questions and one open-ended question which
• MMC Group Employee Engagement Survey 2020 recorded an impressive rate of 97.0%, with 913 out of 943 employees
providing their feedback.

Malakoff Employee Engagement (Response Rate)

2007 2009 2011 2016 2018 2019 2020

Target Number of
520 564 672 1,005 1,035 1,001 943
Respondents
Survey Completed 356 323 569 812 915 759 913
Response Rate 67.0% 57.0% 85.0% 81.0% 88.0% 76.0% 97.0%

Note: The Management had decided for Alam Flora to not participate in the FY2020 MMC Group Employee Engagement Survey

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SECTION 2 OUR PERFORMANCE

SUSTAINABILITY STATEMENT

TALENT DEVELOPMENT
GRI 404-2, 404-3

20 Participants
Although the Covid-19 pandemic required us to shift the majority of our training and
development programmes to the online space, we continued to provide our people with the
Third cohort of the MDP with support they required to pursue their talent development journey.
participants from TBP and TBE
There was a significant reduction on the amount spent on talent development programmes in
FY2020 as these were affected by the pandemic. A sizeable number of training programmes
had to be postponed or cancelled during the MCO period due to restrictions in movement

22 Speakers
and social distancing requirements.

MATECON2020 presented by Nevertheless, we pushed through to provide the following talent development programmes
speakers from KLHQ and site in FY2020.
offices engineers

Technical Training

We continued to develop our people’s technical skills through

a series of competency and certification training programmes
throughout 2020 at all locations. For the second time in a row,
the technical training department successfully organised the
Malakoff Technical Conference 2020 (“MATECON2020”) in
September and October 2020 through an online webinar. The
six-day conference consisted of 20 topics presented by a total
of 22 speakers from KLHQ and site offices engineers.

Executive Development Programme - Alam Flora

6 Sigma Programme The purpose of the programme was to enhance the capability
of Alam Flora executives in managing and delivering their
The 6 Sigma programme has been identified a s o ne o f t he tasks effectively and efficiently. The programme also helped
Group’s strategies to streamline its system and processes participants to improve their leadership, people management
towards optimising the way it conduct its business. In January and technical skills. A total of 18 executives participated in the
2020, Malakoff successfully completed the 6 Sigma Green Belt programme that started in July 2020 and is expected to end
Batch 2 training at TBP. A total 23 participants completed the with the graduation in July 2021.
training programme.
Amount Spent on Talent Development (RM million)
Malakoff Management Development Programme

8
We successfully launched our third cohort of the MDP in 7.0
September 2020, with a total of 20 participants from TBP and
6
TBE. The objective of the programme is to develop potential 5.0 4.8
talents in the middle management level to continuously Budgeted
4 3.3
support Malakoff’s growth into the future. The MDP is Actual
2.2
a nine-month intensive training course that exposes 2 1.4
participants to the themes of managing self, managing others
and managing business.
2018 2019 2020

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OUR PERFORMANCE SECTION 2

SUSTAINABILITY STATEMENT

OCCUPATIONAL SAFETY AND HEALTH 95.0% completion of the HSSE Programme and Zero Loss Time
GRI 403-2 Injury Frequency Rate (“LTIFR”) for operations. Our total number of
incidents reduced from 20 in FY2019 to 8 in FY2020 as a result of
We prioritise our employees’ occupational, safety, health and the good underlying HSSE systems we had in place, and a strong
well-being as it not only facilitates higher workplace productivity workplace safety culture that supports our workers.
but also builds their sense of confidence and security in our
organisation. The unprecedented Covid-19 pandemic required During the year, Malakoff participated in the Systematic
employers to swiftly pivot from traditional OSH approaches, to Occupational Health Enhancement Level Programme (“SOHELP”),
incorporate new health and safety measures that undertook to which is a strategic partnership with the Department of Safety and
minimise the risk of infection. Health (“DOSH”) to increase the occupational health competency
amongst HSE practitioners. This year, five of our power plants
We conducted a Covid-19 Specific Risk Assessment at all our were involved in the programme.
locations where we evaluated the activities our employees were
undertaking in the course of performing their job. We assessed We regret to report that in FY2020, there were four fatalities for
the risks posed by Covid-19 both in terms of the generic risks the year, involving waste management contractors. We extend our
which will be relevant to all operations, as well as specific risks heartfelt condolences to their families for their loss. We stepped up
posed by a particular activity. In line with this, we then developed on our efforts to mitigate these unfortunate incidents and increase
a series of Covid-19 advisories, which among others included the employee safety awareness by conducting retraining exercises.
Covid-19 Social Distancing Advisory, Covid-19 Disinfection SOPs, We also took steps to improve workplace safety and reviewed our
Covid-19 Procedure for Contact Tracing and the development of a safety procedures to ensure that such incidents do not recur.
Pandemic Response Procedure.
We were also able to renew our annual Fire Certificate, DOSH
Our HSSE management systems and programmes continued Pressure Vessel Permits, DOSH Lifting Equipment Permits and the
to provide an effective safety framework for our operations. “Permit Penyimpanan Diesel” from the Ministry of Domestic Trade
Through our safety awareness programmes and activities, we and Consumer Affairs in a timely manner. We successfully migrated
developed a strong safety culture amongst our employees at all from OHSAS 18001:2008 to ISO 45001:2018 – Occupational
our locations. As a result of our focused approach, we recorded Safety Health Management System.

As a result of our focused approach to upholding good levels of OSH, we were honoured with the following awards in FY2020 at the Malaysian
Society of Occupational Safety and Health Awards:

Prai – Gold Merit LPP – Gold Class I TBP – Gold Class II TBE – Gold Class II

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SECTION 2 OUR PERFORMANCE

SUSTAINABILITY STATEMENT

HEALTH, SAFETY, SECURITY AND ENVIRONMENT

Includes (Malakoff) Includes (Alam Flora)

Category Description 2018 2019 2020 2018 2019 2020
Fatality Immediate death or death within one year from the date of 0 0 0 0 0 1
the accident, occupational disease.
LTI An injury is assessed to be on LTI when the injured person 3 0 0 15 16 37
(Operations) cannot return for duty during next shift or next day.
Medical Includes treatment of injuries at administered by 5 1 2 3 0 4
Treatment Injury registered medical personnel.
First Aid Injury Any one-time treatment and subsequent observation of 1 1 0 1 1 1
minor injury which do not ordinarily require medical care.
Fire Incident A fire that occurred within the plant premises 6 9 2 0 1 4
Property An instance where either company property or equipment 5 0 2 30 29 39
Damage are damaged.
Near Misses An incident where no injury, ill health or property damage 5 8 2 0 0 0
occurred, having been barely avoided.
Security incident Any incident related to security breach 0 1 0 0 0 0

LTIFR Performance in FY2020

Malakoff Operations
Total Number of Incidents Total Number of LTI LTIFR

26 20 8 3 0 0 0.45 0.00 0.00

Alam Flora
Total Number of Incidents Total Number of LTI LTIFR

49 47 86 15 16 37 0.54 0.59 1.40

2018 2019 2020

COMMUNITY INVESTMENT AND DEVELOPMENT

GRI 203-1, 203-2

We strongly believe that the success of the Group is inextricably linked to the welfare of its communities. As power producers, the
electricity we generate enables communities to conduct their daily lives and businesses. In order to engender long-term relationships
of trust with the local communities, Malakoff has steadfastly maintained our support of the community through numerous contributions
that focus primarily on education and the environment. In FY2020, we extended our support to programmes that assisted vulnerable
communities deal with the socio-economic and health impacts of the Covid-19 pandemic.

Measures to Improve Likelihood of Community and Job Opportunities

Our commitment to lend support to the underprivileged continued with our annual contribution through Wakalah Zakat for the development
of community welfare and well-being. In FY2020, Malakoff contributed to the positive welfare of a total of 473 poor and needy people, or
Asnaf Fakir and Miskin, by providing them with financial support to improve their quality of life and help with their daily needs.

62 www.malakoff.com.my
 Malakoff Corporation Berhad | Annual Report 2020

OUR PERFORMANCE SECTION 2

SUSTAINABILITY STATEMENT

Supporting Communities to Get Through the COVID-19 Pandemic ALAM FLORA SDN BHD
GRI 302-1, 306-2
When the MCO was announced in March 2020, only businesses considered as
“essential services” were allowed to continue with their physical operations. Alam Flora continued to maintain strong engagements
While larger companies were able to transition their business to a digital model, with the community through a host of outreach
the majority of SMEs and microenterprises were not able to. Consequently, a programmes that were focused on providing a clean
significant portion of the population lost their jobs, or their income streams. and healthy environment. These outreach activities
Those with families, in particular, struggled to get food on the table to sustain their not only served as an important channel for its CSR
loved ones. Cognisant of the severe hardships these vulnerable communities commitments, but also served as a platform through
were facing, Malakoff contributed essential items to local communities to make which Alam Flora employees could personally give
a positive difference in their lives as follows: back to society and contribute to environmental
preservation, in line with its corporate tagline of
Apr • Handover of essential items to the local community: ‘Appreciating LIFE’, where ‘LIFE’ is an acronym for
2020 - Kawasan 1, Mukim Serkat ‘Living In a Fulfilling Environment’.
- Prai and surrounding areas
- Segari, Lumut Alam Flora has also introduced the RewardS@S
• Contributions to Tabung Musaadah Khaira PPZ programme as to help support the Government’s
Jun ‘Separation at Source’ programme (“S@S”). This
• Handover of CSR Contributions to the underprivileged at Pekan involved the use of a bar coding system for the
2020
collection of PETRONAS’s Mesra retail points and
Sep • Providing face masks and hand sanitisers to the local community placement of collection bins at non-landed residential
2020 at Mukim Serkat areas and offices.

Oct In line with SDG 17, Alam Flora has entered into
• Providing hand sanitisers to the Segari and Prai Local Authorities
2020
various collaborative partnerships with PETRONAS,
Contributing to Front Liners Prolintas, Northport and MAHB, to name a few. These
partnerships involved various on-the-ground activities
During the year, we also contributed to medical front liners, to support them in consisting of awareness, education and entertainment
the fight against Covid-19 as follows: (edutainment) programmes led by its very own ‘3R on
Wheels’ (“3RoW”), the first of the country’s such mobile
Mar • Handover of 250pcs of Beras Wangi Jasmine 10kg to Hospital recycling awareness and collecting centre. The 3RoW
2020 Sungai Buloh front liners is a locally fabricated six-wheeler, seven-tonne truck
which had been fitted with a giant LED screen on its
Apr • Contributions to Institut Latihan Kementerian Kesihatan side and a retractable stage for organising talks and
2020 Malaysia (Kejururawatan), Muar demonstrations on S@S. For the first time ever and in
adhering to the new norm, Alam Flora held its annual
Jun • Handover of three washing machines for the Covid-19
2020
3R fashion competition, “Waste is Amaze”, virtually and
Quarantine Centre in Pontian
managed to successfully attract even more participants
CSR Activities that Reinforce our Social License to Operate and viewers beyond the Klang Valley. Through the
programme, the participants used their creativity to
While the majority of our philanthropic contributions in FY2020 were targeted at transform recycable materials to become unique and
helping communities in need through the Covid-19 pandemic, we also reached beautiful fashion designs, based on the given theme.
out to touch the lives of other segments of the community during the year as
follows: During the year, Alam Flora also set up composting
centres in Putrajaya for food waste from restaurants,
Jan • Contributions to the local community at Kawasan 1, Mukim hotels and residences in the vicinity. This green initiative
2020 Serkat in turn supports the Local Agenda 21 project, which
• Contributions to Lembaga Tabung Haji for the Program Sahabat includes community urban farming and a garden.
Korporat TH 1441H In addition, Alam Flora helped set up a composting
• Supporting the Anti-Drug Programme in Mukim Serkat
centre in PPR Seri Alam, Kuala Lumpur which is run by
Feb • Save Our Sea Programme in collaboration with Jabatan the community. During the Covid-19 pandemic, Alam
2020 Perikanan Negeri Perak Flora played an integral role as front liners involved in
national sanitisation operations, where more than 100
Jul • Handover of Lembu Korban at Masjid Khairul Jariah Segari, of its workers cleaned and sanitised Covid-19 affected
2020 Masjid Padang Lallang, Prai and Mukim Serkat areas in the Klang Valley.

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 2 OUR PERFORMANCE

SUSTAINABILITY STATEMENT

Youth Education and Development

GRI 413-1, 413-2

The Malakoff Edufund Programme is our signature CSR

programme focusing on education. Established in 2002,
the programme provides financial support to 11 adopted
schools in the states of Perak, Pulau Pinang and Johor. In
FY2020, we continued our comprehensive CSR Education
Programme in Mukim Serkat, Johor through activities such
as “Jom Sarapan with Malakoff”, tuition classes and book
donation. The initiative is aimed at not only providing the
school children with nutritious breakfasts to improve their
focus in class, but also to encourage them to come early to
school. The programme benefited 953 school children from
the seven primary schools located in Mukim Serkat, Johor.

Due to the pandemic, many schools were shut down for

physical learning for most part of the year in order to keep
students safe from the Covid-19 virus. In line with this, we
had contributed 15 boxes of hand sanitisers and 20 boxes
of face masks to 15 schools in Mukim Serkat, Johor to ease
the burden of the students and their parents in keeping
with the Government’s compliance at schools during these
unprecedented times. Approximately 3,150 students had
benefitted from this contribution.

In fulfilling the Government call for corporate organisations

to support local higher education institutions, Malakoff The Save Our Sea programme was held in 22 February 2020 with the
continued to support Universiti Tenaga Nasional collaboration between Malakoff and Jabatan Perikanan Negeri Perak. We
(“UNITEN”), University Malaysia Pahang (“UMP”) and were able to conduct a key event before the MCO imposed at Dataran
Universiti Teknologi Mara (“UiTM”) to carry out students Teluk Senangin, Lumut, Perak. The event was aimed at supporting the
related activities in the respective universities. marine biodiversity conservation efforts by creating environmental
awareness amongst local communities and the general public, in line with
Environmental Awareness promoting a culture of maintaining the cleanliness of our beaches, oceans
GRI 413-1, 413-2 and rivers.

We spent a significant amount of our effort and time on More than 300 participants comprising non-governmental organisations
programmes that were aimed at creating greater public (“NGOs”) and local communities participated in the event where some
awareness on environmental issues that concern the 200 one-month old turtles were released into the sea. The event was well
global community. These events and activities were received by the public, and we look forward to resuming similar activities
targeted towards local communities, youth and school once normalcy resumes in the future.
children. The programme consisted of activities such as
talks and seminars, and gotong-royong initiatives to clean In FY2020, Alam Flora conducted more than 40 activities under its CSR
up the surrounding areas held in conjunction with local ambit, which included ongoing public awareness and public education
municipalities, local communities and schools. In FY2020 initiatives, especially through the FIKS in Putrajaya, the country’s first
however, the national lockdown that was imposed to such facility focussing on creating awareness and educating the public on
contain the spread of the pandemic affected our efforts to recycling and recovery processes.
carry out more such programmes.

64 www.malakoff.com.my
 Malakoff Corporation Berhad | Annual Report 2020

OUR PERFORMANCE SECTION 2

SUSTAINABILITY STATEMENT

Responsible Subcontracting and Procurement

GRI 204-1
OUTLOOK FOR
We have continuously maintained a fair and ethical approach in our vendor and
supplier selection process. As an important part of our supply value chain, we
SUSTAINABILITY
believe in a merit-based selection process that hinges on the strength of their value
As we progress into the year ahead, we
proposition along with their proven track record, industry expertise and experience,
remain firmly dedicated to see through
as well as their commitment to sustainability and good corporate governance.
our sustainability commitments which
are embedded within our strategy and
In FY2020, we continued to engage with our vendors for their updates in our vendor
business operations, as well as our CSR
registry database which is a crucial aspect in our vendor management process.
outreach efforts. Our long-term goal is to
Due to the unprecedented Covid-19 pandemic and in compliance with the various
be a sustainable clean energy provider
preventive measures outlined by Government agencies, such constraints had
that has invested our organisational heart
inevitably limited our vendors’ ability to provide their services in the same manner
and soul in furthering the interests of our
as before and had also limited the vendors’ participation in the vendor selection
surrounding communities.
process, which has resulted in an increase in procurement cost.

With Alam Flora now a core component

The Covid-19 pandemic which impacted the global supply chain also affected some
of our business, we are well placed to
of our sourcing activities in particular from countries which have imposed various
further the 5R (Refuse, Reduce, Reuse,
lockdown activities throughout FY2020. As a result, alternative sourcing activities
Repurpose and Recycle) agenda in
were embarked upon which have also contributed to higher cost of procurement.
Malaysia, and promote the adoption
of a circular economy in the nation.
6%
Our future focus with regards to our
business expansion is to expand our RE
asset base, as we build our capabilities
to pivot to new clean energy sources.
Malakoff’s Local Vendors
Within our existing plant operations,
Vendors we are committed to drive operational
Overseas Vendors and energy consumption efficiencies
in FY2020
through continuous innovations and
improvements.
94%
We believe our approach of embedding
the triple bottom line into our business
Human Rights operations, objectives and goals, ensures
that the Group will remain relevant in
GRI 102-41, 406-1
the longer term. It ensures our future
In line with our commitment to the International Labour Organisation (“ILO”) profitability within a rapidly changing
and the Universal Declaration of Human Rights, we are firmly committed to world, especially bearing in mind the
upholding human rights across all aspects of our operations. All our policies mega trends that are shaping the global
have been formulated to ensure that we do not infringe on the basic rights of power industry.
employees and the various communities in which we operate in. In FY2020,
there were no incidents of human rights violations recorded throughout
the Group.

Please refer to the GRI Content Index for

full disclosure on page 285 to 291 of this
Annual Report.

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 3 OUR LEADERSHIP

BOARD OF DIRECTORS’ PROFILE

DATUK HAJI HASNI HARUN ANWAR SYAHRIN ABDUL AJIB

Independent Non-Executive Chairman Managing Director/Chief Executive Officer (“MD/CEO”)
Age: Age:
64 48

Gender: Gender:
Male Male

Nationality: Nationality:
Malaysian Malaysian

DATE APPOINTED TO THE BOARD: 20 June 2017 DATE APPOINTED TO THE BOARD: 1 December 2020

ATTENDED BOARD MEETINGS IN 2020: 10/10 ATTENDED BOARD MEETINGS IN 2020: 2/2

ACADEMIC/PROFESSIONAL QUALIFICATIONS: ACADEMIC/PROFESSIONAL QUALIFICATIONS:

Datuk Haji Hasni holds a Master’s Degree in Business Administration Anwar Syahrin obtained a Master in Business Administration from
from United States International University San Diego, California and a University of Salford, United Kingdom and a Bachelor of Engineering in
Bachelor of Accounting (Hons.) Degree from University of Malaya. He Mechanical Engineering from Imperial College of Science, Technology
is also a member of the Malaysian Institute of Accountants. and Medicine, London, United Kingdom. He is a Fellow Chartered
Accountant of the Institute of Chartered Accountants England and
PAST APPOINTMENTS/EXPERIENCES: Wales, United Kingdom and a Member of the Malaysian Institute of
Datuk Haji Hasni held several senior positions in the Accountant Accountants.
General’s Office from 1980 to 1994. He was the Senior General
Manager of the Investment Department at the Employees Provident PAST APPOINTMENTS/EXPERIENCES:
Fund Board from 1994 to 2001 and the Managing Director of RHB Anwar Syahrin started his career with Shell Malaysia Trading Sdn Bhd in
Asset Management Sdn Bhd from 2001 until 2006. He then joined 1996 as an executive in Fleet Distribution where he gained considerable
DRB-HICOM Berhad (“DRB-HICOM”) as Group Chief Financial Officer experience in transport and logistics. Subsequent thereto, he assumed
until December 2006. In January 2007, he joined MMC Corporation a position of Senior Associate (Assurance and Business Advisory) in
Berhad (“MMC”) as the Group Chief Operating Officer. In March 2008, Arthur Andersen Manchester, United Kingdom from 1998 to 2001. He
he was appointed as the Chief Executive Officer of MMC, prior to his then joined Arthur Andersen/Ernst & Young Kuala Lumpur as Senior
appointment as the Group Managing Director of MMC in May 2010 Associate/Chartered Accountant (Assurance and Business Advisory)
until June 2013. in 2002. Anwar Syahrin left the practice to become the MD/Consultant
of Business Associates Consulting Sdn Bhd providing strategy and
OTHER CURRENT APPOINTMENTS: management consulting services from December 2002 to March 2006.
Datuk Haji Hasni is currently the Chairman of Gas Malaysia Berhad. In April 2006, Anwar Syahrin was appointed as the Chief Financial Officer
(“CFO”) of Pelabuhan Tanjung Pelepas Sdn Bhd until May 2008 before
NOTE: his appointment as Director, Finance/Group CFO of MMC in June 2008.
He does not hold any interest in the securities of the Company or its He had also assumed the position of Group Head, Ports and Logistics
subsidiaries. Division of MMC from January to August 2014. Prior to joining Malakoff,
Anwar Syahrin was the MD/CEO of UEM Sunrise Berhad (“UEM Sunrise”)
from 1 September 2014 until 30 October 2020. He also served as a
Board member of the key subsidiaries of UEM Sunrise, amongst others,
UEM Land Berhad and Sunrise Berhad.

OTHER CURRENT APPOINTMENTS:

Other than being the MD/CEO of Malakoff, Anwar Syahrin also sits on
the Board of Alam Flora Sdn Bhd, Malakoff Power Berhad and several
other subsidiaries and associate companies under the Malakoff Group.
He is the Deputy Chairman of Muscat City Desalination Company
S.A.O.G., an associate company of Malakoff which is listed on the
Muscat Securities Market.

He also sits on the Board of Universiti Teknologi MARA (“UiTM”).

NOTE:
He does not hold any interest in the securities of the Company or its
subsidiaries.

MEMBERSHIP OF BOARD COMMITTEES: MEMBERSHIP OF BOARD COMMITTEES:

BAC BNRC BRIC BPC BAC BNRC BRIC BPC

Chairman

66 www.malakoff.com.my
 Malakoff Corporation Berhad | Annual Report 2020

OUR LEADERSHIP SECTION 3

BOARD OF DIRECTORS’ PROFILE

DATO’ SRI CHE KHALIB MOHAMAD NOH CINDY TAN LER CHIN
Non-Independent Non-Executive Director Non-Independent Non-Executive Director
Age: Age:
56 61

Gender: Gender:
Male Female

Nationality: Nationality:
Malaysian Malaysian

DATE APPOINTED TO THE BOARD: 1 July 2013 DATE APPOINTED TO THE BOARD: 9 August 2007

ATTENDED BOARD MEETINGS IN 2020: 10/10 ATTENDED BOARD MEETINGS IN 2020: 10/10

ACADEMIC/PROFESSIONAL QUALIFICATIONS: ACADEMIC/PROFESSIONAL QUALIFICATIONS:

A qualified accountant, Dato’ Sri Che Khalib is a Member of the Cindy Tan obtained an Honours Degree in Economics, majoring in
Malaysian Institute of Accountants (CA, M) and a Fellow Member of statistics, from Universiti Kebangsaan Malaysia in 1984 and a Certified
the Association of Chartered Certified Accountants (FCCA, UK), United Diploma in Accounting and Finance, accorded by the Chartered
Kingdom. Association of Certified Accountants in 1991. In 1995, she attended
the Wharton-National University of Singapore Banking Programme.
PAST APPOINTMENTS/EXPERIENCES:
Dato’ Sri Che Khalib began his career with Messrs. Ernst & Young PAST APPOINTMENTS/EXPERIENCES:
in 1989 and later joined Bumiputra Merchant Bankers Berhad. Cindy Tan joined Employees Provident Fund (“EPF”) in 1984. Since
Between 1992 and 1999, he served in several companies within the then, she has served in the Finance Department, Treasury Department,
Renong Group. In June 1999, Dato’ Sri Che Khalib joined Ranhill Fund Management Function, Fixed Income Investment and Investment
Utilities Berhad as Chief Executive Officer. He then assumed the Compliance and Settlement Department until 2019. In April 2019, she
position of Managing Director and Chief Executive Officer of KUB was appointed as the Head of Risk Management Department of EPF.
Malaysia Berhad. Dato’ Sri Che Khalib was appointed as the President/
Chief Executive Officer of Tenaga Nasional Berhad on 1 July 2004 NOTE:
where he served eight years until the completion of his contract on She does not hold any interest in the securities of the Company or its
30 June 2012. He then joined DRB-HICOM as the Chief Operating subsidiaries.
Officer of Finance, Strategy and Planning in July 2012. Dato’ Sri Che
Khalib was previously a member of the Board and the Executive
Committee of Khazanah Nasional Berhad between 2000 and 2004. He
also served as a Board member within the United Engineers Malaysia
Group of Companies and Bank Industri & Teknologi Malaysia Berhad.
Dato’ Sri Che Khalib was the Managing Director of Malakoff and had
been re-designated as Non-Independent Non-Executive Director since
9 December 2014.

OTHER CURRENT APPOINTMENTS:

Dato’ Sri Che Khalib is currently the Group Managing Director of MMC.
He also sits on the Board of Gas Malaysia Berhad, Johor Port Berhad,
MMC Engineering Group Berhad, Aliran Ihsan Resources Berhad,
Bank Muamalat Malaysia Berhad, NCB Holdings Berhad, Kontena
Nasional Berhad, Northport (Malaysia) Bhd and several private limited
companies.

NOTE:
He holds 420,000 ordinary shares in the Company and none in the
Company’s subsidiaries.

MEMBERSHIP OF BOARD COMMITTEES: MEMBERSHIP OF BOARD COMMITTEES:

BAC BNRC BRIC BPC BAC BNRC BRIC BPC

Member Member Member

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 3 OUR LEADERSHIP

BOARD OF DIRECTORS’ PROFILE

DATUK OOI TEIK HUAT DATUK DR. SYED MUHAMAD SYED ABDUL KADIR
Non-Independent Non-Executive Director Independent Non-Executive Director
Age: Age:
61 74

Gender: Gender:
Male Male

Nationality: Nationality:
Malaysian Malaysian

DATE APPOINTED TO THE BOARD: 1 January 2012 DATE APPOINTED TO THE BOARD: 11 December 2012

ATTENDED BOARD MEETINGS IN 2020: 10/10 ATTENDED BOARD MEETINGS IN 2020: 10/10

ACADEMIC/PROFESSIONAL QUALIFICATIONS: ACADEMIC/PROFESSIONAL QUALIFICATIONS:

Datuk Ooi obtained a Bachelor’s Degree in Economics from Monash Datuk Dr. Syed Muhamad graduated with a Bachelor of Arts (Hons.)
University, Melbourne, Australia in 1984 and is a Member of the from Universiti Malaya in 1971. He obtained a Masters of Business
Malaysian Institute of Accountants and CPA Australia. Administration from the University of Massachusetts, USA, in 1977
and proceeded to obtain a PhD (Business Management) from Virginia
PAST APPOINTMENTS/EXPERIENCES: Polytechnic Institute and State University, USA in 1986. In 2005, he
Datuk Ooi began his career with Messrs. Hew & Co., Chartered obtained a Bachelor of Jurisprudence (Hons.) from the University of
Accountants in 1984. After leaving Messrs. Hew & Co. in June 1989, he Malaya. He obtained the Certificate in Legal Practice in 2008 from the
joined Malaysian International Merchant Bankers Berhad until August Malaysian Professional Legal Board. He was admitted as an Advocate
1993. He joined Pengkalan Securities Sdn Bhd in August 1993 as Head and Solicitor of the High Court of Malaya in July 2009, and obtained
of Corporate Finance, before leaving in September 1996 to set up the Master of Law (Corporate Law) from Universiti Teknologi MARA in
Meridian Solutions Sdn Bhd where he is presently a director. December 2009. In June 2011, he became a Member of the Chartered
Institute of Arbitrators, United Kingdom and in May 2012, he became
OTHER CURRENT APPOINTMENTS: the Fellow of the said institute.
Datuk Ooi also sits on the Boards of MMC, Tradewinds (M) Berhad,
DRB-HICOM, Zelan Berhad, Johor Port Berhad, Gas Malaysia Berhad PAST APPOINTMENTS/EXPERIENCES:
and several private limited companies. Datuk Dr. Syed Muhamad started his career in 1973 as Senior Project
Officer, School of Financial Management at the National Institute of
NOTE: Public Administration (INTAN) and held various positions before his
He holds 420,000 ordinary shares in the Company and none in the final appointment as Deputy Director (Academic). In November 1988,
Company’s subsidiaries. he joined the Ministry of Education as Secretary of Higher Education
and thereafter assumed the post of Deputy Secretary (Foreign and
Domestic Borrowing, Debt Management), Finance Division of Federal
Treasury. Between June 1993 to June 1997, he joined the Board of
Directors of Asian Development Bank, Manila, Philippines, first as
Alternate Executive Director and later as an Executive Director. In July
1997, he joined the Ministry of Finance as Secretary (Tax Division) and
subsequently became the Deputy Secretary General (Operations) of
Ministry of Finance. Prior to his retirement, he was Secretary General,
Ministry of Human Resources from August 2000 to February 2003.

OTHER CURRENT APPOINTMENTS:

Datuk Dr. Syed Muhamad is currently the Chairman of Sun Life Malaysia
Assurance Berhad and Sun Life Malaysia Takaful Berhad. He also sits
on the Board of Directors of Solution Engineering Holdings Berhad,
BSL Corporation Berhad, Export-Import Bank of Malaysia Berhad and
several private limited companies.

NOTE:
He holds 150,000 ordinary shares in the Company and none in the
Company’s subsidiaries.

MEMBERSHIP OF BOARD COMMITTEES: MEMBERSHIP OF BOARD COMMITTEES:

BAC BNRC BRIC BPC BAC BNRC BRIC BPC

Member Member Chairman Member Member

68 www.malakoff.com.my
 Malakoff Corporation Berhad | Annual Report 2020

OUR LEADERSHIP SECTION 3

BOARD OF DIRECTORS’ PROFILE

DATUK IDRIS ABDULLAH DATUK ROZIMI REMELI

Independent Non-Executive Director Independent Non-Executive Director
Age: Age:
64 64

Gender: Gender:
Male Male

Nationality: Nationality:
Malaysian Malaysian

DATE APPOINTED TO THE BOARD: 11 December 2012 DATE APPOINTED TO THE BOARD: 16 October 2017

ATTENDED BOARD MEETINGS IN 2020: 10/10 ATTENDED BOARD MEETINGS IN 2020: 10/10

ACADEMIC/PROFESSIONAL QUALIFICATIONS: ACADEMIC/PROFESSIONAL QUALIFICATIONS:

Datuk Idris graduated from Universiti Malaya in 1981 with a LLB. Datuk Rozimi obtained a Diploma in Electrical Engineering from
(Hons.) Degree and is currently a Partner in a legal firm in Kuching, Universiti Teknologi Malaysia in 1979, a Bachelor in Engineering
Sarawak. from Northorp University, USA in 1984 and a Master in Business
Administration (MBA) from Universiti Sains Malaysia in 1996.
PAST APPOINTMENTS/EXPERIENCES:
Datuk Idris is a former Commission Member of the Companies PAST APPOINTMENTS/EXPERIENCES:
Commission of Malaysia from 2007 to 2014 and a Commission Member Datuk Rozimi has over 32 years of extensive leadership experience in
of the Malaysian Communications and Multimedia Commission from the energy industry. He began his career with Tenaga Nasional Berhad
2011 to 2015. He was a Director of Bank Pembangunan Berhad (“TNB”) since 1979, holding various positions until his retirement in
(Malaysian Development Bank Berhad) from 2010 to 2014. January 2016. In 2006, he was appointed as a General Manager in
the Asset Maintenance Department, Transmission Division. In 2007,
OTHER CURRENT APPOINTMENTS: he was promoted to Senior General Manager where he was primarily
Datuk Idris currently sits on the Board of NCB Holdings Berhad, responsible for effectively managing transmission project management
DRB-HICOM, Pos Malaysia Berhad and several private limited to ensure adherence to contractual specifications, costing and
companies. timely completion. In 2010, he was promoted to Vice President
(Transmission) where he was entrusted with the overall performance of
NOTE: TNB transmission business which focuses on transporting electricity,
He does not hold any interest in the securities of the Company or its managing the division’s assets and operating and maintaining the
subsidiaries. transmission network.

OTHER CURRENT APPOINTMENTS:

Datuk Rozimi also sits on the Board of Sarawak Cable Berhad and
several private limited companies.

NOTE:
He does not hold any interest in the securities of the Company or its
subsidiaries.

MEMBERSHIP OF BOARD COMMITTEES: MEMBERSHIP OF BOARD COMMITTEES:

BAC BNRC BRIC BPC BAC BNRC BRIC BPC

Member Member Chairman Member Member Chairman

BAC: Board Audit Committee BNRC: Board Nomination and Remuneration Committee
LEGEND
BRIC: Board Risk and Investment Committee BPC: Board Procurement Committee

Additional information in relation to the Board of Directors

i) None of the Directors has any family relationship with any Director and/or major shareholder of the Company nor any conflict of interest with the Company.
ii) Other than traffic offences, none of the Directors has been convicted for any offences within the past five years nor has been imposed of any public
sanction or penalty by the relevant regulatory bodies during the financial year under review.

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 3 OUR LEADERSHIP

SENIOR LEADERSHIP PROFILES

ANWAR SYAHRIN CLIVE ANTHONY

ABDUL AJIB SMITH

Managing Director/Chief Chief Operating Officer

Executive Officer

Management Committee Management Committee

Age: 48 Gender: Male Nationality: Malaysian Age: 57 Gender: Male Nationality: British

DATE OF JOINING: 1 December 2020 DATE OF JOINING: 16 September 2020

ACADEMIC/PROFESSIONAL QUALIFICATIONS: ACADEMIC/PROFESSIONAL QUALIFICATIONS:

• Master in Business Administration from University of Salford,
• Bachelor of Science (Hons) in Electrical/Electronic Engineering
United Kingdom.
• Bachelor of Engineering in Mechanical Engineering from from The Open University, United Kingdom.
Imperial College of Science, Technology and Medicine, • Higher Diploma in Industrial Instrumentation and Control,
London, United Kingdom. United Kingdom.
• Fellow Chartered Accountant of the Institute of Chartered • Chartered Engineer and Fellow of the Institution of Engineering
Accountants England and Wales, United Kingdom. and Technology.
• Member of Malaysian Institute of Accountants.

PAST APPOINTMENTS/EXPERIENCES: PAST APPOINTMENTS/EXPERIENCES:

• Started his career with Shell Malaysia Trading Sdn Bhd in • Started his career as an Instrumentation trainee with the
1996 as an executive in Fleet Distribution where he gained Central Electricity Generating board at Aberthaw Coal Fired
considerable experience in transport and logistics. Power Station, Wales, United Kingdom and has more than
• Subsequent thereto, he assumed a position of Senior Associate
42 years of working experience in the power industry, both in
(Assurance and Business Advisory) in Arthur Andersen
Manchester, United Kingdom from 1998 to 2001. the UK and overseas.
• Joined Arthur Andersen/Ernst & Young Kuala Lumpur as Senior • Following the completion of his traineeship, he progressed
Associate/Chartered Accountant (Assurance and Business through various Engineering, Operational and Maintenance
Advisory) in 2002. positions at numerous power plants and Headquarter based
• Became Director/Consultant of Business Associates within the United Kingdom and abroad.
Consulting Sdn Bhd providing strategy and management
• Appointed as Plant Manager at the age of 36 at a modern
consulting services from December 2002 to March 2006.
• Appointed as the Chief Financial Officer (“CFO”) of Pelabuhan CCGT Power Plant North of England, United Kingdom.
Tanjung Pelepas Sdn Bhd from April 2016 until May 2008 • Held numerous Power Plant Manager positions within the
before his appointment as Director, Finance/Group CFO of United Kingdom, employed by CEGB Successor Companies,
MMC Corporation Berhad (“MMC”) in June 2008. National Power, Innogy N Power and RWE.
• Assumed the position of Group Head, Ports and Logistics • Assumed the position of Group Manager of an 8,000 MW
Division of MMC from January to August 2014.
• Prior to joining Malakoff, he was the Managing Director/Chief portfolio of Power Plant within the United Kingdom.
Executive Officer (“MD/CEO”) of UEM Sunrise Berhad (“UEM • Appointed as Plant Manager at Malakoff’s Tanjung Bin power
Sunrise”) from 1 September 2014 until 30 October 2020. plant for a period of 30 months, leading on Strategic challenges
• Served as a board member of the key subsidiaries of UEM and improving overall business performance.
Sunrise, amongst others, UEM Land Berhad and Sunrise Berhad. • Prior to re-joining Malakoff in 2020, he was the Executive
• Currently sits on the Board of Alam Flora Sdn Bhd, Malakoff
Director of O&M (Coal Business Unit) at Aboitiz Power
Power Berhad and several other subsidiaries and associate
companies under the Malakoff Group. Corporation, in the Philippines.
• Sits on the Board of Universiti Teknologi MARA (“UiTM”). • As the COO, he plays a key role in ensuring that the Group
• He is the Deputy Chairman of Muscat City Desalination achieves its strategic objectives and results from both the
Company S.A.O.G., an associate company of Malakoff which operational and financial perspectives.
is listed on the Muscat Securities Market.
NOTE:
NOTE:
• Anwar does not hold any interest in the securities of the • Clive does not hold any interest in the securities of the
Company. Company.

70 www.malakoff.com.my
 Malakoff Corporation Berhad | Annual Report 2020

OUR LEADERSHIP SECTION 3

SENIOR LEADERSHIP PROFILES

MOHD NAZERSHAM DATO’ MOHD

MANSOR ZAIN HASSAN

Chief Financial Officer Chief Executive Officer

Alam Flora Sdn Bhd

Management Committee Management Committee

Age: 47 Gender: Male Nationality: Malaysian Age: 54 Gender: Male Nationality: Malaysian

DATE OF JOINING: 1 December 2017 DATE OF JOINING: 1 February 2020

ACADEMIC/PROFESSIONAL QUALIFICATIONS: ACADEMIC/PROFESSIONAL QUALIFICATIONS:

• Degree in Accounting & Finance from De Montfort University, • Graduated in Technology in Education from Universiti Sains
United Kingdom. Malaysia (“USM”).
• Fellow of the Association of the Chartered Certified Accountants • Diploma in English as a Second language from Universiti Malaya.
(“FCCA”), United Kingdom. • Executive Education Programme from Harvard Business School.
• Member of Malaysian Institute of Accountants.
PAST APPOINTMENTS/EXPERIENCES:
PAST APPOINTMENTS/EXPERIENCES: • Currently helms the country’s largest solid waste management
• Began his career with KPMG, Malaysia in 1997 as an auditor company, Alam Flora Sdn Bhd and its wholly-owned subsidiary,
and later joined MMC in the year 2000 as Group Accountant. Alam Flora Environmental Solutions Sdn Bhd. Alam Flora is one
• Between 2004 and 2012, he served Sapura Group of of the three concessionaires appointed by the Government,
Companies and was the General Manager, Corporate Strategy under the full-privatisation of the solid waste management of
& Development, his last position before he joined Petra Energy the country.
Berhad. • With over 20 years of hands-on experience serving various
• Assumed the position of General Manager of MMC Group positions in Alam Flora, from field operations to top
from 2014 to 2016 and was previously the CFO for MMC Port management, he currently leads a strong team of more than
Holdings Sdn Bhd. 9,000 workers that are responsible for the cleansing and
• Covered the provision of services for accounting, financial collection of solid waste in its concession areas of Kuala
management, taxation, treasury and corporate finance in his Lumpur, Putrajaya and Pahang Darul Makmur. He was also
20 years of experience. instrumental in Alam Flora’s previous venture into the Middle
• Currently sits on the board of key subsidiaries/associate East, Kingdom of Bahrain and Abu Dhabi, UAE.
companies under Malakoff Corporation Berhad. • Prior to Alam Flora, he was the Deputy General Manager at
E-Idaman Sdn Bhd, one of the three concessionaires in Malaysia.
NOTE: • In recognition of his years of dedication and able stewardship
• Mohd Nazersham holds 16,000 ordinary shares in the in leading Alam Flora an serving the communities through
Company. managing and reducing solid waste with minimal environmental
impact, he was conferred with the Darjah Indera Mulia Pahang
by the state of Pahang in 2017, which carries the title Dato’.

NOTE:
• Dato’ Zain does not hold any interest in the securities of the
Company.

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 3 OUR LEADERSHIP

SENIOR LEADERSHIP PROFILES

VINCENT MOHAMMED AZMIL

YAP LENG KHIM ISMAIL

Senior Vice President Senior Vice President

Corporate Services Local Generation Division
Division

Management Committee Management Committee

Age: 47 Gender: Male Nationality: Malaysian Age: 51 Gender: Male Nationality: Malaysian

DATE OF JOINING: 1 December 2017 DATE OF JOINING: 1 November 1994

ACADEMIC/PROFESSIONAL QUALIFICATIONS: ACADEMIC/PROFESSIONAL QUALIFICATIONS:

• Bachelor of Laws (Hons) from University of Nottingham, United • Bachelor of Science in Mechanical Engineering from The
Kingdom. George Washington University, Washington D.C., United
• Barrister-at-Law, Lincoln’s Inn, United Kingdom. States of America.
• Advocate & Solicitor, High Court of Malaya. • Senior Management Development Programme, Harvard
Business School.
PAST APPOINTMENTS/EXPERIENCES:
• Started his career in the legal profession as an Advocate & PAST APPOINTMENTS/EXPERIENCES:
Solicitor at Chooi & Company Cheang & Ariff in 1998. • Started his career as a Gas Turbine Maintenance Engineer with
• Joined OCBC Bank (Malaysia) Berhad as Legal Counsel in Tenaga Nasional Berhad (“TNB”) in September 1992.
2003. • Joined Malakoff and held various positions at Lumut Power
• Admitted as a Partner of Chor Pee Anwarul & Company, Plant (“LPP”), with the last being the Head of Maintenance &
Advocates & Solicitors, in 2004. Engineering prior to his appointment as the Plant Manager of
• Admitted as a Partner of Albar & Partners, Advocates & Prai Power Plant in 2008.
Solicitors, in 2006. • Assigned to an Operations and Maintenance (“O&M”) project in
• Joined Zelan Berhad as Head of Group Legal in 2009 and Kuwait as the Plant Manager of Azzour EPP Plant from 2008 to
appointed as Director of Corporate Services in 2011. 2013 and Plant Manager of Azzour CCGT2 Plant, Kuwait from
• Currently sits on the board of key subsidiaries/associate 2013 to 2015.
companies under Malakoff Corporation Berhad. • Appointed as the Plant Manager of LPP from 2015 to 2016
upon his return to Malaysia.
NOTE: • Appointed as the Head of Engineering, Local Generation
• Vincent does not hold any interest in the securities of the Division in 2016 and assumed his current role as Senior Vice
Company. President of Local Generation Division in February 2019.
• Currently sits on the board of key subsidiaries/associate
companies under Malakoff Corporation Berhad.

NOTE:
• Mohammed Azmil holds 68,000 ordinary shares in the
Company.

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 Malakoff Corporation Berhad | Annual Report 2020

OUR LEADERSHIP SECTION 3

SENIOR LEADERSHIP PROFILES

RAJA ISKANDAR SUBRINA

BIN RAJA THIAGARAJAH
MUKHTARUDDIN

Head, Human Capital Head, Operations &

Division Project Management
Services Division

Ex Officio Ex Officio

Age: 56 Gender: Male Nationality: Malaysian Age: 50 Gender: Female Nationality: Malaysian

DATE OF JOINING: 1 February 2021 DATE OF JOINING: 27 June 1994

ACADEMIC/PROFESSIONAL QUALIFICATIONS: ACADEMIC/PROFESSIONAL QUALIFICATIONS:

• Bachelor of Science in Business Administration (Management) • Bachelor of Engineering (Chemical) (Hons) from University
from California State University, Sacramento, United States of Technology of Malaysia (“UTM”).
America.
• Management Development Programme, Asian Institute of PAST APPOINTMENTS/EXPERIENCES:
Management in Manila, the Philippines. • Started her career with Malakoff in 1994, as a Project Executive
in Technical Services & QA department.
PAST APPOINTMENTS/EXPERIENCES: • During her 27-year career in Malakoff, she gained vast
• Started his career with Mobil Oil Corporation in 1988 as a sales experience and leadership skills in the power and water
representative under its graduate scheme programme. He later industry both in Malaysia and internationally.
joined Malaysia Tourism Promotion Board from December 1989 • Prior to being seconded to a Malakoff associated company
until May 1995 as an Assistant Director based in Kuala Lumpur in Oman, she was the Vice President of Commercial, Asset
and later at its regional office in London, United Kingdom. Management Division. Her duties mainly focused on asset
• Pursued a new career in Gas Malaysia as an Assistant Manager, management, commercial negotiations and contractual
Residential & Commercial Sales in August 1997, and later served management of the key project agreements with the relevant
in various capacities within the company’s marketing function. utilities, Government authorities and O&M contractors, where
• Led the Human Resource (“HR”) department in 2008 and later Malakoff’s operating assets were located.
promoted in 2013 as General Manager, HR and Administration • Thereafter, she was involved in the commercial review and
where he reorganized the company’s structure as the company negotiations for Malakoff’s business development initiatives in
prepared to enter the market liberalisation era. power and water projects in South East Asia, South Asia and
• In 2020, he was made Director of Human Resource and the Middle East, with her latest achievement being the Project
Administration, during the Government’s eventual push for the Director of the winning bid for the Ghubrah Independent Water
liberalisation of Malaysia’s natural gas industry which led to the Plant in Oman in 2012.
implementation of the Third Party Access regime. He was tasked • Seconded to Muscat City Desalination Company (“MCDC”)
with the reorganisation of Gas Malaysia Berhad’s structure in Muscat, Oman as its CEO for a period of five years until
which, upon approval from the Energy Commission (“EC”),
31 October 2020.
led to the successful formation of Gas Malaysia Distribution
• At MCDC, she led the successful Initial Public Offering (“IPO”) of
Sdn Bhd and Gas Malaysia Energy and Services Sdn Bhd,
the company on the Muscat Securities Market (“MSM”) in 2018.
re-deploying over 500 employees into various companies within
• After her stint in Oman, she has now returned to the Company
Gas Malaysia Group.
as the Head of Operations & Project Management Services
• Continues to work closely with the HR fraternities both within
(“OPMS”) Division commencing from 1 November 2020.
the MMC Group as well as externally, leveraging on the Group’s
common interest in Talent Management and Succession Planning.
NOTE:
• Currently a Fellow at the Malaysian Institute of Management and
• Subrina does not hold any interest in the securities of the
has also been appointed as the External Advisory Member at
Company.
Sunway University’s Business School.

NOTE:
• Raja Iskandar does not hold any interest in the securities of the
Company.

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 3 OUR LEADERSHIP

SENIOR LEADERSHIP PROFILES

MOHD HELMY SHAJARATUDDUR

IBRAHIM MOHD IBRAHIM

Head, Investment Head, Business

Development & Development Department
Management Division

Ex Officio Ex Officio

Age: 50 Gender: Male Nationality: Malaysian Age: 46 Gender: Male Nationality: Malaysian

DATE OF JOINING: 6 August 2012 DATE OF JOINING: 1 October 2012

ACADEMIC/PROFESSIONAL QUALIFICATIONS: ACADEMIC/PROFESSIONAL QUALIFICATIONS:

• Bachelor of Engineering in Chemical Engineering (Hons) from
University of Leeds, United Kingdom. • Bachelor of Laws (Hons) from University of Nottingham, United
• ASEAN Senior Management Development Program, Harvard Kingdom.
Business School.
PAST APPOINTMENTS/EXPERIENCES:
PAST APPOINTMENTS/EXPERIENCES:
• Started his career with TNB in September 1997, as a legal
• Joined Malakoff in 1994 as a Chemical/Performance Engineer at
the 1303 MW Segari Energy Ventures (“SEV”) Combined Cycle executive, handling projects and business development matters.
Power Plant where he was involved in the design review and • During his 16- year tenure in TNB, he was instrumental in various
commissioning of the plant. key projects and ventures, including TNB’s tariff reviews and
• Over the years, he was promoted within the core O&M team PPA renegotiation exercises, privatization of Lembaga Letrik
for the plant. Whilst holding the post of Assistant Operation
Manager, he was redeployed to Malakoff’s HQ into the then Sabah, divestments of TNB’s local power plants and coal mine
newly set up, Technical Services Group (“TSG”) as its Senior in Indonesia.
Manager, to provide technical and commercial support to all • His last position in TNB was as a General Manager in the
Malakoff’s plants for strategic medium and long-term areas. President’s/CEO’s Office, before leaving for the role of Senior Vice
• Joined a small team that founded Rangkai Positif Sdn Bhd
President of Investment at Khazanah Nasional in February 2010,
(“RPSB”) in 2001, a company that spearheaded the development
of the 3 x 700 MW Coal Fired TBPP. At RPSB he contributed to oversee the power sector and Iskandar Development Region.
to the successful development of the project up to securing its • Joined Malakoff in October 2012, as an Assistant Vice President
Power Purchase Agreement (“PPA”) and Financial Close (“FC”). of Special Projects. Since joining Malakoff, he had led a
• When Malakoff acquired TBPP in 2006, he opted to leave number of corporate and investment exercises leading to the
RPSB and joined Jimah Energy Ventures (“JEV”) which was
the Special Project Vehicle (“SPV”) for the development of a successful bid for PD Power’s extension of PPA concession,
2 x 700 MW Coal Fired Power Plant in Negeri Sembilan. acquisition of interest in a large scale solar project in Johor,
• He was among the core team that successfully delivered JEV’s winning bids for the development of two small hydro power
PPA and FC, within time and targeted cost. He left JEV as projects in Pahang with total capacity of 55 MW and two (2)
General Manager after 2 years of its commercial operations in
biogas projects in Johor. The most recent corporate exercise
2012 to set up Fergana Resources Sdn Bhd as its Director of
Origination. that he has steered is the completion of the acquisition
• Re-joined Malakoff in 2012 as a Vice President Technical/ of 97.37% equity interest in Alam Flora Sdn Bhd from
Commercial in the Ventures Division. DRB-HICOM Group.
• Promoted as the Head of Business Development under the • One of the key team members in formulating the current
Ventures Division in 2017.
• Reassigned as the Head of Strategy & Investment Management Malakoff’s investment policy and strategic plan.
Division where he oversees strategy, investment monitoring and • In his capacity and current role as the Head of Business
international assets in 2019. Development Department in Malakoff, he will continue
• Reassigned as the Head of Investment Development & to explore and pursue potential investments or growth
Management Division where he oversees investment monitoring,
opportunities for the company, locally and internationally.
international assets and development of Renewable Energy
projects in 2020. • Currently sits on the board of key subsidiaries/associate
• Currently sits on the board of key subsidiaries/associate companies under Malakoff Corporation Berhad.
companies under Malakoff Corporation Berhad.
NOTE:
NOTE:
• Mohd Helmy does not hold any interest in the securities of the • Shajaratuddur holds 26,000 ordinary shares in the Company.
Company.

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 Malakoff Corporation Berhad | Annual Report 2020

OUR LEADERSHIP SECTION 3

SENIOR LEADERSHIP PROFILES

IDZAM YUHAIZI SARAVANAN

MOHD YUNOS DESIGAMANIE

Head, Risk & Process Head, Strategy &

Improvement Division Communication Division

Ex Officio Ex Officio

Age: 48 Gender: Male Nationality: Malaysian Age: 39 Gender: Male Nationality: Malaysian

DATE OF JOINING: 1 March 2020 DATE OF JOINING: 1 June 2018

ACADEMIC/PROFESSIONAL QUALIFICATIONS: ACADEMIC/PROFESSIONAL QUALIFICATIONS:

• Bachelor of Arts in Economics and Social Studies with Honours • Master of Business Administration (Finance) and Bachelor of
from University of Manchester, United Kingdom. Information Technology (Hons) (Software Engineering) from
• Certified Enterprise Risk Manager (“ERM”) and an Associate Multimedia University (“MMU”), Malaysia.
Business Continuity Professional (“ABCP”). • Certificate in Investor Relations (“CIR”) of the Investor Relations
• Certificate of Internal Auditor for Financial Institution (“CIAFIN”). (“IR”) Society (United Kingdom).
• Leadership Development Programme, ICLIF International
Learning Center. PAST APPOINTMENTS/EXPERIENCES:
• A recipient of the Sime Darby Foundation Scholarship award,
PAST APPOINTMENTS/EXPERIENCES: he began his career in Sime Darby Berhad in 2004 as a software
analyst before being appointed to the role of Special Officer
• Served as the Head, Group Risk Management Department of
to the Executive Vice President, Group Strategy & Business
MMC Corporation Berhad for 8 years prior to joining Malakoff.
Development of Sime Darby in 2008.
He oversees several portfolios under him namely Enterprise
• Assigned as the Special Officer to the MD of Sime Darby Energy
Risk Management, Business Continuity Management, Health,
& Utilities, while serving under the MD’s Office as well as the
Safety and Environment and Corporate Integrity, where he
Programme Management Office in 2010.
has established several policies related to his portfolios and
• Appointed as Assistant Vice President, IR in 2012. As part of
lead the implementation of these policies throughout the MMC
the IR unit of Sime Darby, he was a key pioneering member who
Group. was instrumental in engaging the ESG investors, particularly in
• Prior to joining MMC, he has had more 16 years of working Europe.
experience in various industries ranging from banking, • Assumed the role of Strategy & Innovation Manager of Sime
manufacturing, research, oil & gas, engineering and Darby Plantation Berhad in 2017, working closely with the
construction assuming various roles and positions. Chief Strategy & Innovation Officer to build innovation culture
• Currently sits on the board of key subsidiaries/associate and carry out innovation capability building programmes
companies under Malakoff Corporation Berhad. across the corporation.
• Throughout his 14-year tenure with Sime Darby, he has worked
NOTE: in various capacities within the plantation, property, industrial,
• Idzam does not hold any interest in the securities of the motors, energy & utilities and healthcare divisions.
Company. • Joined Malakoff in June 2018 as the Head of IR, spearheading
the Group’s engagement with the investment community.
• Appointed as the Head, Strategy & Communication Division
in February 2020, overseeing the Group’s corporate strategy,
investor relations, corporate communications and stakeholder
management units.
• Currently sits on the board of key subsidiaries/associate
companies under Malakoff Corporation Berhad.

NOTE:
• Saravanan does not hold any interest in the securities of the
Company.

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 3 OUR LEADERSHIP

SENIOR LEADERSHIP PROFILES

MOHD HADI
MOHAMED ANUAR

Chief Internal Auditor,

Group Internal Audit

Chief Internal Auditor

Age: 43 Gender: Male Nationality: Malaysian

DATE OF JOINING: 25 February 2016

ACADEMIC/PROFESSIONAL QUALIFICATIONS:
• Bachelor of Arts (Hons) in Accounting and Finance from the
Manchester Metropolitan University, United Kingdom.
• Associate Member of the Association of Certified Fraud
Examiners and the Institute of Internal Auditors Malaysia
(“AIIA”).

PAST APPOINTMENTS/EXPERIENCES:
• More than 20 years of audit experience and currently leads
the Group Internal Audit of Malakoff which is responsible
to support the Board of the Company through the Board
Audit Committee in discharging its duties and governance
responsibilities of maintaining a sound internal control system
within the organization.
• Started his career as an auditor with Arthur Andersen/Ernst &
Young from 2000 to 2004.
• Subsequent thereto, he joined Petroliam Nasional Berhad
(“PETRONAS”) in 2005 where he assumed the role of Audit
Manager in the Group Internal Audit Division of PETRONAS
until 2011.
• During his tenure with PETRONAS, he was also assigned to
KLCC Holdings Berhad (“KLCC”) to set up the Group Internal
Audit Division of KLCC Group and was the acting Head of the
Division for almost 2 years before returning to PETRONAS.
• Prior to joining Malakoff, he was the Head of Joint Venture
Audit Department of PETRONAS Carigali Sdn Bhd from 2012
to 2016 and was responsible to oversee all joint venture
audits on the company’s joint ventures with other oil and gas
companies/partners in Malaysia and international upstream
business operations worldwide.
Additional information in relation to the Management Committee Members
and Chief Internal Auditor
NOTE: i) None of the Management Committee Members and Chief Internal
• Mohd Hadi holds 42,400 ordinary shares in the Company. Auditor has any family relationship with any Director and/or major
shareholder of the Company nor any conflict of interest with the
Company.
ii) Other than traffic offences, none of the Management Committee
Members and Chief Internal Auditor has been convicted for any
offences within the past five (5) years nor has been imposed of any
public sanction or penalty by the relevant regulatory bodies during the
financial year under review.

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 Malakoff Corporation Berhad | Annual Report 2020

G O V E R N A N C E S TAT E M E N T S SECTION 4

CORPORATE GOVERNANCE OVERVIEW STATEMENT

This corporate governance overview is prepared up to 11 March 2021 and was

INTRODUCTION
approved by the Board on even date. This statement details the key aspects
of the governance framework and practices during the financial year as well
The Board of Directors (“Board”) of Malakoff
as future priorities of Malakoff. The Company regularly reviews its governance
Corporation Berhad (“Malakoff” or “the
framework and practices so as to ensure it consistently reflects market practice
Company”) is committed to sustainable business
and stakeholders’ expectations. The application of each of the practices set out
practices and fulfilling its corporate governance
in the MCCG 2017 is also disclosed in our Corporate Governance Report which
obligation in leading the Company towards
is available on Malakoff‘s corporate website at www.malakoff.com.my.
achieving its growth target and enhancing the
shareholders’ value. Despite the challenging
Malakoff’s Corporate Governance Framework, as illustrated in the diagram
operating environment in year 2020 and the
below, is premised upon the following statutory provisions, best practices and
impact of the outbreak of Covid-19 pandemic,
guidelines:
the Board continues to fulfil its responsibilities
under the Malaysian Code on Corporate
Governance 2017 (“MCCG 2017”) without Companies Act 2016 (“Act”) MCCG 2017
compromising its efforts, where possible, in
applying the principles of good corporate
governance prescribed in the MCCG 2017. Main Market Listing Requirements (“MMLR”) of Bursa Malaysia
Securities Berhad (“Bursa Malaysia”)

BOARD OF DIRECTORS

COMPANY SECRETARY

BOARD RISK & INVESTMENT

BOARD AUDIT COMMITTEE CHIEF EXECUTIVE OFFICER
COMMITTEE

BOARD NOMINATION & BOARD PROCUREMENT

REMUNERATION COMMITTEE COMMITTEE

GROUP INTERNAL AUDIT MANAGEMENT COMMITTEE MANAGEMENT RISK COMMITTEE

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 4 G O V E R N A N C E S TAT E M E N T S

CORPORATE GOVERNANCE OVERVIEW STATEMENT

BOARD LEADERSHIP AND EFFECTIVENESS

i Board Activities

The principal role of the Board of Malakoff (“Malakoff Board”) is to govern and set the strategic direction of the Group, to guide and
exercise oversight over management of Malakoff and its businesses in accordance with the purpose, value and approved strategic
plans of the Malakoff Group. The strategic plans are reviewed periodically by the Board and Management to ensure their relevance to
the Company’s current operating environment including any changes to the Government’s policies for the power industry.

The Board aims to protect and enhance the interests of its shareholders, while taking into account the interests of other stakeholders
including employees, customers, suppliers and the wider community. In performing its role, the Board sets the Group’s core values,
adopts proper standards to ensure that the Group operates with integrity, and complies with the relevant rules and regulations.
The roles and responsibilities of the Board are set out in the Board Charter which is available on the Malakoff’s corporate website at
www.malakoff.com.my.

The Board Charter has clearly set out the roles and responsibilities of the Malakoff Board and those matters delegated to senior
management. Amongst other matters, the Senior Management is responsible for instilling and reinforcing the Group’s values,
implementing sound risk management and controls which accord with the risk appetite set by the Board. The Board receives reports
and information about the Group from the Senior Management to enable the Board to discharge its responsibilities. The Board
holds the management accountable for the performance of its delegated functions and has constructively challenged management’s
proposals tabled for its review and approval. This will foster a culture of accountability throughout the Group.

The Board is assisted by four Board Committees in the review and monitoring of the above functions. The Board Committees,
namely Board Audit Committee (“BAC”), Board Nomination and Remuneration Committee (“BNRC”), Board Risk and Investment
Committee (“BRIC”) and Board Procurement Committee (“BPC”), work within their delegated authority and respective terms of
reference approved by the Board.

Chairman of the Board Managing Director/Chief Executive Officer (“MD/CEO”)

The Chairman of the Board, Datuk Haji Hasni Harun, who is The Company had appointed Encik Anwar Syahrin Abdul Ajib as
an Independent Non-Executive Director (“INED”), leads the the new MD/CEO of the Company effective 1 December 2020
Board and manages the Board’s effectiveness by focusing on subsequent to Dato’ Ahmad Fuaad Mohd Kenali relinquishing
strategy, governance and compliance. The Board appreciates his position as CEO on 31 October 2020. The MD/CEO has
the distinct roles and responsibilities between the Chairman of the responsibility for the day-to-day management of Malakoff
the Board and the Managing Director/Chief Executive Officer. and its businesses with the support of the management team.
Hence, the division of responsibilities is clearly established Details of the members of Malakoff Management Committee
and stated in the Company’s Board Charter to ensure a (“ManCo”) and ex-officio are set out on pages 66 to 75 of the
balance of power and authority. Company’s 2020 annual report and on the Company’s website
at www.malakoff.com.my.

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 Malakoff Corporation Berhad | Annual Report 2020

G O V E R N A N C E S TAT E M E N T S SECTION 4

CORPORATE GOVERNANCE OVERVIEW STATEMENT

Company Secretaries

The Board is supported by the Company Secretaries who are competent and qualified under the Act. The Company Secretaries
advise the Board on corporate governance related matters and the Board policies and procedures, and ensure the Board complies
with the relevant rules and regulatory requirements as well as updates issued by the relevant regulatory authorities from time to time.

The Board maintains ultimate responsibility for strategy and control of Malakoff and its businesses. In fulfilling its roles and
responsibilities, the key focus areas of the Board during the financial year 2020 included:

1. Overseeing management’s performance in strategy implementation including evaluating growth opportunities to complement
the existing portfolio;
2. Reviewing business operations and the development plans of the Company as a whole to ensure long-term shareholders’
value are preserved during the critical period in year 2020 and to mitigate the impact of Covid-19 to the Company;
3. Reviewing and considering the Company’s investment and divestment options or other strategies for value creation to
Malakoff;
4. Reviewing and providing guidance on the implementation of strategy to address areas of underperformance and reposition
the portfolio to deliver growth for the Company;
5. Monitoring the Group’s operating performance and financial position;
6. Reviewing the Group’s risk management framework and monitoring the Group’s operation with due regard to the risk appetite
set by the Board;
7. Monitoring the Group’s health, security, safety and environment performance and overseeing the implementation of strategies
to improve safety performance and enhance workplace safety awareness;
8. Reviewing talent management and development and the appointments of MD/CEO and two company secretaries during the
year; and
9. Reviewing the Company’s framework, policies and procedures including but not limited to the following:

(a) Code of Conduct

Malakoff is committed to upholding the highest standards of ethical conduct, integrity and accountability in all the business
activities and operations. The Code of Conduct, which was adopted by the Board in November 2015, is published on the
Company’s website. It plays a crucial role in determining how the Company conducts its business and operations.

(b) Whistleblowing Policy

The Whistleblowing Policy was established by the Board to provide employees and third parties with proper avenue and
procedure to disclose cases of improper conduct such as criminal offences, fraud, corruption, breach of Group policies
and Code of Conduct or other malpractices without fear of reprisal.

In implementing this policy, a whistle-blower is assured confidentiality of identity to the extent reasonably practicable.
This includes protecting the whistle-blowers from detrimental actions that may result from the disclosure of improper
conduct, provided that the disclosure is made in good faith. The Whistleblowing Policy is also to ensure that fair treatment
is provided to both the whistle-blower and the alleged wrongdoer when a disclosure of improper conduct is made.

Disclosure of any improper conduct can be made verbally or in writing to the Chairman of the BAC via a letter or e-mail to
[email protected].

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 4 G O V E R N A N C E S TAT E M E N T S

CORPORATE GOVERNANCE OVERVIEW STATEMENT

ii Board Composition

Board Size and Structure

Malakoff recognises an effective Board composition that The Board is of the view that the tenure profile of each of its
continues to include directors who collectively bring an directors is appropriately balanced and Board succession and
appropriate mix of skills, commitment and diversity (including renewal planning is properly managed over the medium to longer
gender diversity) to Board decision-making. The Board takes term including the appointment of additional women directors to
cognizance of the benefits of having a diverse range of skills, fulfil the 30% proposed threshold under the MCCG 2017.
knowledge, experience, background and gender among its
members which would promote effective Board deliberations Re-election and Re-appointment of Directors
and robust decision making where matters are viewed from
wider and broader perspectives. Since the adoption of diversity Pursuant to the Company’s Constitution, all Directors must
policy on 21 November 2016, the Board regularly reviews the submit themselves for re-election at least once every three
current and desired skills and experience of each Director and years. The Company’s Constitution also mandates one-third
the Board as a whole, taking into consideration the specialised of the Board shall retire from office every year and shall be
and changing environment that the Company operates within. eligible for re-election at the Annual General Meeting (“AGM”)
of the Company. In this respect, two non-executive directors
The Board currently comprises eight directors with seven non- (“NED”) namely Datuk Haji Hasni Harun and Dato’ Sri Che
executive directors and one newly appointed executive director, Khalib Mohamad Noh, would be retiring at the forthcoming
who is the Managing Director (“MD”) of the Company. Four out AGM together with the newly appointed MD/CEO, Encik Anwar
of the seven non-executive directors are INED and the remaining Syahrin Abdul Ajib. They have offered themselves for re-election
three are non-independent and non-executive directors at the said AGM.
(“NINED”).
In determining the eligibility of the retiring Directors to stand for re-
The composition of the Board meets the MMLR of Bursa Malaysia election, the BNRC considered the performance and contribution
which requires a minimum of two or one-third, whichever is the of the Directors seeking re-election before the names of these
higher, as independent directors (“ID”) including the Chairman. Directors are submitted and recommended by the Board to the
The current Board comprises at least 50% IDs and has met shareholders for re-election into office. For the financial year
the practice as set out in MCCG 2017. The Board considers in review, this was done through a Board assessment with the
the current Board size to be optimal in ensuring swift decision facilitation of the Company Secretary whereby Board members
making and at the same time, effective discharge of its duties were required to conduct a peer assessment of other Directors
and responsibilities. in areas amongst others, his/her knowledge, skills, qualifications
and contributions to Board proceedings.
The summary of Board Composition as at 31 December 2020 is
set out below: As for the MD/CEO, the BNRC and Board had reviewed his
educational background and working experience in detail prior
37.5% 12.5% 12.5% 12.5% to the proposed appointment of Encik Anwar Syahrin. The BNRC
and Board are of the view that the MD/CEO should be given
12.5% the opportunity to prove his ability of stewardship with a longer
period of observance and, hence, recommended the MD/CEO be
Category of Age of re-elected at the forthcoming AGM.
Directors Directors

The BNRC’s recommendations on the Directors standing for

re-election at the forthcoming AGM are stated in Explanatory
50% 62.5% Note 2 under the Notice of the 15th AGM.
Executive Director 40-49 Years 70 Years &
Above
INED 50-59 Years
NINED 60-69 Years

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Board Independence

IDs bring views and judgment to the Board deliberation and of the BNRC and approval of the Board, be recommended for
decision which are independent of the management and free retention as INED by shareholders’ approval annually, or the
from any business or other relationship that could be perceived INED will be re-designated as a Non-ID of the Company. The
to materially interfere with the exercise of objective, unfettered or tenures of Malakoff’s IDs have not exceeded a cumulative term
independent judgement. The Board will ensure the selection of of nine years since its listing in May 2015 and will only be due
IDs is premised on the basis that the candidate is independent in May 2024. The years of service of the IDs as at 31 December
of management, free of any interests, position, association, 2020 are summarised below:
business or other relationship that might influence, or could
reasonably be perceived to influence, the independent exercise
of their judgement. 2 2

Prior to accepting any new director on the Board, each new INED <3 Years
is required to declare his/her interests and relationship to the Years of 3 to 5 Years
Board through the submission of an independent assessment Service 6 to 8 Years
form, which information will form the basis for the Board’s
≥9Years Above
consideration of accepting the ID to the Board.

The Board also reviews the interests declared by the Directors

regularly and considers all business relationships between
Malakoff Group and the Directors or companies in which they
The Board has reviewed the position and relationship of all
are directors or substantial shareholders. In each of these
Directors in office as at the date of the 2020 annual report and
business relationships, the interested Directors would abstain
considered that all four INEDs fulfilled the independence criteria
from all deliberations and decisions on the proposal. The Board
as IDs and are independent.
takes due consideration of any changes to the NEDs’ interests,
positions, associations or relationships that could bear upon
Succession Planning
their independence.

The Board recognises that succession planning is an integral

The Board conducts formal assessment on Directors’
part of the Board’s corporate governance practices to ensure
independence annually to ensure that there are independent
continuity in meeting the Group’s long-term goals and objectives.
elements that fit the Company’s objectives and strategic goals.
Hence, in sourcing for candidates, the BNRC reviews the
The results of the independent assessment for IDs will be tabled
recommendations from the major shareholders, who have better
at the Board for discussion.
understanding of the needs and complexity of the Company,
enabling the recruitment of new director(s), and also engages
In terms of Term Limit and Retirement Age of IDs, these had been
external search firms to find appropriate candidates if necessary.
reflected in the Company’s Policy on Independent Non-Executive
Directors Tenure (“INED Policy”). An INED who has reached the
cumulative nine-year limit may, subject to thorough assessment

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iii Board Meetings

The Board convened ten Board meetings during the year, five of which are scheduled meetings and the other five are on ad hoc basis
to consider urgent matters. All Directors have full attendance to the scheduled Board meetings.

Details of each Director’s attendance to the Board meetings held during the year are tabulated below:-

Name of Directors No. of meetings attended

Datuk Haji Hasni Harun 10 of 10

Anwar Syahrin Abdul Ajib (appointed on 1 December 2020) 2 of 2

Dato’ Sri Che Khalib Mohamad Noh 10 of 10

Cindy Tan Ler Chin 10 of 10

Datuk Ooi Teik Huat 10 of 10

Datuk Dr. Syed Muhamad Syed Abdul Kadir 10 of 10

Datuk Idris Abdullah 10 of 10

Datuk Rozimi Remeli 10 of 10

The Board is committed to meet at least four times a year after the end of each financial quarter where the unaudited quarterly
results would be reviewed and approved before being released to Bursa Malaysia. Meeting dates for the whole year are scheduled in
advance and the calendar for the Board and Board Committees’ meetings is circulated to the Directors before the commencement of
each financial year to enable the Directors to plan their schedule in advance.

Every effort is made to ensure timely circulation of notices, agenda and meeting materials to the Board to provide sufficient time for
the Directors to prepare for Board meetings and to facilitate effective Board discussion. All deliberations and decisions made at the
Board meetings are recorded by the Company Secretaries where the minutes of meetings would be circulated to the Board for review
before the minutes of meeting are confirmed at the next Board meeting.

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iv BNRC

The composition of BNRC of Malakoff remains with four members with a majority being INEDs. The Chairman of the BNRC, Datuk
Haji Hasni Harun, is an INED. The roles and responsibilities of BNRC are set out in its terms of reference which are available on the
Company’s website.

The BNRC held six meetings during the FY2020 to review the nomination and remuneration matters related to the Board and
Management and make the necessary recommendations to the Board for approval. The Chairman of BNRC reports to the Board after
each BNRC meeting.

The key activities of the BNRC during FY2020 are summarised below:-

Nominating Matters

(a) Board Composition and Succession Planning (d) Directors’ Retiring by Rotation
• reviewed the size and composition of the Board • reviewed the performance of the Directors retiring
and Board Committees as well as the Boards of the by rotation and recommended to the Board on the
subsidiaries. re-election of Directors.
• made recommendation on the composition of the • two NEDs and the new MD are subject to retirement
Boards of subsidiaries and appropriate nominees to and re-election at this AGM.
represent Malakoff on the Boards of these companies. • recommended the re-election of directors based
• reviewed the succession planning for CEO-1 positions. on the results of the peer review assessment on
their performance on the Board for FY2020 and
(b) Recruitment/Appointment of Directors observance of the new Director’s ability of adaption and
• reviewed the skills, expertise, knowledge and performance.
experience of an executive director for appointment on
the Board as MD/CEO (Encik Anwar Syahrin). (e) Board Evaluation
• identified and evaluated candidacy of director and • conducted the Board evaluation exercise in respect
made the necessary recommendations to the Board for of the effectiveness of the Board and the Board
approval. Committees for FY2020.
• reviewed the results of the Board evaluation and
(c) Nomination of New Nominees on the Boards of the proposed appropriate action plans to improve on areas
Subsidiaries/Associate Companies of weaknesses and increase effectiveness of the Board.
• reviewed the background, skills, expertise, knowledge • reviewed the training needs of the Directors.
and experience of the management team proposed
by the CEO to be in the pool for nominee directors for (f) Organisation Restructuring
selection to the Boards of Malakoff’s local and overseas • reviewed and recommended the organisation
subsidiaries and associates. restructuring proposed by the CEO for the Board’s
• evaluated the candidacy of directors to the Boards of approval.
local and overseas subsidiaries and associates and
made the necessary recommendations to the Board.

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Remuneration Matters

(a) Remuneration for the Malakoff Group

• recommended bonus pool for the Group based on the achievement of the Corporate KPIs.
• recommended salary increments and bonus quantum for the Group as well as the CEO and his target group.

(b) Directors’ Remuneration Framework

The remuneration package for the executive director is structured to link rewards to corporate and individual performance.
It comprises salary, allowances, bonuses and other customary benefits as accorded by comparable companies. The MD/CEO’s
bonuses are determined by the performance during the year against individual KPIs approved by the Board. The executive director
recuses himself from deliberation and voting on his remuneration at the Board meeting. The BNRC reviews the performance of the
executive director annually and submits its views/recommendations to the Board on adjustments in remuneration and/or rewards
to reflect the executive director’s contributions towards the Group’s achievements for the year.

The NEDs are remunerated through fixed monthly fees or allowances, meeting allowances and benefits-in-kind, such as annual
leave passage and the reimbursement of business peripherals. The level of remuneration of NEDs reflects the current demanding
challenges in discharging their fiduciary duties, roles and responsibilities, whether individually or collectively, as well as the
complexity of the Company’s operations and the industry and to also reflect the experience and level of responsibilities undertaken
by the NEDs of Malakoff. The remuneration of NEDs is not based on commission, percentage of profits, or turnover and does
not include commission based on the percentage of turnover of the Company. Based on the above, a proposed increase of fixed
monthly fees for the NEDs (except of the Non-Executive Chairman) had been tabled and approved by the shareholders at the
14th AGM of the Company.

The details of the remuneration received by the MD/CEO and NEDs for the financial year ended 31 December 2020 are set out in
the table below:

MD/CEO (ED) (Appointed on 1 December 2020)

Meeting Allowances Estimated
Other Allowances* of Board and Board Monetary Value Total
(RM) Committees(RM) Other of Benefits-in- (RM)
Salaries* Emoluments* Kind
Name of Director (RM) Company Subsidiaries Company Subsidiaries (RM) (RM) Company Subsidiaries

Anwar Syahrin 110,000.00 1,000.00 - - 6,500.00 ** 6,000.00 2,333.57 119,333.57 6,500.00

Abdul Ajib
Sub-total for ED 110,000.00 1,000.00 - - 6,500.00 ** 6,000.00 2,333.57 125,833.57

* Salaries, other emoluments and allowances are paid to the MD/CEO as per his employment remuneration package.
** Meeting allowances for Board meetings payable by the subsidiaries of Malakoff, Malaysian Shoaiba Consortium Sdn Bhd (“MSCSB”) and Alam Flora
Sdn Bhd (“Alam Flora”) are shared on an equal basis between Malakoff and the ED.

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NED
Board Committee/
Subsidiary Monthly Meeting Monetary Value
Directors’ Allowances Allowances of Benefits-in-
fees (RM) (RM) Other Kind Total
Name of Director (RM) Company Subsidiaries Company Subsidiaries Allowancesa (RM) (RM)

Datuk Haji Hasni Harun 360,000.00 36,000.00 - 39,500.00 21,000.00b 25,000.00 36,156.09c 517,656.09
Dato’ Sri Che Khalib 100,050.00 24,000.00 52,241.40 e
39,500.00 2,000.00 e
29,962.50 f
- 247,753.90
Mohamad Nohd
Cindy Tan Ler Chin 100,050.00g 24,000.00g - 47,500.00 - 5,000.00 - 176,550.00
Datuk Dr. Syed 100,050.00 96,000.00 - 64,500.00 - 5,000.00 - 265,550.00
Muhamad Syed
Abdul Kadir
Datuk Idris Abdullah 100,050.00 90,000.00 60,000.00e 64,500.00 2,000.00e 5,000.00 - 321,550.00
Datuk Ooi Teik Huat 100,050.00 30,000.00 - 52,500.00 - - - 182,550.00
Datuk Rozimi Remeli 100,050.00 54,000.00 - 67,500.00 - - - 221,550.00
Sub-total for NED 960,300.00 354,000.00 112,241.40 375,500.00 25,000.00 69,962.50 36,156.09 1,933,159.99
Notes:
a. Other allowances paid by Malakoff to the NEDs comprising annual leave passage and annual supplemental fees.
b. Meeting allowances for Board meetings payable by the subsidiary of Malakoff, MSCSB.
c. Benefits-in-kind paid to the Chairman of Malakoff comprising company car and reimbursement of petrol.
d. Directors’ remuneration is shared on an equal basis between MMC Corporation Berhad (“MMC”) and the NED who is nominated by MMC.
e. Monthly allowances and meeting allowances payable by the subsidiary of Malakoff, Alam Flora.
f. Annual leave passage & supplemental fees claimed for year 2019 and 2020.
g. Directors’ fees and Board Committee allowances are shared on an equal basis between Employees Provident Fund Board (“EPF”) and the NED who is
nominated by EPF.
Total (ED & NEDs) 1,070,300.00 355,000.00 112,241.40 375,500.00 31,500.00 75,962.50 38,489.66 2,058,993.56
Total remuneration at 1,070,300.00 467,241.40 407,000.00 75,962.50 38,489.66 2,058,993.56
Group level

The approval of shareholders on the remuneration and benefits payable to the Directors for the next term would be sought at the 15th AGM.

V Board Effectiveness

The Board through the BNRC reviews its performance and the performance of individual directors on a yearly basis. Since the listing
of the Company in 2015, this process was led by an external consultant for three years. In the subsequent years when a consultant is
not engaged, the yearly Board assessment exercise was conducted internally and facilitated by the Company Secretaries to evaluate
the overall effectiveness of the Board and individual Directors for FY2018 to FY2020.

The evaluation was carried out through the feedback obtained from each Board member who is required to complete a set of
customised questionnaires, designed to evaluate the current Board composition and activities. This Board assessment covers the
evaluation of the Board effectiveness in terms of its structure, Board operation and interaction, Board communication and its roles
and responsibilities as well as a combination of self and peer assessment. The Board’s responses and feedback to the questionnaires
are collated and thereafter analysed for formulation of action plans with a view to improve on areas identified by the Board to require
more focus and room for improvement. The BNRC, upon discussion of the results of the assessment, had presented the findings to
the Board.

Nevertheless, the Board would consider engaging an independent consultant to facilitate periodic review of the Board’s performance
for Malakoff as recommended by the MCCG 2017.

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vi Directors’ Training

The Board is always mindful of the importance of continuous education for its members to update their knowledge and enhance their
skills so that they are sufficiently equipped to perform their duties and be more ready to address and meet the challenges faced by
the Company and the Board.

During the year, the Board members (including the new MD/CEO) attended in-house training organised by MMC Corporation Berhad
entitled “Cyber Security Awareness and Budget Tax 2021 Proposals”. The Company Secretary also circulates regular updates on
training programmes from various organisations to the Directors on periodic basis for their consideration for participation.

All Directors had attended at least one training session, in compliance with paragraph 15.08(2) and Appendix 9C (Part A, paragraph 28)
of the MMLR of Bursa Malaysia. Details of the trainings attended by Board members are as follows:-

Name of Directors Conference/Training Programmes Attended Date

Datuk Haji Hasni Harun 1. Managing Recurrent Related Party Transactions 27 October 2020
(Chairman) 2. Cyber Security Awareness and Budget Tax 2021 Proposals 16 December 2020

Anwar Syahrin 1. Raising Defences: Section 17A, MACC Act 8 January 2020
Abdul Ajib (MD/CEO) 2. Cyber Security Awareness and Budget Tax 2021 Proposals 16 December 2020

Dato’ Sri Che Khalib 1. Shariah Governance and Shariah Compliant Culture in Islamic Financial 30 June 2020
Mohamad Noh Institutions
2. Cyber Security Awareness and Budget Tax 2021 Proposals 16 December 2020

Cindy Tan Ler Chin 1. Cyber Security Awareness and Budget Tax 2021 Proposals 16 December 2020
2. Managing Performance Session 21-24 December 2020

Datuk Ooi Teik Huat 1. The Quiet Transformation of Corporate Governance 3 December 2020
2. Malaysia Budget 2021 – Presentation by Ernst & Young 9 December 2020
3. Cyber Security Awareness and Budget Tax 2021 Proposals 16 December 2020

Datuk Idris Abdullah 1. Epidemics, Pandemics and Outbreaks 1 April 2020

2. Digital Transformation 13 April 2020
3. How to be an Effective Non-Executive Director in Disruptive World 21 September 2020
4. Artificial Intelligence in Marketing 16 December 2020
5. Cyber Security Awareness and Budget Tax 2021 Proposals 16 December 2020

Datuk Dr. Syed 1. Briefing on the Corporate Liability Provision under Section 17A MACC Act 28 May 2020
Muhamad 2. FIDE Forum on Risks: A Fresh Look from the Board’s Perspective 8 July 2020
Syed Abdul Kadir 3. FIDE Forum Seminar on Digital Financial Institutions Series: Managing 21 July 2020
Virtual Banking and Insurance Businesses
4. MACC 2018 under Section 17A on Corporate Liability 13 August 2020
5. BNM-FIDE Forum on Annual Dialogue with Governor of BNM 3 September 2020
6. How to be an Effective Non-Executive Director in Disruptive World 21 September 2020
7. Cyber Security Awareness and Budget Tax 2021 Proposals 16 December 2020

Datuk Rozimi Remeli 1. Business Foresight Forum – Evolutionary Change to Revolutionary 18-19 November 2020
Impact
2. Fraud Risk Management Workshop by PricewaterhouseCoopers PLT 1 December 2020
3. Cyber Security Awareness and Budget Tax 2021 Proposals 16 December 2020

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Induction Programme

In 2020, the Company has conducted a comprehensive induction programme to ease the new MD/CEO into his new roles and to
assist him in understanding the Group’s business strategy and operational matters. This has been the norm for new directors to
attend the induction programme as soon as practicable after they are appointed to the Board. The induction programme includes
briefings by each division head of key aspects of their respective section and the challenges currently faced by the Group.

EFFECTIVE AUDIT AND RISK MANAGEMENT

i BAC

The Board places great emphasis on the effectiveness and Other responsibility of BAC includes ensuring proper policies and
independence of the BAC to provide additional assurance processes are in place for the reporting of whistleblower matters and
and oversight relating to financial reporting process, internal oversight of the internal audit issues.
controls, risk management and governance for the Group
due to the substantial amount of risk and compliance matters The BAC comprises solely of NEDs where three out of four
that may stem from the Group’s operations in the highly members are IDs. The BAC is chaired by an INED, Datuk Dr. Syed
regulated industry. Muhamad Syed Abdul Kadir. One of the BAC members is a member
of the Malaysian Institute of Accountants (MIA) thus fulfilling the
The BAC assists the Board in relation to oversight of the requirement under paragraph 15.09(1)(c)(i) of the MMLR of Bursa
following: Malaysia. Furthermore, each of the BAC member is financially
literate in accordance with the definition suggested by the Corporate
• External audit, including prudential audit requirements; Governance Guide 3rd Edition 2017 (“CG Guide”).
• Internal audit function;
• The integrity of statutory financial reporting including Under the CG Guide, continuous development programmes have
financial reporting principles, policies, controls and been recommended for BAC members in relation to four areas
procedures; namely core functions, skills development, role and purpose of
• The effectiveness of the internal control and risk the audit committee and topical updates. During the financial year
management framework; under review, the BAC members have attended trainings for their
• The completeness of related party transactions and continuous professional development to keep themselves abreast of
recurrent related party transaction process to ensure the relevant developments in the industry which covered topics on
the said transactions are fair, within arm’s length and not cyber security and latest trend in waste management and implication
detrimental to the minority shareholders’ interests. on Malaysia.

Assessment of External Auditors

The BAC oversees the external audit function. This includes reviewing and approving the external audit plan and assessing the
performance of the external auditor. The BAC performs annual assessment of the processes and performance of the External Auditors
(“EA”) and had during the year assessed the quality of audit encompassing the performance of KPMG, the quality processes/
performance of the engagement team, audit team independence, objectivity and professionalism, audit scope and planning, audit
fees, audit communication and interaction. Assessment questionnaires were used as a tool to obtain input from each BAC member
and the Management.

Independence of the EA is important to the integrity of the audit function. In dealing with auditor independence, the BAC would assess
the EA through a non-audit services policy approved by the Board on 23 May 2017. Under this policy, approval of the BAC is required for
the engagement of the Group’s EA for non-audit services, if the cumulative non-audit fees for the year reaches 50% of prior year’s audit
fees (including the fees for limited quarterly review). KPMG had provided a written assurance to the BAC that they had been independent
throughout the audit engagement for FY2020 in accordance with the terms of all relevant professional and regulatory requirements.
The Management had also ensured that necessary safeguards were in place when engaging KPMG to carry out non-audit services for
the Group.

Details on the BAC are also elaborated in the BAC Report on pages 92 to 96 of this Annual Report.

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Internal Audit Function

The Group Internal Audit (“GIA”) supports the Board through the BAC in discharging its duties and governance responsibilities of
maintaining a sound internal control system within the organisation. The internal audit function is considered an integral part of
the assurance framework and GIA’s mission is to enhance and protect organisational value by providing risk-based and objective
assurance, advice and insight. At the same time, GIA also assists the BAC and Management to achieve the Company’s goals and
objectives by bringing a systematic and disciplined approach in evaluating and improving the effectiveness of the governance, risk
management and control processes within the Group.

With its independent status within the Group, GIA reports directly and functionally to the BAC and administratively to the MD/
CEO. GIA is also independent of the activities and functions that it audits and performs its duties in accordance with the Internal
Audit Charter, as approved by the BAC, which establishes the framework for the effective and efficient functioning of GIA. The BAC
also reviews and approves the appointment and removal of the Chief Internal Auditor, the Annual Internal Audit Plan, budget and
organisation structure of GIA to ensure that it is adequately resourced with competent staff to perform its role and function effectively.

The standards and practices adopted by GIA are aligned to the International Professional Practices Framework issued by the Institute
of Internal Auditors. As at 31 December 2020, the total number of personnel in GIA was nine including the Chief Internal Auditor. The
name, credential and work experience of the Chief Internal Auditor of GIA are disclosed on page 76 of this Annual Report.

Details of the internal audit function and activities are presented in the BAC Report on page 96 of this Annual Report.

ii Risk Management and Internal Control Framework

Malakoff has established a Group risk management framework including bidding for power, water generation and waste
which forms the basis of the risk management strategy in management projects. BRIC is responsible in assessing the key
managing a broad range of financial and non-financial risks that risks including funding options and costs as well as investment
the Group is exposed to its operating environment. returns in accordance with the Group’s Core Investment Policy
and Guidelines.
The Board always emphasises the importance of maintaining
a sound risk management and internal control system in Malakoff continues to uphold the highest standards of ethical
the organisation. The Enterprise Risk Management Policy & conduct, integrity and accountability in all our business
Framework (“ERMPF”) ensures a structured risk management activities and operations. With the adoption of Malakoff Group
process is adopted across the Group. The ERMPF incorporates Anti-Bribery Policy (“ABP”), the Group applies zero-tolerance
process relating to the identification, analysis, evaluation, policy towards any form of bribery by, or of, its employees or
treatment, monitoring, review, communication and consultation any persons or companies acting for or on behalf of the Group.
of the Group’s risks and controls. The Integrity & Governance Unit was established to support the
implementation of the ABP, with direct access to the Board and
In overseeing the risk management and internal control Senior Management on issues concerning bribery and integrity.
governance for the Malakoff Group, the Board has delegated its
responsibility to the BRIC. The BRIC comprises four NEDs, a In 2020, Covid-19 pandemic has impacted all aspects of our lives
majority of which are IDs, and chaired by an INED. The BRIC and the Group is not spared through this unprecedented time.
assists the Board to oversee the risk management activities and It affects how Malakoff Group works and manages its businesses.
to support the Board in fulfilling its responsibility for identifying The Board and Senior Mvanagement are always on high alert on
significant risks and ensuring the implementation of appropriate the pandemic condition and ensure the Group’s working policies
controls and systems to manage the overall risk exposure of the and procedures are in adherence to the Government directives
Group. The BRIC reports to the Board on a quarterly basis and in managing the pandemic. Stringent measures are implemented
provide reasonable assurance that any identified risk that may throughout the Malakoff Group to prevent infection at the
have adverse impact on the Group’s objectives are mitigated and workplace and premises to minimise the disruptions and ensure
managed. continuity of the Group’s businesses and operations.

BRIC is also delegated with the responsibility to review and Details of the Company’s risk management framework and
recommend investment proposals submitted by the Management. internal control system are set out in the Statement on Risk
Under this purview, the Board had given authority to the BRIC Management and Internal Control on pages 97 to 100 of this
to review and recommend the Group’s major investments, Annual Report.

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COMMUNICATING WITH OUR SHAREHOLDERS

Malakoff recognises the necessity of balancing the expectations of our shareholders and the Group’s capabilities in creating value.
Hence, it is important to provide the shareholders and the broader investment community with facilities to access up-to-date
information, participate in shareholders’ decision of the Company and provide avenues for two-way communication between the
Company, the Board and shareholders. Malakoff has developed an investor engagement platform for engaging with shareholders,
the media and the broader investment community.

In 2020, we continued our investor engagement efforts, focusing on building a better market understanding and a strong foundation
with the shareholders. We believe that consistent and transparent engagement are essential towards achieving a fair market valuation
of the Group. Malakoff’s Investor Relations (“IR”) unit facilitates a two-way communication between the Group and the investment
community via the following channels:

• Corporate Website - provides an essential platform for investors and other stakeholders to access information periodically through
the Investor Relations section at www.malakoff.com.my;
• Annual/Extraordinary General Meeting - offers an opportunity to our shareholders to raise their questions and concerns on the
Group’s performance directly to our Board and Management;
• One-on-One and Group Meetings/Investor Conferences/Roadshows - throughout the year, we held meetings with major institutional
investors, individual shareholder groups and financial analysts to share and discuss the Group’s business performance and its
strategic plan; and
• Annual Report - our Annual Report provides a comprehensive report on the Group’s financial results, business operations and
strategic direction.

Through these channels, Malakoff’s financial and operational performance, its strategic direction, as well as industry trends and
prospects, are consistently communicated to manage investor expectations on the Group’s current and future performance. We also
provide constant feedback to the Board and the Management in creating a thorough understanding of the investor sentiment and
sector trends within the wider investment landscape.

Malakoff’s Corporate Disclosure Policy provides the proper framework and guidelines to govern the release of material and sensitive
information, in line with disclosure requirements. The Head of Investor Relations and/or a member of the Senior Management usually
represent Malakoff in its communication with the investment community.

Analyst Briefings

Concurrent with the release of the Group’s quarterly results announcement 7%

to Bursa Malaysia, Malakoff would conduct an analyst briefing session 53%
to give further insights into the financial results, business operations and
strategic direction for the year under review. The briefings are normally
through face-to-face interaction with conference call facilities to ensure full
access to the intended audience. However, unprecedented times called for Analyst Buy
digital channels to be adopted, with continued communications through Recommendation Hold
virtual briefings. Following the previous practice, the CEO of Malakoff would (As at 31 December 2020)
Sell
present the quarterly performance to the audience before proceeding with
the Question and Answer (“Q&A”) session.

As of end-December 2020, a total of 15 research houses provided

40%
coverage on the Group. This reflects strong interest from the investment
community and shows that Malakoff is closely tracked by domestic and
international sell-side research houses as well as buy-side investors. The (Source from 15 Research Houses)
analyst recommendation as at 31 December 2020 is provided in the chart
for reference:

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CORPORATE GOVERNANCE OVERVIEW STATEMENT

We also tabulated the analyst briefing dates for 2020 as follows:-

Date Event Analyst Briefing Total Participants

19 February 2020 4Q 2019 Financial Results Direct Meeting/Conference Call 35

21 May 2020 1Q 2020 Financial Results Virtual via Microsoft Teams 33

19 August 2020 2Q 2020 Financial Results Virtual via Microsoft Teams 33

24 November 2020 3Q 2020 Financial Results Virtual via Microsoft Teams 37

Investor Relations Activities

During the year under review, we increased our engagements with the investment community and conducted more than 50
one-to-one and group meetings. During these engagements, the Group would address their concerns, where possible, to deliver
sustainable value to its shareholders. In 2020, there were increased engagements with the Environmental, Social and Governance
(“ESG”) investors due to the higher focus on sustainability matters. Additionally, we are actively engaged with other IR stakeholders
such as Bursa Securities, Malaysia Investor Relations Association (“MIRA”), and other IR service providers to ensure the Group
practices the highest standards of transparency and disclosure.

Number of Foreign Shareholders MMC Corporation

Events Amanah Saham
3.95% Berhad
38.45%
Briefings to Analysts and Fund Managers 4 Bumiputera
6.42%
(Direct Meeting/Conference Calls)
Kumpulan Wang
Investor Conferences 4 Persaraan (Diperbadankan)
(KWAP) 9.14%
One-on-One Meetings at Investor 10 Shareholders Mix
Urusharta Jamaah
Conferences (As at 22 February 2021)
Sdn Bhd
In-house Investor Meetings 55 10.22%

ESG Engagements 4
Employees Provident
Fund Board (EPF)
Engagement with IR Stakeholders 6
12.93% Others
(e.g. Bursa Malaysia, MIRA, Regulators, IR 18.89%
Service Providers)

Shareholders are welcome to raise queries or concerns regarding the Group at any time throughout the year. Communication and
feedback from the shareholders can be directed to our IR team through the following contact:

Head of Investor Relations Tel: +603 2263 3240 Email: [email protected]

Malakoff Corporation Berhad
Level 11, Block 4, Plaza Sentral, Fax: +603 2263 3377
Jalan Stesen Sentral 5, 50470 Kuala Lumpur

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CORPORATE GOVERNANCE OVERVIEW STATEMENT

KEY FOCUS AREAS AND FUTURE PRIORITIES STATEMENT OF DIRECTORS’ RESPONSIBILITIES

(Pursuant to paragraph 15.26(a) of the MMLR of Bursa Malaysia)
As the Company continues with its power and water projects
in 2020, the Company has also been actively embarking into The Board has given its assurance that the financial statements are
Renewable Energy in line with its objective of securing new prepared in accordance with the Act and the applicable approved
synergistic businesses during the year. With the expansion of the accounting standards for each financial year which gives a true
Group into waste management and environmental services section and fair view of the state of affairs of the Group and the Company
through Alam Flora Sdn Bhd Group, the Board will continue to refine in a transparent manner at the end of the financial year and of the
its corporate governance practices and procedures throughout the results and cash flows for the financial year.
Group to ease the integration of work processes and practices
and to ensure all the existing and new businesses of the Group The Directors’ Report for the audited financial statements of
are operating in an orderly manner and in the best interests of all the Company and the Group is outlined on pages 105 to 109
stakeholders of Malakoff. of this Annual Report together with the details of the Company
and the Group financial statements for the financial year ended
To further enhance the Group’s capability to compete in this 31 December 2020 which are set out on page 105 to 263 of this
challenging business environment, the Board will look into Annual Report.
sharpening its competitive edge and prioritise its succession
planning to establish a bigger pool of talents from which new COMPLIANCE STATEMENT BY THE BOARD ON THE
candidates will be assessed and identified to take on the senior CORPORATE GOVERNANCE OVERVIEW STATEMENT
positions in the Group.
This statement on the Company’s corporate governance practices
CORPORATE GOVERNANCE REPORT is made in compliance with paragraphs 15.25 and 15.08A of the
MMLR of Bursa Malaysia.
The Corporate Governance Report as prescribed by
Bursa Malaysia for the application of each practice set out in the Having reviewed and deliberated this statement, the Board
MCCG 2017 can be downloaded from the Company’s website at is satisfied that to the best of its knowledge, the Company is
www.malakoff.com.my. substantially in compliance with the principles and practices set
out in the MCCG 2017 as well as the relevant paragraphs under the
MMLR of Bursa Malaysia for the financial year under review. Any
practices in the MCCG 2017 which have not been implemented
during the financial year would be reviewed by the Board and be
implemented where practical and relevant to the Group’s business.

This statement has been presented and approved by the Board at

its meeting held on 11 March 2021.

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BOARD AUDIT COMMITTEE REPORT

The Board of Directors (“Board”) of Malakoff Corporation Berhad (“MCB” or “Company”)

is pleased to present the Board Audit Committee (“BAC” or “Committee”) Report for the
financial year (“FY”) 2020.

COMPOSITION AND ATTENDANCE

The BAC comprises four (4) members as follows, all of whom are Non-Executive Directors (“NEDs”); three (3) being Independent NEDs and
one (1) Non-Independent NED. This meets the requirements of paragraph 15.09(1)(a), (b) and (c) of the Main Market Listing Requirements
(“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”).

MEMBERS OF BAC No. of Meetings Attended

Datuk Dr. Syed Muhamad Syed Abdul Kadir

Chairman | Independent Non-Executive Director
6 /6

Datuk Idris Abdullah

Member | Independent Non-Executive Director
6 /6

Datuk Ooi Teik Huat

Member | Non-Independent Non-Executive Director (Member of the Malaysian Institute of Accountants)
6 /6

Datuk Rozimi Remeli

Member | Independent Non-Executive Director
6 /6

MEETINGS statements announced to Bursa Malaysia as well as compliance

with applicable Financial Reporting Standards. Representatives of
The BAC met six (6) times during the FY2020. The BAC also met the External Auditors were also invited to attend the BAC meetings
with the External Auditors and Chief Internal Auditor separately on quarterly basis, as and when the BAC considered appropriate.
on two (2) occasions, without Management’s presence and had
accordingly complied with the frequency of meeting requirement The Company Secretaries act as the Secretary of the BAC. The
under its Terms of Reference (“TOR”). Minutes of each BAC meeting upon confirmation of the BAC, were
circulated to the Board for information and notation. The Chairman
The Managing Director/Chief Executive Officer (“MD/CEO”), Chief of the BAC also highlights key matters discussed at each BAC
Operating Officer, Chief Financial Officer and Chief Internal Auditor meeting to the Board.
were invited to attend all BAC meetings. The involvement of senior
management in the BAC meetings enabled direct communication ANNUAL PERFORMANCE ASSESSMENT OF BAC
and discussion between the BAC members and senior
management so that matters pertaining to the Company’s and its The performance and effectiveness of the BAC and its members
subsidiaries’ (collectively “Group”) financial results, operational is assessed annually through the Board Committee effectiveness
issues, internal control, governance and internal audit matters are evaluation. The Board is satisfied that the BAC and its members
better appreciated by the BAC. have been able to discharge their functions, duties and
responsibilities in accordance with the BAC’s TOR in supporting the
The External Auditors were engaged to conduct a limited review Board in ensuring that the Group upholds appropriate Corporate
of the Group’s quarterly financial statements, where applicable Governance standards. The TOR of the BAC is available for
and these limited reviews provided assurance to the BAC on reference under the “Investor Relations/Corporate Governance”
the reliability and consistency of the Group’s quarterly financial section of the Company’s website at www.malakoff.com.my.

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BOARD AUDIT COMMITTEE REPORT

SUMMARY OF ACTIVITIES FOR THE FY2020

i Financial Reporting

The BAC reviewed all four (4) quarterly financial statements of the Company with Management before making recommendation to the
Board for its consideration and approval to release the same to Bursa Malaysia.

The BAC also reviewed the consolidated annual audited financial statements of the Company for the FY2019, any audit issues
and reservations arising from the statutory audit with the External Auditors, prior to making recommendation to the Board for its
consideration and approval.

The quarterly financial statements were prepared in accordance with the Malaysian Financial Reporting Standards (“MFRS”) 134
Interim Financial Reporting and Appendix 9B (Part A) of the MMLR of Bursa Malaysia while the consolidated annual audited financial
statements were prepared in accordance with MFRS, International Financial Reporting Standards and the requirements under the
Companies Act 2016.

During the review of the financial statements, the following tasks were carried out by the BAC:

(a) discussed and reviewed with Management and External (c) reviewed the key audit matters and their implications to
Auditors the accounting policies adopted and applied the Group; and how these matters were addressed from
consistently by the Group to ensure compliance with the the audit, going concern considerations and the Auditors’
applicable approved accounting standards, including Report that were included in the Company’s Annual Report;
the appropriateness of the accounting provisions and
compliance with accounting standards and other statutory (d) reviewed the BAC Report and Corporate Governance
and regulatory requirements; Overview Statement and Report to ensure adherence to
legal and regulatory reporting requirements and appropriate
(b) reviewed the declaration of the final and interim dividends resolution of all accounting matters requiring significant
of the Company including the solvency test required under judgement and recommended the same to the Board for
the Companies Act 2016, ensuring that the Company has approval; and
adequate resources to continue in operation for the next
12 months, before such declaration of dividends were (e) discussed, on quarterly basis, any corrected material
recommended to the Board for approval; misstatements in the accounts and reviewed the summary
of the unadjusted audit differences for the Group.

ii External Audit

Where applicable, at each quarterly meeting of the BAC for the FY2020, the following were reviewed and discussed with the BAC by
the External Auditors, Messrs. KPMG PLT (“KPMG”):

(a) reviewed quarterly reports on new and recurring significant (b) reviewed and monitored the nature and extent of the
audit findings arising from the limited review including non-audit services provided by the External Auditors in
financial reporting issues, significant judgements made accordance with the policy on non-audit services to ensure
by Management and unusual events or transactions. Also that the independence and objectivity of KPMG in performing
included in the report, were Management’s responses to its duties as the Group’s External Auditors are safeguarded
the findings and their action plans to address the issues and any potential conflict of interest is being managed;
raised by the External Auditors, for BAC’s notation and
feedback, where necessary;

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BOARD AUDIT COMMITTEE REPORT

(c) reviewed the External Auditors’ 2020 Audit Plan prior to as the Company’s External Auditor for FY2019. The
the commencement of the statutory audit for FY2020, results of the assessment for FY2019 were noted and
highlighting amongst others, the engagement team recommended by the BAC for KPMG’s re-appointment
involved in the statutory audit review, audit timeline, as the External Auditors of the Company for FY2020. The
scope and nature of the audit and emphasised areas of Board at its meeting held on 6 March 2020 approved the
key audit matters for the statutory audit. The potential key BAC’s recommendation, and subsequently shareholders’
audit matters identified for the Group were in respect of approval was obtained at the 14th Annual General Meeting
the review of purchase price allocation of newly acquired (“AGM”).
subsidiaries and joint ventures, recoverability of investment
in associates, recoverability of intangible assets, review of On 11 March 2021, the Board approved BAC’s
residual value of power plants and contingent liability and recommendation for the re-appointment of KPMG as the
legal proceedings; External Auditors of the Company for FY2021, subject to
approval by the shareholders at the forthcoming 15th AGM.
(d) discussed and recommended the proposed fees for the
statutory audit for the Board’s approval; (f) held two (2) private sessions with the External Auditors
in February and November 2020, without the presence
(e) discussed and reviewed the results of the annual of the Management. The meetings provided an open and
assessment evaluated by the BAC and Management unrestricted forum for the External Auditors to discuss with
in respect of the quality of audit, covering the External the BAC the areas of concern and findings related to the
Auditor’s performance, suitability and its independence Group’s financial statements for the attention of BAC.

The fee for non-audit services provided by KPMG for FY2020 amounted to RM640,606 of which RM490,606 was approved by the
Chief Financial Officer in line with Clause 7.4.1 of the non-audit services policy of the Company, whereas the remaining RM150,000
was approved by the BAC. The non-audit services were mainly related to tax compliance and other advisory services largely related to
review of the purchase price allocation pursuant to the Group’s acquisitions of a subsidiary and a joint venture which were completed
in 2020 as well as loan financing activity.

KPMG also, pursuant to the Company’s policy on non-audit services, had undertaken the necessary measures to ensure that each
non-audit service engagement would not result in conflict of interest nor impair the independence and objectivity of the External
Auditors. Management had also ensured that necessary safeguards were in place when engaging KPMG to carry out non-audit
services for the Group. With the measures taken by KPMG and Management, the BAC was satisfied that the non-audit services
provided during the FY complied with applicable rules and standards of independence for auditors, as well as the provisions stipulated
in the non-audit services policy.

KPMG had provided a written assurance to the BAC that it had implemented a number of firm wide ethics and independence systems
to monitor compliance with their policies in relation to independence and ethics and had been independent throughout the audit
engagement for FY2020.

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BOARD AUDIT COMMITTEE REPORT

iii Internal Audit (“IA”)

During the FY2020, the BAC had carried out the following:

(a) reviewed and approved the Annual IA Plan for (d) reviewed and deliberated on the results from ad-hoc special
FY2021 to ensure adequacy of audit scope, review assignments or audit investigations performed based on
coverage, budget, resources and authority for Management’s request or complaints received through whistle-
Group Internal Audit (“GIA”) to carry out its work blowing channels and recommended appropriate remedial actions/
effectively and independently; measures to be taken;

(b) reviewed and deliberated on the IA reports tabled (e) reviewed and monitored the progress and status of action plans
during the year by GIA which highlighted key or corrective actions undertaken by Management to ensure
control issues together with the root causes, risks, audit issues or control deficiencies highlighted by GIA are being
audit recommendations for improvement and addressed and rectified in a timely manner;
Management’s action plans to address the control
deficiencies; (f) reviewed and assessed the effectiveness and performance of the
IA function for FY2019 in respect of audit quality, scope, adequacy
(c) reviewed and deliberated on the follow-up audit of resources and competency; and
reports tabled during the year by GIA on the
adequacy and effectiveness of the action plans (g) held two (2) private sessions with the Chief Internal Auditor in
or corrective actions undertaken by Management February and November 2020 without the presence of Management
in addressing audit issues or control deficiencies to ensure that there were no restrictions on GIA’s scope of work
highlighted from prior year audit reports to ensure and to discuss any other matters that GIA wishes to escalate to
non-recurrence; the BAC.

iv Related Party Transactions (“RPTs”)

The BAC had reviewed and recommended three (3) RPTs entered into with the Company’s related parties in accordance with the
RPT policies and procedures of the Company, for the Board’s approval, to ensure that these transactions were fair and reasonable,
undertaken in the Company’s best interest and on normal commercial terms as well as not detrimental to the interest of the minority
shareholders.

The Group’s RPTs and recurrent related party transactions (“RRPTs”) for the preceding 12 months up to each reporting quarter as
well as the forecasted RPTs and RRPTs for the next 12 months period from the quarterly reporting period were also reported to the
BAC and the Board on a quarterly basis. The reporting of these transactions by the Group was coordinated through the Corporate
Secretarial Department with all the respective subsidiaries, departments and business units within the Group, before the same were
collated and presented to the BAC and the Board. The threshold limit of the RPTs and RRPTs were also monitored accordingly to
ensure compliance with the MMLR.

The GIA also assists the BAC by conducting reviews of the Group’s RPTs and RRPTs to provide assurance that the transactions
reported to the BAC were accurate, complete, in compliance with the MMLR and undertaken on arm’s length basis and normal
commercial terms.

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BOARD AUDIT COMMITTEE REPORT

INTERNAL AUDIT FUNCTION

The GIA was established to support the Board through the BAC in (e) undertake ad-hoc IA assignments, special reviews or audit
discharging its duties and governance responsibilities of maintaining a investigations as requested by the BAC or Management and
sound internal control system within the organization. present the results to the BAC and Management;

The IA function is considered an integral part of the assurance (f) monitor the progress of Management’s agreed action plans
framework and GIA’s mission is to enhance and protect organizational or corrective actions in addressing the audit issues or control
value by providing risk-based and objective assurance, advice and deficiencies highlighted by GIA;
insight. At the same time, GIA assists the BAC and Management to
achieve the Company’s goals and objectives by bringing a systematic (g) maintain professional audit staff with sufficient knowledge,
and disciplined approach in evaluating and improving the effectiveness experience and skills.
of governance, risk management and control processes within the
Group. This function serves as an important source of support for the In addition, GIA is also responsible for the administration of the Group’s
BAC in identifying weaknesses or deficiencies in internal processes Whistle-blowing Policy which provides an avenue for employees and
and to facilitate appropriate remedial measures to be taken by the third parties dealing with the Company to disclose cases of improper
Company. conduct such as criminal offences, fraud, corruption, breach of
policies and procedures or other malpractices to the Company.
The purpose, authority, responsibility, independence and objectivity Any disclosure of improper conduct can be made verbally or
of GIA are formally defined in the IA Charter, as approved by the in writing to the Chairman of the BAC via letter or e-mail to
BAC, which establishes the framework for the effective and efficient [email protected].
functioning of GIA. The standards and practices adopted by GIA are
aligned to the International Professional Practices Framework issued For the FY2020, GIA conducted various IA assignments in accordance
by the Institute of Internal Auditors. with the Annual IA Plan that is consistent with the Company’s goals,
complexity and risks of its activities. During the year, GIA had carried
GIA has an independent status within the Group and is independent out six (6) full audits and six (6) follow-up audits covering the areas of
of the activities and functions that it audits. GIA reports directly and plant operation, maintenance, inventory and warehouse management,
functionally to the BAC and administratively to the MD/CEO. The BAC procurement, finance, human resource, and health, safety, security
also reviews and approves the appointment and removal of the Chief and environment. In addition, GIA had also carried out an additional
Internal Auditor, the Annual IA Plan, budget and organization structure seven (7) special review assignments including investigations.
of GIA to ensure that it is adequately resourced with competent staff to
perform its role and function effectively and independently. The IA reports were tabled and presented to the BAC for deliberation,
highlighting key control issues together with root causes, risks,
Amongst the roles and responsibilities of GIA are as follows: audit recommendations for improvement, along with Management’s
responses and agreed action plans to be implemented. The progress
(a) provide an independent and objective assessment and assurance of these action plans is monitored by GIA and reported to the BAC on
to the BAC and Management on the adequacy and effectiveness a quarterly basis.
of key internal control system, governance, risk management and
control processes of the organization; As at 31 December 2020, the total number of personnel in GIA was
nine (9) including the Chief Internal Auditor. The name, credential and
(b) develop a risk based Annual IA Plan that is aligned to the work experience of the Chief Internal Auditor of GIA are disclosed on
Company’s strategic objectives and takes into consideration of page 76 of the Annual Report.
past audit history, criticality, inputs and feedback on any risk and
control concerns from the BAC and Management; The GIA has a sufficient mix of internal auditors with various
knowledge, skills and competencies to perform its function and GIA
(c) carry out IA assignments in accordance with the approved Annual is committed to equip its auditors with adequate knowledge and
IA Plan and report to the BAC on key control issues, root causes, proficiencies to discharge their duties and responsibilities effectively.
risks, audit recommendations for improvement, along with The Company is also a corporate member of the Institute of Internal
Management’s responses and agreed action plans; Auditors Malaysia which enables the internal auditors in GIA to keep
abreast of latest developments in the IA practices and attend relevant
(d) perform follow-up audits to determine whether the agreed trainings organized by the Institute of Internal Auditors Malaysia.
action plans or corrective actions undertaken by Management in The total cost incurred by GIA for FY2020 was RM2.1 million.
addressing audit issues or control deficiencies highlighted from
past audit reports have been correctly implemented and adhered This BAC Report is made in accordance with the resolution of the
to consistently; Board duly passed on 11 March 2021.

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G O V E R N A N C E S TAT E M E N T S SECTION 4

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

BOARD’S RESPONSIBILITY
INTRODUCTION

The Board is responsible for the overall tone and culture towards an effective risk
The Board of Directors (“Board”) of Malakoff Corporation
management and internal control system in the Group. The Board is also responsible
Berhad is committed to embedding an effective risk
for reviewing the adequacy and effectiveness of the Group’s risk management and
management and internal control system into Malakoff
internal controls processes. The Group’s risk management processes are designed
Corporation Berhad and its subsidiaries (“Group”).
such that all key risk areas are effectively managed to enable the Group to achieve
The Statement on Risk Management and Internal
its business objectives. The Board is aware that the risk management and internal
Control is made in accordance with Paragraph 15.26
control system can only provide reasonable and not absolute assurance against
(b) of the Main Market Listing Requirements of Bursa
the risk of material loss or occurrence of unforeseeable circumstances.
Malaysia Securities Berhad (“Bursa Securities”) and
the revised guidelines on the Statement on Risk
RISK MANAGEMENT
Management and Internal Control - Guidelines for
Directors of Listed Issuers. This is also in line with the
The Group acknowledges that risk management is fundamental in providing
Malaysian Code on Corporate Governance (“MCCG”)
sound corporate governance practice. A holistic approach of risk management
2017 which requires public listed companies to
strengthens the overall internal control, decision making and the resource allocation
maintain a sound system of risk management and
processes within the Group. Risk management enables proactive and structured
internal controls to provide assurance and safeguard
risk identification and evaluation process, and where required, management
shareholders’ investments, customers’ interests and
actions will be identified to mitigate the risk to enable the Group to achieve its
company assets.
business objectives.

Risk Management Framework

The Board is committed to ensure sustainable growth of the Group and recognizes the significance of risk management and policies in
safeguarding the interest of the Group and its shareholders. The Board Risk and Investment Committee (“BRIC”) oversees the Group’s risk
oversight responsibilities and framework. The Management Risk Committee (“MRC”) supports the BRIC in integrating risk management
strategies, risk appetite as well as reviewing the application of risk management practices across Malakoff Corporation Berhad, in accordance
with the Group’s Enterprise Risk Management Policy and Framework (“ERMPF”). Our ERMPF has been revised in 2020 to reflect the changes
from the updated version of ISO 31000:2018 Risk Management Guidelines. The ERMPF has included the Plant Risk Committee (“PRC”) which
has been established to identify, discuss and manage operational risks at the respective power plants.

The ERMPF incorporates the process relating to the identification, analysis, evaluation, treatment, monitoring, review, recording, reporting,
communication and consultation of the Group’s risks and controls. The main elements of the Group’s risk management process are as follows:

SCOPE, CONTEXT, CRITERIA

RISK ASSESSMENT
MONITORING AND
COMMUNICATION AND
REVIEW
CONSULTATION RISK IDENTIFICATION
Monitoring and review
Communication and
are essential part of the
consultation with
RISK ANALYSIS risk management process
stakeholders should take
which provide reasonable
place during all stages
assurance that risks
of the risk management RISK EVALUATION
are being managed
process.
effectively.
RISK TREATMENT

RECORDING AND REPORTING

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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

The Group defines risk as events that could

affect its objectives. It is measured by the Almost
Certain
likelihood of the risk occurring and the
impact if the risk occurs. The ERMPF will
ensure that the risk assessment process Likely

LIKELIHOOD
of identifying, analysing, evaluating and
treating risk are in place to protect the Possible
Group from material losses. It will assist the
Group in making decisions and prioritising
Unlikely
the implementation of the risk treatment.

The risk matrix depicts the likelihood and Rare

impact parameters used to measure and Insignificant Minor Moderate Major Catastrophic

assess the Group’s risk level: IMPACT

Corporate Digital Assurance Risk Reporting

To enhance the Group’s risk management practices, a Corporate On a quarterly basis, the identified risks are discussed and
Digital Assurance module had been employed in the Enterprise Risk deliberated at the MRC meeting chaired by the Managing
Management System (“ERMS”). The scorecard owners, risk owners, Director (“MD”)/Chief Executive Officer (“CEO”). The reports
control owners and action plan owners are required to provide are subsequently tabled to the BRIC for deliberation and
assurance with respect to the status of all material risks, controls and recommendations. The Board notes the report on the risks
management actions. faced by the Group and actions taken by Management to
mitigate the risks. The overview of the Group’s reporting
The respective owners will provide assurance that they have reviewed structure is provided in the table below:
and updated the Corporate Risk Scorecard system with the status of
all material risks, controls and management actions.
BOD
In relation to the Risk Management process, the owners also certify that: Board of Directors

BRIC
• The risks, controls and management actions information within the Board Risk and Investment Committee
Corporate Risk Scorecard are accurate and complete.
MRC
• Where exposure is considered acceptable, they have documented Management Risk Committee
and validated that the control activities are in place and are
RMID Risk Management & Integrity
effective. Department
• Where an individual risk has been assessed as unacceptable,
PRC/BU Plant Risk Committee/
management actions have been formulated and individuals have Business Units
been identified as owners, with accompanying due dates to
address the risk.
• To the extent that an individual risk is not perceived to be within Risk management is integrated into the Group’s day to day
their control (either directly or as delegated to the immediate business activities while risk-based evaluation is incorporated
Management team), it will be documented and elevated to the into its decision-making process. This demonstrates the
appropriate level of Management within the Group. emphasis placed by the Board on the risk management
agenda and underlines the importance of a well-managed
In addition, the owners also confirm that the risk management risk management programme. Echoing the tone of the Board,
process has been complied with and the information for which they the MRC continues to reinforce risk management principles
are responsible for under Corporate Risk Scorecard fairly reflects the among employees to ensure continuous improvement at
position of the Group. all levels.

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G O V E R N A N C E S TAT E M E N T S SECTION 4

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTERNAL CONTROL SYSTEM

The key features of the Group control structure that provide reasonable assurance against the occurrence of events that could prevent the
achievement of business objectives are as follows:

The Board Whistle-Blowing

The Board of Malakoff Corporation Berhad provides direction and oversight The Group’s Whistle-blowing Policy sets out avenues for
on internal controls. The terms of reference and responsibilities are defined employees and third parties dealing with the Group with
together with the Board Charter. The specific lines of responsibility, proper procedure to disclose cases of improper conduct
accountability and delegation of authority as approved by the Board to such as criminal offences, fraud, corruption, breach of
facilitate the Group’s operations is the obligation of the MD/CEO and MRC. Group policies and Code of Conduct or other malpractices.

Business Plan, Budget and Reporting A whistle-blower is assured confidentiality of identity, to

Malakoff Corporation Berhad establishes annual business plans and budgets the extent reasonably practicable. This includes protecting
that have been recommended by Management and approved by the Board the whistleblowers from detrimental actions that may result
from the disclosure of improper conduct, provided that
before commencement of the new financial year.
the disclosure is made in good faith. The Whistle-blowing
Policy is also to ensure that fair treatment is provided to
The Board reviews the result against budget on a quarterly basis in
both the whistle-blower and the alleged wrongdoer when a
conjunction with the public announcement of the Group’s quarterly financial
disclosure of improper conduct is made.
result under the Main Market Listing Requirements of Bursa Securities.
Disclosure of any improper conduct can be made verbally
The Board also reviews Malakoff’s Sustainability Statement which
or in writing to the Chairman of the BAC via a letter or e-mail
summarises the management of material aspects of operations in particular,
to [email protected].
economic, environment and risks, as well as opportunities.

Policies and Procedures The Chief Internal Auditor is responsible for the
administration, interpretation and application of the
Documented internal policies and procedures are in place to ensure Whistle-blowing Policy and any amendment to this Policy
compliance with internal controls and the relevant rules and regulations. shall be affected by the Chief Internal Auditor, subject to
They are reviewed regularly to ensure that the gaps in controls are addressed the approval of the MD/CEO, the Chairman of the BAC and
and where required, policies and procedures are revised to meet with the the Board.
business condition.
Anti-Bribery Policy
Limits of Authority
The Group’s Anti-Bribery Policy was approved and
The Limits of Authority sets out the level of authority under key business areas adopted on 3rd October 2019. This Policy was then revised
(financial and non-financial) of the Group. The authorisation limits in respect and approved on 24th November 2020. The revision
of organisational requirements such as procuring goods and services, cash includes the formation of an Integrity & Governance Unit
transactions and contracting are clearly defined and documented. The and establishment of the role of Integrity Coordinators.
limits are reviewed and updated regularly to reflect the current business The implementation of the policy will further strengthen
environment, operational and structural changes of the Group. our corporate governance and ensure commitment
from all stakeholders to uphold the highest standards
Internal Audit of ethical conduct, integrity and accountability in all
The Group Internal Audit (“GIA”) provides assurance on the existence, our business activities and operations. This is also in
adequacy and effectiveness of governance, risk management and control line with the Malaysian Anti-Corruption Commission
processes designed to improve and add value to the Group. This function (“MACC”) Amendment Act 2018 (“the Act”) which
serves as an important source of support for the Board Audit Committee requires commercial organisations to establish adequate
(“BAC”) in identifying weaknesses or deficiencies in internal processes and procedures to avert corruption as a defence against
to facilitate appropriate remedial measures to be taken by the Company. corporate liability under the Act.

GIA reports directly and functionally to the BAC and administratively to Joint Venture and Associates
the MD/CEO. GIA is independent from the functions and activities that it Malakoff Corporation Berhad ensures that investment and
audits and performs its duties in accordance with the Internal Audit Charter interest in material joint ventures and/or associates, are
as approved by the BAC and the International Professional Practices protected by having board representation at the respective
Framework by the Institute of Internal Auditors. joint ventures and/or associates. The management of
the joint ventures and/or associates is also responsible
Details of the internal audit function and activities are presented in the BAC to oversee the operation and performance of the joint
Report on page 96 of this Annual Report. venture and/or associates.

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 4 G O V E R N A N C E S TAT E M E N T S

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
EFFECTIVENESS
The external auditors have reviewed this Statement on Risk
The Board reviews the effectiveness of the risk management Management and Internal Control pursuant to the scope set out
and internal control system through the following monitoring and in Audit and Assurance Practice Guide (“AAPG 3”), Guidance
assessment mechanisms: for Auditors on Engagements to Report on the Statement on
Risk Management and Internal Control included in the Annual
• A quarterly review of the Group’s actual financial and Report issued by the Malaysian Institute of Accountants (“MIA”)
operational performance against planned performance and for inclusion in the annual report of the Group for the year ended
other key financial and operational performance indicators; 31 December 2020, and reported to the Board that nothing
has come to their attention that cause them to believe that the
• The Risk Management & Integrity Department presents statement intended to be included in the annual report of the
the Risk Management Report to the BRIC every quarter to Group, in all material respects:
provide an overview of the Group’s key risks and action
plans in mitigating the risks. The BRIC provides its views (a) has not been prepared in accordance with the disclosures
which are then communicated to the respective risk required by paragraphs 41 and 42 of the Statement on Risk
owners by the Risk Management & Integrity Department. Management and Internal Control: Guidelines for Directors of
The report is then escalated to the Board upon deliberation Listed Issuers, or
by BRIC; and
(b) is factually inaccurate.
• BAC deliberates and discusses reports issued by the
Internal Audit report and external auditors pertaining to AAPG 3 does not require the external auditors to consider whether
financial, operational, governance, risk management and the Directors’ Statement on Risk Management and Internal Control
control matters. The status of preventive and corrective covers all risks and controls, or to form an opinion on the adequacy
actions for issues discussed are also updated to the BAC and effectiveness of the Group’s risk management and internal
to enable monitoring of the actions. control system including the assessment and opinion by the Board
and Management thereon. The auditors are also not required to
COMMENTARY ON THE ADEQUACY AND EFFECTIVENESS consider whether the processes described to deal with material
internal control aspects of any significant problems disclosed in
The risk management and internal control defined above have been the annual report will, in fact, remedy the problems.
in place for the year under review and up to the date of approval of
this statement for inclusion in the annual report. This statement is made in accordance with the resolution of the
Board dated 11 March 2021.
In making this statement, the Board had received assurance from
the MD/CEO, Chief Financial Officer and Head of Risk & Process
Improvement Division that the risk management and internal
control processes are operating adequately and effectively, in all
material aspects for the reporting period.

The Board is of the opinion that the risk management and internal
control are adequate and effective in providing reasonable
assurance for the year under review.

There was no major internal control weakness identified during the

year under review that may result in any material loss that would
require disclosure in this statement.

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G O V E R N A N C E S TAT E M E N T S SECTION 4

ADDITIONAL COMPLIANCE INFORMATION

UTILISATION OF PROCEEDS

During the financial year, the utilisation of proceeds are as below:

SUBSIDIARY DEBT RAISED UTILISATION OF PROCEEDS

Malakoff International Limited Term Loan facility of up to USD72 million All proceeds raised from the USD term
(“USD term loan”) loan had been utilised to refinance
the financial indebtedness under the
existing facility

AUDIT FEES AND NON-AUDIT FEES Power Systems and GE Power Services (Malaysia) Sdn Bhd
(collectively referred to as “GE”) in order to resolve and settle
The fees paid/payable to the external auditors, KPMG PLT and its the claims (“Claims”) arising from the failure events at the
affiliates (“KPMG”) in relation to the audit and non-audit services 1 x 1000 MW coal fired power plant located in Tanjung Bin,
to the Group and the Company for the financial year ended Johor, Malaysia (“Plant”) that occurred between April 2017 and
31 December 2020 are as follows: June 2019 (collectively referred to as “Failure Events”) upon
the terms and conditions of the Settlement Agreement.
Group Company
The Owner had earlier raised the Claims against GE under the
2020 2020
Engineering, Procurement and Construction Contract dated
RM’000 RM’000
23 February 2012 in relation to the losses and damages that
Audit fees 1,366 574 the Owner suffered as a result of the Failure Events. Pursuant
Non-audit fees 641* 304 to the Settlement Agreement, the Owner and GE agreed
2,007 878 to waive, release and relinquish all their respective rights or
interest in the Claims in consideration of the agreed settlement
package which comprises, inter alia, supply and provision of
* The non-audit fees paid/payable to KPMG were mainly related to tax parts, services and training by GE to the Owner, either without
compliance and other advisory services largely related to review of any charge or at discounted rates.
purchase price allocation pursuant to the acquisitions of a subsidiary
and a joint venture which were completed in 2020 as well as loan (iii)
On 22 September 2020, Malakoff R&D Sdn Bhd,
financing activity.
a wholly-owned subsidiary of Malakoff, entered into a Sale
and Purchase Agreement (“SPA”) with Eksklusif Pesona
MATERIAL CONTRACTS Sdn Bhd to acquire a plot of freehold land of approximately
71.44 hectares or 176.5 acres in size held under title No. GRN
(i) On 20 May 2020, Batu Bor Hidro Sdn Bhd (“BBHSB”) and Lubuk 57532, Lot 16277, located in Mukim Pulau Sebang, Daerah
Paku Hidro Sdn Bhd (“LPHSB”) had separately entered into Alor Gajah, Melaka for a purchase consideration of Ringgit
Renewable Energy Power Purchase Agreements (“REPPAs”) Malaysia One Hundred and Fifty Million (RM150,000,000.00),
with Tenaga Nasional Berhad (“TNB”) for the sale and purchase subject to any adjustment thereto in accordance with the terms
of renewable energy generated from the two proposed small of the SPA.
hydro projects in Pahang (“Projects”) for a period of 21 years.
The REPPAs regulate and govern the rights and obligations of (iv) On 18 November 2020, Southern Biogas Sdn Bhd (“SBSB”),
TNB and BBHSB, and TNB and LPHSB, respectively in relation a 60%-owned indirect subsidiary of Malakoff, had received
to the Projects. Both BBHSB and LPHSB are 65%-owned the Feed-in Tariff approval from the Government of Malaysia
indirect subsidiaries of MCB, with the remaining 35% interest through Sustainable Energy Development Authority (“SEDA”)
owned by Touch Meccanica Sdn Bhd. to undertake the development of 2.4 MW Biogas Power Plant
in Ulu Sebol, Kota Tinggi, Johor Darul Takzim (“Project”).
(ii) On 30 June 2020 , Tanjung Bin Energy Sdn Bhd and Tanjung SBSB had participated in a competitive e-bidding exercise
Bin Energy Issuer Berhad (collectively referred to as “Owner”), for the Project and submitted its bid to SEDA on 5 June 2020
wholly owned subsidiaries of Malakoff, entered into a (“Bid”). SEDA has accepted SBSB’s Bid and selected SBSB as
settlement agreement (“Settlement Agreement”) with Alstom the successful bidder.

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SECTION 4 G O V E R N A N C E S TAT E M E N T S

ADDITIONAL COMPLIANCE INFORMATION

RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“RRPT”)

Malakoff Corporation Berhad (“Malakoff” or “the Company”) had at its 14th Annual General Meeting (“AGM”) held on 9 June 2020
obtained the shareholders’ mandate to allow Malakoff Group to enter into RRPT with related parties that are necessary for the day-to-day
operations of the Group. The RRPT mandate is valid until the conclusion of the forthcoming 15th AGM of the Company.

In accordance with Paragraph 3.1.5 of Practice Note 12 of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities
Berhad, the details of the RRPT conducted during the financial year ended 31 December 2020 pursuant to the said shareholders’
mandate are as follows:

Value of transaction
from 1 January 2020
Malakoff and/or its Transacting Nature of to 31 December 2020
No. subsidiary companies related parties relationship Nature of transactions (RM’000)
Expenses to Malakoff Group
1 Tuah Utama Sdn Bhd MMC Corporation MMC is a major Technical, engineering, Nil
(“TUSB”) Group Berhad (“MMC”) shareholder of consultancy, construction &
Group Malakoff procurement services in relation
to power supply infrastructure
project(s) by MMC Group
2 Alam Flora Sdn Bhd DRB-HICOM DRB is a Supply of maintenance of motor 1,310
(“Alam Flora”) Group Berhad (“DRB”) 55.92%-owned vehicle services by DRB Group
Group subsidiary of Supply of scrap materials/any 7,418
Etika Strategi Sdn assets (i.e. bins, automotive,
Bhd (“ESSB”), a scrap loose ferrous, etc) by
company in which DRB Group
Tan Sri Dato’ Seri
Syed Mokhtar Payment of event, utilities 287
Shah Syed Nor and logistics cost and/or
(“TSSM”) is a major miscellaneous expenses to
shareholder DRB Group
Provision of rental services 2,276
(i.e. buildings, building service
charges, motor vehicle, etc) by
DRB Group
Purchase of machineries, motor 443
vehicles and bins
3 Alam Flora Group MMC Group MMC is a major Payment of utilities cost and/ 370
shareholder of or miscellaneous expenses to
Malakoff MMC Group
4 Alam Flora Group Tradewinds A wholly-owned Provision of insurance broker 3,286
Corporation Berhad subsidiary of for direct insurance and
(“Tradewinds”) Perspective reinsurance business by
Group Lane (M) Sdn Tradewinds Group
Bhd (“PLSB”), a Provision of travel related 82
company in which services by Tradewinds Group
TSSM is an indirect
major shareholder

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G O V E R N A N C E S TAT E M E N T S SECTION 4

ADDITIONAL COMPLIANCE INFORMATION

Value of transaction
from 1 January 2020
Malakoff and/or its Transacting Nature of to 31 December 2020
No. subsidiary companies related parties relationship Nature of transactions (RM’000)
Revenue to Malakoff Group
5 TUSB Group MMC Group MMC is a major Proposed development of Nil
shareholder of rooftop solar photovoltaic
Malakoff project at customers’ premises
to MMC Group
6 TUSB Group DRB Group DRB is a Proposed development of Nil
55.92%-owned rooftop solar photovoltaic
subsidiary of project at customers’ premises
ESSB, a company to DRB Group
in which TSSM is a
major shareholder
7 TUSB Group Padiberas Padiberas is a Proposed development of Nil
Nasional Berhad wholly-owned rooftop solar photovoltaic
(“Padiberas”) subsidiary of project at customers’ premises
Group PLSB, a company to Padiberas Group
in which TSSM is
an indirect major
shareholder
8 Alam Flora Group DRB Group DRB is a Supply of maintenance of 3,059
55.92%-owned building services to DRB Group
subsidiary of Provision of all kinds of services 4,441
ESSB, a company related to cleaning, collection
in which TSSM is a and cleansing to DRB Group
major shareholder
9 Alam Flora Group MMC Group MMC is a major Supply of equipment, 341
shareholder of machinery, transport and labour
Malakoff for cleansing services to MMC
Group
Provision of all kinds of services 3,199
related to cleaning, collection,
cleansing and landscaping to
MMC Group

Notwithstanding the related party disclosures already presented in the audited financial statements in accordance with Malaysian
Financial Reporting Standard 124: Related Party Disclosure (“MFRS 124”), the above disclosures are made in order to comply with
Paragraph 10.09 of the MMLR with regard to the value of RRPT conducted in accordance with the shareholders’ mandate during the
financial year, as the scope of related party relationships and disclosures contemplated by the MMLR are, to a certain extent, different
from those of MFRS 124.

The shareholdings of the respective interested major shareholders as shown above are based on information disclosed in the Circular to
Shareholders dated 24 March 2020 in relation to the proposed shareholders’ mandate for RRPT.

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FINANCIAL
STATEMENTS
105 Directors’ Report
110 Statements of Financial Position
112 Statements of Profit or Loss and Other Comprehensive Income
114 Statements of Changes in Equity
117 Statements of Cash Flows
120 Notes to the Consolidated Financial Statements
259 Statement by Directors
259 Statutory Declaration
260 Independent Auditors’ Report
 Malakoff Corporation Berhad | Annual Report 2020

FINANCIAL PERFORMANCE SECTION 5

DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

The Directors are pleased to submit their report and the audited financial statements of the Group and of the Company for the financial
year ended 31 December 2020.

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding activities, whilst the principal activities of the subsidiaries are as stated in
Note 7 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 for the year attributable to:

Owners of the Company 286,581 117,320
Non-controlling interests 43,488 -
330,069 117,320

RESERVES AND PROVISIONS

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

DIVIDENDS

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

i) a final dividend of 4.11 sen per ordinary share on 4,886,961,300 ordinary shares in issue, totalling RM200,854,109 in respect of the
financial year ended 31 December 2019 on 12 June 2020.

ii) an interim dividend of 2.80 sen per ordinary share on 4,886,961,300 ordinary shares in issue, totalling RM136,834,916 in respect of
the financial year ended 31 December 2020 on 16 October 2020.

The Board of Directors has approved a final dividend of 2.30 sen per ordinary share on the 4,886,961,300 ordinary shares, in respect of
the financial year ended 31 December 2020, totalling RM112,400,110.

The final dividend will be accounted for in the shareholders’ equity as appropriation of retained profits in the financial year ending
31 December 2021.

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SECTION 5 FINANCIAL PERFORMANCE

DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020

DIRECTORS OF THE COMPANY

Directors who served during the financial year until the date of this report are:

Datuk Haji Hasni bin Harun (Chairman)

Dato’ Sri Che Khalib bin Mohamad Noh
Tan Ler Chin
Datuk Ooi Teik Huat
Datuk Idris bin Abdullah
Datuk Dr. Syed Muhamad bin Syed Abdul Kadir
Datuk Rozimi bin Remeli
Anwar Syahrin bin Abdul Ajib (Appointed on 1 December 2020)

DIRECTORS OF THE SUBSIDIARIES

The following is a list of Directors of the subsidiaries (excluding Directors who are also Directors of the Company) in office during
the financial year until the date of this report:

Mohd Nazersham bin Mansor

Mohammed Azmil bin Ismail
Yap Leng Khim
Mohd Helmy bin Ibrahim
Mohamad Lutfi bin Samsudin
Dato’ Mohamad bin Saif @ Saib
Dato’ Haji Mohd Zain bin Hassan
Azri bin Zaharuddin
Mimi Aisyah Chye binti Abdullah (Alternate Director to Azri bin Zaharuddin)
Tengku Dato’ Abdul Aziz bin Tengku Ibrahim
Dato’ Azman bin Omar
Tan Sri Datuk Seri Mohd Hussin bin Abdul Hamid
Datuk Khairuddin bin Mohd Hussin
Dato’ Nor Azman bin Mufti @ Jaafar
Harun bin Halim Rasip
Hamid Hamraoui
Rajendran Nagulusamy
James Philips Morsen
Saravanan A/L Desigamanie (Appointed on 5 March 2020)
Saiful bin Azlan Mahmud (Appointed on 24 March 2020)
Shajaratuddur bin Mohd Ibrahim (Appointed on 30 March 2020)
Ir. Roslan bin Abd Rahman (Appointed on 6 April 2020)
Idzam Yuhaizi bin Mohd Yunos (Appointed on 16 April 2020)
Khairul Anuar bin Ghazahari (Alternate Director to Tengku Dato’ Abdul Aziz bin Tengku Ibrahim) (Appointed on 18 May 2020)
Tengku Dato’ Muhamad Mazlan bin Tengku Putera Zainal Abidin (Alternate Director to Dato’ Azman bin Omar) (Appointed on 18 May 2020)
Hafiz bin Ismail (Alternate Director to Dato’ Nor Azman bin Mufti @ Jaafar) (Appointed on 19 June 2020)
Lim Fu Yen (Appointed on 28 August 2020)
Mohd Mokhtaruddin bin Mohd Tajiee (Appointed on 25 November 2020)
Tan Sri Abu Kassim bin Mohamed (Appointed on 1 February 2021)
Dato’ Sri Mohd Zakaria bin Ahmad (Appointed on 1 February 2021)
Norazni binti Mohd Isa (Resigned on 6 April 2020)

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FINANCIAL PERFORMANCE SECTION 5

DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020

DIRECTORS OF THE SUBSIDIARIES (CONTINUED)

The following is a list of Directors of the subsidiaries (excluding Directors who are also Directors of the Company) in office during the
financial year until the date of this report (continued):

Ruswati binti Othman (Resigned on 5 June 2020)

Sirajul Huda bin Mohamad Zain (Alternate Director to Dato’ Nor Azman bin Mufti @ Jaafar) (Resigned on 19 June 2020)
Habib bin Husin (Resigned on 19 June 2020)
Azhari bin Sulaiman (Resigned on 4 August 2020)
Nazmi bin Othman (Resigned on 28 August 2020)
Ahmad Mukhlas bin Ibrahim (Resigned on 25 November 2020)
Dato’ Ahmad Fuaad bin Mohd Kenali (Resigned on 2 December 2020)

DIRECTORS’ INTERESTS IN SHARES

The interests in the shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were
Directors at financial year end as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares

At At
1.1.2020 Bought Sold 31.12.2020

Direct interests in the Company:

Dato’ Sri Che Khalib bin Mohamad Noh 420,000 - - 420,000
Datuk Ooi Teik Huat 420,000 - - 420,000
Datuk Idris bin Abdullah 172,100 - (172,100) -
Datuk Dr. Syed Muhamad bin Syed Abdul Kadir 150,000 - - 150,000

None of the other Directors holding office at 31 December 2020 had any interest in the shares of the Company and of its related
corporations during the financial year.

The interests and deemed interests in the shares of the Company and of its related corporations of those who were Directors of the
subsidiaries of the Company at financial year end as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares

At
1.1.2020/
date of At
appointment Bought Sold 31.12.2020

Direct interests in the Company:

Mohd Nazersham bin Mansor 16,000 - - 16,000
Mohammed Azmil bin Ismail 68,000 - - 68,000
Mimi Aisyah Chye bin Abdullah 37,000 - - 37,000
Mohamad Lutfi bin Samsudin 38,000 - - 38,000
Saiful bin Azlan Mahmud 32,900 - - 32,900

None of the other Directors of the subsidiaries holding office at 31 December 2020 had any interest in the shares of the Company and of
its related corporations during the financial year.

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 5 FINANCIAL PERFORMANCE

DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020

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 those fees and other benefits included in the aggregate amount of remuneration received or due and receivable by Directors as
shown in the financial statements or the fixed salary of a full time employee of the Company or of related corporations) by reason of
a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a
company in which the Director has a substantial financial interest.

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

ISSUE OF SHARES

At the Fourteenth Annual General Meeting (“AGM”) of the Company held on 9 June 2020, the Company had obtained its shareholders’
approval for the renewal of authority for the Company to purchase up to ten percent (10%) of its total number of issued shares. During
the financial year, the Company did not repurchase any ordinary shares from the open market. The previously repurchased shares are
held as treasury shares in accordance with Section 127 of the Companies Act 2016. None of these treasury shares have been cancalled
during the financial year. As at 31 December 2020, the total number of treasury shares held is 2.26% of the total number of issued shares
of the Company.

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

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year.

INDEMNITY AND INSURANCE COSTS

The total amount of insurance costs effected for Directors and Officers of the Group during the financial year is RM79,600.

There was no indemnity given to or insurance effected for the auditors of the Company.

OTHER STATUTORY INFORMATION

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:

i) all known bad debts have been written off and adequate provision made for doubtful debts, and

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which
they might be expected so to realise.

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FINANCIAL PERFORMANCE SECTION 5

DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020

OTHER STATUTORY INFORMATION (CONTINUED)

At the date of this report, the Directors are not aware of any circumstances:

i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in the
Company inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or

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

iv) not otherwise dealt with in this report or in the financial statements that would render any amount stated in the financial statements
of the Group and of the Company misleading.

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

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

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

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

In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended 31 December 2020
have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction
or event occurred in the interval between the end of that financial year and the date of this report.

SIGNIFICANT EVENTS

Significant events during the year are disclosed in Note 39 to the financial statements.

AUDITORS

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

The auditors’ remuneration is disclosed in Note 29 to the financial statements.

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

…………………………………………………............. ………………………………………………….............
Datuk Haji Hasni bin Harun Dato’ Sri Che Khalib bin Mohamad Noh
Chairman Director

Kuala Lumpur
11 March 2021

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Malakoff Corporation Berhad | Annual Report 2020

SECTION 5 FINANCIAL PERFORMANCE

STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2020

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Restated

Assets
Property, plant and equipment 3 12,391,428 12,881,334 36,650 42,887
Investment properties 4 15,300 15,300 - -
Concession assets 5 167,837 204,283 - -
Intangible assets 6 3,144,168 3,453,653 - -
Investments in subsidiaries 7 - - 7,774,841 7,461,139
Investments in associates 8 798,841 744,991 - -
Investments in joint ventures 9 668,364 635,383 - -
Other investments 14 23,999 21,515 23,999 21,515
Derivative financial assets 10 231,170 327,643 - -
Trade and other receivables 11 480,666 526,419 215,353 215,353
Deferred tax assets 12 194,583 146,498 - -
Total non-current assets 18,116,356 18,957,019 8,050,843 7,740,894

Trade and other receivables 11 884,184 1,501,259 1,168,443 2,410,425

Inventories 13 591,799 693,058 - -
Current tax assets 90,627 67,774 17,154 14,920
Other investments 14 3,378,157 2,509,476 110,060 -
Cash and cash equivalents 15 1,062,600 2,745,389 126,837 43,204
Assets classified as held for sale 16 65,000 65,000 - -
Total current assets 6,072,367 7,581,956 1,422,494 2,468,549
Total assets 24,188,723 26,538,975 9,473,337 10,209,443

Equity
Share capital 17 5,693,055 5,693,055 5,693,055 5,693,055
Treasury shares 17 (98,647) (98,647) (98,647) (98,647)
Reserves 17 61,969 153,180 - -
(Accumulated losses)/Retained profits (348,468) (237,857) 2,213,141 2,437,860
Equity attributable to owners of the Company 5,307,909 5,509,731 7,807,549 8,032,268
Perpetual sukuk 18 800,000 800,000 - -
Non-controlling interests 336,802 365,516 - -
Total equity 6,444,711 6,675,247 7,807,549 8,032,268

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FINANCIAL PERFORMANCE SECTION 5

STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2020

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Restated

Liabilities
Loans and borrowings 19 9,717,431 10,889,063 - -
Lease liabilities 6,746 11,622 616 3,945
Employee benefits 20 100,483 107,159 15,965 27,079
Provision for decommissioning cost 21 99,893 93,724 - -
Provision for concession assets 22 267,715 253,590 - -
Deferred income 23 3,357,888 3,661,066 - -
Derivative financial liabilities 10 15,381 10,013 - -
Deferred tax liabilities 12 1,200,943 1,273,966 464 262
Total non-current liabilities 14,766,480 16,300,203 17,045 31,286

Trade and other payables 24 1,360,268 1,593,219 1,645,796 2,140,067

Current tax liabilities 16,894 39,742 - -
Loans and borrowings 19 1,164,663 1,509,082 - -
Lease liabilities 6,616 12,144 2,947 5,822
Provision for decommissioning cost 21 11,809 17,800 - -
Provision for concession assets 22 26,691 197 - -
Deferred income 23 390,591 391,341 - -
Total current liabilities 2,977,532 3,563,525 1,648,743 2,145,889
Total liabilities 17,744,012 19,863,728 1,665,788 2,177,175
Total equity and liabilities 24,188,723 26,538,975 9,473,337 10,209,443

The notes on pages 120 to 258 are an integral part of these financial statements.

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SECTION 5 FINANCIAL PERFORMANCE

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2020

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Restated

Continuing operations
Revenue 25 6,276,308 7,278,457 544,541 838,177
Cost of sales (5,133,800) (6,091,680) - -
Gross profit 1,142,508 1,186,777 544,541 838,177
Other income 72,486 686,134 1,848 5,343
Administrative expenses (232,437) (226,990) (69,883) (92,333)
Impairment loss on investments in subsidiaries - - (317,069) (269,874)
Net impairment loss on investment in an associate - (407,979) - (749,753)
Impairment loss on financial instruments (19,996) (25,309) (18,363) (25,309)
Other operating expenses (108,566) (102,385) - -
Results from operating activities 853,995 1,110,248 141,074 (293,749)
Finance income 26 163,522 234,926 67,745 85,557
Finance costs 27 (744,696) (840,907) (80,692) (80,632)
Net finance (costs)/income (581,174) (605,981) (12,947) 4,925
Share of profit/(loss) of equity-accounted associates
and joint ventures, net of tax 171,778 (21,623) - -
Profit/(Loss) before tax 444,599 482,644 128,127 (288,824)
Tax expense 28 (114,530) (149,534) (10,807) (14,836)
Profit/(Loss) from continuing operations 330,069 333,110 117,320 (303,660)

Discontinued operations
Profit from discontinued operations, net of tax 42 - 44,819 - -
Profit/(Loss) for the year 29 330,069 377,929 117,320 (303,660)

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FINANCIAL PERFORMANCE SECTION 5

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2020

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Restated

Profit/(Loss) for the year 29 330,069 377,929 117,320 (303,660)

Continuing operations
Items that will not be reclassified subsequently to
profit or loss
Remeasurement of defined benefit liabilities 30 (12,471) 23,884 (4,350) 4,710
Items that may be reclassified subsequently to
profit or loss
Cash flow hedge 30 (71,206) (68,192) - -
Share of loss on hedging reserves of equity-
accounted associates and joint ventures 30 (20,000) (16,796) - -
Foreign currency translation differences for foreign
operations 30 (5) (18,766) - -
Other comprehensive (expense)/income from
continuing operations (103,682) (79,870) (4,350) 4,710
Discontinued operations
Other comprehensive expense from discontinued
operations - (39,939) - -
Total comprehensive income/(expense) for the
year 226,387 258,120 112,970 (298,950)

Profit/(Loss) attributable to:

Owners of the Company
- From continuing operations 286,581 278,577 117,320 (303,660)
- From discontinued operations - 44,819 - -
286,581 323,396 117,320 (303,660)
Non-controlling interests 43,488 54,533 - -
Profit/(Loss) for the year 330,069 377,929 117,320 (303,660)

Total comprehensive income/(expense) attributable

to:
Owners of the Company
- From continuing operations 182,899 198,707 112,970 (298,950)
- From discontinued operations - 4,880 - -
182,899 203,587 112,970 (298,950)
Non-controlling interests 43,488 54,533 - -
Total comprehensive income/(expense) for the
year 226,387 258,120 112,970 (298,950)

Earnings per ordinary share (sen)

Basic/Diluted
- From continuing operations 31 5.86 5.70
- From discontinued operations 31 - 0.92
5.86 6.62

The notes on pages 120 to 258 are an integral part of these financial statements.

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114
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020

Reserves
SECTION 5

Non-
Share Treasury Accumulated Perpetual controlling
capital shares Translation Hedging losses Total sukuk interests Total
Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2019 5,693,055 (97,606) 3,650 128,094 (82,620) 5,644,573 800,000 219,686 6,664,259
Remeasurement of defined benefit
liabilities 30 - - - - 23,884 23,884 - - 23,884
Malakoff Corporation Berhad | Annual Report 2020

Foreign currency translation

differences for foreign operations 30 - - (24,206) - - (24,206) - - (24,206)
Cash flow hedge 30 - - - (102,691) - (102,691) - - (102,691)
FINANCIAL PERFORMANCE

Share of loss on hedging reserves

of equity-accounted associates
and joint ventures 30 - - - (16,796) - (16,796) - - (16,796)
Reclassification of reserves to
accumulated losses upon
disposal of a subsidiary 42 - - 7,904 157,225 (165,129) - - - -
Other comprehensive (expense)/
income for the year - - (16,302) 37,738 (141,245) (119,809) - - (119,809)
Profit for the year, restated - - - - 323,396 323,396 - 54,533 377,929
Comprehensive (expense)/
income for the year, restated - - (16,302) 37,738 182,151 203,587 - 54,533 258,120
Profit distribution of perpetual
sukuk - - - - (47,071) (47,071) - - (47,071)
Acquisition of subsidiaries, restated - - - - - - - 167,943 167,943
Dividends to owners of the
Company 32 - - - - (290,317) (290,317) - - (290,317)
Dividends to non-controlling
interests 6 - - - - - - - (50,000) (50,000)
Redemption of preference shares to
non-controlling interests - - - - - - - (26,646) (26,646)
Total distribution to owners - - - - (290,317) (290,317) - (76,646) (366,963)
Purchase of treasury shares 17 - (1,041) - - - (1,041) - - (1,041)
At 31 December 2019, restated 5,693,055 (98,647) (12,652) 165,832 (237,857) 5,509,731 800,000 365,516 6,675,247

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 STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020

Reserves
Non-

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Share Treasury Accumulated Perpetual controlling
capital shares Translation Hedging losses Total sukuk interests Total
Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2020, restated 5,693,055 (98,647) (12,652) 165,832 (237,857) 5,509,731 800,000 365,516 6,675,247
Remeasurement of defined benefit
liabilities 30 - - - - (12,471) (12,471) - - (12,471)
Foreign currency translation
differences for foreign operations 30 - - (5) - - (5) - - (5)
Cash flow hedge 30 - - - (71,206) - (71,206) - - (71,206)
Share of loss on hedging reserves
of equity-accounted associates
and joint ventures 30 - - - (20,000) - (20,000) - - (20,000)
Other comprehensive (expense)/
income for the year - - (5) (91,206) (12,471) (103,682) - - (103,682)
Profit for the year - - - - 286,581 286,581 - 43,488 330,069
Comprehensive (expense)/
income for the year - - (5) (91,206) 274,110 182,899 - 43,488 226,387
Profit distribution of perpetual
sukuk - - - - (47,032) (47,032) - - (47,032)
Additional investments in
subsidiaries - - - - - - - 665 665
Incorporation of a subsidiary - - - - - - - 20 20
Dividends to owners of the
Company 32 - - - - (337,689) (337,689) - - (337,689)
Dividends to non-controlling
FINANCIAL PERFORMANCE

interests 7 - - - - - - - (66,510) (66,510)

Redemption of preference shares
to non-controlling interests - - - - - - - (6,377) (6,377)
Total distribution to owners - - - - (337,689) (337,689) - (72,887) (410,576)
At 31 December 2020 5,693,055 (98,647) (12,657) 74,626 (348,468) 5,307,909 800,000 336,802 6,444,711
SECTION 5

115
Malakoff Corporation Berhad | Annual Report 2020

The notes on pages 120 to 258 are an integral part of these financial statements.
Malakoff Corporation Berhad | Annual Report 2020

SECTION 5 FINANCIAL PERFORMANCE

STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2020

Share Treasury Retained

capital shares profits Total
Company Note RM’000 RM’000 RM’000 RM’000

At 1 January 2019 5,693,055 (97,606) 3,027,127 8,622,576

Remeasurement of defined benefit liabilities 30 - - 4,710 4,710
Other comprehensive income for the year - - 4,710 4,710
Loss for the year - - (303,660) (303,660)
Comprehensive expense for the year - - (298,950) (298,950)
Dividends to owners of the Company 32 - - (290,317) (290,317)
Purchase of treasury shares 17 - (1,041) - (1,041)
At 31 December 2019 5,693,055 (98,647) 2,437,860 8,032,268
Remeasurement of defined benefit liabilities 30 - - (4,350) (4,350)
Other comprehensive expense for the year - - (4,350) (4,350)
Profit for the year - - 117,320 117,320
Comprehensive income for the year - - 112,970 112,970
Dividends to owners of the Company 32 - - (337,689) (337,689)
At 31 December 2020 5,693,055 (98,647) 2,213,141 7,807,549

The notes on pages 120 to 258 are an integral part of these financial statements.

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FINANCIAL PERFORMANCE SECTION 5

STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Restated

Cash flows from operating activities

Profit/(Loss) before tax
- From continuing operations 444,599 482,644 128,127 (288,824)
- From discontinued operations 42 - 51,403 - -
444,599 534,047 128,127 (288,824)
Adjustments for:
Allowance for diminution in value of consumables 29,161 - - -
Amortisation of intangible assets 321,175 287,737 - -
Amortisation of transaction costs of hedging
instruments 10,482 10,367 - -
Amortisation of concession assets 20,525 1,133 - -
Depreciation of property, plant and equipment 870,019 878,688 3,292 2,934
Depreciation for the right-of-use assets 18,583 12,768 5,189 5,643
(Gain)/Loss on disposal of property, plant and
equipment (416) (313) 16 (17)
Net gain on lease modification (146) - (146) -
Expenses related to retirement benefit plans 8,338 14,495 1,359 3,690
Finance costs 743,633 925,322 80,377 79,929
Finance income (163,522) (235,397) (67,745) (85,557)
Finance costs on lease liabilities 1,063 990 315 703
Gain arising from change in fair value of derivative
financial instruments (18,374) (20,746) - -
Property, plant and equipment written off 6,772 11,545 - -
Impairment loss on concession assets 5,858 - - -
Concession assets written off 16,510 - - -
Net impairment loss on investment in an associate - 407,979 - 749,753
Impairment loss on investments in subsidiaries - - 317,069 269,874
Impairment loss on financial instruments 19,996 25,309 18,363 25,309
Reversal of impairment loss on trade receivables (1,644) (605) - -
Share of (profit)/loss of equity-accounted associates
and joint ventures, net of tax (171,778) 21,623 - -
Gain on derecognition of an associate - (29,842) - -
Bargain purchase on acquisition of a joint venture - (2,958) - -
Net unrealised foreign exchange loss/(gain) 8,179 (13,634) - -
Operating profit before changes in working capital 2,169,013 2,828,508 486,216 763,437

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SECTION 5 FINANCIAL PERFORMANCE

STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Restated

Cash flows from operating activities

Net change in deferred income (303,928) 135,325 - -
Net change in employee benefits (24,253) (35,600) (16,823) (3,478)
Net change in inventories 72,098 69,044 - -
Net change in provision for decommissioning cost (5,991) 15,310 - -
Net change in provision for concession assets 40,619 (1,101) - -
Net change in trade and other receivables 644,645 541,766 650,894 (1,209,505)
Net change in trade and other payables (253,419) (778,931) (574,648) 421,179
Cash generated from/(used in) operations 2,338,784 2,774,321 545,639 (28,367)
Tax paid (312,026) (406,802) (15,403) (20,923)
Tax refund 27,529 56,742 2,564 -
Net cash from/(used in) operating activities 2,054,287 2,424,261 532,800 (49,290)

Cash flows from investing activities

Acquisition of a subsidiary, net of cash and cash
equivalents acquired 40 - (398,278) - -
Acquisition of a joint venture, net of cash and cash
equivalents acquired 41 - (294,347) - -
Change in investments in subsidiaries - - 18 (11)
Disposal of discontinued operations, net of cash and
cash equivalents disposed 42 - 976,431 - -
Change in other investments (868,681) 1,073,002 (110,060) 30,000
Dividends received from associates 10,761 19,797 - -
Dividends received from joint ventures 35,889 141,157 - -
Interest received 159,471 248,051 9,681 8,546
Other investment in redeemable cumulative
convertible preference share (2,484) (5,267) (2,484) (5,267)
Purchase of property, plant and equipment (402,783) (269,963) (3,117) (3,652)
Purchase of concession assets (6,447) (1,083) - -
Proceeds from disposal of property, plant and
equipment 550 388 100 18
Net cash (used in)/from investing activities (1,073,724) 1,489,888 (105,862) 29,634

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FINANCIAL PERFORMANCE SECTION 5

STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2020

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Restated

Cash flows from financing activities

Distribution to perpetual sukuk holder (47,032) (47,071) - -
Dividends paid to owners of the Company 32 (337,689) (290,317) (337,689) (290,317)
Dividends paid to non-controlling interests (66,510) (50,000) - -
Redemption of preference shares to non-controlling
interests (6,377) (26,646) - -
Interest paid (650,787) (794,010) - -
Proceeds from issuance of shares to non-controlling
interests 685 414 - -
Proceeds from redemption of preference shares - 8,455 - -
Purchase of treasury shares - (1,041) - (1,041)
Repayment of borrowings (1,541,790) (1,475,127) - -
Payment of lease liabilities (13,852) (8,564) (5,616) (6,214)
Net cash used in financing activities (2,663,352) (2,683,907) (343,305) (297,572)

Net (decrease)/increase in cash and cash

equivalents (1,682,789) 1,230,242 83,633 (317,228)
Cash and cash equivalents at 1 January 15 2,745,389 1,515,147 43,204 360,432
Cash and cash equivalents at 31 December 15 1,062,600 2,745,389 126,837 43,204

Cash outflows for leases as a lessee

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Included in net cash from/(used in) operating activities

Payment relating to short-term leases (4,909) - - -
Payment relating to leases of low-value assets (304) (141) - (141)
Payment relating to variable leases payments not included in
the measurement of lease liabilities (4,515) - - -
Included in net cash from financing activities
Payment of lease liabilities (13,852) (8,564) (5,616) (6,214)
Total cash outflows for leases (23,580) (8,705) (5,616) (6,355)

The notes on pages 120 to 258 are an integral part of these financial statements.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Malakoff Corporation Berhad is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market
of Bursa Malaysia Securities Berhad. The address of the principal place of business and registered office of the Company is as follows:

Principal place of business and registered office

Level 12, Block 4
Plaza Sentral
Jalan Stesen Sentral 5
50470 Kuala Lumpur

The consolidated financial statements of the Company as at and for the financial year ended 31 December 2020 comprise the Company
and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the Group’s interest in
associates and joint ventures.

The Company is principally engaged in investment holding activities, whilst the principal activities of the subsidiaries are as stated in
Note 7 to the financial statements.

These financial statements were authorised for issue by the Board of Directors on 11 March 2021.

1. BASIS OF PREPARATION

(a) Statement of compliance

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial
Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act
2016 in Malaysia.

The following are accounting standards, interpretations and amendments of the MFRSs that have been issued by the
Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company:

MFRSs, interpretations and amendments effective for annual periods beginning on or after 1 January 2021
• Amendments to MFRS 9, Financial Instruments, MFRS 139, Financial Instruments: Recognition and Measurement,
MFRS 7, Financial Instruments: Disclosures, MFRS 4, Insurance Contracts and MFRS 16, Leases – Interest Rate
Benchmark Reform – Phase 2

MFRSs, interpretations and amendments effective for annual periods beginning on or after 1 January 2022
• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements to
MFRS Standards 2018−2020)
• Amendments to MFRS 3, Business Combinations – Reference to the Conceptual Framework
• Amendments to MFRS 9, Financial Instruments (Annual Improvements to MFRS Standards 2018−2020)
• Amendments to Illustrative Examples accompanying MFRS 16, Leases (Annual Improvements to MFRS Standards
2018−2020)
• Amendments to MFRS 116, Property, Plant and Equipment − Proceeds before Intended Use
• Amendments to MFRS 137, Provisions, Contingent Liabilities and Contingent Assets − Onerous Contracts − Cost of
Fulfilling a Contract
• Amendments to MFRS 141, Agriculture (Annual Improvements to MFRS Standards 2018−2020)

MFRSs, interpretations and amendments effective for annual periods beginning on or after 1 January 2023
• MFRS 17, Insurance Contracts
• Amendments to MFRS 101, Presentation of Financial Statements – Classification of Liabilities as Current or Non-current

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PREPARATION (CONTINUED)

(a) Statement of compliance (continued)

MFRSs, interpretations and amendments effective for annual periods beginning on or after a date yet to be confirmed
• Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint
Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The Group and the Company have early adopted the Amendment to MFRS 16, Leases – Covid-19-Related Rent Concessions.

The Group and the Company plan to apply the abovementioned accounting standards, interpretations and amendments:

• from the annual period beginning on 1 January 2021 for those amendments that are effective for annual periods
beginning on or after 1 January 2021, except for Amendments to MFRS 4, Insurance Contracts which is not applicable
to the Group and the Company.

• from the annual period beginning on 1 January 2022 for those amendments that are effective for annual periods
beginning on or after 1 January 2022, except for Amendments to MFRS 141, Agriculture (Annual Improvements to
MFRS Standards 2018−2020) which is not applicable to the Group and the Company.

• from the annual period beginning on 1 January 2023 for the accounting standard and amendments that are effective for
annual periods beginning on or after 1 January 2023, except for MFRS 17, Insurance Contracts which is not applicable
to the Group and the Company.

The initial application of the abovementioned accounting standards, amendments and interpretations are not expected to
have any material financial impacts to the current period and prior period financial statements of the Group and the Company.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.

(c) Functional and presentation currencies

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

(d) Use of estimates and judgements

The preparation of the financial statements in conformity with MFRSs requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.

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

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PREPARATION (CONTINUED)

(d) Use of estimates and judgements (continued)

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

(i) Residual value of power plant and machinery

a) Gas fired power plant

The residual values of gas fired power plant and machinery are the estimated amount that the Group’s subsidiaries
would be able to generate at the end of the power plant’s useful life. The residual values are based on the valuations
prepared by independent professional valuers.

Estimating the residual values of power plant and machinery involves significant judgement, selection of variety of
methods and assumptions that are normally based on market conditions existing at the balance sheet date. The
actual residual values of the power plant and machinery however, may be different from expected. The Group’s
subsidiaries use recoverable values of the power plant and machinery based on the valuations derived by the valuers
using the assumptions as disclosed in Note 3.2.

b) Coal fired power plant

The residual values of coal fired power plant and machinery are the estimated amount that the Group’s subsidiaries
would be able to generate at the end of the Power Purchase Agreements (“PPAs”) tenure. The residual values are
estimated based on the assumption that the PPAs will be extended for a period of ten (10) years. The residual values
reflect the discounted cash flows that the power plant and machinery will generate during the 10-year extension.

Estimating the residual values of the power plant and machinery involves significant judgement, selection of variety of
methods and assumptions that are normally based on market conditions existing at the balance sheet date. The actual
residual values of the power plant and machinery however, may be different from expected. The Group’s subsidiaries
considered and adopted the recoverable values of the power plant and machinery based on the expected discounted
cash flows derived using the assumptions as disclosed in Note 3.2.

(ii) Provision for retirement benefits

The provision is determined using actuarial valuation prepared by an independent actuary. The actuarial valuation
involved making assumptions about discount rate, future salary increase, mortality rates, resignation rate and normal
retirement age. As such, the estimated provision amount is subject to significant uncertainty. The assumptions used to
estimate the provision are as disclosed in Note 20.

(iii) Intangible assets

Measurement of recoverable amounts of cash generating units is derived based on value in use or fair value less cost
to sell of the cash generating unit. Significant assumptions used to derive value in use are as disclosed in Note 6.

(iv) Provision for concession assets

Estimating the provision for concession assets involves significant judgement, selection of variety of methods and
assumptions that are normally based on past costs incurred. The actual costs, however, may be different from expected.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 the Group entities, unless otherwise stated.

The Group and the Company have early adopted the Amendment to MFRS 16, Leases – Covid-19-Related Rent Concessions. The
amendment introduces an optional practical expedient for leases in which the Group and the Company are lessee – i.e. for leases to
which the Group and the Company apply the practical expedient, the Group and the Company are not required to assess whether
eligible rent concessions that are a direct consequence of the Covid-19 coronavirus pandemic are lease modification. There is no
material impact from the early adoption of Amendment to MFRS 16.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of
subsidiaries are included in the consolidated financial statements from the date that control commences until the date
that control ceases.

The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the entity. Potential voting rights are considered
when assessing control only when such rights are substantive. The Group also considers it has de facto power over
an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the
investee that significantly affect the investee’s return.

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment
losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction
costs.

(ii) Business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on
which control is transferred to the Group.

For new acquisition, the Group measures the cost of goodwill at the acquisition date as:

• the fair value of the consideration transferred; plus

• the recognised amount of any non-controlling interests in the acquiree; plus
• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(a) Basis of consolidation (continued)

(ii) Business combinations (continued)

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree
either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in
connection with a business combination are expensed as incurred.

(iii) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any
non-controlling interests and the other components of equity related to the former subsidiary from the consolidated
statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the
Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control
is lost. Subsequently, it is accounted for as an equity-accounted investee or as a financial asset depending on the level
of influence retained.

(iv) Associates

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

Investments in associates are accounted for in the consolidated financial statements using the equity method less
any impairment losses. The cost of the investment includes transaction costs. The consolidated financial statements
include the Group’s share of profit or loss and other comprehensive income of the 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 associate, the carrying amount of that interest including any
long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that
the Group has an obligation or has made payments on behalf of the associate.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(a) Basis of consolidation (continued)

(iv) Associates (continued)

When the Group ceases to have significant influence over an associate, any retained interest in the former associate at
the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying
amount of a financial asset. The difference between the fair value of any retained interest plus proceeds from the
interest disposed of and the carrying amount of the investment at the date when equity method is discontinued is
recognised in the profit or loss.

When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retained
interest is not remeasured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains
or losses previously recognised in other comprehensive income are also reclassified proportionately to the profit or loss
if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.

Investments in associates are measured in the Company’s statement of financial position at cost less any impairment
losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction
costs.

(v) Joint arrangements

Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring unanimous
consent for decisions about the activities that significantly affect the arrangements’ returns.

A joint arrangement is classified as “joint venture” when the Group has rights only to the net assets of the arrangements.
The Group accounts for its interest in the joint venture using the equity method.

(vi) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or
indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and
statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-
controlling interests in the results of the Group are presented in the consolidated statement of profit or loss and other
comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-
controlling interests and owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if
doing so causes the non-controlling interests to have a deficit balance.

(vii) 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.

Unrealised gains arising from transactions with equity-accounted associates and joint ventures are eliminated against
the investment to the extent of the Group’s interest in the investees. Unrealised losses are eliminated in the same way
as unrealised gains, but only to the extent that there is no evidence of impairment.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 end of the reporting period are retranslated to
the functional currency at the exchange rate at that date.

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting
date, 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 profit or loss, except for differences arising on
the retranslation of equity instruments where they are measured at fair value through other comprehensive income or a
financial instrument designated as a cash flow hedge, which are recognised in other comprehensive income.

In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign
operation is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from
such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other
comprehensive income, and are presented in the foreign currency translation reserve (“FCTR”) in equity.

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

The assets and liabilities of operations denominated in functional currencies other than RM, including goodwill and fair
value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the reporting period,
except for goodwill and fair value adjustments arising from business combinations before 1 January 2009 (the date
when the Group first adopted MFRS) which are treated as assets and liabilities of the Company. The income and
expenses of foreign operations are translated to RM at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income and accumulated in the FCTR in equity.
However, if the operation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation
difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control,
significant influence or joint control is lost, the cumulative amount in the FCTR related to that foreign operation is
reclassified to profit or loss as part of the gain or loss on disposal.

When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the relevant
proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part
of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or
joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(c) Financial instruments

(i) Recognition and initial measurement

A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the
Group or the Company becomes a party to the contractual provision of the instrument.

A financial asset (unless it is a trade receivable without significant financing component) or a financial liability is initially
measured at fair value plus or minus, for an item not at fair value through profit or loss, transaction costs that are
directly attributable to its acquisition or issuance. A trade receivable without a significant financing component is
initially measured at the transaction price.

An embedded derivative is recognised separately from the host contract where the host contract is not a financial asset,
and accounted for separately if, and only if, the derivative is not closely related to the economic characteristics and
risks of the host contract and the host contract is not measured at fair value through profit or loss. The host contract,
in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to
the nature of the host contract.

(ii) Financial instrument categories and subsequent measurement

Financial assets

Categories of financial assets are determined on initial recognition and are not reclassified subsequent to their initial
recognition unless the Group or the Company changes its business model for managing financial assets in which case
all affected financial assets are reclassified on the first day of the first reporting period following the change of the
business model.

(a) Amortised cost

Amortised cost category comprises financial assets that are held within a business model whose objective is to
hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding. The financial assets are
not designated as fair value through profit or loss. Subsequent to initial recognition, these financial assets are
measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment
losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any
gain or loss on derecognition is recognised in profit or loss.

Interest income is recognised by applying effective interest rate to the gross carrying amount except for credit
impaired financial assets (see Note 2(l)(i)) where the effective interest rate is applied to the amortised cost.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(c) Financial instruments (continued)

(ii) Financial instrument categories and subsequent measurement (continued)

Financial assets (continued)

(b) Fair value through profit or loss

All financial assets not measured at amortised cost as described above are measured at fair value through profit
or loss. This includes derivative financial assets (except for a derivative that is a designated and effective hedging
instrument). On initial recognition, the Group or the Company may irrevocably designate a financial asset that
otherwise meets the requirements to be measured at amortised cost or at fair value through other comprehensive
income as ‘at fair value through profit or loss’ if doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.

Financial assets categorised as fair value through profit or loss are subsequently measured at their fair value. Net
gains or losses, including any interest or dividend income, are recognised in the profit or loss.

All financial assets, except for those measured at fair value through profit or loss, are subject to impairment assessment
(see Note 2(l)(i)).

Financial liabilities

The categories of financial liabilities at initial recognition are as follows:

(a) Fair value through profit or loss

Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative
that is a financial guarantee contract or a designated and effective hedging instrument), contingent consideration
in a business combination and financial liabilities that are specifically designated into this category upon initial
recognition.

On initial recognition, the Group or the Company may irrevocably designate a financial liability that otherwise
meets the requirements to be measured at amortised cost as at fair value through profit or loss:

(i) if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise;

(ii) a group of financial liabilities or assets and financial liabilities is managed and its performance is evaluated on
a fair value basis, in accordance with a documented risk management or investment strategy, and information
about the Group is provided internally on that basis to the Group’s key management personnel; or

(iii) if a contract contains one or more embedded derivatives and the host is not a financial asset in the scope
of MFRS 9, where the embedded derivative significantly modifies the cash flows and separation is not
prohibited.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(c) Financial instruments (continued)

(ii) Financial instrument categories and subsequent measurement (continued)

Financial liabilities (continued)

(a) Fair value through profit or loss (continued)

Financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair value
with gains or losses, including any interest expense are recognised in the profit or loss.

For financial liabilities where it is designated as fair value through profit or loss upon initial recognition, the Group
and the Company recognise the amount of change in fair value of the financial liability that is attributable to
change in credit risk in the other comprehensive income and remaining amount of the change in fair value in the
profit or loss, unless the treatment of the effects of changes in the liability’s credit risk would create or enlarge an
accounting mismatch.

(b) Amortised cost

Other financial liabilities not categorised as fair value through profit or loss are subsequently measured at
amortised cost using the effective interest method.

Interest expense and foreign exchange gains and losses are recognised in the profit or loss. Any gains or losses
on derecognition are also recognised in the profit or loss.

(iii) Regular way purchase or sale of financial assets

A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date or
settlement date accounting in the current year.

Trade date accounting refers to:

(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and

(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a
receivable from the buyer for payment on the trade date.

Settlement date accounting refers to:

(a) the recognition of an asset on the day it is received by the Group or the Company, and

(b) derecognition of an asset and recognition of any gain or loss on disposal on the day that is delivered by the Group
or the Company.

Any change in the fair value of the asset to be received during the period between the trade date and the settlement
date is accounted in the same way as it accounts for the acquired asset.

Generally, the Group or the Company applies settlement date accounting unless otherwise stated for the specific class
of asset.

 
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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(c) Financial instruments (continued)

(iv) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder
for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or
modified terms of a debt instrument.

Financial guarantees issued are initially measured at fair value. Subsequently, they are measured at higher of:

• the amount of the loss allowance; and

• the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance
to the principles of MFRS 15, Revenue from Contracts with Customers.

Liabilities arising from financial guarantees are presented together with other provisions.

(v) Hedge accounting

At inception of a designated hedging relationship, the Group and the Company document the risk management objective
and strategy for undertaking the hedge. The Group and the Company also document the economic relationship between
the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and
hedging instrument are expected to offset each other.

Cash flow hedge

A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated
with all, or a component of, a recognised asset or liability or a highly probable forecast transaction and could affect the
profit or loss. In a cash flow hedge, the portion of the gain or loss on the hedging instrument that is determined to be an
effective hedge is recognised in other comprehensive income and accumulated in equity and the ineffective portion is
recognised in profit or loss. The effective portion of changes in the fair value of the derivative that is recognised in other
comprehensive income is limited to the cumulative change in fair value of the hedged item, determined on a present
value basis, from inception of the hedge.

Subsequently, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into
profit or loss in the same period or periods during which the hedged forecast cash flows affect profit or loss. If the
hedge item is a non-financial asset or liability, the associated gain or loss recognised in other comprehensive income
is removed from equity and included in the initial amount of the asset or liability. However, loss recognised in other
comprehensive income that will not be recovered in one or more future periods is reclassified from equity into profit or
loss immediately.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(c) Financial instruments (continued)

(v) Hedge accounting (continued)

Cash flow hedge (continued)

The Group designates only the change in fair value of the spot element of forward contracts as the hedging instrument
in cash flow hedging relationships. The change in fair value of the forward element of forward exchange contracts
(“forward points”) and/or the foreign currency basis spread are separately accounted for as cost of hedging and
recognised in a cost of hedging reserve within equity.

Cash flow hedge accounting is discontinued prospectively when the hedging instrument expires or is sold, terminated
or exercised, the hedge is no longer highly effective, the forecast transaction is no longer expected to occur or the
hedge designation is revoked. If the hedge is for a forecast transaction, the cumulative gain or loss on the hedging
instrument remains in equity until the forecast transaction occurs. When hedge accounting for cash flow hedges is
discontinued, the amount that has been accumulated in the hedging reserve and the cost of hedging reserve remains in
equity until, for a hedge of a transaction resulting in recognition of a non-financial item, it is included in the non-financial
item’s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period
or periods as the hedged expected future cash flows affect profit or loss.

If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the
hedging reserve and the cost of hedging reserve are immediately reclassified to profit or loss.

(vi) Derecognition

A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the
financial asset expire or transferred, or control of the asset is not retained or substantially all of the risks and rewards
of ownership of the financial asset are transferred to another party. On derecognition of a financial asset, the difference
between the carrying amount of the financial asset and the sum of the consideration received (including any new asset
obtained less any new liability assumed) is recognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is
discharged, cancelled or expired. A financial liability is also derecognised when its terms are modified and the cash
flows of the modified liability are substantially different, in which case, a new financial liability based on modified terms
is recognised at fair value. On derecognition of a financial liability, the difference between the carrying amount of the
financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss.

(vii) Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position
when, and only when, the Group or the Company currently has a legally enforceable right to set off the amounts and it
intends either to settle them on a net basis or to realise the asset and liability simultaneously.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(d) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at costs less any accumulated depreciation and any accumulated
impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly
attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing
the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost
of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting
policy on borrowing costs. Cost also may include transfers from equity of any gain or loss on qualifying cash flow
hedges of foreign currency purchases of property, plant and equipment.

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment and is recognised net within “other income”
or “costs of sales” respectively in profit or loss.

(ii) Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of
the item if it is probable that the future economic benefits embodied within the component will flow to the Group or the
Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit
or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(d) Property, plant and equipment (continued)

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are
assessed, and if a component has a useful life that is different from the remainder of that asset, then that component
is depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component
of an item of property, plant and equipment from the date that they are available for use except for inspection costs,
which is depreciated based on actual running hours of the power plant should future inspection is planned. Freehold
land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready
for their intended use. All spare parts which are expected to be used for more than one period are classified under
inspection costs within property, plant and equipment. Spare parts will be depreciated from the date that they are used.

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

• Buildings and improvements 5 - 50 years

• Inspection costs 3 - 10 years
• Power plant and machinery 5 - 31 years
• Office equipment and furniture 3 - 5 years
• Motor vehicles 5 - 10 years
• Computers 3 - 5 years

Depreciation methods, useful lives and residual values are reviewed at end of the reporting period, and adjusted where
appropriate.

(e) Leases

(i) Definition of a lease

A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified
asset, the Group and the Company assess whether:

• the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be
physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a
substantive substitution right, then the asset is not identified;
• the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout
the period of use; and
• the customer has the right to direct the use of the asset. The customer has this right when it has the decision-
making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where
the decision about how and for what purpose the asset is used is predetermined, the customer has the right to
direct the use of the asset if either the customer has the right to operate the asset or the customer designed the
asset in a way that predetermines how and for what purpose it will be used.

At inception or on reassessment of a contract that contains a lease component, the Group and the Company allocate
the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone
prices. However, for leases of properties in which the Group or the Company is a lessee, it has elected not to separate
non-lease components and will instead account for the lease and non-lease components as a single lease component.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(e) Leases (continued)

(ii) Recognition and initial measurement

(a) As a lessee

The Group and the Company recognise a right-of-use asset and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred
and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the
site on which it is located, less any lease incentives received.

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the respective Group entities’ incremental borrowing rate. Generally, the Group entities use their
incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise fixed payments, including in-
substance fixed payments less any incentives receivable.

The Group and the Company have elected not to recognise right-of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months or less and leases of low-value assets. The Group and the Company
recognise the lease payments associated with these leases as an expense on a straight-line basis over the lease
term.

(b) As a lessor

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an
operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of
the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance
lease; if not, then it is an operating lease.

If an arrangement contains lease and non-lease components, the Group applies MFRS 15 to allocate the
consideration in the contract based on the stand-alone selling prices.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(e) Leases (continued)

(iii) Subsequent measurement

(a) As a lessee

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated
useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment.
In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there
is a change in future lease payments arising from a change in an index or rate, if there is a revision of in-substance
fixed lease payments, or if there is a change in the Group’s or the Company’s estimate of the amount expected to
be payable under a residual value guarantee, or if the Group or the Company changes its assessment of whether
it will exercise a purchase, extension or termination option.

When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-
use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Covid-19-related rent concessions

The Group and the Company have applied Amendment to MFRS 16, Leases – Covid-19-Related Rent Concessions.
The Group and the Company apply the practical expedient allowing it not to assess whether eligible rent
concessions that are a direct consequence of the Covid-19 pandemic are lease modifications. The Group and
the Company apply the practical expedient consistently to contracts with similar characteristics and in similar
circumstances. For rent concessions in leases to which the Group and the Company choose not to apply the
practical expedient, or that do not qualify for the practical expedient, the Group and the Company assess whether
there is a lease modification.

(b) As a lessor

The Group recognises lease payments received under operating leases as income on a straight-line basis over
the lease term as part of “revenue”.

The Group recognises finance income over the lease term, based on a pattern reflecting a constant periodic
rate of return on the Group’s and the Company’s net investment in the lease. The Group aims to allocate finance
income over the lease term on a systematic and rational basis. The Group applies the lease payments relating
to the period against the gross investment in the lease to reduce both the principal and the unearned finance
income. The net investment in the lease is subject to impairment requirements in MFRS 9, Financial Instruments
(see Note 2(l)(i)).

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(f) Intangible assets

(i) Goodwill

Goodwill arises on business combinations is measured at cost less any accumulated impairment losses. In respect of
equity-accounted associates and joint ventures, the carrying amount of goodwill is included in the carrying amount of
the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill, that
forms part of the carrying amount of the equity-accounted associates and joint ventures.

(ii) Other intangible assets

Intangible assets, other than goodwill that are acquired by the Group, which have finite useful lives, are measured at
cost less any accumulated amortisation and any accumulated impairment losses.

(iii) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure is recognised in profit or loss as incurred.

(iv) Amortisation

Goodwill is not amortised but is tested for impairment annually and whenever there is an indication that goodwill may
be impaired.

Other intangible assets with a finite useful life are amortised from the date that they are available for use. Amortisation
is recognised in profit or loss based on straight-line basis over the estimated useful lives of intangible assets.

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

• Interest over Power Purchase Agreements 2 – 25 years

• Interest over Power and Water Purchase and Water Purchase Agreements 10 – 15 years
• Interest over Operation and Maintenance Agreements 2 – 25 years
• Interest over Service Concession Agreement 13.75 years

Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted,
if appropriate.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(g) Investment properties

(i) Investment properties carried at fair value

Investment properties are properties which are owned or right-of-use asset held under a lease contract to earn rental
income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production
or supply of goods or services or for administrative purposes.

Investment properties which are owned are measured initially at cost. Cost includes expenditure that is directly
attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the
cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working
condition for their intended use and capitalised borrowing costs. Right-of-use asset held under a lease contract that
meets the definition of investment property is initially measured similarly as other right-of-use assets.

Subsequently, investment properties are measured at fair value, representing open-market values determined annually
by independent qualified valuer with any changes therein recognised in profit or loss for the period in which they arise.
Where the fair value of the investment property under construction is not reliably determinable, the investment property
under construction is measured at cost until either its fair value becomes reliably determinable or construction is
complete, whichever is earlier.

An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and no future
economic benefits are expected from its disposal. The difference between the net disposal proceeds and the carrying
amount is recognised in profit or loss in the period in which the item is derecognised.

(ii) Reclassification to/from investment properties

When an item of property, plant and equipment is transferred to investment properties following a change in its use, any
difference arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its
fair value is recognised directly in equity as a revaluation of property, plant and equipment. However, if a fair value gain
reverses a previous impairment loss, the gain is recognised in profit or loss. Upon disposal of an investment property,
any surplus previously recorded in equity is transferred to retained earnings, the transfer is not made through profit or
loss.

When the use of a property changes such that it is reclassified as property, plant and equipment or inventories, its fair
value at the date of reclassification becomes its cost for subsequent accounting.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(h) Service concession arrangement

(i) Concession assets

Concession assets arise from a service concession arrangement whereby the Group has the right to charge users of
the public services. The estimated useful life of concession assets is the period the Group is able to charge users of the
public services.

Subsequent costs and expenditures relate to infrastructure and equipment costs arising from the commitment to the
concession contract are recognised as additions to the concession assets and are stated at costs. All other repair and
maintenance expenses that are routine in nature, are expensed and recognised in the profit or loss as incurred.

(ii) Provision for concession assets

A provision is recognised based on the contractual obligations that the Group must fulfil as a condition of the Group’s
license to maintain the infrastructure to a specified standard and to restore the infrastructure which has deteriorated
below specific conditions as stated under Service Concession Agreement.

The liability is recognised once an obligation crystallises in the period when a reasonable estimate can be made.
Subsequently, the Group accretes the discount to profit or loss using the effective interest rate method. The unwinding
of the discount is recognised as cost of sales.

(i) Inventories

Inventories are measured at the lower of costs and net realisable values.

The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the
inventories, production or conversion costs and other costs incurred in 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.

(j) 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 fair value with original maturities of three months or less, and are used by the Group
and the Company in the management of their short term commitments.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(k) Non-current asset held for sale

Non-current assets, or disposal group comprising assets and liabilities that are expected to be recovered primarily through
sale or distribution to owners rather than through continuing use, are classified as held for sale or distribution.

Immediately before classification as held for sale or distribution, the assets, or components of a disposal group, are remeasured
in accordance with the Group’s accounting policies. Thereafter, generally the assets, or disposal group, are measured at the
lower of their carrying amount and fair value less costs of disposal.

Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on pro
rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets and
investment property, which continue to be measured in accordance with the Group’s accounting policies. Impairment loss on
initial classification as held for sale or distribution and subsequent gain or loss on remeasurement are recognised in profit or
loss. Gain is not recognised in excess of any cumulative impairment loss.

Intangible assets and property, plant and equipment once classified as held for sale are not amortised or depreciated. In
addition, equity accounting of equity-accounted associates and joint ventures ceases once classified as held for sale or
distribution.

(l) Impairment

(i) Financial assets

The Group and the Company recognise loss allowances for expected credit losses on financial assets measured at
amortised cost. Expected credit losses are a probability-weighted estimate of credit losses.

The Group and the Company measure loss allowances at an amount equal to lifetime expected credit loss, except
for debt securities that are determined to have low credit risk at the reporting date, cash and bank balance and other
debt securities for which credit risk has not increased significantly since initial recognition, which are measured at
12-month expected credit loss. Loss allowances for trade receivables are always measured at an amount equal to
lifetime expected credit loss.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and
when estimating expected credit loss, the Group and the Company consider reasonable and supportable information
that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information
and analysis, based on the Group’s historical experience and informed credit assessment and including forward-
looking information, where available.

Lifetime expected credit losses are the expected credit losses that result from all possible default events over the
expected life of the asset, while 12-month expected credit losses are the portion of expected credit losses that result
from default events that are possible within the 12 months after the reporting date. The maximum period considered
when estimating expected credit losses is the maximum contractual period over which the Group and the Company are
exposed to credit risk.

The Group and the Company estimate the expected credit losses on trade receivables using a provision matrix with
reference to historical credit loss experience.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(l) Impairment (continued)

(i) Financial assets (continued)

An impairment loss in respect of financial assets measured at amortised cost is recognised in profit or loss and the
carrying amount of the asset is reduced through the use of an allowance account.

At each reporting date, the Group and the Company assess whether financial assets carried at amortised cost are credit
impaired. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated
future cash flows of the financial asset have occurred.

The gross carrying amount of a financial asset is written off (either partially or full) to the extent that there is no realistic
prospect of recovery. This is generally the case when the Group or the Company determines that the debtor does not
have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-
off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with
the Group’s or the Company’s procedures for recovery amounts due.

(ii) Other assets

The carrying amounts of other assets (except for inventories, deferred tax assets, investment properties measured
at fair value and non-current assets (or disposal groups) classified as held for sale) are reviewed at the end of each
reporting period to determine whether there is any indication of impairment. If any such indication exists, then the
asset’s recoverable amount is estimated. For goodwill that have indefinite useful lives or that are not yet available for
use, the recoverable amount is estimated each period at the same time.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generate cash
inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units.
Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating units to
which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects
the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a business
combination, for the purpose of impairment testing, is allocated to a cash-generating unit or a group of cash-generating
units that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs
of disposal. 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 or cash-generating unit.

An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its
estimated recoverable amount.

Impairment loss is recognised in profit or loss. Impairment loss recognised in respect of cash-generating units is
allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating units (group of cash-
generating units) and then to reduce the carrying amounts of the other assets in the cash-generating units (groups of
cash-generating units) on a pro rata basis.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(l) Impairment (continued)

(ii) Other assets (continued)

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment loss recognised in
prior periods is assessed at the end of each reporting period for any indication that the loss has decreased or no longer
exist. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount since the last impairment loss was recognised. 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 loss are credited to profit or loss in
the financial year in which the reversals are recognised.

(m) Equity instruments

Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.

(i) Ordinary shares

Ordinary shares are classified as equity.

(ii) Perpetual sukuk

Perpetual sukuk is classified as equity as there is no contractual obligation to redeem the instrument. The perpetual
sukuk is redeemable only at the option of the Company’s subsidiary.

Profit distribution on perpetual sukuk is recognised in the consolidated statement of changes in equity in the period in
which it is declared.

(iii) Repurchase, disposal and reissue of share capital (treasury shares)

When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly
attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares that are not
subsequently cancelled are classified as treasury shares in the statements of changes in equity.

When treasury shares are sold or reissued subsequently, the difference between the sales consideration net of directly
attributable costs and the carrying amount of the treasury shares is recognised in equity.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(n) Employee benefits

(i) Short-term employee benefits

Short-term employee benefits 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 liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the
Group or the Company 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.

(ii) State plans

The Group’s and the Company’s contributions to statutory pension funds are charged to profit or loss in the financial
year to which they relate. Prepaid contributions are recognised as an asset to the extent that a cash refund or a
reduction in future payments is available.

(iii) Defined benefit plans

The Group’s and the Company’s net obligations in respect of defined benefit plans are calculated separately for each
plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting
that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit
credit method. When the calculation results in a potential asset for the Group and the Company, the recognised asset is
limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions
in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any
applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan
assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in
other comprehensive income. The Group and the Company determine the net interest expense or income on the net
defined liability or asset for the period by applying the discount rate used to measure the defined benefit obligation at
the beginning of the annual period to the then net defined benefit liability or asset, taking into account any changes in
the net defined benefit liability or asset during the period as a result of contributions and benefit payments.

Net interest expense and other expenses relating to defined benefit plans are recognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to
past service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group and the Company
recognise gains and losses on the settlement of a defined benefit plan when the settlement occurs.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(o) 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.

Provision for decommissioning cost

Provision for decommissioning cost which arises principally in connection with the power plant is measured by independent
professional valuers whereby the present value is calculated using amounts discounted over the existing PPAs. The liability
is recognised (together with a corresponding amount as part of the power plant) once an obligation crystallises in the period
when a reasonable estimate can be made. Subsequently, the Group accretes the discount to profit or loss using the effective
interest rate method. The unwinding of the discount is recognised as finance cost.

The provision is based on the valuation reports by independent professional valuers. The present value is derived by
discounting the decommissioning cost over the remaining useful lives of the power plants based on the discount rates
ranging from 5.9% to 6.8% (2019: 5.9% to 6.8%).

(p) Contingencies

(i) 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 not recognised in the statements of financial position and 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.

(ii) Contingent assets

When an inflow of economic benefit of an asset is probable where it arises from past events and where existence
will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the entity, the asset is not recognised in the statements of financial position but is being disclosed as a
contingent asset. When the inflow of economic benefit is virtually certain, then the related asset is recognised.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(q) Revenue and other income

(i) Revenue from contracts with customers

Revenue is measured based on the consideration specified in a contract with a customer in exchange for transferring
goods or services to a customer, excluding amounts collected on behalf of third parties. The Group or the Company
recognises revenue when or as it transfers control over a product or service to customer. An asset is transferred when
or as the customer obtains control of the asset.

The Group or the Company transfers control of a good or service at a point in time unless one of the following overtime
criteria is met:

(a) The customer simultaneously receives and consumes the benefits provided as the Group or the Company
performs;
(b) The Group’s or the Company’s performance creates or enhances an asset that the customer controls as the asset
is created or enhanced; or
(c) The Group’s or the Company’s performance does not create an asset with an alternative use and the Group or the
Company has an enforceable right to payment for performance completed to date.

(ii) Capacity payment

Revenue is recognised on a straight-line basis where the PPAs are considered to be or to contain an operating lease.

(iii) Dividend income

Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment
is established.

(iv) Interest income

Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest
income arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying
asset which is accounted for in accordance with the accounting policy on borrowing costs.

(v) Lease income

Lease income is recognised in profit or loss by using effective interest method over the term of the lease.

(vi) Rental income

Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease.

(r) Deferred income

Deferred income comprises the difference between capacity payments received from Tenaga Nasional Berhad and capacity
payments recognised in profit or loss in relation to the PPAs. The amount is recognised in profit or loss on a straight-line basis
over the term of the respective PPAs.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(s) Borrowing costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are
recognised in profit or loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of
those assets.

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

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets
is deducted from the borrowing costs eligible for capitalisation.

(t) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except
to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial
years.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of
assets and liabilities in the statements of financial position and their tax bases. Deferred tax is not recognised for temporary
differences in 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 or 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 end of the reporting period.

Where investment properties are carried at their fair value in accordance with the accounting policy set out in Note 2(g)(i), the
amount of deferred tax recognised is measured using the tax rates that would apply on sale of those assets at their carrying
value at the reporting date unless the property is depreciable and is held with the objective to consume substantially all of the
economic benefits embodied in the property over time, rather than through sale. In all other cases, the amount of deferred
tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets
and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are
not discounted.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(t) Income tax (continued)

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax assets and liabilities on a net basis or their tax assets and liabilities will be realised simultaneously.

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

Unutilised reinvestment allowance and investment tax allowance, being tax incentives that are not a tax base of an asset, are
recognised as a deferred tax asset to the extent that it is probable that the future taxable profits will be available against the
unutilised tax incentive can be utilised.

(u) Discontinued operations

A discontinued operation is a component of the Group’s business that represents a separate major line of business or
geographical area of operations that has been disposed of or is held for sale or distribution, or is a subsidiary acquired
exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation
meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation,
the comparative statement of profit or loss and other comprehensive income is re-presented as if the operation had been
discontinued from the start of the comparative period.

(v) Earnings per ordinary share

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.

(w) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components.
Operating segment results are reviewed regularly by the chief operating decision-maker, which in this case is the Managing
Director/Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and to
assess its performance, and for which discrete financial information is available.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(x) Fair value measurements

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

For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset
in its highest and best use.

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair value
is categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as follows:

Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the
measurement date.
Level 2 : inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either
directly or indirectly.
Level 3 : unobservable inputs for the asset or liability.

The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances
that caused the transfers.

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 3. PROPERTY, PLANT AND EQUIPMENT

148
Office
Asset equipment Right-of-
Freehold under Power Inspection Plant and and Motor use
SECTION 5

land Buildings construction plants costs machinery furniture vehicles Computers assets Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
(Note 3(a))

Cost
At 1 January 2019 115,516 36,882 199,276 19,329,129 1,942,485 131,459 149,132 14,847 96,031 146,423 22,161,180
Acquisition through
business
combination,
restated 15,000 - 6,478 - - 5,213 8,117 1,196 4,336 38,694 79,034
Malakoff Corporation Berhad | Annual Report 2020

Additions - 8 73,990 56,847 117,051 1,322 3,873 453 6,942 9,477 269,963
Disposals - - - - - (147) (221) (217) (1,589) (251) (2,425)
FINANCIAL PERFORMANCE

Write-off - - - (15,088) (1,101) (280) (1,553) (175) - - (18,197)

Reclassifications - - (274,161) 274,161 - (1,399) 1,300 99 - - -
Transfer to assets
classified as held
for sale - - - (675,559) (3,200) - - - - - (678,759)
At 31 December
2019, restated 130,516 36,890 5,583 18,969,490 2,055,235 136,168 160,648 16,203 105,720 194,343 21,810,796
Additions 154,488 - 473 22,735 196,878 7,660 10,358 1,562 8,629 3,576 406,359
Disposals - - - - - (129) (1,711) (799) (1,904) - (4,543)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Write-off - - - (6,947) - (1,786) (20) - - - (8,753)

Reclassifications - - (3,212) 86 3,126 (115) 115 - - - -
Modification of
lease - - - - - - - - - (757) (757)
At 31 December
2020 285,004 36,890 2,844 18,985,364 2,255,239 141,798 169,390 16,966 112,445 197,162 22,203,102

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 3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Office
Asset equipment Right-of-
Freehold under Power Inspection Plant and and Motor use
land Buildings construction plants costs machinery furniture vehicles Computers assets Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
(Note 3(a))

www.malakoff.com.my
Accumulated
depreciation
At 1 January 2019 - 30,567 - 6,888,875 1,356,408 70,769 131,060 11,874 92,172 63,321 8,645,046
Acquisition
through
business
combination - - - - - 322 4,242 218 1,735 9,204 15,721
Depreciation
for the year,
restated - 1,404 - 714,704 144,354 6,802 7,184 1,227 3,013 12,768 891,456
Disposals - - - - - (88) (210) (217) (1,584) (251) (2,350)
Write-off - - - (4,686) (96) (255) (1,440) (175) - - (6,652)
Reclassifications - - - - - (1,036) 944 92 - - -
Transfer to assets
classified as
held for sale - - - (613,759) - - - - - - (613,759)
At 31 December
2019, restated - 31,971 - 6,985,134 1,500,666 76,514 141,780 13,019 95,336 85,042 8,929,462
Depreciation for
the year - 1,405 - 721,155 120,885 9,394 9,814 1,234 6,132 18,583 888,602
Disposals - - - - - (124) (1,698) (691) (1,896) - (4,409)
Write-off - - - (698) - (1,265) (18) - - - (1,981)
Reclassifications - - - - - (97) 97 - - - -
Modification of
lease - - - - - - - - - - -
At 31 December
2020 - 33,376 - 7,705,591 1,621,551 84,422 149,975 13,562 99,572 103,625 9,811,674
FINANCIAL PERFORMANCE

Carrying
amounts
At 1 January 2019 115,516 6,315 199,276 12,440,254 586,077 60,690 18,072 2,973 3,859 83,102 13,516,134
At 31 December
2019, restated 130,516 4,919 5,583 11,984,356 554,569 59,654 18,868 3,184 10,384 109,301 12,881,334
At 31 December
2020 285,004 3,514 2,844 11,279,773 633,688 57,376 19,415 3,404 12,873 93,537 12,391,428
SECTION 5

* During the financial year, there was no interest expense capitalised included in the additions to property, plant and equipment of the Group
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

149
Malakoff Corporation Berhad | Annual Report 2020

(2019: RM4,118,000).
 3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

150
(a) Right-of-use assets

Leasehold Plant and Motor Office

land Buildings machinery vehicles equipment Total
SECTION 5

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost
At 1 January 2019 129,458 16,965 - - - 146,423
Acquisition through business
combination, restated 20,072 12,343 2,827 3,333 119 38,694
Additions - 9,477 - - - 9,477
Disposals - - (251) - - (251)
At 31 December 2019, restated 149,530 38,785 2,576 3,333 119 194,343
Malakoff Corporation Berhad | Annual Report 2020

Additions - 2,115 1,461 - - 3,576

Modification of lease - (757) - - - (757)
At 31 December 2020 149,530 40,143 4,037 3,333 119 197,162
FINANCIAL PERFORMANCE

Accumulated depreciation
At 1 January 2019 60,213 3,108 - - - 63,321
Acquisition through business
combination 270 3,673 2,207 3,017 37 9,204
Depreciation for the year, restated 4,822 7,750 161 33 2 12,768
Disposals - - (251) - - (251)
At 31 December 2019, restated 65,305 14,531 2,117 3,050 39 85,042
Depreciation for the year 5,734 11,544 1,029 252 24 18,583
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

At 31 December 2020 71,039 26,075 3,146 3,302 63 103,625

Carrying amounts
At 1 January 2019 69,245 13,857 - - - 83,102
At 31 December 2019, restated 84,225 24,254 459 283 80 109,301
At 31 December 2020 78,491 14,068 891 31 56 93,537

3.1 Securities

At 31 December 2020, certain Group’s property, plant and equipment with a total carrying amount of RM9,905,051,000 (2019: RM10,381,761,000) were
charged as securities for debt securities issued by subsidiaries (see Note 19 – loans and borrowings).

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

3.2 Residual values

Estimating the useful lives and residual values of the power plant and machinery involves significant judgement, selection of
variety of methods and assumptions that are normally based on market conditions existing at the balance sheet date. The
actual residual values of the power plant and machinery, however, may be different from expected.

The residual values of power plant and machinery are as below:

Residual values
RM’ million RM’ million
PPA Owner Year of expiry 2020 2019

Gas fired power plant

Segari Energy Ventures Sdn. Bhd. 2027 170.0 170.0
GB3 Sdn. Bhd. 2022 90.0 90.0
Prai Power Sdn. Bhd. 2024 50.0 50.0
310.0 310.0

Coal fired power plant

Tanjung Bin Energy Sdn. Bhd. 2041 1,433.0 1,433.0
Tanjung Bin Power Sdn. Bhd. 2031 1,924.0 1,924.0
3,357.0 3,357.0

In assessing the appropriateness of the residual values adopted, management considered the recoverable values of the
power plant and machinery based on the following methods:

a) Valuation by an independent professional valuer for gas fired power plant

The valuation by an independent professional valuer was derived using the following critical assumptions:

1) All plant and equipment will be removed only at the end of the power supply agreement;
2) The recoverable steel within the power house and tank farm will be sold in the local market; and
3) All metals of value will be recovered.

A 5% increase/(decrease) in the residual value would have resulted in a (decrease)/increase in depreciation charge of
RM3,192,000 per annum.

b) The discounted cash flow method for coal fired power plant

The discounted cash flows were derived using the following critical assumptions:

1) The PPAs will be extended for ten (10) years at the end of the initial concession period, in view of:
i) the expected useful life of a coal fired power plant;
ii) increase in demand for power; and
iii) Tenaga Nasional Berhad’s continued reliance on Independent Power Producers.
2) An estimated Variable Operating Rate (“VOR”) during the extension period which management deems to be
reasonable based on the expected demand and the VOR rate at the end of the PPAs;
3) An average despatch factor of 82% to 87% to reflect the future demand for power; and
4) The pre-tax discount rate of 10% per annum.

A 5% increase/(decrease) in the residual value would have resulted in a (decrease)/increase in depreciation charge of
RM11,563,000 per annum.

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 3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

152
Office
equipment Right-of- Right-of-
Freehold Plant and and Motor use assets use assets
SECTION 5

land Buildings machinery furniture vehicles Computers - Land - Buildings Total

Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost
At 1 January 2019 21,516 17,055 154 19,935 1,797 22,878 5,515 21,283 110,133
Additions - - - 28 16 3,608 - - 3,652
Disposals - - - - - (1,522) - - (1,522)
At 31 December 2019 21,516 17,055 154 19,963 1,813 24,964 5,515 21,283 112,263
Malakoff Corporation Berhad | Annual Report 2020

Additions - - - 126 113 2,878 - - 3,117

Disposals - - - - (641) (115) - - (756)
Write-off - - - (1,631) - - - - (1,631)
FINANCIAL PERFORMANCE

Modification of lease - - - - - - - (757) (757)

At 31 December 2020 21,516 17,055 154 18,458 1,285 27,727 5,515 20,526 112,236

Accumulated depreciation
At 1 January 2019 - 12,798 154 19,688 1,433 20,377 1,229 6,641 62,320
Depreciation for the year - 801 - 92 202 1,839 58 5,585 8,577
Disposals - - - - - (1,521) - - (1,521)
At 31 December 2019 - 13,599 154 19,780 1,635 20,695 1,287 12,226 69,376
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Depreciation for the year - 801 - 84 73 2,334 58 5,131 8,481

Disposals - - - - (533) (107) - - (640)
Write-off - - - (1,631) - - - - (1,631)
At 31 December 2020 - 14,400 154 18,233 1,175 22,922 1,345 17,357 75,586

Carrying amounts
At 1 January 2019 21,516 4,257 - 247 364 2,501 4,286 14,642 47,813
At 31 December 2019 21,516 3,456 - 183 178 4,269 4,228 9,057 42,887
At 31 December 2020 21,516 2,655 - 225 110 4,805 4,170 3,169 36,650

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 Malakoff Corporation Berhad | Annual Report 2020

FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

4. INVESTMENT PROPERTIES

Group
2020 2019
RM’000 RM’000

At fair value
At 1 January 15,300 -
Acquisition through business combination (Note 40) - 15,300
At 31 December 15,300 15,300

Investment properties comprise of lands and buildings that are leased to third parties.

The following are recognised in profit or loss in respect of investment properties:

Group
2020 2019
RM’000 RM’000

Lease income 139 149

Direct operating expenses:
- income generating investment properties 25 14
- non-income generating investment properties 111 75

Investment properties of the Group with carrying amount of RM5,100,000 were charged as securities for term loan acquired by the
subsidiary (see Note 19.9).

Fair value information

Fair value of investment properties is categorised as follows:

Group
Level 3
2020 2019
RM’000 RM’000

Lands and buildings 15,300 15,300

Fair value of investment properties was based on valuations by an independent qualified valuer and derived using the market
comparison approach. Sales price of comparable properties in close proximity are adjusted for difference in key attribute such as
property size. The most significant input into this valuation approach is price per square foot of comparable properties.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5. CONCESSION ASSETS

Group
2020 2019
Note RM’000 RM’000

Cost
At 1 January 315,949 -
Acquisition through business combination 40 - 314,866
Additions 6,447 1,083
Write-off 5.2 (28,482) -
At 31 December 293,914 315,949

Accumulated amortisation
At 1 January 111,666 -
Acquisition through business combination 40 - 110,533
Amortisation for the year 20,525 1,133
Write-off 5.2 (11,972) -
Impairment loss 5,858 -
At 31 December 126,077 111,666

Carrying amount
At 1 January 204,283 -
At 31 December 167,837 204,283

5.1 Concession assets – Alam Flora Sdn. Bhd. (“AFSB”)

AFSB entered into a Service Concession Agreement with the Federal Government of Malaysia and Solid Waste and Public
Cleansing Management Corporation (“Corporation”) to undertake the Collection Services and Public Cleansing Management
Services in the states of Pahang, Federal Territories of Kuala Lumpur and Putrajaya for a period of 22 years commencing from
1 September 2011.

The Corporation shall pay AFSB monthly payment of agreed fees in consideration of AFSB’s obligations under the Service
Concession Agreement. The fees are subject to review on the seventh (7th) year anniversary and thereafter on the fourteenth
(14th) year anniversary of the concession.

Upon expiry of the concession period, AFSB shall hand over all assets as required by the Corporation in operational conditions
specified under the Service Concession Agreement.

5.2 During the financial year, AFSB revised its concession asset plan and as a result, certain concession assets were written off,
amounting to RM16,510,000.

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 6. INTANGIBLE ASSETS

Subsidiaries Associates and Joint Ventures

Interest
Interest over over Power
Power Purchase,

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Purchase Power
and and Water
Operation Interest Purchase
and over Service and Water
Maintenance Concession Purchase
Goodwill Agreements Agreement Total Goodwill Agreements Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost
At 1 January 2019 8,232 7,752,609 - 7,760,841 359,576 939,073 1,298,649
Acquisitions through business
combinations (Note 40 and 41),
restated 152,784 - 501,776 654,560 - 66,500 66,500
Effect of movements in exchange
rate - - - - (3,738) - (3,738)
At 31 December 2019/1 January
2020, restated 161,016 7,752,609 501,776 8,415,401 355,838 1,005,573 1,361,411
Effect of movements in exchange
rate - - - - (6,607) - (6,607)
At 31 December 2020 161,016 7,752,609 501,776 8,415,401 349,231 1,005,573 1,354,804

Amortisation and impairment loss

At 1 January 2019 8,232 4,678,435 - 4,686,667 - 836,484 836,484
Accumulated amortisation - 4,678,435 - 4,678,435 - 372,838 372,838
Accumulated impairment loss 8,232 - - 8,232 - 463,646 463,646
FINANCIAL PERFORMANCE

Amortisation for the year, restated - 272,007 3,074 275,081 - 12,656 12,656
Impairment loss - - - - - 51,013 51,013
At 31 December 2019/1 January
2020, restated 8,232 4,950,442 3,074 4,961,748 - 900,153 900,153
SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 6. INTANGIBLE ASSETS (CONTINUED)

156
Subsidiaries Associates and Joint Ventures
Interest
Interest over over Power
SECTION 5

Power Purchase,
Purchase Power
and and Water
Operation Interest Purchase
and over Service and Water
Maintenance Concession Purchase
Goodwill Agreements Agreement Total Goodwill Agreements Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Malakoff Corporation Berhad | Annual Report 2020

Amortisation and impairment loss

(continued)
At 31 December 2019/1 January
FINANCIAL PERFORMANCE

2020, restated 8,232 4,950,442 3,074 4,961,748 - 900,153 900,153

Accumulated amortisation - 4,950,442 3,074 4,953,516 - 385,494 385,494
Accumulated impairment loss 8,232 - - 8,232 - 514,659 514,659

Amortisation for the year - 272,666 36,819 309,485 - 11,690 11,690

At 31 December 2020
Accumulated amortisation - 5,223,108 39,893 5,263,001 - 397,184 397,184
Accumulated impairment loss 8,232 - - 8,232 - 514,659 514,659
8,232 5,223,108 39,893 5,271,233 - 911,843 911,843
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Carrying amounts
At 1 January 2019 - 3,074,174 - 3,074,174 359,576 102,589 462,165
At 31 December 2019, restated 152,784 2,802,167 498,702 3,453,653 355,838 105,420 461,258
At 31 December 2020 152,784 2,529,501 461,883 3,144,168 349,231 93,730 442,961

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6. INTANGIBLE ASSETS (CONTINUED)

Intangible assets arising from interest over Power Purchase, Power and Water Purchase, Water 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 (“PPAs”) (together with the Independent Power Producer Licences (“IPP
Licences”) issued by the Ministry of Energy, Water and Communications), Power and Water Purchase Agreements (“PWPAs”)
and Water Purchase Agreement (“WPA”) held by the subsidiaries, associates and joint venture. The Operation and Maintenance
Agreements (“OMAs”) held by certain subsidiaries engaged in operation and maintenance are associated with the Independent
Power Producers within the Group.

Upon acquisition of the subsidiaries, associates and joint venture, the Group has determined the expected cash flows to be
generated from the PPAs, OMAs (together with the IPP Licences), PWPAs and WPA.

The PPAs and OMAs held by subsidiaries in Malaysia are recognised as a single asset in accordance with MFRS 138, Intangible
Assets, in view that they are required for the generation, operation and maintenance, sale of electricity energy and generating
capacity in Malaysia.

There are five (5) PPAs (together with the respective IPP Licences) held by the Group’s power producing subsidiaries namely
Segari Energy Ventures Sdn. Bhd. (“SEV”), GB3 Sdn. Bhd. (“GB3”), Prai Power Sdn. Bhd. (“PPSB”), Tanjung Bin Power Sdn. Bhd.
(“TBP”) and an associate, Kapar Energy Ventures Sdn. Bhd. (“KEV”). There are five (5) OMAs held by the Group’s operation and
maintenance subsidiaries, namely Malakoff Power Berhad (“MPB”) and Tanjung Bin O&M Berhad (“TBOM”).

The PWPAs and WPA held by associates and joint venture are recognised as part of the carrying amount in the investments in
associates and joint venture.

There are one (1) PWPA held by an associate, namely Hidd Power Company B.S.C. (c) (“HPC”), one (1) PWPA and one (1) WPA held
indirectly by a joint venture, namely Saudi-Malaysia Water & Electricity Company Limited (“SAMAWEC”).

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

Initial measurement

The fair values of the Intangible Assets arising from the PPAs, PWPAs, OMAs, and WPA 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
Intangible Assets represents the present value of the net income after taxes attributable to the Intangible Assets. The net income
attributable to the Intangible Assets was the excess income after charging a fair return on 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 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 Assets. The present value of the expected income attributable to the Intangible Assets
less CAC and taxes represents the value of the Intangible Assets.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6. INTANGIBLE ASSETS (CONTINUED)

Intangible assets arising from interest over Power Purchase, Power and Water Purchase, Water Purchase and Operation
and Maintenance Agreements (continued)

Initial measurement (continued)

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/PWPAs/OMAs 2 – 25 years (in accordance with the respective PPAs, PWPAs
and OMAs)
• Dependable Capacity (“DC”):
- Power 350 MW – 2,420 MW
- Water 17,047 m³/hour
• Capacity Factor:
- Power 10% – 75% of DC
- Water 91% – 99% of DC
• Net Output:
- Electrical (million kW/hour) 213 – 11,197
- Water (thousand m³) 67,370 – 73,771
• Capacity Rate:
- Power (RM/kW/month) 11.35 – 50.00
- Water (RM/m³/month) 1,222 – 1,339
• Fixed Operating Rate under Revenue (RM/kW/month) 4.00 – 10.50
• Variable Operating Rate under Revenue:
- Power (RM/kW/month) 0.013 – 4.775
- Water (RM/m³/month) 58.20 – 116.40
• Fuel price (RM/mmBtu) 4.60 – 13.70
• CAC 17.77% – 28.00% of revenue

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 cash flows, 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 pre-tax discount rate ranges from
7.5% to 9% per annum.

Intangible assets including goodwill arising from interest over Service Concession Agreement

Initial measurement

The Group also generates revenue from the integrated solid waste collection and cleansing public management services in the
states of Pahang, Federal Territory of Kuala Lumpur and Putrajaya under the Service Concession Agreement (“SCA”) held by Alam
Flora Sdn. Bhd. (“AFSB”), the concession asset holder.

During the year, the Group completed the Purchase Price Allocation (“PPA”) and the adjustments were made to the fair value of the
net assets, intangible assets and goodwill as set out in Note 40.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6. INTANGIBLE ASSETS (CONTINUED)

Intangible assets including goodwill arising from interest over Service Concession Agreement (continued)

Initial measurement (continued)

The fair value of the Intangible Assets arising from the SCA 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 Intangible Assets represents
the present value of the net income after taxes attributable to the Intangible Assets. The net income attributable to the Intangible
Assets was the excess income after charging a fair return on 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
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 Assets.
The present value of the expected income attributable to the Intangible Assets less CAC and taxes represents the value of the
Intangible Assets.

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 SCA 13.75 years (in accordance with the SCA)
• Revenue Tariff rate revision takes place on 1 January 2022 and 1 September 2026 with an
annualised growth rate of 2%
• Cost of sales Private contractor cost based on past experience at 53% of total concession business
revenue
• Capital expenditures (“CAPEX”) Expenses on concession assets replacement costs for existing SCA business

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 cash flows, 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 pre-tax discount rate was 18.65%
per annum.

Intangible assets arising from interest over Power and Water Purchase and Water Purchase Agreements

Initial measurement

The Group’s revenue is also derived from the generation and sale of desalinated water and electricity in the Kingdom of Saudi
Arabia, which is governed by the Power and Water Purchase Agreements (“PWPA”) and Water Purchase Agreement (“WPA”).

During the year, the Group completed the Purchase Price Allocation (“PPA”) and the adjustments were made to the fair value of the
net assets, intangible assets and goodwill as set out in Note 41.

The fair value of the Intangible Assets arising from the PWPA and WPA 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 Intangible Assets
represents the present value of the net income after taxes attributable to the Intangible Assets. The net income attributable to
the Intangible Assets was the excess income after charging a fair return on 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 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 Assets. The present value of the expected income attributable to the Intangible Assets less CAC and taxes
represents the value of the Intangible Assets.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6. INTANGIBLE ASSETS (CONTINUED)

Intangible assets arising from interest over Power and Water Purchase and Water Purchase Agreements (continued)

Initial measurement (continued)

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:

• Contracted tariff Agreed tariff as per PWPA and WPA

• Residual value 10% of Engineering, Procurement, and Construction Cost (“EPCC”) net of
decommissioning cost as the terminal value
• Capital expenditures (“CAPEX”) Expenses on power plants and machinery replacement

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 cash flows, 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 pre-tax discount rate was 44%
per annum.

Subsidiaries

Interest over Power Purchase and Operation and Maintenance Agreements

Interest over Power Purchase and Operation and Maintenance Agreements of subsidiaries have finite useful lives and are subject
to impairment assessment only if there is an indication of impairment. There is no indication of impairment during the financial year.

Impairment testing for cash-generating unit containing goodwill

Goodwill was allocated to AFSB at the completion of the acquisition of AFSB by the Group. The provisional goodwill represents
the cash-generating unit (“CGU”) within the Group at which the goodwill was monitored for internal management purposes. The
cash-generating unit relates to collection and cleansing management services. The Group has exercised significant judgment in
assessing the CGU recoverable amount using value in use.

The impairment test of the above CGU was based on the value in use, determined by discounting future cash flows to its present
values equivalent using a rate of return that reflects the relative risk of the cash flows, as well as the time value of money. This
is calculated by weighing the required returns on debt and equity in proportion to its assumed percentages. The applied pre-tax
discount rate was 15% per annum. The discount rate reflected the current market assessment of the time value of money and was
based on the estimated cost of capital.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6. INTANGIBLE ASSETS (CONTINUED)

Subsidiaries (continued)

Impairment testing for cash-generating unit containing goodwill (continued)

The following table shows the valuation techniques used in the determination of value in use, as well as the significant assumptions
used in the valuation model.

• Remaining useful life of SCA 13.75 years (in accordance with the SCA)
• Revenue Tariff rate revision takes place on 1 January 2023 and 1 September 2027 with an
annualised growth rate of 2%
• Cost of sales Private contractor cost based on past experience at 53% of total concession business
revenue
• Capital expenditures (“CAPEX”) Expenses on concession assets replacement costs for existing SCA business
• Pre-tax discount rate 15%

The values assigned to the key assumptions represent management’s assessment of future trends in the solid waste management
industry and were based on external sources and internal sources (historical data).

The estimated recoverable amount exceeds the carrying amount of the above CGU and no impairment loss is recognised. However,
any adverse change in a key assumption may result in an impairment loss to be recognised.

The above estimate is particularly sensitive to the assumption that the Group will successfully achieve tariff rate revisions which are
scheduled to be finalised on 1 January 2023 and 1 September 2027, respectively. A delay in the tariff rate revision of up to 3 years
would result in an impairment loss by approximately RM31,270,000.

Joint venture

Interest over Power and Water Purchase Agreement and Water Purchase Agreement in SAMAWEC

Interest over Power and Water Purchase Agreement and Water Purchase Agreement in SAMAWEC has finite useful lives and is
subject to impairment assessment only if there is an indication of impairment. There is no indication of impairment during the
financial year.

Associates

Interest over Power and Water Purchase Agreement in HPC

Interest over Power and Water Purchase Agreement in HPC has finite useful life and is subject to impairment assessment only if
there is an indication of impairment. There is no indication of impairment during the financial year.

Impairment testing for cash-generating unit (“CGU”) interest over Power Purchase Agreement in KEV

In the previous financial year, KEV recorded an impairment loss on its finance lease receivables, and consequently, the Group has
performed an impairment assessment on intangible asset of KEV.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6. INTANGIBLE ASSETS (CONTINUED)

Associates (continued)

Impairment testing for cash-generating unit (“CGU”) interest over Power Purchase Agreement in KEV (continued)

The carrying amount of the interest over the Power Purchase Agreement was allocated as follows:

Carrying
amount
2019
RM’000

Interest over PPA

CGU – Interest over PPA

KEV – multi-fuelled power generation 56,287
Less: Amortisation for the year (5,274)
Less: Impairment loss on intangible asset (51,013)
Total intangible asset -
Less: Intangible asset in an associate -
-

The impairment test of the above CGU was based on the value in use, determined by discounting future cash flows to its present
values equivalent using a rate of return that reflects the relative risk of the cash flows, as well as the time value of money. This
was calculated by weighing the required returns on debt and equity in proportion to its assumed percentages. The applied pre-tax
discount rate for 2019 was 9% per annum. The discount rate reflected the current market assessment of the time value of money
and was based on the estimated cost of capital.

The management had applied the following key assumptions in deriving the value in use within Level 3 attributable to the Intangible
Assets:

• Remaining useful life of PPA 10 years (in accordance with the PPA)
• Dependable Capacity (“DC”) 282 MW – 468 MW
• Capacity Factor 1% – 80% of DC
• Net Output (million kW/hour) 3,707 – 10,953
• Capacity Rate (RM/kW/month) 11.61
• Fixed Operating Rate under Revenue (RM/kW/month) 5.44 – 6.60
• Variable Operating Rate under Revenue (RM/kW/month) 0.0061 – 0.0101
• Fuel price (RM/mmBtu) 15.55 – 31.40

The values assigned to the key assumptions represent management’s assessment of future trends in the power and utilities
industry and are based on external sources and internal sources (historical data). Consequent to the impairment assessment, an
impairment loss of RM51,013,000 was recognised in profit or loss during the financial year ended 31 December 2019.

The above estimates were particularly sensitive in an increase/(decrease) of the discount rate used. A one (1) percentage point
decrease in the discount rate used would have increased the recoverable amount of interest on PPA of the CGU by RM38,937,000.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7. INVESTMENTS IN SUBSIDIARIES

Company
2020 2019
Note RM’000 RM’000

At cost
Unquoted shares 8,134,741 8,134,741
Unquoted preference shares 7.1 702,171 71,382
Amount due from a subsidiary 7.2 109,343 109,361
Less: Accumulated impairment losses 7.3 (1,171,414) (854,345)
7,774,841 7,461,139

7.1 During the financial year, the Company subscribed 6,307,888 Redeemable Preference Shares (“RPS”) in Tunas Pancar
Sdn. Bhd. (“TPSB”), a wholly-owned subsidiary at an issue price of RM100 each. The total subscription price payable to
TPSB of RM630,788,800 was netted against the amount due from TPSB.

The features of the RPS are as follows:

i) The RPS shall have no fixed dividend and the dividend shall be non-cumulative; and
ii) The RPS shall have no fixed redemption date and the subsidiary has an option to redeem all or part the RPS at any
given time.

7.2 Amount due from a subsidiary is non-trade, unsecured and non-interest bearing. The amount has no fixed payment date and
the subsidiary has the right to defer the payment.

7.3 During the financial year, the Company continued to assess the recoverability of its investments in subsidiaries which have
10 years or less remaining in the terms of their PPAs. Consequent to the impairment test carried out, the Company recognised
an impairment loss amounting to RM317,069,000 (2019: RM269,874,000) in the profit or loss.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7. INVESTMENTS IN SUBSIDIARIES (CONTINUED)

Details of subsidiaries are as follows:

Principal place Effective ownership

of business/ interest and voting
Country of interest (%)
No. Name of companies incorporation 2020 2019 Principal activities

Direct subsidiaries
1. Segari Energy Ventures Malaysia 93.75 93.75 Design, construction, operation and
Sdn. Bhd. maintenance of a combined cycle
power plant, generation and sale
of electrical energy and generating
capacity of the power plant
2. GB3 Sdn. Bhd. Malaysia 75 75 Design, construction, operation and
maintenance of a combined cycle
power plant, generation and sale
of electrical energy and generating
capacity of the power plant
3. Prai Power Sdn. Bhd. Malaysia 100 100 Design, construction, operation and
maintenance of a combined cycle
power plant, generation and sale
of electrical energy and generating
capacity of the power plant
4. Tanjung Bin Power Sdn. Bhd. Malaysia 90 90 Design, engineering, procurement,
construction, installation and
commissioning, testing, operation and
maintenance of a 2,100 MW coal-fired
electricity generating facility and sale
of electrical energy and generating
capacity of the power plant
5. Hypergantic Sdn. Bhd. Malaysia 100 100 Investment holding
6. Tanjung Bin Energy Sdn. Bhd. Malaysia 100 100 Design, engineering, procurement,
construction, installation and
commissioning, testing, operation and
maintenance of a 1,000 MW coal-fired
electricity generating facility
7. Malakoff Technical Solutions Malaysia 100 100 Investment holding company
Sdn. Bhd. (formerly known as and provision of operation and
Teknik Janakuasa Sdn. Bhd.) maintenance and any related services
8. Malakoff Utilities Sdn. Bhd. Malaysia 100 100 Build, own and operate an electricity
distribution system and a centralised
chilled water plant system
9. Malakoff Engineering Sdn. Bhd. Malaysia 100 100 Provision of engineering and project
management services
10. Spring Assets Limited British Virgin 100 100 Dormant
Islands

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7. INVESTMENTS IN SUBSIDIARIES (CONTINUED)

Details of subsidiaries are as follows (continued):

Principal place Effective ownership

of business/ interest and voting
Country of interest (%)
No. Name of companies incorporation 2020 2019 Principal activities

Direct subsidiaries (continued)

11. Malakoff Capital (L) Limited Federal Territory 100 100 Dormant
of Labuan,
Malaysia
12. Malakoff International Limited Cayman Islands 100 100 Offshore – Investment holding
13. Tuah Utama Sdn. Bhd. Malaysia 100 100 Investment holding
14. Desa Kilat Sdn. Bhd. Malaysia 54 54 Land reclamation, development and/or
sale of reclaimed land
15. Malakoff Power Berhad Malaysia 100 100 Operation and maintenance of power
plants
16. Malakoff R&D Sdn. Bhd. Malaysia 100 100 Promoting, developing, acquiring and
enhancing the Group’s capacity and
innovation in the energy business
17. Tunas Pancar Sdn. Bhd. Malaysia 100 100 Investment holding
18. Silver Solar Sdn. Bhd. Malaysia 100 100 Developing, operating and maintaining
solar photovoltaic projects
19. Radiant Summit Global Limited British Virgin 100 - Investment holding
Islands

Indirect subsidiaries
Held through Tanjung Bin Energy Sdn. Bhd.
20. Tanjung Bin Energy Issuer Malaysia 100 100 Administer and manage the
Berhad development of a 1,000 MW coal-fired
electricity generating facility

Held through Malakoff Technical Solutions Sdn. Bhd.

(formerly known as Teknik Janakuasa Sdn. Bhd.)
21. Natural Analysis Sdn. Bhd. Malaysia 100 100 Dormant
22. TJSB Services Sdn. Bhd. Malaysia 100 100 Provision of maintenance, repair and
overhaul and any related services to
power plants and any other plants of
similar main and auxiliary operating
systems
23. TJSB International Limited Cayman Islands 100 100 Offshore – Investment holding
24. TJSB Global Sdn. Bhd. Malaysia 100 100 Investment holding

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7. INVESTMENTS IN SUBSIDIARIES (CONTINUED)

Details of subsidiaries are as follows (continued):

Principal place Effective ownership

of business/ interest and voting
Country of interest (%)
No. Name of companies incorporation 2020 2019 Principal activities

Indirect subsidiaries (continued)

Held through Malakoff Technical Solutions Sdn. Bhd.
(formerly known as Teknik Janakuasa Sdn. Bhd.)
(continued)
25. PT. Teknik Janakuasa^ Indonesia 95 95 Provision of operation and maintenance
services to power plant and/or other
utility plants
26. TJZ Suria Sdn. Bhd. Malaysia 51 51 Provision of operation, maintenance
and repair services of the solar
photovoltaic energy generating
facility (“Facility”) and the associated
transmission line and facilities for the
development and operation of the
Facility

Held through TJSB International Limited

27. TJSB International (Shoaiba) British Virgin 100 100 Offshore – Investment holding
Limited Islands
28. TJSB Middle East Limited British Virgin 100 100 Operation and maintenance of power
Islands plant

Held through Malakoff Engineering Sdn. Bhd.

29. MESB Project Management Malaysia 100 100 Dormant
Sdn. Bhd.

Held through Malakoff International Limited

30. Malakoff Gulf Limited British Virgin 100 100 Offshore – Investment holding
Islands
31. Malakoff Technical (Dhofar) British Virgin 100 100 Offshore – Investment holding
Limited Islands
32. Malakoff AlDjazair Desal Sdn. Malaysia 100 100 Investment holding
Bhd.
33. Malakoff Oman Desalination British Virgin 100 100 Offshore – Investment holding
Company Limited Islands
34. Malakoff Hidd Holding Guernsey 100 100 Asset, property, investment, intellectual
Company Limited property and other holding companies
35. Pacific Goldtree Sdn. Bhd. Malaysia 100 100 Investment holding

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7. INVESTMENTS IN SUBSIDIARIES (CONTINUED)

Details of subsidiaries are as follows (continued):

Principal place Effective ownership

of business/ interest and voting
Country of interest (%)
No. Name of companies incorporation 2020 2019 Principal activities

Indirect subsidiaries (continued)

Held through Tuah Utama Sdn. Bhd.
36. Green Biogas Sdn. Bhd. Malaysia 60 60 Developing, operating and maintaining
biogas power plant project
37. Malakoff Radiance Sdn. Bhd. Malaysia 100 100 Developing, operating and maintaining
rooftop solar projects
38. Batu Bor Hidro Sdn. Bhd. Malaysia 65 65 Construction of hydro power plants,
operation of transmission, distribution
and sales of electricity and operation
of generation facilities that produce
electric energy
39. Lubuk Paku Hidro Sdn. Bhd. Malaysia 65 65 Construction of hydro power plants,
operation of transmission, distribution
and sales of electricity and operation
of generation facilities that produce
electric energy
40. Southern Biogas Sdn. Bhd. Malaysia 60 - Developing, operating and maintaining
biogas power plant project

Held through Malakoff AlDjazair Desal Sdn. Bhd.

41. Tlemcen Desalination France 70 70 Offshore – Investment holding
Investment Company SAS∞

Held through Malakoff Hidd Holding Company Limited

42. Malakoff Summit Hidd Holding Guernsey 57.14 57.14 Asset, property, investment, intellectual
Company Limited property and other holding companies

Held through Malakoff Power Berhad

43. Tanjung Bin O&M Berhad Malaysia 100 100 Operation and maintenance of power
plant
44. PDP O&M Sdn. Bhd.Ø Malaysia 100 100 Operation and maintenance of power
plant

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7. INVESTMENTS IN SUBSIDIARIES (CONTINUED)

Details of subsidiaries are as follows (continued):

Principal place Effective ownership

of business/ interest and voting
Country of interest (%)
No. Name of companies incorporation 2020 2019 Principal activities

Indirect subsidiaries (continued)

Held through Hypergantic Sdn. Bhd.
45. Port Dickson Power Berhad Ø Malaysia 100 100 Independent power producer licensed
by the Government to supply
electricity exclusively to Tenaga
Nasional Berhad

Held through Pacific Goldtree Sdn. Bhd.

46. Skyfirst Power Sdn. Bhd. Malaysia 100 100 Investment holding

Held through Tunas Pancar Sdn. Bhd.

47. Alam Flora Sdn. Bhd.Ø Malaysia 97.37 97.37 Provision of integrated solid waste
collection and public cleansing
management services

Held through Alam Flora Sdn. Bhd.

48. Alam Flora Environmental Malaysia 97.37 97.37 Provision of integrated solid waste
Solutions Sdn. Bhd. management services, recycling
(formerly known as DRB- and integrated facility management
HICOM Environmental services
Services Sdn. Bhd.) Ø

Held through Malakoff Gulf Limited

49. Desaru Investments Cayman Islands 100 100 Offshore – Investment holding
(Cayman Isl.) Limited ∞
50. Malaysian Shoaiba Malaysia 80 80 Investment holding
Consortium Sdn. Bhd.

^
Not audited by member firms of KPMG International
∞
No requirement to be audited
Ø
Not audited by member firms of KPMG International in prior year

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 7. INVESTMENTS IN SUBSIDIARIES (CONTINUED)

The Group’s subsidiaries that have material non-controlling interests (“NCI”) are as follows:

Other
Segari Malaysian subsidiaries

www.malakoff.com.my
Energy Tanjung Shoaiba with
Ventures GB3 Bin Power Alam Flora Consortium immaterial
Sdn. Bhd. Sdn. Bhd. Sdn. Bhd. Sdn. Bhd. Sdn. Bhd. NCI Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2020
NCI percentage of ownership
interest and voting interest 6.25% 25% 10% 2.63% 20.0%
Carrying amount of NCI 40,333 77,685 90,614 19,740 113,804 (5,374) 336,802
(Loss)/Profit allocated to NCI (5,712) 8,267 39,553 2,505 (618) (507) 43,488

Summarised financial information before

intra-group eliminations
As at 31 December
Non-current assets 1,440,847 328,301 4,587,341 293,231 454,845
Current assets 311,848 162,150 60,210 562,896 270
Non-current liabilities (1,095,051) (110,498) (96,793) (274,412) (18)
Current liabilities (12,320) (69,214) (43,573) (376,979) -
Net assets 645,324 310,739 4,507,185 204,736 455,097

Year ended 31 December

Revenue 334,503 270,077 3,160,860 827,261 35,225
(Loss)/Profit for the year (91,397) 33,066 395,527 95,250 32,133
Total comprehensive (expense)/income (91,397) 33,066 395,527 95,250 32,133
Cash flows from operating activities 115,424 126,945 765,442 96,221 (3,072)
Cash flows (used in)/from investing activities (163,559) (49,589) 244,964 (378,876) 33,464
FINANCIAL PERFORMANCE

Cash flows used in financing activities (60,000) (80,723) (1,100,986) (270,311) (32,255)
Net decrease in cash and cash equivalents (108,135) (3,367) (90,580) (552,966) (1,863)
Dividends paid to NCI - 20,000 40,000 6,510 - - 66,510
Redemption of Preference Shares to NCI - - - - 6,377 - 6,377
SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

169
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 7. INVESTMENTS IN SUBSIDIARIES (CONTINUED)

170
The Group’s subsidiaries that have material non-controlling interests (“NCI”) are as follows (continued):

Other
SECTION 5

Segari Malaysian subsidiaries

Energy Tanjung Shoaiba with
Ventures GB3 Bin Power Alam Flora Consortium immaterial
Sdn. Bhd. Sdn. Bhd. Sdn. Bhd. Sdn. Bhd. Sdn. Bhd. NCI Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2019
NCI percentage of ownership
interest and voting interest 6.25% 25% 10% 2.63% 20%
Malakoff Corporation Berhad | Annual Report 2020

Carrying amount of NCI 46,045 89,418 90,967 23,745 120,799 (2,069) 368,905
(Loss)/Profit allocated to NCI (3,710) 11,493 46,471 273 - 6 54,533
FINANCIAL PERFORMANCE

Summarised financial information before

intra-group eliminations
As at 31 December
Non-current assets 1,301,276 439,421 4,838,622 312,132 454,845
Current assets 747,061 175,198 3,820,514 677,804 2,172
Non-current liabilities (131,997) (181,563) (6,393,830) (262,017) -
Current liabilities (1,179,619) (75,383) (1,355,641) (371,106) (2,172)
Net assets 736,721 357,673 909,665 356,813 454,845
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended 31 December

Revenue 1,142,395 337,341 3,812,134 78,984 141,157
(Loss)/Profit for the year (59,360) 45,973 464,712 10,382 134,741
Total comprehensive (expense)/income (59,360) 45,973 464,712 10,382 134,741
Cash flows from operating activities 126,425 57,716 1,275,878 111,502 533
Cash flows from/(used in) investing activities 44,493 (11,485) 365,699 (14,452) 137,850
Cash flows used in financing activities (120,625) (80,723) (1,610,250) (40,233) (157,285)
Net increase/(decrease) in cash and cash
equivalents 50,293 (34,492) 31,327 56,817 (18,902)
Dividends paid to NCI - 20,000 30,000 - - - 50,000
Redemption of Preference Shares to NCI - - - - 26,646 - 26,646

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 Malakoff Corporation Berhad | Annual Report 2020

FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. INVESTMENTS IN ASSOCIATES

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

At cost
Unquoted shares:
- in Malaysia 471,258 471,258 1,112,228 1,112,228
- outside Malaysia 72,073 72,073 - -
Unquoted loan stocks:
- in Malaysia 307,430 307,430 307,430 307,430
Pre-acquisition reserves 100,592 100,592 - -
Share of post-acquisition reserves 35,214 (30,501) - -
Accumulated impairment loss (572,764) (572,764) (1,419,658) (1,419,658)
413,803 348,088 - -

Add: Intangible assets

Goodwill 349,231 355,838 - -
Interest over PPA and PWPA 939,073 939,073 - -
1,288,304 1,294,911 - -

Less: Amortisation of intangible assets

At 1 January (383,349) (372,838) - -
Amortisation for the year (5,258) (10,511) - -
At 31 December (388,607) (383,349) - -

Less: Accumulated impairment loss on intangible

assets
At 1 January (514,659) (463,646) - -
Impairment loss for the year - (51,013) - -
At 31 December (514,659) (514,659) - -
798,841 744,991 - -

In 2019, the Group had performed an impairment assessment on the carrying amount of its investment in an associate which has
10 years or less remaining in the terms of the PPA. The impairment test was based on the value in use, by applying pre-tax discount
rate of 9% per annum. Consequent to the impairment test carried out, the Group and the Company had recognised an impairment
loss on its investment in an associate of RM623,777,000 and RM965,551,000, respectively in the profit or loss. As a result of the
impairment assessment, the Group and the Company had made provision up to the carrying amount of the investment in the
associate.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. INVESTMENTS IN ASSOCIATES (CONTINUED)

Details of associates are as follows:

Principal place Effective ownership
of business/ interest and voting
Country of interest (%)
No. Name of companies incorporation 2020 2019 Principal activities

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

Indirect associates
2. Oman Technical Partners British Virgin 43.48 43.48 Offshore - Investment holding
Limited Islands
3. Salalah Power Holdings Limited Bermuda 43.48 43.48 Dormant
4. Al-Imtiaz Operation and Kingdom of 40 40 Implementation of operation and
Maintenance Company Limited Saudi Arabia maintenance contracts for stations of
electrical power generation and water
desalination
5. Hyflux-TJSB Algeria SPA Algeria 49 49 Operation and maintenance of water
desalination plant
6. Hidd Power Company B.S.C. (c) Bahrain 40 40 Building, operation and maintenance of
power and water stations for special
purposes (specific supply only)
7. Muscat City Desalination Sultanate of 35 35 Operation and maintenance of
Operation and Maintenance Oman pump stations and pipelines,
Company LLC installation and repair of electric
power and transformer plants and
telecommunications and radar plants,
export and import offices, and laying
and maintenance of all kinds of pipes,
business agencies (excluding portfolio
and securities) and wholesale of
industrial chemicals
8. Muscat City Desalination Sultanate of 32.5 32.5 Desalination of water
Company S.A.O.G Oman
9. Saudi-Malaysia Operation Kingdom of 20 20 Operation and maintenance of power
& Maintenance Services Saudi Arabia and water desalination plant
Company Limited

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. INVESTMENTS IN ASSOCIATES (CONTINUED)

The following table summarises the information of the Group’s material associates, adjusted for any differences in the accounting
policies and reconciles the information to the carrying amount of the Group’s interests in the associates.

Hidd Muscat City

Power Desalination
Company Company
B.S.C. (c) S.A.O.G
RM’000 RM’000
Group 40% 32.5%

2020
Summarised financial information
As at 31 December
Non-current assets 3,107,515 930,911
Current assets 1,022,110 58,198
Non-current liabilities (2,460,151) (810,917)
Current liabilities (732,086) (62,386)
Net assets 937,388 115,806

Year ended 31 December

Profit for the year 181,311 20,069
Other comprehensive expense (7,250) (27,615)
Total comprehensive income/(expense) 174,061 (7,546)

Included in the total comprehensive income/(expense) are:

Revenue 1,951,772 182,794
Depreciation and amortisation (224,330) (26,988)
Finance costs (130,478) (32,270)
Tax expense - (5,675)

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. INVESTMENTS IN ASSOCIATES (CONTINUED)

The following table summarises the information of the Group’s material associates, adjusted for any differences in the accounting
policies and reconciles the information to the carrying amount of the Group’s interests in the associates (continued).

Hidd Muscat City Other

Power Desalination individually
Company Company immaterial
B.S.C. (c) S.A.O.G associates Total
Group RM’000 RM’000 RM’000 RM’000

2020
Reconciliation of net assets to carrying amount
As at 31 December
Group’s share of net assets 374,955 37,637 1,211 413,803
Goodwill 349,231 - - 349,231
Intangible assets 35,807 - - 35,807
Carrying amount in the statements of financial position 759,993 37,637 1,211 798,841

Group’s share of results

Year ended 31 December
Group’s share of profit for the year 72,524 6,522 9,306 88,352
Group’s share of other comprehensive expense (2,900) (8,975) - (11,875)
Group’s share of total comprehensive income/
(expense) 69,624 (2,453) 9,306 76,477

Other information
Dividend received - (8,991) (1,770) (10,761)

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. INVESTMENTS IN ASSOCIATES (CONTINUED)

The following table summarises the information of the Group’s material associates, adjusted for any differences in the accounting
policies and reconciles the information to the carrying amount of the Group’s interests in the associates (continued).

Malaysian Muscat City

Kapar Energy Shoaiba Hidd Power Desalination
Ventures Consortium Company Company
Sdn. Bhd.* Sdn. Bhd.** B.S.C. (c) S.A.O.G
RM’000 RM’000 RM’000 RM’000
Group 40% 40% 40% 32.5%

2019
Summarised financial information
As at 31 December
Non-current assets 1,671,033 7,429,273 3,223,524 956,929
Current assets 1,646,075 482,046 651,893 36,708
Non-current liabilities (1,756,974) (4,654,527) (2,765,164) (816,482)
Current liabilities (1,152,972) (862,721) (346,931) (53,802)
Net assets 407,162 2,394,071 763,322 123,353

Year ended 31 December

(Loss)/Profit for the year (325,773) 235,054 134,491 15,965
Other comprehensive expense - (48,825) (25,818) (27,545)
Total comprehensive (expense)/income (325,773) 186,229 108,673 (11,580)

Included in the total comprehensive income/

(expense) are:
Revenue 1,784,915 753,950 1,814,396 180,845
Depreciation and amortisation (4,128) (218,287) (219,182) -
Finance income 18,859 - - -
Finance costs (160,734) (206,726) (141,170) (33,813)
Tax income/(expense) 4,793 (14,996) - (7,423)

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. INVESTMENTS IN ASSOCIATES (CONTINUED)

The following table summarises the information of the Group’s material associates, adjusted for any differences in the accounting
policies and reconciles the information to the carrying amount of the Group’s interests in the associates (continued).

Kapar Malaysian Muscat City Other

Energy Shoaiba Hidd Power Desalination individually
Ventures Consortium Company Company immaterial
Sdn. Bhd.* Sdn. Bhd.** B.S.C. (c) S.A.O.G associates Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2019
Reconciliation of net assets to
carrying amount
As at 31 December
Group’s share of net assets - - 305,329 40,090 2,669 348,088
Goodwill - - 355,838 - - 355,838
Intangible assets - - 41,065 - - 41,065
Carrying amount in the statements of
financial position - - 702,232 40,090 2,669 744,991

Group’s share of results

Year ended 31 December
Group’s share of (loss)/profit for the year (130,309) 22,036 53,796 5,189 6,563 (42,725)
Group’s share of other comprehensive
expense - (5,859) (10,327) (8,952) (1,336) (26,474)
Group’s share of total comprehensive
(expense)/income (130,309) 16,177 43,469 (3,763) 5,227 (69,199)

Other information
Dividend received - - (14,804) (4,381) (612) (19,797)

* Investment in KEV has been fully impaired in the previous financial year, and accordingly the share of net assets of the
associate had been written down to nil.
** In the previous financial year, consequent to the acquisition of an increased equity interest in Malaysian Shoaiba Consortium
Sdn. Bhd., the entity ceased to be an associate and became a subsidiary of the Group.

Unrecognised share of losses

The Group has not recognised losses from Kapar Energy Ventures Sdn. Bhd. (“KEV”), totalling RM28,076,000 for the financial year
ended 31 December 2020 since the Group’s share of losses exceeds its interest in KEV. Hence, the Group has no further obligation
in respect of the losses.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

9. INVESTMENTS IN JOINT VENTURES

2020 2019
Group RM’000 RM’000
Restated

At cost
Unquoted shares, outside Malaysia 427,994 427,994
Pre-acquisition reserves 317,528 317,528
Share of post-acquisition reserves (135,081) (174,494)
610,441 571,028

Add: Intangible assets acquired through

business combination (Note 6)
Intangible assets, restated 66,500 66,500
66,500 66,500

Less: Amortisation of intangible assets

At 1 January (2,145) -
Amortisation for the year, restated (6,432) (2,145)
At 31 December (8,577) (2,145)
668,364 635,383

(i) In 2016, the Group made provision up to the carrying amount of its investment in Almiyah Attilemcania SPA (“AAS”), totalling
RM64,118,000, consequent to a dispute as disclosed in Note 37.

(ii) In 2019, Malakoff Gulf Limited, a wholly-owned indirect subsidiary of the Company, had entered into a Share Sale Agreement
with Khazanah Nasional Berhad to acquire the entire equity interest in Desaru Investment (Cayman Isl.) Limited (“DIL”).
Following the acquisition, the Company’s effective equity interest in Malaysian Shoaiba Consortium Sdn. Bhd. (“MSCSB”),
an associate of DIL, increased from 40% to 80%. MSCSB has a 50% equity interest in Saudi-Malaysia Water & Electricity
Company Limited (“SAMAWEC”). The Group has classified SAMAWEC as a joint venture of the Group.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

9. INVESTMENTS IN JOINT VENTURES (CONTINUED)

Details of joint ventures are as follows:

Principal place Effective ownership

of business/ interest and voting
Country of interest (%)
No. Name of companies incorporation 2020 2019 Principal activities

Indirect joint ventures

1. Almiyah Attilemcania SPA Algeria 35.7 35.7 Construction, operation and
maintenance of a desalination plant
and marketing of desalinated water
produced
2. Saudi-Malaysia Water & Kingdom of 40 40 Offshore – Investment holding
Electricity Company Limited Saudi Arabia
(“SAMAWEC”)

Associates held by SAMAWEC

3. Shuaibah Water & Electricity Kingdom of 24 24 Design, construction, commissioning,
Company Limited (“SWEC”) Saudi Arabia testing, possession, operation and
maintenance of crude oil fired power
generation and water desalination
plant
4. Shuaibah Expansion Holding Kingdom of 24 24 Development, construction, ownership,
Company Limited (“SEHCO”) Saudi Arabia operation and maintenance of
the Shuaibah Phase 3 Expansion
independent water producer (“IWP”),
transport and sale of water and
undertake all works and activities
related thereto, directly or through
another company holding most of its
shares or stock
5. Shuaibah Expansion Project Kingdom of 23.8 23.8 Development, construction, possession,
Company Limited (“SEPCO”) Saudi Arabia operation and maintenance of the
Shuaibah Phase 3 Expansion IWP,
transfer and sell water and all relevant
works and activities

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

9. INVESTMENTS IN JOINT VENTURES (CONTINUED)

The following table summarises the information of the Group’s material joint venture, SAMAWEC, adjusted for any differences in the
accounting policies and reconciles the information to the carrying amount of the Group’s interests in the joint venture.

Group
2020 2019
RM’000 RM’000
Restated

Summarised financial information

As at 31 December
Non-current assets 7,026,042 7,631,517
Current assets 409,376 495,357
Non-current liabilities (4,143,021) (4,851,174)
Current liabilities (747,345) (886,463)
Net assets 2,545,052 2,389,237

Year ended 31 December

Profit for the year 369,623 113,038
Other comprehensive income (33,948) 40,498
Total comprehensive income 335,675 153,536

Included in the total comprehensive income/(expense) are:

Revenue 1,348,373 457,014
Depreciation and amortisation (367,413) (124,687)
Interest expense (307,750) (110,715)
Income tax expense (17,421) (11,021)

Reconciliation of net assets to carrying amount

As at 31 December
Group’s share of net assets 610,441 571,028
Intangible assets 57,923 64,355
Carrying amount in the statements of financial position 668,364 635,383

Group’s share of results

Year ended 31 December
Group’s share of profit for the year 83,426 21,102
Group’s share of other comprehensive (expense)/income (8,124) 9,679
Group’s share of total comprehensive income 75,302 30,781

Other information
Dividend received 35,889 141,157

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10. DERIVATIVE FINANCIAL ASSETS/(LIABILITIES)

2020 2019
Assets Liabilities Assets Liabilities
Group RM’000 RM’000 RM’000 RM’000

Non-current
Derivatives at fair value through profit or loss
- Interest rate swaps - (15,381) - (10,013)
- Cross currency swap 231,170 - 327,643 -
231,170 (15,381) 327,643 (10,013)

Interest rate and cross currency swaps are used to achieve an appropriate mix of fixed and floating interest rates exposure within
the Group’s policy. The Group entered into interest rate and cross currency swaps, to hedge its interest rate and foreign exchange
risks. The interest rate and cross currency swaps are entered into for a period of 5 to 17 years.

11. TRADE AND OTHER RECEIVABLES

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000

Non-current
Other receivables 11.1 50,324 60,777 - -
Amount due from an associate – non-trade 11.2 255,724 240,662 255,724 240,662
Accumulated impairment allowances 11.2 (40,371) (25,309) (40,371) (25,309)
Net amount due from an associate – non-trade 215,353 215,353 215,353 215,353
Deferred expense 214,939 250,239 - -
Other assets 50 50 - -
480,666 526,419 215,353 215,353

Current
Trade
Trade receivables 11.3 565,549 1,160,167 - -
Less: Allowance for impairment loss (3,195) (3,168) - -
562,354 1,156,999 - -

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. TRADE AND OTHER RECEIVABLES (CONTINUED)

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000

Non-trade
Amounts due from subsidiaries 11.4 - - 1,162,670 2,404,223
Amounts due from associates 11.4 50,695 51,132 708 -
Amounts due from related parties 11.4 19,510 18,340 - -
Other receivables 139,875 187,720 1,380 1,756
Deposits and prepayments 111,750 87,068 3,685 4,446
321,830 344,260 1,168,443 2,410,425
884,184 1,501,259 1,168,443 2,410,425
1,364,850 2,027,678 1,383,796 2,625,778

11.1 Other receivables – non-current

Other receivables represent transaction costs arising from derivative instruments which will be amortised systematically over
the tenure of the hedged item.

11.2 Amount due from an associate – non-current

Amount due from an associate is unsecured, stated at amortised cost and is expected to be repaid in the next nine (9) years
in line with the remaining PPA tenure. During the financial year, the Company re-assessed the recoverability of the amount
due from an associate. The impairment test of the amount due from an associate is based on the expected loss model,
determined by discounting the cash shortfalls over the expected life of the amount due from an associate using the effective
interest rate of 7%.

As a result of the impairment assessment, the Group and the Company recognised an impairment loss on amount due from
the associate amounting to RM15,062,000 (2019: RM25,309,000) for the year ended 31 December 2020.

11.3 Trade receivables

Included in trade receivables of the Group is an amount owing from an entity that is under significant influence of the
Government of Malaysia (a party that has an indirect significant influence on the Group) as at the reporting period as follows:

Gross balance outstanding
2020 2019
RM’000 RM’000

Tenaga Nasional Berhad 399,407 1,065,658

Trade receivables are subjected to negotiated terms.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. TRADE AND OTHER RECEIVABLES (CONTINUED)

11.4 Amounts due from subsidiaries, associates and related parties - current

Amounts due from subsidiaries, associates and related parties are unsecured, interest free and repayable on demand except
for amounts of RM684,417,000 (2019: RM725,693,000) due from subsidiaries, which are subject to interest rates ranging from
3.5% - 5.9% (2019: 4.7% - 5.9%) per annum and amounts of RM49,944,000 (2019: RM51,132,000) due from associates,
which are subject to interest rate of 2% (2019: 2%) per annum.

11.5 Offsetting of financial assets and financial liabilities

The following table provides information of financial assets and liabilities that have been set-off for presentation purpose:

Net carrying
amount in the
Balances statements of
Gross that are financial
amount set-off position
Company Note RM’000 RM’000 RM’000

2020
Amounts due from subsidiaries 1,387,430 (224,760) 1,162,670
Amounts due to subsidiaries 24 (1,856,720) 224,760 (1,631,960)

2019
Amounts due from subsidiaries 2,654,608 (250,385) 2,404,223
Amounts due to subsidiaries 24 (2,367,560) 250,385 (2,117,175)

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

12. DEFERRED TAX ASSETS/(LIABILITIES)

Recognised deferred tax assets/(liabilities)

Deferred tax assets/(liabilities) are attributable to the following:

Assets Liabilities Net

2020 2019 2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Restated Restated Restated

Group
Property, plant and equipment - - (2,366,141) (2,301,713) (2,366,141) (2,301,713)
Lease liabilities 2,596 5,660 - - 2,596 5,660
Right-of-use assets - - (5,082) (7,361) (5,082) (7,361)
Investment properties - - (204) (120) (204) (120)
Concession assets - - (35,653) (42,470) (35,653) (42,470)
Provisions 171,973 157,439 - - 171,973 157,439
Intangible assets - - (646,467) (714,096) (646,467) (714,096)
Unutilised tax losses 23,883 - - - 23,883 -
Unutilised capital allowances 1,009,533 871,680 - - 1,009,533 871,680
Deferred income 897,742 971,061 - - 897,742 971,061
Deferred expenses - - (58,540) (67,548) (58,540) (67,548)
Tax assets/(liabilities) 2,105,727 2,005,840 (3,112,087) (3,133,308) (1,006,360) (1,127,468)
Set-off of tax (1,911,144) (1,859,342) 1,911,144 1,859,342 - -
Net tax assets/(liabilities) 194,583 146,498 (1,200,943) (1,273,966) (1,006,360) (1,127,468)

Company
Property, plant and equipment - - (558) (432) (558) (432)
Right-of-use assets - - (761) (2,174) (761) (2,174)
Lease liabilities 855 2,344 - - 855 2,344
Tax assets/(liabilities) 855 2,344 (1,319) (2,606) (464) (262)
Set-off of tax (855) (2,344) 855 2,344 - -
Net tax assets/(liabilities) - - (464) (262) (464) (262)

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184
Movements in temporary differences during the year:

Recognised Recognised
SECTION 5

Recognised in other Arising from in other

in profit comprehensive business Disposal Recognised comprehensive
or loss, (expense) combination, of a At in profit (expense)
At restated /income restated subsidiary 31.12.2019/ or loss /income At
1.1.2019 (Note 28) (Note 30) (Note 40) (Note 42) 1.1.2020 (Note 28) (Note 30) 31.12.2020
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Deferred tax assets

Lease liabilities - 3,769 - 1,891 - 5,660 (3,064) - 2,596
Provisions 118,929 4,467 14,549 72,909 (53,415) 157,439 17,766 (3,232) 171,973
Malakoff Corporation Berhad | Annual Report 2020

Unutilised tax losses - - - - - - 23,883 - 23,883

Unutilised capital allowances 735,695 135,985 - - - 871,680 137,853 - 1,009,533
Deferred income 939,190 31,871 - - - 971,061 (73,319) - 897,742
FINANCIAL PERFORMANCE

Tax assets 1,793,814 176,092 14,549 74,800 (53,415) 2,005,840 103,119 (3,232) 2,105,727
Set-off of tax (1,650,451) (160,780) - (48,111) - (1,859,342) (51,802) - (1,911,144)
Net tax assets 143,363 15,312 14,549 26,689 (53,415) 146,498 51,317 (3,232) 194,583

Deferred tax liabilities

Property, plant and equipment (2,263,670) (37,053) - (990) - (2,301,713) (64,428) - (2,366,141)
Right-of-use assets - (5,530) - (1,831) - (7,361) 2,279 - (5,082)
Investment properties - 1,632 - (1,752) - (120) (84) - (204)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Concession assets - 201 - (42,671) - (42,470) 6,817 - (35,653)

Intangible assets (660,932) 72,608 - (125,772) - (714,096) 67,629 - (646,467)
Deferred expense (76,554) 9,006 - - - (67,548) 9,008 - (58,540)
Others - (3,694) - - 3,694 - - - -
Tax liabilities (3,001,156) 37,170 - (173,016) 3,694 (3,133,308) 21,221 - (3,112,087)
Set-off of tax 1,650,451 160,780 - 48,111 - 1,859,342 51,802 - 1,911,144
Net tax liabilities (1,350,705) 197,950 - (124,905) 3,694 (1,273,966) 73,023 - (1,200,943)

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

12. DEFERRED TAX ASSETS/(LIABILITIES) (CONTINUED)

Movements in temporary differences during the year (continued):

Recognised Recognised
in profit At in profit
At or loss 31.12.2019/ or loss At
1.1.2019 (Note 28) 1.1.2020 (Note 28) 31.12.2020
Company RM’000 RM’000 RM’000 RM’000 RM’000

Property, plant and equipment 35 (467) (432) (126) (558)

Right-of-use assets (3,514) 1,340 (2,174) 1,413 (761)
Lease liabilities 3,666 (1,322) 2,344 (1,489) 855
Provisions 986 (986) - - -
Net tax assets/(liabilities) 1,173 (1,435) (262) (202) (464)

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following item (stated at gross):

Group
2020 2019
RM’000 RM’000

Unutilised tax losses:

As at 31 December 138,283 138,101
Tax at 24% (2019: 24%) 33,188 33,144

In accordance with the provision of Finance Act 2018 requirement, the unutilised tax losses are available for utilisation in the next
seven (7) years, for which, any excess at the end of the seventh (7th) year, will be disregarded. Deferred tax assets have not been
recognised in respect of this item because it is not probable that future taxable profit will be available against which the subsidiaries
can utilise the benefits.

The expiry of the unutilised tax losses is as follows:

Group
2020 2019
RM’000 RM’000

Year of assessment 2025 127,590 127,590

Year of assessment 2026 10,511 10,511
Year of assessment 2027 182 -
138,283 138,101

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

13. INVENTORIES

Group
2020 2019
RM’000 RM’000

At cost
Consumables 272,025 322,396
Coal 270,553 309,707
Diesel fuel 49,221 60,955
591,799 693,058

Recognised in profit or loss:

Allowance for diminution in value of consumables 29,161 -

The allowance for diminution in value of consumables is included in cost of sales.

14. OTHER INVESTMENTS

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000

Non-current
Investment in Redeemable Cumulative
Convertible Preference Shares (“RCCPS”) 14.1 23,999 21,515 23,999 21,515

Current
Deposits with licensed banks and other
licensed corporations
- amortised cost 2,381,810 1,877,683 110,060 -
- fair value through profit or loss 996,347 631,793 - -
3,378,157 2,509,476 110,060 -

14.1 Investment in RCCPS

In 2018, the Group invested in RCCPS issued by a company which is engaged in the installation of non-electric solar energy
collectors and wholesale of variety of goods. The issuer may redeem the RCCPS subject to the approval of the Company.
The RCCPS are subject to dividend rate of 11% per annum.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. CASH AND CASH EQUIVALENTS

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Deposits with licensed banks and other licensed

corporations 404,565 1,514,130 100,190 18,000
Cash and bank balances 658,035 1,231,259 26,647 25,204
1,062,600 2,745,389 126,837 43,204

16. ASSETS CLASSIFIED AS HELD FOR SALE

On 11 December 2019, Port Dickson Power Berhad (“PDP”), a wholly-owned subsidiary of the Company, entered into a Sale and
Purchase Agreement with Pacific Energy Company Limited, Nigeria to dispose four (4) units of used gas turbines and generators,
related auxiliaries and spare parts (“collectively referred to as power plant assets”).

The disposal of the power plant assets is expected to be completed by the second quarter of 2021. Accordingly, these power plant
assets are reclassified as current assets.

At 31 December 2020, the assets classified as held for sale are as follows:

Group
2020 2019
Note RM’000 RM’000

Assets classified as held for sale

Property, plant and equipment (a) 65,000 65,000

Note (a)

Property, plant and equipment held for sale comprise the following:

Group
2020 2019
Note RM’000 RM’000

Cost 3 678,759 678,759

Less: Accumulated depreciation 3 (613,759) (613,759)
65,000 65,000

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17. CAPITAL AND RESERVES

Share capital

Number Number
of shares Amount of shares Amount
2020 2020 2019 2019
Group and Company ’000 RM’000 ’000 RM’000

Issued and fully paid shares with no par value

classified as equity instruments:
Ordinary shares
At 1 January/31 December 5,000,000 5,693,055 5,000,000 5,693,055

Ordinary shares

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share
at meetings of the Company. In respect of the Company’s treasury shares that are held by the Group, all rights are suspended until
those shares are reissued.

Treasury shares

In 2019, the Company repurchased a total of 1,259,700 ordinary shares from the open market for a total consideration of
RM1,040,912 at an average cost of RM0.83 per share. The repurchased transactions were financed by internally generated funds.
The repurchased shares were held as treasury shares in accordance with Section 127 of the Companies Act 2016.

During the financial year, the Company did not repurchase any ordinary shares from the open market. As at 31 December 2020,
the total number of treasury shares held is 2.26% of the total number of issued shares of the Company.

Number Number
of shares Amount of shares Amount
2020 2020 2019 2019
Group and Company ’000 RM’000 ’000 RM’000

Treasury shares
At 1 January 113,039 98,647 111,779 97,606
Purchase during the year - - 1,260 1,041
At 31 December 113,039 98,647 113,039 98,647

Foreign currency translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of the
Group entities with functional currencies other than RM.

Hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedges related to
hedged transactions that have not yet occurred.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

18. PERPETUAL SUKUK

2020 2019
Group RM’000 RM’000

Nominal value
At 1 January/31 December 800,000 800,000

In 2017, Tanjung Bin Energy Sdn. Bhd., a wholly-owned subsidiary of the Company had issued unrated perpetual sukuk of RM800
million in nominal value in accordance with Shariah principle of Wakalah Bi Al-Istithmar (“Sukuk Wakalah”) with an unconditional
and irrevocable subordinated cash deficiency support from the Company.

Details of the Sukuk Wakalah are as follows:

a) The perpetual sukuk has no fixed redemption date and the subsidiary has an option to redeem all or part of the perpetual
sukuk at the end of the seventh year from date of issuance and thereafter on each subsequent periodic distribution date;

b) The perpetual sukuk is unsecured and carries a periodic distribution rate of 5.9% per annum, payable semi-annually from
year 1 to year 7. Thereon, the periodic distribution rate shall be 1% above the prevailing periodic distribution rate;

c) The subsidiary has the right to defer the payment of the periodic distribution amount by giving the required deferral notice.
Deferred periodic distribution, if any, will be cumulative but will not earn additional profits thus, there will be no compounding
effect; and

d) The holder of perpetual sukuk shall have no voting rights at any general meeting of the shareholders of the subsidiary.

Based on the underlying issuing terms, the perpetual sukuk has been classified as equity in the financial statements of the subsidiary.

19. LOANS AND BORROWINGS

Group
2020 2019
Note RM’000 RM’000

Non-current
Secured
AUD term loan 1 19.1 - 358,423
Sukuk Ijarah medium term notes 19.2 2,501,254 2,779,008
Sukuk medium term notes 19.3 2,219,351 2,674,976
Sukuk Wakalah 19.4 235,000 290,000
Senior Sukuk Murabahah 19.5 2,935,000 3,005,000
Senior RM term loan 19.6 353,920 438,130
Senior USD term loan 19.7 1,181,801 1,313,526
USD term loan 19.8 261,105 -

Unsecured
Redeemable Preference Shares 19.10 30,000 30,000
9,717,431 10,889,063

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. LOANS AND BORROWINGS (CONTINUED)

Group
2020 2019
Note RM’000 RM’000

Current
Secured
AUD term loan 1 19.1 - 28,676
Sukuk Ijarah medium term notes 19.2 320,000 500,000
Sukuk medium term notes 19.3 500,000 410,000
Sukuk Wakalah 19.4 55,000 -
Senior Sukuk Murabahah 19.5 70,000 75,000
Senior RM term loan 19.6 84,210 79,450
Senior USD term loan 19.7 107,334 106,745
USD term loan 19.8 28,119 294,696
RM term loan 19.9 - 14,515
1,164,663 1,509,082
10,882,094 12,398,145

19.1 AUD term loan 1 drawdown by Malakoff International Limited (“MIL”)

Security

The AUD term loan 1 was secured over a first ranking share pledge over the investments in subsidiaries and assignment of
MIL’s rights under certain inter-company loans. During the financial year, the AUD term loan 1 was fully settled subsequent to
the disposal of the Group’s investment in Malakoff Wind Macarthur Pty. Limited in December 2019.

19.2 Sukuk Ijarah medium term notes issued by Tanjung Bin Power Sdn. Bhd. (“TBP”)

Security

The Sukuk Ijarah medium term notes are secured over property, plant and equipment with a carrying amount of RM4,383,950,000
(2019: RM4,605,145,000).

Significant covenant

TBP is required to maintain a debt-to-equity ratio of not more than 80:20 and a finance service cover ratio of at least
1.25 times.

19.3 Sukuk medium term notes issued by Malakoff Power Berhad (“MPB”)

Security

The Sukuk medium term notes are secured over an irrevocable and unconditional guarantee under the principle of Kafalah
from the Company, an assignment and charge over MPB’s designated accounts and a third party assignment and charge over
the Company’s disposal proceeds account.

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19. LOANS AND BORROWINGS (CONTINUED)

19.3 Sukuk medium term notes issued by Malakoff Power Berhad (“MPB”) (continued)

Significant covenant

MPB is required to maintain an aggregated debt-to-equity ratio of not more than 1:1 and a Group debt-to-equity ratio of not
more than 5.5:1.

19.4 Sukuk Wakalah issued by Tanjung Bin O&M Berhad (“TBOM”)

Security

The Sukuk Wakalah is secured over the Operation and Maintenance Agreement, Sub Operation and Maintenance Agreement
and Asset Sales Agreement held by TBOM and all the balances in TBOM’s designated accounts.

Significant covenant

TBOM is required to maintain a debt-to-equity ratio of not more than 80:20 and a finance service cover ratio of at least
1.25 times.

19.5 Senior Sukuk Murabahah issued by Tanjung Bin Energy Issuer Berhad (“TBEI”)

Security

The Senior Sukuk Murabahah is secured over Tanjung Bin Energy Sdn. Bhd. (“TBE”)’s property, plant and equipment with a
carrying amount of RM5,520,984,000 (2019: RM5,725,930,000).

Significant covenant

TBEI is required to maintain a debt-to-equity ratio of not more than 80:20 and a finance service cover ratio of not less
than 1.05:1.

19.6 Senior RM term loan drawdown by TBEI

Security

The Senior RM term loan is secured over TBE’s property, plant and equipment as disclosed in Note 19.5.

Significant covenant

TBEI is required to maintain a debt-to-equity ratio of not more than 80:20 and a finance service cover ratio of not less
than 1.05:1.

19.7 Senior USD term loan drawdown by TBEI

Security

The Senior USD term loan is secured over TBE’s property, plant and equipment as disclosed in Note 19.5.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. LOANS AND BORROWINGS (CONTINUED)

19.7 Senior USD term loan drawdown by TBEI (continued)

Significant covenant

TBEI is required to maintain a debt-to-equity ratio of not more than 80:20 and a finance service cover ratio of not less
than 1.05:1.

19.8 USD term loan drawdown by MIL

Security

During the financial year, MIL has refinanced its USD term loan. The refinanced USD term loan is secured over MIL’s designated
account and its investment in a subsidiary.

Significant covenant

The Guarantor (the Company) is required to maintain a debt-to-equity ratio of not more than 1:1 and a Group debt-to-equity
ratio of not more than 5.5:1.

19.9 RM term loan drawdown by Alam Flora Sdn. Bhd. (“AFSB”)

Security

During the financial year, the RM term loan that was secured by way of fixed and floating charges charged over AFSB’s total
assets has been fully settled.

19.10 Redeemable Preference Shares issued by TBP

In 2018, TBP had converted its subordinated loan notes of RM30,000,000 into Redeemable Preference Shares (“RPS”).

The features of the RPS are as follows:

(i) Dividend

(a) Holder of the RPS shall be entitled to receive an annual fixed dividend of 7.5% per annum.

(b) Dividends on the RPS shall be non-cumulative.

(c) Dividends on the RPS shall be payable on the date that the dividends are paid on ordinary shares issued by the
issuer.

(ii) Redemption of RPS

The holder has the discretion to redeem the RPS at any time from the Issue Date up to the Maturity Date, subject to
issuer meeting the requirements stated under the Companies Act.

(iii) Voting

The RPS shall carry no right to vote at any general meeting of the issuer except on a resolution for the winding up and
on any resolution that may affect the rights and privileges of the RPS holder.

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19. LOANS AND BORROWINGS (CONTINUED)

19.11 Reconciliation of movements of liabilities to cash flows arising from financing activities

At Net changes Foreign At

1 January from financing exchange 31 December
2020 cash flows movements Others 2020
Group RM’000 RM’000 RM’000 RM’000 RM’000

AUD term loan 1 387,099 (380,700) (6,399) - -

Sukuk Ijarah medium term
notes 3,279,008 (500,000) - 42,246 2,821,254
Sukuk medium term notes 3,084,976 (410,000) - 44,375 2,719,351
Sukuk Wakalah 290,000 - - - 290,000
Senior Sukuk Murabahah 3,080,000 (75,000) - - 3,005,000
Senior RM term loan 517,580 (79,450) - - 438,130
Senior USD term loan 1,420,271 (82,125) (49,011) - 1,289,135
USD term loan 294,696 - (5,472) - 289,224
RM term loan 14,515 (14,515) - - -
Redeemable Preference
Shares 30,000 - - - 30,000
12,398,145 (1,541,790) (60,882) 86,621 10,882,094

At Net changes Foreign At

1 January from financing exchange 31 December
2019 cash flows movements Others 2019
Group RM’000 RM’000 RM’000 RM’000 RM’000
AUD term loan 1 409,178 (14,191) (7,888) - 387,099
AUD term loan 2 1,417,913 (20,297) (40,791) (1,356,825)* -
Sukuk Ijarah medium term
notes 3,756,019 (525,000) - 47,989 3,279,008
Sukuk medium term notes 3,707,175 (670,000) - 47,801 3,084,976
Sukuk Wakalah 290,000 - - - 290,000
Senior Sukuk Murabahah 3,145,000 (65,000) - - 3,080,000
Senior RM term loan 592,550 (74,970) - - 517,580
Senior USD term loan 1,538,261 (78,473) (39,517) - 1,420,271
USD term loan 314,336 (16,762) (2,878) - 294,696
RM term loan - (10,434) - 24,949 14,515
Redeemable Preference
Shares 30,000 - - - 30,000
15,200,432 (1,475,127) (91,074) (1,236,086) 12,398,145

* The amount was in relation to the disposal of the entire 50% participating interest in the unincorporated joint venture of
the Macarthur Wind Farm in Australia held by Malakoff Wind Macarthur Pty. Limited as disclosed in Note 42.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

20. EMPLOYEE BENEFITS

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Defined benefit obligations 102,013 109,298 16,236 27,721

Fair value of plan assets (1,530) (2,139) (271) (642)
Net defined benefit liabilities 100,483 107,159 15,965 27,079

The Company’s Staff Retirement Benefits Scheme (“the Scheme”) provides pension benefits for eligible employees upon retirement.
Malakoff Corporation Berhad, Malakoff Technical Solutions Sdn. Bhd. (formerly known as Teknik Janakuasa Sdn. Bhd.), Malakoff
Utilities Sdn. Bhd., Malakoff Engineering Sdn. Bhd. and Malakoff Power Berhad (collectively referred to as “employer”) participate
and contribute to the Scheme.

The following table shows the reconciliation from the opening balance to the closing balance for the net defined benefit liabilities
and its components:

Movements in defined benefit obligations

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Defined benefit obligations at 1 January 109,298 129,068 27,721 31,802

Included in profit or loss

Current service costs 5,852 8,299 1,066 2,188
Curtailment costs (1,343) - (600) -
Interest costs 4,062 6,196 949 1,558
8,571 14,495 1,415 3,746

Included in other comprehensive expense/(income)

Actuarial loss/(gain) arising from:
- Experience - (12,653) - (3,124)
- Financial assumptions 6,608 (11,401) 1,420 (2,388)
6,608 (24,054) 1,420 (5,512)

Others
Benefits paid directly by the employer (865) (6,732) (586) (4,697)
Benefits paid by the plan (3,705) (3,479) (2,374) (3,048)
Settlement (17,894) - (11,360) -
Inter-company transfer - - - 5,430
(22,464) (10,211) (14,320) (2,315)
Defined benefit obligations at 31 December 102,013 109,298 16,236 27,721

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20. EMPLOYEE BENEFITS (CONTINUED)

Movements in fair value of plan assets

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Plan assets at 1 January (2,139) (804) (642) (225)

Included in profit or loss

Interest income (233) - (56) (56)
(233) - (56) (56)

Included in other comprehensive expense/(income)

Return on scheme assets lesser than discount rate 2,631 170 2,930 802
2,631 170 2,930 802

Others
Benefits paid by the plan 3,705 3,479 2,374 3,048
Employer contributions (16,054) (4,984) (13,634) (4,211)
Settlement 10,560 - 8,757 -
(1,789) (1,505) (2,503) (1,163)
Plan assets at 31 December (1,530) (2,139) (271) (642)

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20. EMPLOYEE BENEFITS (CONTINUED)

Movements in net defined benefit liabilities

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Net defined benefit liabilities at 1 January 107,159 128,264 27,079 31,577

Included in profit or loss

Current service costs 5,852 8,299 1,066 2,188
Curtailment costs (1,343) - (600) -
Interest costs 3,829 6,196 893 1,502
8,338 14,495 1,359 3,690

Included in other comprehensive expense/(income)

Actuarial loss/(gain) arising from:
- Experience - (12,653) - (3,124)
- Financial assumptions 6,608 (11,401) 1,420 (2,388)
Return on scheme assets lesser than discount rate 2,631 170 2,930 802
9,239 (23,884) 4,350 (4,710)

Others
Benefits paid directly by the employer (865) (6,732) (586) (4,697)
Employer contributions (16,054) (4,984) (13,634) (4,211)
Inter-company transfer - - - 5,430
Settlement (7,334) - (2,603) -
(24,253) (11,716) (16,823) (3,478)
Net defined benefit liabilities at 31 December 100,483 107,159 15,965 27,079

The Group expects to pay RM4,826,000 (2019: RM25,202,000) in contributions to the defined benefit plan in 2021.

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20. EMPLOYEE BENEFITS (CONTINUED)

Plan assets

The major categories of plan assets are as follows:

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Equity instruments 402 1,061 72 319

Malaysian government securities 408 436 73 131
Foreign investments 103 370 18 111
Cash and cash equivalents 601 261 106 78
Others 16 11 2 3
1,530 2,139 271 642

Actuarial assumptions

Principal actuarial assumptions at the end of the reporting period:

Group Company
2020 2019 2020 2019

Discount rate 3.50% 4.20% 3.50% 4.20%

Salary inflation 7.00% 7.00% 7.00% 7.00%

As at 31 December 2020, the weighted average duration of the Scheme is estimated to be 10 years (2019: 8 years).

Sensitivity analysis

Reasonably possible changes at the reporting date to the significant actuarial assumptions, holding other assumptions constant,
would have affected the defined benefit obligations by the amounts shown below:

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Impact on the defined benefit obligations

Discount rate
One percentage point increase (9,266) (8,455) (1,994) (1,850)
One percentage point decrease 10,537 9,646 2,239 2,084

Salary inflation
One percentage point increase 11,320 9,363 2,436 2,032
One percentage point decrease (10,108) (8,381) (2,202) (1,842)

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

21. PROVISION FOR DECOMMISSIONING COST

Group
2020 2019
RM’000 RM’000

At 1 January 111,524 96,214

Provision made during the year - 7,235
Provision used during the year (5,991) -
Unwinding of discount 6,169 8,075
At 31 December 111,702 111,524

Non-current 99,893 93,724

Current 11,809 17,800
111,702 111,524

Provision for decommissioning cost is the estimated cost that the Group will have to incur in removing or dismantling the power
plants at the end of their respective PPA terms.

The provision is based on valuation reports prepared by a professional valuer. The present value is derived by discounting the
decommissioning cost over the remaining useful life of the power plant based on the appropriate discount rates.

22. PROVISION FOR CONCESSION ASSETS

Group
2020 2019
RM’000 RM’000

At 1 January 253,787 -
Acquisition through business combination (Note 40) - 254,888
Provision made during the year 39,276 1,527
Unwinding of discount 14,573 952
Provision used during the year (2,797) (3,580)
Change in estimate (10,433) -
At 31 December 294,406 253,787

Non-current 267,715 253,590

Current 26,691 197
294,406 253,787

The Group has contractual obligations to maintain the assets required to provide collection services and public cleansing services
to a specified standard under the Service Concession Agreement.

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23. DEFERRED INCOME

Group
2020 2019
RM’000 RM’000

At 1 January 4,052,407 3,917,082

Additions 87,573 222,599
Recognised in profit or loss (391,501) (87,274)
At 31 December 3,748,479 4,052,407

Non-current 3,357,888 3,661,066

Current 390,591 391,341
3,748,479 4,052,407

24. TRADE AND OTHER PAYABLES

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000

Trade
Trade payables 24.1 675,171 839,404 - -

Non-trade
Other payables 112,150 120,565 4,885 7,856
Accrued expenses 24.2 569,385 633,250 8,951 15,036
Amounts due to subsidiaries 24.3 - - 1,631,960 2,117,175
Amounts due to related parties 24.3 3,562 - - -
685,097 753,815 1,645,796 2,140,067
1,360,268 1,593,219 1,645,796 2,140,067

24.1 Trade payables

Included in trade payables of the Group are amounts owing to entities that are under significant influence of the Government
of Malaysia (a party that has an indirect significant influence on the Group) as at the reporting date as follows:

Gross balance outstanding

2020 2019
RM’000 RM’000

Petroliam Nasional Berhad 11,972 101,147

TNB Fuel Services Sdn. Bhd. 427,876 492,983
Tenaga Nasional Berhad 7,876 10,613
447,724 604,743

Trade payables are subjected to negotiated terms.

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24. TRADE AND OTHER PAYABLES (CONTINUED)

24.2 Accrued expenses

As at 31 December 2020, included in accrued expenses of the Group are interest expense payable of RM115,212,000 (2019:
RM118,010,000) and provision for CESS fund of RM41,071,000 (2019: RM47,251,000).

24.3 Amounts due to subsidiaries and related parties

Amounts due to subsidiaries and related parties are unsecured, interest free and repayable on demand except for amounts
of RM1,193,336,000 (2019: RM1,271,326,000) due to subsidiaries, which are subject to interest rates ranging from
5.50% - 6.90% (2019: 5.50% - 6.90%) per annum.

25. REVENUE

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Continuing operations
Revenue from contracts with customers 4,101,311 4,978,757 - -

Other revenue
- Capacity income 2,172,331 2,297,863 - -
- Project management fees 329 1,355 329 1,355
- Rental income from estate 2,337 482 2,337 482
- Dividends from subsidiaries - - 511,000 819,300
- Management fees from subsidiaries - - 30,875 17,040
2,174,997 2,299,700 544,541 838,177
6,276,308 7,278,457 544,541 838,177

Discontinued operations
Other revenue
- Finance lease income - 143,815 - -
Total revenue 6,276,308 7,422,272 544,541 838,177

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25. REVENUE (CONTINUED)

25.1 Disaggregation of revenue

Local Foreign Total

2020 2019 2020 2019 2020 2019
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Major products
and services
Energy income 3,151,149 4,748,742 - - 3,151,149 4,748,742
Electricity distribution 121,082 148,564 - - 121,082 148,564
Operation and
maintenance fees 1,325 1,029 494 1,438 1,819 2,467
Revenue from concession
business 724,892 67,366 - - 724,892 67,366
Solid waste, tipping fees
and recycling 69,129 7,590 - - 69,129 7,590
Integrated facility
management 26,793 2,945 - - 26,793 2,945
Construction contracts 6,447 1,083 - - 6,447 1,083
4,100,817 4,977,319 494 1,438 4,101,311 4,978,757

Timing and recognition

Over time 3,280,003 4,899,418 494 1,438 3,280,497 4,900,856
At a point in time 820,814 77,901 - - 820,814 77,901
4,100,817 4,977,319 494 1,438 4,101,311 4,978,757

Revenue from contracts

with customers 4,100,817 4,977,319 494 1,438 4,101,311 4,978,757
Other revenue 2,174,997 2,299,700 - 143,815 2,174,997 2,443,515
Total revenue 6,275,814 7,277,019 494 145,253 6,276,308 7,422,272

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

25. REVENUE (CONTINUED)

25.2 Nature of goods and services

The following information reflects the typical transactions of the Group:

Nature of goods Timing of recognition or method used to Significant payment

and services recognise revenue terms
Energy income Revenue is recognised over time as the customer Credit period of 30 days
simultaneously receives and consumes the electricity from invoice date.
provided by the entity.

Electricity distribution Revenue is recognised over time as the customer Credit period of 30 days
simultaneously receives and consumes the electricity from invoice date.
provided by the entity.

Operation and Revenue is recognised over time as and when the Credit period of 30 days
maintenance fees operation and maintenance services are performed by from invoice date.
the entity.

Revenue from Revenue is recognised at a point in time when the services Credit period of 30 to 60 days
concession business are performed by the entity. from invoice date.

Solid waste, tipping Revenue is recognised at a point in time when the services Credit period of 30 to 60 days
fees and recycling are performed by the entity. from invoice date.

Integrated facility Revenue is recognised at a point in time when the services Credit period of 30 to 60 days
management are performed by the entity. from invoice date.

Construction contracts Revenue is recognised over time as and when the services Credit period of 30 to 60 days
are performed by the entity. from invoice date.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

26. FINANCE INCOME

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Continuing operations
Interest income on financial assets calculated using
the effective interest method
– at amortised cost 132,903 163,500 67,745 85,200
Interest income on financial assets that are measured
at fair value through profit or loss 30,619 72,527 - 357
163,522 236,027 67,745 85,557

Discontinued operations
Interest income on financial assets calculated using
the effective interest method
– at amortised cost - 471 - -
163,522 236,498 67,745 85,557

Recognised in profit or loss

- From continuing operations 163,522 234,926 67,745 85,557
- From discontinued operations - 471 - -
163,522 235,397 67,745 85,557
Capitalised on qualifying assets
- Property, plant and equipment - 1,101 - -
163,522 236,498 67,745 85,557

27. FINANCE COSTS

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Continuing operations
Interest expense of financial liabilities that are not at
fair value through profit or loss
– at amortised cost 737,464 837,061 80,377 79,929
Interest expense on lease liabilities 1,063 990 315 703
Other finance costs 6,169 8,075 - -
744,696 846,126 80,692 80,632

Discontinued operations
Interest expense of financial liabilities that are not at
fair value through profit or loss
– at amortised cost - 85,405 - -
744,696 931,531 80,692 80,632

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27. FINANCE COSTS (CONTINUED)

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Recognised in profit or loss

- From continuing operations 744,696 840,907 80,692 80,632
- From discontinued operations - 85,405 - -
744,696 926,312 80,692 80,632
Capitalised on qualifying assets
- Property, plant and equipment - 5,219 - -
744,696 931,531 80,692 80,632

28. TAX EXPENSE

Recognised in profit or loss

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Restated

Tax expense on continuing operations 114,530 149,534 10,807 14,836

Tax expense on discontinued operations 42 - 6,584 - -
114,530 156,118 10,807 14,836

Current tax expense

Malaysian – current year 236,003 378,556 9,540 11,948
Overseas – current year 10 4,988 - -
Under/(Over) provision in prior year 2,857 (14,164) 1,065 1,453
238,870 369,380 10,605 13,401

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28. TAX EXPENSE (CONTINUED)

Recognised in profit or loss (continued)

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000
Restated

Deferred tax expense

Origination and reversal of temporary differences (125,147) (216,706) 227 235
Overseas – current year - (4,047) - -
Under/(Over) provision in prior year 807 7,491 (25) 1,200
(124,340) (213,262) 202 1,435
Total tax expense 114,530 156,118 10,807 14,836

Reconciliation of tax expense

Profit/(Loss) for the year 330,069 377,929 117,320 (303,660)

Total tax expense 114,530 156,118 10,807 14,836
Profit/(Loss) excluding tax 444,599 534,047 128,127 (288,824)

Income tax calculated using

Malaysian tax rate of 24% (2019: 24%) 106,704 128,171 30,750 (69,318)
Non-taxable income (13,182) (125,323) (102,332) (170,960)
Non-deductible expenses 58,571 151,669 81,349 252,461
Effect of tax rates in foreign jurisdictions - 3,084 - -
Effect of share of results of associates
and joint ventures (41,227) 5,190 - -
Under/(Over) provision in prior year
- current tax 2,857 (14,164) 1,065 1,453
- deferred tax 807 7,491 (25) 1,200
114,530 156,118 10,807 14,836

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

29. PROFIT/(LOSS) FOR THE YEAR

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000
Restated

Profit/(Loss) for the year is arrived

at after charging/(crediting):
Auditors’ remuneration:
Audit fees
-
KPMG 1,366 1,266 574 624
- Other audit firms 300 898 - 354
Non-audit fees*
- KPMG 641 790 304 11
- Other audit firms 722 292 587 79

Material expenses/(income)
Allowance for diminution in value of consumables 29,161 - - -
Amortisation of intangible assets 321,175 287,737 - -
Amortisation of transaction costs of hedging
instruments 10,482 10,367 - -
Amortisation of concession assets 20,525 1,133 - -
Depreciation of property, plant and equipment 870,019 878,688 3,292 2,934
Depreciation of right-of-use assets 18,583 12,768 5,189 5,643
(Gain)/Loss on disposal of property, plant and
equipment (416) (313) 16 (17)
Personnel expenses (including key management
personnel):
- Contribution to Employees Provident Fund 31,580 19,644 5,379 5,021
- Expenses related to retirement benefit plans 8,338 14,495 1,359 3,690
- Wages, salaries and others 265,024 150,929 33,230 37,493
Property, plant and equipment written off 6,772 11,545 - -
Expenses related to Voluntary Separation Scheme
(“VSS”)/Mutual Separation Scheme (“MSS”) 5,052 16,360 - 7,242
Impairment loss on investment in an associate - 623,777 - 965,551
Gain arising from derecognition of financial assets
measured at amortised cost - (215,798) - (215,798)
Net impairment loss on investment in an associate** - 407,979 - 749,753
Impairment loss on investments in subsidiaries - - 317,069 269,874
Impairment loss on financial instruments 19,996 25,309 18,363 25,309
Contribution and corporate social responsibility 12,446 12,459 446 459

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

29. PROFIT/(LOSS) FOR THE YEAR (CONTINUED)

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000
Restated

Profit/(Loss) for the year is arrived

at after charging/(crediting) (continued):
Realised foreign exchange (gain)/loss (3,813) 10,528 94 (537)
Unrealised foreign exchange loss/(gain) 8,179 (13,634) - -
Zakat expenses 5,536 1,226 1,220 1,226
Impairment loss on concession assets 5,858 - - -
Concession assets written off 16,510 - - -
Net gain on lease modification (146) - (146) -
Gain arising from change in fair value of derivative
financial instruments (18,374) (20,746) - -
Reversal of impairment loss on trade receivables (1,644) (605) - -
Gain on disposal of a subsidiary*** - (556,620) - -
Gain on derecognition of an associate - (29,842) - -
Bargain purchase on acquisition of a joint venture - (2,958) - -

Expenses arising from leases

Expenses relating to short-term leases 4,909 - - -
Expenses relating to leases of low-value assets 304 141 - 141
Expenses relating to variable leases payments not
included in the measurement of lease liabilities 4,515 - - -

* The non-audit fees paid/payable to KPMG for the current financial year mainly related to tax compliance and other advisory
services largely related to review of purchase price allocation pursuant to the acquisitions of a subsidiary and a joint venture
which were completed in 2020 as well as loan financing activity. In the previous financial year, the non-audit fees were mainly
related to tax due diligence and advisory works for the disposal of the entire 50% participating interest in the unincorporated
joint venture of the Macarthur Wind Farm in Australia.

** Net impairment loss on investment in an associate recognised in the previous financial year was in relation to the impairment
loss recognised on Kapar Energy Ventures Sdn. Bhd. as disclosed in Note 6 and 8.

*** The gain on disposal of a subsidiary recognised in the previous financial year was in relation to the disposal of the entire 50%
participating interest in the unincorporated joint venture of the Macarthur Wind Farm in Australia as disclosed in Note 42.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

30. OTHER COMPREHENSIVE (EXPENSE)/INCOME

Before tax Tax credit Net of tax

Group RM’000 RM’000 RM’000

2020
Continuing operations
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit liabilities (9,239) (3,232) (12,471)
Items that may be reclassified subsequently to profit or loss
Cash flow hedge - Loss arising during the year (71,206) - (71,206)
Share of loss on hedging reserves of equity-accounted associates and
joint ventures (20,000) - (20,000)
Foreign currency translation differences for foreign operations
- Loss arising during the year (5) - (5)
(91,211) - (91,211)
(100,450) (3,232) (103,682)

2019
Continuing operations
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit liabilities 23,884 - 23,884
Items that may be reclassified subsequently to profit or loss
Cash flow hedge - Loss arising during the year (68,192) - (68,192)
Share of loss on hedging reserves of equity-accounted associates and
joint ventures (16,796) - (16,796)
Foreign currency translation differences for foreign operations
- Loss arising during the year (18,766) - (18,766)
(103,754) - (103,754)
(79,870) - (79,870)

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

30. OTHER COMPREHENSIVE (EXPENSE)/INCOME (CONTINUED)

Before tax Tax credit Net of tax

Group (continued) RM’000 RM’000 RM’000

2019
Discontinued operations
Items that may be reclassified subsequently to profit or loss
Cash flow hedge - Loss arising during the year (49,048) 14,549 (34,499)
Foreign currency translation differences for foreign operations
- Loss arising during the year (5,440) - (5,440)
(54,488) 14,549 (39,939)

Company
2020
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit liabilities (4,350) - (4,350)

2019
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit liabilities 4,710 - 4,710

31. EARNINGS PER SHARE

Basic/Diluted earnings per ordinary share

The calculation of basic/diluted earnings per ordinary share is based on the profit attributable to ordinary shareholders and a
weighted average number of ordinary shares outstanding, calculated as follows:

2020 2019
Group Restated

Profit attributable to ordinary shareholders (RM’000)

- From continuing operations 286,581 278,577
- From discontinued operations - 44,819
286,581 323,396

Weighted average number of ordinary shares at 31 December (‘000) 4,886,961 4,887,313

Basic/Diluted earnings per ordinary share (sen)

- From continuing operations 5.86 5.70
- From discontinued operations - 0.92
5.86 6.62

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

32. DIVIDENDS

Dividends recognised by the Company:

Sen Total amount Date of

per share RM’000 payment

2020
Final 2019 ordinary share 4.11 200,854 12 June 2020
Interim 2020 ordinary share 2.80 136,835 16 October 2020
Total amount 337,689

2019
Final 2018 ordinary share 3.50 171,075 31 May 2019
Interim 2019 ordinary share 2.44 119,242 11 October 2019
Total amount 290,317

The Board of Directors has approved a final dividend of 2.30 sen per ordinary share on the 4,886,961,300 ordinary shares, in
respect of the financial year ended 31 December 2020, totalling RM112,400,110.

The final dividend will be accounted for in the shareholders’ equity as appropriation of retained profits in the financial year ending
31 December 2021.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

33. OPERATING SEGMENTS

As the Group continues to explore and diversify its assets portfolio, both domestically and internationally, the Management,
for the purpose of making informed decisions, monitors and reports the operating results, of which the Managing Director/Chief
Executive Officer (“the chief operating decision-maker”) regularly reviews and analyses the operating results of local and foreign
segments in a manner consistent with the Group’s internal reporting.

The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.
Segment operating results, assets and liabilities are from operating activities of a segment that are directly attributable to the
segment and the relevant portion that can be allocated on a reasonable basis to the segment.

Segment assets

The segment assets consist of property, plant and equipment, investment properties, concession assets, intangible assets, other
investments, derivative financial assets, trade and other receivables, deferred tax assets, inventories, current tax assets, cash and
cash equivalents and assets classified as held for sale of the segment. Investments in associates and joint ventures are excluded
from the segment assets. The segment assets are presented in a manner that is consistent with the internal reporting provided to
the Management for the allocation of resource and assessment of segment performance.

Segment liabilities

The segment liabilities consist of loans and borrowings, lease liabilities, employee benefits, provision for decommissioning costs,
provision for concession assets, deferred income, derivative financial liabilities, deferred tax liabilities, trade and other payables and
current tax liabilities of the segment. The segment liabilities are presented in a manner that is consistent with the internal reporting
provided to the Management for the allocation of resource and assessment of segment performance.

Segment capital expenditure

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

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 33. OPERATING SEGMENTS (CONTINUED)

212
Local Foreign Eliminations(A) Consolidated
2020 2019 2020 2019 2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
SECTION 5

Restated Restated Restated Restated

Continuing
operations
Business segments
Revenue from
external customers 6,275,814 7,277,019 494 1,438 - - 6,276,308 7,278,457
Inter-segment
Malakoff Corporation Berhad | Annual Report 2020

revenue 1,960,179 2,566,428 60,247 847,819 (2,020,426) (3,414,247) - -

8,235,993 9,843,447 60,741 849,257 (2,020,426) (3,414,247) 6,276,308 7,278,457
FINANCIAL PERFORMANCE

Discontinued
operations 1
Business segments
Revenue from
external customers - - - 143,815 - - - 143,815
Total segment
revenue 8,235,993 9,843,447 60,741 993,072 (2,020,426) (3,414,247) 6,276,308 7,422,272

Profit after tax

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

- From continuing
operations 758,459 1,436,601 16,830 690,649 (445,220) (1,794,140) 330,069 333,110
- From
discontinued
operations - - - 50,473 - (5,654) - 44,819
758,459 1,436,601 16,830 741,122 (445,220) (1,799,794) 330,069 377,929

Note 1: Discontinued operations referred to the disposal of 50% participating interest in the unincorporated joint venture of the Macarthur Wind Farm in
Australia held by Malakoff Macarthur Pty. Limited, completed on 18 December 2019. Details were disclosed in Note 42.

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 33. OPERATING SEGMENTS (CONTINUED)

Local Foreign Eliminations(A) Consolidated

2020 2019 2020 2019 2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

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Restated Restated Restated Restated

Segment assets 37,425,191 40,036,090 1,855,599 2,650,909 (16,559,272) (17,528,398) 22,721,518 25,158,601
Investments in
associates - - 65,887 65,887 732,954 679,104 798,841 744,991
Investments in joint
ventures - - 516,959 526,450 151,405 108,933 668,364 635,383
24,188,723 26,538,975
Segment liabilities 25,763,410 28,889,004 1,103,374 1,472,483 (9,122,772) (10,497,759) 17,744,012 19,863,728
Capital expenditure 402,783 272,896 - - - (2,933) 402,783 269,963

(A)
Inter-segment transactions are eliminated on consolidation.

Local Foreign Consolidated

2020 2019 2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Restated Restated Restated

Non-cash (expense)/income items:

Allowance for diminution in value of consumables (29,161) - - - (29,161) -
Amortisation of intangible assets (309,485) (280,349) (11,690) (7,388) (321,175) (287,737)
Amortisation of transaction costs of hedging
instruments (10,482) (10,367) - - (10,482) (10,367)
Amortisation of concession assets (20,525) (1,133) - - (20,525) (1,133)
Depreciation of property, plant and equipment (870,019) (878,688) - - (870,019) (878,688)
Depreciation for the right-of-use assets (18,583) (12,768) - - (18,583) (12,768)
FINANCIAL PERFORMANCE

Gain on disposal of property, plant and equipment 416 313 - - 416 313
Net gain on lease modification 146 - - - 146 -
Expenses related to retirement benefit plans (8,338) (14,495) - - (8,338) (14,495)
(1,266,031) (1,197,487) (11,690) (7,388) (1,277,721) (1,204,875)
SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 33. OPERATING SEGMENTS (CONTINUED)

214
Local Foreign Consolidated
2020 2019 2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
SECTION 5

Restated Restated Restated

Non-cash (expense)/income items (continued):

Gain arising from change in fair value of derivative
financial instruments 18,374 20,746 - - 18,374 20,746
Property, plant and equipment written off (6,772) (11,545) - - (6,772) (11,545)
Impairment loss on concession assets (5,858) - - - (5,858) -
Concession assets written off (16,510) - - - (16,510) -
Malakoff Corporation Berhad | Annual Report 2020

Impairment loss on financial instruments (19,996) (25,309) - - (19,996) (25,309)

Reversal of impairment loss on trade receivables 1,644 605 - - 1,644 605
Net unrealised foreign exchange (loss)/gain (369) (868) (7,810) 14,502 (8,179) 13,634
FINANCIAL PERFORMANCE

(29,487) (16,371) (7,810) 14,502 (37,297) (1,869)

(1,295,518) (1,213,858) (19,500) 7,114 (1,315,018) (1,206,744)

Geographical information

The local and foreign segments are managed on a worldwide basis, with operating facilities in Malaysia, Indonesia, Middle East and Australia.

Geographic revenue information is based on geographical location of the customers. Geographic non-current assets are based on the geographical
location of the assets. The amounts of non-current assets do not include financial instruments (including investments in associates and joint ventures)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

and deferred tax assets.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

33. OPERATING SEGMENTS (CONTINUED)

Geographical information (continued)

Non-current Non-current
Revenue assets Revenue assets
2020 2020 2019 2019
Group RM’000 RM’000 RM’000 RM’000
Restated

Geographical information
Continuing operations
Malaysia 6,275,814 15,718,733 7,277,019 16,554,570
Indonesia 494 - 1,020 -
Middle East - - 418 -
6,276,308 15,718,733 7,278,457 16,554,570

Discontinued operations1
Australia - - 143,815 -
6,276,308 15,718,733 7,422,272 16,554,570

Note 1: Discontinued operations referred to the disposal of 50% participating interest in the unincorporated joint venture of the
Macarthur Wind Farm in Australia held by Malakoff Macarthur Pty. Limited, completed on 18 December 2019. Details were
disclosed in Note 42.

Major customer

The following is a major customer with revenue equal or more than 10% of the Group’s total revenue:

Revenue
2020 2019
Group RM’000 RM’000

Tenaga Nasional Berhad 5,323,480 7,046,605

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS

34.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:

a) Fair value through profit or loss (“FVTPL”)

- Mandatorily required by MFRS 9
- Designated upon initial recognition (“DUIR”)
b) Amortised cost (“AC”)

Carrying Mandatorily FVTPL-

amount AC at FVTPL DUIR
Group RM’000 RM’000 RM’000 RM’000

2020
Financial assets
Trade and other receivables* 938,276 938,276 - -
Other investments 3,402,156 2,381,810 1,020,346 -
Cash and cash equivalents 1,062,600 1,062,600 - -
Derivative financial assets 231,170 - - 231,170
5,634,202 4,382,686 1,020,346 231,170

Financial liabilities
Loans and borrowings (10,882,094) (10,882,094) - -
Trade and other payables* (1,352,701) (1,352,701) - -
Derivative financial liabilities (15,381) - - (15,381)
(12,250,176) (12,234,795) - (15,381)

Carrying Mandatorily
amount AC at FVTPL
Company RM’000 RM’000 RM’000

2020
Financial assets
Trade and other receivables* 1,383,036 1,383,036 -
Other investments 134,059 110,060 23,999
Cash and cash equivalents 126,837 126,837 -
1,643,932 1,619,933 23,999

Financial liabilities
Trade and other payables (1,645,796) (1,645,796) -
(1,645,796) (1,645,796) -

* Excludes non-financial instruments

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.1 Categories of financial instruments (continued)

Carrying Mandatorily FVTPL-

amount AC at FVTPL DUIR
Group RM’000 RM’000 RM’000 RM’000

2019
Financial assets
Trade and other receivables* 1,577,829 1,577,829 - -
Other investments 2,530,991 1,877,683 653,308 -
Cash and cash equivalents 2,745,389 2,745,389 - -
Derivative financial assets 327,643 - - 327,643
7,181,852 6,200,901 653,308 327,643

Financial liabilities
Loans and borrowings (12,398,145) (12,398,145) - -
Trade and other payables* (1,584,198) (1,584,198) - -
Derivative financial liabilities (10,013) - - (10,013)
(13,992,356) (13,982,343) - (10,013)

Carrying Mandatorily
amount AC at FVTPL
Company RM’000 RM’000 RM’000

2019
Financial assets
Trade and other receivables* 2,624,615 2,624,615 -
Other investments 21,515 - 21,515
Cash and cash equivalents 43,204 43,204 -
2,689,334 2,667,819 21,515

Financial liabilities
Trade and other payables (2,140,067) (2,140,067) -
(2,140,067) (2,140,067) -

* Excludes non-financial instruments

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.2 Net gains and losses arising from financial instruments

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Net gains/(losses) on:

Financial assets measured at amortised cost 118,364 343,436 49,382 276,226
Financial liabilities measured at amortised cost (745,643) (903,612) (80,471) (79,930)
Fair value through profit or loss
- Designated upon initial recognition 18,374 20,746 - -
- Mandatorily required by MFRS 9 31,074 72,527 455 357
(577,831) (466,903) (30,634) 196,653

34.3 Financial risk management

The Group has exposure to the following risks from its financial instruments:

• Credit risk
• Liquidity risk
• Market risk

34.4 Credit risk

Credit risk is the risk of a financial loss if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. The Group’s exposure to credit risk arises principally from the individual characteristics of each customer.
The Company’s exposure to credit risk arises principally from advances to subsidiaries and financial guarantees given to
banks for credit facilities granted to subsidiaries. There are no significant changes as compared to prior periods.

Trade receivables

Risk management objectives, policies and processes for managing the risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis through the review
of receivables ageing.

At each reporting date, the Group or the Company assesses whether any of the trade receivables are credit impaired.

The gross carrying amounts of credit impaired trade receivables are written off (either partially or full) when there is no
realistic prospect of recovery. This is generally the case when the Group or the Company determines that the debtor does
not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.
Nevertheless, trade receivables that are written off could still be subject to the enforcement activities.

There are no significant changes as compared to previous year.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.4 Credit risk (continued)

Trade receivables (continued)

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from trade receivables is represented by
the carrying amounts in the statements of financial position.

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

Concentration of credit risk

At the end of the reporting period, the Group has a concentration of credit risk in the form of trade debts due from Tenaga
Nasional Berhad, representing approximately 43% (2019: 68%) of the total receivables of the Group.

The exposure to credit risk for trade receivables at the end of the reporting period by geographic region are as follows:

Group
2020 2019
RM’000 RM’000

Domestic 562,354 1,156,999

Recognition and measurement of impairment losses

In managing credit risk of trade receivables, the Group manages its debtors and takes appropriate actions (including but not
limited to legal actions) to recover long overdue balances. Generally, trade receivables will pay within 30 days. The Group’s
debt recovery process is as follows:

a) Above 30 days past due after credit term, the Group will start to initiate a structured debt recovery process which is
monitored by the commercial team; and
b) Above 90 days past due, the Group will initiate a legal proceeding against the customer.

The Group uses an allowance matrix to measure Expected Credit Losses (“ECLs”) of trade receivables.

Loss rates are based on actual credit loss experience over the past three years. The Group also considers differences
between (a) economic conditions during the period over which the historic data has been collected, (b) current conditions
and (c) the Group’s view of economic conditions over the expected lives of the receivables. Nevertheless, the Group believes
that these factors are not significant for the purpose of impairment calculation for the year.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.4 Credit risk (continued)

Trade receivables (continued)

Recognition and measurement of impairment losses (continued)

The following table provides information about the exposure to credit risk and ECLs for trade receivables which are grouped
together as they are expected to have similar risk nature.

Gross
carrying Loss Net
amount allowance balance
Group RM’000 RM’000 RM’000

2020
Not past due 484,535 (105) 484,430
Past due 0 – 30 days 34,086 (122) 33,964
Past due 31 – 120 days 39,258 (422) 38,836
Past due more than 120 days 7,670 (2,546) 5,124
565,549 (3,195) 562,354

2019
Not past due 1,149,689 - 1,149,689
Past due 0 – 30 days 1,810 - 1,810
Past due 31 – 120 days 2,120 (43) 2,077
Past due more than 120 days 6,548 (3,125) 3,423
1,160,167 (3,168) 1,156,999

The movements in the allowance for impairment in respect of trade receivables during the financial year are shown below:

Lifetime ECL
Group RM’000

At 1 January 2019 969

Acquisition through business combination 2,804
Reversal of impairment loss (605)
At 31 December 2019/1 January 2020 3,168
Impairment loss during the year 1,671
Reversal of impairment loss (1,644)
At 31 December 2020 3,195

The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group is satisfied that
recovery of the amount is probable, the amount considered irrecoverable is written off against the receivables.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.4 Credit risk (continued)

Cash and cash equivalents

The cash and cash equivalents are held with banks and financial institutions. As at the end of the reporting period,
the maximum exposure to credit risk is represented by their carrying amounts in the statements of financial position.

These banks and financial institutions have low credit risks. In addition, some of the bank balances are insured by government
agencies. Consequently, the Group and the Company are of the view that the loss allowance is not material.

Other receivables

Credit risk on other receivables mainly arises from interest receivables, deposits paid for office buildings and fixtures rented.
These deposits will be received at the end of each lease term. The Group manages the credit risk together with the leasing
arrangement.

As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the
statements of financial position.

Interest receivable is due from banks and financial institutions that have a low credit risk. In addition, some of the bank
balances are insured by government agencies. Consequently, the Group is of the view that the loss allowance is not material.

The movements in the allowance for impairment in respect of other receivables during the financial year are shown below:

Group Company
RM’000 RM’000

Lifetime ECL
At 1 January 2019/31 December 2019/1 January 2020 12,237 5,516
Impairment loss during the year 3,263 -
Amounts written off (203) -
At 31 December 2020 15,297 5,516

Financial guarantees

Risk management objectives, policies and processes for managing the risk

The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries.
The Company monitors the ability of the subsidiaries to service their loans on an individual basis.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.4 Credit risk (continued)

Financial guarantees (continued)

Exposure to credit risk, credit quality and collateral

The maximum exposure to credit risk amounts to RM3,008,575,000 (2019: RM3,766,771,000) representing the outstanding
banking facilities of the subsidiaries as at the end of the reporting period.

The financial guarantees are provided as credit enhancements to the subsidiaries’ secured loans.

Recognition and measurement of impairment loss

The Company assumes that there is a significant increase in credit risk when a subsidiary’s financial position deteriorates
significantly. The Company considers a financial guarantee to be credit impaired when:

• The subsidiary is unlikely to repay its credit obligation to the bank in full; or
• The subsidiary is continuously loss making and is having a deficit shareholders’ fund.

The Company determines the probability of default of the guaranteed loans individually using internal information available.

As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.

The financial guarantees have not been recognised since the fair value on initial recognition was not material.

Related company loans and advances

Risk management objectives, policies and processes for managing the risk

The Group and the Company provide loans and advances to related companies. The Group and the Company monitor the
results of the related companies regularly, as well as their ability to repay the loans and advances on an individual basis.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the
statements of financial position.

Related company loans and advances provided are not secured by any collateral or supported by any other credit
enhancements.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.4 Credit risk (continued)

Related company loans and advances (continued)

Recognition and measurement of impairment loss

Generally, the Group and the Company consider related company loans and advances to have low credit risk. It is assumed
that there is a significant increase in credit risk when a related company’s financial position deteriorates significantly. As the
Group and the Company are able to determine the timing of payments of the related company’s loans and advances when
they are payable, loans and advances are considered to be in default when the related companies are not able to pay when
demanded. A related company’s loans and advances are considered to be credit impaired when:

a) the related company is unlikely to repay its loans or advances to the Company in full;
b) the related company’s loans and advances are overdue for more than 365 days; or
c) the related company is continuously loss making and has a deficit in shareholders’ fund.

The Group and the Company determine the probability of default for these loans and advances individually using internal
information available.

The following table provides information about the exposure to credit risk and ECLs for related companies’ loans and
advances.

Gross Impairment
carrying loss Net
amount allowances balance
Group RM’000 RM’000 RM’000

2020
Significant increase in credit risk 255,724 (40,371) 215,353

2019
Significant increase in credit risk 240,662 (25,309) 215,353

Company
2020
Low credit risk 1,013,042 - 1,013,042
Significant increase in credit risk 475,996 (110,307) 365,689
1,489,038 (110,307) 1,378,731

2019
Low credit risk 2,400,905 - 2,400,905
Significant increase in credit risk 310,619 (91,948) 218,671
2,711,524 (91,948) 2,619,576

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.4 Credit risk (continued)

Related company loans and advances (continued)

Recognition and measurement of impairment loss (continued)

The movements in the allowance for impairment in respect of related companies’ loans and advances during the financial
year are as follows:

Group Company
RM’000 RM’000

Lifetime ECL
At 1 January 2019 (949) (67,588)
Amount written off 949 949
Impairment loss during the year (25,309) (25,309)
At 31 December 2019/1 January 2020 (25,309) (91,948)
Impairment loss during the year (15,062) (18,363)
Amounts written off - 4
At 31 December 2020 (40,371) (110,307)

34.5 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure
to liquidity risk arises principally from its various payables, loans and borrowings.

The Group maintains a level of cash and cash equivalents deemed adequate by the management to ensure, as far as
possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

It is not expected that the cash flows included in the maturity analysis in relation to the Group’s and the Company’s financial
liabilities could occur significantly earlier, or at significantly different amounts.

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 34. FINANCIAL INSTRUMENTS (CONTINUED)

34.5 Liquidity risk (continued)

Maturity analysis

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The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting period based
on undiscounted contractual payments (including interest):

Carrying Contractual Contractual Under 1-2 2-5 More than

amount interest rate cash flows 1 year years years 5 years
Group RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000

2020
Financial liabilities
Secured
Sukuk Ijarah medium term
notes 2,821,254 4.79 - 5.45 3,818,670 474,404 439,076 1,345,274 1,559,916
Sukuk medium term notes 2,719,351 5.25 - 6.25 3,928,098 667,655 481,405 974,510 1,804,528
Sukuk Wakalah 290,000 4.80 - 5.60 362,906 69,966 67,326 42,413 183,201
Senior Sukuk Murabahah 3,005,000 5.08 - 6.20 4,524,752 246,206 218,949 820,040 3,239,557
Senior RM term loan 438,130 3.48 - 5.80 486,180 104,892 124,970 256,318 -
Senior USD term loan 1,289,135 5.80 1,871,537 200,529 227,041 789,355 654,612
Libor + margin
USD term loan 289,224 1.40 295,849 32,616 263,233 - -
10,852,094 15,287,992 1,796,268 1,822,000 4,227,910 7,441,814
Unsecured
Redeemable Preference Shares 30,000 7.50 44,430 2,250 2,250 6,750 33,180
Trade and other payables^ 1,352,701 - 1,352,701 1,352,701 - - -
Lease liabilities 13,362 3.99 – 6.80 17,441 7,172 2,358 1,468 6,443
12,248,157 16,702,564 3,158,391 1,826,608 4,236,128 7,481,437
FINANCIAL PERFORMANCE
SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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226
34.5 Liquidity risk (continued)

Maturity analysis (continued)

SECTION 5

The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting period based
on undiscounted contractual payments (including interest) (continued):

Carrying Contractual Contractual Under 1-2 2-5 More than

amount interest rate cash flows 1 year years years 5 years
Group RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000
Malakoff Corporation Berhad | Annual Report 2020

2019
Financial liabilities
Secured
FINANCIAL PERFORMANCE

BBSY*+margin
AUD term loan 1 387,099 1.43 407,205 37,478 36,786 332,941 -
Sukuk Ijarah medium term
notes 3,279,008 4.66 - 5.45 4,496,374 677,704 474,404 1,332,508 2,011,758
Sukuk medium term notes 3,084,976 5.15 - 6.25 4,527,386 599,287 667,655 1,220,685 2,039,759
Sukuk Wakalah 290,000 4.80 - 5.60 377,914 15,007 69,966 100,859 192,082
Senior Sukuk Murabahah 3,080,000 4.97 - 6.20 4,780,093 255,340 246,206 744,892 3,533,655
Senior RM term loan 517,580 4.84 - 5.80 595,417 106,108 106,239 383,070 -
Senior USD term loan 1,420,271 5.80 1,815,177 186,186 182,479 615,767 830,745
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Libor + margin
USD term loan 294,696 1.20 298,241 298,241 - - -
RM term loan 2 14,515 5.73 15,010 15,010 - - -
12,368,145 17,312,817 2,190,361 1,783,735 4,730,722 8,607,999
Unsecured
Redeemable Preference Shares 30,000 7.50 46,680 2,250 2,250 6,750 35,430
Trade and other payables^ 1,584,198 - 1,584,198 1,584,198 - - -
Lease liabilities 23,766 5.50 - 6.80 24,191 12,506 11,610 75 -
14,006,109 18,967,886 3,789,315 1,797,595 4,737,547 8,643,429

^ Excludes non-financial instruments

* Bank Bill Swap Bid Rate (“BBSY”)

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.5 Liquidity risk (continued)

Maturity analysis (continued)

The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the
reporting period based on undiscounted contractual payments (including interest) (continued):

Carrying Contractual Contractual Under

amount interest rate cash flows 1 year 1 - 2 years 2 - 5 years
Company RM’000 % RM’000 RM’000 RM’000 RM’000

2020
Financial liabilities
Unsecured
Other payables and
accruals^ 13,836 - 13,836 13,836 - -
Amounts due to
subsidiaries 1,193,336 5.50 – 6.90 1,268,676 1,268,676 - -
Amounts due to
subsidiaries 438,624 - 438,624 438,624 - -
Lease liabilities 3,563 3.99 – 5.50 3,661 3,026 635 -
1,649,359 1,724,797 1,724,162 635 -

2019
Financial liabilities
Unsecured
Other payables and
accruals 22,892 - 22,892 22,892 - -
Amounts due to
subsidiaries 1,271,326 5.50 – 6.90 1,352,047 1,352,047 - -
Amounts due to
subsidiaries 845,849 - 845,849 845,849 - -
Lease liabilities 9,767 5.50 10,275 6,215 3,425 635
2,149,834 2,231,063 2,227,003 3,425 635

^ Excludes non-financial instruments

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices will affect
the Group’s financial position or cash flows.

Currency risk

The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in a currency other
than the respective functional currencies of Group entities. The currencies giving rise to this risk are primarily Australian Dollar
(“AUD”), Indonesian Rupiah (“IDR”), Kuwait Dinar (“KWD”), Swiss Franc (“CHF”) and US Dollar (“USD”).

Exposure to foreign currency risk

The Group’s exposure to foreign currency (a currency which is other than the currency of the Group entities) risk, based on
carrying amounts as at the end of the reporting period is as follows:

AUD IDR KWD CHF USD

RM’000 RM’000 RM’000 RM’000 RM’000

2020
Deposits with licensed banks 780 6,893 893 - 107,521
Loans and borrowings - - - - (289,224)
Trade and other payables - - - - (3,035)
Net exposure 780 6,893 893 - (184,738)

2019
Deposits with licensed banks 410,838 4,396 890 - 66,007
Loans and borrowings (387,099) - - - (294,696)
Trade and other payables - - - (18,172) (25,663)
Net exposure 23,739 4,396 890 (18,172) (254,352)

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.6 Market risk (continued)

Currency risk (continued)

Currency risk sensitivity analysis

Foreign currency risk arises from Group entities which have functional currencies other than Ringgit Malaysia (“RM”). A 10%
(2019: 10%) strengthening of the RM against the following currencies would have increased/(decreased) post-tax profit by
the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered
to be reasonably possible at the end of reporting period. The analysis assumes that all other variables, in particular interest
rates, remained constant and ignores any impact of forecasted sales and purchases.

Profit or loss
2020 2019
Group RM’000 RM’000

AUD (59) (1,804)

IDR (524) (334)
KWD (68) (68)
CHF - 1,381
USD 14,040 19,331
13,389 18,506

A 10% (2019: 10%) weakening of RM against the above currencies at the end of the reporting period would have had equal
but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remained
constant.

Interest rate risk

The Group’s fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates.
The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Short
term receivables and payables are not significantly exposed to interest rate risk.

Risk management objectives, policies and processes for managing the risk

In managing interest rate risk, the Group maintains a balanced portfolio consisting mainly fixed rated instruments. All interest
rate exposures are monitored and managed proactively by the Group’s management.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.6 Market risk (continued)

Interest rate risk (continued)

Exposure to interest rate risk

The interest rate profile of the Group’s and the Company’s interest-bearing financial instruments, based on carrying amounts
at the end of the reporting period are as follows:

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Fixed rate instruments

- Financial assets 4,157,697 4,717,202 935,568 780,944
- Financial liabilities (10,496,699) (11,596,206) (1,196,899) (1,281,093)

Floating rate instruments

- Financial liabilities (398,757) (825,705) - -

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points (“bps”) in interest rates at the end of the reporting period would have increased/(decreased)
equity and post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular
foreign currency rates, remained constant.

Profit or loss Equity

100 bps 100 bps 100 bps 100 bps
increases decreases increases decreases
RM’000 RM’000 RM’000 RM’000

2020
Floating rate instruments (3,988) 3,988 - -
Interest rate swaps - - 6,750 (6,960)
Cross currency swap - - (6,207) 6,330
Cash flow sensitivity (net) (3,988) 3,988 543 (630)

2019
Floating rate instruments (7,912) 7,912 - -
Interest rate swaps - - 9,839 (10,217)
Cross currency swap - - 46,037 (42,241)
Cash flow sensitivity (net) (7,912) 7,912 55,876 (52,458)

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.7 Hedging activities

Currency risk – Transactions in foreign currency

The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies
in which sales, purchases, receivables and borrowings are denominated and the respective functional currencies of the
Group. The functional currency of Group companies is primarily the Ringgit Malaysia (“RM”). The currency in which these
transactions are primarily denominated is the US Dollar (“USD”).

The Group determines the existence of an economic relationship between the hedging instrument and hedged item based
on the currency, amount and timing of their respective cash flows. The Group assesses whether the derivative designated in
each hedging relationship is expected to be and has been effective in offsetting changes in cash flows of the hedged item
using the hypothetical derivative method.

In these hedge relationships, the main sources of ineffectiveness are:

• the effect of the counterparty and the Group’s own credit risk on the fair value of the forward foreign exchange contracts,
which is not reflected in the change in the fair value of the hedged cash flows attributable to the change in exchange
rates; and
• changes in the timing of the hedged transactions.

Interest rate risk

To manage interest rate risk exposure, the Group partly enter into fixed-rate instruments and partly by borrowing at a floating
rate and using interest rate swaps as hedges of the variability in cash flows attributable to movements in interest rates.

The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on
the reference interest rates, tenors, repricing dates and maturities and the notional or par amounts.

The Group assesses whether the derivative designated in each hedging relationship is expected to be effective in offsetting
changes in cash flows of the hedged item using the hypothetical derivative method.

In these hedge relationships, the main sources of ineffectiveness are:

• the effect of the counterparty and the Group’s own credit risk on the fair value of the swaps, which is not reflected in
the change in the fair value of the hedged cash flows attributable to the change in interest rates; and
• differences in repricing dates between the swaps and the borrowings.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.7 Hedging activities (continued)

Cash flow hedge

The Group entered into various interest rate swaps (“IRS”) and cross currency swap (“CCS”) in order to hedge the interest
rate risk and foreign exchange risk in relation to the variability in cash flows on the floating rate RM, AUD and USD loans.

The Group held the following instruments to hedge exposures to changes in foreign currency and interest rates.

Maturity
Under 1 1-2 2-5 More than
year years years 5 years
Group RM’000 RM’000 RM’000 RM’000

2020
Foreign currency risk
Cross currency swap
Net exposure (1,743) 10,736 98,002 140,518
Fixed foreign exchange rate (RM/USD) 3.149 3.149 3.149 3.149

Interest rate risk

Interest rate swaps
Net exposure (7,086) (5,218) (3,472) -
Fixed interest swaps 5.80% 5.80% 5.80% -

2019
Foreign currency risk
Cross currency swap
Net exposure 7,805 7,986 45,265 88,231
Fixed foreign exchange rate (RM/USD) 3.149 3.149 3.149 3.149

Interest rate risk

Interest rate swaps
Net exposure (3,659) (3,116) (3,802) -
Fixed interest swaps 5.80% 5.80% 5.80% -

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.7 Hedging activities (continued)

Cash flow hedge (continued)

The amounts relating to items designated as hedged items as at reporting date are as follows:

Change in
value used Cash
for calculation flow
of hedge hedge
ineffectiveness reserve
Group RM’000 RM’000

2020
Foreign currency risk
Cross currency swap 18,374 65,837

Interest rate risk

Interest rate swaps - 5,369

2019
Foreign currency risk
Cross currency swap 20,674 (65,180)

Interest rate risk

Interest rate swaps 72 (37,511)

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.7 Hedging activities (continued)

Cash flow hedge (continued)

The amounts relating to items designated as hedging instruments as at reporting date are as follows:

Carrying amount Line item in

the statement
of financial
position where
the hedging
Nominal instrument is
amount Assets Liabilities included
Group RM’000 RM’000 RM’000

2020
Foreign currency risk
Derivative
financial
Cross currency swap (1,010,613) 231,170 - assets

Interest rate risk

Derivative
financial
Interest rate swaps (328,741) - (15,381) liabilities

2019
Foreign currency risk
Derivative
financial
Cross currency swap (1,092,703) 327,643 - assets

Interest rate risk

Derivative
financial
Interest rate swaps (388,185) - (10,013) liabilities

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.7 Hedging activities (continued)

Cash flow hedge (continued)

The amounts relating to hedge effectiveness as at reporting date are as follows:

Line item in
Changes Hedge profit or loss
in the value ineffectiveness that includes
of hedging recognised hedge
instrument in profit ineffective
recognised or loss -ness
Group RM’000 RM’000

2020
Foreign currency risk
Other operating
Cross currency swap (96,473) 18,374 expenses

Interest rate risk

Other operating
Interest rate swaps (5,368) - expenses

2019
Foreign currency risk
Other operating
Cross currency swap (84,933) 20,674 expenses

Interest rate risk

Other operating
Interest rate swaps 195,798 72 expenses

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.7 Hedging activities (continued)

Cash flow hedge (continued)

The following table provides reconciliation by risk category of components of equity and analysis of other comprehensive income
items, net of tax, resulting from cash flow hedge accounting.

Hedging reserve
2020 2019
Group RM’000 RM’000

At 1 January 165,832 128,094

Changes in fair value:
Cross currency swap (65,837) (65,180)
Interest rate swaps (5,369) (37,511)
Share of hedging reserve of equity-accounted associates and joint ventures (20,000) (16,796)
Transfer to retained earnings upon disposal of subsidiaries - 157,225
At 31 December 74,626 165,832

34.8 Fair value information

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

The table below analyses financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed,
together with their fair values and carrying amounts shown in the statements of financial position.

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34.8 Fair value information (continued)

Fair value of financial instruments Fair value of financial instruments

carried at fair value not carried at fair value Total Carrying

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Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total fair value amount
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2020
Non-current
Financial assets
Derivative financial
assets:
Cross currency swap - 231,170 - 231,170 - - - - 231,170 231,170
Other investments - - 23,999 23,999 - - - - 23,999 23,999
- 231,170 23,999 255,169 - - - - 255,169 255,169
Financial liabilities
Derivative financial
liabilities:
Interest rate swaps - (15,381) - (15,381) - - - - (15,381) (15,381)

Loans and
borrowings
Secured:
Sukuk Ijarah
medium term
notes - - - - - (3,274,168) - (3,274,168) (3,274,168) (2,821,254)
Sukuk medium
term notes - - - - - (3,264,167) - (3,264,167) (3,264,167) (2,719,351)
Sukuk Wakalah - - - - - (312,727) - (312,727) (312,727) (290,000)
Senior Sukuk
Murabahah - - - - - (3,456,890) - (3,456,890) (3,456,890) (3,005,000)
Senior RM term loan - - - - - - (430,607) (430,607) (430,607) (438,130)
Senior USD term
loan - - - - - - (1,476,079) (1,476,079) (1,476,079) (1,289,135)
FINANCIAL PERFORMANCE

USD term loan - - - - - - (286,631) (286,631) (286,631) (289,224)

Unsecured:
Redeemable
Preference Shares - - - - - - (30,031) (30,031) (30,031) (30,000)
- (15,381) - (15,381) - (10,307,952) (2,223,348) (12,531,300) (12,546,681) (10,897,475)
SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 34. FINANCIAL INSTRUMENTS (CONTINUED)

238
34.8 Fair value information (continued)

Fair value of financial instruments Fair value of financial instruments

SECTION 5

carried at fair value not carried at fair value Total Carrying

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total fair value amount
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2019
Non-current
Financial assets
Derivative financial
assets:
Cross currency swap - 327,643 - 327,643 - - - - 327,643 327,643
Malakoff Corporation Berhad | Annual Report 2020

Other investments - - 21,515 21,515 - - - - 21,515 21,515

- 327,643 21,515 349,158 - - - - 349,158 349,158
Financial liabilities
FINANCIAL PERFORMANCE

Derivative financial
liabilities:
Interest rate swaps - (10,013) - (10,013) - - - - (10,013) (10,013)

Loans and
borrowings
Secured:
AUD term loan 1 - - - - - - (386,479) (386,479) (386,479) (387,099)
Sukuk Ijarah medium
term notes - - - - - (3,693,168) - (3,693,168) (3,693,168) (3,279,008)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Sukuk medium term

notes - - - - - (3,603,975) - (3,603,975) (3,603,975) (3,084,976)
Sukuk Wakalah - - - - - (303,959) - (303,959) (303,959) (290,000)
Senior Sukuk
Murabahah - - - - - (3,420,243) - (3,420,243) (3,420,243) (3,080,000)
Senior RM term loan - - - - - - (507,836) (507,836) (507,836) (517,580)
Senior USD term
loan - - - - - - (1,606,964) (1,606,964) (1,606,964) (1,420,271)
Unsecured:
Redeemable
Preference Shares - - - - - - (30,091) (30,091) (30,091) (30,000)
- (10,013) - (10,013) - (11,021,345) (2,531,370) (13,552,715) (13,562,728) (12,098,947)

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

34. FINANCIAL INSTRUMENTS (CONTINUED)

34.8 Fair value information (continued)

Level 2 fair value

Derivatives

The Interest Rate Swap (“IRS”) and Cross Currency Swap (“CCS”) instruments entered by a subsidiary in Malaysia are not actively
traded therefore market-based prices are not readily available. The fair values of the instruments are calculated based on the present
value of future principal and interest cash flows. The spot rates, forward rates and foreign exchange rates used to calculate present
value are directly observable from the market.

For IRS entered by a subsidiary in Australia, the fair value of IRS is based on broker quotes. These quotes are tested for reasonableness
by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a
similar instrument at the measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take into
account of the credit risk of certain Group’s subsidiaries and counterparties where appropriate.

Non-derivative financial liabilities

Fair value of the long term borrowings is calculated based on the present value of future principal and interest cash flows, discounted
at the market rate of interest at the end of the reporting period.

Transfers between Level 1 and Level 2 fair values

There has been no transfer between Level 1 and 2 fair values during the financial year (2019: no transfer in either directions).

Level 3 fair value

Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.

The following table shows the valuation techniques used in the determination of fair values within Level 3, as the key unobservable
inputs used in the valuation models.

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34. FINANCIAL INSTRUMENTS (CONTINUED)

34.8 Fair value information (continued)

(a) Financial instruments not carried at fair value

Type Description of valuation technique and inputs used

Finance lease receivable Discounted cash flows using a rate based on current market rate of borrowings
of a subsidiary
Loans and borrowings Discounted cash flows using applicable and prevailing rates at the reporting date

(b) Financial instruments carried at fair value

Type Description of valuation technique and inputs used

Other investments As the investee has not commenced operations, the net assets value at reporting
date is used

Valuation process applied by the Group for Level 3 fair value

The Group has an established control framework with respect to the measurement of fair values of financial instruments.
This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including
Level 3 fair values, and reports directly to the Chief Financial Officer. The valuation team regularly reviews significant
unobservable inputs and valuation adjustments.

35. CAPITAL MANAGEMENT

The Group’s objectives when managing capital are to maintain a strong capital base and to safeguard the Group’s ability to
continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the
business. The Directors monitor and are determined to maintain an optimal debt-to-equity ratio that complies with debt covenants.

35.1 The Company’s debt-to-equity ratio is applied to the following loans and borrowings:

a) Sukuk medium term notes issued by Malakoff Power Berhad (“MPB”)

For Sukuk medium term notes issued by MPB, the Company is required to maintain an aggregated debt-to-equity ratio
of not more than 1:1.

The debt-to-equity ratios at 31 December 2020 and at 31 December 2019 were as follows:

2020 2019

Company debt-to-equity ratio 0.44:1 0.51:1

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

35. CAPITAL MANAGEMENT (CONTINUED)

35.1 The Company’s debt-to-equity ratio is applied to the following loans and borrowings: (continued)

b) USD term loan for Malakoff International Limited (“MIL”)

c) AUD term loan 1 for MIL

For USD term loan and AUD term loan 1, held by MIL, the Company is required to maintain its debt-to-equity ratio of
not more than 1:1. The AUD term loan 1 has been fully settled during the financial year.

The debt-to-equity ratios at 31 December 2020 and at 31 December 2019 were as follows:

2020 2019

Company debt-to-equity ratio 0.42:1 0.50:1

35.2 The Group’s debt-to-equity ratio is applied to the following loans and borrowings:

a) Sukuk medium term notes issued by MPB

b) USD term loan for MIL
c) AUD term loan 1 for MIL

For Sukuk medium term notes issued by MPB, USD term loan and AUD term loan 1 held by MIL, the Group is required
to maintain its debt-to-equity ratio of not more than 5.5:1. The AUD term loan 1 has been fully settled during the
financial year.

The debt-to-equity ratios at 31 December 2020 and at 31 December 2019 were as follows:

2020 2019

Group debt-to-equity ratio 1.77:1 1.96:1

Debt covenants in relation to subsidiaries are disclosed in Note 19.

There were no changes in the Group’s approach to capital management during the financial year.

36. CAPITAL AND OTHER COMMITMENTS

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

Plant and equipment

Authorised but not contracted for 813,441 510,664 4,661 7,044
Authorised and contracted for 72,432 106,848 - -
885,873 617,512 4,661 7,044

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

37. CONTINGENCIES

Contingent liabilities not considered remote

Litigations

(i) Proceedings by the Public Prosecutor of Algeria against Almiyah Attilemcania SPA (“AAS”)

On 4 September 2014, AAS, a joint venture of the Group, was charged in the Court of Ghazouet in the district of Tlemcen,
Algeria, for an alleged breach of foreign exchange regulations concerning a sum of USD26.9 million. The Group holds an
indirect effective interest of 35.7% in AAS via Tlemcen Desalination Investment Company SAS (“TDIC”), an indirect subsidiary
of Malakoff International Limited.

In 2009, it was discovered that there was a considerable gap (“Invoice Gap”) between the value of the equipment received as
per the invoices declared to the Algerian Customs and the value of the milestone payments made by AAS to the supplier cum
contractor (“Contractor”). AAS wrote to the Contractor seeking clarifications as the Contractor was responsible for resolving
tax and customs issues. However, as the Invoice Gap was not resolved by the Contractor, the Algerian Customs initiated
investigations and thereafter filed a charge against AAS for repression of foreign exchange regulations.

The Court had on 24 December 2014 convicted AAS and had subsequently imposed a penalty of DZD3,929,038,151
(approximately RM148.3 million at the exchange rate of RM1: DZD26.5) (“Penalty”). The Group’s liability arising from the
Penalty, in proportion to the Group’s 35.7% effective interest in AAS via TDIC, which may impact the profit of the Group,
amounts to DZD1,402,666,620 (approximately RM52.9 million). The Court of Appeal upheld the decision and the Penalty
imposed by the Court on 2 March 2016.

Notwithstanding the decision of the Court, AAS has been advised by its attorney in Algeria that the Penalty would not be
enforced until the exhaustion of all rights to appeal by AAS in respect of the proceedings.

In 2016, the Group’s carrying amount of investment in AAS has been fully impaired.

AAS’ attorney had updated AAS on 31 December 2019 that the appeal at the Supreme Court has not yet been assigned to
any chamber and therefore no hearing date has been scheduled.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

37. CONTINGENCIES (CONTINUED)

Contingent liabilities not considered remote (continued)

Litigations (continued)

(ii) International Chamber of Commerce International Court of Arbitration (“ICC”) Arbitration No. 24250/DDA between Algerian
Energy Company SPA (“AEC” or “Claimant”) and (1) Tlemcen Desalination Investment Company SAS (“TDIC”), (2) Hyflux
Limited (“Hyflux”) and (3) Malakoff Corporation Berhad (“MCB”) in relation to the Souk Tleta Seawater Desalination Plant in
the District of Tlemcen, Algeria (“Plant”)

On 19 March 2019, AEC filed a request for Arbitration (“Request”) at ICC, Paris, against TDIC, Hyflux and MCB (collectively
referred to as “Respondents”) in relation to the Water Purchase Agreement dated 9 December 2007 (“WPA”), Framework
Agreement of December 2007 (“FA”), Joint Venture Agreement dated 28 March 2007 (“JVA”) and Dispute Resolution Protocol
dated 9 December 2007 (“DRP”) (collectively referred to as “Contract Documents”).

In the Request, the Claimant has alleged, amongst others, that the Respondents:

a) Are liable for breaches of contract and negligence in the design, operation and maintenance of the Plant; and
b) Wrongly objected to the termination of the WPA, transfer of AAS shares to AEC and conduct of a technical audit of the
Plant under the FA.

In this regard, the reliefs sought by the Claimant from the arbitral tribunal include, inter alia:

a) A declaration that the Respondents have breached their contractual obligations under the Contract Documents;
b) An order that the WPA was validly terminated for events of default;
c) An order for TDIC to transfer its shares in AAS to AEC at the price of 1 Algerian Dinar;
d) An order for the Respondents to indemnify AEC for damages incurred as a result of their breaches, estimated on an
interim basis at 80 Million Euro;
e) An order for the Respondents to pay all costs of the Plant rehabilitation to be completed by a third party to be selected
by AEC; and
f) An order for the Respondents to guarantee the payment or reimburse the fine of 3,929 million Algerian Dinar
(imposed on AAS by the Algerian courts for the Invoice Gap, which is currently pending outcome of AAS’ appeal to the
Algerian Supreme Court).

The Respondents filed their respective answers to the Request at the ICC in May 2019. On 17 January 2020, the Respondents
filed their respective submissions on jurisdictional objections against AEC’s claims. The Claimant filed its reply on
28 February 2020 and the Respondents submitted their reply on 15 April 2020.

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37. CONTINGENCIES (CONTINUED)

Contingent liabilities not considered remote (continued)

Litigations (continued)

(ii) International Chamber of Commerce International Court of Arbitration (“ICC”) Arbitration No. 24250/DDA between Algerian
Energy Company SPA (“AEC” or “Claimant”) and (1) Tlemcen Desalination Investment Company SAS (“TDIC”), (2) Hyflux
Limited (“Hyflux”) and (3) Malakoff Corporation Berhad (“MCB”) in relation to the Souk Tleta Seawater Desalination Plant in
the District of Tlemcen, Algeria (“Plant”) (continued)

On 15 June 2020, the arbitral tribunal conducted a virtual hearing of the Respondents’ jurisdictional objections. On 16 January
2021, MCB was informed by its counsel that the arbitral tribunal had issued its award on the Respondents’ jurisdictional
objections and decided that it has jurisdiction to review and decide on AEC’s claims under the JVA and FA, and reserves its
decision regarding the issues under the WPA. The ICC arbitration will now progress to the next phase where the merits of the
claims and defences will be heard and deliberated.

On 25 February 2021, the arbitral tribunal invited the parties to provide updates on the procedural timetable for the rest of the
arbitral proceedings. On 26 February 2021, AEC’s solicitors informed the arbitral tribunal that parties will provide an update
regarding the timetable for the proceedings by 11 March 2021.

ICC also reminded AEC about the payment of the outstanding portion of the advance on costs of USD151,668 and ICC’s
power to direct the arbitral tribunal to suspend its work and set a time limit, on the expiry of which AEC’s claims shall be
considered as withdrawn.

(iii) Singapore International Arbitration Centre (“SIAC”) Arbitration No. 278 of 2018 between Prai Power Sdn. Bhd. (“Claimant”),
a wholly-owned subsidiary of Malakoff Corporation Berhad (“MCB”), and (1) GE Energy Parts Inc, (2) GE Power Systems
(Malaysia) Sdn. Bhd., (3) General Electric International Inc and (4) General Electric Company (collectively “Respondents”),
where MCB and Malakoff Power Berhad (“MPB”) have been joined as third parties to the arbitration

MCB was notified on 9 January 2020 that GE Energy Parts, Inc (“1st Respondent”), GE Power Systems (Malaysia) Sdn. Bhd.
(“2nd Respondent”), General Electric International, Inc (“3rd Respondent”), and General Electric Company (“4th Respondent”)
had filed an application (“Joinder Application”) to join MCB and MPB as parties to the Respondents’ Counterclaim in the
arbitration initiated by Allianz General Insurance Company (Malaysia) Berhad (“AGI”) on 24 September 2018 as a subrogated
action in the name of the Claimant in relation to an incident on or around 18 July 2015 (“2015 Incident”) which resulted in
damage to a gas turbine at the Claimant’s 350 MW Combined Cycle Gas Turbine Power Plant situated in Prai, Penang (“Prai
Power Plant”).

The Claimant alleged, among others, that the Respondents had failed to exercise reasonable care and skill to properly design,
manufacture, supply and install a GE 109FA single shaft gas turbine at the Prai Power Plant and therefore claimed for, among
others, loss and damage in the sum of RM72,094,050 from the Respondents.

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37. CONTINGENCIES (CONTINUED)

Contingent liabilities not considered remote (continued)

Litigations (continued)

(iii) Singapore International Arbitration Centre (“SIAC”) Arbitration No. 278 of 2018 between Prai Power Sdn. Bhd. (“Claimant”),
a wholly-owned subsidiary of Malakoff Corporation Berhad (“MCB”), and (1) GE Energy Parts Inc, (2) GE Power Systems
(Malaysia) Sdn. Bhd., (3) General Electric International Inc and (4) General Electric Company (collectively “Respondents”),
where MCB and Malakoff Power Berhad (“MPB”) have been joined as third parties to the arbitration (continued)

On 22 April 2019, the Respondents filed a Counterclaim against the Claimant, seeking damages for breach of the
Settlement and Release Agreement between the Respondents, Claimant, MCB and MPB which was entered into on
12 December 2012 (“SRA”) for resolution of disputes in relation to two incidents at the Prai Power Plant which occurred
in 2006 and 2009 and the agreement between the Claimant and the 1st and 2nd Respondents which was entered into on
19 December 2000 (“Agreement by the Claimant”) in relation to a Long Term Service Agreement between MPB and the
1st and 2nd Respondents.

In the Joinder Application, the Respondents alleged that:

a) The commencement of the arbitration constitutes a breach of the Settlement and Release Agreement between the
Respondents, Claimant, MCB and MPB dated 12 December 2012 (“SRA”);
b) Under the SRA, MCB and MPB are liable to indemnify the Respondents against the arbitration;
c) Under the Long Term Service Agreement between MPB and the 1st and 2nd Respondents dated 19 December 2000
(“LTSA”), MPB is liable to indemnify the Respondents against the arbitration;
d) MPB has breached its insurance obligations under the LTSA; and
e) If the Respondents are found liable for the 2015 Incident, MPB is liable for contributory negligence as the operator of
Prai Power Plant.

Following MCB’s and MPB’s submission against the Joinder Application, the Respondents had on 2 October 2019 withdrawn
the Joinder Application with liberty to file afresh and commenced amicable dispute resolution process with MCB and MPB.

The representatives of GE, MCB and MPB had a without prejudice meeting on 25 October 2019 whereby the parties agreed
to refer the dispute to the parties’ higher management for further negotiation.

GE has refiled the application to join MCB and MPB as parties to GE’s Counterclaim, since GE, MCB and MPB had conducted
and completed the dispute resolution process under the SRA and LTSA without any successful resolution of the dispute.

Following the meeting of senior management between the parties on 21 November 2019, in the interest of cost, the parties agreed
to waive the requirement for non-binding mediation as prescribed under the dispute resolution provision in the LTSA/SRA.

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37. CONTINGENCIES (CONTINUED)

Contingent liabilities not considered remote (continued)

Litigations (continued)

(iii) Singapore International Arbitration Centre (“SIAC”) Arbitration No. 278 of 2018 between Prai Power Sdn. Bhd. (“Claimant”),
a wholly-owned subsidiary of Malakoff Corporation Berhad (“MCB”), and (1) GE Energy Parts Inc, (2) GE Power Systems
(Malaysia) Sdn. Bhd., (3) General Electric International Inc and (4) General Electric Company (collectively “Respondents”),
where MCB and Malakoff Power Berhad (“MPB”) have been joined as third parties to the arbitration (continued)

On 20 June 2020, the arbitral tribunal decided in its discretion to grant the Joinder Application to join MCB and MPB as
parties to the arbitration. The arbitral tribunal did not find it necessary to decide on the merits of the claims at this juncture,
which will instead be decided at the merits hearing of the SIAC Arbitration.

Subsequent to the above, the Respondents filed their Statement of Claim dated 7 September 2020 against MCB and MPB
alleging:

a) Breach of the SRA by both MCB and MPB, in that the Claimant’s claim is extinguished by the SRA;
b) MCB and MPB are required to indemnify the Respondents against the Claimant’s claim under the SRA and LTSA;
c) Breach of insurance obligations by MPB under the LTSA, in allegedly failing to procure the required waiver of subrogation;
and
d) MPB ought to be liable for the 2015 Incident, in full or by way of contributory negligence, as the operator of the plant.

On 26 October 2020, MCB and MPB submitted their Statement of Defence, pleading inter alia the following defences:

a) MCB’s and MPB’s obligation to indemnify under the SRA does not arise because the 2015 Incident is fundamentally
different from the 2006 and 2009 Incidents. Further, any finding by the arbitral tribunal that the Claimant’s claim is
a breach of the SRA will result in the dismissal of the Claimant’s claim, and thus there will be no indemnifiable loss
incurred by the Respondents;
b) MPB has no obligation to indemnify the 3rd and 4th Respondents under the LTSA as they are not parties to the LTSA.
Further, the Claimant’s claim, being a claim for negligence in inter alia design, does not arise out of the LTSA;
c) MPB did not breach its insurance obligations under the LTSA, as MPB procured insurance which complied with the
requirements of the LTSA; and
d) MPB is not liable for contributory negligence in operating the Prai Power Plant, as MPB had fulfilled its operations and
maintenance obligations.

On 30 November 2020, the Respondents submitted its Statement of Reply.

On 15 February 2021, parties to the Third Party Claim exchanged lists of the documents on which each party intends to rely
on in the arbitration.

The parties to the Third Party Claim may request the other party to disclose any additional documents or categories of
documents which are relevant and material to the outcome of the Third Party Claim by 15 March 2021.

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37. CONTINGENCIES (CONTINUED)

Contingent liabilities not considered remote (continued)

Litigations (continued)

(iv) Asian International Arbitration Centre (“AIAC”) Arbitration No. ADM-831-2020 between Tanjung Bin Energy Sdn. Bhd.
(“Claimant”) and Consortium HSL-TGE-GASB (“Respondent” or “Contractor”), comprising HSL Constructor Pte Ltd,
HSL Constructor Sdn. Bhd., Tecgates Engineering (M) Sdn. Bhd. and Gema Antara Sdn. Bhd.

Tanjung Bin Energy Sdn. Bhd. (“TBE”), a wholly-owned subsidiary of the Company, had on 12 March 2020, commenced
arbitration against Consortium HSL-TGE-GASB (“Respondent” or “Contractor”), an unincorporated joint venture comprising
(a) HSL Constructor Pte Ltd; (b) HSL Constructor Sdn. Bhd.; (c) Tecgates Engineering (M) Sdn. Bhd.; and (d) Gema Antara
Sdn. Bhd. in relation to disputes arising from the Engineering, Procurement, Construction and Commissioning Contract
dated 9 June 2017 (“EPCC Contract”) for the New Coal Unloading Jetty and Associated Bulk Material Handling System at
1x1000 MW Coal Fired Power Plant at Tanjung Bin, Johor.

TBE had identified multiple breaches by the Contractor of its contractual duties under the EPCC Contract, including inter alia
the following:

a) The Contractor failed to complete all work which is stated in the EPCC Contract as required for the work to be
considered as completed for the purposes of taking over under the EPCC Contract by 6 March 2019, the stipulated
Time for Completion. Accordingly, the Contractor is obligated to pay to TBE the sum of RM36,335,779, being the delay
damages (“Delay Damages”) under the EPCC Contract; and
b) The Contractor failed to deliver to TBE a warranty bond of RM12,111,926, being 5% of the contract price, in
accordance with the requirements under the EPCC Contract, following the issuance of the Taking Over Certificate dated
25 July 2019 by TBE (“Warranty Bond”).

TBE therefore seeks the following reliefs and remedies against the Contractor in the arbitration:

a) A declaration that TBE is entitled to the full payment of RM36,335,779 as Delay Damages;
b) An order that the Contractor pay the sum of RM7,900,568 (being Delay Damages of RM36,335,779 less remaining
milestone claims of RM28,435,211);
c) An order that the Contractor forthwith deliver the Warranty Bond;
d) In the alternative for c) above, an order that the Contractor pay the amount required to be guaranteed by the Warranty
Bond, i.e. RM12,111,926;
e) Costs; and
f) Such further or other relief(s) as the arbitral tribunal deems fit.

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37. CONTINGENCIES (CONTINUED)

Contingent liabilities not considered remote (continued)

Litigations (continued)

(iv) Asian International Arbitration Centre (“AIAC”) Arbitration No. ADM-831-2020 between Tanjung Bin Energy Sdn. Bhd.
(“Claimant”) and Consortium HSL-TGE-GASB (“Respondent” or “Contractor”), comprising HSL Constructor Pte Ltd,
HSL Constructor Sdn. Bhd., Tecgates Engineering (M) Sdn. Bhd. and Gema Antara Sdn. Bhd. (continued)

The Contractor submitted its Response to Notice of Arbitration on 10 April 2020, denying TBE’s claims and counterclaiming
the milestone payments of RM28,435,211.

On 9 December 2020, AIAC had issued its confirmation on the registration of the commencement of the arbitration.
AIAC further instructed TBE and the Contractor to pay a provisional advance deposit (“Deposit”) totalling USD101,833 in two
equal portions by 30 December 2020. TBE had paid its portion of the Deposit while the Contractor had yet to pay its portion.

38. RELATED PARTIES

Identity of 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. Related
parties may be individuals or other entities.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning,
directing and controlling the activities of the Group or the Company either directly or indirectly. The key management personnel
include all the Directors of the Group, and certain members of senior management of the Group.

The Group has related party relationship with its holding companies, significant investors, subsidiaries, associates, a joint venture
and key management personnel.

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38. RELATED PARTIES (CONTINUED)

Significant related party transactions

Related party transactions have been entered into in the normal course of business under normal trade terms. The significant
related party transactions of the Group and the Company are shown below. The balances related to the following transactions are
shown in Notes 11 and 24.

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

i. Associates
Interest income on unsecured subordinated
loan notes 15,062 35,658 15,062 35,658
Dividends 10,761 19,797 - -

ii. Joint venture

Dividends 35,889 141,157 - -

iii. Subsidiaries
Management fees - - 30,875 17,040
Dividends - - 511,000 819,300
Interest income on advances to subsidiaries - - 42,540 41,160
Interest expense on advances from subsidiaries - - (80,377) (79,929)
Rental income - - - 3,463

iv. Entities that are under significant influence

of the Government of Malaysia
(a party that has direct or indirect significant
influence on the Group and the Company)
Tenaga Nasional Berhad
- Sales of capacity and energy 5,017,025 7,179,418 - -
- Purchase of electricity bulk supply (102,588) (125,094) - -
Petroliam Nasional Berhad
- Purchase of gas (238,846) (1,070,382) - -
TNB Fuel Services Sdn. Bhd.
- Purchase of coal (2,583,517) (3,168,400) - -
Energy Commission
- CESS fund contribution (21,798) (28,511) - -
Malaysian Resources Corporation Berhad
- Sales of centralised chilled water
and electricity 24,410 27,388 - -

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38. RELATED PARTIES (CONTINUED)

Significant related party transactions (continued)

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000

v. Related parties
Sales 23,066 20,485 - -
Purchases (20,144) (13,467) - -

vi. Key management personnel

Directors
- Salary 110 - 110 -
- Fees 960 982 960 982
- Meeting allowances 451 392 376 364
- Other allowances 76 130 76 130
- Other remuneration 574 535 355 350
- Estimated monetary value of benefit-in-kind 39 54 39 40
2,210 2,093 1,916 1,866

39. SIGNIFICANT EVENTS DURING THE YEAR

(a) Incorporation of subsidiaries

(i) On 3 June 2020, Tuah Utama Sdn. Bhd. (“TUSB”), a wholly-owned subsidiary of the Company together with Concord
Alliance Sdn. Bhd. (“Concord”) jointly incorporated Southern Biogas Sdn. Bhd. (“SBSB”), a private company limited by
shares under the Companies Act 2016 of which TUSB and Concord hold 60% and 40% equity interest, respectively.
SBSB was incorporated as the special purpose company to carry out the business of developing, operating and
maintaining a biogas power plant. The share capital of SBSB is RM50,000 comprising 50,000 ordinary shares which
have been issued and fully paid-up.

(ii) On 28 May 2020, the Company subscribed two (2) ordinary shares of Radiant Summit Global Ltd. (“RSG”), a special
purpose vehicle company to facilitate the Company’s participation in offshore investment projects. The share capital of
RSG is USD2 comprising two (2) ordinary shares which have been issued and fully paid-up.

(b) Acquisition of a freehold land located in Mukim Pulau Sebang, Daerah Alor Gajah, Melaka

On 22 September 2020, Malakoff R&D Sdn. Bhd., a wholly-owned subsidiary of the Company entered into a Sale and
Purchase Agreement (“SPA”) with Eksklusif Pesona Sdn. Bhd. to acquire a plot of freehold land of approximately 71.44
hectares or 176.5 acres in size held under title No. GRN 57532, Lot 16277, located in Mukim Pulau Sebang, Daerah Alor
Gajah, Melaka for a purchase consideration of RM150 million subject to any adjustment thereto in accordance with the terms
of the SPA.

Upon completion of the land acquisition, MCB Group will be well positioned to undertake the development of renewable
energy projects in the future.

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39. SIGNIFICANT EVENTS DURING THE YEAR (CONTINUED)

(c) Award of Feed-in Tariff Approval for a 2.4 MW Biogas Power Project in Ulu Sebol, Kota Tinggi, Johor Darul Takzim

On 18 November 2020, Southern Biogas Sdn. Bhd. (“SBSB”), a 60%-owned indirect subsidiary of the Company, received
approval for the Feed-in Tariff (“FiT”) from the Government of Malaysia through Sustainable Energy Development Authority
(“SEDA”) to undertake the development of a 2.4 MW Biogas Power Plant in Ulu Sebol, Kota Tinggi, Johor Darul Takzim. The
FiT is for a period of 21 years from the commencement operation date (“COD”), November 2023.

40. ACQUISITION OF A SUBSIDIARY

Acquisition of 97.37% equity interest in Alam Flora Sdn. Bhd. (“AFSB”)

On 5 December 2019, Tunas Pancar Sdn. Bhd., a wholly-owned subsidiary of the Company, completed the acquisition of 97.37%
equity interest in Alam Flora Sdn. Bhd. (“AFSB”) for a total cash consideration of RM869,000,000. AFSB had contributed revenue of
RM78,984,000 and profit of RM7,011,000 to the Group for the one-month period leading to the financial year ended 31 December
2019. If the acquisition had occurred on 1 January 2019, management estimated that consolidated revenue and profit for the
financial year ended 31 December 2019 would have been RM8,260,527,000 and RM371,285,000, respectively.

Fair value of consideration transferred

Group
2019
RM’000

Cash and cash equivalents 869,000

Completion of purchase price allocation (“PPA”) for acquisition of AFSB

At the acquisition date, the Group had estimated the provisional goodwill and intangible assets at RM84,947,000 and RM606,703,000,
respectively.

During the financial year, the Group completed the purchase price allocation in accordance with MFRS 3, Business Combinations
and adjustments were made to the fair value of net assets, provisional intangible assets and goodwill recorded at the date of the
acquisition.

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40. ACQUISITION OF A SUBSIDIARY (CONTINUED)

Acquisition of 97.37% equity interest in Alam Flora Sdn. Bhd. (“AFSB”) (continued)

Completion of purchase price allocation (“PPA”) for acquisition of AFSB (continued)

The effect of the adjustments is set out below:

Adjustments
during
Preliminary measurement Final
assessment period assessment
Group RM’000 RM’000 RM’000

Property, plant and equipment 56,011 7,302 63,313

Investment properties 15,300 - 15,300
Concession assets 204,333 - 204,333
Intangible assets 607,215 (105,439) 501,776
Deferred tax assets 26,689 867 27,556
Trade and other receivables 204,344 - 204,344
Inventories 1,298 - 1,298
Cash and cash equivalents 470,722 - 470,722
Loans and borrowings (24,949) - (24,949)
Lease liabilities (7,874) - (7,874)
Provision for concession assets (254,888) - (254,888)
Deferred tax liabilities (145,609) 25,306 (120,303)
Trade and other payables (341,716) - (341,716)
Current tax liabilities (3,351) - (3,351)
Fair value of identifiable net assets 807,525 (71,964) 735,561

The above fair value adjustments were recorded with effect from the date of acquisition. As a result, certain balances on the
consolidated statement of financial position as at 31 December 2019 and consolidated statement of profit or loss and other
comprehensive income for the year ended 31 December 2019 were restated as disclosed in Note 43.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

40. ACQUISITION OF A SUBSIDIARY (CONTINUED)

Acquisition of 97.37% equity interest in Alam Flora Sdn. Bhd. (“AFSB”) (continued)

Completion of purchase price allocation (“PPA”) for acquisition of AFSB (continued)

The effect of the adjustments made upon the completion of PPA is set out below:

Adjustments
during
Preliminary measurement Final
assessment period assessment
Group RM’000 RM’000 RM’000

Fair value of consideration transferred 869,000 - 869,000

Non-controlling interests, based on their proportionate interest in the net
identifiable assets acquired 23,472 (4,127) 19,345
Cost of business combination 892,472 (4,127) 888,345
Adjusted net assets acquired (346,431) (8,169) (354,600)
Fair value of intangible assets (606,703) 105,439 (501,264)
Deferred tax liabilities 145,609 (25,306) 120,303
Fair value of identifiable net assets (807,525) 71,964 (735,561)
Goodwill 84,947 67,837 152,784

Net cash outflow arising from acquisition of a subsidiary

Group
2019
RM’000

Purchase consideration settled in cash and cash equivalent (869,000)

(-) Cash and cash equivalents acquired 470,722
(398,278)

Fair value measurement

The intangible assets and goodwill arising from the acquisition amounting to RM501,264,000 and RM152,784,000, respectively
were measured and accounted for using the Multi-Period Excess Earning Method (“MEEM”) under the income method.

Acquisition-related costs

The Group incurred acquisition-related costs of RM4,799,000 related to stamp duty, external legal fees and due diligence
costs. The stamp duty, legal fees and due diligence costs were included in administrative expenses for the financial year ended
31 December 2019.

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41. ACQUISITION OF A JOINT VENTURE

On 12 September 2019, Malakoff Gulf Limited, a wholly-owned indirect subsidiary of the Company, entered into a Share Sale
Agreement with Khazanah Nasional Berhad to acquire the entire equity interest in Desaru Investment (Cayman Isl.) Limited (“DIL”).
Following the acquisition, the Company’s effective equity interest in Malaysian Shoaiba Consortium Sdn. Bhd. (“MSCSB”), an
associate of DIL, increased from 40% to 80%. MSCSB had a 50% equity interest in Saudi-Malaysia Water & Electricity Company
Limited (“SAMAWEC”). The Group had classified SAMAWEC as a joint venture of the Group.

For the financial year ended 31 December 2019, the share of profit recognised from SAMAWEC was RM21,102,000. If the acquisition
had occurred on 1 January 2019, management estimated that the share of profit from SAMAWEC for the financial year ended 31
December 2019 would have been RM68,788,000.

Fair value of consideration transferred

Group
2019
RM’000

Cash and cash equivalents 294,891

Completion of purchase price allocation (“PPA”) for acquisition of Desaru Investment (Cayman Isl.) Limited (“DIL”)

At the acquisition date, the Group had estimated the provisional intangible assets at RM63,282,000.

During the financial year, the Group completed the purchase price allocation in accordance with MFRS 3, Business Combinations
and adjustments were made to the fair value of net assets and provisional intangible assets recorded at the date of the acquisition.

The effect of the adjustments is set out below:

Adjustments
during
Preliminary measurement Final
assessment period assessment
Group RM’000 RM’000 RM’000

Investments in joint ventures 738,739 9,165 747,904

Cash and cash equivalents 544 - 544
Deferred tax liabilities - (5,469) (5,469)
Trade and other payables (2,055) - (2,055)
Fair value of identifiable net assets 737,228 3,696 740,924

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41. ACQUISITION OF A JOINT VENTURE (CONTINUED)

Completion of purchase price allocation (“PPA”) for acquisition of Desaru Investment (Cayman Isl.) Limited (“DIL”) (continued)

The above fair value adjustments were recorded with effect from the date of acquisition. As a result, certain balances on the
consolidated statement of financial position as at 31 December 2019 and consolidated statement of profit or loss and other
comprehensive income for the year ended 31 December 2019 were restated as disclosed in Note 43.

The effect of the adjustments made upon the completion of PPA is set out below:

Adjustments
during
Preliminary measurement Final
assessment period assessment
Group RM’000 RM’000 RM’000

Fair value of consideration transferred 294,891 - 294,891

Fair value of existing interest 294,891 - 294,891
Non-controlling interests, based on their proportionate interest in the net
identifiable assets acquired 147,446 738 148,184
Cost of business combination 737,228 738 737,966
Adjusted net assets acquired (673,946) (5,947) (679,893)
Fair value of intangible assets (63,282) (3,218) (66,500)
Deferred tax liabilities - 5,469 5,469
Fair value of identifiable net assets (737,228) (3,696) (740,924)
Bargain purchase - (2,958) (2,958)

Net cash outflow arising from acquisition of a joint venture

Group
2019
RM’000

Purchase consideration settled in cash and cash equivalent (294,891)

(-) Cash and cash equivalents acquired 544
(294,347)

Fair value measurement

The intangible assets and bargain purchase arising from the acquisition amounting to RM66,500,000 and RM2,958,000, respectively
were measured and accounted for using the MEEM under the income method.

The derecognition of MSCSB as an associate, following the increased in the Group’s effective interest from 40% to 80%, resulted
in a gain of RM29,842,000 which was included in other income for the financial year ended 31 December 2019.

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

41. ACQUISITION OF A JOINT VENTURE (CONTINUED)

Acquisition-related costs

The Group had incurred acquisition-related costs of RM749,000 related to external legal fees and due diligence costs. The legal
fees and due diligence costs were included in administrative expenses for the financial year ended 31 December 2019.

42. DISCONTINUED OPERATIONS/DISPOSAL OF A SUBSIDIARY

On 18 December 2019, Skyfirst Power Sdn. Bhd., a wholly-owned indirect subsidiary of the Company completed the disposal of its
entire 50% participating interest in the unincorporated joint venture of the Macarthur Wind Farm in Australia held by Malakoff Wind
Macarthur Pty. Limited for a cash consideration of RM976,000,000, resulted in a gain on disposal of RM556,620,000 to the Group.
The consolidated statement of profit or loss and other comprehensive income have been presented as discontinued operations for
the financial year ended 31 December 2019. The discontinued operations were presented separately from continuing operations as
follows:

Results of discontinued operations

Group
2019
RM’000

Revenue 143,815
Gross profit 143,815
Administrative expenses (366)
Other operating expenses (7,112)
Results from operating activities 136,337
Finance income 471
Finance costs (85,405)
Profit before tax 51,403
Income tax expense (6,584)
Profit from discontinued operations 44,819

Other comprehensive expense, net of tax

Items that may be reclassified subsequently to profit or loss
Cash flow hedge (34,499)
Foreign currency translation differences for foreign operations (5,440)
Other comprehensive expense, net of tax (39,939)
Total comprehensive income for the year from discontinued operations 4,880

The profit from discontinued operations of RM44,819,000 for the financial year ended 31 December 2019 was attributable entirely
to the owners of the Company.

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FINANCIAL PERFORMANCE SECTION 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

42. DISCONTINUED OPERATIONS/DISPOSAL OF A SUBSIDIARY (CONTINUED)

Results of discontinued operations (continued)

Effects of the disposal on the consolidated statement of cash flows of the Group were as follows:

Group
2019
RM’000

Cash flows from/(used in) discontinued operations

Net cash from operating activities 38,124
Net cash from investing activities 471
Net cash used in financing activities (19,363)
Net increase in cash and cash equivalents 19,232

Effects of the disposal on the consolidated statement of financial position of the Group were as follows:

Group
2019
RM’000

Assets/(Liabilities) disposed:
Finance lease receivable 1,984,367
Deferred tax assets 53,415
Other receivables 5
Tax recoverable 1,260
Cash and cash equivalents 99
Other payables (14,642)
Derivative financial liabilities (247,062)
Borrowings (1,356,825)
Deferred tax liabilities (3,694)
Translation differences (19,976)
Net assets and liabilities 396,947
Cash and cash equivalents disposed (99)
Gain on disposal of a subsidiary 556,620
Transaction costs 22,963
Net cash inflow on sale of discontinued operations 976,431

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SECTION 5 FINANCIAL PERFORMANCE

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

43. COMPARATIVE FIGURES

Completion of purchase price allocation for acquisitions of Alam Flora Sdn. Bhd. (“AFSB”) and Desaru Investment (Cayman Isl.)
Limited (“DIL”)

Following completion of the PPA for the acquisitions of AFSB and DIL during the financial year, the Group adjusted the fair values
of certain identifiable assets and liabilities. The fair values were adjusted retrospectively.

The restatement of comparatives as at 31 December 2019 are as follows:

(a) Consolidated statement of financial position as at 31 December 2019

As previously
stated Adjustments As restated
RM’000 RM’000 RM’000

Non-current assets
Property, plant and equipment 12,874,076 7,258 12,881,334
Intangible assets 3,490,922 (37,269) 3,453,653
Investments in joint ventures 626,322 9,061 635,383
Deferred tax assets 146,498 - 146,498

Equity
Accumulated losses (241,100) 3,243 (237,857)
Non-controlling interests 368,905 (3,389) 365,516

Non-current liabilities
Deferred tax liabilities 1,294,770 (20,804) 1,273,966

(b) Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2019

As previously
stated Adjustments As restated
RM’000 RM’000 RM’000

Costs of sales (6,091,865) 185 (6,091,680)

Other income 683,176 2,958 686,134
Tax expense (156,218) 100 (156,118)

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FINANCIAL PERFORMANCE SECTION 5

STATEMENT BY DIRECTORS
PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016

In the opinion of the Directors, the financial statements set out on pages 110 to 258 are drawn up in accordance with Malaysian Financial
Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as
to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2020 and of their financial
performance and cash flows for the financial year then ended.

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

…………………………………………………............. ………………………………………………….............
Datuk Haji Hasni bin Harun Dato’ Sri Che Khalib bin Mohamad Noh
Chairman Director

Kuala Lumpur

11 March 2021

STATUTORY DECLARATION
PURSUANT TO SECTION 251(1)(B) OF THE COMPANIES ACT 2016

I, Mohd Nazersham bin Mansor, 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 110 to 258 are, to the best of my knowledge and belief,
correct and I make this solemn declaration conscientiously believing the declaration to be true, and by virtue of the Statutory Declarations
Act 1960.

Subscribed and solemnly declared by the abovenamed Mohd Nazersham bin Mansor, NRIC: 730416-14-5671, MIA CA34453,
at Kuala Lumpur in the Federal Territory on 11 March 2021.

…………………………………………
Mohd Nazersham bin Mansor

Before me:

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SECTION 5 FINANCIAL PERFORMANCE

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF MALAKOFF CORPORATION BERHAD
(REGISTRATION NO. 200601011818/731568-V)
(INCORPORATED IN MALAYSIA)

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Malakoff Corporation Berhad, which comprise the statements of financial position as at
31 December 2020 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements
of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, as set out on pages 110 to 258.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company
as at 31 December 2020, and of their financial performance and cash flows for the year then ended in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements
section of our auditors’ report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.

Independence and Other Ethical Responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice)
of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ International Code
of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other
ethical responsibilities in accordance with the By-Laws and the IESBA Code.

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FINANCIAL PERFORMANCE SECTION 5

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF MALAKOFF CORPORATION BERHAD
(REGISTRATION NO. 200601011818/731568-V)
(INCORPORATED IN MALAYSIA)

Key Audit Matter

Key audit matter is a matter that, in our professional judgement, was of most significance in our audit of the financial statements of the
Group and of the Company for the current year. The matter was addressed in the context of our audit of the financial statements of the
Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on the matter.

Group
Valuation of goodwill of Alam Flora Sdn. Bhd.

Refer to Note 2 - Significant accounting policy: Intangible assets and in Note 6 – Intangible assets

The key audit matter How the matter was addressed in our audit

The Group has goodwill amounting to We performed the following audit procedures, among others:
RM152,784,000 as at 31 December • We evaluated management’s cash flow projections and the process by which they were
2020 arising from the acquisition of developed. We compared the projections to Board’s approved business plans and
Alam Flora Sdn. Bhd. (“AFSB”). also compared previous projections to actual results to assess the performance of the
business and the accuracy of the forecasting;
We focused on goodwill of the Group • We obtained confirmation that the key assumptions were subject to oversight from the Directors;
as the carrying amount is material • We evaluated and challenged the following key assumptions used in the cash flows:
and the impairment test is sensitive - Contracted tariff – we agreed the contracted tariff used in the projections to the
to a possible change in assumptions. contracted tariff;
- Cost of sales – we assessed the private contractor costs based on past experience;
There is significant judgement - Capital expenditure (“CAPEX”) – we compared CAPEX assumption in the cash flows
involved in forecasting and to the budget approved by the Directors; and
discounting of future cash flows, - Discount rate – our own specialist compared the discount rate used to industry
which is the basis of assessment of practice and external sources.
the recoverability of goodwill. • We assessed whether the Group’s disclosures about the sensitivity of the outcome of
the impairment assessment to changes in key assumptions reflected the risks inherent
in the valuation of goodwill.

Information Other than the Financial Statements and Auditors’ Report Thereon

The Directors of the Company are responsible for the other information. The other information comprises the information included in the
annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the annual report and we do not express any
form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the annual
report and, in doing so, consider whether the annual report is materially inconsistent with the financial statements of the Group and of
the Company or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of the annual report, we are required to report that fact. We have nothing
to report in this regard.

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SECTION 5 FINANCIAL PERFORMANCE

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF MALAKOFF CORPORATION BERHAD
(REGISTRATION NO. 200601011818/731568-V)
(INCORPORATED IN MALAYSIA)

Responsibilities of the Directors for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give
a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors
determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the ability of the
Group and of the Company to continue as going concerns, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or
have no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing
in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Group and of the
Company.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the
Group or of the Company to continue as going concerns. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as going concerns.
• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including
the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and
events in a manner that gives a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group
to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance
of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.

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FINANCIAL PERFORMANCE SECTION 5

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF MALAKOFF CORPORATION BERHAD
(REGISTRATION NO. 200601011818/731568-V)
(INCORPORATED IN MALAYSIA)

Auditors’ Responsibilities for the Audit of the Financial Statements (continued)

We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and
to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.

From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial
statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe these matters
in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our auditors’ report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in
Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMG PLT Foong Mun Kong

(LLP0010081-LCA & AF 0758) Approval Number: 02613/12/2022 J
Chartered Accountants Chartered Accountant

Petaling Jaya

11 March 2021

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SECTION 6 O T H E R I N F O R M AT I O N

LIST OF PROPERTIES

PROPERTIES OWNED BY MALAKOFF CORPORATION BERHAD’S GROUP

The details of lands and buildings owned by us are set out below:

Audited Net
Approximate book value as at
Name of registered owner/ age of Built-up Restriction 31 December
(Beneficial owner, if applicable)/ Description of property/ buildings area/Land in interest/ 2020
No Lot. no./Postal address/Tenure Existing use (years) area encumbrances RM

1. Malakoff Industrial land/The land N/A 480 sq metre/ The land cannot 4,170,284
is currently tenanted by 14.5 Ha be transferred,
PN 356979 Lot 12248, Mukim Digi Telecommunications charged, leased Refer to note (2)
of Pengkalan Baharu, District of Sdn Bhd and is used as at without prior
Manjung, Perak Darul Ridzuan, base transceiver station approval of the
Malaysia for the operation of Digi Menteri Besar of
Telecommunications Sdn Perak.
Persiaran Segari Off Highway 60, Bhd’s cellular telephone
Daerah Manjung, 32200 Segari, network.
Perak Darul Ridzuan, Malaysia

Leasehold for a period of 99 years,

expiring on 30 July 2096
2. Malakoff Refer to note (3)/The lands N/A N/A/ Nil 21,516,000
are currently used for oil 735.5 Ha
Refer to note (3) palm cultivation. Refer to note (2)

Windsor Estate, Ulu Sepetang

34010 Taiping, Perak Darul Ridzuan,
Malaysia

Freehold
3. Malakoff Four office units on the 19 1,228 sq N/A 1,571,548
8th and 9th floor of a metre
Parcel no. 2A-8-1, 2A-8-2, 2A-9-1 commercial building/Level
and 2A-9-2, Plaza Sentral 8 is vacant and Level 9 is
tenanted.
Level 8 and Level 9, Block 2A, Plaza
Sentral, Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia

Freehold

Refer to note (4)

4. Malakoff Ten office units on the 19 1,986 sq N/A 1,086,065
12th and 13th floor of a metre
Parcel no. CS/3B/12-3, CS/3B/12- commercial building/
3A, CS/3B/12-5, CS/3B/12-6, Currently is vacant.
CS/3B/12-7, CS/3B/13-3, CS/3B/13-
3A, CS/3B/13-5, CS/3B/13-6 and
CS/3B/13-7, Plaza Sentral

Level 12 and Level 13, Block 3B,

Plaza Sentral, Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia

Freehold

Refer to note (4)

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O T H E R I N F O R M AT I O N SECTION 6

LIST OF PROPERTIES

PROPERTIES OWNED BY OUR GROUP (CONTINUED)

The details of lands and buildings owned by us are set out below (continued):

Audited Net
Approximate book value as at
Name of registered owner/ age of Built-up Restriction 31 December
(Beneficial owner, if applicable)/ Description of property/ buildings area/Land in interest/ 2020
No Lot. no./Postal address/Tenure Existing use (years) area encumbrances RM

5. SEV Industrial land/The land 25 26,787 sq The land cannot 3,849,000

is currently used for the metre/ be transferred,
HSD 29841 PT 6325, Mukim SEV Power Plant, which 148,400 sq charged, leased Refer to note (2)
of Pengkalan Baharu, District of includes an administration metre without prior
Manjung, Perak Darul Ridzuan, building, a single- storey approval of the
Malaysia simulator training building, Menteri Besar of
a single-storey clubhouse, Perak.
Lumut Power Plant, Persiaran Segari a guard house, a gas
Off Highway 60, Daerah Manjung, turbine building, a steam
32200 Segari, Perak Darul Ridzuan, turbine building, a fuel oil
Malaysia tank farm, a warehouse
and a black start diesel
Leasehold for a period of 99 years, generator building.
expiring on 12 January 2094
6. GB3 Industrial land/The land is 19 12,384 sq The land cannot Refer to notes (2)
currently used for the GB3 metre/ be transferred, and (5)
HSD 29843 PT 6327, Mukim Power Plant which includes 111,600 sq charged, leased
of Pengkalan Baharu, District of an administration building, metre without prior
Manjung, Perak Darul Ridzuan, ten units of cooling tower, approval of the
Malaysia workshop building and Menteri Besar of
a gas and steam turbine Perak.
Lumut Power Plant, Persiaran Segari building.
Off Highway 60, Daerah Manjung, Lease of part
32200 Segari, Perak Darul Ridzuan, of the land
Malaysia registered in
favour of GB3
Leasehold for a period of 99 years, on 22 June 2001
expiring on 12 January 2094 for a period of
21 years from 21
June 2001 until
21 June 2022.
7. GB3 Industrial land/The land 19 N/A/ The land cannot Refer to notes (2)
is currently used for the 12,100 sq be transferred, and (5)
HSD 29845 PT 6329, Mukim Lumut Power Plant, which metre charged, leased
of Pengkalan Baharu, District of includes the PETRONAS without prior
Manjung, Perak Darul Ridzuan, Energy & Gas Trading approval of the
Malaysia Sdn Bhd gas metering Menteri Besar of
equipment station. It also Perak.
Lumut Power Plant, Persiaran Segari has the interconnection
Off Highway 60, Daerah Manjung, facilities such as gas Lease of part
32200 Segari, Perak Darul Ridzuan, pipelines and venting of the land
Malaysia equipment to supply gas to registered in
the Lumut Power Plant. favour of GB3
Leasehold for a period of 99 years, on 22 June 2001
expiring on 12 January 2094 for a period of
21 years from 21
June 2001 until
21 June 2022

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SECTION 6 O T H E R I N F O R M AT I O N

LIST OF PROPERTIES

PROPERTIES OWNED BY OUR GROUP (CONTINUED)

The details of lands and buildings owned by us are set out below (continued):

Audited Net
Approximate book value as at
Name of registered owner/ age of Built-up Restriction 31 December
(Beneficial owner, if applicable)/ Description of property/ buildings area/Land in interest/ 2020
No Lot. no./Postal address/Tenure Existing use (years) area encumbrances RM

8. GB3 Industrial land/The land is 19 1,095 sq The land cannot Refer to notes (2)
currently used for storage metre/ be transferred, and (5)
HSD 23550, PT 4034 of diesel tanks and erected 1.69 Ha charged, leased
PN 356978 Lot 12247, Mukim with a chemical storage without prior
of Pengkalan Baharu, District of building and a fuel oil pump approval of the
Manjung, Perak Darul Ridzuan, station used by the GB3 Menteri Besar of
Malaysia Power Plant. Perak.

GB3 Sdn Bhd, Lumut Power Plant,

Persiaran Segari Off Highway 60,
Daerah Manjung, 32200 Segari,
Perak Darul Ridzuan, Malaysia

Leasehold for a period of 99 years,

expiring on 30 July 2096
9. PD Power Commercial or industrial 26 5,560 sq The land cannot Refer to note (6)
land for power plant/The metre/94,210 be transferred,
GRN 237771 Lot 13409, Pekan land is currently used for sq metre charged, leased
and District of Port Dickson, Negeri the Port Dickson Power without prior
Sembilan Darul Khusus, Malaysia Plant which includes a approval of the
building to house four units state authority.
Batu 2, Jalan Seremban, 71000 of gas turbine, a fuel oil
Port Dickson, Negeri Sembilan Darul tank farm, a warehouse
Khusus, Malaysia and a black start diesel
generator.
Freehold
10. PD Power Commercial or industrial 26 N/A/ The land cannot Refer to note (6)
land for electrical 5,459 sq be transferred,
GRN 237773 Lot 13411, Pekan substation/The land metre charged, leased
and District of Port Dickson, Negeri is currently used for without prior
Sembilan Darul Khusus, Malaysia TNB switch yard approval of the
and transmission for state authority.
Batu 2, Jalan Seremban, 71000 interconnection facilities.
Port Dickson, Negeri Sembilan Darul
Khusus, Malaysia

Freehold
11. PD Power Building land for office 26 510 sq The land cannot Refer to note (6)
building/The land is metre/ be transferred,
GRN 237774 Lot 13412, Pekan currently used for double- 4,654 sq charged, leased
and District of Port Dickson, Negeri storey administration metre without prior
Sembilan Darul Khusus, Malaysia office building for the Port approval of the
Dickson Power Plant. state authority.
Batu 2, Jalan Seremban, 71000
Port Dickson, Negeri Sembilan Darul
Khusus, Malaysia

Freehold

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O T H E R I N F O R M AT I O N SECTION 6

LIST OF PROPERTIES

PROPERTIES OWNED BY OUR GROUP (CONTINUED)

The details of lands and buildings owned by us are set out below (continued):

Audited Net
Approximate book value as at
Name of registered owner/ age of Built-up Restriction 31 December
(Beneficial owner, if applicable)/ Description of property/ buildings area/Land in interest/ 2020
No Lot. no./Postal address/Tenure Existing use (years) area encumbrances RM

12. PD Power Commercial or industrial 26 N/A/ The land cannot Refer to note (6)
land for gas station/The 7,392 sq be transferred,
GRN 237776 Lot 13415, Pekan land is currently used metre charged, leased
and District of Port Dickson, Negeri for PETRONAS Energy without prior
Sembilan Darul Khusus, Malaysia & Gas Trading Sdn Bhd approval of the
gas metering equipment state authority.
Batu 2, Jalan Seremban, 71000 station and interconnection
Port Dickson, Negeri Sembilan Darul facilities.
Khusus, Malaysia

Freehold
13. PD Power Building land for residential/ 26 N/A/ The land cannot Refer to note (6)
Vacant land. 1,684 sq be transferred,
GRN 237768 Lot 13406, Pekan metre charged, leased
and District of Port Dickson, Negeri without prior
Sembilan Darul Khusus, Malaysia approval of the
state authority.
Batu 2, Jalan Seremban, 71000
Port Dickson, Negeri Sembilan Darul
Khusus, Malaysia

Freehold
14. PD Power Building land for residential/ 26 N/A/ The land cannot Refer to note (6)
Vacant land. 6,143 sq be transferred,
GRN 237769 Lot 13407, Pekan metre charged, leased
and District of Port Dickson, Negeri without prior
Sembilan Darul Khusus, Malaysia approval of the
state authority.
Batu 2, Jalan Seremban, 71000
Port Dickson, Negeri Sembilan Darul
Khusus, Malaysia

Freehold
15. PD Power Agriculture land/ 26 N/A/ The land cannot Refer to note (6)
Vacant land and pond. 6.641 Ha be transferred,
GRN 237770 Lot 13408, Pekan charged, leased
and District of Port Dickson, Negeri without prior
Sembilan Darul Khusus, Malaysia approval of the
state sauthority.
Batu 2, Jalan Seremban, 71000
Port Dickson, Negeri Sembilan Darul
Khusus, Malaysia

Freehold

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SECTION 6 O T H E R I N F O R M AT I O N

LIST OF PROPERTIES

PROPERTIES OWNED BY OUR GROUP (CONTINUED)

The details of lands and buildings owned by us are set out below (continued):

Audited Net
Approximate book value as at
Name of registered owner/ age of Built-up Restriction 31 December
(Beneficial owner, if applicable)/ Description of property/ buildings area/Land in interest/ 2020
No Lot. no./Postal address/Tenure Existing use (years) area encumbrances RM

16. PD Power Building land for kids’ 26 N/A/ The land cannot Refer to note (6)
playground/The land is 5,345 sq be transferred,
GRN 237775 Lot 13414, Pekan currently used for public metre charged, leased
and District of Port Dickson, Negeri children playground. without prior
Sembilan Darul Khusus, Malaysia approval of the
state authority.
Batu 2, Jalan Seremban, 71000
Port Dickson, Negeri Sembilan Darul
Khusus, Malaysia

Freehold
17. PD Power Building land for residential/ 26 42 sq The land cannot Refer to note (6)
The land is currently used metre/ be transferred,
GRN 237777 Lot 13416, Pekan for single-storey guard 3,225 sq charged, leased
and District of Port Dickson, Negeri house building for the Port metre without prior
Sembilan Darul Khusus, Malaysia Dickson Power Plant. approval of the
state authority.
Batu 2, Jalan Seremban, 71000
Port Dickson, Negeri Sembilan Darul
Khusus, Malaysia

Freehold
18. PD Power Building land for 26 760 sq Nil Refer to note (6)
multipurpose hall/The metre/
HSD 21135 Lot 484, Mukim and land is currently used for 0.554 Ha
District of Port Dickson, Negeri multipurpose public hall.
Sembilan Darul Khusus, Malaysia

Batu 2, Jalan Seremban, 71000

Port Dickson, Negeri Sembilan Darul
Khusus, Malaysia

Freehold
19. PD Power Building land for 26 N/A/ Nil Refer to note (6)
recreational field/The 1.897 Ha
HSD 21134 Lot 483, Mukim and land is currently used for
District of Port Dickson, Negeri public football field and
Sembilan Darul Khusus, Malaysia multipurpose court.

Batu 2, Jalan Seremban, 71000

Port Dickson, Negeri Sembilan Darul
Khusus, Malaysia

Freehold

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O T H E R I N F O R M AT I O N SECTION 6

LIST OF PROPERTIES

PROPERTIES OWNED BY OUR GROUP (CONTINUED)

The details of lands and buildings owned by us are set out below (continued):

Audited Net
Approximate book value as at
Name of registered owner/ age of Built-up Restriction 31 December
(Beneficial owner, if applicable)/ Description of property/ buildings area/Land in interest/ 2020
No Lot. no./Postal address/Tenure Existing use (years) area encumbrances RM

20. PD Power Building lands for low 26 65 sq metre for Nil Nil
cost residential/The each house/
23 parcels of land held under GRN land is currently erected 213 sq metre
35822 Lot 6976 to GRN 35830 Lot with 23 units of low cost for GRN 35884
6984, GRN 35832 Lot 6986 to GRN houses which are currently and 111 sq
35837 Lot 6991 and GRN 35884 tenanted. metre for each
Lot 7041 to GRN 35891 Lot 7048, of the other lot
all located at Pekan and District of
Port Dickson, Negeri Sembilan Darul
Khusus, Malaysia

No. 1 to 9, No. 11 to 16, No. 117 to

124, Jalan Tun Sambanthan, Taman
NLFCS, Tg. Gemuk, 71000 Port
Dickson, Negeri Sembilan Darul
Khusus, Malaysia

Freehold
21. TJSB Five office units on the 19 975 sq N/A 167,020
13Ath floor of a commercial metre/
Parcel no. CS/3B/13A-3, building. Currently is N/A
CS/3B/13A-4, CS/3B/13A-5, vacant.
CS/3B/13A-6 and CS/3B/13A-7,
Plaza Sentral

Level 13A, Block 3B, Plaza Sentral,

Jalan Stesen Sentral 5, 50470 Kuala
Lumpur, Malaysia

Freehold

Refer to note (7)

22. M Utilities The underground level of 19 2,507 sq N/A Refer to note (8)
a commercial building/ metre/
Level no. Minus 9M, Building no. 4, Currently used for N/A
Plaza Sentral centralised chilled water
plant system.
Suite 4-G-A, Ground Floor, Block 4,
Plaza Sentral, Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia

Freehold

Refer to note (9)

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SECTION 6 O T H E R I N F O R M AT I O N

LIST OF PROPERTIES

PROPERTIES OWNED BY OUR GROUP (CONTINUED)

The details of lands and buildings owned by us are set out below (continued):

Audited Net
Approximate book value as at
Name of registered owner/ age of Built-up Restriction 31 December
(Beneficial owner, if applicable)/ Description of property/ buildings area/Land in interest/ 2020
No Lot. no./Postal address/Tenure Existing use (years) area encumbrances RM

23. M Utilities The ground level of a 19 970 sq N/A Refer to note (8)
commercial building/ metre/
Level no. 0M, Building no. 4, Plaza Currently used as an office N/A
Sentral space.

Suite 4-G-A, Ground Floor, Block 4,

Plaza Sentral, Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia

Freehold

Refer to note (9)

24. M Utilities The lower ground level of 19 983 sq N/A Refer to note (8)
a commercial building/ metre/
Level no. 5.4M and 4.7M, Building Currently used to house N/A
no. 4, Plaza Sentral electrical equipment for
the Main Distribution
Suite 4-G-A, Ground Floor, Block 4, Substation.
Plaza Sentral, Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia

Freehold

Refer to note (9)

25. M Utilities The underground level of 19 272 sq N/A Refer to note (8)
a commercial building/ metre
Level Minus 6.5M, Building no. 4, Currently used as the
Plaza Sentral central control room and
centralised chilled water
Suite 4-G-A, Ground Floor, Block 4, plant room.
Plaza Sentral, Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia

Freehold

Refer to note (9)

26. DKSB Building land for residential/ N/A N/A/ The land cannot Refer to note (10)
Vacant land. 11,684 be transferred,
HSD 30118 PT 34621, Mukim sq metre charged, leased
of Sitiawan, Perak Darul Ridzuan, without prior
Malaysia approval of the
state authority.
Near Jalan Teluk Rubiah, 32040 Seri
Manjung, Perak, Malaysia

Leasehold for a period of 99 years,

expiring on 17 January 2109

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O T H E R I N F O R M AT I O N SECTION 6

LIST OF PROPERTIES

PROPERTIES OWNED BY OUR GROUP (CONTINUED)

The details of lands and buildings owned by us are set out below (continued):

Audited Net
Approximate book value as at
Name of registered owner/ age of Built-up Restriction 31 December
(Beneficial owner, if applicable)/ Description of property/ buildings area/Land in interest/ 2020
No Lot. no./Postal address/Tenure Existing use (years) area encumbrances RM

27. TBE Industrial land for 5 N/A/ The land cannot Refer to note (11)
permanent jetty and any 0.9454 be transferred,
HSD 14674 PTD 2263, Mukim of structure related thereto. Ha charged, leased
Serkat, District of Pontian, Johor without the prior
Darul Takzim, Malaysia approval of the
State Authority
Tanjung Bin Energy T4, Tanjung Bin,
Serkat 82030 Pontian, Johor Darul
Takzim, Malaysia

Leasehold for a period of 60 years,

expiring on 17 September 2077
28. TBE Industrial land for 5 N/A/ The land cannot Refer to note (12)
permanent jetty and any 0.3753 be transferred,
HSD 14673 PTD 2264, Mukim of structure related thereto. Ha charged, leased
Serkat, District of Pontian, Johor without the prior
Darul Takzim, Malaysia approval of the
State Authority
Tanjung Bin Energy T4, Tanjung Bin,
Serkat 82030 Pontian, Johor Darul
Takzim, Malaysia

Leasehold for a period of 60 years,

expiring on 17 September 2077
29. AFSB Industrial land/The land is 30 1,650 N/A 5,100,000
erected with one (1) unit sq ft/
HSD 51058 Lot PT No. 6108, of 3 ½ storey intermediate 153,285
Mukim of Sungai Buloh, District terrace shop office storey sq metre
of Petaling, Selangor Darul Ehsan, building for commercial
Malaysia building and curently is
tenanted.
No. 74, Jalan SS21/39, Damansara
Utama, 47400 Petaling Jaya,
Selangor Darul Ehsan, Malaysia

Freehold
30. AFSB Industrial land Depot for N/A N/A/ N/A 17,853,312
AFSB Wilayah Persekutuan 15,506
Pajakan Negeri 17254, Lot 40326, Kuala Lumpur Service Area. sq metre
Mukim of Sungai Buloh, District of
Petaling, Selangor Darul Ehsan;
Lot 40326, Section U5 Shah Alam,
Selangor Darul Ehsan, Malaysia

No. 2, Jalan Utarid U5/18A, Mutiara

Subang, Section U5, 40150 Shah
Alam, Selangor Darul Ehsan, Malaysia

Leasehold for a period of 80 years

expiring on 11 December 2096

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SECTION 6 O T H E R I N F O R M AT I O N

LIST OF PROPERTIES

PROPERTIES OWNED BY OUR GROUP (CONTINUED)

The details of lands and buildings owned by us are set out below (continued):

Audited Net
Approximate book value as at
Name of registered owner/ age of Built-up Restriction 31 December
(Beneficial owner, if applicable)/ Description of property/ buildings area/Land in interest/ 2020
No Lot. no./Postal address/Tenure Existing use (years) area encumbrances RM

31. AFSB 1st floor of a commercial 12 3,329.75 N/A 1,541,333

building for administration sq ft/
HSD 4497, PT 26, District of Pekan, and operation office for 309.34
Pahang Darul Makmur, AFSB Pahang Service Area. sq metre
Malaysia

Lot No. G-02, First Floor, Bangunan

UMNO Pekan, Jalan Teng Que,
26600 Pekan, Pahang Darul Makmur,
Malaysia

Leasehold for a period of 99 years

expiring on 6 September 2097
32. AFSB Industrial land Depot for N/A N/A/ N/A 1,576,753
AFSB Kuantan Service 36,420
HSM 16205, No. PT 22739, Area. sq metre
Mukim of Sungai Karang, District
of Kuantan, Pahang Darul Makmur,
Malaysia

Leasehold for a period of 99 years

expiring on 23 August 2115
33. AFSB Vacant agricultural land. N/A N/A/ N/A 15,000,000
52.21
Lot 2619, 2622, 215, 961, 1272, acres
1273, 1602 & 1791 in Mukim of
Bentong, District of Bentong, Pahang
Darul Makmur, Malaysia

Freehold
34. AFSB Double- storey building for 9 1,431.65 N/A 472,033
office use. sqft/
Lot Type C, No 90 Rompin, 133
Held Under Individual Title HSM sq metre
943, PT No. 1460, Mukim of Bebar,
District of Rompin, Muadzam Shah,
Pahang Darul Makmur, Malaysia

No. 3, Jalan Makmur 7, Presint

Niaga, Bandar Satelit Muadzam Shah,
26700 Muadzam Shah, Pahang Darul
Makmur, Malaysia

Leasehold for a period of 99 years

expiring on 7 November 2111

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O T H E R I N F O R M AT I O N SECTION 6

LIST OF PROPERTIES

PROPERTIES OWNED BY OUR GROUP (CONTINUED)

The details of lands and buildings owned by us are set out below (continued):

Audited Net
Approximate book value as at
Name of registered owner/ age of Built-up Restriction 31 December
(Beneficial owner, if applicable)/ Description of property/ buildings area/Land in interest/ 2020
No Lot. no./Postal address/Tenure Existing use (years) area encumbrances RM

35. AFES Vacant land. N/A N/A/ N/A 101,589

3,968
Title No. Pajakan Negeri 2879, Lot sq metre
95, Mukim Ulu Telom, District of
Cameron Highlands, Pahang Darul
Makmur, Malaysia

Leasehold for a period of 99 years

expiring on 13 September 2039
36. AFES Industrial land/The land is 9 7,750 N/A 2,500,000
erected with one and a half sq ft/
Title No. GM 2289, Lot 2901 and (1½) storey semi-detached 1375 sq
Title No. GM 2335, Lot 2950 both factory which is currently metre
at Mukim 06, District Seberang Perai vacant.
Tengah, Pulau Pinang, Malaysia

No. 1, Jalan Nagasari 4, Taman

Nagasari, 13600 Prai, Pulau Pinang,
Malaysia

Freehold
37. AFES Industrial land/The land 5 52,780 sq ft/ N/A 7,700,000
is erected with a three (3) 107,593 sq ft
Title No. HSD 493845 PTD 76034 storey office building with
of Mukim Tebrau, District of Johor an annexed single storey
Bahru, Johor Darul Takzim, Malaysia warehouse building which
is currently vacant.
No. 7, Jalan Firma 3/1, Lot PLO 255,
Kawasan Perindustrian Tebrau IV,
81200 Johor Bahru, Johor Darul
Takzim, Malaysia

Freehold
38. MRAD Freehold agriculture land N/A N/A/ N/A 154,487,847
together with oil palm 71.44 Ha
Title No. GRN 57532 of Mukim cultivation.
Pulau Sebang, District of Alor Gajah,
Melaka, Malaysia

Lot 16277, Mukim Pulau Sebang, Alor

Gajah, Melaka, Malaysia

Freehold

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SECTION 6 O T H E R I N F O R M AT I O N

LIST OF PROPERTIES

PROPERTIES OWNED BY OUR GROUP (CONTINUED)

The details of lands and buildings owned by us are set out below (continued):

Notes:

1) These industrial lands are occupied by third parties.

2) Excluding buildings and fixtures on the land.

3) Malakoff is the registered proprietor of 37 parcels of land (“Windsor Lands”) which are collectively known as the Windsor Estate. The
Windsor Estate is currently managed by Tradewinds Plantech Sdn Bhd (commencing from 1 June 2020 until 31 May 2021 via letter
of award for the provision of palm oil plantation, operation and management services dated 1 June 2020). Among the 37 parcels of
Windsor Lands, the following 34 parcels of the said lands are used as agricultural land for commercial planting - oil palm, which are
consistent with the express conditions in their respective issue document of title:

No Land titles no
GM 297 Lot 4615, GM 7229 Lot 4309, GRN 49012 Lot 5408, GRN 53898 Lot 5538, GRN 53899 Lot 5539, GRN 59198
Lot 2665, GRN 59203 Lot 446, GRN 66379 Lot 4136 and GRN 66619 Lot 2790

i. All lands are located at Mukim of Batu Kurau, Districts of Larut and Matang, Perak Darul Ridzuan, Malaysia
No Land titles no
GM 445 Lot 315, GM 446 Lot 332, GM 448 Lot 317, GM 451 Lot 316, GM 454 Lot 364, GM 459 Lot 359, GM 460 Lot
361, GM 507 Lot 421, GM 511 Lot 437, GM 512 Lot 440, GM 516 Lot 473, GM 517 Lot 474, GM 518 Lot 475, GM 519
Lot 476, GM 520 Lot 477, GM 521 Lot 480, GM 522 Lot 481, GM 523 Lot 490, GM 549 Lot 629, GRN 45878 Lot 462,
GRN 45879 Lot 690, GRN 45880 Lot 691, GRN 60574 Lot 504, GRN 62453 Lot 502 and GRN 65982 Lot 408

ii. All lands are located at Mukim of Kamunting, Districts of Larut and Matang, Perak Darul Ridzuan, Malaysia

Pursuant to a letter dated 18 December 2013 issued by Pejabat Pengarah Tanah dan Galian Negeri Perak to Pejabat Daerah dan
Tanah Larut, Matang dan Selama, the remaining three parcels of Windsor Lands are subject to Government compulsory acquisition
(“Said Windsor Lands”). The Said Windsor Lands are currently pending completion of Government compulsory acquisition. As
such, the express condition of the Said Windsor Lands has yet to be reflected in their respective issue document of title to reflect
the existing use of the Said Windsor Lands. Further details of the Said Windsor Lands are as follows:

No Land titles no. Description of property/Existing express condition

GRN 49011 Lot 5407 and GRN 59202 Lot 2825

Both lands are located at Mukim of Batu Kurau, Districts of

i. Larut and Matang, Perak Darul Ridzuan, Malaysia Agricultural land for agricultural purposes
GRN 48916 Lot 505, Mukim of Kamunting, District of Larut
ii. and Matang, Perak Darul Ridzuan, Malaysia Agricultural land for commercial planting - rubber

4) Pursuant to the sale and purchase agreements dated 3 December 1999 and 21 June 2005 between Kuala Lumpur Sentral Sdn Bhd
and Malakoff, respectively, the parcels identified above are held under the master title GRN 46226, Lot 78 Section 0070, Town of
Kuala Lumpur and currently pending issuance of strata titles.

5) The audited NBV as at 31 December 2020 of the properties under item no. 6 to item no. 8 is RM1,797,000. The respective properties
were not audited on an individual basis.

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O T H E R I N F O R M AT I O N SECTION 6

LIST OF PROPERTIES

PROPERTIES OWNED BY OUR GROUP (CONTINUED)

The details of lands and buildings owned by us are set out below (continued):

Notes (continued):

6) The audited NBV as at 31 December 2020 of the properties under item no. 9 to item no. 19 is RM12,896,000. The respective
properties were not audited on an individual basis.

7) Pursuant to the sale and purchase agreement dated 17 December 1996 between Kuala Lumpur Sentral Sdn Bhd and TJSB, the
parcel identified above is held under the master title GRN 46226, Lot 78 Section 0070, Town of Kuala Lumpur and currently pending
issuance of strata titles.

8) The audited NBV as at 31 December 2020 of the properties under item no. 22 to item no. 25 is RM728,084. The respective
properties were not audited on an individual basis.

9) Pursuant to the sale and purchase agreement dated 14 April 2005 between Kuala Lumpur Sentral Sdn Bhd and M Utilities, the
parcels identified above are held under the master title GRN 46226, Lot 78 Section 0070, Town of Kuala Lumpur and currently
pending issuance of strata titles.

10) The audited NBV of the property under item no. 26 as at 31 December 2020 is RM1, as the cost of the land was charged out as part
of our project expense.

11) The NBV of the property under item no. 27 as at 31 December 2020 is RM670,928. The land recognised as part of Jetty asset and
were not audited on an individual basis.

12) The NBV of the property under item no. 28 as at 31 December 2020 is RM360,500. The land recognised as part of Jetty asset and
were not audited on an individual basis.

None of the properties disclosed above are in breach of any land use conditions and/or are in non-compliance with current statutory
requirements, land rules or building regulations which will have a material adverse impact on our operations or the utilisation of our
assets on the said properties. No valuations have been conducted on any of the properties disclosed above.

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SECTION 6 O T H E R I N F O R M AT I O N

LIST OF PROPERTIES

PROPERTIES LEASED/TENANTED BY OUR GROUP

The details of material properties leased/tenanted by us are set out below:

Approximate
Name of lessor/lessee or landlord/ age of Built-up
tenant or grantor/grantee/Lot. no./ Description of property/ buildings area/Land Tenure/Date of Rental
No Postal address Existing use (years) area expiry RM

1. TNB (as lessor)/PPSB (as lessee) Industrial land for power 18 6,954 sq A lease for a Lump sum
station/The land is currently metre/ period of 24 payment of
HSD 50349 PT 10, Bandar Prai, used for the Prai Power 46.168 years, expiring 16,000,000
District of Seberang Perai Tengah, Plant complex which acres on 7 November
Pulau Pinang, Malaysia includes turbine building, 2024
demineralisation plant,
Prai Power Plant, Prai Power chemical lab, pump room,
Station, Jalan Perusahaan, 13600 chlorination room, guard
Prai, Pulau Pinang, Malaysia house, hydrogen cylinder
store, H-boiler pump power
station, fuel gas station,
fuel oil pump house, foam
station, programmable
logic controller, building
and electric fuel gas,
inflammable material store,
administration building
and sheds. Land of
approximately 2,088.706
sq metre is sub-leased
to PETRONAS Energy &
Gas Trading Sdn Bhd as
per Sub Lease Agreement
dated 5 July 2006.
2. Seaport (as lessor)/TBP (as lessee) Industrial land for heavy 15 238,716 A lease for a Refer to note (1)
industries of power station sq metre/ period of 45
HSD 11438 PTD 1859, Mukim of only/The land is currently 69.963 years, expiring
Serkat, District of Pontian, Johor used for the Tanjung Bin Ha on 31 January
Darul Takzim, Malaysia Power Plant complex and 2048
other related purpose.
Tanjung Bin Power Plant, Lot 1769
& Lot 1770, Tanjung Bin, Serkat
82030 Pontian, Johor Darul Takzim,
Malaysia
3. Seaport (as lessor)/TBP (as lessee) Building land for coal ash 15 N/A/ A lease for a Refer to note (1)
disposal pond/Vacant land 156.533 period of 45
HSD 10927 PTD 1773, Mukim of with mudflat area. Ha years, expiring
Serkat, District of Pontian, Johor on 31 January
Darul Takzim, Malaysia 2048

Tanjung Bin Power Plant, Lot 1769

& Lot 1770, Tanjung Bin, Serkat
82030 Pontian, Johor Darul Takzim,
Malaysia

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O T H E R I N F O R M AT I O N SECTION 6

LIST OF PROPERTIES

PROPERTIES LEASED/TENANTED BY OUR GROUP (CONTINUED)

The details of material properties leased/tenanted by us are set out below (continued):

Approximate
Name of lessor/lessee or landlord/ age of Built-up
tenant or grantor/grantee/Lot. no./ Description of property/ buildings area/Land Tenure/Date of Rental
No Postal address Existing use (years) area expiry RM

4. Seaport (as lessor)/TBP (as lessee) Commercial or industrial 15 N/A/ A lease for a Refer to note (1)
land for permanent jetty 1.730 Ha period of 45
HSD 10924 PTD 1771, Mukim of and any structure related years, expiring
Serkat, District of Pontian, Johor thereto/The land is currently on 31 January
Darul Takzim, Malaysia erected with a permanent 2048
jetty and the structures
Tanjung Bin Power Plant, Lot 1769 related thereto including
& Lot 1770, Tanjung Bin, Serkat conveyor belt and coal
82030 Pontian, Johor Darul Takzim, unloaders.
Malaysia
5. Seaport (as lessor)/TBP (as lessee) Industrial land for coal ash 15 N/A/ A lease for a Refer to note (1)
disposal pond/The land is 91.024 period of 45
HSD 13031 PTD 2098, Mukim of currently used as ash pond Ha years, expiring
Serkat, District of Pontian, Johor for the Tanjung Bin Power on 31 January
Darul Takzim, Malaysia Plant. 2048

Tanjung Bin Power Plant, Lot 1769

& Lot 1770, Tanjung Bin, Serkat
82030 Pontian, Johor Darul Takzim,
Malaysia
6. Seaport (as lessor)/TBP (as lessee) Industrial land for coal ash 15 N/A/ A lease for a Refer to note (1)
disposal pond/The land is 0.597 Ha period of 45
HSD 13032 PTD 2099, Mukim of currently used as ash pond years, expiring
Serkat, District of Pontian, Johor for the Tanjung Bin Power on 31 January
Darul Takzim, Malaysia Plant. 2048

Tanjung Bin Power Plant, Lot 1769

& Lot 1770, Tanjung Bin, Serkat
82030 Pontian, Johor Darul Takzim,
Malaysia
7. Seaport (as lessor)/TBE (as lessee) Industrial land for power 5 N/A/ A lease for a Refer to note (1)
station and other related 8.118 Ha period of 45 plus a nominal
HSD 13028 PTD 2095, Mukim of purposes only/The land years, expiring value of 10
Serkat, District of Pontian, Johor is currently used for the on 31 January
Darul Takzim, Malaysia Tanjung Bin Energy Power 2048
Plant.
Tanjung Bin Energy T4, Tanjung Refer to note (2)
Bin, Serkat 82030 Pontian, Johor
Darul Takzim, Malaysia
8. Seaport (as lessor)/TBE (as lessee) Industrial land for coal yard/ 5 N/A/ A lease for a Refer to note (1)
The land is currently used 21.996 period of 45 plus a nominal
HSD 13029 PTD 2096, Mukim of for the coal yard of the Ha years, expiring value of
Serkat, District of Pontian, Johor Tanjung Bin Energy Power on 31 January 10
Darul Takzim, Malaysia Plant 2048

Tanjung Bin Energy T4, Tanjung Refer to note (2)

Bin, Serkat 82030 Pontian, Johor
Darul Takzim, Malaysia

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SECTION 6 O T H E R I N F O R M AT I O N

LIST OF PROPERTIES

PROPERTIES LEASED/TENANTED BY OUR GROUP (CONTINUED)

The details of material properties leased/tenanted by us are set out below (continued):

Approximate
Name of lessor/lessee or landlord/ age of Built-up
tenant or grantor/grantee/Lot. no./ Description of property/ buildings area/Land Tenure/Date of Rental
No Postal address Existing use (years) area expiry RM

9. SWW (as lessor)/TBE (as lessee) Industrial land for the 5 N/A/ A lease Nil
petrochemical centre and 0.444 Ha commencing
HSD 13393 PTD 2150, Mukim of the maritime industry/The from 7 March Refer to note (3)
Serkat, District of Pontian, Johor land will be used for any 2012 to the day
Darul Takzim, Malaysia other contingency to the before 21 March
Tanjung Bin Energy Power 2041.
Tanjung Bin Energy T4, Tanjung Bin, Plant.
Serkat 82030 Pontian, Johor Darul Refer to note (3)
Takzim, Malaysia
10. Lembaga Tabung Haji (as landlord)/ Seven office units each 19 7,854 sq Period of 464,965
Malakoff (as tenant) on the 7th, 8th, 10th, 11th, metre/ tenancy from 1 per month
12th and 13th floor of a N/A July 2018 until (up to March
Part of GRN 46226, Lot 78 Section commercial building/ 30 June 2021 2020)
0070, Town of Kuala Lumpur, Level Currently used as office
7 to Level 13, Building no. 4, Plaza space by Malakoff. 398,541
Sentral, Brickfields, Kuala Lumpur, per month
Malaysia (from April 2020)

Level 7 to Level 13, Block 4, Plaza

Sentral, Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia
11. Lembaga Tabung Haji (as landlord)/ The ground level of a 19 349 sq Period of 35,720
M Utilities (as tenant) commercial building/ metre/ tenancy from 1 per month
Currently used as office N/A July 2018 until
Part of GRN 46226, Lot 78 Section space and as a Customer 30 June 2021
0070, Town of Kuala Lumpur, Service Center by
Level Ground, Building no. 4, Plaza M Utilities.
Sentral, Brickfields, Kuala Lumpur,
Malaysia

Suite 4-G-A, Ground Floor, Block 4,

Plaza Sentral, Jalan Stesen Sentral 5,
50470 Kuala Lumpur, Malaysia

Notes:

1) Pursuant to the lease agreement dated 18 February 2003 and its supplemental agreements dated 1 October 2003 and 19 August
2014, respectively, between Seaport and TBP, the total rental of the lease for all four lots (and a parcel of land held under PTD 1858,
which has been transferred to and registered with TNB in 2006 pursuant to the terms of the TBP PPA and is currently erected with
a switchyard used for the Tanjung Bin Power Plant) is RM102,050,000 and has been paid by TBP in the manner as set out in the
said agreements, with the final payment made on 14 March 2005 (i.e. prior to the registration of the lease). A portion of land title no.
HSD 11438 PTD 1859 is sub-leased to TBE pursuant to a sub-lease agreement dated 29 February 2012 between TBP and TBE.

2) A presentation for registration of lease in favour of TBE and creation of charge over the lease in favour of TBE’s financing parties for
Lot PTD 2095 and PTD 2096 have been made to the Johor Land Office on 11 February 2015. The issuance of the new document of
titles to TBE have completed on 12 March 2015.

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LIST OF PROPERTIES

PROPERTIES LEASED/TENANTED BY OUR GROUP (CONTINUED)

The details of material properties leased/tenanted by us are set out below (continued):

Notes (continued):

3) Pursuant to the land lease agreement entered into between TBE and SWW dated 6 January 2016, a presentation for registration of
lease in favour of TBE and creation of charge over the lease in favour of TBE’s financing parties for Lot PTD 2150 have been made
to the Johor Land Office on 16 February 2016. The issuance of new document of title to TBE has completed on 16 March 2016. The
consideration for the lease of RM1,194,794 has been paid by TBE to SWW.

Save as disclosed above, where an application has been made to change the conditions of the land use, none of the properties disclosed
above are in breach of any land use conditions and/or are in non-compliance with current statutory requirements, land rules or building
regulations which will have a material adverse impact on our operations or the utilisation of our assets on the said properties.

MATERIAL EQUIPMENT
The material plants and equipment used by our operations are set out below:

Audited NBV as at
Description 31 December 2020
RM’000
The building, plant and machinery of the SEV Power Plant 973,391
The building, plant and machinery of the GB3 Power Plant 294,155
The building, plant and machinery of the Prai Power Plant 285,453
The building, plant and machinery of the TBP Power Plant 4,356,592
The building, plant and machinery of the Port Dickson Power Plant 65,0001
The building, plant and machinery of the TBE Power Plant 5,474,920
Total 11,449,511

Note 1: The amount is classified as asset held for sale in the financial statements.

Save for PD Power, the material equipment of the respective IPPs have been secured under the financing facilities taken up by the
respective IPPs for purposes of the relevant construction of power plant. The financing facilities taken up by SEV, PPSB and GB3 in
relation to construction of the SEV, PPSB and GB3 power plants have been fully repaid.

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SHARE PRICE MOVEMENT AND FINANCIAL CALENDAR

MALAKOFF SHARE PRICE MOVEMENT 2020 Average Share Price Volume Traded

Share Price Volume Traded

(RM/Share) (Million)

1.0
120

0.8 100

80
0.6

60

0.4

40

0.2
20

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020

Highest Share Price (RM/Share) 0.88 0.90 0.88 0.89 0.89 0.95 1.00 1.00 1.00 0.95 0.95 0.91
Lowest Share Price (RM/Share) 0.82 0.82 0.66 0.81 0.82 0.86 0.92 0.94 0.95 0.90 0.90 0.89
Average Share Price (RM/Share) 0.86 0.87 0.78 0.86 0.86 0.89 0.96 0.97 0.98 0.92 0.92 0.90
Volume Traded (Million) 25.3 51.9 65.3 29.6 69.0 94.0 62.0 40.2 34.0 38.1 25.5 38.3

FINANCIAL CALENDAR 2020

Quarterly Results Annual General Meeting

19 February 2020 23 March 2020
Announcement of the unaudited consolidated results for the Notice of the Fourteenth Annual General Meeting.
4th quarter ended 31 December 2019. 6 May 2020
20 May 2020 Notice of postponement of the Fourteenth Annual General
Announcement of the unaudited consolidated results for the Meeting and to be held via Virtual Meeting.
1st quarter ended 31 March 2020. 9 June 2020
18 August 2020 Fourteenth Annual General Meeting via Virtual Meeting.
Announcement of the unaudited consolidated results for the Dividends
2nd quarter ended 30 June 2020.
12 June 2020
24 November 2020 Payment of single tier final dividend of 4.11 sen per ordinary
Announcement of the unaudited consolidated results for the share for the financial year ended 31 December 2019.
3rd quarter ended 30 September 2020.
16 October 2020
Annual Audited Accounts Payment of single tier interim dividend of 2.80 sen per ordinary
24 March 2020 shares for the financial year ended 31 December 2020
Announcement of the Annual Audited Accounts for the financial year
ended 31 December 2019 and issuance of Annual Report 2019.

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SHAREHOLDINGS STATISTICS
AS AT 22 FEBRUARY 2021

Class of Securities : Ordinary shares

Issued and Paid-up Share Capital : RM500,000,000 with total number of issued shares of 5,000,000,000 ordinary shares (Inclusive
of treasury shares of 113,038,700)
Voting Rights : One vote per ordinary share
Number of Shareholders : 18,744

ANALYSIS OF SHAREHOLDINGS

No. of % of No. of % of Issued

Size of Shareholdings Shareholders Shareholders Shares Share Capital

Less than 100 214 1.14 2,249 0.00

100 to 1,000 2,993 15.97 1,729,085 0.04
1,001 to 10,000 9,368 49.98 49,567,860 1.01
10,001 to 100,000 5,387 28.74 170,302,001 3.48
100,001 to less than 5% of issued shares 776 4.14 895,040,588 18.31
5% and above of issued shares 6 0.03 3,770,319,517 77.16
TOTAL 18,744 100.00 4,886,961,300* 100.00

* Excluding treasury shares of 113,038,700

DIRECTORS’ INTERESTS AS PER THE REGISTER OF DIRECTORS’ SHAREHOLDINGS

Directors’ Interest in the Company

Direct Indirect
Name No. of shares % No. of shares %

Datuk Haji Hasni Harun - - - -

Anwar Syahrin Abdul Ajib - - - -
Dato’ Sri Che Khalib Mohamad Noh 420,000 0.01 - -
Datuk Ooi Teik Huat 420,000 0.01 - -
Datuk Idris Abdullah - - - -
Datuk Dr Syed Muhamad Syed Abdul Kadir 150,000 0.00 - -
Cindy Tan Ler Chin - - - -
Datuk Rozimi Remeli - - - -

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SHAREHOLDINGS STATISTICS
AS AT 22 FEBRUARY 2021

Substantial Shareholders according to the Register of Substantial Shareholders

Direct Indirect
No. Name No. of shares % No. of shares %

1 Anglo-Oriental (Annuities) Sdn Bhd (“AOA”) (1) 981,341,460 20.08 - -

2 MMC Corporation Berhad (“MMC”) 897,695,630 18.37 981,341,460 (2) 20.08
3 Employees Provident Fund Board (3) 631,642,133 12.93 - -
4 Urusharta Jamaah Sdn Bhd (4)
499,498,760 10.22 - -
5 Kumpulan Wang Persaraan (Diperbadankan) (5) 446,629,634 9.14 - -
6 Amanah Saham Bumiputera (6)
313,511,900 6.42 - -
7 Seaport Terminal (Johore) Sdn Bhd (“Seaport”) (7)
- - 1,879,037,090 38.45
8 Indra Cita Sdn Bhd (“ICSB”) (8) - - 1,879,037,090 38.45
9 Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed Nor (9)
- - 1,879,037,090 38.45

Notes:

(1)
Of which 200,957,230 shares held through its own account and 780,384,230 shares held through Bank Muamalat Malaysia Berhad.

(2)
Deemed interested in 981,341,460 shares held by AOA in Malakoff by virtue of its 100% direct shareholding in AOA.

(3)
Of which 631,642,133 shares held through Citigroup Nominees (Tempatan) Sdn. Bhd.

(4)
Of which 499,498,760 shares held through Citigroup Nominees (Tempatan) Sdn. Bhd.

(5)
Of which 421,916,534 shares held through its own account and 24,713,100 shares held through various Citigroup Nominees (Tempatan)
Sdn Bhd CDS accounts.

(6)
Of which 313,511,900 shares held through Amanahraya Trustees Berhad.

(7)
Deemed interested by virtue of its direct major shareholdings in MMC.

(8)
Deemed interested through Seaport.

(9)
Deemed interested through ICSB.

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SHAREHOLDINGS STATISTICS
AS AT 22 FEBRUARY 2021

30 Largest Shareholders

No. of % of Issued
No. Name of Shareholders Shares Share Capital

1 MMC CORPORATION BERHAD 897,695,630 18.37

2 BANK MUAMALAT MALAYSIA BERHAD 780,384,230 15.97
PLEDGED SECURITIES ACCOUNT FOR ANGLO-ORIENTAL (ANNUITIES) SDN BHD
3 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 617,284,533 12.63
EMPLOYEES PROVIDENT FUND BOARD
4 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 499,162,760 10.21
URUSHARTA JAMAAH SDN. BHD. (1)
5 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 421,916,534 8.63
6 AMANAHRAYA TRUSTEES BERHAD 313,511,900 6.42
AMANAH SAHAM BUMIPUTERA
7 ANGLO-ORIENTAL (ANNUITIES) SDN BHD 200,957,230 4.11
8 AMANAHRAYA TRUSTEES BERHAD 111,235,600 2.28
AMANAH SAHAM MALAYSIA 2 - WAWASAN
9 AMANAHRAYA TRUSTEES BERHAD 73,977,500 1.51
AMANAH SAHAM MALAYSIA
10 LEMBAGA TABUNG HAJI 65,331,300 1.34
11 HSBC NOMINEES (ASING) SDN BHD 34,052,900 0.70
JPMCB NA FOR VANGUARD EMERGING MARKETS STOCK INDEX FUND
12 CARTABAN NOMINEES (TEMPATAN) SDN BHD 31,681,300 0.65
PAMB FOR PRULINK EQUITY FUND
13 HSBC NOMINEES (ASING) SDN BHD 28,687,413 0.59
JPMCB NA FOR VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND
14 AMANAHRAYA TRUSTEES BERHAD 26,261,800 0.54
AMANAH SAHAM BUMIPUTERA 2
15 AMANAHRAYA TRUSTEES BERHAD 24,567,400 0.50
AMANAH SAHAM BUMIPUTERA 3 – DIDIK
16 AMANAHRAYA TRUSTEES BERHAD 20,473,600 0.42
AMANAH SAHAM MALAYSIA 3
17 MAYBANK NOMINEES (TEMPATAN) SDN BHD 19,741,100 0.40
MTRUSTEE BERHAD FOR PRINCIPAL DALI EQUITY GROWTH FUND (UT-CIMB-
DALI) (419455)
18 SERAIMAS BINA SDN. BHD. 14,753,300 0.30
19 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 14,357,600 0.29
EMPLOYEES PROVIDENT FUND BOARD (AMUNDI)
20 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 11,361,600 0.23
GREAT EASTERN TAKAFUL BERHAD (CREDIT TAKAFUL PIA)
21 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 10,994,100 0.22
KUMPULAN WANG PERSARAAN (DIPERBADANKAN) (PRINCIPAL EQITS)
22 CARTABAN NOMINEES (ASING) SDN BHD 10,224,200 0.21
SSBT FUND 64DY FOR INTERNATIONAL SMALL CAP PORTFOLIO (BERNSTEIN FUND)

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SHAREHOLDINGS STATISTICS
AS AT 22 FEBRUARY 2021

30 Largest Shareholders (continued)

No. of % of Issued
No. Name of Shareholders Shares Share Capital

23 MAYBANK NOMINEES (TEMPATAN) SDN BHD 9,000,000 0.18

NATIONAL TRUST FUND (IFM MAYBANK) (412183)
24 HSBC NOMINEES (ASING) SDN BHD 8,681,200 0.18
JPMCB NA FOR VANGUARD FIDUCIARY TRUST COMPANY INSTITUTIONAL TOTAL
INTERNATIONAL STOCK MARKET INDEX TRUST II
25 DB (MALAYSIA) NOMINEE (ASING) SDN BHD 8,433,300 0.17
SSBT FUND WTAS FOR WISDOMTREE EMERGING MARKETS HIGH DIVIDENDFUND
26 CITIGROUP NOMINEES (ASING) SDN BHD 8,196,284 0.17
CBNY FOR EMERGING MARKET CORE EQUITY PORTFOLIO DFA INVESTMENT
DIMENSIONS GROUP INC
27 WENDY LAU SIE SIE 8,000,000 0.16
28 AMANAHRAYA TRUSTEES BERHAD 6,903,400 0.14
ASN IMBANG (MIXED ASSET BALANCED) 1
29 DB (MALAYSIA) NOMINEE (ASING) SDN BHD 6,667,400 0.14
SSBT FUND TCTD FOR CALIFORNIA STATE TEACHERS RETIREMENT SYSTEM
30 DB (MALAYSIA) NOMINEE (ASING) SDN BHD 6,631,900 0.14
THE BANK OF NEW YORK MELLON FOR VANGUARD FTSE ALL-WORLD EX-US SMALL-
CAP INDEX FUND
TOTAL 4,291,127,014 87.80

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GRI CONTENT INDEX

GRI Standard Disclosure Page number(s) and/or URL(s)

GRI 101: Foundation 2016
General Disclosures

GRI 102: General Organizational profile

Disclosures 2016 102-1 Name of the organisation Cover page Annual Report FY2020
102-2 Activities, brands, products, and services We Are Malakoff (page 2-3)
102-3 Location of headquarters Corporate Information (page 8)
102-4 Location of operations Domestic and International Footprint (page 4-5)
102-5 Ownership and legal form Corporate Structure (page 6-7)
102-6 Markets served We Are Malakoff (page 3-5)
102-7 Scale of the organisation Corporate Structure (page 6-7)
102-8 Information on employees and other Sustainability Statement: Social (page 55-56)
workers
102-9 Supply chain AR2020 excludes supply chain disclosures till
102-10 Significant changes to the organisation more accurate and meaningful data can be
and its supply chain collected
102-11 Precautionary Principle or approach Sustainability Statement (page 39-48)
102-12 External initiatives About This Report
102-13 Membership of associations Corporate Information (page 8)
Strategy
102-14 Statement from senior decision-maker Management Discussion & Analysis (page 16-37),
MD/CEO’s Message (page 38-39)
102-15 Key impacts, risks, and opportunities Management Discussion & Analysis (page 16-37),
MD/CEO’s Message (page 38-39)
Ethics and integrity
102-16 Values, principles, standards, and norms Sustainability Statement (page 45)
of behavior
102-17 Mechanisms for advice and concerns Sustainability Statement (page 45)
about ethics
Governance
102-18 Governance structure Sustainability Governance Structure (page 39-40)
102-19 Delegating authority Sustainability Governance Structure (page 39-40)
102-20 Executive-level responsibility for Sustainability Governance Structure (page 39-40)
economic, environmental, and social
topics
102-21 Consulting stakeholders on economic, Stakeholder Engagement (page 41)
environmental, and social topics
102-22 Composition of the highest governance Corporate Information (page 8)
body and its committees
102-23 Chair of the highest governance body Board of Directors’ Profile (page 66-69)
102-24 Nominating and selecting the highest Corporate Governance Overview Statement
governance body (page 77-91)

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GRI CONTENT INDEX

GRI Standard Disclosure Page number(s) and/or URL(s)

GRI 101: Foundation 2016 (continued)
General Disclosures (continued)

GRI 102: General Organizational profile (continued)

Disclosures 2016 102-26 Role of highest governance body in Corporate Governance Overview Statement
(continued) setting purpose, values, and strategy (page 77-91)
102-27 Collective knowledge of highest Board of Directors’ Profile (page 66-69)
governance body
102-28 Evaluating the highest governance body’s Corporate Governance Overview Statement
performance (page 77-91)
102-29 Identifying and managing economic, Sustainability Statement: Materiality (page 42)
environmental, and social impacts
102-30 Effectiveness of risk management Statement of Risk Management and Internal
processes Control (page 97-100)
102-31 Review of economic, environmental, and Sustainability Statement: Materiality (page 42)
social topics
102-32 Highest governance body’s role in Sustainability Governance Structure (page 40)
sustainability reporting
102-33 Communicating critical concerns Sustainability Statement: Materiality (page 42)
102-34 Nature and total number of critical Sustainability Statement: Materiality (page 42)
concerns
102-35 Remuneration policies Corporate Governance Overview Statement:
BNRC (page 83-85)
102-36 Process for determining remuneration Corporate Governance Overview Statement:
BNRC (page 83-85)
102-37 Stakeholders involvement in remuneration Corporate Governance Overview Statement:
BNRC (page 83-85)
102-38 Annual total compensation ratio Corporate Governance Overview Statement:
BNRC (page 83-85)
102-39 Percentage increase in annual total Corporate Governance Overview Statement:
compensation ratio BNRC (page 83-85)
Stakeholder engagement
102-40 List of stakeholder groups Stakeholder Engagement (page 41)
102-41 Collective bargaining agreements Sustainability Statement: Human Rights (page 65)
102-42 Identifying and selecting stakeholders Stakeholder Engagement (page 41)
102-43 Approach to stakeholder engagement Stakeholder Engagement (page 41)
102-44 Key topics and concerns raised Stakeholder Engagement (page 41)
Reporting practice
102-45 Entities included in the consolidated Financial Statements (page 105-263)
financial statements
102-46 Defining report content and topic About This Report
Boundaries
102-47 List of material topics Sustainability Statement: Materiality (page 42)
102-48 Restatements of information Stakeholder Engagement (page 41)

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GRI CONTENT INDEX

GRI Standard Disclosure Page number(s) and/or URL(s)

GRI 101: Foundation 2016 (continued)
General Disclosures (continued)

GRI 102: General Reporting practice (continued)

Disclosures 2016 102-49 Changes in reporting Sustainability Governance (page 40)
(continued)
102-50 Reporting period About This Report
102-51 Date of most recent report About This Report
102-52 Reporting cycle About This Report
102-53 Contact point for questions regarding About This Report
the report
102-54 Claims of reporting in accordance with About This Report
the GRI Standards Sustainability Governance (page 40)
102-55 GRI content index Sustainability Statement: GRI Content Index Table
(page 285-291)
102-56 External assurance About This Report

Material Topics
GRI 200 Economic Standard Series

Economic Performance
GRI 103: Management 103-1 Explanation of the material topic and its Sustainability: Economic (page 43-48)
Approach 2016 Boundary
103-2 The management approach and its Sustainability: Economic (page 43-48)
components
103-3 Evaluation of the management approach Sustainability: Economic (page 43-48)
GRI 201: Economic 201-1 Direct economic value generated and Management Discussion and Analysis (page 16-37)
Performance 2016 distributed Sustainability: Security of Supply & Plant Security
(page 45), Strategic Business Development (page
46), Business Process Improvement (page 46),
Lean Six Sigma (page 47), Green 5S (page 47),
Operational Excellence (page 47), Renewable
Energy (page 48)
201-2 Financial implications and other risks and Chairman’s Statement (page 12-15) and
opportunities due to climate change Sustainability Statement: Renewable Energy (page
48), Environmental (page 49)
Market Presence
GRI 103: Management 103-1 Explanation of the material topic and its Management Discussion and Analysis
Approach 2016 Boundary (page 16-37)
103-2 The management approach and its Management Discussion and Analysis
components (page 16-37)
103-3 Evaluation of the management approach Management Discussion and Analysis
(page 16-37)

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GRI CONTENT INDEX

GRI Standard Disclosure Page number(s) and/or URL(s)

Material Topics (continued)
GRI 200 Economic Standard Series (continued)

Indirect Economic Impacts

GRI 103: Management 103-1 Explanation of the material topic and its Sustainability: Social (page 54-65)
Approach 2016 Boundary
103-2 The management approach and its Sustainability: Social (page 54-65)
components
103-3 Evaluation of the management approach Sustainability: Social (page 54-65)
GRI 203: Indirect 203-1 Infrastructure investments and services Economic: Security of Supply and Plant Security
Economic Impacts 2016 supported (page 45), Information Security (page 46)
Sustainability: Social (page 63-64)
203-2 Significant indirect economic impacts Sustainability: Social (page 63-65)
Procurement Practices
GRI 103: Management 103-1 Explanation of the material topic and its Social: Responsible Subcontracting &
Approach 2016 Boundary Procurement (page 65)
103-2 The management approach and its Social: Responsible Subcontracting &
components Procurement (page 65)
103-3 Evaluation of the management approach Social: Responsible Subcontracting &
Procurement (page 65)
GRI 204: Procurement 204-1 Proportion of spending on local suppliers Social: Responsible Subcontracting &
Practices Procurement (page 65)
Anti-corruption
GRI 103: Management 103-1 Explanation of the material topic and its Economic: Anti-Bribery Compliance (page 45)
Approach 2016 Boundary
103-2 The management approach and its Economic: Anti-Bribery Compliance (page 45)
components
103-3 Evaluation of the management approach Economic: Anti-Bribery Compliance (page 45)
GRI 205: Anti-corruption 205-2 Communication and training about anti- Economic: Anti-Bribery Compliance (page 45)
2016 corruption policies and procedures
205-3 Confirmed incidents of corruption and Economic: Whistle-Blowing Policy (page 45)
actions taken

GRI 300 Environmental Standards Series

Materials
GRI 103: Management 103-1 Explanation of the material topic and its Enviromentental: Energy Consumption and
Approach 2016 Boundary Efficiency (page 50-51)
103-2 The management approach and its Enviromentental: Energy Consumption and
components Efficiency (page 50-51)
103-3 Evaluation of the management approach Enviromentental: Energy Consumption and
Efficiency (page 50-51)
GRI 301: Materials 2016 301-1 Materials used by weight or volume Enviromentental: Energy Consumption and
Efficiency (page 50-51)
301-2 Recycled input materials used Enviromentental: Waste Management (page 53)

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GRI CONTENT INDEX

GRI Standard Disclosure Page number(s) and/or URL(s)

GRI 300 Environmental Standards Series (continued)

Energy
GRI 103: Management 103-1 Explanation of the material topic and its Environmental: Energy Consumption and Efficiency
Approach 2016 Boundary (page 50-51)
103-2 The management approach and its Environmental: Energy Consumption and Efficiency
components (page 50-51)
103-3 Evaluation of the management approach Environmental: Energy Consumption and Efficiency
(page 50-51)
GRI 302: Energy 2016 302-1 Energy consumption within the Environmental: Energy Consumption and Efficiency
organization (page 50-51), Alam Flora (page 63)
302-4 Reduction of energy consumption Environmental: Energy Consumption and Efficiency
(page 50-51)
Water
GRI 103: Management 103-1 Explanation of the material topic and its Environmental: Water Use Impact (page 52)
Approach 2016 Boundary
103-2 The management approach and its Environmental: Water Use Impact (page 52)
components
103-3 Evaluation of the management approach Environmental: Water Use Impact (page 52)
GRI 303: Water 2016 303-1 Water withdrawal by source Environmental: Water Use Impact (page 52)
303-3 Water recycled and reused Environmental: Water Use Impact (page 52)
Emissions
GRI 103: Management 103-1 Explanation of the material topic and its Environmental: Emissions Management (page 50)
Approach 2016 Boundary
103-2 The management approach and its Environmental: Emissions Management (page 50)
components
103-3 Evaluation of the management approach Environmental: Emissions Management (page 50)
GRI 305: Emissions 2016 305-2 Energy indirect GHG emission Environmental: Emissions Management (page 50)
305-5 Reduction of GHG emissions Environmental: Emissions Management (page 50)
Effluents and Waste
GRI 103: Management 103-1 Explanation of the material topic and its Environmental: Waste Management (page 53)
Approach 2016 Boundary
103-2 The management approach and its Environmental: Waste Management (page 53)
components
103-3 Evaluation of the management approach Environmental: Waste Management (page 53)
GRI 306: Effluents and 306-2 Waste by type and disposal method Environmental: Waste Management (page 53), Alam
Waste 2016 Flora (page 63)
Environmental Compliance
GRI 103: Management 103-1 Explanation of the material topic and its Economic: Regulatory Compliance (page 43)
Approach 2016 Boundary
103-2 The management approach and its Economic: Regulatory Compliance (page 43)
components
103-3 Evaluation of the management approach Economic: Regulatory Compliance (page 43)
GRI 307: Environmental 307-1 Non-compliance with environmental laws Economic: Regulatory Compliance (page 43)
Compliance 2016 and regulations Compliance with New Environmental Quality (“CAR
2014”) (page 44), Sustainability: Environmental
(page 49)

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GRI CONTENT INDEX

GRI Standard Disclosure Page number(s) and/or URL(s)

GRI 400 Social Standards Series

Employment
GRI 103: Management 103-1 Explanation of the material topic and its Sustainability: Social (page 54-60)
Approach 2016 Boundary
103-2 The management approach and its Sustainability: Social (page 54-60)
components
103-3 Evaluation of the management approach Sustainability: Social (page 54-60)
GRI 401: Employment 401-1 New employee hires and employee Social: Diversity and Equal Opportunities
2016 turnover (page 55)
401-2 Benefits provided to full-time employees Social: Employee Welfare (page 57, 59)
that are not provided to temporary or
part-time employees
401-3 Parental leave Social: Leave Benefits (page 59)
Labor/Management Relations
GRI 103: Management 103-1 Explanation of the material topic and its Social: Employee Welfare (page 57-58)
Approach 2016 Boundary
103-2 The management approach and its Social: Employee Welfare (page 57-58)
components
103-3 Evaluation of the management approach Social: Employee Welfare (page 57-58)
GRI 402: Labor/ 402-1 Minimum notice periods regarding Social: Employee Welfare (page 58)
Management Relations operational changes
Occupational Health and Safety
GRI 103: Management 103-1 Explanation of the material topic and its Social: Occupational Safety and Health (page 61)
Approach 2016 Boundary
103-2 The management approach and its Social: Occupational Safety and Health (page 61)
components
103-3 Evaluation of the management approach Social: Occupational Safety and Health (page 61)
GRI 403: Occupational 403-2 Types of injury and rates of injury, Social: Occupational Safety and Health (page 62)
Health and Safety 2016 occupational diseases, lost days, and
absenteeism, and number of work-related
fatalities
Training and Education
GRI 103: Management 103-1 Explanation of the material topic and its Social: Talent Development (page 60)
Approach 2016 Boundary
103-2 The management approach and its Social: Talent Development (page 60)
components
103-3 Evaluation of the management approach Social: Talent Development (page 60)
GRI 404: Training and 404-2 Programs for upgrading employee skills Social: Talent Development (page 60)
Education 2016 and transition assistance programs
404-3 Percentage of employees receiving Social: Talent Development (page 60)
regular performance and career
development reviews

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GRI CONTENT INDEX

GRI Standard Disclosure Page number(s) and/or URL(s)

GRI 400 Social Standards Series (continued)

Diversity and Equal Opportunity

GRI 103: Management 103-1 Explanation of the material topic and its Social: Diversity & Equal Opportunities (page 54)
Approach 2016 Boundary
103-2 The management approach and its Social: Diversity & Equal Opportunities (page 54)
components
103-3 Evaluation of the management approach Social: Diversity & Equal Opportunities (page 54)
GRI 405: Diversity and 405-1 Diversity of governance bodies and Social: Diversity & Equal Opportunities
Equal Opportunities 2016 employees (page 54), Corporate Governance Overview
Statement (page 80-81)
Non-discrimination
GRI 103: Management 103-1 Explanation of the material topic and its Social: Diversity & Equal Opportunities (page 54)
Approach 2016 Boundary
103-2 The management approach and its Social: Diversity & Equal Opportunities (page 54)
components
103-3 Evaluation of the management approach Social: Diversity & Equal Opportunities (page 54)
GRI 406: Non- 406-1 Incidents of discrimination and corrective Social: Diversity & Equal Opportunities (page 54),
discrimination 2016 actions taken Human Rights (page 65)
Local Communities
GRI 103: Management 103-1 Explanation of the material topic and its Social: Community Investment and Development
Approach 2016 Boundary (page 62-64)
103-2 The management approach and its Social: Community Investment and Development
components (page 62-64)
103-3 Evaluation of the management approach Social: Community Investment and Development
(page 62-64)
GRI 413: Local 413-1 Operations with local community Social: Community Investment and Development
Communities 2016 engagement, impact assessments, and (page 62-64)
development programs
413-2 Operations with significant actual and Social: Community Investment and Development
potential negative impacts on local (page 62-64)
communities

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SECTION 6 O T H E R I N F O R M AT I O N

NOTICE OF 15TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT THE 15TH ANNUAL GENERAL MEETING (“AGM”) OF MALAKOFF CORPORATION BERHAD (“COMPANY”)
WILL BE HELD AS A FULLY VIRTUAL GENERAL MEETING AT THE BROADCAST VENUE AT THE BOARDROOM, LEVEL 7, BLOCK 4,
PLAZA SENTRAL, JALAN STESEN SENTRAL 5, 50470 KUALA LUMPUR, MALAYSIA ON WEDNESDAY, 28 APRIL 2021 AT 10.00 A.M.
FOR THE PURPOSE OF CONSIDERING AND, IF THOUGHT FIT, PASSING THE FOLLOWING RESOLUTIONS:

ORDINARY BUSINESS

1. “THAT the Audited Financial Statements of the Company for the financial year ended 31 December
2020 and the Directors’ Report and Auditors’ Report thereon be and are hereby received.”

(Please refer to Explanatory Note 1)

2. “THAT the following Directors who retire in accordance with Article 105 of the Company’s Constitution
be and are hereby re-elected as the Directors of the Company:

(i) Datuk Haji Hasni Harun Resolution 1

(ii) Dato’ Sri Che Khalib Mohamad Noh” Resolution 2

(Please refer to Explanatory Note 2)

3. “THAT Encik Anwar Syahrin Abdul Ajib who retires in accordance with Article 111 of the Company’s Resolution 3
Constitution be and is hereby re-elected as the Director of the Company”

(Please refer to Explanatory Note 2)

4. “THAT the payment of Directors’ fees up to an amount of RM1,230,000 to the Non-Executive Directors Resolution 4
(“NED”) with effect from the conclusion of the 15th AGM until the next AGM of the Company be and is
hereby approved.”

(Please refer to Explanatory Note 3)

5. “THAT the payment of the following Directors’ benefits with effect from the conclusion of the 15th AGM
until the next AGM of the Company be and is hereby approved:

(i) Directors’ benefits up to an amount of RM1,260,000 to all NEDs by the Company; and Resolution 5
(ii) Directors’ benefits up to an amount of RM250,000 by the subsidiaries of the Company to the Resolution 6
Directors.”

(Please refer to Explanatory Note 3)

6. “THAT Messrs. KPMG PLT, who are eligible and have given their consent for re-appointment, be and are Resolution 7
hereby re-appointed as Auditors of the Company until the conclusion of the next AGM, AND THAT the
remuneration to be paid to them be fixed by the Board of Directors.”

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O T H E R I N F O R M AT I O N SECTION 6

NOTICE OF 15TH ANNUAL GENERAL MEETING

SPECIAL BUSINESS

To consider and, if thought fit, to pass the following Ordinary Resolutions with or without modifications:

7. Proposed Renewal of Authority for the Company to Purchase Its Own Shares Resolution 8

“THAT subject to provisions of the Companies Act 2016 (“Act”), the Constitution of the Company, the
Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”)
and all prevailing laws, rules, regulations, orders, guidelines and requirements for the time being in
force, approval and authority be and are hereby given to the Directors of the Company (“Directors”), to
the extent permitted by law, to purchase such number of ordinary shares in the Company (“Shares”) as
may be determined by the Directors, from time to time through Bursa Securities upon such terms and
conditions as the Directors may deem fit, necessary and expedient in the best interest of the Company,
provided that:

a) the maximum aggregate number of Shares purchased or held by the Company pursuant to this
resolution shall not exceed ten percent (10%) of the total number of issued shares of the Company
at any point in time;
b) the maximum amount of funds to be allocated by the Company for the purpose of purchasing its
shares shall not exceed the amount of the retained profits of the Company at the time of purchase;
and
c) the authority conferred by this resolution shall be effective immediately after the passing of this
resolution and shall continue to be in force until:

(i) the conclusion of the next annual general meeting of the Company at which time the authority will
lapse unless the authority is renewed by a resolution passed at that meeting, either conditionally
or unconditionally;
(ii) the expiration of the period within which the next annual general meeting of the Company is
required by law to be held; or
(iii) the authority is revoked or varied by ordinary resolution passed by the shareholders of the
Company at a general meeting of the Company,

whichever occurs first;

THAT the Directors be and are hereby authorised to deal with the Shares so purchased, at their
discretion, in the following manner:

(i) cancel the Shares so purchased;

(ii) retain the Shares so purchased as treasury shares; or
(iii) retain part of the Shares so purchased as treasury shares and cancel the remainder of the Shares;

THAT where such Shares are held as treasury shares, the Directors be and are hereby authorised to deal
with the treasury shares in their absolute discretion, in the following manner:

(i) distribute the Shares as dividends to shareholders, such dividends to be known as “shares dividends”;
(ii) resell the Shares or any of the Shares in accordance with the relevant rules of Bursa Securities;
(iii) transfer the Shares or any of the Shares for the purposes of or under an employees’ share scheme;
(iv) transfer the Shares or any of the Shares as purchase consideration;
(v) cancel the Shares or any of the Shares; or
(vi) sell, transfer or otherwise use the Shares for such other purposes as the Minister may by order
prescribe;

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SECTION 6 O T H E R I N F O R M AT I O N

NOTICE OF 15TH ANNUAL GENERAL MEETING

AND THAT the Directors be and are hereby authorised and empowered to do all acts and things
and to take all such steps as necessary or expedient (including opening and maintaining a Central
Depository System account) and to enter into and execute, on behalf of the Company, any
instrument, agreement and/or arrangement with any person, and with full power to assent to any
condition, modification, variation and/or amendment as may be imposed by Bursa Securities or any
relevant regulatory authority, and/or as may be required in the best interest of the Company and to
take all such steps as the Directors may deem fit, necessary and expedient in the best interest of
the Company in order to implement, finalise and give full effect to the purchase by the Company of
its Shares.”

(Please refer to Explanatory Note 4)

8. Proposed Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Resolution 9
Transactions of a Revenue or Trading Nature and Proposed New Shareholders’ Mandate for
Additional Recurrent Related Party Transactions of a Revenue or Trading Nature (“Proposed
Shareholders’ Mandate”)

“THAT, subject to Paragraph 10.09 of the MMLR of Bursa Securities, the Company and its
subsidiaries (“Group”) be and are hereby authorised to enter into recurrent related party transactions
of a revenue or trading nature with the Related Parties as set out in Section 2.4 of the Circular
to Shareholders dated 29 March 2021, PROVIDED THAT such transactions are necessary for the
Group’s day-to-day operations and are in the ordinary course of business of the Group and at arm’s
length basis and on normal commercial terms which are not more favourable to the related parties
than those generally available to the public and are not to the detriment of the minority shareholders
of the Company;

THAT such approval shall continue to be in force until:

(i) the conclusion of the next AGM of the Company following the general meeting at which this
Ordinary Resolution shall be passed, at which time it will lapse, unless by a resolution passed at
the general meeting, the authority conferred by this resolution is renewed;
(ii) the expiration of the period within which the next AGM of the Company after the date it is
required to be held pursuant to Section 340(2) of the Act (but shall not extend to such extensions
as may be allowed pursuant to Section 340(4) of the Act); or
(iii) revoked or varied by resolution passed by the shareholders of the Company at a general meeting,

whichever is earlier;

AND THAT the Directors of the Company and its subsidiaries be and are hereby authorised to
complete and do all such acts and things as they may consider expedient or necessary to give effect
to the Proposed Shareholders’ Mandate as authorised by this Ordinary Resolution.”

(Please refer to Explanatory Note 5)

9. To transact any other business of which due notice shall have been given in accordance with the Act
and the Company’s Constitution.

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O T H E R I N F O R M AT I O N SECTION 6

NOTICE OF 15TH ANNUAL GENERAL MEETING

NOTICE OF BOOK CLOSURE AND NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN THAT shareholders who are registered in the Record of Depositors at the close of business on 21 May
2021 shall be entitled to the final dividend which will be paid on 18 June 2021.

A depositor shall qualify for dividend entitlement only in respect of:

a) Shares transferred into the Depositor’s securities account before 4.30 p.m. on 21 May 2021 in respect of ordinary transfers; and

b) Shares bought on Bursa Securities on a cum entitlement basis according to the Rules of Bursa Securities.

BY ORDER OF THE BOARD

Noor Raniz bin Mat Nor (MAICSA 7061903)
Cheryl Rinai Kalip (LS 0008258)
Company Secretaries

Kuala Lumpur
29 March 2021

Notes:

As a shareholder, you are encouraged to leverage on the Remote Participation and Voting Facilities to participate and vote remotely at the Company’s 15th
AGM to be held fully virtual without a physical meeting venue.

1. The broadcast venue is strictly for the compliance with Section 327(2) of the Companies Act 2016 that requires the Chairman of the meeting to be
present at the main venue of the meeting. No member and proxy from the public should be physically present nor admitted at the broadcast venue on
the day of the 15th AGM.
2. Members and proxies are encouraged to go online, participate and vote at the 15th AGM using the Remote Participation and Voting (“RPV”) facilities via
live webcast and online remote voting provided by the Company’s Share Registrar, Boardroom Share Registrars Sdn Bhd through its Boardroom Smart
Investor Online Portal at https://www.boardroomlimited.my/. Members are advised to read the Administrative Details on the procedures to participate
in this 15th AGM remotely.
3. Only depositors whose names appear on the Record of Depositors as at 21 April 2021 shall be entitled to register and participate in the meeting or
appoint proxies to participate and/or vote on their behalf.
4. A member of the Company entitled to participate and vote at this meeting is entitled to appoint a proxy or proxies or attorney or other duly authorised
representative to participate and vote at his stead. A member of the Company may appoint up to two (2) proxies to participate at the same meeting.
Where a member of the Company appoints two (2) proxies, the appointment shall be invalid unless the member specifies the proportion of his
shareholding to be represented by each proxy.
5. In case of a corporation, the proxy form should be under its common seal or under the hand of an officer or attorney duly authorised on its behalf.
A proxy need not be a member of the Company and a member may appoint any person to be his proxy. The instrument appointing a proxy shall be
deemed to confer authority to demand or join in demanding a poll.
6. In the case of joint holders, the signature of any one of them will suffice.
7. Where a member is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares
in the Company for multiple beneficial owners in one securities account (omnibus account), there is no limit to the number of proxies which the exempt
authorised nominee may appoint in respect of each omnibus account it holds. Where a member appoints more than one (1) proxy, the appointment
shall be invalid unless it specifies the proportion of its shareholding to be represented by each proxy.
8. Unless voting instructions are indicated in the spaces provided in the proxy form, the proxy may vote as he/she thinks fit.
9. The proxy form, to be valid, must be deposited at the office of Boardroom Share Registrars Sdn Bhd, 11th Floor, Menara Symphony, No. 5, Jalan Prof.
Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than 48 hours before the time appointed for the meeting or
any adjournment thereof. Alternatively, the proxy form can be deposited electronically through the Share Registrar’s website, Boardroom Smart Investor
Online Portal at https://www.boardroomlimited.my/ before the proxy form lodgment cut-off time as mentioned above.
10. Members’/proxies’ login to the virtual meeting portal will commence at 9.00 a.m. on the day of the meeting and shall remain open until the conclusion
of the 15th AGM or such time as may be determined by the Chairman of the meeting.

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SECTION 6 O T H E R I N F O R M AT I O N

NOTICE OF 15TH ANNUAL GENERAL MEETING

Explanatory Notes on Ordinary Business:

1. Explanatory Note 1
Audited Financial Statements for the financial year ended 31 December 2020

This agenda item is meant for discussion only as provided under Section 340(1) of the Act and the Company’s Constitution. The
Audited Financial Statements do not require the shareholders’ approval and hence, the matter will not be put forward for voting.

2. Explanatory Note 2
Re-election of Directors retiring in accordance with Articles 105 and 111 of the Company’s Constitution

The proposed ordinary resolutions 1 and 2 under Agenda 2 and ordinary resolution 3 under Agenda 3 of the 15th AGM are to seek the
shareholders’ approval on the re-election of the Directors standing for re-election in accordance with the Company’s Constitution,
who have offered themselves for re-election.

i) Datuk Haji Hasni Harun and Dato’ Sri Che Khalib Mohamad Noh retire in accordance with Article 105

In deliberating the re-election of the retiring Directors at the 15th AGM, the Board Nomination and Remuneration Committee
(“BNRC”) had taken into consideration of the performance and contribution of each Director based on the annual Board
assessment conducted for the financial year 2020, and the criteria on qualification of Directors pursuant to Paragraph 2.20A of
MMLR of Bursa Securities. The retiring Directors met the performance criteria required for an effective and high performance
Board.

ii) Encik Anwar Syahrin Abdul Ajib retires in accordance with Article 111

As a new Managing Director/Chief Executive Officer (“MD/CEO”) of the Company, the BNRC’s recommendation to re-elect
Encik Anwar Syahrin was mainly supported by his vast experience in various fields such as transport, logistics, property
development, finance and accounting as well as his ability of stewardship gained from his senior management positions in both
the private and public companies. This would enable him to provide the necessary leadership to the Board with his insightful and
in-depth knowledge of diverse areas.

The Board, after having considered the recommendations of the BNRC, is recommending the re-election of the abovementioned
Directors for the shareholders’ approval.

3. Explanatory Note 3
Directors’ Remuneration

Section 230(1) of the Act stipulates that the fees and any benefits payable to the directors of a listed company and its subsidiaries
shall be tabled at a general meeting for the shareholders’ approval.

The proposed ordinary resolutions 4, 5 and 6, if passed, will allow the payment of the following Directors’ remuneration to the Directors
on a monthly basis and/or as and when incurred within the approval period after the Directors have discharged their responsibilities
and rendered their services to the Company and the subsidiaries.

(i) Directors’ remuneration payable by the Company to all NEDs comprises the following:

a) Directors’ fees; and

b) Benefits such as Board Committee allowances, meeting allowances, annual leave passage and/or annual supplemental fees,
including benefits-in-kind to the Chairman;

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O T H E R I N F O R M AT I O N SECTION 6

NOTICE OF 15TH ANNUAL GENERAL MEETING

The shareholders had, at the 14th AGM of the Company held on 9 June 2020, approved the revision of the Directors’ fees from
RM7,500 to RM9,000 per month per NED effective from the conclusion of the 14th AGM. Save for the approved revised Directors’ fees,
all other benefits for the NEDs remain unchanged since the listing of the Company in May 2015.

The current Directors’ remuneration payable to the NEDs are summarised in the table below:

Directors’ fees/allowances Meeting Allowances

(per member) (per member)
Board/Board Committees Non-Executive
Chairman
(“NEC”)/ NED/ NEC/ NED/
per month per month per meeting per meeting
(RM) (RM) (RM) (RM)

i) Board 30,000 9,000 2,500 2,500

ii) Board Audit Committee 4,000 2,500 2,500 2,500
iii) Board Nomination & Remuneration Committee 3,000 2,000 2,000 2,000
iv) Board Risk & Investment Committee 3,000 2,000 2,000 2,000
v) Board Procurement Committee N/A N/A 3,000 2,000

Other benefits
NEC Per NED
Items (RM) RM)

i) Annual leave passage & annual supplemental fees 25,000 25,000

per annum per annum
ii) Benefits-in-kind (Board only) up to 3,500 per month N/A
(as claimed)

(Note: each of the foregoing payments being exclusive of the others)

(ii) Directors’ benefits payable by the subsidiaries of the Company to the Directors, comprising fixed allowances, meeting allowances
or any other benefits.

The details of the Directors’ fees and benefits paid to each Director for the financial year 2020 are disclosed in the Corporate
Governance Overview Statement in the Annual Report 2020.

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SECTION 6 O T H E R I N F O R M AT I O N

NOTICE OF 15TH ANNUAL GENERAL MEETING

Explanatory Notes on Special Business:

4. Explanatory Note 4
Proposed Renewal of Share Buy-Back Authority

The proposed resolution 8, if passed, will empower the Directors to purchase the Company’s own shares of up to ten percent (10%)
of its total number of issued shares subject to Section 127 of the Act and any prevailing laws, rules, regulations, orders, guidelines
and requirements issued by the relevant authorities at the time of the purchase(s).

Please refer to the Share Buy-Back Statement to Shareholders dated 29 March 2021 for further information.

5. Explanatory Note 5
Proposed Shareholders’ Mandate for Recurrent Related Party Transactions (“RRPTs”)

The proposed resolution 9, if passed, will empower the Company and its subsidiaries (“Group”) to enter into RRPTs of a revenue
or trading nature with the related parties as set out in Section 2.4 of the Circular to Shareholders dated 29 March 2021 which are
necessary for the Group’s day-to-day operations and/or in the ordinary course of business of the Group on normal commercial terms
and to facilitate the conduct of the Group’s business in a timely manner.

The proposal includes the proposed renewal of the existing shareholders’ mandate for RRPTs of a revenue or trading nature that was
approved by the shareholders at the 14th AGM and proposed new shareholders’ mandate for additional RRPTs of a revenue or trading
nature.

Details of the Proposed Shareholders’ Mandate are set out in the Circular to Shareholders dated 29 March 2021 which is issued
together with the Annual Report 2020 of the Company.

6. Abstention from Voting

The Directors who are shareholders of the Company shall abstain from voting on the resolution in respect of their own re-election,
resolutions concerning remuneration of the Directors and the Proposed Shareholders’ Mandate (applicable to interested directors
only), at the 15th AGM.

STATEMENT ACCOMPANYING NOTICE

OF THE 15TH AGM
(PURSUANT TO PARAGRAPH 8.27(2) OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD)

The Directors retiring in accordance with the Company’s Constitution and seeking for re-election are as follows:

Pursuant to Article 105 of the Company’s Constitution

1. Datuk Haji Hasni Harun

2. Dato’ Sri Che Khalib Mohamad Noh

Pursuant to Article 111 of the Company’s Constitution

1. Encik Anwar Syahrin Abdul Ajib

The profiles of the abovenamed Directors are stated in the Directors’ Profile on page 66 to 67 of the Annual Report 2020.

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O T H E R I N F O R M AT I O N SECTION 6

ADMINISTRATIVE DETAILS

ADMINISTRATIVE DETAILS FOR THE 15TH ANNUAL GENERAL MEETING (“AGM”) OF MALAKOFF CORPORATION BERHAD
(“COMPANY”) TO BE HELD AS A FULLY VIRTUAL MEETING AT THE BROADCAST VENUE AT THE BOARDROOM, LEVEL 7,
BLOCK 4, PLAZA SENTRAL, JALAN STESEN SENTRAL 5, 50470 KUALA LUMPUR ON WEDNESDAY, 28 APRIL 2021 AT 10.00 A.M.

1. Remote Participation and Voting at A Fully Virtual 15th AGM 3. Proxy

Having regard to the well-being and safety of the Company’s If an individual shareholder is unable to attend the 15th AGM,
shareholders, employees and advisers who will attend the 15th he/she is encouraged to appoint the Chairman of the meeting
AGM and as a precautionary measure amid COVID-19, the as his/her proxy and indicate the voting instructions in the
Company will conduct its 15th AGM as a fully virtual meeting proxy form (enclosed together with the Notice of 15th AGM
via Remote Participation and Voting (“RPV”) Facilities, without dated 29 March 2021) (“Proxy Form”) in accordance with the
a physical meeting venue, on 28 April 2021. notes and instructions printed therein.

The shareholders are strongly encouraged to For the shareholders who have submitted Proxy Forms
participate using the RPV webcast which is available at appointing their proxies, you may register your intention
https://boardroomlimited.my, to login, register and sign up to participate via https://boardroomlimited.my. The proxy
as a user. No shareholder/proxy/ corporate representative appointment will be deemed revoked upon your registration to
from the public should be physically present nor admitted personally participate remotely in the 15th AGM.
at the broadcast venue at the date of the 15th AGM of the
Company. The broadcast venue is meant for the compliance Corporate shareholders that wish to appoint a representative
with Section 372(2) of the Companies Act 2016 that the to participate and vote remotely at the 15th AGM may refer to
Chairman shall be present at the main venue of the AGM. details set out under item 6 or contact the share registrars,
Boardroom Share Registrars Sdn Bhd (“Boardroom”), with the
With the use of RPV Facilities, the shareholders may exercise details set out under item 9 below for assistance and will be
your rights to participate, speak (in the form of real time required to provide the following documents to Boardroom not
submission of typed texts) and vote at the general meeting later than Monday, 26 April 2021 at 10.00 a.m.:
from different location without physically present at the
meeting venue, including to pose questions to the Board or (i) original certificate of appointment of its corporate
Management of the Company. representative or Proxy Form under the seal of the
corporation or under the hand of a duly authorised officer/
The closing time to submit your request to access the RPV attorney;
webcast is at 10.00 a.m. on 26 April 2021 (48 hours before the (ii) copy of the corporate representative’s or proxy’s MyKad
15th AGM). (front and reverse) or passport; and
(iii) corporate representative’s or proxy’s email address and
Depending on the evolving COVID-19 situation in Malaysia mobile phone number.
from time to time, the Company will inadvertently require to
change the arrangements of its 15th AGM with short notice Boardroom shall respond to you on your request for remote
to cope with the situation. Kindly be informed of the latest participation.
updates on the 15th AGM (if any) at the Company’s website or
announcement by the Company. The Company will continue to The corporate shareholder (through corporate representative(s)
observe the guidelines issued by Ministry of Health of Malaysia or appointed proxy(ies) who is unable to attend the 15th AGM)
and will take all necessary precautionary measures as advised. is encouraged to appoint the Chairman of the meeting as its
proxy and indicate the voting instructions in the Proxy Form in
2. General Meeting Record of Depositors (“ROD”) accordance with the notes and instructions printed therein.

Only depositors whose names appear on the ROD as at In respect of the beneficiaries of the shares under a nominee
21 April 2021 shall be entitled to participate in the 15th AGM or company’s CDS account (“NC members”) who wish to
appoint proxies to register and vote on their behalf. participate and vote remotely at the 15th AGM, the NC
member(s) can request its nominee company to appoint him/
her as a proxy to participate and vote remotely at the 15th AGM.

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SECTION 6 O T H E R I N F O R M AT I O N

ADMINISTRATIVE DETAILS

The nominee company may refer to details set out under item The Company’s share registrars/poll administrator, Boardroom,
6 or contact Boardroom’s officer with the details set out under will assist to conduct the poll by way of electronic voting and
item 9 below for assistance and will be required to provide the the independent scrutineers will verify and validate the poll
following documents to Boardroom not later than Monday, results. Upon the completion of the voting session for the
26 April 2021 at 10.00 a.m.: 15th AGM, the scrutineers will verify the poll results followed
by the Chairman’s announcement whether the resolutions are
(i) original Proxy Form under the seal of the nominee company; duly passed.
(ii) copy of the proxy’s MyKad (front and reverse) or passport;
and 6. RPV Facilities
(iii) proxy’s email address and mobile phone number.
Please note that this option is available to (i) individual
Boardroom shall respond to you on your request for remote shareholders; (ii) corporate shareholders; (iii) Authorised
participation. Nominee; and (iv) Exempt Authorised Nominee.

4. Shareholders’ Right to Speak If you choose to participate in the meeting online, you will be
able to view live webcast of the meeting, submit questions
The shareholders may use the query box facility on the RPV to the Chairman and submit your votes in real time whilst the
webcast to transmit your question to the Chairman/Board. The meeting is in progress.
Chairman/Board will try to address and answer the relevant
questions during the Questions and Answers session. Kindy follow the steps below on how to request for login ID and
password.
5. Poll Voting

The voting at the 15th AGM will be conducted by way of poll in

accordance with Paragraph 8.29A of the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad.

Step 1 – Register Online with Boardroom Smart Investor Portal (for first time registration only)
[Note: If you have already signed up with Boardroom Smart Investor Portal, you are not required to register again. You may proceed to
Step 2. Submit request for Remote Participation user ID and password.]

a. Access website https://boardroomlimited.my

b. Click <<Login>> and click <<Register>> to sign up as a user.
c. Complete registration and upload softcopy of MyKad (front and back) or Passport in JPEG or PNG format.
d. Please enter a valid email address and wait for Boardroom’s email verification.
e. Your registration will be verified and approved within one business day and an email notification will be provided.

Step 2 – Submit Request for Remote Participation User ID and Password

[Note: The registration for remote access will be opened on 29 March 2021]

Individual Shareholders Corporate Shareholders, Authorised Nominee and Exempt

- Login to https://boardroomlimited.my using your user ID and Authorised Nominee
password above. - Write in to [email protected] by providing
- Select “VIRTUAL MEETING” from main menu and select the the name of Member, CDS Account Number accompanied with
correct Corporate Event “Malakoff Corporation Berhad 15th the Certificate of Appointment of Corporate Representative or
Annual General Meeting”. Proxy Form (as the case may be) to submit the request.
- Read and agree to the Terms & Conditions and confirm the - Please provide a copy of corporate representative’s MyKad/
Declaration. Identification Card (front and back) or Passport in JPEG or
- Enter your CDS account number and thereafter submit your PNG format as well as his/her email address.
request.

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O T H E R I N F O R M AT I O N SECTION 6

ADMINISTRATIVE DETAILS

a. You will receive a notification from Boardroom that your request has been received and is being verified.
b. Upon system verification against the AGM’s Record of Depositories, you will receive an email from Boardroom either approving or
rejecting your registration for remote participation.
c. You will also receive your remote access user ID and password along with the email from Boardroom if your registration is approved.
d. Please note that the closing time to submit your request is at 10.00 am on 26 April 2021 (48 hours before the 15th AGM).

Step 3 – Login to Virtual Meeting Portal

[Please note that the quality of the connectivity to Virtual Meeting Portal for live web cast as well as for remote online voting is highly
dependent on the bandwidth and the stability of the internet connectivity available at the location of the remote users.]
a. The Virtual Meeting portal will be open for login starting one hour (1 hour) before the commencement of the 15th AGM at
10.00 a.m. on 28 April 2021.
b. Follow the steps given to you in the email along with your remote access user ID and password to login to the Virtual Meeting portal.
(Refer to Step 2 above).
c. The steps will also guide you how to view live web cast, ask questions and vote.
d. The live web cast will end and the Messaging window will be disabled the moment the Chairman announces the closure of the AGM.
e. You can now logout from the Virtual Meeting Portal.

7. F&B & Door Gift 9. Enquiry

There will be NO distribution of food voucher or door gift If you have any enquiry prior to the 15th AGM, please contact
to shareholders. the following officers during office hours from 9.00 a.m. to
5.00 p.m. (Mondays to Fridays):
8. Annual Report 2020 and Other Documents for AGM
Boardroom Share Registrars Sdn Bhd
The Notice of 15th AGM, Proxy Form, administrative details (Registration No. 199601006647/378993-D)
and the request form for hard copy of the following documents 11th Floor, Menara Symphony,
(“Request Form”) are included in the Abridged Annual Report No. 5, Jalan Prof. Khoo Kay Kim,
2020 which will be sent by ordinary post to the shareholders. The Seksyen 13, 46200 Petaling Jaya,
same (except for Request Form) have also been incorporated Selangor Darul Ehsan, Malaysia
in the Annual Report 2020 that are available on the Company’s
website at www.malakoff.com.my together with items (ii) General Line : +603-7890 4700
and (iii): Fax No. : +603-7890 4670
Officers : Encik Zulkernaen Abd Samad
(i) The Company’s Annual Report 2020; +603-7890 4741
(ii) Circular to Shareholders in relation to Proposed ([email protected])
Shareholders’ Mandate for Recurrent Related Party Puan Rozleen Monzali
Transactions of A Revenue or Trading Nature (“Circular”); +603-7890 4739
and ([email protected])
(iii) Share Buy-Back Statement to Shareholders in relation to
the Proposed Renewal of Authority for the Company to
Purchase Its Own Shares (“Statement”).

Should you require a printed copy of item (i), (ii) or (iii) stated
above, please send the completed Request Form to Boardroom
Share Registrars Sdn Bhd or contact the personnel as stated in
item 9 for assistance/clarification.

www.malakoff.com.my 301
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PROXY FORM No. of Ordinary Share(s) Held
Malakoff Corporation Berhad
CDS Account No.
(Registration No. 200601011818/731568-V)

I/We NRIC/Passport No:

(Full name in block letters)
of Tel No:
(Address in full)
being a member/members of Malakoff Corporation Berhad, hereby appoint

Name/NRIC No. No. of Shares Percentage (%)

Proxy 1 and/or failing him/her
Proxy 2 or failing him/her,

the Chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at the 15th Annual General Meeting (“AGM”) of the Company to
be held as a fully virtual general meeting at the broadcast venue at the Boardroom, Level 7, Block 4, Plaza Sentral, Jalan Stesen Sentral 5, 50470
Kuala Lumpur, Malaysia on Wednesday, 28 April 2021 at 10.00 a.m. and at any adjournments thereof, on the following resolutions referred to in
the Notice of the 15th AGM:

(Please indicate with an “X” in the space provided below how you wish your votes to be cast on the resolutions specified in the notice of meeting.
If you do not do so, the proxy/proxies will vote or abstain from voting on the resolutions as he/they may think fit).

1. To receive the Audited Financial Statements of the Company for the Financial Year Ended 31 December 2020 and the Directors’ Report and
Auditors’ Report thereon
ORDINARY BUSINESS For Against
2. Re-election of Datuk Haji Hasni Harun who retires in accordance with Article 105 of the Company’s
Constitution (Resolution 1)
3. Re-election of Dato’ Sri Che Khalib Mohamad Noh who retires in accordance with Article 105 of the
Company’s Constitution (Resolution 2)
4. Re-election of Encik Anwar Syahrin Abdul Ajib who retires in accordance with Article 111 of the Company’s
Constitution (Resolution 3)
5. Payment of Directors’ fees to the Non-Executive Directors with effect from the conclusion of the 15th AGM
until the next AGM of the Company (Resolution 4)
6. Payment of Directors’ benefits to the Non-Executive Directors with effect from the conclusion of the 15th
AGM until the next AGM of the Company (Resolution 5)
7. Payment of Directors’ benefits by the subsidiaries to the Directors with effect from the conclusion of the 15th
AGM until the next AGM of the Company (Resolution 6)
8. Re-appointment of Messrs. KPMG PLT as Auditors of the Company (Resolution 7)
SPECIAL BUSINESS
9. Proposed Renewal of Authority for the Company to Purchase Its Own Shares (Resolution 8)
10. Proposed Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Transactions and
Proposed New Shareholders’ Mandate for Additional Recurrent Related Party Transactions of A Revenue
or Trading Nature (Resolution 9)

Signed this day of 2021

Signature of member / Common Seal

Notes: 5. In case of a corporation, the proxy form should be under its common seal or under
the hand of an officer or attorney duly authorised on its behalf. A proxy need not be
As a shareholder, you are encouraged to leverage on the Remote Participation and a member of the Company and a member may appoint any person to be his proxy.
Voting Facilities to participate and vote remotely at the Company’s 15th AGM to be held The instrument appointing a proxy shall be deemed to confer authority to demand
fully virtual without a physical meeting venue. or join in demanding a poll.
6. In the case of joint holders, the signature of any one of them will suffice.
1. The broadcast venue is strictly for the compliance with Section 327(2) of the 7. Where a member is an exempt authorised nominee as defined under the
Companies Act 2016 that requires the Chairman of the meeting to be present at Securities Industry (Central Depositories) Act 1991 which holds ordinary shares
the main venue of the meeting. No member and proxy from the public should be in the Company for multiple beneficial owners in one securities account (omnibus
physically present nor admitted at the broadcast venue on the day of the AGM. account), there is no limit to the number of proxies which the exempt authorised
2. Members and proxies are encouraged to go online, participate and vote at the nominee may appoint in respect of each omnibus account it holds. Where a
AGM using the Remote Participation and Voting (“RPV”) facilities via live webcast member appoints more than one (1) proxy, the appointment shall be invalid unless
and online remote voting provided by the Company’s Share Registrar, Boardroom it specifies the proportion of its shareholding to be represented by each proxy.
Share Registrars Sdn Bhd through its Boardroom Smart Investor Online Portal 8. Unless voting instructions are indicated in the spaces provided in the proxy form,
at https://www.boardroomlimited.my/. Members are advised to read the the proxy may vote as he/she thinks fit.
administrative details on the procedures to participate in this AGM remotely. 9. The proxy form, to be valid, must be deposited at the office of Boardroom Share
3. Only depositors whose names appear on the Record of Depositors as at 21 April Registrars Sdn Bhd, 11th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay
2021 shall be entitled to participate in the AGM or appoint proxies to participate Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less
and/or vote on their behalf. than 48 hours before the time appointed for the meeting or any adjournment
4. A member of the Company entitled to participate and vote at this meeting is entitled thereof. Alternatively, the proxy form can be deposited electronically through
to appoint a proxy or proxies or attorney or other duly authorised representative the Share Registrar’s website, Boardroom Smart Investor Online Portal at
to participate and vote at his stead. A member of the Company may appoint up https://www.boardroomlimited.my/ before the proxy form lodgement cut-off time
to two (2) proxies to participate at the same meeting. Where a member of the as mentioned above.
Company appoints two (2) proxies, the appointment shall be invalid unless the 10. Members’/proxies’ login to the virtual meeting portal will commence at 9.00 a.m.
member specifies the proportion of his shareholding to be represented by each on the day of the meeting and shall remain open until the conclusion of the AGM or
proxy. such time as may be determined by the Chairman of the meeting.
Please fold here

Malakoff Corporation Berhad

15th Annual General Meeting
Stamp

To : Boardroom Share Registrars Sdn Bhd

(Registration No. 199601006647/378993-D)
11th Floor, Menara Symphony,
No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13,
46200 Petaling Jaya, Selangor Darul Ehsan,
Malaysia

Please fold here

MALAKOFF CORPORATION BERHAD
(Registration No. 200601011818 / 731568-V)

Level 7, Block 4, Plaza Sentral

Jalan Stesen Sentral 5
50470 Kuala Lumpur, Malaysia

Tel: +603-2263 3388

Fax: +603-2263 3333

www.malakoff.com.my