Malakoff Corporation Berhad
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MALAKOFF Twenty-Eighth Annual General Meeting Grand Nirwana Ballroom, Lower Lobby, Mutiara Hotel, Jalan Sultan Ismail, 50250 Kuala Lumpur Wednesday, 25 February 2004 at 11.00 a.m. evolving to excel... ...as the nation’s top IPP The cover depicts a traditional Malaysian top or better known as ‘gasing’, in motion. An artform in itself, gasing spinning has long since been a part of Malaysia’s rich cultural heritage. As the nation’s leading independent power producer (“IPP”), Malakoff draws inspiration from this timeless tradition which requires a high degree of strength, dexterity and precision. Just as a gasing spins to produce centrifugal force, the Group has been evolving strongly and steadily through the development of additional facilities as well as synergistic acquisitions, annual report 2003 thus reinforcing its position as the nation’s top IPP. highlights for the year 2003 Vision Contents • Financial performance continues to improve with power To be a Cost Effective Energy Provider 01 5-year group financial highlights generation as the main contributor to the Group. 02 corporate profile 04 chairman’s statement • Net profit of the Group increased by 25%. Mission 10 managing director’s review In striving to enhance shareholders’ 23 corporate information value and achieve our vision, we seek to: 24 corporate data 25 corporate structure • Develop and utilise local expertise; 26 board of directors 28 profile of board of directors • Share knowledge and spur the growth 34 management team of the power industry; and 37 corporate highlights 38 our operations & maintenance team Increase/ • Promote innovation in all aspects 42 location of Malakoff’s power plants (Decrease) of our business. 44 calendar events from 2002 2003 2002 2001 2000 1999 (%) RM’000 RM’000 RM’000 RM’000 RM’000 49 corporate governance statement on corporate governance 50 Revenue 6.3 1,825,013 1,717,462 1,513,462 1,473,196 1,572,603 audit committee report 56 Profit before taxation 16.9 687,494 588,228 527,001 544,158 546,785 Corporate Values statement of internal control 59 Profit after tax & minority interest 24.9 441,754 353,591 317,970 344,179 373,131 61 approved utilisation of funds • Integrity • Teamwork • Innovation additional compliance information 62 As at 31 August 70 directors’ responsibility statement • Excellence • Respect for Individual Paid-up capital 1.5 871,288 858,664 279,703 276,717 273,007 71 financial statements Shareholders’ funds 14.0 2,811,285 2,467,135 2,178,526 1,835,574 1,495,957 Total assets employed 5.3 7,358,996 6,990,589 5,780,491 5,126,403 4,856,430 117 other corporate information 118 financial calendar & share performance chart Per share (sen) 119 analysis of shareholdings Earnings 22.8 51.1 41.6 38.0* 41.7* 45.7* 122 properties of the group Dividend (gross) 13.6 25.0 22.0 20.0 15.0 10.0 123 notice of annual general meeting Net tangible assets 13.6 309.0 272.0 243.3* 203.4* 164.0* 125 statement accompanying notice of annual general meeting of the company proxy form * Pre-bonus issue figures which have been adjusted accordingly to ensure comparability with post-bonus issue figures. (A 2:1 Bonus Issue was implemented on 15 November 2001) 5-year group financial highlights 2003 Revenue Profit After Tax & Minority Interest Shareholders’ Funds RM million RM million RM million ANNUAL ANNUAL REPORT 1,573 1,473 1,513 1,717 1,825 373 344 318 354 442 1,496 1,836 2,179 2,467 2,811 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 (INCORPORATED IN MALAYSIA) 24816-M Total Assets Employed Earnings Per Share Net Tangible Assets Per Share RM million sen sen MALAKOFF MALAKOFF BERHAD 4,856 5,126 5,780 6,991 7,359 45.7 41.7 38.0 41.6 51.1 164.0 203.4 243.3 272.0 309.0 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 corporate profile Malakoff Berhad (“Malakoff”) was incorporated on 9 October (“Prai Power Plant”) and SKS Power Sdn. Bhd. (“SKS Power”), 1975 as a plantation-based company, and was listed on the the developer of the 2,100MW coal-fired power plant in Tanjung Main Board of Kuala Lumpur Stock Exchange the following year. Bin, Johor (“Tanjung Bin Power Plant”). The Prai Power Plant A shift in its corporate direction resulted in the disposal of was commissioned on 20 June 2003. The addition of Prai Power its plantation-based assets in October 1993 and subsequent Plant to our generation portfolio has increased our total venture into the power sector. effective generation capacity to 1,895MW. This will further increase to 3,785MW when the Tanjung Bin Power Plant is From its humble beginnings, Malakoff has grown into the completed in 2007. nation’s leading independent power producer (“IPP”) with total Group assets exceeding RM7 billion and a market capitalisation Malakoff’s operations & maintenance (“O&M”) services are in excess of RM4.5 billion as at 31 August 2003. The Company undertaken by its wholly-owned subsidiary Teknik Janakuasa lists Malaysia Mining Corporation Berhad, International Power plc, Sdn. Bhd. (“TJSB”). One of the leading O&M service providers in a global power player with power generation interests around the country, TJSB provides O&M services to SEV’s and GB3’s the world and the Employees Provident Fund Board as its power plants; Petronas Gas Berhad’s two (2) Centralised Utility substantial shareholders. Facilities in Kerteh, Terengganu, and Gebeng, Pahang; and Prai Power Plant, through its subsidiary Natural Analysis Sdn. Bhd. Through its portfolio of services that encompasses power generation, operations and maintenance, electricity distribution, Malakoff’s electricity distribution activities are carried out by and project management, the Group continues to play a pivotal its wholly-owned subsidiary Wirazone Sdn. Bhd. (“Wirazone”). role in supporting the nation’s drive towards industrialisation. Wirazone currently supplies limited centralised chilled water plant system and electricity distribution system to the landmark Malakoff’s power generation assets are held via its 75% equity Kuala Lumpur Sentral development (“KL Sentral”) which is set to stake in Segari Energy Ventures Sdn. Bhd. (“SEV”), the owner become the transportation and communications hub of the nation. of the 1,303MW combined cycle power plant in Segari, Perak (“Lumut Power Plant”); and 20% equity interest in Port Dickson The Group provides project management services via another Power Berhad, the owner of a 440MW open cycle power plant wholly-owned subsidiary Malakoff Engineering Sdn. Bhd. (“MESB”), in Port Dickson, Negeri Sembilan, through its wholly-owned the project manager for the GB3 power plant. Its list of recent subsidiary Hypergantic Sdn. Bhd. completed projects managed by MESB include Centralised Chilled Water Plant and Electricity Distribution System within KL Another 75%-owned subsidiary GB3 Sdn. Bhd. (“GB3”) owns the Sentral and the GB3 power plant. MESB will also play a key role 640MW combined cycle gas turbine power plant located adjacent in the development of the Tanjung Bin Power Plant. to the Lumut Power Plant in Segari, Perak. The GB3 power plant which commenced full combined cycle commercial operation For the future, the Group will continue to leverage on its on 31 January 2003, has raised the Group’s total effective track record and expertise within its core competencies to generation capacity to 1,545MW as at the financial year ended enhance its growth and profitability. As Malakoff forges ahead, 31 August 2003. The Company had recently completed its the corporation will continue to uphold its responsibilities acquisition of Prai Power Sdn. Bhd. (“Prai Power”), the owner to the nation, shareholders, customers, employees and the of the 350MW combined cycle power plant in Prai, Penang communities in which it operates. “ From its humble beginnings, Malakoff has grown into the nation’s leading independent power producer with total Group assets exceeding RM7 billion and a market capitalisation in excess of RM4.5 billion.” “Our shareholders’ funds rose from RM2,467.1 million as at the financial year ended 31 August 2002 to RM2,811.3 million as at the end of the financial year under review, an increase of RM344.2 million or 14.0%.” Tan Sri Abdul Halim bin Ali chairman’s statement 2003 Dear Shareholders, ANNUAL ANNUAL REPORT On behalf of the Board of Directors, I am We achieved a Group net profit of RM441.8 million for the financial year under 4 pleased to present the Annual Report and review, an increase of RM88.2 million or 24.9% over the RM353.6 million recorded in 5 Audited Financial Statements of Malakoff the previous financial year. This corresponds to an increase in earnings per share Berhad and its Group of Companies for the from 41.6 sen to 51.1 sen. financial year ended 31 August 2003. Our improved performance has further enhanced shareholders’ value. Our shareholders’ funds rose from RM2,467.1 million for the financial year ended 31 August 2002 to Financial Highlights RM2,811.3 million for the financial year under review, an increase of RM344.2 million Malakoff’s performance for the financial or 14.0%. year ended 31 August 2003 has been (INCORPORATED IN MALAYSIA) commendable. The Group’s revenue increased Such impressive results have been largely due to our sound operational performance. from RM1,717.5 million in the previous During the financial year, Malakoff delivered approximately 10,766GWh of electricity 24816-M financial year to RM1,825.0 million, an to Tenaga Nasional Berhad (“TNB”), which amounted to 15.8% of total electricity increase of RM107.5 million or 6.3%.