At Malakoff, We Continuously Strive To
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BUSINESS REVIEW POWERING EXCELLENCE Corporate Overview 002 Awards and Accolades 004 Corporate Information 007 MALAKOFF CORPORATION BERHAD In the News 008 (“MALAKOFF” OR “THE GROUP”) CONTINUES Corporate Structure 010 TO FOCUS ON OPERATIONAL EXCELLENCE Financial Statistics 012 BY STRENGTHENING OUR FUNDAMENTALS Investor Relations 015 TO ACHIEVE SUSTAINABLE GROWTH. AS THE BOARD OF DIRECTORS LARGEST INDEPENDENT POWER PRODUCER IN MALAYSIA, WE LEVERAGE ON OUR COLLECTIVE Board of Directors 016 Board of Directors’ Profi le 018 EXPERTISE AND RESOURCES EFFECTIVELY AND EFFICIENTLY TO STEER US TOWARDS MANAGEMENT COMMITTEE ACHIEVING OUR VISION “TO BE A PREMIER Management Team 022 GLOBAL POWER AND WATER COMPANY”. Management Team Profi le 024 Table of CONTENTS CORPORATE PERFORMANCE Chairman’s Statement 030 Domestic and International Footprint 034 CEO’s Operations Review – Management Discussion & Analysis 036 Sustainability Statement 048 CORPORATE EVENTS Corporate Events Highlights 076 GOVERNANCE STATEMENTS Corporate Governance Overview Statement 084 Statement of Risk Management and Internal Control 102 Board Audit Committee Report 110 Additional Compliance Information 115 FINANCIAL STATEMENTS Financial Statements 118 OTHERS List of Properties 243 Shareholdings Statistics 258 Notice of Annual General Meeting 262 th Administrative Details 267 13 ANNUAL PROXY FORM GENERAL MEETING Mahkota Ballroom Hotel Istana 73, Jalan Raja Chulan 50200 Kuala Lumpur Thursday, 25 April 2019 10.00 a.m. 002 MALAKOFF CORPORATION BERHAD ANNUAL REPORT 2018 CORPORATE OVERVIEW MALAKOFF CORPORATION BERHAD (“MALAKOFF”) IS AN INDEPENDENT POWER AND WATER PRODUCER BASED IN ASIA. OUR CORE BUSINESS INCLUDE POWER GENERATION, WATER DESALINATION AND OPERATION & MAINTENANCE SERVICES. IN MALAYSIA, WE OWN AN EFFECTIVE GENERATION CAPACITY OF 6,346 MW COMPRISING OF 7 POWER PLANTS THAT RUN ON GAS, OIL AND COAL. OUR VISION CORPORATE VALUES TO BE A PREMIER GLOBAL POWER • INTEGRITY AND WATER COMPANY • TEAMWORK • INNOVATION • EXCELLENCE OUR MISSION • HARMONY • ASPIRING TO BECOME THE PREFERRED EMPLOYER OF CHOICE CORE BUSINESS SEGMENTS • DELIVER SUPERIOR SHAREHOLDER VALUE • POWER GENERATION • SOUGHT AFTER AS A PARTNER • WATER DESALINATION • SUSTAINING BEST IN CLASS • OPERATION & MAINTENANCE SERVICE OPERATING DISCIPLINE • EARNING RESPECT AS A GOOD CORPORATE CITIZEN CRITICAL STRENGTH • PROJECT DEVELOPMENT & EXECUTION • LICENSE TO OPERATE POWER PLANT • FINANCIAL DISCIPLINE • STRONG GOVERNANCE STRUCTURE www.malakoff.com.my 003 MALAKOFF’S MALAYSIAN POWER GENERATION ASSETS WITH TOTAL EFFECTIVE CAPACITY OF 6,346 MW ON THE INTERNATIONAL are held through a number of subsidiaries and associate companies: FRONT, WE OWN AN EFFECTIVE CAPACITY OF TANJUNG BIN ENERGY POWER PLANT 690 MW OF 100% equity interest in Tanjung Bin Energy Sdn Bhd POWER AND 1,000 MW Power Plant 420,925 m3/day OF DESALINATED WATER. PORT DICKSON POWER PLANT THESE PROJECTS ARE 100% equity interest in Port Dickson Power Berhad, via its wholly-owned LOCATED IN SAUDI ARABIA, subsidiary Hypergantic Sdn Bhd OMAN, BAHRAIN, 436 MW Power Plant ALGERIA AND AUSTRALIA. PRAI POWER PLANT Furthermore, Malakoff provides services through 100% equity interest via its wholly-owned the wholly-owned subsidiary companies: subsidiary Prai Power Sdn Bhd 350 MW Power Plant • Operation and maintenance services through wholly-owned Malakoff Power Berhad and Teknik Janakuasa Sdn Bhd; SEV POWER PLANT • Electricity distribution activities through 93.75% equity interest in Segari Energy Malakoff Utilities Sdn Bhd, a wholly-owned Ventures Sdn Bhd subsidiary, that currently supplies centralised 1,303 MW Power Plant chilled water and distributes electricity to the landmark Kuala Lumpur Sentral development; and TANJUNG BIN POWER PLANT • Project management services for in-house and external projects through Malakoff Engineering 90% equity interest in Tanjung Bin Power Sdn Bhd, a wholly-owned subsidiary of Sdn Bhd Malakoff. 2,100 MW Power Plant At Malakoff, we aim to work together with all stakeholders for productive partnership. We GB3 POWER PLANT believe that long-term partnerships re-enforce our success. As an asset-centered organisation, 75% equity interest in GB3 Sdn Bhd we maximise the value of assets we manage for 640 MW Power Plant our shareholders and partners. We do this by fully understanding the elements of cost, risk and performance unique to the environment in which we operate. KAPAR POWER PLANT 40% equity interest in Kapar Energy Ventures Sdn Bhd 2,420 MW Power Plant 004 MALAKOFF CORPORATION BERHAD ANNUAL REPORT 2018 AWARDS AND ACCOLADES 1 2 3 4 MARIM Risk Enterprise Risk NCOSH SHASSIC 5 Star Management Management Excellence Rating Team of The Year Excellence Award Award 2018 The construction of Tanjung Award 2018 2018 – “Electricity Bin Energy Sdn Bhd’s Malakoff won the Risk Malakoff won the Excellence Facility” (“TBE”) new coal unloading jetty and associated bulk Management Team of the Award, in the Enterprise Risk Malakoff’s Lumut Power material was awarded a 5 Year Award in conjunction Management & Business Plant (“LPP”) won the Star Rating for Safety and with the Malaysian Continuity Management National Council for Health Assessment System Association of Risk & category at the Annual Occupational Safety and in Construction (“SHASSIC”) Insurance Management Governance, Risk & Health (“NCOSH”) Excellence in May 2018. Based on (“MARIM”) Conference 2018. Compliance (“GRC”) Alumni Award 2018 for the CIS (Construction Industry The award recognises the Forum held in 2018. The “Electricity Facility” category. Standard) 10:2008 carried Risk Management Team award recognises Malakoff’s The award recognises LPP’s out by CIDB, SHASSIC 5 that has gone the extra mile efforts in implementing excellent track record in Star signifi es a high level of with measurable results in effective Enterprise Risk occupational health and compliance with safety and effectively implementing risk Management and Business safety management system health regulations at a work management practices. Continuity Management. and practices at the site. workplace. www.malakoff.com.my 005 5 6 7 NIOSH DOE Strategic National Day Plaque of Partner Plaque of Celebration Appreciation Appreciation 2018 Special Malakoff received an Special Recognition from the Award appreciation plaque in Department of Environment Malakoff received a Special conjunction with the National (“DOE”) to Malakoff as a Award from Pontian’s Institute of Occupational “Strategic Partner” for its District Offi ce in recognition Health and Safety (“NIOSH”) commitment in environmental for its Corporate Social Silver Jubilee celebration. preservation and conservation Responsibility (“CSR”) The award was presented as a responsible corporate efforts in conjunction in recognition of Malakoff’s citizen, in conjunction with with the National Day continuous support to NIOSH the National Environment Celebration. Malakoff and for promoting a safe Day (Hari Alam Sekitar was described as a and healthy environment at Kebangsaan) 2018. strong supporter of CSR the workplace. programmes especially for the local community in Mukim Serkat, Pontian. Delivering006 MALAKOFF CORPORATION BERHAD Reliable ANNUAL REPORT 2018 Operations We remain committed to continuously review and improve our operational effi ciency and effectiveness to deliver safe and reliable operations for all our operating assets. www.malakoff.com.my 007 CORPORATE INFORMATION BOARD COMPANY SECRETARIES BOARD PROCUREMENT COMMITTEE OF DIRECTORS Yeoh Soo Mei (MAICSA 7032259) Sharifah Ashtura Jamalullail Chairman DATUK HAJI HASNI HARUN Syed Osman (LS 0009113) Datuk Rozimi Remeli Independent Non-Executive Chairman Independent Non-Executive Director DATO’ SRI CHE KHALIB BOARD AUDIT COMMITTEE Members MOHAMAD NOH Chairman Datuk Ooi Teik Huat Non-Independent Non-Executive Director Non-Independent Non-Executive Director Datuk Dr. Syed Muhamad CINDY TAN LER CHIN Syed Abdul Kadir Cindy Tan Ler Chin Non-Independent Non-Executive Director Independent Non-Executive Director Non-Independent Non-Executive Director Members DATUK OOI TEIK HUAT AUDITORS Non-Independent Non-Executive Director Datuk Idris Abdullah Independent Non-Executive Director KPMG PLT DATUK DR. SYED MUHAMAD Datuk Ooi Teik Huat Level 10, KPMG Tower SYED ABDUL KADIR Non-Independent Non-Executive Director No. 8, First Avenue Independent Non-Executive Director Bandar Utama, 47800 Petaling Jaya Datuk Rozimi Remeli Selangor Darul Ehsan Independent Non-Executive Director DATUK IDRIS ABDULLAH Independent Non-Executive Director PRINCIPAL BANKER BOARD NOMINATION AND DATUK ROZIMI REMELI REMUNERATION COMMITTEE CIMB Bank Berhad Independent Non-Executive Director Chairman Malayan Banking Berhad SHARIFAH SOFIA SYED Datuk Haji Hasni Harun RHB Bank Berhad Independent Non-Executive Chairman MOKHTAR SHAH AmBank Berhad Non-Independent Non-Executive Director Members SHARE REGISTRARS Datuk Dr. Syed Muhamad Syed Abdul Kadir Independent Non-Executive Director Boardroom Share Registrars Sdn Bhd (formerly known as Symphony Share Datuk Idris Abdullah Registrars Sdn Bhd) Independent Non-Executive Director Level 6, Symphony House Dato’ Sri Che Khalib Mohamad Noh Pusat Dagangan Dana 1 Non-Independent Non-Executive Director Jalan PJU 1A/46, 47301 Petaling Jaya Selangor Darul Ehsan Tel: +603-7849 0777 BOARD RISK AND INVESTMENT Fax: +603-7841 8151/52 COMMITTEE Chairman COMPANY ADDRESS Datuk Idris Abdullah Independent Non-Executive Director Level 7, Block 4, Plaza Sentral Jalan Stesen Sentral 5 Members 50470 Kuala Lumpur Tel: +603-2263 3388 Datuk Dr. Syed Muhamad