000Malakoff_annual_report

notes to the consoliDateD financial statements (continued) 7. investment in associates (continued) T he 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 interest in the associates. 2014 S huaibah K apar Water & Hidd Energy Electricity Power Ventures Company Company S dn. Bhd. L imited B .S.C RM’000 RM’000 RM’000 summarised financial information as at 31 december Non-current assets 2,860,229 6,739,485 3,375,084 Current assets 1,519,584 429,755 317,601 Non-current liabilities ( 3,235,750) (5,337,201) (3,106,649) Current liabilities ( 952,954) ( 538,611) ( 418,414) Net assets 191,109 1,293,428 167,622 year ended 31 december ( Loss)/Profit for the year ( 128,789) 269,492 104,130 Other comprehensive income – 13,800 ( 59,423) T otal comprehensive (expense)/income ( 128,789) 283,292 44,707 149 149

notes to the consoliDateD financial statements (continued) 7. investment in associates (continued) T he 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 interest in the associates. 2014 S huaibah K apar Water & Hidd Other Energy Electricity Power individually Ventures Company Company immaterial S dn. Bhd. L imited B .S.C associates T otal RM’000 RM’000 RM’000 RM’000 RM’000 included in the total comprehensive income/(expense) is: Revenue 1,973,405 947,910 1,039,970 Depreciation and amortisation ( 241) ( 241,788) ( 160,454) I nterest income 18,277 – 13 I nterest expense ( 187,406) ( 320,412) ( 155,233) I ncome tax expense ( 42,801) – – reconciliation of net assets to carrying amount as at 31 december Group’s share of net assets 76,444 155,212 67,050 66,279 364,985 Goodwill – – 303,979 – 303,979 I ntangible assets 110,447 – 67,278 – 177,725 Redeemable unsecured loan stocks 356,630 – – – 356,630 Carrying amount in the statement of financial position 543,521 155,212 438,307 66,279 1,203,319 group’s share of result year ended 31 december Group’s share of (loss)/profit for the year ( 51,515) 32,339 41,652 12,536 35,012 Group’s share of other comprehensive income/(expense) – 1,656 ( 23,769) ( 495) ( 22,608) Group’s share of total comprehensive (expense)/income ( 51,515) 33,995 17,883 12,041 12,404 other information Dividend received – – ( 16,975) ( 3,000) ( 19,975) 150 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 7. investment in associates (continued) T he 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 interest in the associates. 2013 Shuaibah P ort K apar Water & Hidd Dickson Energy Electricity Power P ower Ventures Company Company B erhad S dn. Bhd. L imited B .S.C RM’000 RM’000 RM’000 RM’000 summarised financial information as at 31 december Non-current assets 134,949 3,002,390 6,531,350 3,257,531 Current assets 152,386 1,733,204 429,933 293,508 Non-current liabilities ( 15,387) (3,387,729) (5,294,617) (2,985,281) Current liabilities ( 35,461) (1,027,965) ( 553,766) ( 414,676) Net assets 236,487 319,900 1,112,900 151,082 year ended 31 december Profit/(Loss) for the year 78,500 ( 44,097) 237,302 69,916 Other comprehensive income – – – 263,751 T otal comprehensive income/(expense) 78,500 ( 44,097) 237,302 333,667 151 151

notes to the consoliDateD financial statements (continued) 7. investment in associates (continued) T he 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 interest in the associates. 2013 S huaibah P ort K apar Water & Hidd Other Dickson Energy Electricity Power individually P ower Ventures Company Company mmaterial i B erhad S dn. Bhd. L imited B .S.C associates T otal RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 included in the total comprehensive income/(expense) is: Revenue 321,602 2,622,256 902,163 976,116 Depreciation and amortisation ( 22,937) ( 244) ( 232,130) ( 165,311) I nterest income 1,713 16,937 – 13 I nterest expense ( 1,314) ( 288,523) ( 324,195) ( 156,318) I ncome tax expense ( 26,548) ( 35,775) – – reconciliation of net assets to carrying amount as at 31 december Group’s share of net assets 59,122 127,960 124,344 60,388 59,253 431,067 Goodwill – – – 284,765 – 284,765 I ntangible assets – 149,078 – 72,518 – 221,596 Redeemable unsecured loan stocks – 357,030 – – – 357,030 Carrying amount in the statement of financial position 59,122 634,068 124,344 417,671 59,253 1,294,458 152 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 7. investment in associates (continued) T he 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 interest in the associates. 2013 S huaibah P ort K apar Water & Hidd Other Dickson Energy Electricity Power individually P ower Ventures Company Company mmaterial i B erhad S dn. Bhd. L imited B .S.C associates T otal RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 group’s share of result year ended 31 december Group’s share of profit/ (loss) for the year 19,625 ( 17,639) 28,476 27,945 ( 1,002) 57,405 Group’s share of other comprehensive (expense)/income – – ( 106,987) 71,873 ( 22,116) ( 57,230) Group’s share of total comprehensive income/(expense) 19,625 ( 17,639) ( 78,511) 99,818 ( 23,118) 175 other information Dividend received 27,750 – – 23,947 2,671 54,368 8 . investment in an equity accounted Joint venture 2014 2013 group RM’000 RM’000 at cost Unquoted shares, outside Malaysia 64,118 64,118 Share of post-acquisition reserves ( 6,233) ( 12,888) 57,885 51,230 Almiyah Attilemcania SPA (“AAS”), a joint arrangement which is principally engaged in the construction, operation and maintenance of a sea water desalination plant and marketing of desalinated water produced in Algeria. AAS is structured as a separate vehicle and provides the Group rights to the net assets of the entity. Accordingly, the Group has classified the investment in AAS as an equity accounted joint venture. 153 153

notes to the consoliDateD financial statements (continued) 8 . investment in an equity accounted Joint venture (continued) The following tables summarise the financial information of AAS, as adjusted for any differences in accounting policies and reconcile the information to the carrying amount of the Group’s interest i n AAS. 2014 2013 group RM’000 RM’000 Percentage of ownership interest 35.7% 35.7% Percentage of voting interest 40.0% 40.0% summarised financial information as at 31 december Non-current assets 492,250 535,944 Current assets 232,888 192,352 Non-current liabilities ( 485,737) ( 511,791) Current liabilities ( 77,258) ( 73,004) 162,143 143,501 year ended 31 december Profit for the year 18,641 10,636 included in the profit for the year are: Revenue 120,755 121,082 Depreciation and amortisation ( 21,463) ( 23,156) I nterest expense ( 17,139) ( 19,752) reconciliation of net assets to carrying amount as at 31 december Group’s share of net assets 57,885 51,230 Carrying amount in the statement of financial position 57,885 51,230 group’s share of result year ended 31 december Group’s share of profit for the year 6,655 3,797 154 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 9. finance lease receivable T he finance lease receivable relates to the 25-year lease agreement for the right to use and occupy 3 parcels of land, substation and assets. T he future minimum lease payments under finance lease together with the present value of the net minimum lease payments are as follows: 2014 2013 group RM’000 RM’000 minimum lease payments: Within one year 143,629 141,499 1-2 years 157,675 146,452 2-5 years 495,574 492,726 Over 5 years 3,916,436 4,166,757 Gross investment in finance lease 4,713,314 4,947,434 L ess : Unearned finance income ( 2,722,340) (2,934,489) Present value of minimum lease payments 1,990,974 2,012,945 analysed as: Within one year – – 1-2 years 211 – 2-5 years 24,960 – Over 5 years 1,965,803 2,012,945 T otal finance lease receivable 1,990,974 2,012,945 comprising: Current – – Non-current 1,990,974 2,012,945 1,990,974 2,012,945 F or the financial year ended 31 December 2014, the Group recognised a finance lease income of RM160,161,000 (2013: RM80,268,000) as disclosed in Note 21. 155 155

notes to the consoliDateD financial statements (continued) 10. deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following: Assets Liabilities Net 2014 2013 2014 2013 2014 2013 group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 P roperty, plant and equipment – – ( 1,989,694) (2,093,386) (1,989,694) (2,093,386) Provisions 216,594 147,053 – – 216,594 147,053 I ntangibles – – ( 1,087,657) (1,183,274) (1,087,657) (1,183,274) Unutilised tax losses 21,467 38,143 – – 21,467 38,143 Unutilised capital allowances 229,829 518,904 – – 229,829 518,904 Deferred income 707,283 641,928 – – 707,283 641,928 Deferred expense – – ( 41,279) ( 19,545) ( 41,279) ( 19,545) Others 2,244 2,244 – – 2,244 2,244 T ax assets/(liabilities) 1,177,417 1,348,272 ( 3,118,630) (3,296,205) (1,941,213) (1,947,933) Set-off of tax ( 397,568) ( 650,760) 397,568 650,760 – – Net tax assets/(liabilities) 779,849 697,512 ( 2,721,062) (2,645,445) (1,941,213) (1,947,933) Assets Liabilities Net 2014 2013 2014 2013 2014 2013 company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Provisions – 2,555 – – – 2,555 156 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 10. deferred tax assets and liabilities (continued) Movements in temporary differences during the year: Recognised Arising Recognised Recognised i n other f rom i n profit At i n profit comprehensive business At or loss 31.12.2013/ or loss i ncome combination At 1.1.2013 ( Note 27) 1.1.2014 ( Note 27) ( Note 25) ( Note 37) 31.12.2014 group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 deferred tax assets Provisions 70,814 76,239 147,053 19,168 39,715 10,658 216,594 Unutilised tax losses – 38,143 38,143 ( 16,676) – – 21,467 Unutilised capital allowances 650,196 ( 131,292) 518,904 (289,075) – – 229,829 Deferred income 597,276 44,652 641,928 65,355 – – 707,283 Others 2,244 – 2,244 – – – 2,244 T ax assets 1,320,530 27,742 1,348,272 (221,228) 39,715 10,658 1,177,417 Set-off of tax ( 708,960) 58,200 ( 650,760) 253,192 – – ( 397,568) Net tax assets 611,570 85,942 697,512 31,964 39,715 10,658 779,849 deferred tax liabilities P roperty, plant and equipment ( 2,165,541) 72,155 (2,093,386) 130,041 – ( 26,349) (1,989,694) I ntangibles ( 1,293,661) 110,387 (1,183,274) 120,802 – ( 25,185) (1,087,657) ( Deferred expense – ( 19,545) ( 19,545) 21,734) – – ( 41,279) T ax liabilities ( 3,459,202) 162,997 (3,296,205) 229,109 – ( 51,534) (3,118,630) Set-off of tax 708,960 ( 58,200) 650,760 (253,192) – – 397,568 ( Net tax liabilities ( 2,750,242) 104,797 (2,645,445) 24,083) – ( 51,534) (2,721,062) Recognised Recognised in profit At in profit At or loss 31.12.2013/ or loss At 1.1.2013 ( Note 27) 1.1.2014 ( Note 27) 31.12.2014 company RM’000 RM’000 RM’000 RM’000 RM’000 deferred tax assets Provisions 5,884 ( 3,329) 2,555 ( 2,555) – deferred tax liabilities Provisions ( 15,899) 15,899 – – – 157 157

notes to the consoliDateD financial statements (continued) 11. trade and other receivables Group Company 2014 2013 2014 2013 Notes RM’000 RM’000 RM’000 RM’000 non-current Other receivables 11.1 114,793 126,939 – – current trade T rade receivables 11.2 905,118 922,631 – – L ess: Allowance for impairment loss ( 360,627) ( 228,288) – – 544,491 694,343 – – non-trade Amount due from subsidiaries – – 921,736 582,255 Amount due from an associate 11.3 320,370 293,960 320,554 293,960 Other receivables 297,619 136,456 7,930 7,133 Deposits 107,150 105,783 4,386 6,192 Prepayments 34,653 35,726 – – 759,792 571,925 1,254,606 889,540 1,304,283 1,266,268 1,254,606 889,540 1,419,076 1,393,207 1,254,606 889,540 11.1 other receivables Other receivables represent the transaction costs which arose from derivative instruments, which will be amortised systematically over the tenure of the hedged item. 158 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 11. trade and other receivables (continued) 11.2 trade receivables I ncluded in trade receivables of the Group is amount owing from an entity that is under common control by 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 2014 2013 RM’000 RM’000 T enaga Nasional Berhad 876,984 886,743 11.3 amount due from an associate The amount due from an associate relates to interest receivable subject to the existing terms of t he unsecured loan stocks. 12. inventories Group 2014 2013 RM’000 RM’000 at cost Spares and consumables 269,848 235,076 Coal 161,345 173,724 Diesel fuel 87,241 70,275 518,434 479,075 159 159

notes to the consoliDateD financial statements (continued) 13. other investments Group 2014 2013 RM’000 RM’000 Restated loans and receivables: Deposits with licensed banks and other licensed corporations 321,509 1,165,954 The carrying amount of fixed deposits is assumed to reasonably approximate their fair values. I ncluded in other investments of the Group are amounts that are placed with licensed banks which are under common control by the Government of Malaysia (a party that has an indirect significant i nfluence on the Group or the Company) as at the reporting periods as follows: Group 2014 2013 RM’000 RM’000 Restated Deposits with licensed banks and other licensed corporations 170,360 681,542 1 4. cash and cash equivalents Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Restated Deposits with licensed banks and other licensed corporations 3,112,052 2,140,945 584,852 128,596 Cash and bank balances 462,848 234,838 8,142 5,989 3,574,900 2,375,783 592,994 134,585 160 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 1 4. cash and cash equivalents (continued) I ncluded in cash and cash equivalents of the Group and of the Company are amounts that are placed with licensed banks and other licensed corporations which are under common control by the Government of Malaysia (a party that has an indirect significant influence on the Group and on the Company) as at the reporting periods as follows: Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Restated Deposits with licensed banks and other licensed corporations 2,763,796 1,778,039 586,569 134,579 15. caPital and reserves 15.1 share capital 2014 2013 Number Number Amount of shares Amount of shares group and company RM’000 ’ 000 RM’000 ‘ 000 authorised: Ordinary shares of RM1 each 490,000 490,000 490,000 490,000 Redeemable convertible non-cumulative preference shares of RM0.10 each 10,000 100,000 10,000 100,000 issued and fully paid: Ordinary shares of RM1 each: At beginning/end of the year 351,344 351,344 351,344 351,344 Redeemable convertible non-cumulative preference shares of RM0.10 each: At beginning/end of the year 4,179 41,792 4,179 41,792 355,523 393,136 355,523 393,136 161 161

notes to the consoliDateD financial statements (continued) 15. caPital and reserves (continued) 15.2 ordinary shares T he 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. 15.3 redeemable convertible non-cumulative preference shares Holders of redeemable convertible (at the option of the Company in the event the Company i s listed on Bursa Malaysia) non-cumulative preference shares receive a non-cumulative gross dividend of RM1 per share at the Company’s discretion and are distributed in priority to all dividends declared and payable to the Company’s ordinary shareholders. They do not have the r i ght to participate in any additional dividends declared for ordinary shareholders. Preference shares do not carry the right to vote except for variation of holders’ rights to the class of shares, proposal to wind up and during the winding up of the Company, proposal to reduce the share capital of the Company and on the proposal for the disposal of the whole Company’s property, business or undertaking. The preference shares shall rank equally among themselves in all r espects and shall rank in senior to the ordinary shares but junior to the Junior Sukuk. 15.4 foreign currency translation reserve T he 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, as well as from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary. 15.5 capital redemption reserve T he Company had on 1 October 2009 redeemed 8,400,000 Redeemable Convertible Preference Shares (“RCPS”) at a redemption price of RM10.00 per share comprising the nominal amount of RM0.10 each and premium of RM9.90 each to the RCPS holders registered in the Company’s Register of Members. The redemption of the RCPS was made proportionately in respect of each holding of RCPS, fully paid out from the retained profits and share premium account of the Company. I n accordance with the requirement of Section 67A of the Companies Act, 1965, an amount equivalent to the nominal value of the RCPS totalling RM840,000 was transferred from the retained profits to the capital redemption reserve. 15.6 hedging reserve T he hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedges related transactions that have not yet occurred. 162 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 1 6. loans and borroWings Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 non-current secured Al-Istisna bond 64,650 129,495 – – AUD term loan 1 454,217 425,508 – – AUD term loan 2 1,462,219 1,501,324 – – RM term loan 1 47,153 39,220 – – RM term loan 2 30,000 – – – Sukuk Ijarah medium term notes 3,581,077 3,544,065 – – Sukuk medium term notes 3,884,427 4,244,338 – – Sukuk Wakalah 400,000 450,000 – – Senior Sukuk Murabahah 3,290,000 3,290,000 – – Senior RM term loan 364,000 – – – Senior USD term loan 644,800 – – – USD term loan 286,363 277,107 – – unsecured J unior EBL term loan 1,058,064 726,905 – – Subordinated loan notes 126,247 183,798 – – Unrated Junior Sukuk Musharakah 1,800,000 1,800,000 1,800,000 1,800,000 17,493,217 16,611,760 1,800,000 1,800,000 current secured Commercial papers – 198,173 – – Al-Bai Bithaman Ajil bonds – 130,000 – – Al-Istisna bonds 64,845 63,736 – – AUD term loan 2 13,629 10,872 – – RM term loan 1 1,347 – – – RM term loan 2 155,000 – – – Sukuk medium term notes 440,000 500,000 – – Sukuk Wakalah 50,000 20,000 – – USD term loan 9,441 8,844 – – 734,262 931,625 – – 18,227,479 17,543,385 1,800,000 1,800,000 163 163

notes to the consoliDateD financial statements (continued) 1 6. loans and borroWings (continued) security a) As at 31 December 2014, the bonds, medium term and loan notes of the Group were secured over property, plant and equipment with a carrying amount of RM13,335,958,000 (2013: RM12,261,679,000). b) As at 31 December 2014, Sukuk Wakalah was secured over the Operation and Maintenance Agreement, Sub Operation and Maintenance Agreement and Asset Sales Agreement held by a subsidiary, Tanjung Bin O&M Berhad (“TBOM”) and all the balances in the Revenue Account, Operating Account, Finance Service Reserve Account, Maintenance Reserve Account and Overhaul Reserve Account of TBOM. significant covenants The borrowings are subject to the fulfillment of the following significant covenants: i ) ABBA bonds issued by GB3 Sdn. Bhd. (“GB3”) I n 2013, GB3 was required to maintain a debt-to-equity ratio of not more than 9:1 during post- completion (of the power plant) period and a debt service cover ratio of at least 1.25 times commencing from the commercial operation date. The ABBA bonds was fully redeemed during t he year. i i) Al-Istisna bonds issued by Prai Power Sdn. Bhd. (“PPSB”) PPSB is required to maintain a debt-to-equity ratio of not more than 4:1 and an annual finance s ervice ratio of at least 1.4 times commencing from the third year of the first issuance of the bonds. i ii) Sukuk Ijarah medium term notes issued by Tanjung Bin Power Sdn. Bhd. (“TBP”) 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. i v) USD term loan drawdown by Malakoff International Limited (“MIL”) MIL is required to maintain a debt-to-equity ratio of the Guarantor (the Company) of not more t han 1.25:1 and a Group debt-to-equity ratio of not more than 7:1. v) Junior EBL term loan facility drawdown by Tanjung Bin Energy Issuer Berhad (“TBEI”) TBEI is required to maintain a debt-to-equity ratio of the Original Sponsor (the Company) of not more than 1.25:1 and a Group debt-to-equity ratio of not more than 7:1. vi) Senior Sukuk Murabahah issued by Tanjung Bin Energy Issuer Berhad (“TBEI”) TBEI is required to maintain a debt-to-equity ratio of not exceed 80:20 and a finance service cover r atio of not less than 1.05:1. 164 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 1 6. loans and borroWings (continued) significant covenants (continued) vii) Senior USD term loan drawdown by Tanjung Bin Energy Issuer Berhad (“TBEI”) Senior USD term loan was drawndown by TBEI during the financial year. TBEI is required to maintain a debt-to-equity ratio of not exceed 80:20 and a finance service cover ratio of not less t han 1.05:1. viii) Senior RM term loan drawdown by Tanjung Bin Energy Issuer Berhad (“TBEI”) Senior RM term loan was drawndown by TBEI during the financial year. TBEI is required to maintain a debt-to-equity ratio of not exceed 80:20 and a finance service cover ratio of not less t han 1.05:1. i x) AUD term loan 1 drawdown by Malakoff International Limited (“MIL”) MIL is required to maintain a total debt-to-equity ratio of the parent (the Company) of not more t han 1.25:1 and a Group total debt-to-equity ratio of not more than 7:1. x) AUD term loan 2 drawdown by Wind Macarthur Finco Pty Limited (“MWF”) MWF is required to maintain a minimum projected debt service cover ratio of 1.10:1 on any two consecutive calculation date. x i) Sukuk Wakalah issued by Tanjung Bin O&M Berhad (“TBOM”) T BOM is required to maintain a debt-to-equity ratio of not more than 80:20 commencing 24 months after the issue date until the final maturity and a finance service cover ratio of at l east 1.25 times. xii) Sukuk medium term notes issued by Malakoff Power Berhad (“MPB”) MPB was required to maintain an aggregated debt-to-equity ratio of not more than 1:1 and the Group debt-to-equity ratio of not more than 5.5:1. xiii) Commercial papers issued by Malakoff Power Berhad (“MPB”) I n 2013, MPB was required to maintain a consolidated company debt-to-equity ratio of not more t han 1.25:1 and a Group debt-to-equity ratio of not more than 7:1. Commercial paper was fully r edeemed during the financial year. xiv) RM term loan 1 drawdown by Malakoff Utilities Sdn. Bhd. (“MUSB”) MUSB is required to maintain a debt-to-equity ratio of not more than 1.50:1 and a debt service cover ratio of not less than 1.20 times. xv) RM term loan 2 drawdown by Port Dickson Power Berhad (“PDP”) RM term loan 2 was drawndown by PDP during the financial year. PDP is required to maintain a finance service coverage ratio of at least 1.10 times. 165 165

notes to the consoliDateD financial statements (continued) 1 6. loans and borroWings (continued) significant covenants (continued) terms and debt repayment schedule Carrying Under 1 1-2 2-5 Over 5 Y ear of amount y ear y ears y ears y ears group maturity RM’000 RM’000 RM’000 RM’000 RM’000 2014 secured Al-Istisna bond 2015 – 2016 129,495 64,845 64,650 – – AUD term loan 1 2016 454,217 – 454,217 – – AUD term loan 2 2015 – 2030 1,475,848 13,629 22,109 1,055,505 384,605 RM term loan 1 2015 – 2024 48,500 1,347 5,389 16,167 25,597 RM term loan 2 2015 – 2016 185,000 155,000 30,000 – – S ukuk Ijarah medium term notes 2019 – 2029 3,581,077 – – 525,000 3,056,077 S ukuk medium term notes 2015 – 2031 4,324,427 440,000 100,000 1,000,000 2,784,427 Sukuk Wakalah 2015 – 2029 450,000 50,000 55,000 55,000 290,000 Senior Sukuk Murabahah 2017 – 2032 3,290,000 – – 210,000 3,080,000 Senior RM term loan 2017 – 2024 364,000 – – 182,420 181,580 Senior USD term loan 2017 – 2027 644,800 – – 164,300 480,500 USD term loan 2015 – 2017 295,804 9,441 15,734 270,629 – unsecured J unior EBL term loan 2017 1,058,064 – – 1,058,064 – S ubordinated loan notes 2022 – 2032 126,247 – – – 126,247 Unrated Junior Sukuk Musharakah 2042 1,800,000 – – – 1,800,000 18,227,479 734,262 747,099 4,537,085 12,209,033 166 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 1 6. loans and borroWings (continued) significant covenants (continued) terms and debt repayment schedule (continued) Carrying Under 1 1-2 2-5 Over 5 Y ear of amount y ear y ears y ears y ears group maturity RM’000 RM’000 RM’000 RM’000 RM’000 2013 secured ABBA bonds 2014 130,000 130,000 – – – Al-Istisna bonds 2014 – 2016 193,231 63,736 64,845 64,650 – AUD term loan 1 2016 425,508 – – 425,508 – AUD term loan 2 2014 – 2030 1,512,196 10,872 16,233 1,082,255 402,836 RM term loan 2015 – 2024 39,220 – 1,089 13,073 25,058 Commercial papers 2014 198,173 198,173 – – – S ukuk Ijarah medium term notes 2019 – 2029 3,544,065 – – – 3,544,065 S ukuk medium term notes 2014 – 2031 4,744,338 500,000 440,000 430,000 3,374,338 Sukuk Wakalah 2014 – 2029 470,000 20,000 50,000 110,000 290,000 Senior Sukuk Murabahah 2017 – 2032 3,290,000 – – 145,000 3,145,000 USD term loan 2014 – 2017 285,951 8,844 8,844 268,263 – unsecured J unior EBL term loan 2017 726,905 – – 726,905 – S ubordinated loan notes 2022 – 2031 183,798 – – – 183,798 Unrated Junior Sukuk Musharakah 2042 1,800,000 – – – 1,800,000 17,543,385 931,625 581,011 3,265,654 12,765,095 167 167

notes to the consoliDateD financial statements (continued) 1 6. loans and borroWings (continued) significant covenants (continued) terms and debt repayment schedule (continued) Carrying Under 1 1-2 2-5 Over 5 company Y ear of amount y ear y ears y ears y ears maturity RM’000 RM’000 RM’000 RM’000 RM’000 2014 unsecured Unrated Junior Sukuk Musharakah 2042 1,800,000 – – – 1,800,000 1,800,000 – – – 1,800,000 2013 unsecured Unrated Junior Sukuk Musharakah 2042 1,800,000 – – – 1,800,000 1,800,000 – – – 1,800,000 16.1 unrated Junior sukuk musharakah Pursuant to the terms and conditions of the unrated Junior Sukuk Musharakah (“Instrument”), t he Instrument will either expire on 3 September 2042 or when the Group and the Company t rigger the special event, whichever is earlier. Special event is the date of listing of the Company’s entire and issued paid-up share capital on Bursa Malaysia Securities Berhad or such other s tock exchanges. In determining the effective interest rate to account for the present value of t he Instrument at the end of the reporting period, the Group and the Company considered all contractual terms of the Instrument, including the timing and probability of triggering the special event. The Company’s intention to list the entire issued and paid-up share capital on the Main Market of Bursa Malaysia Securities Berhad remained unchanged and is expected to crystallise within 12 months from the current reporting period. Accordingly, an estimated cash flows is used to compute the present value instead of using the contractual cash flow over the full contractual t erm of the Instrument. The present value of the Instrument at the end of the reporting period were approximate its carrying amount due to the short term nature of the Instrument. 168 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 17. emPloyee benefits Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Defined benefit obligations 90,526 84,203 26,322 24,317 F air value of plan assets ( 15,619) ( 16,788) ( 13,975) ( 14,092) Net defined benefit liabilities 74,907 67,415 12,347 10,225 T he Company’s Staff Retirement Benefits Scheme (“Scheme”) provides pension benefits for the eligible employees upon retirement. Five entities within the Group, namely Malakoff Corporation Berhad, Teknik J anakuasa Sdn. Bhd., Malakoff Utilities Sdn. Bhd., Malakoff Engineering Sdn. Bhd. and Malakoff Power Berhad participated in making contributions to the Scheme. The following table shows the reconciliation from the opening balance to the closing balance for net defined benefit liability and its components: movement in defined benefit obligations Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Defined benefit obligations at beginning of the year 84,203 75,101 24,317 24,122 included in profit or loss Current service cost 8,459 8,555 2,501 2,521 I nterest cost 4,499 3,943 1,371 1,182 Other service cost ( 54) 834 – 792 12,904 13,332 3,872 4,495 included in other comprehensive income Actuarial (gain)/loss arising from: – Demographic assumptions ( 1,160) – ( 233) – – Financial assumptions 1,238 ( 2,265) 149 ( 610) – Experience adjustments ( 872) – 2,630 – – Others – – (152) – ( 794) ( 2,265) 2,394 ( 610) others Benefits paid directly by the employer ( 3,069) ( 990) ( 147) ( 579) Benefits paid by the plan ( 2,718) ( 975) ( 2,261) ( 107) I ntercompany employee transfers – – ( 1,853) ( 3,004) ( 5,787) ( 1,965) ( 4,261) ( 3,690) Defined benefit obligations at end of the year 90,526 84,203 26,322 24,317 169 169

notes to the consoliDateD financial statements (continued) 17. emPloyee benefits (continued) movement in fair value of plan assets Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Plan assets at beginning of the year ( 16,788) ( 1,885) ( 14,092) ( 587) included in profit or loss I nterest income ( 928) ( 72) ( 829) ( 17) ( 928) ( 72) ( 829) ( 17) included in other comprehensive income Return on scheme assets lesser/ (greater) than discount rate 782 ( 168) 928 105 Others – – ( 983) – 782 ( 168) ( 55) 105 others Benefits paid by the plan 2,718 975 2,261 107 Employer contribution ( 1,403) ( 15,638) ( 1,260) ( 13,700) 1,315 ( 14,663) 1,001 ( 13,593) Plan assets at end of the year end of the year ( 15,619) ( 16,788) ( 13,975) ( 14,092) 170 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 17. emPloyee benefits (continued) movement in net defined benefit liabilities Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Net defined benefit liabilities at beginning of the year 67,415 73,216 10,225 23,535 included in profit or loss Current service cost 8,459 8,555 2,501 2,521 I nterest cost 3,571 3,871 542 1,165 Other service cost ( 54) 834 – 792 11,976 13,260 3,043 4,478 included in other comprehensive income Actuarial (gain)/loss arising from: – Demographic assumptions ( 1,160) – ( 233) – – Financial assumptions 1,238 ( 2,265) 149 ( 610) – Loss due to experience (872) – 2,630 – Return on scheme assets lesser/ ( greater) than discount rate 782 ( 168) 928 105 Others – – ( 1,135) – ( 12) ( 2,433) 2,339 ( 505) other Benefits paid directly by the employer ( 3,069) ( 990) ( 147) ( 579) Employer contribution ( 1,403) ( 15,638) ( 1,260) ( 13,700) I ntercompany employee transfer – – ( 1,853) ( 3,004) ( 4,472) ( 16,628) ( 3,260) ( 17,283) Net defined benefit liabilities at end of the year 74,907 67,415 12,347 10,225 The Group expects to pay RM1,868,000 in contributions to the defined benefit plans in 2015. 171 171

notes to the consoliDateD financial statements (continued) 17. emPloyee benefits (continued) Plan assets The major categories of plan assets are as follows: Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Equity instruments 8,981 8,237 8,036 6,915 Malaysian government securities 3,998 3,492 3,578 2,931 Corporate bonds 500 – 447 – F oreign investments 1,234 2,965 1,104 2,489 Cash and cash equivalents 609 1,847 545 1,550 Others 297 247 265 207 15,619 16,788 13,975 14,092 actuarial assumptions Principal actuarial assumptions at the end of the reporting period: Group Company 2014 2013 2014 2013 Discount rate 5.4% 5.3% 5.4% 5.3% Salary inflation 7.9% 7.9% 7.9% 7.9% As at 31 December 2014, the Scheme duration is estimated to be around 11 years (2013: 12 years). sensitivity analysis Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below. Group Company 2014 2014 RM’000 RM’000 impact on the aggregate service and interest costs discount rate One percentage point increase ( 522) ( 112) One percentage point decrease 559 116 salary inflation One percentage point increase 1,610 438 One percentage point decrease ( 1,392) ( 383) 172 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 17. emPloyee benefits (continued) sensitivity analysis (continued) Group Company 2014 2014 RM’000 RM’000 impact on the defined benefit obligation discount rate One percentage point increase ( 8,680) ( 2,212) One percentage point decrease 10,147 2,548 salary inflation One percentage point increase 9,884 2,485 One percentage point decrease ( 8,637) ( 2,203) Group Company 2013 2013 RM’000 RM’000 impact on the aggregate service and interest costs discount rate One percentage point increase ( 784) ( 199) One percentage point decrease 892 226 salary inflation One percentage point increase 1,818 501 One percentage point decrease ( 1,541) ( 429) impact on the defined benefit obligation discount rate One percentage point increase ( 9,517) ( 2,575) One percentage point decrease 11,244 2,996 salary inflation One percentage point increase 11,852 3,189 One percentage point decrease ( 10,196) ( 2,785) Although the analysis does not account to the full distribution of cash flows expected under the plan, i t does provide an approximation of the sensitivity of the assumptions shown. 173 173

notes to the consoliDateD financial statements (continued) 18. deferred income 2014 2013 group RM’000 RM’000 At beginning of the year 2,668,485 2,389,105 Additions 333,359 329,882 Credited to profit or loss ( 60,264) ( 50,502) At end of the year 2,941,580 2,668,485 Non-current 2,811,196 2,608,222 Current 130,384 60,263 2,941,580 2,668,485 19. trade and other Payables Group Company 2014 2013 2014 2013 Notes RM’000 RM’000 RM’000 RM’000 trade T rade payables 19.1 407,152 223,161 – – non-trade Other payables 19.2 148,847 370,943 6,591 10,406 Accrued expenses 19.2 419,515 340,012 37,611 38,206 Amounts due to subsidiaries 19.3 – – 1,134,453 853,249 568,362 710,955 1,178,655 901,861 975,514 934,116 1,178,655 901,861 174 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 19. trade and other Payables (continued) 19.1 trade payables I ncluded in trade payables of the Group are amounts owing to entities that are under common control by the Government of Malaysia (a party that has an indirect significant influence on the Group) as at the reporting period as follows: Net balance outstanding 2014 2013 RM’000 RM’000 Petroliam Nasional Berhad 26,339 68,445 Petronas Dagangan Berhad 33,641 – T NB Fuel Services Sdn. Bhd. 315,992 99,391 T enaga Nasional Berhad 6,219 4,995 382,191 172,831 19.2 other payables and accrued expenses As at 31 December 2014, included in accrued expenses of the Group were interest expense payable of RM171,865,000 (2013: RM193,196,000) and provision for CESS fund of RM45,582,000 ( 2013: RM26,480,000). 19.3 amounts due to subsidiaries The amounts due to subsidiaries are unsecured, interest free and repayable on demand. 175 175

notes to the consoliDateD financial statements (continued) 20. derivative financial assets/(liabilities) 2014 2013 Assets Liabilities Assets Liabilities group RM’000 RM’000 RM’000 RM’000 non-current Derivatives used for hedging – Interest rate swaps – ( 167,338) 16,134 ( 31,762) – Cross currency swaps 99,147 – 64,107 – 99,147 ( 167,338) 80,241 ( 31,762) current Derivatives used for hedging – Interest rate swaps – ( 27,704) – ( 34,319) – ( 27,704) – ( 34,319) 99,147 ( 195,042) 80,241 ( 66,081) I nterest rate swap and cross currency swap are used to achieve an appropriate mix of fixed and floating interest rate exposure within the Group’s policy. The Group entered into interest rate swaps and cross currency swaps, to hedge the interest rate risk and foreign exchange risk. The interest rate swaps and cross currency swaps were entered into for a period of 5 years to 25 years tenure. 21. revenue Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Electricity generation and distribution 5,398,177 4,612,563 – – Project management fees 1,701 967 1,701 967 Rental income from estate 4,341 3,638 4,341 3,638 Operation and maintenance fees 30,104 19,983 – – F inance lease income 160,161 80,268 – – Dividends from subsidiaries – – 958,876 3,658,000 Management fees from subsidiaries – – 26,418 26,553 5,594,484 4,717,419 991,336 3,689,158 176 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 2 2. finance income Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 I nterest income of financial assets that are not at fair value through profit or loss 140,354 203,267 34,505 81,740 Recognised in profit or loss 132,688 161,052 34,505 81,740 Capitalised on qualifying assets as a reduction of borrowing costs: – Property, plant and equipment 7,666 42,215 – – 140,354 203,267 34,505 81,740 23. finance costs Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Interest expense of financial liabilities that are not at fair value through profit or loss: – Loans and borrowings 1,165,702 1,055,870 169,212 228,820 Recognised in profit or loss 911,242 840,318 169,212 228,820 Capitalised on qualifying assets: – Property, plant and equipment 254,460 215,552 – – 1,165,702 1,055,870 169,212 228,820 177 177

notes to the consoliDateD financial statements (continued) 24. Profit for the year Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Profit for the year is arrived at after charging: a. expenses by nature Amortisation of intangible assets 473,110 432,403 – – Amortisation of prepaid lease payments 4,344 4,346 – – Amortisation of transaction costs of hedging instruments 12,146 12,144 – – Auditors’ remuneration: Audit fees – KPMG Malaysia 500 500 100 100 – Affiliates of KPMG Malaysia 779 315 377 315 – Other audit firms 146 – – – Non-audit fees – KPMG Malaysia 702 1,895 660 1,695 – Affiliates of KPMG Malaysia 2,127 2,644 1,361 703 – Other audit firms 1,395 1,386 633 1,301 Changes in inventories of spares and consumables ( 20,291) 14,723 – – Contribution and Corporate Social Responsibility activities 5,350 12,000 – – Depreciation of property, plant and equipment 558,644 471,266 5,997 4,702 F uel costs 2,497,586 2,158,800 Net foreign exchange loss – 6,139 – – P ersonnel expenses (including key management personnel): Contribution to Employees Provident Fund 17,401 12,823 4,644 3,853 E xpenses related to retirement benefit plans 11,976 13,260 3,043 4,478 Wages, salaries and others 133,769 96,513 37,943 28,040 Plant and equipment written off 20,897 127,126 – – Others 463,623 400,928 45,546 81,360 total cost of sales and administrative expenses 4,184,204 3,769,211 100,304 126,547 b. other operating expenses Amortisation of intangible assets 38,632 37,434 – – Net impairment loss on trade receivables 45,678 171,194 – – Others 149,921 116,451 – – total other operating expenses 234,231 325,079 – – 178 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 24. Profit for the year (continued) Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 and after crediting: c. revenue Dividends from subsidiaries – – 958,876 3,658,000 Management fees from subsidiaries – – 26,418 26,553 d. other income Net foreign exchange gain 13,787 – 100 – Gain arising from change in fair value of derivative financial instruments 5,891 44,041 – – Others 75,665 35,041 2,938 593 total other income 95,343 79,082 3,038 593 e. other non-operating income Bargain purchase gain 33,398 – – – Fair value gain of existing interest in the acquiree (Port Dickson Power Berhad) 27,581 – – – total other non-operating income 60,979 – – – 25. other comPrehensive income 2014 group Before tax ax benefit Net of tax T RM’000 RM’000 RM’000 items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit liability 12 401 413 items that may be reclassified subsequently to profit or loss Cash flow hedge – Loss arising during the year ( 117,409) 39,314 ( 78,095) F oreign currency translation differences for foreign operations – Gain arising during the year 5,166 – 5,166 Share of losses on hedging reserve of equity– accounted associates ( 22,608) – ( 22,608) ( 134,851) 39,314 ( 95,537) 179 179

notes to the consoliDateD financial statements (continued) 25. other comPrehensive income (continued) 2013 Before tax ax benefit Net of tax T group RM’000 RM’000 RM’000 items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit liability 3,245 ( 812) 2,433 items that may be reclassified subsequently to profit or loss Cash flow hedge – Gain arising during the year 238,418 – 238,418 F oreign currency translation differences for foreign operations – Loss arising during the year ( 25,869) – ( 25,869) Share of losses on hedging reserve of equity– accounted associates ( 57,230) – ( 57,230) 155,319 – 155,319 2014 Before tax ax benefit Net of tax T company RM’000 RM’000 RM’000 items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit liability ( 2,339) – ( 2,339) 2013 T Before tax ax benefit Net of tax company RM’000 RM’000 RM’000 items that will not be reclassified subsequently to profit or loss Remeasurement of defined benefit liability 673 ( 168) 505 180 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 26. Key management Personnel comPensation The key management personnel compensations are as follows: Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Directors – Salary 563 – 563 – – Fees 893 915 893 915 – Meeting allowances 317 331 315 329 – Other allowances 292 639 292 639 – Other emoluments 281 238 239 238 – Estimated monetary value of benefit-in-kind 3 – 3 – T otal short term employee benefits 2,349 2,123 2,305 2,121 27. income tax exPense/(benefit) recognised in profit or loss Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 T otal income tax expense/(benefit) 182,640 ( 150,511) 15,273 7,273 Major components of income tax expense include: current tax expense Malaysian – current year 180,874 35,509 7,810 19,808 Overseas – current year 3,711 – – – Under provision in prior years 5,936 4,719 4,908 35 190,521 40,228 12,718 19,843 deferred tax expense Origination and reversal of temporary differences ( 6,177) ( 196,367) – ( 12,570) ( Over)/Under provision in prior years ( 1,704) 5,628 2,555 – ( 7,881) ( 190,739) 2,555 ( 12,570) T otal income tax expense/(benefit) 182,640 ( 150,511) 15,273 7,273 181 181

notes to the consoliDateD financial statements (continued) 27. income tax exPense/(benefit) (continued) recognised in profit or loss (continued) Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 reconciliation of tax expense Profit for the year 412,844 234,658 744,090 3,408,851 T otal income tax expense/(benefit) 182,640 ( 150,511) 15,273 7,273 Profit excluding tax 595,484 84,147 759,363 3,416,124 T ax at Malaysian tax rate of 25% 148,871 21,037 189,841 854,031 Non-taxable income – – ( 239,719) ( 914,500) Non-deductible expenses 84,277 103,899 57,688 67,707 T ax incentives – ( 119,200) – – Effect of tax rates in foreign jurisdictions 170 – – – Effect of deduction on C-inspection costs ( 40,216) ( 114,606) – – Effect of corporate tax rate reduction on deferred tax* ( 5,159) ( 36,688) – – Effect of share of results of associates ( 10,417) ( 15,300) – – Current year losses for which no deferred tax asset was recognised 882 – – – Under/(Over) provision in prior years – current tax 5,936 4,719 4,908 35 – deferred tax ( 1,704) 5,628 2,555 – T otal income tax expense/(benefit) 182,640 ( 150,511) 15,273 7,273 * A reduction in the corporate tax rate from 25% to 24% was proposed in the 2014 budget. For t he Group, management has used judgement with regard to determining temporary differences expected to reverse and estimated the temporary difference. The effect of any change is r ecognised in the profit or loss. The reduction will be effective 1 January 2016. 182 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 28. earnings Per share Group 2014 2013 RM’000 RM’000 B asic and diluted earnings per share are based on: Net profit attributable to ordinary shareholders a 341,549 161,533 a) basic earnings per share Number of ordinary shares b 351,344 351,344 Basic earnings per share (RM) a/b 0.97 0.46 b) diluted earnings per share T he Company will undertake a conversion of the RCPS in conjunction with and as an integral part of the proposed listing and quotation for the entire enlarged issued and paid-up share capital. As at 31 December 2014, the Company had a total of 41,792,004 RCPS issued with a par value of RM0.10. The Company will issue one (1) additional RCPS having a par value of RM0.90 f or each RCPS issued in the Company. The total issue of 83,584,008 RCPS in the Company will be consolidated into 41,792,004 RCPS with a par value of RM1.00 each and thereafter converted by t he shareholders of the Company into 41,792,004 new ordinary shares. For the diluted earnings per share calculation, the weighted average number of ordinary shares i n issue is adjusted to assume conversion of all RCPS as mentioned above. Group 2014 2013 RM’000 RM’000 Weighted average number of ordinary shares of RM1.00 each in issue 351,344 351,344 Adjustment for the conversion of the RCPS 41,792 41,792 c 393,136 393,136 Diluted earnings per share (RM) a/c 0.87 0.41 183 183

notes to the consoliDateD financial statements (continued) 2 9. dividends Dividends recognised by the Company: Sen per share T otal (net of tax) amount Date of payment RM’000 2014 I nterim 2014 ordinary 16.14 56,708 8 April 2014 I nterim 2014 preference 100.00 41,792 8 April 2014 I nterim 2014 ordinary 28.46 100,000 9 September 2014 T otal amount 198,500 2013 I nterim 2013 ordinary 13.72 48,208 20 May 2013 I nterim 2013 preference 100.00 41,792 20 May 2013 I nterim 2013 ordinary 28.75 101,000 28 August 2013 T otal amount 191,000 After the end of the reporting period the following dividend was proposed by the Directors. This dividend will be recognised in subsequent financial year upon approval by the owners of the Company. Sen per share T otal (net of tax) amount RM’000 F inal 2014 ordinary 28.46 100,000 184 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 30. oPerating segments, geograPhical and customer information The Group has two operating segments, as described below, which are the Group’s strategic business units. The strategic business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Group’s Chief Executive Officer (the chief operating decision maker) reviews internal management reports at least on a quarterly basis. The following summary describes the operations i n each of the Group’s operating segments: • Asset management Asset management division is responsible for managing assets to achieve the greatest return and the process of monitoring and maintaining facilities systems. • Operations and maintenance (“O&M”) Operation and maintenance division is responsible for providing repair and maintenance services f or all the power plant equipments within the Group. Segment profit and loss is measured based on profit before taxes, finance costs, interest income and share of profit of equity-accounted associates and a joint venture, net of tax as included in t he internal management reports that are reviewed by the Group’s Chief Executive Officer (the chief operating decision maker). segment assets T he segment assets consist of property, plant and equipment, intangible assets, prepaid lease payments, investment in an equity accounted joint venture, finance lease receivable, derivative fi nancial assets, other receivables, deferred tax assets, trade and other receivables, inventories, current t ax assets, other investments and cash and cash equivalents of the segment. Investment in associates i s excluded from the segment assets. The segment assets is included in the internal management r eports that are reviewed by the Group’s Chief Executive Officer. segment liabilities T he segment liabilities consist of loans and borrowings, employee benefits, deferred income, deferred tax liabilities, derivative financial liabilities, trade and other payables and current tax liabilities of the s egment. The segment liabilities is included in the internal management reports that are reviewed by t he Group’s Chief Executive Officer. segment capital expenditure Segment capital expenditure is the total cost incurred during the financial year to acquire property, plant and equipment. 185 185

03 21 M 00 ’0 R 4 77 49 ,1,1 – 4 77 49 ,1,1 72 21 0,1 11 02 6,5 (4,1) 80 38 – 1 22 6,0 10 51 5,1 24 68 3,5 se so f east C o n s o l i d a t e d 04 21 M 00 ’0 R 5 54 44 ,9,8 – 5 54 44 ,9,8 1 21 32 ,7,9 12 68 3,8 (1,4) 91 22 0 99 6,7 1 67 4,6 (8,4) 12 60 42 84 1,4 fit n i l b 03 21 M 00 ’0 R – (,9,0) 4 66 46 (,9,0) ( A ) 4 66 46 (,6,0) ( B ) 4 71 92 m r ia ino n ag o s t ot E l i m i n a t i o n s ( A ) 04 21 M 00 ’0 R – (,0,9) 2 52 72 (,0,9) ( A ) 2 52 72 (,6,6) ( B ) 2 12 80 M,1,2,0)ada n 03 21 M 00 ’0 9 93 1,8 86 93 9,9 96 96 1,7 50 06 3,3 4 38 52 00 ( c o n t i n u e d ) O & M R statements n e no m t o ai r f 04 21 M 00 ’0 R 0 14 3,0 92 98 9,4 1 03 02 ,2,5 35 56 4,7 M,7,4,0 21:R 1 67 81 00(03 financial mri dc so ut n la A s s e t m a n a g e m e n t 03 21 04 21 M 00 ’0 R M 00 ’0 R 4 67 46 ,9,3 5 54 30 ,6,8 3 79 43 ,9,1 1 59 84 ,0,4 8 46 89 ,9,4 7 04 24 ,7,2 4 94 07 ,3,7 3 08 66 ,8,7 e e l i m i n a t e d o n c o n s o l i d a t i o n fR oso ett as c in consoliDateD a g aPh c i r mns go e t, e e s utmr o e n lcs a t i n g a c t i v i t i e s e n no q iy a c u t d c o ne u t- o n e t r, t sa daj i tvnue a n s a c t i o n s a r s so n e -e mn r nat sg fitr os 43 30 00. M4,8,0) notes to the ( c o n t i n u e d ) gsg e r t n Peai 3. o m ns e t bui ess g e sn s eeu rmetra x Rvnef o etrvne -e mn eeu n esg Itr etrvne emn eeu tlsg a to o m o p e r re s u l t s f r e n neicm iac no F n necs s ot iac F O hrnn o e a igicm o-prt te fe fpoto r fi S aeo r h n as c ae so i ftx nto a e Icm a epne/ eet etx(xes)bnfi no r Potf rt ey a e r fi o 186 0 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 30. oPerating segments, geograPhical and customer information (continued) Asset management O&M Consolidated 2014 2013 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 segment assets 25,809,779 24,403,617 2,322,974 2,370,212 28,132,753 26,773,829 I nvestment in associates 1,203,319 1,294,458 – – 1,203,319 1,294,458 T otal assets 29,336,072 28,068,287 segment liabilities 19,905,755 17,972,278 5,253,701 5,956,863 25,159,456 23,929,141 capital expenditure 1,608,583 2,530,522 5,978 4,445 1,614,561 2,534,967 non-cash expenses items: Amortisation of intangible assets ( 401,261) ( 361,049) ( 110,481) ( 108,788) ( 511,742) ( 469,837) Amortisation of prepaid lease payments ( 4,344) ( 4,346) – – ( 4,344) ( 4,346) Amortisation of transaction costs of hedging instruments ( 12,146) ( 12,144) – – ( 12,146) ( 12,144) Depreciation ( 555,876) ( 468,728) ( 2,768) ( 2,538) ( 558,644) ( 471,266) E xpenses related to retirement benefit plans ( 3,844) ( 4,831) ( 8,132) ( 8,429) ( 11,976) ( 13,260) I mpairment loss on trade receivables ( 48,973) ( 177,273) – – ( 48,973) ( 177,273) Property, plant and equipment written off ( 20,897) ( 127,076) – ( 50) ( 20,897) ( 127,126) ( 1,047,341) (1,155,447) ( 121,381) ( 119,805) (1,168,722) (1,275,252) 187 187

notes to the consoliDateD financial statements (continued) 30. oPerating segments, geograPhical and customer information (continued) geographical information T he Asset Management and O&M segments are managed on a worldwide basis, but operate facilities i n Malaysia, Indonesia, Middle East, Australia and North America. Geographic revenue information is based on geographical location of the customers. Geographic non-current asset is based on the geographical location of the assets. The amounts of non-current assets do not include financial instruments (including investments in associates and investment in an equity accounted joint venture) and deferred tax assets. Group Non-current Revenue assets geographical information RM’000 RM’000 2014 Malaysia 5,404,240 19,098,510 I ndonesia 14,823 – Middle East 15,260 – Australia 160,161 – 5,594,484 19,098,510 2013 Malaysia 4,617,842 18,207,065 I ndonesia 3,059 – Middle East 16,250 – Australia 80,268 – 4,717,419 18,207,065 major customer The following is major customer with revenue equal or more than 10% of the Group’s total revenue: Revenue 2014 2013 RM’000 RM’000 all common control company of: T enaga Nasional Berhad 5,457,407 4,726,492 188 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 3 1. financial instruments 31.1 categories of financial instruments The table below provides an analysis of financial instruments categorised as follows: a) Loans and receivables (L&R); b) Financial liabilities measured at amortised cost (FL); and c) Fair value through profit or loss (FVTPL) – Designated upon initial recognition (DUIR) Carrying L&R/ FVTPL– amount (FL) DUIR group RM’000 RM’000 RM’000 2014 financial assets T rade and other receivables* 1,257,485 1,257,485 – F inance lease receivable 1,990,974 1,990,974 – Other investments 321,509 321,509 – Cash and cash equivalents 3,574,900 3,574,900 – Derivatives financial assets 99,147 – 99,147 7,244,015 7,144,868 99,147 financial liabilities L oans and borrowings ( 18,227,479) (18,227,479) – T rade and other payables ( 975,514) ( 975,514) – Derivative financial liabilities ( 195,042) – ( 195,042) ( 19,398,035) (19,202,993) ( 195,042) 2013 financial assets, restated T rade and other receivables* 1,218,397 1,218,397 – F inance lease receivable 2,012,945 2,012,945 – Other investments 1,165,954 1,165,954 – Cash and cash equivalents 2,375,783 2,375,783 – Derivatives financial assets 80,241 – 80,241 6,853,320 6,773,079 80,241 financial liabilities L oans and borrowings ( 17,543,385) (17,543,385) – T rade and other payables ( 934,116) ( 934,116) – Derivative financial liabilities (66,081) – (66,081) ( 18,543,582) (18,477,501) ( 66,081) * E xcludes non-financial instruments 189 189

notes to the consoliDateD financial statements (continued) 3 1. financial instruments (continued) 31.1 categories of financial instruments (continued) Company Carrying L&R/ amount (FL) company RM’000 RM’000 2014 financial assets T rade and other receivables 1,254,606 1,254,606 Cash and cash equivalents 592,994 592,994 1,847,600 1,847,600 financial liabilities L oans and borrowings ( 1,800,000) (1,800,000) T rade and other payables ( 1,178,655) (1,178,655) ( 2,978,655) (2,978,655) 2013 financial assets T rade and other receivables 889,540 889,540 Cash and cash equivalents 134,585 134,585 1,024,125 1,024,125 financial liabilities L oans and borrowings ( 1,800,000) (1,800,000) T rade and other payables ( 901,861) ( 901,861) ( 2,701,861) (2,701,861) 31.2 net gains and losses arising from financial instruments Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 L oans and receivables 132,688 161,052 34,505 81,740 Financial liabilities measured at amortised cost ( 911,242) ( 840,318) ( 169,212) ( 228,820) Fair value through profit or loss – Designated upon initial recognition 5,891 44,041 – – ( 772,663) ( 635,225) ( 134,707) ( 147,080) 190 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 3 1. financial instruments (continued) 31.3 financial risk management The Group has exposure to the following risks from its use of financial instruments: • Credit risk • Liquidity risk • Market risk 31.4 credit risk Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial i nstrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers and investment debt securities. The Company’s exposure to credit risk arises principally from loans and advances to subsidiaries and financial guarantees given. 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. Normally financial guarantees of banks, shareholders or directors of customers are obtained, and credit evaluations are performed on customers requiring credit over a certain amount. Exposure to credit risk, credit quality and collateral As at the end of the reporting period, the maximum exposure to credit risk arising from receivables i s 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 does not require collateral in respect of financial assets. I nvestments are allowed only in liquid securities and only with counterparties that have a credit r ating equal to or better than the Group and the Company. Given their high credit ratings, management does not expect any counterparty to fail to meet their obligations. At the end of the reporting period, the Group has a concentration of credit risk in the form of t r ade debts due from Tenaga Nasional Berhad (TNB), representing approximately 40% (2013: 55%) of the total receivables of the Group. The maximum exposures to credit risk for the Group and t he Company are represented by the carrying amount of each financial asset. 191 191

notes to the consoliDateD financial statements (continued) 3 1. financial instruments (continued) 31.4 credit risk (continued) receivables (continued) Impairment losses The ageing of trade receivables as at the end of the reporting period was: Gross Impairment Net group RM’000 RM’000 RM’000 2014 Not past due 532,275 – 532,275 Past due 0 – 30 days 7,433 – 7,433 Past due 31 – 120 days 4,402 – 4,402 Past due more than 120 days 361,008 ( 360,627) 381 905,118 ( 360,627) 544,491 2013 Not past due 345,520 ( 20,058) 325,462 Past due 0 – 30 days 365,162 ( 20,983) 344,179 Past due 31 – 120 days 1,955 ( 186) 1,769 Past due more than 120 days 209,994 ( 187,061) 22,933 ` 922,631 ( 228,288) 694,343 At the end of the reporting period, trade receivables with a carrying amount of RM4,783,000 ( 2013: RM24,702,000) were past due but not considered impaired. These trade receivables relate t o customers for whom there has not been significant change in credit quality and the amounts are considered recoverable. The movements in the allowance for impairment loss on trade receivables during the financial y ear were: 2014 2013 group RM’000 RM’000 At beginning of the year 228,288 57,094 I mpairment loss recognised 48,973 177,273 I mpairment loss reversed ( 3,295) ( 6,079) Acquisition through business combination 86,661 – At end of the year 360,627 228,288 T he 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 receivable directly. 192 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 3 1. financial instruments (continued) 31.5 liquidity risk L iquidity 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. T he 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. Maturity analysis T he table below summarises the maturity profile of the Group’s and the Company’s financial l i abilities as at the end of the reporting period based on undiscounted contractual payments (including interest): Contractual More Carrying interest Contractual Under t han amount r ate cash flows 1 year 1 – 2 years 2 – 5 years 5 years group RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000 2014 financial liabilities secured Al-Istisna bonds 129,495 9.00-9.20 141,895 73,905 67,990 – – AUD term loan 1 454,217 BBSY + 472,133 20,373 451,760 – – margin 1.85 AUD term loan 2 1,475,848 5.72-7.90 2,068,357 121,282 128,153 1,256,673 562,249 RM term loan 1 48,500 6.67-6.84 65,624 4,598 8,421 23,112 29,493 RM term loan 2 185,000 4.45 191,147 160,837 30,310 – – Sukuk Ijarah medium term notes 3,581,077 4.54-5.45 6,029,069 201,539 201,539 1,129,617 4,496,374 S ukuk medium term notes 4,324,427 4.30-6.25 9,608,431 722,751 381,769 1,794,549 6,709,362 Sukuk Wakalah 450,000 3.95-5.60 626,299 71,530 74,628 102,228 377,913 Senior Sukuk Murabahah 3,290,000 4.65-6.20 5,931,672 190,889 192,456 768,234 4,780,093 Senior RM term loan 364,000 5.23-5.80 503,833 19,510 19,564 239,294 225,465 Senior USD term loan 644,800 5.80 795,785 15,607 14,325 211,122 554,731 USD term loan 295,804 L ibor + 308,707 12,820 21,541 274,346 – margin 2.50 B alance carried forward 15,243,168 26,742,952 1,615,641 1,592,456 5,799,175 17,735,680 193 193

notes to the consoliDateD financial statements (continued) 3 1. financial instruments (continued) 31.5 liquidity risk (continued) Maturity analysis (continued) T he table below summarises the maturity profile of the Group’s and the Company’s financial l i abilities as at the end of the reporting period based on undiscounted contractual payments (including interest): Contractual More Carrying interest Contractual Under t han amount r ate cash flows 1 year 1 – 2 years 2 – 5 years 5 years group RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000 2014 financial liabilities (continued) Balance brought forward 15,243,168 26,742,952 1,615,641 1,592,456 5,799,175 17,735,680 unsecured Junior EBL term loan 1,058,064 5.15-5.23 1,181,588 56,557 56,868 1,068,163 – S ubordinated loan notes 126,247 9.00-12.00 182,010 30,505 20,241 33,734 97,530 Unrated Junior Sukuk Musharakah 1,800,000 6.30-9.30 6,436,410 113,400 168,776 501,283 5,652,951 T rade and other payables 975,514 – 975,514 975,514 – – – 19,202,993 35,518,474 2,791,617 1,838,341 7,402,355 23,486,161 . 194 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 3 1. financial instruments (continued) 31.5 liquidity risk (continued) Maturity analysis (continued) T he table below summarises the maturity profile of the Group’s and the Company’s financial l i abilities as at the end of the reporting period based on undiscounted contractual payments (including interest): Contractual More Carrying interest Contractual Under t han amount r ate cash flows 1 year 1 – 2 years 2 – 5 years 5 years group RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000 2013 financial liabilities secured ABBA bonds 130,000 8.00 140,400 140,400 – – – Al-Istisna bonds 193,231 8.90-9.20 220,573 78,678 73,905 67,990 – AUD term loan 1 BBSY + margin 425,508 1.85 475,878 20,137 20,137 435,604 – AUD term loan 2 1,512,196 5.50 2,228,048 121,695 126,057 1,364,963 615,333 RM term loan 39,220 6.67 55,905 2,625 3,705 19,504 30,071 Commercial papers 198,173 3.65 200,000 200,000 – – – Sukuk Ijarah medium term notes 3,544,065 4.54-5.45 6,230,608 201,539 201,539 604,617 5,222,913 S ukuk medium term notes 4,744,338 4.10-6.25 10,391,182 782,751 722,751 1,202,819 7,682,861 Sukuk Wakalah 470,000 3.95-5.60 668,737 42,439 71,530 161,931 392,837 Senior Sukuk Murabahah 3,290,000 4.65-6.20 6,122,562 190,889 190,889 712,914 5,027,870 USD term loan 285,951 L ibor + 313,717 17,331 17,065 279,321 – margin 2.50 B alance carried forward 14,832,682 27,047,610 1,798,484 1,427,578 4,849,663 18,971,885 195 195

notes to the consoliDateD financial statements (continued) 3 1. financial instruments (continued) 31.5 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): Contractual More Carrying interest Contractual Under t han amount r ate cash flows 1 year 1 – 2 years 2 – 5 years 5 years group RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000 2013 financial liabilities (continued) Balance brought forward 14,832,682 27,047,610 1,798,484 1,427,578 4,849,663 18,971,885 unsecured Junior EBL term loan 726,905 5.15 – 5.23 837,904 34,875 35,037 767,992 – S ubordinated loan notes 183,798 9.00-12.00 237,556 12,423 23,583 19,906 181,644 Unrated Junior Sukuk Musharakah 1,800,000 6.30-9.30 6,603,811 113,400 167,400 502,659 5,820,352 T rade and other payables 934,116 – 934,116 934,116 – – – 18,477,501 35,660,997 2,893,298 1,653,598 6,140,220 24,973,881 196 MALAKOFF CORPORATION BERHAD Annual Report 2014

notes to the consoliDateD financial statements (continued) 3 1. financial instruments (continued) 31.5 liquidity risk (continued) Maturity analysis (continued) T he table below summarises the maturity profile of the Group’s and the Company’s financial l i abilities as at the end of the reporting period based on undiscounted contractual payments (including interest): Contractual More Carrying interest Contractual Under than amount r ate cash flows 1 year 1 – 2 years 2 – 5 years 5 years company RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000 2014 financial liabilities unsecured Unrated Junior Sukuk Musharakah 1,800,000 6.30-9.30 6,436,410 113,400 168,776 501,283 5,652,951 Other payables and accruals 1,178,655 – 1,178,655 1,178,655 – – – 2,978,655 7,615,065 1,292,055 168,776 501,283 5,652,951 2013 financial liabilities unsecured Unrated Junior Sukuk Musharakah 1,800,000 6.30-9.30 6,603,811 113,400 167,400 502,659 5,820,352 Other payables and accruals 901,861 – 901,861 901,861 – – – 2,701,861 7,505,672 1,015,261 167,400 502,659 5,820,352 197 197

notes to the consoliDateD financial statements (continued) 3 1. financial instruments (continued) 31.6 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. 31.6.1 currency risk T he 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), Swiss Franc (CHF), Kuwait Dinar (KWD), Euro (EUR) and US Dollar (USD). exposure to foreign currency risk T he 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 was: AUD CHF KWD E UR USD RM’000 RM’000 RM’000 RM’000 RM’000 2014 Deposits with licensed banks 23,317 – 9,610 161,377 114,583 T rade and other receivables 17,399 63,334 6,982 – 7,114 L oans and borrowings ( 1,930,064) – – – ( 940,604) T rade and other payables ( 17,393) ( 1,249) – ( 2,909) ( 3,149) Net exposure ( 1,906,741) 62,085 16,592 158,468 ( 822,056) 2013 Deposits with licensed banks 42,751 43,767 23,368 – 28,647 T rade and other receivables – – 5,396 – 11,245 L oans and borrowings ( 1,937,704) – – – ( 285,951) T rade and other payables ( 23,013) – – ( 61,538) ( 58,729) Net exposure ( 1,917,966) 43,767 28,764 ( 61,538) ( 304,788) 198 MALAKOFF CORPORATION BERHAD Annual Report 2014