CONTENTS

EXECUTIVE SUMMARY 2

COMPANY / DEPARTMENT SUMMARY 3

MARKET ANALYSIS 4

STRATEGY AND IMPLEMENTATION SUMMARY 7

MANAGEMENT SUMMARY 12

FINANCIAL PROJECTIONS 13

EXECUTIVE SUMMARY

RMS Business Proposal 2006 1

 “Destiny is no matter of chance. It is a matter of choice. It is not a thing to be
waited for, it is a thing to be achieved.”

William Jennings Bryan

1.0 Executive Summary

Repair Maintenance Section (RMS) is a maintenance department under Teknik
Janakuasa Sdn. Bhd. specialized in turbine, boiler and ‘balance of plant’ major
equipments overhaul. This area has a very large market potential due to amount of
cash been spent every year by TJSB for routine overhaul and inspection works. RMS
to develop a capable team that will be more focus on business to reduce TJSB O&M
cost and at the same time opens a new market for TJSB. For the first five years,
RMS target market is within power plants inside Malakoff. Once creating a strong
brand name in the market, RMS will venture for other potential businesses outside
Malakoff. By doing this, not only TJSB can reduce O&M cost for all the three plants
but also retain the expertise in the company and possibility of ventures for new
project.

Gas turbine overhaul and heat recovery steam generator inspection will be the core
business based on potential revenue and is parallel with RMS expertise. For the first
five years beginning January 2007, gas turbine overhaul for Lumut and Prai power
plants can create total revenue of MYR 95.82 million and estimated gross profit of
MYR 21.84 million. HRSG inspection services for Lumut, Prai and Tanjung Bin
power plant will create estimated revenue of MYR 2.77 million with gross profit of
MYR 1.46 million, with the highest gross margin percentage at 52.8%. This
contributed to assessment work carried out by in-house expert inside RMS. Referred
to projected profit in five years (involvement mainly in plants inside Malakoff) a
steady stream of profit at average MYR 3.4 million per annum was estimated. Market
demand in Malakoff will maintain through out the year as it is based on machine
operating hours. In the long-term planning, with RMS focusing for market outside
Malakoff after 2011, this profit may double with the correct marketing strategy and
good manpower planning.

In realizing this plan, RMS will be set up as a company, a subsidiary of TJSB. This is
to ensure for proper marketing and for RMS to be more focus in business. RMS
vision is to be a leading company in power industry life-cycle asset maintenance in
Malaysia.

The key of success is to develop and create a strong brand name in the market.
Continuous staff development is essential to ensure a professional, competent and
motivated team in RMS. A good marketing strategy and ‘positive’ partnership must

COMPANY / DEPARTMENT SUMMARY

be put into plan for rapid development and for competitiveness in the market.

RMS Business Proposal 2006 2

2.0 Company / Department Summary

Repair Maintenance Section (RMS) was

A b d R a h m a n R a d z i
H O D formed in early 2005 as a specialized team
in gas turbine overhaul for Lumut Power
A D M I N - S I T E Plant. The team is based in LPP and
N o r J a s n i
S h a r a p
consists of twelve experienced personnel.
This dedicated overhaul team is also part of
the program to ensure better work quality,
G T G T C o m m i s s i o n i n g
I z la n C h o w S C higher efficiency, reduction of plant O&M
cost and to release some maintenance
workload from the plant operators and at the
S u p e r v i s o r same time retain the expertise in the Group.
A r if f in
S a lim
Currently RMS is part of TJSB maintenance
team without own revenue, however has
M e c h a n Gi c ea nl e r a t o r recorded a cost saving to the group for
approximately MYR 4 million since its
M R a h i m T i an r m iz i involvement in LPP gas turbine overhaul
R o h im
B a k h t ia r
and inspection works.
Z o lk a f li

2.1 Company / Department Experience

2.1.1 Lumut Power Plant

RMS has involved in five ABB GT13E2 major (C) inspections, several minor (A&B)
inspections, one ABB GT13E2 tula1 re-blading and one ABB steam turbine major
(G) inspection.

From the five ABB GT major (C) inspections RMS had involved, RMS had managed
two, where previously was ‘lumped sum’ to Alstom Power, and had achieved service
cost saving of MYR 3.15 million to TJSB.

2.1.2 Prai Power Plant

RMS has also outsourced skilled manpower to Prai Power Plant for a GE Frame 9FA
C-Inspection (minor) and turbine alignment work.

MARKET ANALYSIS

RMS Business Proposal 2006 3

3.0 Service to Customer
RMS is a committed and a specialist team for major equipments overhaul for power
industry. Service coverage is from rotating machinery i.e. gas and steam turbine,
major pump, to steam generator and big valve. The main business is to manage
overhaul work efficiently of major equipments for power plants in Malakoff and other
potential external customer. Parts of the job scope are assessment, minor repair and
replacement of parts. Supervisors and specialists from RMS will manage and
supervise the task given with support from identified contractors for labour work and
logistic. Service for major equipments offered are as below,

 Steam / Gas Turbine

 ST / GT Generator
 Steam Generator or Boiler
 Pump (6.6 kV or above)
 BOP equipments

3.1 Market
3.1.1 In the Group

Recent years has seen a significant growth of power generation in the group. From a
single major power plant i.e. LPP – SEV of 1,303 MW in 2000, the group now own an
extension block of LPP of additional 640 MW, Prai Power Plant of 350 MW, 40% of
Kapar Power Plant of 2,420 MW and Tanjung Bin Power Plant of 2,100 MW that is
still under development and will be fully commissioned by 2008.

For short term planning, RMS targets to secure service contract with Lumut, Prai and
Tanjung Bin power plants that are operated by TJSB. Target market is to secure
service contract for RMS to manage overhaul of ST/GT, boiler, pump and BOP
equipments, which is parallel to RMS expertise. ST/GT and boiler are identified as
the two segments with the
highest market potential in Market analysis in Group
term of frequency of services
and revenue. A challenge for
RMS is to secure contract 10%
LPP-GT/ST
10%
with plant operator especially LPP-Boiler
40%
Lumut Power Plant with the 3%
PPP-GT/ST
highest number of gas PPP-Boiler
7%
turbine and boiler, and
TBPP-ST
eventually to be followed by 30%
TBPP-Boiler
Prai Power Plant and
Tanjung Bin Power Plant.
Market Analysis

RMS Business Proposal 2006 4

 Group power
Type GT ST HRSG Percentage
plants
Combined
Lumut PP 9 3 9 70%
Cycle
Combined
Prai PP 1 1 1 10%
Cycle
Conventional
Tg Bin PP - 3 3 20%
Thermal

Total 10 7 13 100%

As per Malakoff outage master schedule, almost 85% scheduled work is identified in
LPP. This contributed by the number of gas turbine and HRSG installed in LPP. The
services under RMS for GT and HRSG throughout 2007-2011 (5 years), is estimated
to generate revenue of MYR 88.9 million. For PPP, involvement of RMS in turbine is
quite limited due to LTSA signed with GE until first cycle of major inspection (MI),
due in 2009. A revision of LTSA after first MI will see more involvement of RMS in
turbine servicing work, however this is much dependent on the agreement achieved.
Service of GT alone for PPP referred to LTSA signed with GE can approximately
generate potential revenue of MYR 4.56 million per annum.

Malakoff GT, ST and HRSG outage master schedule, 2007-2011

Group (Malakoff) Outage Master Schedule, 2007-2011

Make 2007 2008 2009 2010 2011
LPP GT - Major Inspection (30 days) ABB 13E2 4 5 1 4 4
LPP GT - Minor Inspection (5 days) ABB 13E2 8 11 10 8 7
LPP HRSG - Major Inspection (20 days) ABB 2 3 1 - -
LPP HRSG - Minor Inspection (5 days) ABB 10 13 10 12 11
LPP ST - Major Inspection (35 days) ABB - 1 - 1 -
LPP ST - Minor Inspection (14 days) ABB 1 - 1 - -
PPP GT - Major Inspection (40 days) GE 9FA - - 1* - -
PPP GT - Minor Inspection (14 days) GE 9FA 1* 1* - 1 1
PPP HRSG - Inspection (10 days) Doosan 1 1 1 1 1
PPP ST - Inspection (30 days) GE - - 1 - -
TBPP ST - Inspection (30 days) Toshiba 1 1 2 1 2
TBPP HRSG – Inspection (10 days) IHI 1 1 2 1 2

* Service awarded to GE as per LTSA

signed

Apart from major machines i.e. GT, ST and HRSG, balance of plant (BOP)
equipments have also some market potential. There are approximately 100 major
pumps identified in all the three plants, a cooling tower (for rotating part i.e. fan and
gearbox) in Lumut PP, and other major auxiliary machines especially in Tanjung Bin
PP such as boiler fans, gas air heater, coal pulverizer and electrostatic precipitator.
Frequency of overhaul is limited to number of breakdown, which is less than 5%

RMS Business Proposal 2006 5

 through out the year. This can contribute estimated revenue of MYR 200,000 to MYR
1 million per annum.

3.1.2 Power plant outside Malakoff

Tenaga Nasional Berhad has the lion share of Malaysia power industry with
capability to generate power approximately 60% of peninsular Malaysia generation
capacity. Other major IPPs beside Malakoff Berhad are YTL Power Generation,
Powertek Berhad, Genting Sanyen Power and Teknologi Tenaga Perlis Consortium.
The market trend in Malaysia for services of major equipments i.e. GT and ST, is
dominated by machine OEM mainly Alstom, GE and Siemens. There is no yet a
reliable and trusted third part company been offered to perform major services for GT
and ST. Due to high requirement of machine availability as stated in PPA, most of
the IPPs in Malaysia rely heavily to the OEM which offers optimization of outage
window and guarantee in machine performance. While TNB having the comfort of
less aggressive environment has formed their own service company i.e. TNB
Remaco Sdn Bhd. TNB Remaco requires only minimum number of OEM specialist
for major services. Early this year they have proven themselves by performing major
overhaul of gas turbine ABB GT13D utilizing fully on their own personnel and
specialist.

The level of competition in Malaysia is high. Own heavily invested repair and
maintenance team will be the favourite choice of TNB plants for GT and ST
maintenance strategy. To secure contract with TNB plants is very slim. The potential
market is to attract and secure contract with IPPs that are currently enjoying good
services with OEM companies. To create a competitive market, RMS has to
establish a strong brand name in the market, a very competitive services fee and
forging strong partnership with other relevant companies i.e. technical and labour.

The projection of 8.1% growth per year until 2010 of Asia power demand is another
good potential market for maintenance and services industry. With the correct
marketing strategy and technical development / partnership, the potential to extend
our service overseas especially in Asia is enormous and very real.

STRATEGY AND IMPLEMENTATION SUMMARY

RMS Business Proposal 2006 6

 “To be a leader in power industry life-cycle asset maintenance in Malaysia.”

RMS Vision

4.0 Strategy and Implementation Summary

Strategizing RMS business is the first phase to reduce target and to ensure mission
achievement. There will be two business focus groups in RMS. Based on market
trend and opportunity, RMS core business will be gas turbine and HRSG-boiler
assessment and overhaul works. Steam turbine assessment and overhaul, ‘balance
of plant’ major equipments overhaul and condition based monitoring (CBM) of plants
equipment will be in the second business focus group. This is to ensure prioritization
of works in the group.

Second phase is the identification of resources available and new recruitment for
RMS. This exercise must be parallel with RMS target market in Malakoff and external
to ensure optimum resources intake and planning.

Third phase are to plan for continuous development of RMS personnel and forging
partnership with relevant local and international companies for support and new
ventures. By doing this, RMS will commit on continuously building up a strong brand
name in the market, local and international.

4.1 Restructuring and Recruitment

A new structure was developed for RMS to ensure clear responsibility of each focus
businesses. This was also as a platform to analyze personnel competency and
manpower requirement. There will be five teams under RMS, each identified with
their focal person based on individual expertise. In the exercise, four TJSB
personnel, two engineers and two technicians, from LPP (3) and TBPP (1) were
identified as potential candidates to support RMS. Another two ‘fresh’ mechanical
engineers each to assist in GT/ST and HRSG teams, and one experienced
technician (from TNB Remaco) to support HRSG team is required. Part of resource
optimization program, even though RMS personnel were assigned to various teams
and different expertise, all require to be specialized in GT and HRSG inspection
works which are RMS core businesses.

Mr. Izlan Ismail to lead RMS GT/ST team ensuring GT/ST overhaul efficiency and
workmanship quality, which is the main RMS core business. Mr. Chow Sak Choon
(I&C engineer) will lead RMS commissioning team specialized in ABB GT13E2 (9
units in LPP). He will lead LPP GT C-Inspection commissioning work and to give
technical support on GT13E2 operational issues. Mr. Izham Khalil (Mechanical
engineer), from LPP Engineering department, was identified to lead HRSG team,
one of the RMS core businesses. Mr. Izham has experience with assessment of
HRSG in LPP will continue his contribution in RMS HRSG team and to extend his

RMS Business Proposal 2006 7

expertise to PPP and TBPP. Mr. Zaidi Zainol, from TBPP, or Mr. Halim Selamat,
from LPP, were identified to lead RMS condition based monitoring (CBM) team for all
the three power plants in Malakoff i.e. LPP, PPP and TBPP. This is to centralize
analysis and review of Malakoff plant equipments condition, and to ensure a
systematic action plan. However, existing plant CBM teams will be maintained under
plant local management, which they will give support and reporting on weekly or
monthly basis to RMS CBM team.

New RMS structure proposal

A b d R a h m a n R a d z i
H O D

A D M I N - S I T E
N o r J a s n i
S h a r a p

G T / S T G T C o m m i s s i o H n R i nS g G C B M B O P
I z la n C h o w S C I z h a m * Z a id i* o r H a lim *

M e c h M e c h
E n g in e e r 1 E n g in e e r 2 P l a n t s C B M P u m p
T e a m Z o lk a f li
B a k h t ia r

M e c h a n i c G a el n e r a t o r M e c h a n i c a l M o t o r
A r if f in Z a m r i * R o h im Z a m r i *
S a lim T a r m iz i Z a k a r ia * * T a r m iz i

C o o l i n g T o w e r
A z iz a n *

C o a l H a n d l i n g
R a h im in

* Non-RMS personnel in Malakoff

** Non-RMS personnel outside Malakoff

The personnel plan layout is the foundation of RMS; having the key people in place
will enable the team to start with a solid foundation. Initial phase of recruitment
strategy is to engage experienced and competent personnel. This is to ascertain
proper set up of capable and motivated RMS team. Once initial set up completed,
RMS will recruit fresh manpower for support, on-job development and exposure of
good working culture inside RMS.

4.2 Technical and Inter-personal Skill Development

Continuous development of RMS personnel, technical and inter-personal skill, is

essential to ensure efficient management and quality of workmanship during
overhaul, and indirectly proving RMS capabilities in the market. RMS technical
competency target was prepared to ensure clear goal and technical development to
be achieved. Generally, all RMS personnel must be competent to lead and supervise

RMS Business Proposal 2006 8

machine overhaul and inspection works. They must be knowledgeable on the subject
and can make decision during overhaul. This is to ensure ‘positive’ involvement and
smooth management and supervision of work. Below is the table on the summary of
RMS technical requirement and target. RMS must give full commitment in achieving
this target and in continuous development of staff, to accomplish mission and
milestones targeted.

RMS technical competency requirement / target

Competency
Position Job Description
Requirement
Gas Turbine Team
Supervisor OEM Chief Lead Engineer Lead GT mechanical overhaul work
Foreman / Technician OEM Mech / Generator Lead shift GT mechanical / generator
Supervisor overhaul work, assist Chief Lead
Engineer
Heat Recovery Steam Generator Team
Supervisor / Technician DOSH Steam Engineer 2nd Liaise with DOSH and supervise
grade, Welding inspector 3.1, boiler repair / inspection works
NDT competencies,
'Balance of Plant' Team
Supervisor / Technician Relevant competencies, Lead and supervise overhaul / repair
competency certificate from / inspection works
Suruhanjaya Tenaga,
knowledge in alignment,
vibration and lubrication

Below are the trainings require and have been identified to achieve required level of
competencies for RMS,

GT / ST

 OEM training  for overhaul of turbine and generator

 Blades and major components assessment
 Alignment and adjustment for assembly
 Rigging
 Generator diagnosis
 Pump and valves overhaul (for steam turbine)

Heat Recovery Steam Generator

 OEM training  for inspection and repair

 DOSH competency certificate  steam engineer
 Welding inspection
 NDT i.e. PT, MPT, UT, RT, hardness test
 Metallurgy

RMS Business Proposal 2006 9

‘Balance of Plant’

 Pump alignment and balancing

 Suruhanjaya Tenaga competency certificate  A0, A4, B0, B4
 Vibration
 Lubrication

GT13E2 Commissioning

 OEM training  operation and thermal commissioning

 I&C commissioning  Advant P and close loop controller

As RMS most valuable asset is on human resource, continuous development and

competency of staff must be emphasized. This is to reduce dependency to the OEM
and creating an independent and capable overhaul team in the group.

4.3 Partnership

Partnership, for turbine overhaul and service, is required for rapid set up of a strong
brand name in the market and development of technical capability to RMS. Correct
strategy of partnership can create an environment of less dependency to OEM and
to open opportunity of new ventures. Internationally, there are numbers of proven
and well known third party turbine overhaul and service company. Compare to OEM
companies, a third party company i.e. Wood Group, TSN or Turbocare, is more
ready to join and build a partnership with RMS to broaden their market opportunity.
There are two ways of approach for a successful RMS partnership. First is to support
RMS for existing business in Malakoff, which is quite a high risk as the OEM
companies might withdraw their support that have been given to us so far. Second
approach is purely on new ventures, where RMS can use the partnership to gain
trust and recognition from potential customer. Correct strategy for partnership
requires a thorough review, study and analysis to ensure a winning venture. The
strategy for RMS partnership won’t be elaborated in this business plan however it is
very important to be touched again in creating new business for RMS externally.
Pros & cons of JV with OEM / third party

Pros Cons
Gain trust / recognition from OEM withdraw support
customer / insurance
Potential market Profit sharing
Transfer of technology Limited to certain machine only
Established working system / Not totally independent
procedure
Strong technical support /
database
4.4 Milestones

RMS Business Proposal 2006 10

The following lists are the important program milestones for RMS within 10 years.
The milestone indicates RMS emphasis on planning for implementation.

SHORT-TERM PLANNING (< 3 years)

1. Set up RMS organization structure

2. Achieve RMS technical competency requirement target
3. Set up RMS technical database / protocol
4. Finalize Long Term Inspection Agreement (LTIA) with LPP for HRSG routine
inspections and GT A, B and C inspections
5. Identify possible collaboration with local and international partners
6. Identify potential internal and external market

MID-TERM PLANNING (3 to 5 years)

1. Set up TJSB-RMS company,

 Register company
 Prepare accounting system
 Prepare brochures / profile
2. Finalize Long Term Inspection Agreement (LTIA) with PPP and TBPP for
HRSG routine inspections and GT and ST inspections
3. Set up partnership with relevant OEM and third party companies
4. Identify potential external market

LONG-TERM PLANNING (> 5 years)

1. Secure and market services to external plant, local and overseas

2. To be an established company in repair and maintenance of gas turbine and
HRSG
3. To be an established company in power plant equipments condition based
monitoring

MANAGEMENT SUMMARY

RMS Business Proposal 2006 11

5.0 Management Structure

RMS is a small maintenance department operated in Lumut Power Plant and

consists of a team with highly technical expertise. A proper management and
reporting structure is required to maintain dynamic marketing / sales strategy and
service order from customer. RMS will be reporting to Mr. Rosli Abd Hamid, HOD
TJSB Operations and technical, to maintain TJSB expertise under one team and
partly for easy collaboration with other plants operation and maintenance team i.e.
LPP, PPP and TBPP. Mr. Abd Rahman Radzi, HOD RMS, to lead RMS in ensuring
team technical expertise and capabilities in term of work efficiency, workmanship
quality and work culture in the organization. He will focus on team development and
to achieve targeted missions for RMS in creating a well-known service company in
the market. Mr. Rahimi Md Sharip, Manager RMS/Technical – KLHQ, will be RMS
representative in term of marketing and based in KL headquarters. He will control
and organize RMS service work as requested from clients. In addition Mr. Rahimi will
collaborate with TJSB Marketing Department in identifying potential partners and
clients (external market) for RMS and finalizing Long Term Inspection Agreement
(LTIA) with relevant power plants under Malakoff.

RMS Management Summary

R o s li A b d H a m id
H O D
T J S B O p e r a t i o n s
& T e c h n i c a l

M
o k h t a r H a s M s ao nh d Y u s o f M o h d N o h
H O D H O D
T J S B M a r k e t i n Tg J* S B T r a i n i n g *

A b d R a h m a n R R a a h d i mz i i M d S h a r ip
H O D M a n a g e r
R M S R M S / T e c h n i c a l - K L H Q
* Departments under Operations & Maintenance Division, TJSB

TJSB Marketing department will assist and give support for RMS in identifying
potential market outside Malakoff and collaboration / partnership with relevant
parties. Marketing department will also advise and assist RMS for setting up as a
company in the mid-term planning (3 to 5 years). TJSB Training Department will

FINANCIAL PROJECTIONS
involve directly in technical development of RMS personnel. Continuous staff
development is vital to ensure achieving RMS vision as leader in power industry life-
cycle asset maintenance in Malaysia.

RMS Business Proposal 2006 12

6.0 Financial Projections

The following information presents a summary of RMS financial projections for five
years beginning January 2007. The financial details based on actual figures from
past experiences, estimation of cost by calculation of man hours and services
required, and on assumption based on experiences and actual data collected. Below
are the facts and assumptions taken into account used as basis for this financial
analysis.

 LPP GT and HRSG inspections revenue and direct cost based on

actual financial statement
 LPP ST inspection revenue based on actual financial statement with
estimated direct cost
 PPP GT revenue based on LTSA signed with GE and estimated direct
cost based on man hours and consumables cost
 PPP and TBPP HRSG inspections revenue and direct cost based on
estimation of man hours and support services i.e. NDT required
 PPP and TBPP ST inspections cost are excluded due to no
experience
 BOP revenue and direct cost for all plants are based on assumption
number of equipments and percentage of breakdown
 RMS staff salary based on estimation of 19 personnel i.e. 1 manager,
6 engineers, 2 supervisors and 10 foremen or technicians

Projected Profit and Loss, 2007-2011

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

-
2007 2008 2009 2010 2011

Financial forecast for the first five years are concentrated on the businesses inside
Malakoff. These are based on the services offered to Lumut, Prai and Tanjung Bin

RMS Business Proposal 2006 13

power plants excluding steam turbine overhaul works for PPP and TBPP due to lack
of actual data for accurate estimation. Total profit projected for the first five years is
MYR 17.23 million with the highest profit at MYR 6.8 million on 2011. There are
steady numbers of service demand from plants through out the year based on
machine operating hours. 89.64% out of total revenue is coming from LPP for GT,
ST and HRSG inspection works. This is mainly due to number of machines installed
in LPP, and main machines with the highest market revenue in PPP and TBPP were
excluded due to limitation of LTSA in PPP and lack of knowledge / expertise for
TBPP steam turbine overhaul work. The projected profit per revenue is maintained at
average of 7% for the first three years and suddenly jumped to average of 20% due
to RMS taking over of Prai Power Plant GE Frame 9FA yearly inspection, creating a
revenue of MYR 4.56 million per annum. This is very much dependent on the review
of Prai PP LTSA with GE after year 2009 (completed first cycle of M-Inspection). Part
of RMS technical development program, an estimated of MYR 150,000 can be
reduced from direct cost per LPP GT major (C) inspection. For the fourth and fifth
year, this will reduce an estimated of MYR 1.2 million from GT major (C) inspection
direct cost. Depends on the competency level of RMS personnel and the successful
technical development the cost can reduce further up to 200%.

Projected Profit and Loss, 2007-2011

Pro Forma Profit and Loss

2007 2008 2009 2010 2011
REVENUES
Total 21,005,000 27,898,000 7,155,000 31,455,200 30,328,200
DIRECT COSTS OF REVENUES
Total 17,214,000 23,550,800 5,192,640 23,479,680 21,698,960
GROSS MARGIN 3,791,000 4,347,200 1,962,360 7,975,520 8,629,240
Percentage 18.05% 15.58% 27.43% 25.36% 28.45%

EXPENSES
Salary 1,248,000 1,297,920 1,347,840 1,397,760 1,447,680
Technical Training 665,000 691,600 270,000 280,000 290,000
Tools 100,000 104,000 108,000 112,000 116,000
Total 2,013,000 2,093,520 1,725,840 1,789,760 1,853,680

PROFIT
Total 1,778,000 2,253,680 236,520 6,185,760 6,775,560
Profit / Revenues 8.46% 8.08% 3.31% 19.67% 22.34%

RMS has an exciting and profitable future. Based on pro forma profit and loss, 2007
– 2011, showed a steady stream of profit at average of MYR 3.4 million per annum. It
is expected to maintain the same profit after 2011 due to continuous demand of
machine overhaul. The profit can further increase by reduction of OEM specialist
during overhaul with continuous staff development and exposure. After 2011, as per
long-term planning, RMS to secure service contract with plant outside Malakoff,
which can double the profit obtained. RMS involvement not only can reduce TJSB

RMS Business Proposal 2006 14

O&M cost and at the same time as a stepping-stone to open a new market window
for Malakoff.

6.1 Revenue versus Direct Cost

The following are the lists of revenue versus direct cost referred to each service
under RMS for LPP, PPP and TBPP.

Projected Revenue versus Direct Cost

Projected Revenue versus Direct Cost

Plant Description Revenue Direct cost Profit

5,800,00 4,675,00 1,125,00
LPP GT 3rd C-Inspection 0 0 0
4,300,00 3,728,00 572,00
LPP GT C-Inspection 0 0 0
65,00
LPP GT A, B-Inspection 75,000 10,000 0
30,00
LPP HRSG major insp 185,000 155,000 0
15,00
LPP HRSG minor insp 20,000 5,000 0
3,400,00 3,200,00 200,00
LPP ST G-Inspection 0 0 0
100,00
LPP ST M-Inspection 850,000 750,000 0
4,560,00 2,000,00 2,560,00
PPP GT CI / HGPI 0 0 0
PPP GT MI N/A N/A N/A
PPP ST Inspection N/A N/A N/A
25,00
PPP HRSG Inspection 30,000 5,000 0

TBPP ST Inspection N/A N/A N/A

45,00
TBPP HRSG Inspection 55,000 10,000 0
50,00
All BOP, in 2007-2009 200,000 150,000 0
150,00
All BOP, in 2010-2011 500,000 350,000 0

RMS Business Proposal 2006 15

 Projected Revenue versus Direct Cost by
equipment, 2007-2011

2% 6% 2%

GT
ST
HRSG
BOP

90%

For the total five years, involvement in gas turbine overhaul work produced almost
90% of gross profit, revenue versus direct cost. This contributed by frequency of
overhaul and requirement of highly expertise personnel for the service work. The
total gross profit for gas turbine was estimated at MYR 21.84 million. Second highest
gross profit estimated at MYR 1.46 million is HRSG inspection works. Even though
sharing the same number of inspection frequency as gas turbine, HRSG only require
assessment of parts instead of actual overhaul work. Steam turbine overhaul gross
profit at the second lowest at MYR 600,000 due to lower in frequency and steam
turbine overhaul work for PPP and TBPP were excluded due to lack of expertise
(manpower), information and data required. Future RMS involvement in steam
turbine overhaul works at PPP and TBPP may show increase in revenue. ‘Balance of
plant’ equipments overhaul estimated with the lowest gross profit at MYR 450,000 in
five years due to requirement of services only during breakdown which less than 5%
every year.

RMS Business Proposal 2006 16