Eng - IOI Group

ECONOMIC PROFIT AND RETURNS cont’dThe Group’s various business units are accountable for cost of capital employed (shareholders’ equity and borrowings) inorder to measure real economic profit and returns. The system measures how much economic value they have created bydeducting a charge (cost of equity and cost of debts) for the capital employed from net operating profit after taxes(“NOPAT”). Business units must have a NOPAT that is more than its costs of capital before it is considered to have“created value” or economic profit.FIVE-YEAR ECONOMIC PROFIT TRENDAn analysis on the distribution of the Group’s NOPAT between cost of debts, cost of equity and economic profit.In RM1999 2000 2001 2002 2003Economic Profit 218,397 109,658 122,711 136,612 260,126Total Costs of Debts 70,870 33,628 35,846 34,797 51,984Total Costs of Equity 251,465 273,934 239,800 324,744 409,775NOPAT 540,732 417,220 398,357 496,153 721,885RM ('000)800700600500400300Economic Profit200100Tatal Cost of Debts01999 2000 2001 2002 2003Total Costs of Equity43IOI Corporation BerhadAnnual Report 2003