c o r p o r a t e i n f o r m a t i o n -...

Management

Dato’ Ahmad Fuaad bin Mohd DahalanManaging Director

Yusop bin JaridiAssistant General Manager, Customer Services

Zawiah binti Mat ArufAssistant General Manager,Corporate Communications

C O R P O R A T E S E R V I C E S D I V I S I O N

Dr. Mohamadon bin AbdullahSenior General Manager,Corporate Services

Dr. Wafi Nazrin bin Abdul HamidGeneral Manager, Corporate Services

Capt Ahmad Zuraidi bin DahalanGeneral Manager, Corporate Safety & Security

Adnan bin ShahbudinAssistant General Manager, Security Services

Mariah binti Sheikh HusseinAssistant General Manager,Malaysia Airlines Academy

Shahjanaz binti KamaruddinGroup General Counsel

F L I G H T O P E R AT I O N S D I V I S I O N

Dato’ Capt Mohd Nawawi bin AwangSenior General Manager, Flight Operations

Capt Mohammad Azharuddin bin OsmanGeneral Manager, Flight Operations (Operations & Development)

Shulhameed bin K E Kappal MaricanGeneral Manager, Flight Operations (Services & Infrastructure)

Capt Ooi Teong SiewAssistant General Manager, Flight Operations (Quality Assurance, Projects & Processes)

C O R P O R A T E I N F O R M A T I O N

C O R P O R A T E P R O F I L E

Board of Directors

Dato’ Dr Mohamed Munir bin Abdul MajidNon-Independent and Non-Executive Chairman

Dato’ N Sadasivan A/L N N PillayIndependent and Non-Executive Deputy Chairman

Dato’ Ahmad Fuaad bin Mohd DahalanNon-Independent and Managing Director

Dato’ Zaharaah binti ShaariNon-Independent and Non-Executive Director

Dato’ Gumuri bin HussainNon-Independent and Non-Executive Director

Dato’ Mohamed Azman bin YahyaIndependent and Non-Executive Director

Keong Choon KeatIndependent and Non-Executive Director

Martin Gilbert BarrowIndependent and Non-Executive Director

Datuk Haji S Abdillah @ Abdullah bin Hassan @ S HassanNon-Independent and Non-Executive Director

Datuk Amar Haji Abdul Aziz bin Haji HussainIndependent and Non-Executive Director

Datu Haji Salleh bin Haji SulaimanAlternate Director to Datuk Amar Haji Abdul Azizbin Haji Hussain

Tengku Azmil Zahruddin bin Raja Abdul AzizAlternate Director to Dato’ Gumuri bin Hussain

Abdul Rahman bin Abdul GhaniAlternate Director to Datuk Haji S Abdillah @ Abdullah bin Hassan @ S Hassan

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Kamal Azran bin AdamAssistant General Manager, Flight Operations (Manpower Planning & Productivity)

T E C H N I C A L A N D G R O U N D

O P E R A T I O N S D I V I S I O N

Tajuden bin Abu BakarSenior General Manager,Technical & Ground Operations

Mohd Roslan bin IsmailGeneral Manager, Engineering & Maintenance

Wan Abdul Rahim bin Hj Wan IshakAssistant General Manager,Maintenance Operations

Iszham bin IdrisAssistant General Manager,Maintenance Support

Nizuyir bin BuyongAssistant General Manager,Ground Support Services

Abdullah bin MudaAssistant General Manager,Flight Management Centre

Hayati binti Dato’ AliAssistant General Manager,Ground Handling Management

Zabariah binti Md IbrahimHead of Finance - Technical & Ground Operations

I T P L A N N I N G & S E R V I C E S D I V I S I O N

Marzida binti Mohd NoorSenior General Manager, IT Planning & Services

C A R G O D I V I S I O N

Ong Jyh JongSenior General Manager, Cargo

Mohd Yunus bin IdrisAssistant General Manager, Operations (Cargo)

S A L E S , D I S T R I B U T I O N &

M A R K E T I N G D I V I S I O N

Dato’ Abdul Rashid Khan bin Abdul Rahim KhanSenior General Manager,Sales, Distribution & Marketing

Danny KondicGeneral Manager, Sales - East

Phang Pow IngGeneral Manager, Sales - West

Azmil Hisham bin Abd RahmanAssistant General Manager,Product Development & Services

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YM Raja Nor Diana binti Raja Zainal Karib ShahAssistant General Manager,Marketing Support

Germal Singh KheraAssistant General Manager, International Affairs -Sales Distribution & Marketing

Liew Lup Foong, JosephineHead of Finance - Sales, Distribution & Marketing

Visvaratnam SabaratnamAssistant General Manager,Sales Management & Planning

Yazid bin MohamedAssistant General Manager,Advertising, Promotions & Branding

Md Saat bin A SamadAssistant General Manager, Distribution

Suhaila binti Hj ShamsuddinAssistant General Manager,Customer Management & Service Quality

F I N A N C E D I V I S I O N

Low Chee TengChief Financial Officer

Mohd Sukri bin HusinGeneral Manager,Group Reporting, Control & Budget

Merina binti Abu TahirGeneral Manager, Group Accounting

Ahmad Ramzi bin Muhamad BukhariAssistant General Manager, Treasury & Investment

Heng Geok ChinAssistant General Manager, Financial Accounting

Md Yasin bin BachikAssistant General Manager, Passenger RevenueReporting Management & Projects

Subramaniam s/o MuniandyAssistant General Manager, Financial Services

Yoon Chooi WanAssistant General Manager, Financial Systems

Serena Ho Lee ChenAssistant General Manager, Reporting & Control

Azahar bin HamidAssistant General Manager, Budget & Planning

H U M A N R E S O U R C E S D I V I S I O N

Mohamed Yusof bin Ahmad MuhaiyuddinGeneral Manager, Human Resources Management

P R O J E C T M A N A G E M E N T

& A S S U R A N C E D I V I S I O N

Mohd Nadziruddin bin Md BasriGeneral Manager,Project Management & Assurance

Ahmad Muzzaffar bin Ahmad MustaphaAssistant General Manager,Centralised Procurement

Ahmad Shamsuddin bin MuhiyuddinAssistant General Manager,Property Maintenance

Mohamad Fadzil bin Mohamad AriffAssistant General Manager,Property Development

N E T W O R K & R E V E N U E

M A N A G E M E N T D I V I S I O N

Yap Kiang ThiamGeneral Manager,Network & Revenue Management

Kym Joylene ClarkeAssistant General Manager,Revenue Management

Liow Ngit SingAssistant General Manager, Operations Planning

Mohd Razali bin HarunAssistant General Manager, Aircraft Trading

I N T E R N A L A U D I T D E P A R T M E N T

Shahnaz Al-Sadat binti Tan Sri Sheikh Abdul MohseinGeneral Manager, Internal Audit

R E G I O N A L M A N A G E M E N T

Dato’ Tuan Ibrahim bin AbdullahRegional General Manager, Middle East & Africa

Dr Amin Khan Regional General Manager, China and SAR

Sharifuddin bin BapuRegional Manager, United Kingdon/Europe

Mohd Salleh bin Ahmad TabraniRegional Manager, Australia & New Zealand

Adrian Sen Sai ChewRegional Manager, North Asia

Rajendran SinnakaundanRegional Manager, ASEAN

Syed Abdillah bin Syed AzizRegional Manager, South Asia

Halid AlpiRegional Manager, Americas

Baharom bin Mohd YatimRegional Manager, Malaysia & Singapore

Company Secretar yRizani bin Hassan LS 05125

Registered Office33rd Floor, Bangunan MAS, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia

Tel 603 2165 5008 Fax 603 2162 8305 www.malaysiaairlines.com

AuditorsMessrs Ernst & YoungLevel 23A, Menara Milenium, Jalan Damansara, Pusat Bandar Damansara, Damansara Heights,50490 Kuala Lumpur, Malaysia

Tel 603 2087 7000 Fax 603 2095 9076 main 603 2095 9078 audit

Share Registration OfficeSymphony Share Registrars Sdn Bhd (formerly known as Malaysian Share Registration Services Sdn Bhd)

Level 26, Menara Multi Purpose, Capital Square, No. 8, Jalan Munshi Abdullah, 50100 Kuala Lumpur, Malaysia

Tel 603 2721 2222 Fax 603 2721 2530

ListingBursa Malaysia Securities Berhad (formerly known as Kuala Lumpur Stock Exchange)

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A U D I T C O M M I T T E E R E P O R T


The Board Audit Committee (BAC) of MalaysianAirline System Berhad (MAS) is pleased to present the Audit Committee Report for thefinancial year 2003/2004.

Composition of the Board Audit Committee

The BAC was established in 1992, with terms of reference approved by the Board of Directors.These terms provide for the Board to electMembers of the BAC from amongst themselves,to comprise no fewer than three Directors, the majority of whom shall be IndependentDirectors. Appointment to the Committee isreferred to the Nomination Committee, prior toapproval by the Board of Directors. The Boardthen shall ensures that the composition of theCommittee meets the independence and experience requirements set out by BursaMalaysia Securities Berhad (BMSB).

The term of office of a Member of theCommittee shall be three years, after which he or she may be re-nominated and appointedby the Board of Directors. The Board shall review the performance of the Committee andits Members at least once every three years.

During the financial year, Datuk Haji S Abdillah@ Abdullah bin Haji Hassan @ S Hassan was appointed as a Member of the BAC to replaceDatu Haji Salleh bin Haji Sulaiman.

As at the end of the financial year,the BAC comprised the following:

Chairman:Keong Choon Keat Independent Non-Executive Director

MembersTan Sri Dato’ Seri Dr Samsudin bin Hitam Non-Independent Non-Executive DirectorDato’ Zaharaah binti Shaari Non-Independent Non-Executive DirectorDatuk Haji S Abdillah @ Abdullah bin Hassan @ S HassanIndependent Non-Executive DirectorDato’ N Sadasivan A/L N N Pillay Independent Non-Executive Director

The Chairman of the Committee is a Member of the Malaysian Institute of Accountants. The profiles of the Chairman and CommitteeMembers are set out on pages 20 to 28 of this Annual Report.

Objectives

The Committee’s principal objective is to assistthe Board of Directors in discharging the Board’sstatutory duties and responsibilities relating tothe accounting and reporting practices of theHolding Company and each of its subsidiaries. In addition, the Committee shall:• Evaluate the quality of the audits performed

by internal and external auditors• Provide assurance that the financial

information presented by Management is relevant, reliable and timely

• Oversee compliance with relevant laws and regulations and observance of a proper code of conduct

• Determine the quality, adequacy and effectiveness of the Group’s internal control environment.

(resigned on 01.08.04)

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Authority

The BAC shall, in accordance with proceduresdetermined by the Board of Directors and at theexpense of the Company:• Investigate any activity within its terms of

reference, with the cooperation of all employees as directed by the Board and the Committee

• Have full and unrestricted access to all information, documents and resources required to perform its duties, as well as to the internal and external auditors and Senior Management of the Company and Group

• Obtain independent professional advice or other advice and to secure the attendance of external parties with relevant experience and expertise, if necessary

• Convene meetings with the internal or external auditors, without the attendance of the Executive Director, whenever deemed necessary

• Make relevant reports when necessary to the relevant authorities, if a breach of the Listing Requirements has occurred.

Duties & Responsibilities

The duties and responsibilities of the BAC are toundertake the following and report accordinglyto the Board of Directors:• Review of the audit plan and audit reports,

including the evaluation of the internal control system with the external auditors

• Review the quality of the external auditors and to make recommendations on their appointment, termination and remuneration, and to consider the nomination of a person or persons as external auditors

• Review the liaison between the external auditors, Management and Board of Directors,and the assistance given by Management to the external auditors

• Assess the adequacy of the scope, functions and resources of the internal audit function and ensure that internal auditors have the necessary authority to do their work

• Review the internal audit programme, processes and results of the audit, and assess whether appropriate actions have been taken on the recommendations of the internal auditors

• Review the quarterly reporting to BMSB and year-end annual financial statements before submission to the Board of Directors, focusing on major accounting policy changes, significant audit issues in relation to estimates and judgmental areas, significant and unusual events, and compliance with accounting standards and other legal requirements

• Monitor any related party transactions that may arise within the Group and to report, if any, transactions between the Group and any related party outside the Group that are not based on arms-length terms and are disadvantageous to the Group.

• Review any related party transaction and conflict of interest situation that may arise within the Group including any transaction, procedure or cause of conduct that may raise questions of management integrity.

Meetings of the Committee

The BAC shall meet at least four times a year or more frequently as circumstances dictate. The Committee had nine meetings during the financial year, and the attendance record of each Member is as follows:

Name of Director AttendanceKeong Choon Keat (Chairman) 9/9Tan Sri Dato’ Seri Dr Samsudin bin Hitam (resigned on 01.08.2004) 4/9Dato’ Zaharaah binti Shaari 4/9Datuk Haji S Abdillah @ Abdullah bin Hassan @ S Hassan 2/2Dato’ N Sadasivan A/L N N Pillay 8/9Datu Haji Salleh bin Haji Sulaiman 7/9

Note:

The first figure above denotes the number of meetings attended

while the second figure denotes the number held. The number

of meetings held refers to the applicable meetings for each

Director and varied based on their dates of appointment.

Representatives of Senior Management, the General Manager of Internal Audit and representatives of the external auditors attend the Committee’s meetings as and when appropriate. Minutes of each meeting are maintained and distributed to each Member of the BAC as well as to other Members of the Board of Directors. The Chairman of theCommittee makes a report of each meeting to the Board.

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Activities in the Financial Year

During the financial year, other than to reviewthe quarterly reporting to BMSB and the annualfinancial statements, the Committee undertookthe following activities:• Reviewed the external and internal audit plans

and budgets• Reviewed the external and internal audit

reports and subsequent follow-up of outstanding issues

• Reviewed key processes that required internal control enhancements with Management

• Reviewed relevant related party transactions

Internal Audit Function

The MAS Group has an established InternalAudit Department (IAD) that reports to the BAC.An approved Internal Audit Charter provides forthe independence of the function in reviewingthe Group’s internal control system. The IADalso assists Senior Management in enhancinginternal controls and ensuring the effectivenessof the internal control system.

The IAD adopts established auditing standardsand performs an annual self-assessment againstapplicable guidelines to maintain its proficiencyand ensure due professional care. The GeneralManager of Internal Audit is a Certified InternalAuditor, while MAS is a Corporate Member ofthe Institute of Internal Auditors.

The BAC approves the Annual Internal AuditPlan. The risk-based plan is developed to coverkey operational and financial activities that aresignificant to the overall performance of theGroup on a cyclical basis.

The IAD is continuously improving its identification of risk and control areas, and their priorities to determine the scope of internal audit activities. The risk and control areas are classified as audit universesagainst the following objectives:• Revenue enhancement and protection• Operational effectiveness and efficiency,

including cost containment• Assets and services management, including

effectiveness of management assurance functions

• Human resource management • Financial reporting integrity• Information system management.

Internal audit activities covering all the aboveobjectives are undertaken for both Passengerand Cargo businesses at Corporate Headquartersand Stations worldwide. Audits are also under-taken on an ad-hoc basis at the special requestof either the BAC or Senior Management. Theaudits are performed to assure the BAC on theadequacy of the internal control system and thecompliance to the system. The IAD works closelywith external auditors to resolve any controlissues and assists in ensuring that appropriatemanagement actions are taken.

In this financial year, the IAD executed 41 audits and 12 project advisory assignments. In addition, the IAD undertook a project management role for specific internal controlenhancement initiatives including risk management, business planning and operationsintegration projects. The IAD is continuouslymonitoring the implementation of audit recommendations through periodic follow-up reviews. .

The BAC receives regular and timely reportsfrom the General Manager of Internal Audit on the results of audits performed and theprogress of internal control projects. TheCommittee reviews and approves the IAD’sannual budget to ensure that the function has adequate resources. As at the end of thefinancial year, the Department had 45 internalauditors of varying levels and mix of expertisewith approximately 68,000 available audit man-hours per annum.

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S T A T E M E N T O F I N T E R N A L C O N T R O L


Public listed companies are required by theMalaysian Code on Corporate Governance tomaintain a sound system of internal control. In addition, it is a listing requirement of BursaMalaysia Securities Berhad that directors of public listed companies include a statement onthe state of internal control in the companies’annual reports.

Responsibility

The overall responsibility for the MalaysianAirline System Berhad’s (MAS) system of internalcontrol group-wide, including the review of itseffectiveness, lies with the Board of Directors.The Board, recognising the importance of maintaining a sound system of internal controlto safeguard shareholders’ investments and the Group’s assets, has instituted an internalcontrol system, the details of which are set out below. In addition, the Board took steps to formalise a risk management framework to identify key significant risks, evaluate the impact and set the policies relating to the risks and relevant controls.

The Management is responsible for implement-ing the Board’s policies on risks and control.

Internal Control Processes

Both the Board and Management of MAS arecommitted to implementing an internal controlsystem to manage those risks that could affectthe Group’s continued growth and financial viability. Accordingly, measures are continuallytaken to improve the policies, processes andstructure relating to internal control, and ensurethat the people tasked with the responsibilitiesare qualified and trained. This continualimprovement enhances the management ofexisting risks and, by taking into considerationthe changes in the risk profile of the industryand the Group, helps to anticipate and managepotential risks.

The key elements in MAS’ internal control system, including the processes in place toreview its adequacy, are as follows:• An organisation structure, which is aligned

to business and operations requirements and led by Division Heads with accountability,is in place.

• Integrated business planning and budgeting processes are driven by commercial objectives.

• During the financial year, action was taken to enhance these processes by assigning a single driver to specifically focus on revenue targets. Operational budgets work towards achieving these targets.

• The Management Committee, comprising members of Senior Management, is responsible for, amongst others:• Reviewing the actual monthly performance

against expectations and budget• Undertaking quality assurance on key

information and submitting performance reports to the Board of Directors

• Addressing any internal control issues with the Board Audit Committee (BAC) and the Internal Audit Department (IAD)

• Addressing any matters arising from meetings of the BAC and ensuring that Management acts upon these matters accordingly.

• There is a clear definition of authority and responsibilities through the Group’s ApprovingAuthority Manual that has been approved by the Board and subject to regular updating and enhancement.

• Procedures with embedded internal controls are documented in a series of Standard Operating Manuals. There is a structure for organisation-wide control and custodianship of these manuals. The manuals are regularly reviewed to ensure the alignment, standardisation and comprehensiveness of the procedures. Greater communication is ensured on key internal control procedures, including those relating to authorisation, accountability, monitoring and reconciliation processes.

• The Systemwide Stations Internal Control Manual (SICM), comprising the Management

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Handbook, Station Approving Authority Manual and the SICM Operational Manual, has been introduced in the financial year as a complete document on policies and key procedures related to all station activities for adherence by all personnel systemwide.

• Employees are given regular training and education on the importance of governance, risk management and internal control.

• The IAD reports to the BAC, performs systematic reviews of key processes relating to high-risk areas and assesses the effectiveness of internal controls, including compliance.

• Recommendations for improvement are highlighted to Senior Management and the Committee, with periodic follow-up review of actions taken.

• The BAC regularly reviews, on behalf of the Board, with Senior Management those internalcontrol issues identified in reports by the internal and external auditors and the actions taken. The internal auditors assist the Committee in periodically reviewing the measures taken to address their concerns on internal control. The scope of this review includes any significant internal control aspects of issues identified in the financial statements as disclosed in this Annual Report.

• In its monthly meeting, the Board of Directors reviews the operational and financial perform-ance of the Group. The scope of this review also covers any significant internal control aspects of issues identified in the monthly performance reports and any areas disclosed in this Annual Report.

• Senior Management has continued the initiative to formalise a risk management framework in the organisation, with the following objectives:• To systemise a continuous process for

identifying, evaluating and managing the significant risks faced by the Company

• To provide a platform for communication of risk and control profiles between Senior Management and the Board

• To inculcate an organisation-wide culture of risk awareness and management

• To establish a documented process of controlmonitoring and improvement plans.

A Risk Management Coordination Unit wasformed to facilitate the development of the risk management framework throughout theorganisation. The MAS Risk ManagementFramework and MAS Risk Model have been formulated and implemented organisation-wideon a progressive basis, with the objective ofdrawing up the Corporate Risk Profile and related risk management policies. The profile will be documented and monitored through the Corporate Risk Scorecard recently obtained.Efforts are continually being made to progressively integrate the results into themonthly reports to the Board of Directors.

Design of Internal Control System

The Board of Directors and Senior Managementconsistently endeavour to maintain an adequatesystem of internal control designed to managerather than eliminate risk throughout the organisation. It is recognised, however, that such a system will only provide reasonable assurance, and not absolute assurance, againstthe occurrence of any material loss.

MAS’ internal control system does not apply to its material associated companies, which fallwithin the control of their majority shareholders.Nonetheless, the interests of MAS are servedthrough representation on the Board ofDirectors of the respective associated companiesand through the review of managementaccounts received. These provide the MAS Board of Directors with performance-relatedinformation to enable timely decisions in regardto the Group’s investments in such companies.

The Board confirms that the system of internalcontrol, with the key elements highlightedabove, was in place during the financial year,except where otherwise stated. The system issubject to regular reviews by the Board.

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S T A T E M E N T O N C O R P O R A T E G O V E R N A N C E


In line with one of Malaysian Airline SystemBerhad’s (MAS) objectives to exceed best practices in the industry, the Board of Directorscontinues to place high emphasis on corporategovernance in all of the Group’s activities. TheBoard is fully committed to ensuring that theprinciples of the Malaysian Code on CorporateGovernance (the Code) are complied withthroughout the Group, both locally and world-wide. The Board has given due consideration tothe Best Practices In Corporate Governance andefforts have been made to ensure that the BestPractices are appropriately adopted. In thisStatement on Corporate Governance, the Boardis pleased to report on the extent that the Codehas been successfully implemented within MAS.

The Board of Directors has considered the manner it has applied the Principles of theMalaysian Code on Corporate Governance (“the Code”) and the extent to which it has complied with the Best Practices of theCode, the analysis of which is reported in this Statement.

The Board of Directors is committed to adoptingthe highest standards of corporate governancepractices in all of the Group’s activities aroundthe world. To this end and in line with theGroup’s objective of exceeding best practices in the industry, every effort has been made toevaluate and apply the relevant Best Practices of the Code for the Group.

The Board of Directors

Responsibilities of the Board

The principal focus of the Board is the overallstrategic direction, development and control of the MAS Group. The Board is responsible for approving key issues involving business plans and budgets, major capital expenditure,acquisition and disposal of assets, interim and annual results, human resource policiesincluding performance management system,enhancement of safety and security measures

as well as succession planning for SeniorManagement. The Board’s authority is defined in the Approving Authority Manual.

In each of its regularly scheduled meetings,Board Members review the Group’s monthlyoperational and financial performance. Based on quantitative and qualitative informationreceived, the Board identifies the principal risks and provides direction on the appropriatepolicies, procedures and systems to address such risks. The Board also reviews the adequacyand integrity of the Group’s internal control system, including the management informationsystem, and compliance with relevant legislationand guidelines.

Structure for an Effective Board

The structure of the Board of Directors is animportant element in ensuring that it is able toexecute its responsibilities effectively. As at theend of the financial year, the Board of MAS comprised eleven members with the followingcomposition:

Categor y NumberNon-Executive Chairman 1Executive Director 1Non-Independent and Non-Executive Directors 3Independent Directors 6

The Directors’ profiles are set out on pages 20 to 28 of this Annual Report.

There is a clear division of responsibilitiesbetween the Chairman of the Board and theManaging Director. The Independent Directors,who constitute more than one-third of theBoard, represent the interests of public share-holders. The Non-Executive Directors provide a mix of related industry-specific knowledge as well as broad government, business and commercial experience. All Non-ExecutiveDirectors are independent of Management and free from any relationship that could

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interfere with their independent judgement. Insituations where it would be inappropriate forconcerns to be dealt with by the Chairman orthe Managing Director, such concerns would beconveyed to Dato’ N Sadasivan A/L N N Pillay,the Senior Independent Non-Executive Director.

The Board believes that its current structure andsize satisfactorily reflect the interest investmentsof its shareholders and that it is able to provideclear and effective leadership to the Group.

Disclosures

Each Director is required to make written disclosures, where such disclosures are tabled atthe board meeting, to the effect that he is anofficer or member of a specified corporation andis to be regarded as interested in any transactionwhich may, after the date of the disclosure, bemade with that corporation.

Board Meetings and Attendance

The Board met every month during the financialyear, except in December 2003, as planned.Prior to a meeting, each Director received anagenda and a full set of Board Papers for eachagenda item. The Directors are supplied withadequate information that goes beyond assess-ing the quantitative performance, in a timelyfashion prior to a meeting, to enable them tomake informed decisions.

The Board meeting attendance record for eachDirector for the Financial Year ended 31 March2004 is as follows:

Name of Director AttendanceTan Sri Dato’Seri Azizan bin Zainul Abidin Chairman 11/11Dato’ Md Nor bin Md Yusof Managing Director (resigned on 31.03.04) 10/11Tan Sri Dato’ Seri Dr Samsudin bin Hitam (resigned on 01.08.04) 8/11Dato’ Zaharaah binti Shaari 9/11Keong Choon Keat 11/11Martin Gilbert Barrow 9/11Dato’ N Sadasivan A/L N N Pillay 10/11Dato’ Mohamed Azman bin Yahya 9/11Datu Haji Salleh bin Haji Sulaiman (resigned on 31.12.03) 8/9Dato’ Haji S Abdillah @ Abdullah bin Hassan @ S Hassan 7/11Dato’ Gumuri bin Hussain (appointed on 20.5.03) 9/10Tan Sri Nor Mohamed bin Yakcop (appointed on 14.10.03 and resigned on 10.01.04) 2/2Datuk Amar Haji Abdul Aziz bin Haji Hussain (appointed on 01.01.04) 2/2

Note

The first figure above denotes the number of meetings attended while the second figure

denotes the number held. The number of meetings held refers to the applicable meetings

for each Director and varied based on their dates of appointment.

Each Director has full access to all information within the Group, individually or collectively, and has direct access to the advice and services of the Group’s Company Secretary. The Directors are free, at the Company’s expense, to seek independent professional advice should they consider it necessary in furtherance of their duties and a procedure for Directors to take independent professional advice is currently being formalised.

Board Committees

To assist the Board in executing its responsibilities, a number of committees with specified terms of reference and responsibilities have been established. These committees are the:1 Board Audit Committee 2 Nomination Committee 3 Remuneration Committee 4 Board Safety and Security Committee 5 Board Tender Committee.

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Board Audit Committee

The Board Audit Committee Report, stating its membership, role and activities during thefinancial year, is set out on pages 39 to 41 of this Annual Report.

Nomination Committee

The Company has in place formal and transparent procedures for the appointment of new Directors. These procedures ensure that all nominees to the Board are first considered by the Nomination Committee who, after taking into account the required mix of skills, experience and other qualities,would make a recommendation to the Board.

The composition of the Nomination Committee (NC) as at the end of the financial year was as follows:

ChairmanTan Sri Dato’ Seri Azizan bin Zainul Abidin

MembersTan Sri Dato’ Seri Dr Samsudin bin Hitam(resigned on 01.08.04)Datu Haji Salleh bin Haji SulaimanDato’ N Sadasivan A/L N N PillayDato’ Mohamed Azman bin Yahya

The NC comprises exclusively Non-ExecutiveDirectors, the majority of whom are independ-ent. The Committee is authorised to:1 Annually review the required mix of skills,

experience and other qualities, including core competencies, which all Directors should have;

2 Assess, on an annual basis, the effectiveness ofthe Board as a whole and the Committees of the Board, as well as evaluate the contributionof each individual Director;

3 Recommend to the Board candidates for directorships and nominees for the Board Committees.

During the financial year, the NC met twice to deliberate and recommend to the Board ofDirectors on the nomination of Directors andtheir alternates. The Committee also reviewedthe composition of the Board to ensure a good balance of skills and experience amongstits members.

As at the date of this Annual Report, all Directors have successfully completed theMandatory Accreditation Programme and areparticipating in the Continuous EducationProgramme mandated by Bursa MalaysiaSecurities Berhad. In addition, as part of theannual strategic planning session during thefinancial year, external speakers updated theDirectors on industry-specific developments. The Directors were also invited to the MASWorldwide Business Forum 2004, organised bythe Sales, Distribution and Marketing Division,during which regional and area managementstaff were informed of the latest developmentswithin the Group.

The Company’s Articles of Association requirethat all Directors, who are appointed by theBoard, are subject to election by shareholders atthe first opportunity after their appointment andto re-election at least once every three years.

Remuneration Committee

Members of the Remuneration Committee (RC)during the financial year were:

ChairmanDato’ Mohamed Azman bin Yahya

MembersDato’ Zaharaah binti ShaariKeong Choon KeatDato’ N Sadasivan A/L N N Pillay

Membership of the RC comprises mainly Non-Executive Directors. The Committee isauthorised to review, assess and recommend to the Board of Directors, with independent professional advice if necessary, the remunera-tion packages of the Directors in all forms.The remuneration of the Executive Director consists of a basic salary and other emoluments.Other benefits customary to the Group aremade available as appropriate. Any salaryreview takes into account market rates and theperformance of the individual and the Group.The Non-Executive Directors’ remunerationcomprises fees and allowances that reflect theirexpected roles and responsibilities, including any additional work and contributions required.

Details of the total remuneration during the financial year disclosed by category are as follows:

Basic Salary & Other Emoluments (RM) Benefits (RM) Total (RM)

‘000 ‘000 ‘000

Executive Director 897 1 898Non-Executive Directors 565 - 565Total 1,462 1 1,463

The remuneration of Directors on an individual basis, as suggested by the Code, is not disclosed, as the Board believes that this will not add significantly to the understanding and evaluation of the Group’sstandards of corporate governance.

Board Safety and Security Committee

The Board of Directors is always mindful that the safety and security of its operations are critical to the success of the Group’s business as well as its reputation. The establishment of the Board Safety and SecurityCommittee (BSSC), who is empowered to address and resolve relatedissues, in 2002 reflects this concern.

The Directors who served on the BSSC as at the end of the financial year were:

ChairmanMartin Gilbert Barrow

MembersDato’ Md Nor bin Md Yusof (resigned on 31.3.04)Datu Haji Salleh bin Haji Sulaiman

Other Members of the Committee included

relevant Senior Management.

The Committee has the following functions:1 To review the overall safety and security performance of the Group and

outline strategies and specific actions to achieve the Group’s corporate safety objectives and targets

2 To review occurrence reports as well as trend analyses and ensure that corrective actions are taken in a timely manner

3 To monitor safety management processes in flight operations, engineering, security, cargo and ground operations, and ensure that these are in line with the Group’s quality standards

4 To encourage good communication between the various departments in regard to the above processes so that any problem areas are quickly highlighted and corrective actions taken

5 To ensure that contingency planning and crisis management procedures are in place.

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The BSSC deliberated on a number of matters during the financial year, particularly in regard to:• Best practices in aircraft maintenance• Human fatigue in airline operations• International aviation incident/accident reports• Enhancement of security measures and procedures• Occupational safety and health at the workplace

Board Tender Committee

As at the end of the financial year, the Board Tender Committee (BTC) comprised the following Members:

ChairmanDato’ N Sadasivan A/L N N Pillay

MemberDato’ Gumuri bin Hussain (Alternate: Tengku Azmil Zahruddin bin Raja Abdul Aziz)

Other Members of the Committee included

relevant Senior Management.

The principal duties and responsibilities of the BTC are to ensure that the procurement processcomplies with relevant policies and requirementsand to consider, evaluate and approve or recommend awards that are beneficial to the Group. In this regard, the Committee takes intoconsideration various factors such as price, usage of products and services, as well as theirquantity. The BTC deliberates and approves any purchase with a value of between RM5 million to RM20 million. For purchases above 20 million,the BTC will evaluate and recommend to the Board.

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Communication with Shareholders

As part of good corporate governance, theBoard maintains an ongoing communicationprogramme to ensure that shareholders are keptappropriately informed of developments withinthe Group.

Investor Relations

Immediately after the Group’s quarterly financialresults are publicly announced, it is customaryfor briefings with analysts and the media to be held. The Managing Director and SeniorManagement are present at these briefings toclarify issues raised by the analysts and membersof the media. It is also the Group’s practice tohold special briefings with analysts and themedia in regard to any special developmentrelating to the Group, after the necessaryapprovals have been obtained and, where appli-cable, the prescribed announcements to BursaMalaysia Securities Berhad have been made.

In addition, the Managing Director holds briefings with institutional investors as and when required.

To develop a long-term relationship with share-holders and institutional investors, the Grouphas established an Investor Relations Departmentthat resides in the Finance Division and reportsdirectly to the Chief Financial Officer. TheDepartment enables the maintenance of anopen channel of communication between MASand its shareholders and institutional investors.Towards this end, a dedicated e-mail address([email protected]) has been set up, towhich shareholders can direct their queries.

Annual General Meeting (AGM)

The AGM is the principal forum for dialoguewith shareholders. Notice of the AGM and theAnnual Report are sent out to shareholders atleast 21 days before the date of the meeting.The Annual Report provides detailed and comprehensive information on the Group’sbusiness and activities to help shareholders make informed decisions on their investment in MAS. Shareholders may also access theGroup’s website (www.malaysiaairlines.com)for more information.

During the AGM, the Board takes the opportunity to report on the progress and performance of the Group and respond to

questions raised by shareholders pertaining tothe Group’s activities. In order that shareholderscan gain full understanding and evaluate theissues involved, explanatory statements are provided to them on items of special businessthat may be included in the Notice of Meeting.

At the AGM, shareholders have direct access to Board members who are on hand to answertheir questions, either on a specific resolution oron the Company generally.

Accountability & Audit

Financial Reporting

The Board ensures that the Group’s quarterlyreports to Bursa Malaysia Securities Berhad and the Annual Report to shareholders present a fair assessment of the Group’s position and prospects. The BAC assists the Board toscrutinise information for disclosure in suchreports and the overall quality of the Group’sfinancial reporting.

Statement of Directors’ Responsibility inRelation to the Financial Statements

In the preparation of the Financial Statements as set out on pages 113 to 200 of this AnnualReport, the Directors are of the view that:• The Group has used appropriate accounting

policies that were consistently applied;• Reasonable and prudent judgements and

estimates were made;• All applicable approved accounting standards

in Malaysia have been followed.

The Directors are responsible for ensuring thatthe Company maintains accounting records,which disclose with reasonable accuracy thefinancial position of the Company and theGroup, and that the Financial Statements comply with the Companies Act 1965. The Statement of Directors pursuant to Section169 of the Companies Act 1965 is set out onpage 126 of this Annual Report.

Internal Control

The Board acknowledges its overall responsibilityfor maintaining a sound system of internal control to safeguard shareholders’ investmentand the Group’s assets. The report on theGroup’s internal control is presented in theStatement on Internal Control on pages 42 to 43 of this Annual Report.

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Relationship with Auditor

The Board maintains an appropriate relationshipwith the Group’s auditors through the BAC. The authority, role and responsibilities of the Committee are presented in the AuditCommittee Report set out on pages 39 to 41 of this Annual Report.

The Group has always maintained a close andtransparent relationship with its auditors in seek-ing professional advice and ensuring compliancewith the relevant accounting standards.

This Statement is made in accordance with the resolution of the Board of Directors dated 14 June, 2004.

Additional Compliance Information

The following information is provided in compliance with paragraph 9.25 of the Listing Requirements of Bursa Malaysia Securities Berhad:

Imposition of Sanctions/Penalties

There were no sanctions and/or penalties (thatwere made public) imposed on the Companyand its subsidiaries, Directors or Management by the relevant regulatory bodies during thefinancial year.

Material Contracts

Save as disclosed below, there were no othermaterial contracts entered into by the Companyor its subsidiaries involving directors and majorshareholders interests during the financial year:

1Supplemental Agreement dated 28 May 2002between the Company and Aircraft BusinessMalaysia Sdn Bhd (ABM), a wholly-owned sub-sidiary of the Minister of Finance Incorporated,to amend certain clauses stated in the MasterAircraft Purchase Agreement dated 5 February2002 between the aforesaid parties.

2Eight Operating Lease Agreements, one of whichis dated 6 June 2002 and seven of which aredated 28 May 2002, between the Company andABM in relation to the lease of the eight aircraftfor a lease period of not exceeding 12 years.

3Eight Supplemental Agreements dated 30 July 2002 between theCompany and ABM to amend the terms of rental rate/formula stated in the Operating Lease Agreements between the aforesaid parties referred to in the paragraph above.

4Several Agreements dated 30 July 2002 between the Company andPenerbangan Malaysia Berhad (PMB), such as the following:

a Widespread Asset Unbundling (WAU) Agreement, which describes the general structure of the Agreement for Aircraft and Finance Agreements Unbundling, the Agreement for Domestic Business Unbundling, the Common Terms Agreement, the Governance Agreement and the Aircraftand Engines Purchase Agreement.

b Agreement for Aircraft and Finance Agreements Unbundling, which sets out the terms and arrangements under which PMB and Malaysia Airlinesmust make payments to each other, in relation to the aircraft assets that are subject to finance leases, loan agreements or operating leases entered into by Malaysia Airlines (Encumbered Aircraft Assets) and certain payments which Malaysia Airlines receives in respect of its aircraftassets, and in relation to specifically identified liabilities of Malaysia Airlines that are unbundled. This Agreement provides PMB with an option to purchase the Encumbered Aircraft Assets becoming unencum-bered to Malaysia Airlines, upon which such aircraft will be leased back to Malaysia Airlines on the same terms as the leaseback agreements for Unencumbered Aircraft Assets referred to under paragraph 4(d).

c Agreement for Domestic Business Unbundling, which sets out the terms and arrangements under which Malaysia Airlines agrees to pay PMB the revenue generated from the Domestic Business and PMB agrees to pay Malaysia Airlines expenditure incurred by Malaysia Airlines in respect of the Domestic Business. Included in this Agreement are the details of the cost allocation of both variable and fixed costs/overheads of Malaysia Airlines to the Domestics Business, including costs of operating and managing the Domestic Business. This agreement also sets out the terms and arrangements under which Malaysia Airlines will operate the Domestic Business.

d Aircraft and Engines Purchase Agreement, which sets out the terms and arrangements under which Malaysia Airlines agrees to sell and transfer title to 24 aircraft and 8 spare engines owned by Malaysia Airlines (Unencumbered Aircraft Assets) to PMB, in consideration of PMB’s obligation to pay Malaysia Airlines certain payments under the Agreement for Aircraft and Finance Agreements Unbundling. The signing of the leaseback agreements for the Unencumbered Aircraft Assets is a condition precedent to the Proposed WAU.

e Common Terms Agreement, which sets out the common terms, conditions and provisions that are incorporated by reference to each of the Agreement for Aircraft and Finance Agreements Unbundling, the Agreement for Domestic Business Unbundling, the Governance Agreement and the WAU Agreement. Included in this Agreement is a description of events of default that apply to the said agreements.

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f Governance Agreement, which constitutes an agreement between Malaysia Airlines, as the Asset Operator, and PMB, ABM and Assets Global Network Sdn Bhd, as the Asset Owners,to comply with the corporate and contractual governance code in relation to the conduct between Malaysia Airlines and the Assets Owners on matters referred to in the Agreement for Aircraft and Finance Agreements Unbundling, the Agreement for Domestic Business Unbundling, the Governance Agreement, the Aircraft and Engines Purchase Agreement and the WAU Agreement.

5Supplemental Agreement dated 11 October2002 between Malaysia Airlines and PMB toamend certain provisions of the Agreement forAircraft and Finance Agreements Unbundlingand the Agreement for Domestic BusinessUnbundling.

6Supplemental Agreement dated 11 October2002 between Malaysia Airlines and PMB toamend certain provisions of the Aircraft andEngines Purchase Agreement.

7Conditional Share Sale Agreement dated 30 July 2002 between the Company andGubahan Saujana Sdn Bhd, LSG Asia GmbH and Fahim Sdn Bhd for the proposed disposal of 54,600,000 ordinary shares of RM1.00 eachand 700,000 redeemable preference shares ofRM0.01 each to be issued, both aggregating70% of the enlarged issued capital in MASCatering Sdn Bhd, for a total cash considerationof RM175 million.

8The Lease Agreement dated 6 November 2002between Malaysia Airlines and PMB in relation to the lease of 24 aircraft sold by MalaysiaAirlines to PMB under the Aircraft and EnginesPurchase Agreement, for a period expiring on 30 September 2005 or such other later dateagreed by the parties.

9The Lease Agreement dated 6 November 2002between Malaysia Airlines and PMB in relation tothe lease of eight spare engines sold by MalaysiaAirlines to PMB under the Aircraft and EnginesPurchase Agreement, for a period expiring on 30 September 2005 or such other later dateagreed by the parties.

10The Lease Agreement dated 12 November 2002between Malaysia Airlines and PMB in relation tothe lease of one aircraft sold by Malaysia Airlinesto PMB pursuant to the Agreement for Aircraftand Finance Agreements Unbundling referred to in paragraph 4(b), for a period expiring on 30 September 2005 or such other later dateagreed by the parties.

11The Lease Agreement dated 20 November 2002between Malaysia Airlines and PMB in relation tothe lease of one aircraft sold by Malaysia Airlinesto PMB pursuant to the Agreement for Aircraftand Finance Agreements Unbundling referred to in paragraph 4(b), for a period expiring on 30 September 2005 or such other later dateagreed by the parties.

12The Lease Agreement dated 3 December 2002between Malaysia Airlines and PMB in relation tothe lease of one aircraft sold by Malaysia Airlinesto PMB pursuant to the Agreement for Aircraftand Finance Agreements Unbundling referred to in paragraph 4(b), for a period expiring on 30 September 2005 or such other later dateagreed by the parties.



15The Lease Agreement dated 8 January 2003between Malaysia Airlines and PMB in relation tothe lease of one aircraft sold by Malaysia Airlinesto PMB pursuant to the Agreement for Aircraftand Finance Agreements Unbundling referred to in paragraph 4(b), for a period expiring on 30 September 2005 or such other later dateagreed by the parties.

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16The Lease Agreement dated 24 January 2003between Malaysia Airlines and PMB in relation tothe lease of one aircraft sold by Malaysia Airlinesto PMB pursuant to the Agreement for Aircraftand Finance Agreements Unbundling referred to in paragraph 4(b), for a period expiring on 30 September 2005 or such other later dateagreed by the parties.

17Reimbursement Agreement (in respect of KLIABuildings) dated 26 March 2003 betweenMalaysia Airlines and Assets Global Network Sdn Bhd (AGN), a wholly-owned subsidiary ofthe Minister of Finance Incorporated, in relationto the reimbursement of RM1,010,600,000.00by AGN to Malaysia Airlines in respect of theBuildings and Infrastructure erected by MalaysiaAirlines in KLIA.

18Sub-Lease Agreement (in respect of KLIABuildings) dated 26 March 2003 betweenMalaysia Airlines and AGN in relation to the sub-lease of the land and the buildings andinfrastructure as therein defined for 57 years at a yearly rent payable by Malaysia Airlines toAGN in accordance with the Rent Scheduleappended to the Sub-Lease Agreement.

19Reimbursement Agreement (in respect ofSubang Lands) dated 26 March 2003 betweenthe Company and AGN in relation to the reimbursement of RM233,000,000.00 by AGNto Malaysia Airlines in respect of the Buildingsand Infrastructure erected by Malaysia Airlineson Subang Lands. This Agreement has been executed but completion is subject to approvalof the Application for Surrender and Re-alien-ation of the lands into four separate portions orunits with separate documents of title. Theapproval of the Application for Surrender andRe-alienation has not been obtained within theExtended Approval Period.

Utilisation of Proceeds from RedeemableConvertible Preference Shares

The proceeds raised from the RedeemableConvertible Preference Shares issued in FinancialYear ended 2002 have been fully utilised as atFinancial Year ended 2003.

Non-Audit Fees

The amount of non-audit fees paid and payable to the external auditors by the Groupfor the financial year ended 31 March 2004 isRM753,000.00.

Revaluation Policy on Landed Properties

The revaluation of landed properties will only beundertaken by the Company upon the approvalof the Board of Directors of the Company orshould there be an intended sale or should themarket values be materially changed.

Profit Guarantee

The Company did not give any profit guaranteeduring the financial year.

Share Buyback

There was no share buyback during the financial year.

American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme(as at 31 March 2003)

The Company did not sponsor any ADR or GDRprogramme during the financial year.

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N O T I C E O F A N N U A L G E N E R A L M E E T I N G


NOTICE IS HEREBY GIVEN THAT the Thirty-Third Annual General Meeting of

Malaysian Airline System Berhad will be held at Nirwana Ballroom 1, Lower

Lobby, Mutiara Hotel Kuala Lumpur, Jalan Sultan Ismail, 50250 Kuala Lumpur ,

on Monday, 13 September 2004, at 10.00 am for the following purposes:

Resolution 1

Resolution 2

Resolution 3

Resolution 4Resolution 5

Resolution 6Resolution 7Resolution 8Resolution 9

Agenda

As Ordinary Business

1 To receive and adopt the Report of the Directors and the Audited Accounts for the financial year ended 31 March 2004 together with the Report of the Auditors thereon

2 To approve the declaration of a final tax-exempt dividend of 2.5 sen per share in respect of the year ended 31 March 2004

3 To approve the Directors’ fees for the financial year ended 31 March 2004

4 To re-elect the following Directors retiring under Article 139 of the Company’s Articles of Association, and who, being eligible, offer themselves for re-election:

i Keong Choon Keatii Martin Gilbert Barrow

5 To re-elect the following Directors retiring under Article 137 of the Company’s Articles of Association, and who, being eligible, offer themselves for re-election:

i Datuk Amar Haji Abdul Aziz bin Haji Hussainii Datuk Haji S Abdillah @ Abdullah bin Hassan @ S Hassaniii Dato’ Ahmad Fuaad bin Mohd Dahalaniv Dato’ Dr Mohamed Munir bin Abdul Majid

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“

Resolution 10

Resolution 11

Resolution 12

6 To re-appoint Messrs. Ernst & Young as Auditors and to authorise the Directors to fix their remuneration

As Special Business

7 To consider and if thought fit to pass the following Ordinary Resolution:

Authority to Allot and Issue Shares

THAT subject to the Companies Act, 1965 (the Act), the Articles ofAssociation of the Company, approval from Bursa Malaysia SecuritiesBerhad and other government or regulatory bodies, where such approvalis necessary, full authority be and is hereby given to the Board of Directors,pursuant to Section 132D of the Act, to issue shares in the capital of the Company at any time upon such terms and conditions and for suchpurposes as the Directors may in their discretion deem fit, provided alwaysthat the aggregate number of shares to be issued shall not exceed 10% of the issued share capital of the Company and that such authority shallcontinue to be in force until the conclusion of the next Annual GeneralMeeting of the Company”

8 To transact any other ordinary business for which due notice has been given

Notice of Book Closure for Payment of Dividends

Subject to the approval of shareholders at the Thirty-Third Annual GeneralMeeting, a final tax-exempt dividend of 2.5 sen per share in respect of the year ended 31 March 2004 will be paid on 12 October 2004 to share-holders whose names appear on the Register of Members and the Recordof Depositors at the close of business on 30 September 2004

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NOTICE IS HEREBY GIVEN that the Share Transfer Books, the Register of Members and the Record of Depositors of the Company will be closed from 1 October 2004 to 4 October 2004 (both dates inclusive) to determine shareholders’ entitlements to the dividend payment

A Depositor shall qualify for entitlement only in respect of:

a shares deposited into the Depositor’s Securities Account before 12.30pm on 24 September 2004 (in respect of shares which are exempted from mandatory deposit);

b shares transferred into the Depositor’s Securities Account before 4.00pm on 30 September 2004 (in respect of ordinary transfers);

c shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad

By Order of the Board

Rizani bin Hassan LS 05125Company Secretary

20 August 2004Kuala Lumpur

Explanatory Note on Item 7 of the Agenda

Resolution pursuant to Section 132D, Companies Act, 1965The Ordinary Resolution proposed under item 7 of theAgenda, if passed, will empower the Directors to issue sharesin the Company up to an amount not exceeding in total 10% of the issued share capital of the Company, subject tocompliance with the relevant regulatory requirements. Theapproval is sought to avoid any delay and cost in convening a general meeting for such issuance of shares. This authority,unless revoked or varied by the Company at a general meeting, will expire at the next Annual General Meeting.

Notes1 A member of the Company entitled to attend and vote at

the Meeting is entitled to appoint a proxy/proxies to attendand vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

2 In the case of a corporate member, the instrument appointing a proxy shall be under its Common Seal or under the hand of its officers or attorney, duly authorisedin that behalf.

3 A holder may appoint more than two proxies to attend the Meeting. Where a member appoints two or more proxies, he shall specify the proportion of his shareholding to be represented by each proxy

4 The right of foreigners to vote in respect of their deposited securities is subject to Section 41 (1) (e) and Section 41 (2) of the Securities Industry (Central Depositories) Act, 1991 and the Securities Industry (Central Depositories) (Foreign Ownership) Regulations, 1996. The position of such Depositors in this regard will be determined based on the General Meeting Record of Depositors. Such Depositors whose shares exceed the Company’s foreign shareholding limit of 45% as at the date of the General Meeting Record of Depositors may attend the above Meeting but are not entitled to vote. Consequently, a proxy appointed by such Depositor who is not entitled to vote will also not be entitled to vote at the above Meeting.

5 The instrument appointing a proxy must be deposited at Symphony Share Registrars Sdn Bhd, Level 26, Menara Multi-Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur , not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

6 Shareholders’ attention is hereby drawn to the Listing Requirements of Bursa Malaysia Securities Berhad, which allows a member of the Company who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, to appoint at least one (1) proxy inrespect of each securities account it holds with ordinaryshares of the Company standing to the credit of the said securities account.

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S T A T E M E N T A C C O M P A N Y I N G T H E

N O T I C E O F A N N U A L G E N E R A L M E E T I N G


Directors standing for re-election at the 33rd Annual General Meeting of the Company to be held at Nirwana Ballroom 1, Lower Lobby, Mutiara Hotel Kuala Lumpur, Jalan Sultan Ismail, 50250 Kuala Lumpur,on Monday, 13 September 2004, at 10.00 am are as follows:

Name of Director Details of Attendance Details of Individual Directors of Board Meetings & other Disclosure Requirements

Keong Choon KeatArticle 139 of the Company’s Articles of Association 11/11 Refer to page 25 of Annual Report

Martin Gilbert BarrowArticle 139 of the Company’s Articles of Association 9/11 Refer to page 22 of Annual Report

Datuk Amar Haji Abdul Aziz bin Haji HussainArticle 137 of the Company’s Articles of Association 2/2 Refer to page 22 of Annual Report

Datuk Haji S Abdillah @ Abdullah bin Hassan @ S HassanArticle 137 of the Company’s Articles of Association 7/11 Refer to page 23 of Annual Report

Dato’ Ahmad Fuaad bin Mohd DahalanArticle 137 of the Company’s Articles of Association Not applicable* Refer to page 21 of Annual Report

Dato’ Dr Mohamed Munir bin Abdul MajidArticle 137 of the Company’s Articles of Association Not applicable* Refer to page 20 of Annual Report

*Dato’ Ahmad Fuaad bin Mohd Dahalan and Dato’ Dr Mohamed Munir bin Abdul Majid were appointed after the financial year ended 31 March 2004.

General Meeting held during the financial year ended 31 March 2004

32nd Annual General Meeting

Date 8 September 2003

Time 10.00 am

Venue Nirwana Ballroom 1, Lower LobbyMutiara Hotel Kuala LumpurJalan Sultan Ismail50250 Kuala Lumpur

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