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80 Malaysian Airline System Berhad Annual Report 04/05(10601-W)

COMPANY SECRETARY

Rizani bin Hassan (LS 05125)

REGISTERED OFFICE

33rd Floor, Bangunan MASJalan Sultan Ismail50250 Kuala LumpurMalaysia

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

SOLICITORS

Messrs Lee Hishammuddin and Allen & GledhillAdvocates & SolicitorsLevel 16, Menara Asia LifeNo. 189 Jalan Tun Razak50400 Kuala LumpurMalaysia

Tel : 603 2161 2330Fax : 603 2161 3933 / 2161 1661

Messrs Zaid Ibrahim & Co.Advocates & SolicitorsLevel 19, Menara MileniumJalan DamanlelaPusat Bandar Damansara50490 Kuala LumpurMalaysia

Tel : 603 2087 9999Fax : 603 2094 4888 / 2094 4666 / 2094 9998

BANKERS

Malayan Banking BerhadMenara Maybank100, Jalan Tun Perak50050 Kuala LumpurMalaysia

Tel : 603 2074 7037Fax : 603 2078 9761

Bumiputra-Commerce Bank Berhad6, Jalan Tun Perak50050 Kuala LumpurMalaysia

Tel : 603 2693 1722Fax : 603 2698 6628

AUDITORS

Messrs Ernst & YoungLevel 23A, Menara MileniumJalan Damanlela, Pusat Bandar DamansaraDamansara Heights50490 Kuala LumpurMalaysia

Tel : 603 2087 7000Fax : 603 2095 9076 main

603 2095 9078 audit

SHARE REGISTRATION OFFICE

Symphony Share Registrars Sdn BhdLevel 26, Menara Multi PurposeCapital Square, No. 8, Jalan Munshi Abdullah 50100Kuala LumpurMalaysia

Tel : 603 2721 2222Fax : 603 2721 2530

LISTING

Bursa Malaysia Securities Berhad

corporate information

80

81Malaysian Airline System Berhad Annual Report 04/05(10601-W)

Date Time Nature Venue of Meeting of Meeting of Meeting

19 April 2004 9.30 am Board of Directors’ Meeting The Conference Room[No. 01-04] 34th Floor, Bangunan MAS

Jalan Sultan Ismail50250 Kuala Lumpur

24 May 2004 9.30 am Board of Directors’ Meeting The Conference Room[No. 02-04] 34th Floor, Bangunan MAS


14 June 2004 3.00 pm Board of Directors’ Meeting The Conference Room[No. 03-04] 34th Floor, Bangunan MAS


12 July 2004 9.30 am Board of Directors’ Meeting The Conference Room[No. 04-04] 34th Floor, Bangunan MAS


23 August 2004 9.30 am Board of Directors’ Meeting The Conference Room[No. 05-04] 34th Floor, Bangunan MAS


13 September 2004 1.00 pm Board of Directors’ Meeting Rajah Room, Lower Lobby[No. 06-04] Mutiara Hotel Kuala Lumpur


11 October 2004 9.30 am Board of Directors’ Meeting The Conference Room[No. 07-04] 34th Floor, Bangunan MAS


29 November 2004 9.30 am Board of Directors’ Meeting The Conference Room[No. 08-04] 34th Floor, Bangunan MAS


2 February 2005 10.30 am Board of Directors’ Meeting The Meeting Room 2[No. 09-04] 30th Floor, Bangunan MAS


28 February 2005 2.45 pm Board of Directors’ Meeting The Conference Room[No. 10-04] 34th Floor, Bangunan MAS


28 March 2005 9.30 am Board of Directors’ Meeting The Conference Room[No. 11-04] 34th Floor, Bangunan MAS


details of board of directors’ meetings

81


Date of birth

Nationality

Qualification

WorkingExperience

Occupation

Date firstappointed tothe Board

BoardCommittee

Otherdirectorshipof publiccompanies

16 February 1948

Malaysian

• Ph. D (International Relations) and• B.Sc (Econ) from London School of

Economics and Political Science, UK.

• 1972 – 1975Part-time lecturer, Department ofInternational Relations, LSE London

• 1975 – 1978Research Analyst, Daiwa EuropeLondon

• January 1979 – September 1980Leader Writer, The New StraitsTimes Press (NST)

• September 1980 – May 1981Assistant Editor, NST

• May 1981 – January 1982Assistant Group Editor, NST

• January 1982 – November 1982Deputy Group Editor, NST

• 1982 – 1986Group Editor (English), NST

• 1986 - 1993- CEO, Commerce InternationalMerchant Bankers Berhad (CIMB)(formerly known as PertanianBaring Sanwa)- Executive Chairman, CIMB

• 1993 – February 1999Executive Chairman, SecuritiesCommission

Chairman

1 June 2004

• Nomination Committee (Chairman)• Board Strategy Committee

(Chairman)

• Saujana Resorts (M) Berhad• PECD Berhad (Chairman)

He also served as Director andChairman of several othercompanies and council member ofgovernment agencies during hiscareer. Some of the prominent onesinclude the following :-• Association of Merchant Banks• KLOFFE Sdn. Bhd.• Malaysia Securities Exchange Berhad• Council of Malaysian Industrial

Development Authority (MIDA)• Foreign Investment Committee (FIC)

of the Prime Minister’s Department

Familyrelationshipwith anydirector and/ormajorshareholderof the listedissuer

Any conflictof interestwith the listedissuer

Convictions ofoffences withinthe past 10years otherthan trafficoffences (if any)

No. of Boardmeetingsattended in thefinancial year

Nil

Nil

Nil

9 out of 9

DATO’ DR MOHD MUNIRBIN ABDUL MAJID

Non-Independent andNon-Executive Chairman

82

board of directors


DATO’ N. SADASIVANA/L N. N. PILLAYIndependent and

Non-Executive Deputy Chairman

Date of birth

Nationality

Qualification

WorkingExperience

Occupation


BoardCommittee


Familyrelationshipwith anydirectorand/ormajorshareholderof the listedissuer

29 February 1940

Malaysian

Bachelor of Arts (Hons) - Economic,University of Malaya

• 1 March 1963 - 31 Disember 1967Economist/Chief Industrial FacilitiesDivision, Economic DevelopmentBoard, Singapore

• 1 January 1968 - 31 May 1972Director of Division, MalaysianIndustrial Development Authority(MIDA)

• 1 June 1972 - 31 December 1975Director, Overseas Promotion Officein Dusseldorf, Germany, MIDA

• 1 January 1976 - 31 January 1984Deputy Director-General, MIDA

• 1 February 1984 - 28 February 1995Director-General

• 1 April 1995 to presentExecutive Chairman, SKAManagement Consultants Sdn. Bhd.

Management Consultant

1 December 2001

• Board Tender Committee (Chairman)• Board Audit Committe• Nomination Committee• Remuneration Commitee

• Chemical Company of MalaysiaBerhad

• Petronas Gas Berhad• Leader Universal Holdings Berhad• APM Automotive Holdings Berhad• Pengurusan Danaharta Nasional

Berhad• Bank Negara Malaysia• Malaysian Industrial Development

Finance Berhad• Yeo Hiap Seng (Malaysia) Berhad

Nil

Any conflictof interestwith thelistedissuer

Convictions ofoffenceswithinthe past 10years otherthan trafficoffences(if any)

No. of Boardmeetingsattended inthe financialyear

Nil

Nil

11 out of 11

83


DATO’ AHMAD FUAADBIN MOHD. DAHALAN

Managing Director






Nil

Nil

Nil

Nil

10 out of 11

Date of birth

Nationality

Qualification

WorkingExperience

Occupation


BoardCommittee

24 June 1950

Malaysian

Bachelor of Arts (Hons.), University ofMalaya

• April 1973Attachment to Wisma Putra,Ministry of Foreign Affairs

• July 1973Joined Malaysian Airline SystemBerhad as Management Trainee

• April 1974Attachment as Assistant to AreaManager, UK in London

• June 1974Re-posted to Kuala Lumpur asCommercial Executive to GeneralSales Manager

• November 1975Posted to Japan as Assistant to AreaManager Japan, Tokyo

• August 1976Posted as Relief Area Manager,Indonesia

• July 1977Area Manager, Philippines

• June 1979Relief Duties as the Area Manager,UK, Germany & Holland

• January 1980Area Manager, France & SouthernEurope

• October 1984Regional Manager, Sarawak

• July 1987Regional Manager, PeninsularMalaysia & Singapore

• February 1990Vice President, Americas

• October, 1997Vice President, United Kingdom &Europe

• June 2001Senior General Manager, Sales,Distribution & Marketing

• April 2004 to presentManaging Director, Malaysian AirlineSystem Berhad

Managing Director

1 April 2004

• Board Safety and Security Committee• Board Strategy Committee

84


Date of birth

Nationality

Qualification

WorkingExperience

Occupation


BoardCommittee






DATO’ IZZUDDIN BIN DALINon-Independent

and Non-Executive Director

28 February 1949

Malaysian

•Bachelor of Economics, UniversityMalaya

•M. Arts. (Economics), WesternMichigan University, USA

•1972Ministry of Finance- Department of Administration- Department of Budget- Department of Credit and Loan- Department of International Economics

•1993- General Manager, Administration/

Company Secretary of K.L.International Airport Berhad,

- Director of the Department ofBudget, Ministry of Finance

•2003Secretary General with the Ministry ofPublic Works

•1 August 2004Secretary General with the Ministryof Finance

Secretary General, Ministry of Finance

13 September 2004

Board Audit Committee

Nil

Nil

Nil

Nil

4 out of 5

85


KEONG CHOON KEATIndependent and

Non-Executive Director

22 July 1944

Malaysian

• Associate of the Institute ofChartered Accountants in England& Wales

• Member of the MalaysianInstitute of Accountants

• Member of the MalaysianAssociation of Certified PublicAccountants

• Fellow of the Institute ofChartered Accountants in Englandand Wales

• January 1968 - July 1968Audit Assistant, Harrison Willis &Company Ltd., England

• July 1968 - March 1969Accountant, Bristol Myers &Company Ltd. Middlesex, England

• 1969 -1974Internal Audit Manager, MalaysianTobacco Company Berhad

• 1974 - September 1975Finance Controller, PemasangMotor-Motor Pahang Sdn. Bhd.

• October 1975 - January 1977General Manager, UMWEngineering Sdn. Bhd.

• February 1977 - October 1981Group Chief Accountant, UMWHoldings Group

• November 1981 - 1987Director, Group Accounts, UMWHoldings Group

• 1988 - July 1999Executive Director, UMW HoldingsGroup

• August 1999 to presentAccredited Consultant, DBM(Malaysia) Sdn. Bhd.

Consultant

16 April 2001

• Board Audit Committee (Chairman)• Remuneration Committee• Nomination Committee

• JT International Berhad• Pacificmas Berhad• Chin Teck Plantations Berhad• Negri Sembilan Oil Palms Berhad• Crest Builder Holdings Berhad• The Pacific Insurance Berhad

Date of birth

Nationality

Qualification

WorkingExperience

Occupation


BoardCommittee


Nil

Nil

Nil

9 out of 11





86


MARTIN GILBERT BARROWIndependent and

Non-Executive Director

Date of birth

Nationality

Qualification

WorkingExperience

Occupation

10 March 1944

British

• Gained Oxford and Cambridge BoardExamination “A” Levels in Science andMathematics

• Attended courses in Finance andMarketing

• 1962 – 1964Traveled extensively in Asia, working inAustralia and Malaysia

• 1964Joined Matheson & Co., London

• 1965Jardine Matheson, Hong Kong

• 1965 – 1975Management role in the Group’soperation in Hong Kong, Japan andThailand

• 1975 – 1980Managing Director of the Group’soperations in Japan

• 1980 – 1983President, Olayan Saudi HoldingCompany, the Group’s affiliate in SaudiArabia

• 1983 – 1988Regional Managing Director, Jardinesoperations in Hong Kong and China

• 1989 – 2001Director, Jardine Matheson Ltd –Group Head Office

Key Experience in Public Service• 1979

Elected Chairman of BritishChamberof Commerce in Japan

• 1984 – 1994Member of the Aviation AdvisoryBoard

• 1987 – 1990Member of Steering Group, NewAirport

• 1988 – 1995Appointed by the Governor of HongKong as a member of the LegislativeCouncil

• 1988 – 1996Chairman of the Hong Kong TouristAssociation

• 1989Chairman of the Community Chest ofHong Kong

• 1984 – 2001Chairman of the Sailors Home andMis-sion to Seafarers

• 1990 – 2001Chairman of the Hong Kong Arts Fes-tival Society

• 1996 – 2001Chairman, Committee on Deregula-tion, Business Advisory Group

Director

Date firstappointedto the Board

BoardCommittee


Familyrelationshipwith anydirectorand/or majorshareholder ofthe listedissuer

Any conflict ofinterest withthe listedissuer

Convictions ofoffenceswithin thepast 10 yearsotherthan trafficoffences(if any)


29 August 2001

Board Safety and Security Committee(Chairman)

Nil

Nil

Nil

Nil

9 out of 11

87




Any conflict ofinterest withthe listed issuer

Convictions ofoffences withinthe past 10years otherthan trafficoffences(if any)


Date of birth

Nationality

Qualification

WorkingExperience

Occupation


BoardCommittee

8 January 1964

Malaysian

• B Sc Economics (First ClassHonours), London School ofEconomics and Political Science(University of London)

• Member of the Institute ofChartered Accountants in Englandand Wales

• Member of the Malaysian Instituteof Accountants (Public Accountant)

• Fellow of the Institute of Banks inMalaysia

• September 1985 - December 1988KPMG, London, England- Chartered Accountant

• April 1989 to July 1990Island & Peninsular Berhad- Corporate Finance Manager- Assistant General Manager

(Finance) - February 1990• August 1990 to December 1994

Bumiputra Merchant BankersBerhad- Manager in Corporate Finance

Department- Senior Manager – July 1991- General Manager in Corporate

Finance Department – May, 1992• December 1994 to May 1998

Amanah Merchant Bank Berhad- Chief Executive – December 1994- Executive Director – May 1996

• January 1998 - May 1998Amanah Capital Malaysia Berhad- Group Executive Director

• 21 May 1998 - July 2003Pengurusan Danaharta NasionalBerhad- Managing Director – June 1998- Chairman – 1 August 2001

• 1 August 2001 - 31 July 2002Corporate Debt RestructuringCommittee

- Chairman

Group Chief Executive, SymphonyHouse Berhad

1 December 2001

• Remuneration Committee(Chairman)

• Nomination Committee• Board Strategy Committee

DATO’ MOHAMED AZMANBIN YAHYA

Non-Independent andNon-Executive Director

• Bolton Berhad• Pharmaniaga Berhad• Khazanah Nasional Berhad• PLUS Expressways Berhad• Symphony House Berhad• Scomi Group Berhad

Nil

Nil

Nil

9 out of 11

88


DATUK ABDILLAH @ ABDULLAHBIN HASSAN @ S HASSAN

Independent andNon-Executive Director

Date of birth

Nationality

Qualification

WorkingExperience

Occupation


BoardCommittee


19 August 1949

Malaysian

BA (Hons), Anthropology/Sociology,University Malaya

• 1974 - 1977Administrative Officer, ChiefMinister’s Department

• 1977 – 1978District Officer, Kudat

• 1979 – 1980Deputy Director, StateManagement and MonitoringUnit, Chief Minister’s Department

• 1980 – 1983Permanent Secretary, Ministry ofCulture, Youth and Sports

• 1984 - 1990Secretary of Internal Affairs &Research Office, Chief Minister’sDepartment

• 1991 – 1992Principal Assistant Secretary,Cabinet and Constitution Section,Chief Minister’s Department

• 1992 – 1994Deputy Director, StateEstablishment Office, ChiefMinister’s Department

• 1994 – 1996Directors, State EstablishmentOffice, Chief Minister’sDepartment

• 1996 – 1998Deputy State Secretary, ChiefMinister’s Department

• 1998 to presentPermanent Secretary, Ministry ofFinance Sabah

Permanent Secretary, Ministry ofFinance, Sabah

10 March 2003


• Borneo Housing Mortgage FinanceBerhad

• Sabah Development Bank Berhad• Progressive Insurance Berhad• Saham Sabah Berhad• Perbadanan Pinjaman Sabah





Nil

Nil

Nil

9 out of 11

89





Date of birth

Nationality

Qualification

WorkingExperience

Occupation


BoardCommittee



28 August 1970

Malaysian

• Chartered Accountant- Associate of Malaysian Institute of Accountants- Associate of Institute of Chartered Accountants in England and Wales

• Associate of Association ofCorporate Treasurers, UnitedKingdom

• Double First Class Degree inEconomics from University ofCambridge, United Kingdom

• Audit and Business AdvisoryServices Division,PricewaterhouseCoopers inLondon and Hong Kong

• October 2002 - 15 August 2004Executive Director/Chief FinancialOfficer, Penerbangan MalaysiaBerhad

• 16 August 2004 to presentManaging Director/Chief ExecutiveOfficer, Penerbangan MalaysiaBerhad

Managing Director/Chief ExecutiveOfficer, Penerbangan Malaysia Berhad

23 August 2004

• Board Strategy Committee• Board Tender Committee• Board Safety and Security

Committee

Penerbangan Malaysia Berhad

Nil

TENGKU AZMIL ZAHRUDDIN BINRAJA ABDUL AZIZ


Nil

Nil

7 out of 7

90


DATUK AMAR HAJI ABDUL AZIZBIN HAJI HUSAIN


Date of birth

Nationality

Qualification

WorkingExperience

Occupation


BoardCommittee


18 July 1950

Malaysian

• B. EC (Bus. Adm.), University ofMalaya

• MBA (Finance), SyracuseUniversity, Syracuse, New York

• 23 July 1973Assistant Secretary, State PlanningUnit

• 1 August 1979Principal Assistant Secretary, StateFinancial Secretary’s Office

• 1 September 1981Deputy Chairman, SarawakEconomic DevelopmentCorporation

• 19 January 1987Deputy State FinancialSecretary, State FinancialSecretary’s Office

• 2 May 1990Permanent Secretary, Ministry ofInfrastructure Development

• 30 September 1993Senior Administrative Officer(Special Functions), StateSecretary’s Office

• 29 January 1994Deputy State Secretary (HumanResources), Chief Minister’sDepartment

• 25 August 2000State Secretary, Chief Minister’sDepartment

State Secretary of Sarawak

1 January 2004

• Nomination Committee• Board Safety and Security

Committee

• Borneo Housing MortgageFinance Berhad

• Koperasi Koppes Berhad





Nil

Nil

Nil

8 out of 11

91


BoardCommittee






Date of birth

Nationality

Qualification

WorkingExperience

Occupation


16 October 1951

Malaysian

• BA (Hons), Economics, UniversityKebangsaan Malaysia

• Master of Arts of Law &Diplomacy, The Fletcher School ofLaws & Diplomacy Tufts University

• 1977 - 1980Assistant Director, Research &Training, Ministry of Culture, Youth& Sports

• 1980 – 1981Assistant Director, PsychologicalOperations & Warfare activities,National Security Council PrimeMinister’s Department

• 1981 – 1986- Senior Private Secretary to the

Minister, Ministry of Home Affairs- Principal Assistant Secretary

(Documentation), Ministry ofEnergy, Telecom & Post

• 1986 – 1987Principal Assistant Secretary (ArmForces Council), Ministry ofDefence

• 1987 - 1991Principal Assistant Secretary(Personnel), Ministry of Health

• 1991 – 1993- Senior Program Coordinator,

National Institute of PublicAdministration

- Principal Assistant Director,Economic Planning (Unit) Perak

• 1993 – 1999- General Manager, Yayasan Perak- Managing Director, Ekatinta Sdn.

Bhd.• 2000 – 2001

Planner – Social Development,President’s Office, MRCB

• 2001 - 2004Executive Director, Berjaya GroupBerhad

• 2004 to presentChairman, Pertubuhan BeritaNasional Malaysia

Chairman, Pertubuhan BeritaNasional Malaysia

2 February 2005

Nil

• AWC Facility Solutions Berhad• Berjaya Group Berhad• Berjaya Vacation Club Berhad• Linkedua (Malaysia) Berhad

Nil

Nil

Nil

3 out of 3

DATO’ MOHD. ANNUARBIN ZAINI


92


Date of birth

Nationality

Qualification

WorkingExperience

Occupation


BoardCommittee



Any conflictof interest withthe listedissuer



2 July 1949

Malaysian

• BA (Hons), University of MalayaM. Sc. Transport Planning and

• Management Polytechnic of CentralLondon, United Kingdom

• 1971 - 1973Assistant Secretary (Civil AviationPlanning Development, AirTransportation and InternationalAffairs), Ministry of Transport

• 1974 - 1975Director of Air Transportation andInternational Affairs, Department ofCivil Aviation, Malaysia

• 1976 - 1982Principal Assistant Secretary (AviationDivision), Ministry of Transport

• 1983 - 1989Undersecretary, Aviation Division,Ministry of Transport

• 1989 - 1995Deputy Director of Budget, Ministryof Finance

• 1995 - August, 1996Director, OrganisationalDevelopment, Public ServicesDepartment, Prime MinisterDepartment

• August 1996 - June, 1999Director of Budget, Ministry ofFinance

• June, 1999 - 2 July, 2005Secretary General , Ministry ofTransport

Special Transport Advisor, Ministry ofTransport

1 October 1999 and resigned on 2November 2004, re-appointed on 18July 2005

Nil

Nil

Nil

Nil

Nil

4 out of 7 (during her tenure asDirector for financial year 2004/05)

DATO’ ZAHARAAHBINTI SHAARI


93


Date of birth

Nationality

Qualification

WorkingExperience

7 May 1950

Malaysian

• Bachelor of Science, University ofMalaya

• Diploma Education, University ofMalaya

• Advanced Diploma ScienceEducation, London University,United Kingdom

• Master of Education, Universityof London, United Kingdom

• Certificate in FinancialManagement, University ofCalifornia, Berkeley, USA

• Fellow of the Kennedy School ofGovernment, Harvard University,Cambridge, USA

• 1975Education Officer/Teacher

• 1977 - 1978Vice Principal

• 1978 -1980Principal

• 1980 - 1982Development Officer, Departmentof Education

• 1982 - 1983Senior Project Officer, SarawakEconomic DevelopmentCorporation (SEDC)

• 1983 - 1987Director, SEDC

• 1987 - 1992General Manager, BorneoDevelopment Corporation Sdn.Bhd. (BDC)

• 1992 - 1993General Manager, BintuluDevelopment Authority (BDA)

• 1993 - 1997Senior Assistant Director,Sarawak Foundation

• 1994 – 1997Managing Director, CentreModern Management

• 1997 – 1999Deputy Director, SarawakFoundation

• 1999 – 2001Permanent Secretary of Ministry ofInfrastructure Development andCommunication

Occupation


BoardCommittee

Otherdirectorship ofpubliccompanies


Any conflictof interest withthe listedissuer



• 2001 – presentDeputy State Secretary of Sarawak

Deputy State Secretary of Sarawak

Appointed as Alternate Director toDatuk Amar Haji Abdul Aziz on 1January, 2004

Nil

Nil

Nil

Nil

Nil

2 out of 11 on behalf ofDatuk Amar Hj Abdul Aziz.

DATU HAJI SALLEHBIN HAJI SULAIMAN

Alternate Director to Datuk AmarHaji Abdul Aziz bin Haji Husain

94


Date of birth

Nationality

Qualification

WorkingExperience

Occupation


BoardCommittee



2 October 1950

Malaysian

B A, University of Queensland,Australia

1977 - 2000Served in the Civil Service includingstatutory bodies and agencies forover twenty-four (24) years.Last served as Government Printer,Sabah Government PrinterDepartment and retired a civilservant on 2 October 2001

Chief Executive Oficer, Warisan HartaSabah Sdn. Bhd.

Appointed as Alternate Director toDatuk Abdillah on 11th July, 2003

Nil

Borneo Housing Mortgage FinanceBerhad

Nil

Any conflict ofinterest withthe listedissuer



Nil

Nil

2 out of 11 on behalf ofDatuk Abdillah

ABDUL RAHMANBIN ABDUL GHANI

Alternate Director to Datuk Abdillah @Abdullah bin Hassan @ S Hassan

95


board audit committee report

The Board Audit Committee (BAC) of Malaysian Airline System Berhad (MalaysiaAirlines) is pleased to present the Audit Committee Report for the financial year 2004/05.

A. Establishment and Composition of Board Audit Committee

The BAC was established in 1992, with the terms of reference approved by the Boardof Directors.

The terms of reference provide for the Board to elect the BAC members from amongstthemselves, to comprise no fewer than three Directors, the majority of whom shall beIndependent Directors. Appointment to the Committee is referred to the NominationCommittee, prior to approval by the Board of Directors. The Board shall then ensurethat the composition of the Committee meets the independence and experiencerequirements set out by Bursa Malaysia Securities Berhad (BMSB).

The term of office of a Member of the Committee shall be three years, after which heor she may be re-nominated and appointed by the Board of Directors. The Board ofDirectors shall review the performance of the Committee and its members at leastonce every three years.

During the financial year, Dato’ Izzuddin bin Dali was appointed as a member of theCommittee replacing Tan Sri Dato’ Seri Dr. Samsudin bin Hitam.

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

Name of Directors Classification

Keong Choon Keat (Chairman) Independent Non-Executive Director

Dato’ Izzuddin bin Dali Non-Independent Non-Executive Director(appointed on 15.12.2004)

Datuk Abdillah @ Independent Non-Executive DirectorAbdullah bin Hassan @ S Hassan

Dato’ 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 Committee Members are set out on pages 82 to 95of this Annual Report.

B. Objectives

The Committee’s principal objective is to assist the Board of Directors in dischargingthe Board’s statutory duties and responsibilities relating to the accounting and reportingpractices of the Holding Company and each of its subsidiaries. In addition, the BACshall:

• Evaluate the quality of the audits performed by the internal and externalauditors;

• Provide assurance that the financial information presented by managementis relevant, reliable and timely;

• Oversee compliance with relevant laws and regulations and observance of aproper code of conduct; and

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

96


BOARD AUDIT COMMITTEE REPORT

C. Authority

The BAC shall, in accordance with procedures determined by the Board of Directorsand at the expense of the Company:

• Investigate any activity within its terms of reference, with the cooperation ofall employees as directed by the Board and the Committee;

• Have full and unrestricted access to all information, documents and resourcesrequired to perform its duties, as well as to the internal and external auditorsand senior management of the Company and Group;

• Obtain independent professional advice or other advice, if necessary;• Convene meetings with the internal or external auditors, without the

attendance of the Executive Director, whenever deemed necessary; and• Make relevant reports when necessary to the relevant authorities if a breach

of the Listing Requirements has occurred.

D. Duties and Responsibilities

The duties and responsibilities of the BAC are to undertake the following and reportaccordingly to the Board of Directors:

• Review the audit plan and audit reports, including the evaluation of theinternal control system with the external auditors;

• Review the quality of the external auditors and to make recommendations ontheir appointment, termination and remuneration;

• Review the liaison between the external auditors, Management and Board ofDirectors, and the assistance given by Management to the external auditors;

• Assess the adequacy of the scope, functions and resources of the internal auditfunction and ensure that internal auditors have the necessary authority to dotheir work;

• Review the internal audit programme, processes and results of the audit, andassess whether appropriate actions have been taken on the recommendationsof the internal auditors;

• Review the quarterly reporting to BMSB and year-end annual financialstatements before submission to the Board of Directors, focusing on majoraccounting policy changes, significant audit issues in relation to the estimatesand judgmental areas, significant and unusual events, and compliance withaccounting standards and other legal requirements;

• Monitor any related party transactions that may arise within the Group andto report, if any, transactions between the Group and any related party outsidethe Group that are not based on arm’s length terms and are disadvantageousto the Group; and

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



E. Meetings of the Committee

The BAC shall meet at least four times annually, or more frequently as circumstancesdictate. The Committee had 13 meetings during the financial year, and the attendancerecord of each Member is as follows:

No. of MeetingsName of Directors Held* Attended

Keong Choon Keat 13 13

Dato’ Izzuddin bin Dali 3 2

Datuk Abdillah @ 13 6Abdullah bin Hassan @ S Hassan

Dato’ N. Sadasivan A/L N.N. Pillay 13 12

* Number of meetings held are applicable meetings for each director and variedbased on their dates of appointment

Representatives of Senior Management, Head of Internal Audit and External Auditorsattend the meetings as and when appropriate. Minutes of each meeting are kept anddistributed to each Member of the BAC as well as to the other members of the Boardof Directors. The Chairman of the Committee makes a report on each meeting to theBoard.

F. Activities in the Financial Year

The activities of the Committee during the financial year 2004/05 were as follows: -

Risks and Controls• Reviewed the progress of the risk management functions and its ongoing

activities for identifying, evaluating, monitoring and managing risks; and• Reviewed the adequacy and effectiveness of internal controls through the

evaluation of results of work performed by internal and external auditors aswell as through discussions with Management.

Internal Audit• Approved the audit plan, scope and budget for the financial year;• Reviewed the results of internal auditors’ work and monitored the

implementation of management action plans in addressing and resolvingissues;

• Reviewed the adequacy of resources and the competencies of staff within theInternal Audit Department to execute the audit plan; and

• Reviewed the performance of Internal Audit Department and recommendedimprovements.

External Audit• Agreed to the external auditors’ terms of engagement, audit plan and scope

for the financial year;• Reviewed the results and issues arising from their audit of the financial

year end and the resolution of issues highlighted in their report to theCommittee; and

• Made recommendations to the Board of Directors on the appointment andremuneration of the external auditors.



Financial Reporting• Reviewed and deliberated on the Quarterly Financial Announcements and

Annual Financial Statements to BMSB and recommended them for approvalby the Board of Directors.

Related Party Transactions• Reviewed related party transactions for compliance with the Listing

Requirements of BSMB.

G. Internal Audit Function

The internal audit function is performed through the Internal Audit Department (IAD)of Malaysia Airlines Group that reports to the BAC. The function is governed by anapproved Charter that provides for its independence in the review of the internalcontrol system of the Group. The IAD also assists Senior Management in enhancinginternal controls and ensuring the adequacy, integrity and effectiveness of the internalcontrol system within the Group.

The IAD adopts established auditing standards and performs an annual self-assessmentagainst applicable guidelines to maintain its proficiency and ensure due professionalcare. The Head of the IAD is a Chartered Accountant and Malaysia Airlines is a CorporateMember of the Institute of Internal Auditors.

The objective of the IAD is to provide independent and objective assurance as well asother consultative activities designed to add value and improve the Group’s operations.IAD carries out its functions in a manner that should meet or exceed requirements bythe Standard for Professional Practice of International Auditors.

The risk based audit plan approved by the BAC is developed to cover key operationaland financial activities that are significant to the overall performance of the Group ona cyclical basis. The IAD continuously identifies and prioritises risk and control areas toascertain the scope of its activities. The audit activities are categorised within theassigned audit universes to support 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; and• Information system management.

Internal audit activities covering all the above objectives are undertaken for bothPassenger and Cargo businesses at Corporate Headquarters and Stations worldwide.The IAD also conducts special audits on an ad hoc basis based on specific requestseither by BAC or the Senior Management. In addition, the IAD works closely withexternal auditors to resolve any control issues and assists in ensuring that appropriatemanagement actions are taken. The IAD continuously monitors the execution of theaudit recommendations through periodic follow-up reviews. The BAC receives regularand timely reports from the Head of Internal Audit on the results of audits performed.During this financial year, the IAD undertook 76 audit and 11 projects’ advisoryassignments.

The BAC reviews and approves the IAD’s annual budget to ensure that the function isadequately resourced with competent and proficient internal auditors. During thefinancial year, the IAD Unit has been established to position structured training andcontinuous development programs for the auditors, supervising the IAD’s humanresources management activities and putting into place effective quality initiativeprograms for the department. As at 31 March 2005, the IAD had 50 internal auditorsof various mix of expertise and experiences with approximately 73,300 available man-hours per annum.


statement on internal control

INTRODUCTION

It is a requirement of the Malaysian Code of Corporate Governance (“the Code”) thatthe Board of Directors should maintain a sound system of internal controls to safeguardshareholders’ investments and the Group’s assets. In compliance with Bursa MalaysiaListing Requirements under para 15.27(b) and Statement on Internal Control: Guidancefor Directors of Public-Listed Companies, the Board of Directors are pleased to presentthe Statement on Internal Control for the financial year 2004/05.

RESPONSIBILITIY

The overall responsibility for the Malaysian Airline System Berhad’s (Malaysia Airlines)system of internal control group-wide, including the review of its effectiveness, resideswith the Board of Directors. The Board of Directors is committed to ensure there is inplace a sound system of internal control and risk management within the Group.Recognising the importance of maintaining a sound system of internal control tosafeguard shareholders’ investments and the Group’s assets, the Board has institutedan internal control system, the details of which are set out below.

The risk management framework has also been formalised, adopted and continuouslyreviewed to reaffirm key significant risks, identify new risks, evaluate current controlsand determine appropriate management action plans to manage the said risks.

The Management is responsible for implementing the Board’s policies on risks andcontrols. All employees have a responsibility for internal control as part of theiraccountability for achieving the Group’s overall objectives.

INTERNAL CONTROL PROCESSES

Both the Board and Management of Malaysia Airlines continue to strive in enhancingand implementing the internal control system to manage those risks that could affectthe Group’s continued growth and financial viability. Accordingly, actions arecontinually taken to improve the policies, processes and structure relating to internalcontrol, and ensure that the people tasked with the responsibilities are qualified andtrained. This continual improvement enhances the management of existing risks and,by taking into consideration the changes in the risk profile of the industry and theGroup, helps to anticipate and manage potential risks.

The key elements in Malaysia Airlines’ internal control system, including the processesin place to review its adequacy, are as follows:

• An organisation structure, which is aligned to business and operationsrequirements and led by Division Heads with defined responsibility,accountability and delegation of authority, is in place.

• Integrated business planning and budgeting processes are driven bycommercial objectives. Actions were taken to enhance these processes byassigning a single driver that focuses on revenue targets. Operational budgetswork towards achieving these targets. The Board reviews and approves theCompany’s Business Plan and Budget on an annual basis.

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STATEMENT ON INTERNAL CONTROL

• The Management Committee, comprising members of Senior Management,is responsible for, amongst others:- Developing the Company’s business strategies and establishing corporate

key performance indicators.- 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

Corporate Approving Authority Manual (CAAM) that has been approved bythe Board and subject to review and enhancement on a periodic basis.Subsidiaries’ approving authority and financial approving authority manualsare currently being reviewed to align to the revised CAAM.

• Procedures with embedded internal controls are documented in a series ofStandard Operating Manuals. There is a structure for organisation-wide controland the Organisation & Methods Department has been identified to hold thecustodianship of all the manuals. The manuals are regularly reviewed to ensurethe alignment, standardisation and comprehensiveness of the procedures.Greater communication is ensured on key internal control procedures, includingthose relating to authorisation, accountability, monitoring and reconciliationprocesses.

• The systemwide Stations Internal Control Manual (SICM) comprising theManagement Handbook, Station Approving Authority Manual and the SICMOperational Manual has now become the core reference document on policiesand key procedures related to all station activities for adherence by allpersonnel systemwide. The SICM is subject to review on a yearly basis.

• Regular training, workshops and awareness programmes for the employeesare conducted to emphasize the importance of governance, risk managementand internal control.

• The IAD reports to the BAC, performs systematic reviews of key processesrelating to high-risk areas and assesses the effectiveness of internal controls,including compliance. Recommendations for improvement are highlighted toSenior Management and the Committee, with periodic follow-up reviews ofactions taken.

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

• The Board of Directors reviews the operational and financial performance ofthe Group. The scope of this review also covers any significant internal controlaspects of issues identified in the monthly performance reports and any areasdisclosed in this Annual Report.


RISK MANAGEMENT

The Group has in place an ongoing process for identifying, evaluating, monitoringand managing principal risks that may impact on the achievement of business objectivesand evaluating the adequacy and effectiveness of controls in place to mitigate theserisks.

During the year under review, as part of embedding risk management into the workingculture, the risk management function was operationalised effective from 1 September2004, in the form of a Risk Management Unit (RMU), under the ambit of the CorporateServices Division. Efforts have been taken under RMU to refine the Malaysian AirlinesRisk Management Framework with the objective of establishing an effective frameworkthat is integrated with the operational and reporting processes.

Risk Management Oversight

Board of Directors – Reviews principle risks based on information received andprovides direction on the appropriate policies, procedures and systems to address suchrisks.

Board Audit Committee (BAC) – Reviews the risk profiles reported on a quarterlybasis as part of the evaluation of the internal control systems.

Management Committee (MC) – Oversees the risk management activities of theGroup and subsequently reports to the Malaysia Airlines Board through the BAC.

RMU – Coordinates, consolidates and reports all Risk Management information to theMC and BAC on a quarterly basis to ensure consistent methodology and approachpractised organization-wide.

Divisional / Departmental Risk Managers (DRM) and Regional Risk Managers(RRM) – Each DRM and RRM is responsible for updating and monitoring their respectivedivisional and regional risk profiles. They are tasked with liaising with RMU on all riskmanagement initiatives including providing updates on their divisional and regionalrisk profiles.

The information flow to the BAC and MC is both “top-down” and “bottom-up”. TheBoard through the BAC is responsible for ensuring that risk management in theorganisation is effective and that preventive mechanisms are in place. The MC isresponsible for monitoring the effectiveness of the processes in the organisation, andreporting to the Board on actions taken in managing current and emerging risks.Management, on the other hand, are responsible for managing their risk profilesincluding ensuring implementation and monitoring of action plans.



Common Risk Language

The Malaysian Airlines Risk Model, which was developed in 2002, has been reviewedand streamlined into 4 areas, namely Strategic Risk, Operational Risk, Financial Riskand Regulatory Risk. These 4 areas of risks, can be further categorised into 2 levels ofrisk, that is, strategic level and process level as follows.

Strategic level – these risks are mainly external that are impacted by strategicdecisions made. Strategic Risks are typically risks that threatenthe long-term survival and well-being of the Group, and may arisefrom geo-political or economic changes, competition or othercauses.

Process level – these are mostly internal and some external risks that are drivenby the processes that support the strategies, objectives and plans.Process level risks would include Operational, Financial andRegulatory Risks.

Embedding Risk Management Across All Levels

During the year under review, the Group carried out its Corporate Risk Profiling Exerciseto re-affirm the Corporate Risk Profile that was initially developed in 2002. Followingthis, the risk management framework and Corporate Risk Profile were cascaded tothe respective divisions as part of the “top-down” approach on risk management.

In the “bottom-up” approach, Divisional / Departmental Risk Profiling Exercises wereconducted, and continue to be conducted, to re-affirm existing risks and identify newrisks which may impact the key business processes; evaluate current controls anddetermine appropriate management action plans to manage the said risks. Similarly,Regional Risk Profiling Exercises will commence in the coming financial period to re-affirm and identify risks, controls and management action plans by regions to ensurecoverage of risks faced by Malaysia Airlines operations abroad.

Going forward, quarterly reviews shall be carried out by RMU in collaboration withthe respective Divisions / Departments in the Group to ensure consistent application,effective functioning of the Risk Management Framework, continued relevance ofthe risk profiles developed, and completion of the management action plans.

DESIGN OF INTERNAL CONTROL SYSTEM

The Board of Directors and Senior Management constantly endeavour to maintain anadequate system of internal control designed to manage rather than eliminate riskthroughout the organisation. It is recognised, however, that such a system will onlyprovide reasonable assurance, and not absolute assurance, against the occurrence ofany material loss.

Malaysia Airlines’ internal control system does not apply to its associated companies,which fall within the control of their majority shareholders. Nonetheless, the interestsof Malaysia Airlines are served through its representation on the Board of the respectiveassociated companies and through the review of management accounts received. Theseprovide the Malaysia Airlines Board of Directors with performance-related informationto enable timely decisions with regard to the Group’s investments in such companies.

The Board confirms that the system of internal control, with the key elementshighlighted above, is in place during the financial year, except where otherwise stated.The system is subject to regular reviews by the Board.



statement on corporate governance

In line with one of Malaysian Airline System Berhad’s (Malaysia Airlines) objectives toexceed best practices in the industry, the Board of Directors continues to place highemphasis on corporate governance in all of the Group’s activities. The Board is fullycommitted to ensuring that the principles of the Malaysian Code on CorporateGovernance (“the Code”) are complied with throughout the Group, both locally andworldwide. The Board has given due consideration to the Best Practices In CorporateGovernance and efforts have been made to ensure that the Best Practices areappropriately adopted. In this Statement on Corporate Governance, the Board ispleased to report on the extent that the Code has been successfully implementedwithin Malaysia Airlines.

The Board of Directors has considered the manner in which it has applied the principlesof 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 adopting the highest standards of corporategovernance practices in all of the Group’s activities around the world. To this end andin line with the Group’s objective of exceeding best practices in the industry, everyeffort has been made to evaluate and apply the relevant Best Practices of the Code forthe Group.

THE BOARD OF DIRECTORS

Responsibilities of the Board

The principal focus of the Board is on establishing the overall strategic direction,development and control of the Malaysia Airlines Group. The Board is responsible forapproving key matters involving business plans and budgets, major capital expenditure,acquisition and disposal of assets, interim and annual results, human resource policiesincluding Performance Management System, Safety and Security Enhancementmeasures as well as succession planning for Senior Management. The Board’s authorityis defined in the Corporate Approving Authority Manual.

In each of its regularly scheduled meetings, Board Members review the Group’s monthlyoperational and financial performance. Based on quantitative and qualitativeinformation received, the Board identifies the principal risks and provides directionon the appropriate policies, procedures and systems to address such risks. The Boardalso reviews the adequacy and integrity of the Group’s internal control system, includingthe management information system, and compliance with relevant legislation andguidelines.

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STATEMENT ON CORPORATE GOVERNANCE

Structure for an Effective Board

The structure of the Board of Directors is an important element in ensuring that it isable to execute its responsibilities effectively. As at the end of the financial year, theBoard of Malaysia Airlines comprised eleven members with the following composition:

Category Number

Non-Independent and Non-Executive Chairman 1

Executive Director 1

Non-Independent and Non-Executive Directors 3

Independent and Non-Executive Directors 6

The Directors’ profiles are set out on pages 82 to 95 of this Annual Report.

There is a clear division of responsibilities between the Chairman of the Board and theManaging Director. The Independent Directors, who constitute more than one-thirdof the Board, represent the interests of public shareholders. The Non-Executive Directorsprovide a mix of related industry-specific knowledge as well as broad government,business and commercial experience. All Non-Executive Directors are independent ofManagement and free from any relationship that could interfere with theirindependent judgement. In situations where it would be inappropriate for concernsto be dealt with by the Chairman or the Managing Director, such concerns would beconveyed to Dato’ N. Sadasivan A/L N. N. Pillay, who is the Deputy Chairman and theSenior Independent Non-Executive Director.

The Board believes that its current structure and size satisfactorily reflect theinvestments of its shareholders and that it is able to provide clear and effectiveleadership to the Group.

Disclosures

Each Director is required to make written disclosures, where such disclosures are tabledat the board meeting, to the effect that he is an officer or member of a specifiedcorporation and is to be regarded as interested in any transaction which may, afterthe date of the disclosure, be made with that corporation.

Board Meetings and Attendance

The Board met every month during the financial year, except in December 2004 andJanuary 2005, as planned. Prior to a meeting, each Director received an agenda and afull set of Board Papers for each item on the agenda. The Directors are supplied withadequate information that goes beyond assessing the quantitative performance, in atimely fashion prior to a meeting to enable them to make informed decisions.


The Board meeting attendance record for each Director for the financial year ended31 March 2005 is as follows:

Name of Director Attendance

Dato’ Dr. Mohd Munir bin Abdul Majid 9/9Chairman (appointed on 01.06.04)

Tan Sri Dato’ Seri Azizan bin Zainul Abidin 4/4Chairman (passed away on 14.07.04)

Dato’ N. Sadasivan A/L N. N. Pillay 11/11Deputy Chairman

Dato’ Ahmad Fuaad bin Mohd. Dahalan 10/11Managing Director (appointed on 01.04.04)

Tan Sri Dato’ Dr Samsudin bin Hitam 2/4(resigned on 01.08.04)

Dato’ Zaharaah binti Shaari 4/7(resigned on 02.11.04)

Dato’ Gumuri bin Hussin 3/4(resigned on 16.08.04)

Keong Choon Keat 9/11

Martin Gilbert Barrow 9/11

Dato’ Mohamed Azman bin Yahya 9/11

Datuk Abdillah @ Abdullah bin Hassan @ S Hassan 9/11

Datuk Amar Haji Abdul Aziz bin Haji Husain 8/11

Tengku Azmil Zahruddin bin Raja Abdul Aziz 7/7(appointed on 24.08.04)

Dato’ Izzuddin bin Dali 4/5(appointed on 13.09.04)

Dato’ Mohd. Annuar bin Zaini 3/3(appointed on 02.02.05)

Note: The first figure above denotes the number of meetings attended while the secondfigure denotes the number held. The number of meetings held refers to the applicablemeetings for each Director and varies based on their dates of appointment.

Each Director has full access to all information within the Group, individually orcollectively, and has direct access to the advice and services of the Group’s CompanySecretary. The Directors are free, at the Company’s expense, to seek independentprofessional advice should they consider it necessary, in furtherance of their duties.The Board has established an agreed procedure for Directors to take independentprofessional advice.



Board Committees

To assist the Board in executing its responsibilities, a number of board sub-committeeswith specified terms of reference and responsibilities have been established. Thesecommittees are the:

1. Board Audit Committee2. Nomination Committee3. Remuneration Committee4. Board Safety and Security Committee5. Board Tender Committee6. Board Strategy Committee


The Board Audit Committee (“BAC”) Report, stating its membership, role and activitiesduring the financial year, is set out on pages 96 to 99 of this Annual Report.

The Chairman of BAC reports the outcome of its meetings to the Board and suchreports are incorporated as part of the agendas of the Board meetings.

Nomination Committee

The Company has in place formal and transparent procedures for the appointment ofnew Directors. These procedures ensure that all nominees to the Board are firstconsidered by the Nomination Committee (“NC”) taking into account the requiredmix of skills, experience and other qualities before making a recommendation to theBoard. The scope of the NC has been further expanded in September 2004 when theBoard approved the revised Corporate Approving Authority Manual wherein the NCwill also deliberate on the appointment of any person to the position of GeneralManager and above within the Senior Management group.

The composition of the NC as at the end of the financial year was as follows:

Chairman: Dato’ Dr. Mohd Munir bin Abdul MajidMembers: Dato’ N. Sadasivan A/L N. N. Pillay

Dato’ Mohamed Azman bin YahyaDatuk Amar Haji Abdul Aziz bin Haji Husain

The NC comprises exclusively Non-Executive Directors, the majority of whom areindependent. 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 of the Board as a whole and theCommittees of the Board, as well as evaluate the contribution of each individualDirector; and

3. recommend to the Board candidates for directorships and nominees for theBoard Committees.

During the financial year, the NC met twice to deliberate and recommend to the Boardof Directors on the nomination of Directors and their alternates. The Committee alsoreviewed the composition of the Board to ensure a good balance of skills and experienceamongst its members.



As at the date of this Annual Report, all Directors have successfully completed theMandatory Accreditation Programme and are participating in the Continuous EducationProgramme mandated by Bursa Malaysia Securities Berhad. Following the new rulingby BMSB that the Board is responsible for the training needs of its Directors, severaltraining programmes have been scheduled for the Directors in order to enhance theirskills and knowledge as well as to update themselves on the developments within theindustry. In addition, as part of the annual strategic planning session during the financialyear, external speakers updated the Directors on industry-specific developments. TheDirectors were also invited to the Malaysia Airlines Worldwide Business Forum 2005,organised by the Sales, Distribution and Marketing Division, during which regionaland area management staff were informed of the latest developments within theGroup.

The Company’s Articles of Association require that all Directors, who are appointed bythe Board, are subject to election by shareholders at the first opportunity after theirappointment and to re-election at least once every three years.

Remuneration Committee

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

Chairman: Dato’ Mohamed Azman bin YahyaMembers: Keong Choon Keat

Dato’ 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, withindependent professional advice if necessary, the remuneration packages of theDirectors in all forms.

The remuneration of the Executive Director consists of basic salary and otheremoluments. Other benefits customary to the Group are made available as appropriate.Any salary review takes into account market rates and the performance of the individualand the Group. The Non-Executive Directors’ remuneration comprises fees andallowances that reflect their expected roles and responsibilities, including any additionalwork and contributions required.

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

Basic Salary & Benefits TotalOther Emoluments (RM) (RM) (RM)

Executive Director 639,000 1,000 640,000

Non-Executive Directors 537,000 - 537,000

Total 1,176,000 1,000 1,177,000

The Board has chosen not to disclose the remuneration of Directors on an individualbasis, as suggested by the Code, as the Board believes that such information will notadd significantly to the understanding and evaluation of the Group’s standards ofcorporate governance.



Board Safety and Security Committee

The Board of Directors is always mindful that the safety and security of its operationsare critical to the success of the Group’s business as well as its reputation. The Boardhas therefore seen it appropriate to establish a Board Safety and Security Committee(“BSSC”) to address and resolve issues that may affect the safety and security of theGroup’s operations.

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

Chairman: Martin Gilbert BarrowMembers: Dato’ Ahmad Fuaad bin Mohd Dahalan

Datuk Amar Haji Abdul Aziz bin Haji HusainTengku Azmil Zahruddin bin Raja Abdul Aziz

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 objectivesand targets;

2. To review occurrence reports as well as trend analyses and ensure that correctiveactions 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 withthe Group’s quality standards;

4. To encourage good communication between the various departments withregard to the above processes so that any problem areas are quickly highlightedand corrective actions taken; and

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

The BSSC deliberated on a number of matters during the financial year, particularlywith regard to:

• The maintenance and health of aircraft;• The performance of crew members when on flying assignments;• Lessons to be learnt from incidents suffered by other operators;• Safety and security policies on matters such as cabin baggage and identification

checks on domestic passengers;• Security enhancement issues and the policy on sky marshals;• Relevant safety and security concerns highlighted in the audit reports and

actions that have been taken; and• Review of the annual Safety Enhancement Action Plan, including audits by

various parties.

The Chairman of BSSC and the General Manager Corporate Safety & Security reportthe outcome of its meetings to the Board and such reports are incorporated as part ofthe agendas of the Board meetings and the minutes of each BSSC meeting will bedistributed to all Board members.



Board Tender Committee

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

Chairman: Dato’ N. Sadasivan A/L N. N. PillayMember: 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 procurementprocess complies with the relevant policies and requirements and to consider, evaluateand approve or recommend awards that are beneficial to the Group. In this regard,the Committee takes into consideration various factors such as price, usage of productsand services, as well as their quantity. The BTC deliberates and approves any purchasewith a value from RM5 million to RM30 million. For purchases above RM30 million,the BTC will evaluate and make a recommendation to the Board.

Board Strategy Committee

As at the end of the financial year, the Board Strategy Committee (BSC) comprised thefollowing Members:

Chairman: Dato’ Dr. Mohd Munir bin Abdul MajidMember: Dato’ Ahmad Fuaad bin Mohd Dahalan

Dato’ Mohamed Azman bin YahyaTengku Azmil Zahruddin bin Raja Abdul Aziz

The principal duties and responsibilities of the BSC are to identify, advise and assistthe Board of Directors and Management in determining the strategic direction forthe Company in the dynamic airline industry business environment.

COMMUNICATION WITH SHAREHOLDERS

As part of good corporate governance, the Board maintains an ongoing communicationprogramme to ensure that shareholders are kept appropriately informed ofdevelopments within the Group.

Investor Relations

Immediately after the Group’s quarterly financial results are publicly announced, it iscustomary for briefings with analysts and the media to be held. The Managing Directorand Senior Management are present at these briefings to clarify issues raised by theanalysts and members of the media. It is also the Group’s practice to hold specialbriefings with analysts and the media with regard to any special development relatingto the Group, after the necessary approvals have been obtained and, where applicable,the prescribed announcements to Bursa Malaysia Securities Berhad have been made.

In addition, the Managing Director holds briefings for institutional investors as andwhen required.

To develop a long-term relationship with shareholders and institutional investors, theBoard has established an Investor Relations Department that resides in the FinanceDivision and reports directly to the Chief Financial Officer. The Department enablesthe maintenance of an open channel of communication between Malaysia Airlinesand its shareholders and institutional investors. Towards this end, a dedicated e-mailaddress ([email protected]) has been set up, to which shareholders can directtheir queries.



Annual General Meeting (AGM)

The AGM is the principal forum for dialogue with shareholders. Notice of the AGMand the Annual Report are sent out to shareholders at least 21 days before the date ofthe meeting. The Annual Report provides detailed and comprehensive informationon the Group’s business and activities to help shareholders make informed decisionson their investment in Malaysian Airlines. Shareholders may also access the Group’swebsite (www.malaysiaairlines.com.my) for more information.

During the AGM, the Board takes the opportunity to report on the progress andperformance of the Group and respond to questions raised by shareholders pertainingto the Group’s activities. To enable shareholders to gain full understanding and evaluatethe issues involved, explanatory statements are provided to them on items of specialbusiness that may be included in the Notice of Meeting.

At the AGM, shareholders have direct access to Board members who are at hand toanswer their questions, either on a specific resolution or on the Company generally.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board ensures that the Group’s quarterly reports to Bursa Malaysia Securities Berhadand the Annual Report to shareholders present a fair assessment of the Group’sperformance and prospects. The BAC assists the Board to scrutinise information toensure adequate disclosures are made in such reports and the overall quality of theGroup financial reporting is maintained.

Statement of Directors’ Responsibility in Relation to the Financial Statements

In the preparation of the Financial Statements as set out on pages 148 to 232 of thisAnnual Report, the Directors are of the view that:

• The Group has used appropriate accounting policies that were consistentlyapplied;

• Reasonable and prudent judgements and estimates were made; and• All applicable approved accounting standards in Malaysia have been followed.

The Directors are responsible for ensuring that the Company maintains accountingrecords, which disclose with reasonable accuracy the financial position of the Companyand the Group, and that the Financial Statements comply with the Companies Act,1965.

The Statement of Directors pursuant to Section 169 of the Companies Act, 1965 is setout on page 162 of this Annual Report.



Internal Control

The Board acknowledges its overall responsibility for maintaining a sound system ofinternal control to safeguard shareholders’ investment and the Group’s assets. Incompliance with the Listing Requirements of Bursa Malaysia Securities Berhad underpara 15.27(b) and guided by the Statement of Internal Control: Guidance for Directorsof Public Listed Companies, the report on the Group’s internal control is presented inthe Statement on Internal Control on pages 100 to 103 of this Annual Report.

Relationship with Auditor

The Board maintains an appropriate relationship with the Group’s auditors throughthe BAC. The authority, role and responsibilities of the Committee are presented inthe Audit Committee Report set out on pages 96 to 99 of this Annual Report.

The Group has always maintained a close and transparent relationship with its auditorsin seeking professional advice and ensuring compliance with the relevant accountingstandards.

This Statement is made in accordance with the resolution of the Board of Directorsdated 1 July 2005.

Additional Compliance Statement

In compliance with the Listing Requirements of Bursa Malaysia Securities Berhad underpara 9.25, the Board is also pleased to provide disclosure on the following information:-

1. Imposition of Sanctions/Penalties:-

There were no sanctions and/or penalties (that were made public) imposed on theCompany and its subsidiaries, Directors or Management by the relevant regulatorybodies during the financial year.

2. Material Contracts:-

Save as disclosed below, there are no other material contracts entered into by theCompany or its subsidiaries, involving directors and major shareholders’ interestsduring the financial year:-

(i) Supplemental Agreement dated 28 May 2002 between the Company andAircraft Business Malaysia Sdn. Bhd. (“ABM”), a wholly-owned subsidiary ofthe Minister of Finance, Incorporated, to amend certain clauses stated in theMaster Aircraft Purchase Agreement dated 5 February 2002 between theaforesaid parties.

(ii) Eight (8) Operating Lease Agreements, one (1) of which is dated 6 June 2002and seven (7) of which are dated 28 May 2002, between the Company andAircraft Business Malaysia Sdn. Bhd. (“ABM”), a wholly-owned subsidiary ofthe Minister of Finance, Incorporated, in relation to the lease of the eight (8)aircraft for a lease period not exceeding 12 years.

(iii) Eight (8) Supplemental Agreements dated 30 July 2002 between the Companyand Aircraft Business Malaysia Sdn. Bhd. (“ABM”), a wholly-owned subsidiaryof the Minister of Finance, Incorporated, to amend the terms of rental rate/formula stated in the Operating Lease Agreements between the aforesaidparties referred to in paragraph (ii) above.



(iv) Several Agreements dated 30 July 2002 between the Company andPenerbangan Malaysia Berhad (“PMB”) such as:

(a) Widespread Asset Unbundling (“WAU”) Agreement which describes thegeneral structure of the Agreement for Aircraft and Finance AgreementsUnbundling, the Agreement for Domestic Business Unbundling, theCommon Terms Agreement, the Governance Agreement and the Aircraftand Engines Purchase Agreement.

(b) Agreement for Aircraft and Finance Agreements Unbundling which setsout the terms and arrangements under which PMB and Malaysia Airlinesmust make payments to each other, in relation to the aircraft assets whichare subject to finance leases, loan agreements or operating leases enteredinto by Malaysia Airlines (Encumbered Aircraft Assets) and certain paymentswhich Malaysia Airlines receives in respect of its aircraft assets, and inrelation to specifically identified liabilities of Malaysia Airlines which areunbundled. This agreement provides PMB with an option to purchase theEncumbered Aircraft Assets becoming unencumbered to Malaysia Airlines,upon which such aircraft will be leased back to Malaysia Airlines on thesame terms as the leaseback agreements for Unencumbered Aircraft Assetsreferred to under paragraph 2 (iv)(d).

(c) Agreement for Domestic Business Unbundling which sets out the termsand arrangements under which Malaysia Airlines agrees to pay PMB therevenue generated from the Domestic Business and PMB agrees to payMalaysia Airlines expenditure incurred by Malaysia Airlines in respect ofthe Domestic Business. Included in this agreement are the details of thecost allocation of both variable and fixed costs/overheads of MalaysiaAirlines to the Domestic Business, including costs of operating andmanaging the Domestic Business. This agreement also sets out the termsand arrangements under which Malaysia Airlines will operate the DomesticBusiness.

(d) Aircraft and Engines Purchase Agreement which sets out the terms andarrangements under which Malaysia Airlines agrees to sell and transfertitle to twenty-four (24) aircraft and eight (8) spare engines owned byMalaysia Airlines (Unencumbered Aircraft Assets), to PMB, in considerationof PMB’s obligation to pay Malaysia Airlines certain payments under theAgreement for Aircraft and Finance Agreements Unbundling. The signingof the leaseback agreements for the Unencumbered Aircraft Assets is acondition precedent to the Proposed WAU.

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

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



(v) Supplemental Agreement dated 11 October 2002 between Malaysia Airlines and PMB, to amend certainprovisions of the Agreement for Aircraft and Finance Agreements Unbundling and the Agreement forDomestic Business Unbundling.

(vi) Supplemental Agreement dated 11 October 2002 between Malaysia Airlines and PMB, to amend certainprovisions of the Aircraft and Engines Purchase Agreement.

(vii) The Lease Agreement dated 6 November 2002 between Malaysia Airlines and PMB in relation to thelease of twenty-four (24) aircraft sold by Malaysia Airlines to PMB under the Aircraft and Engines PurchaseAgreement, for a period which expires on 30 September 2005 or such other later date agreed by theparties.

(viii) The Lease Agreement dated 6 November 2002 between Malaysia Airlines and PMB in relation to thelease of eight (8) spare engines sold by Malaysia Airlines to PMB under the Aircraft and Engines PurchaseAgreement, for a period which expires on 30 September 2005 or such other later date agreed by theparties.

(ix) The Lease Agreement dated 12 November 2002 between Malaysia Airlines and PMB in relation to thelease of one (1) aircraft sold by Malaysia Airlines to PMB pursuant to the Agreement for Aircraft andFinance Agreements Unbundling referred to in paragraph 2 (iv)(b) above, for a period which expires on30 September 2005 or such other later date agreed by the parties.

(x) The Lease Agreement dated 20 November 2002 between Malaysia Airlines and PMB in relation to thelease of one (1) aircraft sold by Malaysia Airlines to PMB pursuant to the Agreement for Aircraft andFinance Agreements Unbundling referred to in paragraph 2 (iv)(b) above, for a period which expires on30 September 2005 or such other later date agreed by the parties.

(xi) The Lease Agreement dated 3 December 2002 between Malaysia Airlines and PMB in relation to thelease of one (1) aircraft sold by Malaysia Airlines to PMB pursuant to the Agreement for Aircraft andFinance Agreements Unbundling referred to in paragraph 2 (iv)(b) above, for a period which expires on30 September 2005 or such other later date agreed by the parties.

(xii) The Lease Agreement dated 13 December 2002 between Malaysia Airlines and PMB in relation to thelease of one (1) aircraft sold by Malaysia Airlines to PMB pursuant to the Agreement for Aircraft andFinance Agreements Unbundling referred to in paragraph 2 (iv)(b) above, for a period which expires on30 September 2005 or such other later date agreed by the parties.

(xiii) The Lease Agreement dated 20 December 2002 between Malaysia Airlines and PMB in relation to thelease of one (1) aircraft sold by Malaysia Airlines to PMB pursuant to the Agreement for Aircraft andFinance Agreements Unbundling referred to in paragraph 2 (iv)(b) above, for a period which expires on30 September 2005 or such other later date agreed by the parties.

(xiv) The Lease Agreement dated 8 January 2003 between Malaysia Airlines and PMB in relation to the leaseof one (1) aircraft sold by Malaysia Airlines to PMB pursuant to the Agreement for Aircraft and FinanceAgreements Unbundling referred to in paragraph 2 (iv)(b) above, for a period which expires on 30September 2005 or such other later date agreed by the parties.

(xv) The Lease Agreement dated 24 January 2003 between Malaysia Airlines and PMB in relation to the leaseof one (1) aircraft sold by Malaysia Airlines to PMB pursuant to the Agreement for Aircraft and FinanceAgreements Unbundling referred to in paragraph 2 (iv)(b) above, for a period which expires on 30September 2005 or such other later date agreed by the parties.

(xvi) Reimbursement Agreement (In Respect of KLIA Buildings) dated 26 March 2003 between Malaysia Airlinesand Assets Global Network Sdn. Bhd. (“AGN”), a wholly-owned subsidiary of the Minister of Finance,Incorporated in relation to the reimbursement of RM1,010,600,000 by AGN to Malaysia Airlines in respectof the buildings and infrastructure erected by Malaysia Airlines in KLIA.



(xvii) Sub-Lease Agreement (In Respect of KLIA Buildings) dated 26 March 2003 between Malaysia Airlines andAssets Global Network Sdn. Bhd. (“AGN”), a wholly-owned subsidiary of the Minister of Finance,Incorporated in relation to the sub-lease of the land and the buildings and infrastructure as thereindefined for fifty-seven (57) years at a yearly rent payable by Malaysia Airlines to AGN in accordance withthe Rent Schedule appended to the Sub-Lease Agreement.

4. Utilisation of Proceeds from Redeemable Convertible Preference Shares

There were no proceeds raised from any corporate proposal during the financial year.

5. Non-audit fees

The amount of non-audit fees paid and payable to the external auditors by the Group for the financial yearended 31 March 2005 is RM937,000.

6. Revaluation Policy on Landed Properties

Revaluation of landed properties will only be undertaken by the Company upon the approval of the Board ofDirectors of the Company or should there be an intended sale or the market values were materially changed.

7. Profit Guarantee

The Company did not give any profit guarantee during the financial year.

8. Share Buyback

There was no share buyback scheme undertaken by the Company.

9. Options, Warrants or Convertible Securities

There were no options, warrants or convertible securities during the financial year.

10. American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programme (as at 31March 2005)

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

11. Variation in Results

There was no variance of 10% or more in the results in the unaudited quarterly result and the audited financialstatement.

The Company did not release any profit estimate, forecast or projection during the financial year.

12. Recurrent Related Party Transactions (“RRPT”) of Revenue Nature

Please refer to page 209 of the Annual Report.



Asian Frequent FlyerPte Ltd

GE Engine Services MalaysiaSdn. Bhd.

Hamilton Sundstrand CustomerSupport Centre (M) Sdn. Bhd.

Honeywell Aerospace ServicesSdn. Bhd.

MAS Catering Sdn. Bhd.

Pan Asia PacificAviation Services Limited.

Taj Madras Flight Kitchen

Limited

33.33%

30%

49%

30%

30%

23.53%

20%

group structure

as at 18 July 2005

MALAYSIAN AIRLINE SYSTEM BERHAD INVESTMENT IN ASSOCIATES

80% Abacus Distribution Systems (Malaysia) Sdn. Bhd.

51% Aerokleen Services Sdn. Bhd.

100% Aircraft Engine Repair And Overhaul (M) Sdn. Bhd.

100% Kelas Services Sdn. Bhd.

56.7% Macnet CCN (M) Sdn. Bhd.

100% Malaysia Airlines Cargo (L) Limited

100% Malaysia Airlines Cargo Sdn. Bhd.

100% MAS Academy Sdn. Bhd.

100% MAS Aerotechnologies Sdn. Bhd.

60% MAS Catering (Sarawak) Sdn. Bhd.

100% MAS Golden Boutiques Sdn. Bhd.

100% MAS Golden Holidays Sdn. Bhd.

100% MAS Hotels And Boutiques Sdn. Bhd.

100% MAS Properties Sdn. Bhd.

100% MAS Wings of Gold Sdn. Bhd.

100% MIR Technologies Sdn. Bhd.

100% Pengangkutan Kargo Udara MAS Sdn. Bhd.

100% Syarikat Pengangkutan Senai Sdn. Bhd.

116



‘Golden Holidays’ offers flexibility inchoosing tours and packages that best suitindividual needs.


MANAGINGDIRECTOR

MANAGINGDIRECTOR’S OFFICE

• CorporateCommunications

• Corporate Safety& Security

COMPANY SECRETARY

FLIGHT OPERATIONS

• Administration & Finance• Operations & Development• Services & Infrastructure• Quality Assurance, Processes

& Projects• Manpower Planning

& Productivity• Flight Crew Training Centre• Flight Safety & Human Factor

SALES, DISTRIBUTION& MARKETING

• Sales• International Affairs• Sales Management

& Planning• Haj & Charters• Product Development

& Services• Head of Finance• Marketing Support• Customer Management

& Service Quality• Distribution• Advertising, Promotions

& Branding

GROUP FINANCE

• Chief Financial Officer• Group Accounting

- Financial Services- Financial Compliance

& Airline Revenue Reporting- Financial Accounting- Financial Systems

• Group Reporting, Control& Budget

• Treasury & Investment

NETWORK & REVENUEMANAGEMENT

• Operations Planning• Aircraft Trading• Network Planning• Revenue Management• IT Relationship Management

organisational structureeffective 1 August 2005

118

INTERNAL AUDIT

BOARD OFDIRECTORS

BOARD AUDITCOMMITTEE


CARGO

• Business Development & Sales• Cargo Operations• Finance• Corporate Affairs• Human Resources• IT Relationship

GROUP IT & SUPPORT SERVICES

• Finance Support Services• Human Resource Support Services• IT Support Services

TECHNICAL &GROUND OPERATIONS

• Engineering & Maintenance• Ground Support Services• Security Services• Ground Handling Management• Flight Management Centre• Emergency Management Centre• Finance & Administration

CORPORATE SERVICES

• Centralised Procurement• Project Management• Property Administration• Insurance• Property Projects• Organisation, Methods

& Risk Management• Group Legal Practice

CUSTOMER SERVICES

• Inflight Services• Airport Services• Manpower Planning• Quality Assurance

GROUP HUMAN RESOURCE

• Human Resource Management• Human Resource Development• Medical Services• Planning & Rewards• Malaysia Airlines Academy• Project Coordination


119


Dato’ Ahmad Fuaadbin Mohd DahalanManaging Director

Dato’ Ahmad Fuaad, 55 years old and a Malaysian, is currently ManagingDirector of Malaysia Airlines, a position he was appointed to on 1 April2004. He is also a Member of the Board’s Safety and Security Committee.

After graduating with a Bachelor of Arts (Hons) degree, Dato’ AhmadFuaad served a few months with the Ministry of Foreign Affairs beforejoining Malaysia Airlines in July 1973. At Malaysia Airlines, he hasundertaken various assignments and held a number of positions inMalaysia as well as overseas. He had been Area Manager, firstly in thePhilippines and then in France and Southern Europe; Regional Managerof Sarawak followed by Peninsular Malaysia and Singapore; and Vice-President of the Americas and later the United Kingdom and Europe.Before his appointment as Managing Director, he was the SeniorGeneral Manager of Sales, Distribution and Marketing. Dato’ AhmadFuaad does not hold any directorships in other public companies.

management committee

120120


Dato’ Abdul Rashid Khanbin Abdul Rahim KhanSenior General ManagerSales, Distribution and Marketing

Dato’ Abdul Rashid Khan joined Malaysia Airlinesin 1972. He has served as Regional Manager ofNorth America, Thailand, Germany and Malaysia.He subsequently served as General Manager,Sales before undertaking his current position asSenior General Manager, Sales, Distribution andMarketing effective 1 April 2004. He is currentlyserving senior roles in the industry’s mostprominent and influential organisations,including PATA, Aseanta, and the NationalTourism Committee. He is also Chairman of theBoard of Airline Representatives, Malaysia.

Tajuden bin Abu BakarSenior General ManagerTechnical and Ground Operations

Tajuden is an Australian-trained LicensedAircraft Maintenance Engineer and holds aMaster of Science Degree in EngineeringBusiness Management from the University ofWarwick, UK. He has held several positions inthe technical and operations disciplines since1976 and was the Vice President of Engineeringand Maintenance before taking up the presentposition in 2001. Apart from being the Boarddirector of several Malaysia Airlinessubsidiaries, he is also Chairman of GE EngineServices (M) Sdn Bhd, Hamilton SundstrandSupport Centre (M) Sdn Bhd, Aerokleen ServicesSdn Bhd and Malaysia Airlines CateringSarawak Sdn Bhd. He is also a Director of PanAsia Pacific Aviation Services (Pte), Hong Kongand LSG Brahim Sdn. Bhd. He representsMalaysia Airlines in the Board of Directors ofMiGHT, Subang International Aerospace Park(SIAP) Consortium, the Technical Committee ofAssociation of Asia Pacific Airlines (AAPA) andis also a member of the InternationalFederation of Airworthiness.


Dato’ Captain Mohd Nawawibin AwangSenior General ManagerFlight Operations

Following a five-year flying career with the RoyalMalaysian Air Force, Dato’ Captain MohdNawawi bin Awang joined Malaysia Airlines in1975. He has flown various types of aircraft,clocking more than 15,000 flying hours, and iscurrently rated on the B747-400. He has servedas Vice-President, Flight Operations, since 1996and was appointed to his current position in June2001. He is a member of the UK CharteredInstitute of Transport and holds a Master ofBusiness Administration degree from theUniversity of Strathclyde, Scotland.

Low Chee TengChief Financial Officer

Low Chee Teng has 25 years experience in thefinancial matters of Malaysia Airlines, havingjoined the Airline as an Accountant in 1977.After graduating from Victoria University ofWellington, New Zealand, with a Bachelor ofCommerce & Administration degree, he wenton to obtain a Master of BusinessAdministration degree with distinction fromthe International Management Centre, UK. Heis a member of the Malaysian Institute ofAccountants and the Institute of CharteredAccountants of New Zealand. He wasappointed to his current position in September2002.


Dato’ Ong Jyh JongSenior General ManagerCargo

Dato’ Ong Jyh Jong joined Malaysia Airlines in1984 after graduating from the UniversitiKebangsaan Malaysia with a Bachelor of SocialScience (Hons) degree. He served in variouscapacities, including District Manager Phuket,Manager South Australia, Sales Manager andGeneral Manager, Cargo Sales, before leavingthe airline to pursue other business ventures in1996. He rejoined Malaysia Airlines in January2001 and was instrumental in introducingfreighter services to the airline. He was alsoresponsible for developing a number of world-class initiatives and joint ventures with otherairlines. He currently serves as a Adviser to AirCargo Europe.

Marzidabinti Mohd NoorSenior General ManagerGroup IT & Support Services

Marzida Mohd Noor started her career in 1989as an IT Management Consultant with KPMG.In 1992, she joined the Corporate PlanningDivision of Malaysia Airlines and was involvedin a number of strategic planning activities ofthe company. She was the Programme Directorfor the Malaysia Airlines Year 2000 Project.Appointed to her present position in June 2001,she has successfully led the implementation ofthe IT outsourcing deal with IBM. In addition,Marzida is also leading a Board-sanctionedSupport Services Improvement Programme toreview and streamline the support servicesfunction of the Airline. Marzida holds aBachelor of Science (Decision Sciences) degreefrom Indiana University, USA, and a Master ofScience degree in Management InformationSystem from the United States InternationalUniversity, USA.


Mohd Nadziruddinbin Mohd BasriSenior General ManagerCustomer Services

Mohd Nadziruddin bin Mohd Basri holds aBachelor of Economics degree from the LondonSchool of Economics and is a Fellow of theAssociation of Chartered Certified Accountants.He was a Senior Manager with the Assuranceand Business Advisory Division of Ernst & Young,when he was seconded to Malaysia Airlines inJuly 2001 to assist management with theturnaround initiatives. He joined the airline as apermanent staff in April 2003.

Capt Ahmad Zuraidibin DahalanGeneral ManagerCorporate Safety & Security

A graduate of the Royal Military College, CaptAhmad Zuraidi bin Dahalan joined MalaysiaAirlines in 1977 as a Cadet Pilot. He has flownvarious types of aircraft and is currently ratedon the B747-400. He has served as an instructorpilot and examiner on the B737-400 and A330and is a Boeing-certified instructor on the B777.He did his aircraft accident investigation trainingat Cranfield University, UK. He moved up theranks in the Flight Operations Safety Departmentto become Chief Pilot (Flight Safety and HumanFactors), before being appointed to his currentposition in August 2003. He is a member of theInternational Society of Air Safety Investigatorsbased in Washington DC, USA, the InternationalAdvisory Committee of the Flight SafetyFoundation, the UK Flight Safety Committee andthe Flight Operations Safety Working Group ofthe Association of Asia Pacific Airlines. He alsosits on the IATA Flight Operations SafetyCommittee.


Yap Kiang ThiamGeneral ManagerNetwork and Revenue Management

Yap Kiang Thiam joined Malaysia Airlines in 1979after graduating with a Bachelor of Economics(Hons) degree from the University of Malaya. Hehas served in various capacities, including MarketPlanning Analyst, Market Research Controller,Marketing Manager North America based in LosAngeles and Regional Manager China/SAR basedin Hong Kong. He was appointed as GeneralManager, Network and Revenue Managementon 1 June 2004.

Mohamed Yusofbin Ahmad MuhaiyuddinGeneral ManagerHuman Resource Management

After obtaining a Bachelor of Science (Geology)degree from Indiana University, USA, MohamedYusof bin Ahmad Muhaiyuddin joined EssoProduction Malaysia in 1979 as a geologist. In1987, he moved into human resources at Essoand went on to hold various positions in humanresources management in UMW and KumpulanGuthrie. He was the Assistant Governor (HumanResource Management) of Bank NegaraMalaysia before joining Malaysia Airlines inDecember 2000 to take up his current position.

Dr. Wafi Nazrin bin Abdul HamidGeneral ManagerCorporate Services

Dr. Wafi read law at the International IslamicUniversity graduating with first class honours.He subsequently obtained a Master of Lawsdegree from Cambridge University and aDoctorate of Philosophy in Law fromSouthampton University where he was awardedthe Cambridge Commonwealth Trust and theBritish Chevening scholarships respectively. Dr.Wafi also has an MBA in Applied Finance andInvestment from the Universiti KebangsaanMalaysia. After practising at the Malaysian Bar,he served PETRONAS and its subsidiary, MalaysiaInternational Shipping Corporation Berhad.

Raja Azura Raja MahayuddinAssistant General ManagerInternal Audit

Raja Azura binti Raja Mahayuddin has a Bachelorof Accountancy (Hons) degree from UniversitiUtara Malaysia and is a Chartered Accountant.She is also an associate member of the Instituteof Internal Auditors Malaysia. She had been anAssistant Manager with the Assurance andBusiness Advisory Division of an accounting firmbefore joining Malaysia Airlines as Internal AuditManager in 2002. She was then transfered tothe Project Management and Assurance Divisionin June 2003 to set up and lead the Organisationand Methods Department. She was appointedAssistant General Manager Internal Audit on 1March 2005.


Rizani bin HassanCompany Secretary

Rizani bin Hassan began his career as a LegalOfficer of a government statutory body aftergraduating from the MARA Institute ofTechnology in 1986 with a degree in Law. In1991, he joined a private law firm as anadvocate and solicitor. He was appointed LegalCorporate Counsel of Malaysia Airlines in 1994and thereafter as General Counsel andCompany Secretary in 2002. He is also Secretaryto the Management Commitee.



BOARD OF DIRECTORS

Dato’ Dr Mohd. 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 DahalanManaging Director

Dato’ Izzuddin bin DaliNon-Independent and Non-Executive Director

Keong Choon KeatIndependent and Non-Executive Director

Martin Gilbert BarrowIndependent and Non-Executive Director

Dato’ Mohamed Azman bin YahyaNon-Independent and Non-Executive Director

Datuk Abdillah @ Abdullah bin Hassan @ SHassanIndependent and Non-Executive Director

Tengku Azmil Zahruddin bin Raja Abdul AzizNon-Independent and Non-Executive Director

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

Dato’ Mohd. Annuar bin ZainiIndependent and Non-Executive Director

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

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

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

GROUP SECRETARIAL PRACTICE

Rizani bin HassanCompany Secretary

management teamas at 1 August 2005

MANAGEMENT

Dato’ Ahmad Fuaad bin Mohd DahalanManaging Director

MANAGING DIRECTOR’S OFFICE

Captain Ahmad Zuraidi bin DahalanGeneral ManagerCorporate Safety & Security

Zawiah binti Mat ArufAssistant General Manager,Corporate Communications

FLIGHT OPERATIONS DIVISION

Dato’ Captain Mohd Nawawi bin AwangSenior General Manager

Captain Mohamed Azharuddin bin OsmanGeneral Manager,Operations & Development

Hayati binti Dato’ AliActing General Manager,Services & Infrastructure

Abdul Rahman bin IbrahimActing Assistant General Manager,Manpower Planning & Productivity

Captain Ooi Teong SiewAssistant General Manager,Quality Assurance, Projects & Processes

GROUP FINANCE

Low Chee TengChief Financial Officer

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

Heng Geok ChinActing General Manager,Group Accounting

Ahmad Ramzi bin Mohd BukhariActing General Manager,Treasury & Investment

Yoon Chooi WanAssistant General Manager,Financial Systems

Sumitha a/p PatmanathanAssistant General Manager,Financial Services

128


MANAGEMENT TEAM

Serena Ho Lee ChenAssistant General Manager,Group Reporting & Control

Azahar bin HamidAssistant General Manager,Budget & Planning

NETWORK & REVENUE MANAGEMENT DIVISION

Yap Kiang ThiamGeneral Manager

Mohd Razali HarunAssistant General Manager,Aircraft Trading

Liow Ngit SingAssistant General Manager,Operations Planning

Saw Leong BengAssistant General Manager,Network Planning

Sharifah Salwa Syed KamaruddinAssistant General ManagerRevenue Management

SALES, DISTRIBUTION & MARKETING DIVISION

Dato’ Abdul Rashid Khan bin Abdul Rahim KhanSenior General Manager

Phang Pow IngGeneral Manager,Sales

Azmil Hisham bin Abdul RahmanAssistant General ManagerProduct Development & Services

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

Germal Singh KheraAssistant General Manager,International Affairs

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

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

Captain Nik Ahmad Huzlan bin Nik HussainAssistant General Manager,Haj & Charters

CARGO

Dato’ Ong Jyh JongSenior General Manager

Shahari bin SulaimanGeneral Manager,Business Development & Sales

Mohd Yunus IdrisGeneral Manager,Cargo Operations

REGIONAL MANAGEMENT

Dr Amin KhanRegional General Manager,China & SAR

Halid bin AlpiRegional Manager,Americas

Adrian Sen Sai ChewRegional Manager,North Asia

Syed Abdillah bin Syed AzizRegional Manager,ASEAN

Mohd Salleh bin Ahmad TabraniRegional Manager,Australia/New Zealand & SWP

Baharom bin Mohd YatimRegional Manager,Malaysia

Christopher YekRegional Manager,South Asia

Halimy MahmoodRegional Manager,Middle East & Africa

Lim Cheng HoeRegional Manager,United Kingdom & Europe


MANAGEMENT TEAM

CUSTOMER SERVICES DIVISION

Mohd Nadziruddin bin Md BasriSenior General Manager

Kamal Azran bin AdamAssistant General Manager,Manpower Planning

Yusop bin JaridiAssistant General Manager,Airport Services

Azman bin AhmadAssistant General Manager,Inflight Services

Eddy Leong Chin TungAssistant General Manager,Quality Assurance

GROUP HUMAN RESOURCE

Mohamed Yusof bin Ahmad MuhaiyuddinGeneral Manager

Mariah binti Shiekh HussienAssistant General Manager,Human Resource Development

Zaiful Hasmi bin Hj Mohd HashimAssistant General Manager,Human Resource Management

GROUP IT & SUPPORT SERVICES

Marzida binti Mohd NoorSenior General Manager

Merina binti Abu TahirGeneral Manager,Finance Support Services

Md Yasin bin BachikAssistant General Manager,Passenger Revenue Accounting Services

Chong Min SinAssistant General Manager,HR Support Services

Faridah Abdul Rahman.Assistant General Manager,IT Support Services

TECHNICAL & GROUND OPERATIONS DIVISION

Tajuden bin Abu BakarSenior General Manager

Mohd Roslan bin IsmailGeneral Manager,Engineering & Maintenance

Nizuyir bin BuyongAssistant General Manager,Ground Support Services

Abdullah bin MudaAssistant General Manager,Flight Management Centre

Zabariah binti Md IbrahimAssistant General Manager,Finance and Administration

Wan Abdul Rahim bin Wan IshakAssistant General Manager,Maintenance Operations

Iszham bin IdrisAssistant General Manager,Maintenance Support

Moses DevanayagamAssistant General Manager,Ground Handling Management

Jeff Nor JetteyHead of Security

CORPORATE SERVICES DIVISION

Dr. Wafi Nazrin bin Abdul HamidGeneral Manager

Ahmad Shamsuddin bin MuhiyuddinAssistant General Manager,Property Administration

Mohamad Fadzil bin Mohd AriffAssistant General Manager,Property Projects

Ahmad Muzzaffar bin Ahmad MustaphaAssistant General Manager,Centralised Procurement

Wan Mazlina binti Wan MustafaAssistant General Manager,Organisation, Methods & Risk Management

INTERNAL AUDIT DEPARTMENT

Raja Azura binti Raja MahayuddinAssistant General Manager


CORPORATE INFORMATION


corporate social reponsibilty

Only when the last blade of grass is goneOnly when the last tree is cut downOnly when the last fish is caughtOnly when the last river is poisonedWill man realize you cannot eat money

Chief SeattleUS Congress, 1854

INTRODUCTION

Business and society are interdependent. The well-being of one depends on the well-beingof the other. Companies worldwide engaged in Corporate Social Responsibilty are reportingbenefits to their reputation and their bottom line.

At Malaysian Airline System Berhad, we recognise the need to strike a harmonious balancebetween private sector pursuits and corporate social responsibility – both of which providethe synergy that earn not only customer loyalty and support, but the support of stakeholdersat large.

Malaysia Airlines is a global company that provides air transportation and related services.From enabling fast and reliable travel, to meeting the challenge of assisting world trade,Malaysia Airlines makes a positive contribution to the quality of life enjoyed by people inMalaysia and the world over. Our aircraft enables people to travel on business or forpleasure. We also play a role in the transport of cargo by air – increasingly playing a vitalrole in the global economy. Humanitarian efforts also rely on our aircraft for medicalassistance and disaster relief.

The most significant contribution Malaysia Airlines makes in the field of corporate socialresponsibility comes from the wealth created by maintaining the 22,513 highly-skilled jobswhich arise from our business activities, mainly in Malaysia and the destinations that wefly to. Malaysia Airlines employs 238 managerial staff, 1,338 executive staff, 1,247 technicalcrew, 5,449 cabin crew, 2,273 technical staff and 11,968 support staff. During the yearunder review, our global wage bill was RM1.9 billion. In addition, Malaysia Airlines’ activitiessupport thousands of jobs throughout our global supply chain. Thousands of downstreamindustries also benefit from the existence of Malaysia Airlines.

132


Code of Conduct

Malaysia Airlines complies fully with the Malaysian government’s Code on CorporateGovernance. We have a non-executive Chairman and 9 non-executive directors on ourboard to provide good governance.

Our Code of Business Conduct applies to all employees and sets out the high standardsof behaviour we expect. It covers areas such as confidentiality, conflicts of interest,business gifts and hospitality.

Malaysia Airlines also expects our suppliers to maintain high standards in their businessdealings and we have developed a strong Suppliers’ Code of Conduct to cover supplierquality and continuous improvement.

Policies are in place covering every aspect of employment from equality of opportunityto family-friendly guidelines.

Promotion of Malaysia in The National, Regional and International Arenas

Malaysia Airlines plays a major role in the promotion of Malaysia to travellers in thenational, regional and international arenas. The Company is delighted to have helpedin wooing tourists into Malaysia from its network of 32 domestic and 86 internationaldestinations. Malaysia Airlines also participated in several high profile promotionsand sponsorship activities held worldwide. In addition to promoting and furtherenhancing the awareness of the Malaysia Airlines’ brand, the airline focused onpositioning Malaysia as a ‘top-of-mind’ holiday destination to both the front end andconsumer at large.

Malaysia Airlines also plays a pivotal role in promoting the Kuala Lumpur InternationalAirport as a strategic hub for travelers into the region. The mention of KLIA is made inour monthly inflight magazine Going Places as well as a host of our marketing supportliterature. On-board passengers on international flights are also enlightened of theKLIA through a video presentation prior to touch-down. The international media arealso regularly invited by air to Malaysia with the first port-of-call at KLIA. Through theefforts of Malaysia Airlines, the KLIA saw passenger traffic of 6,621,300, an increase of14.6 per cent compared to the previous year.

Last year, the country received 15.6 million tourists who brought in RM29.7 billion inforeign exchange, and Malaysia Airlines is pleased to have contributed to this success.

Commitment, Adoption and Community Care

We are committed to the communities in which we operate and our communityinvestment programmes involve support for national integration, the arts, theenvironment, education and economic and social regeneration.

In October 2004, MASkargo adopted an orphanage the ‘Rumah Anak-anak YatimBanting’ providing the isolated orphans of the home warmth and care, and theopportunity to be at a number of Malaysia Airlines’ events.

MASkargo took on as a corporate sponsor The Malay Mail Big Walk held in KualaLumpur. In August 2004, Malaysia Airlines presented a donation of RM10,000 to thecharity segment of The Malay Mail Big Walk 2004. Part of the proceeds from theamount was channelled to Wisma Harapan for the purchase of 300 pairs of shoes forthe children.

On 28 January 2005, the Company donated 300 pairs of school shoes to the Selangor& Federal Territory Association for Retarded Children.

CORPORATE SOCIAL RESPONSIBILITY



Relief Aid - Tsunami Emergency Flight Operations in Greater Detail

The recent tsunami disaster that hit a major part of Southeast Asia on 26 December2004 saw Malaysia Airlines swinging into action. Special consideration was given fortsunami relief shipments in the form of free air travel, freight and special capacityallotment.

Malaysia Airlines activated an Emergency Operations Centre (EOC) on 26 December2004 at KLIA. As Phuket Airport was closed on the morning of 26 December 2004,Malaysia Airlines cancelled its flight MH787/26 December 2004 from Phuket to KualaLumpur. The Malaysia Airlines EOC then arranged a special flight on the next day, 27December 2004, to cater for the return passage of passengers affected by the cancelledflight to Kuala Lumpur.

Malaysia Airlines sent six of its staff from the Special Assistance Team of the EmergencyOperations Centre to Phuket on 27 December 2004 to help passengers normalize travelarrangements out of Phuket. This team returned on the evening of 2 January 2005after completing its tasks.

Other stations (Colombo, New Delhi, Chennai, Male, Langkawi, Penang, Medan andJakarta) were requested to be on alert to provide timely feedback on air operationsand passenger needs in tsunami hit countries.

MASkargo’s first relief flight left for Male in Maldives on 1 January 2005 followed byJakarta and Medan in Indonesia on 2 January 2005. Another flight to Colombo wasscheduled on 3 January 2005.

Malaysia Airlines also provided logistic support for the transportation of medical andrelief supplies for tsunami disaster victims in Perak, Kedah and Penang either by air orby using trucks operated by its subsidiary Pengangkutan Kargo Udara MAS Sdn Bhd.The Malaysia Airlines EOC had also set up a call centre at MASkargo (8525 2140 & 85252141) for the public and voluntary organizations to avail this facility.



As the main ground handler for the United Nations’ Humanitarian Air Servicesoperations, MASkargo arranged 2.6 million kilograms of relief cargo for tsunamidisaster victims to Banda Aceh, Indonesia. Among items that were dispatched by airincluded vehicles, water purification equipment, medical equipment and food.

The operations started on 6 January 2005 in Subang, with the cooperation from theRoyal Malaysian Air Force (RMAF). The type of aircraft handled by the MASkargo teamfor the project included the B747-200, B747-400, B707, DC-8, L1011, A330-200, AN-124, IL-76 and the C-130H.

MASkargo was also the cargo carrier for the ‘Force of Nature’ concert in aid of thetsunami victims. The company flew 32,000 kgs of equipment using eight freighters allin the name of humanity.

To aid the unfortunate victims, the Company donated RM200,000 to the NationalDisaster Relief Fund through the NST, Berita Harian TV3 and 8TV/Malaysian TsunamiDisaster Fund. The Company also donated RM100,000 to the Malaysian GLC Fund fordistribution to the affected countries like Indonesia, Sri Lanka and India.

Malaysia Airlines also provided complimentary air passage for relief workers andvolunteers. There was also generous excess baggage waiver for the relief workerswho brought along medical supplies to the tsunami affected areas. The Companyteamed up with Yayasan Salam Malaysia and Mercy Malaysia.

Internship

Malaysia Airlines has embarked on providing vacation job opportunities for universitiy/college students during their long semester breaks. A total of 112 students have beenengaged by Finance Division under this initiative. The Company also accepts studentswho wish to do their industrial/practical training.

In June 2004, MASkargo signed the first Memorandum of Understanding (MOU) withPoliteknik Port Dickson for the first ever implementation of the Cargo InternshipProgramme. The Cargo Internship Program (CIP) is a development programme thatprovides undergraduates of local learning institutions with an opportunity toexperience a working environment that is energetic and dynamic at MASkargo. Theprogramme provides on-the-job training for students where they will be on’in-plant attachment’ within MASkargo Maintenance Workshop functions. Besideshands-on technical exposure, trainees will also be equipped with managementdevelopmental training during the attachment period.

A second MOU was signed on 5 July 2005, this time with MARA. The programme is asuccess as it provides on-the-job training for students within MASkargo’s maintenanceworkshop functions. Besides hands-on technical exposure, trainees are also equippedwith management developmental training during the attachment period.


Occupational Safety and Health, and the Environment

The safety and health of our workforce is paramount and we have rigorous proceduresin place to monitor and maintain the highest standards in the workplace, includingwidely respected occupational health provisions. Malaysia Airlines ensures the safetyand health of its employees while they are at work by complying with the standardslaid down in the Malaysian Occupational Safety and Health Act, 1994 as well as theEnvironment Quality Act, 1974. The Company places great importance on these issuesand has developed internal policies and guidelines that set out requirements ensuringworkplaces are safe and free from health risks. These requirements also outline theduties of different groups of people who play a role in workplace safety and health.At Malaysia Airlines, the Safety and Health committees, senior management and linemanagement ensure conformance to the standards prescribed in law as well as companyoperating procedures. In addition, line management has been given the additionalresponsibility of ensuring safety and health at their respective departments andbranches.

Rural Air Services

As the national airline of Malaysia, Malaysia Airlines is continually mindful of theneeds of the Malaysian population. Since 1 October 1972, the Company has beenproviding the vital air link between the remote areas of East Malaysia and its urbancentres through Rural Air Services. Using the 19-seater Twin Otter aircraft, these serviceslink Bintulu, Kota Kinabalu, Kuching, Miri, Sandakan and Sibu with the airfields inBakalalan, Bario, Belaga, Kudat, Lawas, Limbang, Mukah, Long Akah, Long Banga,Long Lelang, Long Seridan, Marudi, Mulu and Tomanggong.

To ensure affordability, fares for these services have always been maintained at verylow levels, well below the operating costs per passenger. Where existing airfields areupgraded, Malaysia Airlines introduces the 50-seater Fokker aircraft operations tothese remote stations. The airfields of Limbang and Mulu are among the recent.

Affordable Fares

Affordable airfares through rebates for selected customer types have beenimplemented since Malaysia Airlines took to the skies in 1972. Rebated airfares areoffered to groups such as families travelling together, passengers travelling in groupsof three, students, senior citizens and passengers with disabilities. Rebated airfaresare also extended to members of the security forces and the media as well.

In addition, there are Super Saver fares, night tourist fares for flights operated betweenKuala Lumpur and Kota Bahru, Penang, Kuching and Kota Kinabalu, and excursionfares.

Malaysia Airlines also offers special fares for travel between Malaysia, Brunei andSingapore to accommodate groups that include students, members of the securityforces, passengers with disabilities and those travelling in groups of ten or more.




Environment-friendly Operations

An increasing number of cities worldwide impose jet curfews at their airports to preventaircraft landings and take-offs during the late hours of the evening and spanning tothe next morning. Malaysia Airlines takes care to factor these jet curfew restrictionsinto its flight operations planning.

Within the airline, a number of initiatives have been taken to put in place operationsthat are environment-friendly. At Malaysia Airlines’ hangars in Subang and KLIA, wastewater arising from all cleaning processes relating to aircraft and the maintenance ofparts are first treated in-house to raise it to ‘Standard A’, as required by the Departmentof Environment (DOE), before being discharged into the drainage system.

Toxic waste at engineering and maintenance premises are collected and stored incontainers in accordance with DOE guidelines under the revised Environmental QualityAct, 1974, and disposed of at the incinerator operated by Kualiti Alam Sdn Bhd atBukit Pelanduk, Negeri Sembilan.

To prevent toxic gases from being discharged into the atmosphere, all cleaning andmaintenance processes of components and parts at the hangars in Subang and KLIAare subject to chemical emission tests.

The Company’s aircraft engine run bays at Subang and KLIA hangars are equippedwith a noise suppression system to mitigate noise pollution where sound emission islimited to 85 decibels maximum as stipulated by DOE when engines are tested atmaximum power.

At the workplace, Malaysia Airlines places the safety of its employees as the top priority.All engineering and maintenance staff are supplied with appropriate personalprotective attire and equipment.

Air Passage For The Needy

Malaysia Airlines provides complimentary air transportation for the needy who haveto undergo major medical treatment locally and overseas. The airline also provideshighly rebated airfares for persons accompanying the needy who travel on MalaysiaAirlines’ air travel sponsorships.

Air Passage For Worthy Causes

Complimentary air passage for speakers/presenters to attend world events in Malaysiaand overseas are also provided.


corporate calendar of events

APRIL 2004

2 Malaysia Airlines launches Kota Kinabalu-Shanghai return service.

18 Malaysia Airlines participates in the AsiaMedia Summit.

26 Malaysia Airlines organises MICE Seminar.30 Malaysia Airlines’ third weekly frequency

between Kuala Lumpur and Bandar SeriBegawan.

MAY 2004

2 Malaysia Airlines introduces Electronic AirWaybills.

7 Malaysia Airlines hosts special ‘SaturdayNight Fever’ Night with valued guests.

10 Golden Holidays honours Malaysia AirlinesTravel Fair 2004 Contest winners.

12 Malaysia Airlines strengthens travel linksbetween Australia and Sarawak.

24 Malaysia Airlines posts increased profits.25 Malaysia Airlines seeks higher global profile

with participation in Tourism RendezvousNew Zealand (TRENZ) tradeshow.

28 Fuel surcharge introduced.31 MASkargo moves to e-Booking for

shipments from Australia.

JUNE 2004

3 Malaysia Airlines brings Angkor Wat into itsglobal network with the introduction offlights to Siem Reap.

10 Fuel surcharge standardized.13 MASkargo Introduces 24-Hour one-stop

service at Animal Hotel beginning 15 June.16 Malaysia Airlines brings ethnic world music

to Malaysia.28 ID checks for Malaysia Airlines’ domestic

flight passengers introduced.29 Malaysia Airlines launches ‘Prevention of

Sexual Crime Campaign 2004’.

JULY 2004

2 Malaysia Airlines presents award-winningphotographer Ian Lloyd of NationalGeographic Channel.

6 Malaysia Airlines introduces third weeklyflight between Kuala Lumpur and Karachi.

9 Malaysia Airlines gears up for world musicextravaganza by sponsoring the 7thRainforest World Music Festival.

14 Demise of Malaysia Airlines Chairman TanSri Dato’ Seri Azizan bin Zainul Abidin.

15 Malaysia Airlines upgrades Miri-Limbangreturn operations with Fokker 50 services

27 Earlier flight closure time for MalaysiaAirlines Shuttle Passengers on Singapore-Kuala Lumpur service.

28 Dato’ Dr Mohd Munir Abdul Majid isappointed Malaysia Airlines’ newChairman.

29 One cabin baggage policy adopted.

AUGUST 2004

5 Malaysia Airlines operates to New BaiyunAirport in Guangzhou, China.

9 Penang Chief Minister officially opensMalaysia Airlines’ new Penang city office.

11 Creative Kids’ Corner introduced atMalaysia Airlines’ KLIA Golden Lounge.

12 Malaysia Airlines launches SpecialPackages To Xiamen, China.

17 Malaysia Airlines enhances its corporatewebsite.

20 Malaysia Airlines Corporate wargameslaunched.

23 Malaysia Airlines sustains recordperformance registering RM1,945.4 millionin passenger revenue for its first quarterending June 2004.

138


SEPTEMBER 2004

4 Chengdu - Malaysia Airlines’ latestdestination.

14 Malaysia Airlines launches SuperSavers.17 Time Olympic Covers exhibition.22 Malaysia Airlines deploys open-systems

AirOps module as central building block ofbest practice iOPS (integrated operationsinitiative).

OCTOBER 2004

10 Stockholm - Malaysia Airlines’ firstScandinavian on-line destination and firstEuropean link with New York, USAlaunched.

20 Korean Air and Malaysia Airlines enhancecode-share co-operation.

20 Malaysia Airlines focuses on capturinggreater segment of the premium travelmarket by reconfiguring its B777-200 andretrofitting the B747-400 aircraft.

NOVEMBER 2004

1 Malaysia Airlines commences KualaLumpur-Stockholm-New York returnservice.

6 Riang Ria Raya Bersama Malaysia Airlines2004.

7 Malaysia Airlines clinches ‘In-flight RetailerOf The Year” award for its shopping brand‘Temptations’.

23 Telekom Malaysia and Malaysia Airlinessynergise business relationship.

29 Malaysia Airlines continues to recordhigher profit after tax of RM132.7 million.

16 Ahmedabad - Malaysia Airlines’ latestdestination in India.

DECEMBER 2004

7 Grads, a Malaysia Airlines student cardlaunched.

9 Malaysia Airlines announces its in-flightpreparations for 2004/5 Haj charter flights.

22 Malaysia Airlines’ Christmas Showtime tospread festive cheer.

30 Malaysia Airlines donates RM200,00 andactivates post-tsunami relief initiatives.

JANUARY 2005

15 Kunming – Malaysia Airlines’ seventhdestination In China.

19 Malaysia Airlines signs Fly Rail tie-up withEurostar.

21 Malaysia Airlines participates In ASEANTourism Forum 2005 in Langkawi.

28 Malaysia Airlines adds Kolkata, India to itsnetwork.

FEBRUARY 2005

13 Malaysia Airlines Travel Fair 2005 invitescustomers to pit their skills and win 12Golden Holiday packages

15 New meals for Malaysia Airlines’ youngpassengers introduced.

19 Malaysia Airlines Travel Fair 2005.24 Malaysia Airlines, Singapore Airlines and

Silk Air code-share to benefit consumers.27 Malaysia Airlines sponsors ‘Opportunity

Malaysia 2005’.28 Malaysia Airlines announces profit after

tax RM216.9 million for the nine-monthperiod ending 31 December 2004.

MARCH 2005

1 Malaysia Airlines-MATTA Charity Golf2005, the largest simultaneous tee-off golftournament in the country.

15 Xi’an – Malaysia Airlines’ eighth Chinesedestination.

23 Malaysian Prime Minister launchesMalaysia Airlines’ “An ExperienceRedefined”.

26 Malaysia Airlines launches DiscoverSarawak Packages 2005/6.

27 Malaysia Airlines flies direct betweenKuala Lumpur and Sandakan.

28 Malaysia Airlines increases flights toMaldives to three times weekly.


employee calendar of events

JULY 2004

Royal Brunei Airlines (RBA) KUL presentedCertificates of Achievement to 12 MalaysiaAirlines staff from various operational areasfor their contribution to RBA’s customerservice campaign entitiled ‘You Are NumberOne’ in a simple ceremony at the AirportServices Administration Office in KLIA.

3 200 staff participated in the MalaysiaAirlines Engineering and Maintenance(E&M) Charity Treasure Hunt from Subangto Melaka and hosted about 50 childrenfrom a local orphanage to a dinner.

3 Kelab Sukan MAS (KSM) Backpackers Clubtook part in the Malaysia AXN Challenge2004.

17 Kelab Sukan MAS (KSM) sent 30 staff to thefourth Sutera Harbour 7Km (Kilometre)Sunset Charity Run in Kota Kinabalu.

AUGUST 2004

7 Expenditure Accounting (Technical Cost)celebrated its family day at the A’FamosaWater World in Melaka. About 84 staff andfamily members attended the event.

13 18 Malaysia Airlines staff received theircertificates as Malaysia Airlines FlightDispatchers at the Malaysia AirlinesAcademy, Kelana Jaya.

APRIL 2004

14-15 Secretary, Maizaliena Abdullah from FlightOperations was conferred ‘Best Secretaryof the Year 2004’ at Malaysian 21stSecretaries Conference 2004 held in KualaLumpur

20 Staff in Los Angeles attended anEmergency Operations training held at LosAngeles International Airport to ensurecompliance with the US Federal AirportAuthority (FAA) regulations.

24-25 Kelab Sukan MAS (KSM), organized theMalaysia Airlines Netball & Volleyball Inter-Department/Station competition at KSMSports Complex in Subang.

MAY 2004

21 Corporate Communications Departmentdonated RM10,000 to Fathil Muhamad, aData Entry Clerk in Engineering, forsurgical expenses for his son who has a liverdisorder, Biliary Atresia.

JUNE 2004

18 Malaysia Airlines employees participatedin the 5th Corporate War Games at KemTerendak Melaka, applying oriental wargame strategy with focus on scenariomanagement and business intelligenceintroduced by a master strategist, Sun Tzu.

22 More than 2,000 staff pledged to adoptGoing Beyond Expectations (GBE) as a wayof life, at a company-level rally atEngineering & Maintenance Hangar inSubang.

140


EMPLOYEE CALENDAR OF EVENTS

29 MASkargo’s Safety Unit organised aneducational visit for its staff to the NationalInstitute of Occupational Safety and HealthMalaysia (NIOSH) in Bangi.

FEBRUARY 2005

The Malaysia Airlines Shooting Clubemerged third in the Malaysian Navy OpenShooting Competition 2005. The event wasparticipated by 80 shooters from variousclubs including Malaysian Armed Forces.

25 21 staff from Security Department attendedthe ‘Basic Airline Security’ course held atAdministration Building, Malaysia AirlinesKota Kinabalu.

MARCH 2005

7 More than 100 Customer Services staffwitnessed the Customer Services Division’sInternalizing Going Beyond Expectations(IGBE) campaign launched by ManagingDirector, Dato’ Ahmad Fuaad Dahalan atKLIA.

18 Customer Services Department (CSD) KotaKinabalu Airport held its CSD Nite at theHotel Hyatt Kota Kinabalu, attended by 150staff.

26 Malaysia Airlines organised the Family Fest2005 in the National Stadium at Bukit Jalil,Kuala Lumpur officially launched by ourChairman, Dato’ Dr Mohd Munir AbdulMajid.

SEPTEMBER 2004

14 300 staff from Sabah and Brunei attendedan International Going Beyond Expectations(IGBE) staff rally, in the Grand Ballroom ofthe Pacific Sutera Hotel, conducted by theManaging Director, Dato’ Ahmad FuaadDahlan and his team from Kuala Lumpur.

29 About 200 Sales, Distribution and MarketingDivision staff attended an InternalizingGoing Beyond Expectation staff rally atMalaysia Airlines head office.

OCTOBER 2004

6 Flight Operations took the lead tointernalize the ‘Going Beyond Expectation(GBE)’ motto in a mini rally, for its staff atthe Malaysia Airlines Academy, Kelana Jaya.

12 124 staff from the Ramp Handling (Non-Technical) of Ground Support Services whopassed out with flying colours werepresented certificates at a ceremony held atConcorde Hotel in Sepang.

NOVEMBER 2004

4 Over 120 staff gathered for the InternalizingGoing Beyond Expectations (IGBE)programme in London.

DECEMBER 2004

5 About 300 staff and their family membersparticipated in the Engineering &Maintenance (E&M) family day held atCamar Rimba, Agriculture Park BukitCerakah, Shah Alam.

11 The Finance Division held a ‘Finance Nite2004’ for its staff at the Nikko Hotel KualaLumpur graced by Chairman, Dato’ Dr MohdMunir Abdul Majid.


No. of Aircraft No. of Aircraftin Malaysia Airlines in Malaysia Airlines

Operation Operationas at 31 March 2005 as at 31 March 2004

LEASED AIRCRAFT

B747-400P 17 17

B747-200F 7 8

B777-200 17 15

A330-300 11 10

A330-200 5 5

B737-400 39 39

F50 10 10

DHC6 5 5

Total 111 109

Systemwide 111 109 -

fleet status

as at 31 March 2005

142


HELSINKI

OSLO

GOTHENBURG

COPENHAGEN

DUBLIN

BELFAST

GLASGOW

ABERDEEN

EDINBURGH

TEESIDE

LEEDS BRADFORD

LONDON

PARIS

AMSTERDAM

FRANKFURT

MANCHESTER

STOCKHOLM

VIENNA

ZURICH

ROME

ISTANBUL

BEIRUT

JEDDAH

TASHKENT

TEHRAN

DOHA

DUBAI

KARACHI

DELHI

KOLKATA

AHMEDABAD

MUMBAI

HYDERABAD

BANGALORE

CHENNAI

MALE

COLOMBO

DHAKA

YANGON

SINGAPORE

MEDAN

PADANG

JAKARTA

YOGYAKARTA

SURABAYA

DENPASAR

LANGKAWI

ALOR SETAR

KOTA BHARU

KUALA TERENGGANU

PENANG

KUANTAN

IPOH

JOHOR BAHRU

CAIRO

MAURITIUS

JOHANNESBURG

CAPE TOWN

LOS ANGELES

NEW YORK

BUENOS AIRES

32 DOMESTIC DESTINATIONS

86 INTERNATIONAL DESTINATIONS

CODE SHARE / JOINT SERVICE OPERATIONS

destinations

KUALA LUMPUR


route network


BEIJING

SHANGHAI

XI’AN

KUNMING

CHENGDU

XIAMEN

GUANGZHOU

TAIPEI

KAOHSIUNG

HONG KONG

HANOI

HO CHI MINH CITY

SIEM REAP

PHNOM PENH

BANGKOK

PHUKET

TOMANGGONG

TAWAU

LAHAD DATU

SANDAKAN

KUDAT

KOTA KINABALU

LABUAN

LAWAS

LIMBANG

MIRI

MARUDI

MULU

BAKALALAN

BARIO

LONG SERIDAN

LONG LELANG

LONG AKAH

LONG BANGA

BELAGA

BINTULU

MUKAH

SIBU

KUCHING

CEBU

MANILA

TARAKAN

PONTIANAK

BANDAR SERI BEGAWAN

PERTH

ADELAIDE

MELBOURNE

SYDNEY

BRISBANE

DARWIN

AUCKLAND

TOKYO

NAGOYA

OSAKA

SEOUL

FUKUOKA


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