Analysis of Airline Operations (Including Freighter) by GEORAPHICAL ROUTE REGION
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O&M_86764_Cover.ai 23/5/08 7:57:59 PM MH PROMISE More than just an airline code. It is where everything comes from the heart. Where different cultures and needs are understood. And respect is not learnt from a training manual. It is us treating everyone like a guest in our home. And ensuring smooth journeys all the way. This is MH. Our Malaysian way of hospitality. O&M_86764_AR 07 Part I_M7.indd 3 23/5/08 7:05:19 PM O&M_86764_AR 07 Part I_M7.indd 4 23/5/08 7:05:46 PM Contents 1 Notice of Annual General Meeting 6 2 Statement Accompanying the Notice of Annual General Meeting 9 3 Corporate Corporate Profi le 12 Corporate Information 13 Group Structure 15 Board of Directors 16 Senior Management 24 Statistical Highlights 30 Chairman’s Statement 40 Managing Director’s Statement 46 Operational Review 54 Going Forward 68 4 Governance Details of Board of Directors’ Meeting 75 Audit Committee Report 77 Statement of Internal Control 82 Statement of Corporate Governance 86 Statement of Corporate Social Responsibility 102 List of Company Properties 107 Analysis of Shareholdings 110 5 Financial Report 120 6 Key Corporate Events 238 7 Awards & Recognition 242 8 Proxy Form 243 O&M_86764_AR 07 Part I_M7.indd 5 23/5/08 7:05:57 PM Notice of Annual General Meeting NOTICE IS HEREBY GIVEN THAT the Thirty Seventh Annual General Meeting of Malaysian Airline System Berhad will be held at the Auditorium, 1st Floor, South Wing, MAS Academy, No. 2 Jalan SS7/13, Kelana Jaya, 47301 Petaling Jaya, Selangor Darul Ehsan on Monday, 23 June 2008 at 10.00 a.m. for the following purposes:- AGENDA 1. To receive the Audited Financial Statements for the fi nancial year ended Ordinary Resolution 1 31 December 2007 together with the Reports of Directors and Auditors thereon. 2. To approve the declaration of a fi rst and fi nal tax-exempt dividend of 2.5 sen Ordinary Resolution 2 per share in respect of the fi nancial year ended 31 December 2007. 3. To approve the Directors’ fees for the fi nancial year ended 31 December 2007. Ordinary Resolution 3 4. To re-elect the following Directors retiring under Article 139 of the Company’s Articles of Association, and who, being eligible, offer themselves for re-election:- (i) Dato’ Sri Iris Jala @ Idris Jala Ordinary Resolution 4 (ii) Dato’ N. Sadasivan a/l N. N. Pillay Ordinary Resolution 5 (iii) Datuk Haji Yusoff @ Hunter bin Datuk Haji Mohamed Kasim Ordinary Resolution 6 5. To re-elect the following Director retiring under Article 137 of the Company’s Articles of Association, and who, being eligible, offer himself for re-election:- (i) Datuk Amar Wilson Baya Dandot Ordinary Resolution 7 6. To re-appoint Messrs. Ernst & Young as Auditors of the Company until the Ordinary Resolution 8 conclusion of the next Annual General Meeting and to authorise the Directors to fi x their remuneration. SPECIAL BUSINESS 7. To consider and if thought fi t, to pass the following Ordinary Resolution:- Ordinary Resolution 9 Authority to Allot and Issue Shares “THAT subject to the Companies Act, 1965 (the Act), the Articles of Association of the Company, approval from the Bursa Malaysia Securities Berhad and other government or regulatory bodies, where such approval is necessary, full authority be and is hereby given to the Board of Directors pursuant to Section 132D of the Act, to issue shares in the capital of the Company at any time upon such terms and conditions and for such purposes as the Directors may in their discretion deem fi t, provided always that the aggregate number of shares to be issued shall not exceed 10% of the issued share capital of the Company and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.” 8. To transact any other ordinary business for which due notice has been given. Ordinary Resolution 10 6 MALAYSIAN AIRLINE SYSTEM BERHAD (10601-W) O&M_86764_AR 07 Part I_M7.indd 6 23/5/08 7:06:17 PM Notice of Annual General Meeting NOTICE OF DIVIDEND ENTITLEMENT NOTICE IS ALSO HEREBY GIVEN that the fi rst and fi nal tax-exempt dividend of 2.5 sen per share in respect of the fi nancial year ended 31 December 2007 will be payable on 31 July 2008 to depositors who are registered in the Record of Depositors at the close of business on 11 July 2008, if approved by shareholders at the forthcoming Thirty Seventh Annual General Meeting on Monday, 23 June 2008. A depositor shall qualify for entitlement only in respect of:- (a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 11 July 2008 in respect of ordinary transfers; and (b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad. BY ORDER OF THE BOARD RIZANI BIN HASSAN (LS 05125) COMPANY SECRETARY 30 May 2008 Selangor Darul Ehsan EXPLANATORY NOTES ON SPECIAL BUSINESS: Ordinary Resolution 9 Resolution pursuant to Section 132D, Companies Act, 1965. The proposed Ordinary Resolution 9, if passed, will empower the Directors to issue shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company, subject to compliance with the relevant regulatory requirements. The approval is sought to avoid any delay and cost in convening a general meeting for such issuance of shares. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next Annual General Meeting. 1. A member entitled to attend and vote at the Meeting is entitled to appoint more than two (2) proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. 2. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or, if the appointer is a corporation, either under its seal or under the hand of an offi cer or attorney duly authorised. MALAYSIAN AIRLINE SYSTEM BERHAD (10601-W) 7 O&M_86764_AR 07 Part I_M7.indd 7 23/5/08 7:06:31 PM Notice of Annual General Meeting 3. A holder may appoint more than two (2) proxies to attend the Meeting. Where a member appoints two (2) or more proxies, he shall specify the proportion of his shareholding to be represented by each proxy. 4. The right of foreigners to vote in respect of their deposited securities is subject to Section 41(1)(e) and Section 41(2) of the Securities Industry (Central Depositories) Act, 1991 and the Securities Industry (Central Depositories) (Foreign Ownership) Regulations, 1996. The position of such depositors in this regard will be determined based on the General Meeting Record of Depositors. Such Depositors whose shares exceed the Company’s foreign shareholding limit of 45% as at the date of the General Meeting Record of Depositors may attend the above Meeting but are not entitled to vote. Consequently, a proxy appointed by such depositor who is not entitled to vote will also not be entitled to vote at the above Meeting. 5. The instrument appointing a proxy must be deposited at Symphony Share Registrars Sdn. Bhd., Level 26 Menara Multi-Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur, not less than 48 hours before the time for holding the Meeting or at any adjournment thereof. 6. Shareholders’ attention is hereby drawn to the Listing Requirements of Bursa Malaysia Securities Berhad, which allows a member of the Company who is an authorised nominee as defi ned under the Securities Industry (Central Depositories) Act, 1991, to appoint at least one (1) proxy in respect of each securities account he holds with ordinary shares of the Company standing to the credit of the said securities account. 8 MALAYSIAN AIRLINE SYSTEM BERHAD (10601-W) O&M_86764_AR 07 Part I_M7.indd 8 23/5/08 7:07:13 PM Statement Accompanying the Notice of Annual General Meeting 1. Further details of Directors who are standing for re-election or re-appointment as per Agenda 4 and 5 of the Notice of the 37th AGM respectively:- A. Ordinary Resolution 4 Dato’ Sri Iris Jala @ Idris Jala (Non-Independent Executive Director) Dato’ Sri Idris Jala, aged 49, a Malaysian, is currently Managing Director/Chief Executive Offi cer of MAS, a position he currently holds since 1 December 2005. He is also a Member of the Board Safety & Security Committee. He holds a Bachelor of Social Science (Hons) in Development Studies/Management degree from University Sains Malaysia and a Master in Industrial Relations from University of Warwick, United Kingdom. Prior to MAS, he was attached to Shell MDS (Malaysia) Sdn. Bhd. as Managing Director and Executive Director of Shell Malaysia Ltd., Gas & Power from 2003 to 2005. He joined Sarawak Shell Berhad in 1982 as Industrial Relations Offi cer and later promoted to Head Staff Development in 1987. In 1989, he was appointed Human Resource Advisor, Shell International, Holland and Head Human Resource Planning of Sarawak Shell Berhad. From 1995 to 1997, he was appointed Business Reengineering Manager, Retail Area Manager, Senior Manager, National Retail Sales of Shell Malaysia Ltd. In 1998, he was promoted as Chairman/Managing Director (LPG) of Shell Sri Lanka.