Chairman's Statement

Extracted from Annual Report 2007

Dear Shareholders,
On behalf of the Board of Directors, I am pleased to present the Annual Report and Financial Statements of Ranhill Berhad ("Ranhill" or "the Group") for the financial year ended 30 June 2007.

Performance Highlights

Ranhill turned in a sterling performance for the year under review. Not only did we accomplish record highs on the financial front, we strengthened our position as a premier engineering and construction player in the Oil & Gas, Power, Water and Infrastructure sectors, expanded our asset base, and made exciting inroads into new and existing markets.

Our focus on ensuring strong project execution, establishing sound engineering and construction ("E&C") capabilities in key geographic locations and investing astutely in strategic assets, continues to pay off handsomely. For the period under review, the Group registered net profit attributable to shareholders of RM116.8 million on the back of revenue of RM1.47 billion.

Over the course of the financial year, we continued to build up our engineering services and engineering, procurement and construction ("EPC") portfolio by completing existing projects and embarking on new ones throughout Asia and Africa. Leveraging upon our E&C capability, we continued to expand dynamically into the development, operation and ownership of assets in the Energy and Infrastructure sectors.

Exciting new developments on the exploration and production side hold much promise for the future growth of our Oil & Gas Division especially in the light of continuing high demand for hydrocarbons. Our Water Division, spearheaded by Ranhill Utilities, has strengthened its position as a top ranking regional water utilities player and is poised to make the most of water and wastewater opportunities under the Ninth Malaysian Plan and the nation's new water regulatory regime.

In the Power business, we continue to pursue our strategy of expanding our regional power generation capacity through power plant conversion and asset acquisition. The Infrastructure Division has kicked off its maiden USD1.8 billion infrastructure project in Libya and is undertaking EPC works for Malaysia's landmark Women and Children's Hospital as well as design and build for 30 community and sports complexes throughout Malaysia.

As we set our sights on growing our core businesses in a concerted manner and bolstering our capabilities around the globe, it is with confidence that I can say Ranhill is all set to move up to the next level of growth.

Corporate Governance

Ranhill steadfastly subscribes to the tenets of integrity, transparency and accountability in all our dealings. To ensure the long term viability of our businesses and to create sustainable shareholder value, we undertake exemplary corporate governance practices in the management of the business and affairs of the Group. For the period under review, we continued to align our corporate governance controls in line with the best practices identified in the Malaysian Code on Corporate Governance.

Human Capital Development

At Ranhill, we are continuously exploring opportunities that will enhance the value of our human capital and establish the Ranhill Group as an "employer of choice". As part of our continuous efforts to optimise the skills sets of the Group's employees, Group Human Resources has set up a training and development unit that has been tasked with ensuring our employees have access to high quality personal, technical and professional training opportunities. By offering employees long-term career development opportunities, we aim to encourage employee retention and infuse on-the-job satisfaction.

In cooperation with Group Management Information Systems, the unit has put together a Training Management System which includes a comprehensive listing of various training programmes across all job skills and training needs analysis for both strategic organisational training and personal training.

Commitment To CSR

To underscore Ranhill's commitment to Corporate Social Responsibility ("CSR"), the Board has approved a new CSR framework for the Group. Based on Bursa Malaysia's recommendations, this framework will outline CSR initiatives under the perspectives of the Environment, Community, Marketplace and Workplace. We have also begun to realign our diverse CSR activities and focus our efforts on issues pertaining to the environment as this has a direct impact on our businesses. In line with the Government's call for companies to be more proactive in their CSR efforts, Ranhill has registered itself as one of the founding members of the Institute of Corporate Responsibility ("ICR") Malaysia. This platform gives us the opportunity to engage with ICR member companies on CSR best practices.

Appreciation

On behalf of Ranhill's Board of Directors, I wish to express our heartfelt gratitude to our business partners, bankers and financiers, the authorities, our customers and shareholders for their continued confidence in Ranhill.

The Group's outstanding performance this year is largely owing to the efforts of the dedicated team at Ranhill that continues to raise the bar on excellence and drive the Group forward. To our employees, the management team and my colleagues on the Board, please accept my heartfelt gratitude for your loyalty, perseverance and efforts.

On behalf of the Board, I wish to thank Terence Francis Mahony who resigned from the Board on 25 May 2007, for his invaluable contributions to Ranhill during his tenure. We wish him every success in his future endeavours. I would also like to take this opportunity to welcome onboard Nadzru Azhari who was appointed to the Board on 16 August 2007.

Last but not least, my sincere thanks to my fellow Board Members for their sound advice and guidance. I look forward to your invaluable support and continued commitment in driving Ranhill forward. As we focus on taking Ranhill to new heights of success, I trust that all stakeholders will continue to support us in our endeavours.

Tan Sri (Dr) Sallehuddin Mohamed
Chairman