A N N U A LR E P O R T

2009Originally Global. Strategically Poised.

b Ranhill Berhad (430537-K)

Founder’s Message

Our Business at a Glance

Chairman’s Statement

President’s Statement

Office of the President

Ranhill Leadership

Group Financial Highlights

Corporate Information

Directors’ Profile

Operations Review:-

1. Environment

2. Power

3. Infrastructure

4. Petroleum & Chemical

Sustainability Report

Statement on Corporate Governance

Audit Committee Report

Terms of Reference of the Audit Committee

Statement on Internal Control

Financial Statements

Analysis of Shareholdings

Properties Held by the Group

Ranhill Global Offices

Notice of Annual General Meeting

Statement Accompanying the Notice of

Annual General Meeting

Form of Proxy

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ORIGINALLY GLOBAL. STRATEGICALLY POISED.

In 1955, John Rankine and John Hill formed an engineering and consultancy outfit, Rankine & Hill in Sydney, Australia.

The firm then grew at a rapid pace, and eventually the founders decided that it was time for them to expand their

business globally. In 1961, Rankine & Hill opened its doors in Kuala Lumpur and since then the company has evolved to

the Ranhill we know of today.

Foresight and focus keep Ranhill on track to persistently achieve greater status as a world player in diverse market

sectors. The approach we take is devised to the point of being an art, and is the reason we have not only maintained our

presence, but diversified into an extensive portfolio of business applications.

We are privileged to stand confident and forge ahead with our objectives, and we know we owe this to the experience we

have garnered over the course of more than 54 years in the business. Well balanced actions in an environment of change

make the ripples of volatile financial markets even out into calm waters, enabling us to accomplish the highest standards

of quality in our services as well as in all our projects.

This, our purpose, is furthered by the tenets of transparency, integrity and accountability which are the underlying

currents that run through our organisation. No matter where in the world we operate, success only pushes us to greater

heights.

ANNUAL REPORT 2009 1

Founder’sMESSAGE

It was 1955 when John Hill and I formed Rankine & Hill. We started with nothing - no money, no clients, and no employees until the moment when spontaneously, a number of the engineers and staff trustingly volunteered to come with us.

Henry Llewellyn, the senior partner of Stanley Llewellyn our old firm, was generous in his support of our seemingly reckless venture.

Our first big client was Sir Arthur Stephenson of Stephenson & Turner, hospital architects of international repute and experience. This was followed by the construction of the then tremendous factory for British Motor Corporation in Sydney. From this point on, we never looked back and the work kept flowing in as we continued to grow.

It was then that we looked to overseas countries to expand our operations. We took great pride in maintaining our standards of excellence in our overseas operations and to continue working for the client’s best interests, for instance, through our checking section.

In 1961, we established Rankine & Hill offices in Hong Kong, Singapore and Kuala Lumpur. The Kuala Lumpur office quickly became an important partner for our growing international works, and together with Malaysian partners, we started the consulting firm Ranhill Bersekutu partnership in 1973.

Today, Ranhill has expanded its business beyond engineering consulting and is a construction giant and owner of infrastructure assets around the region. However, I still see the shared values between our old firm and Ranhill in Malaysia today, exemplified by the commitment to extra effort in maintaining the highest standards of excellence and service to clients; as well as its global pursuit for opportunities and the passion to seek and learn through its contacts around the world.

I watch with a mixture of pride and frustration as I see the developments of companies that have ties or a history to Rankine & Hill. Pride because of what they are achieving, and frustration because I am no longer young enough to be a part of it all.

Rankine & Hill’s legacy in companies with which it was initially involved is in the examples of standards of excellence and client interest. It is with pride that I see Ranhill in Malaysia leading the way in world today.

John RankineCo-founder of Rankine & Hill, Australia

2 Ranhill Berhad (430537-K)

Our Business at aGLANCE

ENVIRONMENT

Ranhill Utilities is one of Malaysia’s leading water engineering, construction and asset ownership companies. We are the only company in Malaysia to provide total source-to-tap and wastewater treatment solutions. Our track record has expanded further in Asia Pacific and the Middle East; whilst attracting reputable business partners. Our concession projects are progressing on schedule and the recurring income from these jobs will augur well for the Group going forward.

Work on the second 190MW combined cycle gas turbine power plant in Sabah is on track for completion in 2010. We are looking forward to this milestone as it will bring the Group’s total power generating capacity to 380MW, making us the largest independent power producer in Sabah.

POWER

ANNUAL REPORT 2009 3

INFRASTRUCTURE PETROLEUM & CHEMICAL

We continue to be a leader in the area of Engineering, Procurement and Construction Management (“EPCM”) services as well as conceptual and detailed design works for clients both locally and abroad. From Liwan, China to East Malaysia, we have been involved in significant projects including deepwater jobs and Maintenance and Engineering Services contracts (“MECS”).

Going forward, we will look towards achieving a healthy balance between brownfield and greenfield jobs while always providing the safest possible working environments for our people.

Our Infrastructure division has experienced a productive year with the awarding of new projects such as the engineering design of City of Lights in Abu Dhabi, project management and construction supervision for Al-Ajailat and Al-Ejdaida project in Libya, etc. On-going projects such as the design and build of 10,860 housing units in Libya is progressing on schedule. On the asset ownership side, the opening of the E22 Expressway in September 2009 will help to alleviate traffic congestion on the existing Pasir Gudang highway in Johor.

The technical acumen and experience of the Group, coupled with strong project management has enabled us to be profitable despite undergoing a rise in material costs and the unprecedented global economic crisis.

4 Ranhill Berhad (430537-K)

Chairman’sSTATEMENT

Dear Shareholders,

I am pleased to present the Annual Report and Audited Financial Statements for the Financial Year ended 30 June 2009.

ANNUAL REPORT 2009 5

Chairman’s STATEMENT

I am happy to state that during the year under review the Company has recorded an improved financial performance - a clear indicator that we are progressing on the right path towards greater success and growth.

We can draw further encouragement from our financial results as they were achieved against the backdrop of a global economic crisis.

Our return to profitability can be attributed to many factors. These initiatives are in line with the Board of Directors (“Board”) strategic plans to grow Ranhill Berhad.

Firstly, I wish to highlight the remarkable professional talent in the Group – our global workforce who have exemplified unwavering commitment and dedication during the year under review. I wish to commend all our employees who have been the differentiating factor in enabling us to rise above the challenges and register a strong performance.

The restructuring of our business into 4 distinct business divisions – Environment, Power, Infrastructure and Petroleum & Chemical has proven to be effective. This has enabled greater operational efficiencies and strategic control – allowing us to better compete, especially in the international marketplace.

By expanding overseas to emerging markets such as Libya, China, India, Vietnam and others, we have provided the Group with diverse income streams while reducing our dependence on a particular market.

These are countries with a growing demand for infrastructure, power generation, water and waste water projects. By establishing a presence here, we are strategically poised to capture a share of these fast growing markets. We will also further strengthen our brand name as an international player.

While we expand aggressively on the international front, we also made headway locally. During the year under review, in support of the Malaysian Government’s efforts in reforming the water industry, we successfully migrated our 70%-owned subsidiary, SAJ Holdings Sdn Bhd (“SAJH”) into the licensing regime under the Water Services Industry Act 2006. After the migration, SAJH which was previously an asset heavy utility has emerged as an asset light company focused purely on operations.

With this, we are now able to focus fully on ensuring operational excellence and first class service. The new business model for SAJH will also ensure long term value to shareholders.

Another local highlight is the opening of Phase I of the E22 Senai-Pasir Gudang-Desaru Expressway (“E22”). Apart from facilitating faster travel between the towns of Senai, Pasir Gudang and Desaru, the 77km highway will have a catalytic effect for economic growth and development in the area.

We are proud to be involved in such a landmark project, which brings tremendous benefit to the surrounding communities.

The desire to bring betterment to the people and communities we encounter has now become a key performance measurement for the Group. Over the years, we have evolved to not just evaluate our success based on financial bottom-lines but also in terms of the social and environmental attitudes – the triple bottom-line.

As such, corporate sustainability or corporate responsibility (“CR”) is a key area for the Group going forward.

Corporate Responsibility – Making a Positive Impact

I am pleased to say that as shareholders, you can draw satisfaction in knowing that your company has been active in improving the lives of local communities and to bring betterment to the environment.

In this regard, we are sharing our experiences and knowledge in sustainable water management and supply with communities in Vietnam, Thailand, Philippines, India and Indonesia.

As a member of the United Nations (“UN”) Global Compact Board – the world’s largest voluntary corporate citizenship initiative, we constantly ensure that our operations are in line with responsible business practices. Our business practices are aligned to the United Nations Millennium Development Goals.

Through these social efforts, Ranhill has assisted hundreds of communities. We have also benefitted from the awareness and understanding created for the Ranhill brand among national governments, while gaining first hand insights of business opportunities available in these countries.

Climate Change

Of particular interest to the Group is the issue of climate change. Having personally experienced its effects in Johor some years ago, we have made this cause part of our triple bottom line.

6 Ranhill Berhad (430537-K)

We continue to operate in eco-friendly ways such as constantly adopting measures to reduce our carbon footprint, incorporating green technologies and always seeking ways to bring improvement to the lives, communities and environments where we maintain a business presence. More details of which, are available in our Sustainability Report in this annual report.

We believe that apart from enhancing our image, the triple bottom line further elevates our positioning as a leader in our field, a brand with strong equity and also contributes to our business success – attracting and retaining quality investors and business partners.

Human Capital Development

Realising the importance of human capital development, the Group has put in place strategies to recruit, develop and retain our people across our international operations. We have a multi-national, multi-discipline talent pool; which is one of the Group’s core strengths.

Our task is to cultivate a world-class working culture and environment that allows our people to perform at their best, while providing job satisfaction and rewarding careers. We see talent as a key area for the Group going forward.

The benefit of an international, multi-cultural workforce is the reservoir of experience, ideas and knowledge sharing opportunities available to the Group. The possibility to exchange best practices and share insights is a valuable asset. This will only improve competence and competitive ability in the long run.

Corporate Governance

Ranhill is committed to upholding the tenets of transparency, integrity and accountability. We have in place strong corporate governance practices that guide us in the management of the Group’s business affairs. To ensure the long term viability of our businesses and to create sustainable shareholder value, we have aligned our corporate governance controls in line with the best practices identified in the Malaysian Code on Corporate Governance (“Code”).

The Board continually practices good corporate governance to manage the business and affairs of the Group and takes measures to promote the Group’s compliance with the Best Practices in Corporate Governance as identified in the Code. The Board considers that it has complied with the Code.

Prospects

The global economy is showings signs of a recovery, though progress is slow.

As the economy recovers, there will be growth; which is closely followed by a demand for more power, infrastructure and water. We are strategically poised to capture this wave of progress in the global market.

Over the past 8 years, we have successfully grown the company on the right path towards greater growth and profitability; while positioning the Group as a global entity. We will maintain Ranhill’s good reputation as a professional and world-class operator.

Appreciation

On behalf of the Board, I wish to thank our business partners, bankers and financiers, the authorities, our customers and shareholders for their steadfast support and continued confidence in Ranhill.

I also wish to express our gratitude to the management team and our employees for their contributions and dedication to Ranhill. Last but not least, I thank my esteemed colleagues on the Board for their counsel and guidance in what was an exciting and eventful year in the Group’s history.

Tan Sri Dato’ Sri (Dr) Sallehuddin MohamedChairmanRanhill Berhad

Chairman’s STATEMENT