Berhad (119767-X) Edaran Otomobil Nasional Berhad (119767-X)

AnnualReport2004 Annual

Edaran Otomobil Nasional Berhad (119767-X) Report EON Head Office Complex No. 2, Persiaran Kerjaya Taman Perindustrian Glenmarie

Seksyen U1 2004 40150 Shah Alam Selangor Darul Ehsan Tel: 03-7711 2211 Fax : 03-7803 0009 COVER RATIONALE

The cover illustrates a metaphor exemplified by the abundant opportunities waiting to be realised and the new energy symbolised by the spirited gold fish, an icon of wealth and vigour. The electrifying surge into the next level portrays EON’s determination, dedication and aspiration to re-define and strategically position itself in the local . In excelling to a new level, EON is poised to realise all possibilities and exceed expectations. “A Paradigm Shift” is our beginning in achieving a new and dynamic business culture as well as a wider range of exciting marques. It is a reflection of our commitment to always be at the forefront of our business. At A Glance

EDARAN OTOMOBIL NASIONAL BERHAD (EON) IS ONE OF ’S LEADING COMPANIES IN MOTOR VEHICLES DISTRIBUTION AND RETAILING. FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2004, THE GROUP RECORDED A REVENUE OF RM3.9 BILLION WITH A PRE-TAX PROFIT OF RM300.5 MILLION.

FINANCIAL CALENDAR FOR FINANCIAL YEAR ended 31 December 2004

QUARTERLY ANNOUNCEMENT OF RESULTS 20 MAY 2004 29 NOV 2004 1st Quarter for the 3rd Quarter for the three months ended nine months ended 31 March 2004 30 September 2004

27 AUG 2004 24 FEB 2005 2nd Quarter for the 4th Quarter for six months ended the year ended 30 June 2004 31 December 2004

DIVIDENDS 14 JUNE 2004 31 MAY 2005 Payment of final dividend of 22 sen Book closure for determining the per share less income tax at 28% in entitlement for the proposed final respect of the year ended dividend of 18 sen per share less 31 December 2003. income tax at 28% and proposed special dividend of 84 sen per share 14 JULY 2004 less income tax at 28% in respect of Distribution of shares in EON Capital the year ended 31 December 2004. Berhad (ECB) by way of dividends in specie of ECB shares on the basis of 28.1 ECB shares for every 100 EON shares held and capital repayment on GENERAL MEETINGS the basis of 111.5 ECB shares for every 100 EON shares held. 7 APR 2004 25 AUG 2004 5 MAY 2005 Extraordinary General Meeting 2nd Extraordinary Notice of 21st Annual 8 OCT 2004 to seek shareholders’ approval General Meeting to seek General Meeting. Payment of interim dividend of 10 sen for the Distribution of shares in shareholders’ approval per share less income tax at 28% in EON Capital Berhad (ECB) by for the disposal of the 30 MAY 2005 respect of the year ended way of payment of dividends in entire shareholding in 21st Annual General 31 December 2004. specie and capital repayment. EONCAP Securities Sdn Meeting. Bhd (formerly known as 20 MAY 2004 Leong & Company Sdn 20th Annual General Meeting. Bhd) and MCIC Holdings Sdn Bhd.

1 EON BERHAD ANNUAL REPORT 2004 Contents

4 EON Corporate Profile 80 Human Resource Development 5 Awards for 2004 82 Harnessing Information Technology 6 Types of Vehicles Distributed by 83 Statement of Occupational Safety The Group and Health and the Environment 8 Notice of Annual General Meeting 85 Corporate Social Responsibilities 10 Statement Accompanying 86 Group Financial Review Notice of Annual General Meeting 90 Calendar of Major Events 14 Corporate Information 96 Awards and Recognition Within 15 Financial Highlights Two Decades 16 Five Years Group Financial Summary 97 Milestones Within Two Decades 17 EON’s Growth Trend – Company 99 Statement of Directors’ Responsibility for Preparing the Financial Statements 18 EON’s Growth Trend – Group 100 Financial Statements 19 Share Prices and Trading Volume 164 Analysis of Shareholding 20 Corporate Structure 165 List of Thirty (30) Largest Shareholders 21 Organisation Structure 166 Properties owned by Edaran Otomobil 22 Profile of Board of Directors Nasional Berhad Group 30 Senior Management 172 EON Group Branches 34 Statement on Corporate 174 Analysis of Proton Vehicles Sales Network Governance 175 Analysis of Non-Proton Vehicles Sales 46 Risk Management Network 48 Report of the Board Audit 176 EON List of Bumiputera Sales Dealers Committee by State 53 Additional Compliance Information 178 EON List of Non-Bumiputera Sales 54 Statement of Internal Control Dealers by State 56 Chairman’s Statement 179 EON List of Franchise Service Dealers (FSD) by State 64 Managing Director’s Review of Operations 183 Euromobil List of Sales Dealers by State 74 Our Commitment to Customer Service/Customer Relationship 184 Corporate Directory Management • Proxy Form 78 Maximising Shareholder Value

2 EON BERHAD ANNUAL REPORT 2004 page56 chairman’s statement

page64 managing director’s review of operations

page100 financial statements

3 EON BERHAD ANNUAL REPORT 2004 CORPORATE PROFILE

CORE VALUES

I–INTEGRITY Carry out one’s roles and responsibilities Vision in an honest and sincere manner TO BE THE LEADING AND C– CUSTOMER FOCUSED THE MOST INNOVATIVE Create a positive experience for internal AUTOMOTIVE RETAILER and external customers at all times

L– LEARNING ORGANISATION Encourage continuous learning and promote the exchange of knowledge Mission within EON TO PROVIDE EXCELLENT CUSTOMER SERVICE I–INNOVATION Pursue new ideas to improve the quality of products and services offered

P–PRIDE Possess a sense of belonging and achievement of being part of the EON family

DRB-HICOM GROUP CORPORATE PROFILE

DRB-HICOM Berhad is one of Malaysia’s leading AUTOMOTIVE MANUFACTURING & DISTRIBUTION conglomerates, playing an integral role in the nation’s The Group’s leadership within this sector is reflected through road to industrialisation. niche segmentation via new technology development and continued strategic alliances with renowned global names such as Mitsubishi, Isuzu, Citroen, Kawasaki, Tata, Honda We are diversified yet focused, and have interests in and . We continuously seek new alliances to key sectors of the economy mainly:- strengthen our base further and develop new business potential that will strengthen both DRB-HICOM and our partners. • Automotive Manufacturing & Distribution PROPERTY & INFRASTRUCTURE •Property & Infrastructure DRB-HICOM is extensively involved in retail, commercial and •Services residential property development, and has made strong inroads in the construction sector especially in infrastructure developments. DRB-HICOM will continue to look for opportunities that will benefit the Group and the country. SERVICES The rapidly growing service-based industry represents new opportunities for DRB-HICOM. Our interests include IT, financial services, solid waste management, automotive services, tourism and transportation.

4 EON BERHAD ANNUAL REPORT 2004 Awards For 2004

• Homegrown Franchisor of the Year 2002 / 2003 Award by Malaysian Franchise Association

• Corporate Governance Merit Award by Malaysian Business

• Best Workplace Practices Category in the Asian Corporate Social Responsibility (CSR) Award 2004

• Best Environmental Practices Award by IPRM

• Best Employee Relations Practices Award by IPRM

• Best Public Relations Practices Award by IPRM

•Overall Champion IPRM Kristal Awards by IPRM

• Anugerah Citra Wangsa Malaysia (Radio Advertisement Category) by Dewan Bahasa & Pustaka

5 EON BERHAD ANNUAL REPORT 2004 TYPES OF VEHICLES RETAILED BY THE GROUP

PERDANA

SATRIA GTi ATOS LORIMAS

ARENA GEN.2

GETZ AUDI A6

AUDI TT AUDI A8

SANTA FE

TRAJET

AUDI A4

WIRA MATRIX

TUCSON

ISWARA

WAJA Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Twenty-First Annual General Meeting (AGM) of the Company will be held at Glenmarie Ballroom A, The Pan Pacific Glenmarie Resort, 1, Jalan Usahawan U1/8, Seksyen U1, 40250 Shah Alam, Selangor Darul Ehsan on Monday, 30 May 2005 at 9.30 a.m. for the following purposes:

1. To receive and adopt the Reports of the Directors and are hereby empowered, pursuant to Section 132D of Auditors and the Audited Financial Statements for the the Companies Act, 1965, to issue shares in the year ended 31 December 2004. Company from time to time at such price, upon such (Resolution 1) terms and conditions, for such purposes and to such person or persons whomsoever as the Directors 2. To declare a final dividend of 18 sen per share less 28% may deem fit provided that the aggregate number of Malaysian Income Tax and a special dividend of 84 sen shares issued pursuant to this resolution does not per share less 28% Malaysian Income Tax. exceed 10 per cent of the issued share capital of (Resolution 2) the Company for the time being and that such authority shall continue to be in force until the 3. To re-elect the following Directors who retire in conclusion of the next AGM of the Company.” accordance with the Company’s Articles of Association: (Resolution 10)

Under Article 103 (ii) “THAT subject always to the provisions of the i. Y Bhg Tan Sri Saw Huat Lye (Resolution 3) Companies Act, 1965 (“Act”), the Memorandum & ii. Y Bhg Datuk Ir (Dr) Ahmad Zaidee Articles of Association of the Company, the Listing bin Laidin (Resolution 4) Requirements of Bursa Malaysia Securities Berhad iii. Encik Wan Mat bin Wan Sulaiman (Resolution 5) (“Bursa Malaysia”), the regulations, guidelines and iv. Y Bhg Datuk Choo Keng Kit (Resolution 6) practice notes issued from time to time by Bursa v. Ms Vimala Menon (Resolution 7) Malaysia or any other regulatory authorities, the mandate approved for renewal by the shareholders 4. To approve the Directors’ fees amounting to RM574,611 of the Company on 20 May 2004 pursuant to for the year ended 31 December 2004. paragraph 10.09 of the Listing Requirements of (Resolution 8) Bursa Malaysia, authorising the Company and its subsidiaries (“EON Group”) to enter into the 5. To re-appoint Messrs PricewaterhouseCoopers as Auditors recurrent related party transactions of a revenue or of the Company and to authorise the Directors to fix their trading nature (“Recurrent Transactions”) as set out remuneration. (Resolution 9) in Section 2.1.1 of the Circular to Shareholders dated 5 May 2005 (“Circular”) with the related 6. To transact any other ordinary business for which due parties mentioned therein which are necessary for notice has been given. the EON Group’s day-to-day operations, be and is hereby renewed AND THAT the scope of such 7. As Special Business: renewed mandate be and is hereby extended to the To consider and, if thought fit, to pass the following Recurrent Transactions with new related parties as resolutions as Ordinary Resolutions: set out in Section 2.1.2 of the Circular (“Proposal”);

(i) “THAT subject always to the Companies Act, 1965 and the approvals of the relevant governmental and/or regulatory authorities, the Directors be and

8 EON BERHAD ANNUAL REPORT 2004 AND THAT the EON Group is hereby authorised to enter By order of the Board into the Recurrent Transactions with the related parties therein provided that:

(a) the transactions are in the ordinary course of business on an arm’s length basis and on normal commercial terms which are not more NOOR AZWAH SAMSUDIN favourable to the related parties than those (LS. No. 0006071) generally available to the public and are not Company Secretary detrimental to the minority shareholders of the Company; and Shah Alam 5 May 2005 (b) disclosure of the aggregate value of the transactions conducted during a financial year will be disclosed in the Annual Report for the said financial year with particulars of the types of the Recurrent Transactions made and the Explanatory Notes On Special Business: names of the related parties involved in each (i) The effect of Resolution 10 is to allow the Directors to issue shares type of the Recurrent Transactions made and in the Company up to an amount not exceeding in aggregate 10 per their relationship with the Company, cent of the issued share capital of the Company for the time being.

AND THAT the authority conferred by such renewed (ii) The effect of the Resolution 11 is to renew the mandate for the mandate shall continue to be in force until: Recurrent Transactions as set out in Section 2.1.1 of the Circular to Shareholders dated 5 May 2005 with the related parties mentioned (a) the conclusion of the next AGM of the Company therein and to extend the scope of the mandate to apply to Recurrent following the forthcoming AGM at which the Transactions with new related parties as set out in Section 2.1.2 of Proposal is approved, at which time it will lapse, the Circular. unless further renewed by a resolution passed at the next AGM; Notes (b) the expiration of the period within the next i) A member of the Company entitled to attend and vote at the meeting AGM of the Company after the forthcoming is entitled to appoint one or more proxies to attend and vote in his AGM is required to be held pursuant to Section stead. A proxy need not be a member of the Company. 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to ii) The instrument appointing the proxy must be deposited at the Office Section 143(2) of the Act); or of the Registrars, ShareWorks Sdn Bhd, No. 23, Jalan Sri Hartamas 7, Sri Hartamas, 50480 not less than 48 hours before (c) revoked or varied by ordinary resolution the time appointed for holding the meeting. passed by the shareholders in a general meeting of the Company, whichever is the earlier;

AND THAT the Directors of the Company and/or any of them be and are hereby authorised to complete and do all such acts and things as they may consider expedient or necessary to give effect to the Proposal and the transactions authorised thereunder.” (Resolution 11)

9 EON BERHAD ANNUAL REPORT 2004 Statement Accompanying Notice of Annual General Meeting

PURSUANT TO PARAGRAPH 8.28 (2) OF THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD (BURSA MALAYSIA) 4. FURTHER DETAILS OF DIRECTORS STANDING FOR RE-ELECTION

Name

1. NAMES OF DIRECTORS WHO ARE STANDING FOR RE-ELECTION: Nationality

Under Article 103 of the Company’s Articles of Association Age (i) Y Bhg Tan Sri Saw Huat Lye (ii) Y Bhg Datuk Ir (Dr) Ahmad Zaidee bin Laidin Qualification (iii) Encik Wan Mat bin Wan Sulaiman (iv) Y Bhg Datuk Choo Keng Kit (v) Ms Vimala Menon

2. DIRECTORS’ ATTENDANCE OF BOARD MEETINGS FOR THE YEAR ENDED 31 DECEMBER 2004.

The above information can be found in the Directors’ Profile section of the Annual Report.

3. PLACE, DATE AND HOUR OF THE TWENTY-FIRST ANNUAL GENERAL MEETING

Place : Glenmarie Ballroom A The Pan Pacific Glenmarie Resort 1, Jalan Usahawan U1/8, Seksyen U1 Position on the Board 40250 Shah Alam, Selangor Working Experience Date :Monday, 30 May 2005

Time : 9.30 a.m.

Occupation

Any other directorships of public companies as at 31 March 2005

Securities holdings in EON and its subsidiaries

Any family relationship with Director and/or major shareholder of EON

Any conflict of interest with the Company

List of convictions for offences within the past 10 years other than traffic offences, if any

10 EON BERHAD ANNUAL REPORT 2004 Y Bhg Tan Sri Saw Huat Lye Y Bhg Datuk Ir (Dr) Ahmad Zaidee bin Laidin

Malaysian Malaysian

69 61

• Bachelor of Arts (Honours) in Economics, • Degree of Doctor of the University by University of University Malaya Stirling, U.K. • Advanced Management Programme, Harvard • The Honorary Doctor of Technology from Oxford Business School, U.S.A. Brookes University, U.K. • Honorary Doctor of Letters from the Manchester Metropolitan University, U.K. • Honorary Professor of Napier University, U.K • Masters in Science in Technological Economics (Management & Industrial Science), Stirling • Chartered Electrical Engineer, U.K. • Registered Professional Engineer, Malaysia • Fellow of Academy of Science Malaysia • Fellow of Institution of Engineers Malaysia • Member of Institute of Management Services, U.K. • Member of Institution of Electrical Engineers, U.K. • Member of World Federation of Engineering Organisations (WFEO) • Honorary Fellow of Asean Federation of Engineering Organisations

Independent Non-Executive Director Independent Non-Executive Director

• The Malayan Home and Foreign Service • Senior Management Analyst, Tenaga Nasional Berhad • Chief Executive, Malaysia Airlines Berhad • Director, Institut Latihan Ahmad Shah, Bangi • Executive Director, Syed Kechik Group of • Deputy General Manager Corporate Services, Companies Management Development Services, Tenaga Nasional • Executive Chairman, Malaysian Helicopter Berhad Services Berhad • Director of Institut Teknologi MARA (ITM) • Rector of Institut Teknologi MARA (ITM) •Vice Chancellor, Universiti Teknologi MARA (UiTM)

Executive Director, Naluri Berhad Consultant Engineer

• Naluri Berhad Malaysia Mining Corporation Berhad • Shell Refining Company (FOM) Malaysia Erinco Sdn Bhd (Chairman) • Guiness Anchor (M) Berhad University Tenaga Nasional Sdn Bhd Meteor Learning Sdn Bhd

None None

None None

None None

None None

11 EON BERHAD ANNUAL REPORT 2004 Statement Accompanying Notice of Annual General Meeting

4. FURTHER DETAILS OF DIRECTORS STANDING FOR RE-ELECTION (CONT’D.)

Name Encik Wan Mat bin Wan Sulaiman

Nationality Malaysian

Age 57

Qualification • Bachelor of Arts (Honours) in Economics, University Malaya • Masters of Public Affairs, Southern Illinois University, U.S.A.

Position on the Board Independent Non-Executive Director

Working Experience • Assistant Secretary, Ministry of Finance • Assistant Secretary, Malaysian Centre for Development Studies, Prime Minister’s Department, Kuching • Assistant Federal Secretary, Prime Minister’s Department, Kota Kinabalu • Federal Establishment Officer, Public Services Department, Kota Kinabalu • Divisional Secretary, Ministry of Public Enterprise • Deputy Director, Poverty Eradication Unit, Prime Minister’s Department, Kuala Lumpur • State Development Officer, Prime Minister’s Department, • Divisional Secretary, Federal Territory Development Division, Prime Minister’s Department • Deputy Secretary General, Prime Minister’s Department, Kuala Lumpur • Secretary, Government Procurement Management Division, Ministry of Finance • Deputy Secretary General, Ministry of Health

Occupation None

Any other directorships of None public companies as at 31 March 2005

Securities holdings in EON None and its subsidiaries

Any family relationship with Director and/or major None shareholder of EON

Any conflict of interest with the Company None

List of convictions for offences within the past 10 None years other than traffic offences, if any

12 EON BERHAD ANNUAL REPORT 2004 Y Bhg Datuk Choo Keng Kit Ms Vimala Menon

Malaysian Malaysian

55 50

• Associate Member of the Malaysian • Associate Member of Institute of Chartered Institute of Management Accountants in England and Wales • Associate Member of the Institute of • Member of Malaysian Institute of Marketing, U.K. Accountant • Member of the British Institute of Management, U.K.

Non-Independent Executive Director Non-Independent Executive Director

• State Manager, Wilayah/Selangor, • Audit Senior, Hays Allan Chartered Borneo Motors (M) Sdn Bhd Accountants • Deputy General Manager, Tan Chong • Audit Supervisor, Kassim & Chan & Sons Motor Co. Sdn Bhd • Manager, Accounts, EON Berhad • General Manager, Sales, EON Berhad • General Manager, Finance, EON Berhad

Executive Director, Motor Group, Executive Director, Finance and Corporate EON Berhad Services, EON Berhad

EON Bank Berhad None

None Direct interest in 112,000 shares in EON

None None

None None

None None

13 EON BERHAD ANNUAL REPORT 2004 Corporate Information

BOARD OF DIRECTORS

Y Bhg Tan Sri Dato’ Seri (Dr) Mohd Y Bhg Dato’ Dr M SHANmughalingam Ms Vimala Menon Saleh bin Sulong (Chairman) Y Bhg Datuk Ir. (Dr) Ahmad Zaidee Y Bhg Datuk William Chong Wei Yoon Y Bhg Datuk Adzmi bin Abdul Wahab bin Laidin (Alternate Director to Y Bhg Tan Sri Dato’ Seri (Managing Director) (Dr) Mohd Saleh bin Sulong) Y Bhg Datuk Wan Awang bin Wan Y Bhg Dato’ Maznah bte Abdul Jalil Yaacob Mr Fumihiko Minami (Alternate Director to Mr Rin Nan Lun) Y Bhg Datuk Haji Faisal bin Siraj Encik Wan Mat bin Wan Sulaiman Mr Adam Keswick (Alternate Director to Mr Anthony Nightingale) Mr Anthony Nightingale Y Bhg Dato’ Khalid bin Haji Ismail

Puan Aziyah binti Bahauddin Mr Rin Nan Lun

Y Bhg Tan Sri Saw Huat Lye Y Bhg Datuk Choo Keng Kit

COMPANY SOLICITORS BANKERS REGISTRAR SECRETARY Anad & Noraini EON Bank Berhad ShareWorks Sdn Bhd Puan Noor Azwah Samsudin 12.01 – 12.06, Level 12 Malayan Banking Berhad No. 23, Jalan Sri Hartamas 7 The Heritage House Bumiputra-Commerce Bank Taman Sri Hartamas 33 Jalan Yap Ah Shak Berhad 50480 Kuala Lumpur HEAD OFFICE 50350 Kuala Lumpur Standard Chartered Bank Tel:03-6201 1120 EON Head Office Complex Malaysia Berhad Fax: 03-6201 3121 No. 2, Persiaran Kerjaya, Nik Saghir & Ismail Seksyen U1 28th Floor, Menara Maybank Taman Perindustrian AUDITORS STOCK EXCHANGE 100 Jalan Tun Glenmarie PricewaterhouseCoopers LISTING 50050 Kuala Lumpur 40150 Shah Alam 11th Floor, Wisma Sime Bursa Malaysia Securities Selangor Darul Ehsan Darby Berhad Tel:03-7711 2211 Skrine & Co. Jalan Raja Laut (26 July 1990) Fax: 03-7803 0009 Unit 50-8-1, 8th Floor P.O. Box 10192 Wisma UOA Damansara 50706 Kuala Lumpur 50, Jalan Dungun REGISTERED Damansara Heights OFFICE 50490 Kuala Lumpur EON Head Office Complex No. 2, Persiaran Kerjaya, Seksyen U1 Taman Perindustrian Glenmarie 40150 Shah Alam Selangor Darul Ehsan Tel:03-7711 2211 Fax: 03-7803 0009

14 EON BERHAD ANNUAL REPORT 2004 Financial Highlights

Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

PROFITABILITY Revenue 3,901,173 4,987,051 2,862,509 3,129,248 Profit from operations1 293,740 571,713 135,717 129,151 Profit before tax 300,528 579,681 170,658 131,801 Profit attributable to shareholders 148,027 262,436 131,105 96,962

KEY BALANCE SHEET DATA Total assets 1,468,028 32,672,661 1,379,451 2,053,876 Cash and bank balances and deposits with financial institutions 557,842 3,703,815 521,457 393,266 Paid-up capital 248,993 244,714 248,993 244,714 Shareholders’ funds 1,165,245 2,257,662 1,094,235 1,780,256

FINANCIAL RATIOS Return on average shareholders’ funds (%) 8.6 11.6 9.1 5.1 Return on average assets (%) 0.9 0.8 7.6 4.2

SHARE INFORMATION Basic earnings per share (sen) 60 111 53 41 Gross Dividend per share (sen) 200 238 200 238 Net dividend payout ratio (%) – at Company level2 153 76 153 76 Net tangible assets per share (RM) 4.68 9.23 4.39 7.27 Price to earnings ratio3 (times) 5.9 7.0 — — Price to book multiple3 (times) 0.8 0.8 — — Share price – closing as at 31 December 3.54 7.80

1 Before finance cost, share of associates’ results and net gain on disposal of investments. 2 Excluding dividend in specie of EON Capital Berhad and Jardine Cycle & Carriage Limited shares. 3 Based on closing price as at 31 December.

15 EON BERHAD ANNUAL REPORT 2004 Five Year Group Financial Summary

2004 2003 2002 2001 2000 RM’000 RM’000 RM’000 RM’000 RM’000

PROFITABILITY Revenue 3,901,173 4,987,051 7,427,704 7,548,331 6,361,545 Profit from operations1 293,740 571,713 702,659 715,450 676,878 Profit before tax 300,528 579,681 906,550 818,565 774,907 Profit attributable to shareholders 148,027 262,436 488,910 446,383 506,127

KEY BALANCE SHEET DATA Total assets 1,468,028 32,672,661 32,350,134 26,474,224 19,271,467 Cash and bank balances and deposits with financial institutions 557,842 3,703,815 2,838,259 2,790,057 2,529,501 Paid-up capital 248,993 244,714 231,423 228,590 228,453 Shareholders’ funds 1,165,245 2,257,662 2,271,138 2,539,908 2,303,763

FINANCIAL RATIOS Return on average shareholders’ funds (%) 8.6 11.6 20.3 18.4 22.5 Return on average assets (%) 0.9 0.8 1.7 2.0 2.9

SHARE INFORMATION Basic earnings per share (sen) 60 111 213 195 222 Gross Dividend per share (sen) 200 238 490 65 65 Net dividend payout ratio – Company level2 (%) 153 76 214 40 40 Net tangible assets per share (RM) 4.68 9.23 9.81 11.11 10.08 Price to earnings ratio3 (times) 5.9 7.0 4.0 4.6 3.0 Price to book multiple3 (times) 0.8 0.8 0.9 0.8 0.7 Share price – closing as at 31 December 3.54 7.80 8.55 9.00 6.70

1 Before finance cost, share of associates’ results and net gain on disposal of investments. 2 Excluding dividend in specie of EON Capital Berhad and Jardine Cycle & Carriage Limited shares. 3 Based on closing price as at 31 December.

Significant events affecting results, assets, liabilities and equity: 2004 – Distribution of EON Capital Berhad (ECB) shares to shareholders. Accordingly, the results of ECB group were excluded from July 2004.

2002 – Partial divestment of interest in Jardine Cycle & Cariage Limited in November 2002. Equity accounting ceased from December 2002 as the residual shareholding was reduced to 13.1%.

16 EON BERHAD ANNUAL REPORT 2004 Five Year Group Financial Summary

COMPANY 44.6 559,500 41.4 543,363 487,367 471,400 35.5 362,291 22.5 17.9 473,585 472,245 394,136 403,859 339,867 Units Units 125,860 135,578 127,859 72,092 68,224 '00 '01 '02 '03 '04 '00 '01 '02 '03 '04

EON's Proton sales volume EON's market share Service throughput - branches Service throughput - FSD

Revenue Profit before tax 5,967.2 469.5 5,682.3 5,258.3 376.2 370.1 3,129.2 2,862.5 170.7 131.8 RM Million RM Million '00 '01 '02 '03 '04 '00 '01 '02 '03 '04

17 EON BERHAD ANNUAL REPORT 2004 Five Year Group Financial Summary

GROUP

Revenue Profit before tax 906.5 7,548.3 7,427.7 818.6 774.9 6,361.5 4,987.1 579.7 3,901.2 300.5 RM Million RM Million '00 '01 '02 '03 '04 '00 '01 '02 '03 '04

Shareholders' funds Total assets 32,672.7 32,350.1 2,539.9 2,271.1 2,303.8 2,257.7 26,474.2 19,271.5 1,165.2 1,468.0 RM Million RM Million '00 '01 '02 '03 '04 '00 '01 '02 '03 '04

Basic earnings per share Gross dividend per share 490 222 213 195 238 111 200 65 65 60 sen sen '00 '01 '02 '03 '04 '00 '01 '02 '03 '04

Net tangible assets per share 11.11 9.81 10.08 9.23 4.68 RM '00 '01 '02 '03 '04

18 EON BERHAD ANNUAL REPORT 2004 Share Prices and Trading Volume on Bursa Malaysia for 2004

RM 12 100

9 75

6 50

3 25

0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Highest (RM) Lowest (RM) Volume (’000)

2004 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Highest (RM) 8.30 9.15 10.50 10.60 10.20 9.70 9.45 3.10 3.14 3.08 3.44 3.56

Lowest (RM) 7.65 8.35 9.30 10.00 8.85 8.65 3.04 2.98 3.00 3.00 3.06 3.30

Volume (‘000) 2,021 6,805 6,597 4,521 3,473 19,084 81,029 27,467 37,584 15,404 23,949 17,696

19 EON BERHAD ANNUAL REPORT 2004 Corporate Structure

EDARAN OTOMOBIL NASIONAL BERHAD Automotive Euromobil Sdn Bhd 100% EONMobil Sdn Bhd 100% Automotive Conversion Engineering Sdn Bhd 100%

General Trading EON Trading Sdn Bhd 100% Properties EON Properties Sdn Bhd 100%

Automotive Mitsubishi Motors Malaysia Sdn Bhd 48% Proton Parts Centre Sdn Bhd 40%

Services SRT-EON Security Services Sdn Bhd 40%

Properties Hicom Megah Sdn Bhd 36%

Manufacturing Johnson Controls Automotive Holding (M) Sdn Bhd 30%

20 EON BERHAD ANNUAL REPORT 2004 Organisation Structure

Board Of Directors

Audit Committee Internal Audit Nomination Committee Remuneration Committee Management Committee Risk Management Committee Company Secretary

Chairman

Managing Director

Executive Director - Motor Group Sales Executive Director - Finance & Corporate Services After Sales Executive Director Pre - Delivery Inspection Marketing Services

Finance Corporate Finance Group Finance Management Information System

Customer Service & Quality Human Resource & Administration

21 EON BERHAD ANNUAL REPORT 2004 Profile of Board of Directors

Y BHG TAN SRI DATO’ SERI (DR) Y BHG DATUK ADZMI MOHD SALEH BIN SULONG BIN ABDUL WAHAB

Y Bhg Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong, 53, a Y Bhg Datuk Adzmi bin Abdul Wahab, 62, a Malaysian, is a Malaysian, is a Non-Independent Non-Executive Director and Non-Independent Executive Director. He was appointed to the Chairman of EON Berhad. He was appointed to the Board in Board in February 1992 and was appointed Managing Director April 1996 and was appointed Chairman in March 1997. Tan in November of the same year. He is a member of the Board Sri is a member of the Board Nomination Committee and Audit Committee. Board Remuneration Committee. Datuk Adzmi holds a Bachelor of Arts (Honours) degree in Tan Sri is a member of the Chartered Institute of Management Economics and a Post Graduate Diploma in Public Accountants, United Kingdom. He served as a senior Administration from University Malaya and a Master of Business accountant in Cycle & Carriage Bintang Berhad, Cycle & Administration from University of Southern California, U.S.A. Carriage (Malaysia) Sdn Bhd and United Cycle Sdn Bhd for 10 years before his appointment as Executive Director of the Datuk Adzmi served the Malaysian Administrative and Master-Carriage Group of Companies in 1984. Diplomatic Service in various capacities in the Ministry of Finance, Tenggara Development Authority and Prime Tan Sri is the Group Chairman of DRB-HICOM Berhad. Currently, Minister’s Department from 1967 to 1982. He was Manager, he is also Chairman of HICOM Holdings Berhad, Gadek Corporate Planning of HICOM Berhad from 1982 to 1985. He (Malaysia) Berhad, EON Capital Berhad, Horsedale Development joined PROTON in 1985 and his last position in PROTON before Berhad and several other private limited companies in the DRB- joining EON was Director/Corporate General Manager, HICOM Group. Tan Sri also serves as Chairman of Kolej Administration & Finance Division. Datuk Adzmi is Chairman and Universiti Teknikal Kebangsaan Malaysia and Yayasan Budiman Director of various subsidiaries and associated companies UiTM. In addition, he is also a member of the Board within EON Group. Datuk Adzmi also serves as Chairman of of Perbadanan Usahawan Nasional Berhad and Yayasan Malaysia Franchise Association since 1994. Kebajikan Negara. Datuk Adzmi attended all the six Board Meetings held in the Tan Sri is a deemed major shareholder of the Company. Tan financial year ended 31 December 2004. Sri is deemed interested in the recurrent related party transactions of a revenue or trading nature and hence had abstained from voting at the Annual General Meeting of the Company held on 20 May 2004 to seek shareholders’ approval for the renewal of mandate on recurrent transactions that are in the ordinary course of business.

Tan Sri attended all the six Board Meetings held in the financial year ended 31 December 2004.

22 EON BERHAD ANNUAL REPORT 2004 Y BHG DATO’ MAZNAH Y BHG DATUK HAJI FAISAL BTE ABDUL JALIL BIN SIRAJ

Y Bhg Dato’ Maznah bte Abdul Jalil, 51, a Malaysian, is a Non- Y Bhg Datuk Haji Faisal bin Siraj, 59, a Malaysian, is a Non- Independent Executive Director. She was appointed to the Independent Non-Executive Director. He was appointed to the Board in March 1997. Board on 11 April 1996 and is a member of the Board Audit Committee. Dato’ Maznah holds a Bachelor and Master degrees in Business Administration (Finance) from Northern Illinois Datuk Haji Faisal is a Fellow of the Institute of Chartered University, U.S.A. and Central Michigan University, U.S.A. Accountants in England and Wales, and a member of the respectively. Malaysian Institute of Accountants and Malaysian Institute of Certified Public Accountants. Dato’ Maznah is the Senior Group Director, Corporate Finance and Advisory of DRB-HICOM Berhad. She is Chairman of Datuk Haji Faisal is the Senior Group Director, Financial Uni.Asia General Insurance Berhad and Uni.Asia Life Assurance Services & Treasury of DRB-HICOM Berhad. Prior to joining Berhad. She also serves on the Boards of Uni.Asia Capital Sdn DRB-HICOM, he was with Malaysia Mining Corporation Berhad Bhd, EON Capital Berhad, EON Bank Berhad, EON Finance from 1976 to 1994, the last position being Executive Director. Berhad, Gadek (Malaysia) Berhad, HICOM Holdings Berhad, He also serves on the Boards of Gadek (Malaysia) Berhad, Reinsurance (L) Ltd., Malaysian International Merchant HICOM Holdings Berhad, Horsedale Development Berhad, Bankers Berhad and several private limited companies under Rebak Island Marina Berhad and Perak Corporation Berhad. the DRB-HICOM group. Datuk Haji Faisal attended all the six Board Meetings held in Dato’ Maznah is also a member of the Board of Universiti the financial year ended 31 December 2004. Teknologi MARA, Malaysia and member of the Board of Trustees of Malaysian AIDS Foundation in her capacity as Treasurer.

Prior to joining DRB-HICOM, she was with a local merchant bank from 1979 to 1992 with exposure in various corporate advisory assignments. In 1992, she joined Master-Carriage (Malaysia) Sdn Bhd as Director, Corporate Affairs.

Dato’ Maznah attended all the six Board Meetings held in the financial year ended 31 December 2004.

23 EON BERHAD ANNUAL REPORT 2004 Profile of Board of Directors

MR ANTHONY NIGHTINGALE PUAN AZIYAH BINTI BAHAUDDIN

Mr Anthony Nightingale, 57, a British national, is a Non- Puan Aziyah binti Bahauddin, 54, a Malaysian, is a Non- Independent Non-Executive Director. He was appointed to the Independent Non-Executive Director. Puan Aziyah was appointed Board in March 1998. to the Board on 30 January 2004.

Mr Nightingale who holds a Bachelor Degree (Honours) in Puan Aziyah holds a Bachelor of Arts degree in Economics Classics, Cambridge University, U.K., is the Chairman of from University Malaya. Jardine Cycle & Carriage Limited, Jardine Motors Group Holdings Limited, Jardine Pacific Limited and MCL Land She began her career in the civil service in 1974. She has Limited. Mr Nightingale is also a Director of Jardine Matheson been in the Ministry of Finance since service. Except for five Limited, Jardine Matheson Holdings Limited and Cycle & years in the Government Procurement Management Division, Carriage Bintang Berhad. Mr Nightingale is currently on the the rest of her career has been with the Tax Analysis Division. Board of Commissioners of PT Astra International, Indonesia. He is the Chairman of the Hong Kong General Chamber of Currently, she is the Under Secretary, Tax Analysis Division, Commerce and a member of the Hong Kong Trade Ministry of Finance. Puan Aziyah also sits on the Boards of Development Council, the Economic and Employment Council in Malaysia Thailand Joint Authority, Putrajaya Corporation, Hong Kong and the Greater Pearl River Delta Business Council. Companies Commissions of Malaysia and University College of Engineering and Technology, Malaysia. Mr Nightingale attended four out of six Board Meetings held in the financial year ended 31 December 2004. Puan Aziyah attended the entire six Board meetings held in the financial year ended 31 December 2004.

24 EON BERHAD ANNUAL REPORT 2004 Y BHG TAN SRI SAW HUAT LYE Y BHG DATO’ DR M SHANMUGHALINGAM

Y Bhg Tan Sri Saw Huat Lye, 69, a Malaysian, is an Y Bhg Dato’ Dr M SHAN, 65, a Malaysian, is an Independent Independent Non-Executive Director. He was appointed to the Non-Executive Director. He was appointed to the Board on Board on 4 September 2001 and is the Chairman of the Board 27 August 2001. He is the Chairman of the Board Audit Committee and a member of the Board Remuneration Remuneration Committee and a member of the Board Committee. Nomination Committee.

Tan Sri Saw holds a Bachelor of Arts (Honours) degree in Dato’ Dr M SHAN holds a Bachelor of Arts (Honours) degree Economics from University Malaya and attended the Advanced in Economics from University of Malaya, a Masters degree in Management Programme of Harvard Business School, U.S.A. Economics and Government from Harvard University, U.S.A. and a Doctorate of Philosophy in Economics and Government Tan Sri Saw Huat Lye served the Malayan Home and Foreign from Oxford University, U.K. He is a Fellow of Economic Service from 1958 to 1971. He was Chief Executive of Development Institute, World Bank, U.S.A. Malaysia Airlines from 1971 to 1982 and Executive Chairman of Malaysian Helicopter Services Berhad from 1985 to 1998. He served in the Treasury, Ministry of Finance from 1962 to Currently, he is the Executive Director of Naluri Berhad and a 1978, his last post being Deputy Secretary (Economic) and in member on the Board of Shell Refining Company (FOM) Berhad from 1979 to 1991, his last post, General and Chairman of Guiness Anchor (M) Berhad. Manager. He was the Managing Director of Sri Inderajaya Sdn Bhd from 1992 to April 1996. Since May 1996, he is the Tan Sri Saw attended all the six Board Meetings held in the Managing Director of Trilogic Sdn Bhd and sits on the advisory financial year ended 31 December 2004. panels to the Malaysian Institute of Economic Research (MIER) and Asian Strategy and Leadership Institute (ASLI).

He also sits on the Boards of Main Board public listed companies Delloyd Ventures Berhad, PBA Holdings Berhad and Mamee-Double Decker (M) Berhad and several unlisted companies including Trilogic Sdn Bhd, Commerce International Merchant Bankers (CIMB) (L) Ltd, CIMB Discount House Bhd, CIMB Securities Sdn Bhd and Malaysian Industrial Development Finance (MIDF) Aberdeen Asset Management Sdn Bhd.

Dato’ Dr M SHAN attended all the six Board Meetings held in the financial year ended 31 December 2004.

25 EON BERHAD ANNUAL REPORT 2004 Profile of Board of Directors

Y BHG DATUK IR. (DR) AHMAD ZAIDEE Y BHG DATUK WAN AWANG BIN LAIDIN BIN WAN YAACOB

Y Bhg Datuk Ir. (Dr) Ahmad Zaidee bin Laidin, 61, a Malaysian, Y Bhg Datuk Wan Awang bin Wan Yaacob, 64, a Malaysian, is is an Independent Non-Executive Director. He was appointed to an Independent Non-Executive Director. He was appointed to the Board on 4 September 2001 and is the Chairman of the the Board on 27 August 2001 and is a member of the Board Board Nomination Committee and a member of the Board Audit Committee. Remuneration Committee. Datuk Wan Awang holds a Bachelor of Arts (Honours) degree Datuk Ir. (Dr) Ahmad Zaidee holds a Masters in Science in from University Malaya and a Masters in Public Administration Technological Economics (Management & Industrial Science), from the University of Southern California, U.S.A. University of Stirling and is a registered Professional Engineer Malaysia as well as a Chartered Electrical Engineer (U.K). He Datuk Wan Awang served the Government for 32 years from is a Fellow of the Institution of Engineers, Malaysia, as well as 1964 to 1995 in various positions in the Ministry of Foreign Academy of Sciences Malaysia and is currently serving in the Affairs, Public Service Department, Fisheries Department, councils of both bodies. Internationally, he is a member of the Ministry of Defence, Ministry of Home Affairs and Ministry of Institution of Electrical Engineers, and the Institute of Transport. His last position before his retirement was Secretary Management Services, U.K. He also served in the council of General, Ministry of Transport. He was a member of the Public the World Federation of Engineering Organisations (WFEO). He Service Commission from 1996 to 2000. was awarded the Degree of Doctor of the University by University of Stirling, the Honorary Doctor of Technology by Datuk Wan Awang attended all the six Board Meetings held in Oxford Brookes University and Honorary Doctor of Letters by the financial year ended 31 December 2004. the Manchester Metropolitan University as well as Honorary Professor of Napier University, United Kingdom.

Datuk Ir. (Dr) Ahmad Zaidee is the Past President of Federation of Engineering Institutions of Southeast Asia and the Pacific (FEISEAP), President of Institution of Engineers, Malaysia (IEM) and Honorary Fellow of the ASEAN Federation of Engineering Organisations.

He is also a Director of Malaysia Mining Corporation Berhad, Universiti Tenaga Nasional Sdn Bhd and Meteor Learning Sdn Bhd as well as Chairman of Erinco Sdn Bhd. He was the Chairman of SIRIM Berhad until 23 February 2004 and a Director of SIRIM Berhad until 14 December 2004.

Datuk Ir. (Dr) Ahmad Zaidee attended four out of six Board Meetings held in the financial year ended 31 December 2004.

26 EON BERHAD ANNUAL REPORT 2004 ENCIK WAN MAT BIN WAN SULAIMAN Y BHG DATO’ KHALID BIN HAJI ISMAIL

Encik Wan Mat bin Wan Sulaiman, 57, a Malaysian, is an Y Bhg Dato’ Khalid bin Haji Ismail, 64, a Malaysian, is a Non- Independent Non-Executive Director. He was appointed to the Independent Non-Executive Director. He was appointed to the Board on 4 September 2001 and is a member of the Board Board on 2 January 2002. Audit Committee. Dato’ Khalid holds a Bachelor of Arts (Honours) degree from Encik Wan Mat holds a Bachelor of Arts (Honours) degree in University Malaya and a Masters in Public Administration from Economics from University Malaya and a Masters of Public University of Southern California, U.S.A. Affairs from Southern Illinois University, U.S.A. Dato’ Khalid served the Government for 30 years from 1965 Encik Wan Mat has held various positions while serving the to 1995 in various positions in the Public Services government. Joining the service in 1971, he had served, Commission, Public Services Department, Kuala Lumpur City among others, the Prime Minister’s Department, Public Hall, Prime Minister’s Department and Ministry of Finance. His Services Department, Ministry of Public Enterprise, Ministry of last position was Secretary General, Ministry of Culture, Arts Finance and Ministry of Health. and Tourism, Malaysia. He was concurrently the Commissioner of Tourism, Malaysia from 1991 to 1995. Encik Wan Mat attended five out of six Board Meetings held in the financial year ended 31 December 2004. Dato’ Khalid bin Haji Ismail is the Group Country Chairman, Jardine Group of Companies, Malaysia since 1996. He also sits on the Boards of Malaysia Discount Berhad, Cycle & Carriage Bintang Berhad and Rangkaian Hotel Sri Malaysia Sdn Bhd.

Dato’ Khalid attended all the six Board Meetings held in the financial year ended 31 December 2004.

27 EON BERHAD ANNUAL REPORT 2004 Profile of Board of Directors

MR RIN NAN LUN Y BHG DATUK CHOO KENG KIT

Mr Rin Nan Lun, 41, a Singaporean, is a Non-Independent Non- Y Bhg Datuk Choo Keng Kit, 55, a Malaysian, is a Non- Executive Director. He was appointed to the Board on 20 Independent Executive Director. He was appointed to the Board November 2003. in July 1989 and is currently Executive Director, Motor Group.

He holds a Computer Science degree from University of Datuk Choo is a member of the British Institute of Southern California, U.S.A. Management, U.K., an Associate Member of the Institute of Marketing, U.K., and the Malaysian Institute of Management. Mr Rin Nan Lun began his career as an Analyst Programmer with IBM Singapore from 1988 until 1990. Currently, he is a Datuk Choo joined EON in October 1984 as General Manager, Director of Kualapura (M) Sdn Bhd. He also serves on the Sales and was promoted to Director/Sales Director in 1989 Board of Horsedale Development Berhad. He is an Alternate and subsequently, to Executive Director, Motor Group in 1994. Director of EON Bank Berhad, EON Finance Berhad, HICOM As Executive Director, he serves on the Boards of several GAMUDA Development Sdn Bhd and Danau Permai Resort companies within the EON Group as well as on the Board of Berhad. EON Bank Berhad. Prior to joining EON, he served Borneo Motors (M) Sdn Bhd for 13 years from 1968 and in April Mr Rin is deemed interested in the Company by virtue of his 1981, he joined Tan Chong & Sons Motor Co. Sdn Bhd as indirect substantial interest in Kualapura (M) Sdn Bhd, a major Deputy General Manager, Marketing. shareholder of the Company. He is deemed interested in the recurrent related party transactions of a revenue or trading Datuk Choo attended all the six Board Meetings held in the nature and hence had abstained from voting at the Annual financial year ended 31 December 2004. General Meeting of the Company held on 20 May 2004 to seek shareholders’ approval for the renewal of mandate on recurrent transactions that are in the ordinary course of business.

Mr Rin attended five out of six Board Meetings held in the financial year ended 31 December 2004.

28 EON BERHAD ANNUAL REPORT 2004 MS VIMALA MENON

Ms Vimala Menon, 50, a Malaysian, is a Non-Independent Executive Director. She was appointed to the Board in February 1990 and is currently Executive Director, Finance and Corporate Services.

Ms Menon is an Associate Member of The Institute of Chartered Accountants in England and Wales and a member of the Malaysian Institute of Accountants.

Ms Menon joined EON as Manager, Accounts in September 1984 and was promoted to General Manager, Finance in February 1989 and Executive Director, Finance & Corporate Services in 1994. As Executive Director, she serves on the Boards of several companies within the EON Group.

Ms Menon attended five out of six Board Meetings held in the financial year ended 31 December 2004.

Except as stated in the individual Director’s Profile, none of the Directors have any family relationship with any director and/or major shareholder of the Company and have no conflict of interest with the Company and no convictions for offences within the past 10 years.

29 EON BERHAD ANNUAL REPORT 2004 Senior Management

12 3

1. PUAN NOOR AZWAH SAMSUDIN 3. DATUK ABDUL RAZAK DAWOOD Company Secretary, Secretarial & Legal Senior Manager, After Sales

Puan Noor Azwah Samsudin, 34, was appointed the Company YBhg Datuk Abdul Razak Dawood, 48, joined the company in Secretary since December 2003. Prior to her appointment with August 1984. He was formerly the Senior Manager of EON, she has served in similar capacity in the insurance Marketing Division from 1990 to 2002. He was also seconded industry. Puan Noor Azwah is a graduate in Law from the to the refurbishment business at EON Motor Ria Sdn Bhd as University of Sheffield, U.K. and holds a Certificate in Legal Executive Director from 1997 to 1999. Prior to joining EON, Practice from the Legal Qualifying Board, Malaysia. She is he was attached to UMW Group in 1981 and served in various also an associate member of the Institute of Company capacities including Regional Manager-Heavy Equipment Sales Secretaries, Malaysia. (East Region) and Manager-Business Development until his secondment to EON in 1984.

2. MR WONG CHEONG WAH He sits on the Board of Malaysian Industry-Government Group Senior Manager, Sales for High Technology and also served as an exco member from September 2003 to 2005. He is also an active member of the Mr Wong Cheong Wah, 54, joined the Company in June 1985. International Association of Business Communicators (IABC) He holds a Bachelor of Economics (Business Administration) having served in the executive council of the Malaysian Chapter from University Malaya. Prior to joining the Company, he was from 2000 to 2001. with Malaysia International Consultants Sdn Bhd (MINCO) as Economist from 1974 to 1979, Tractors Malaysia Bhd as YBhg Datuk Abdul Razak holds a Bachelor of Economics from Market Research Executive from 1979 to 1981 and UMW as Universiti Malaya and attended the Asian Institute of Marketing Planning Executive in 1981 before he was Management, Philippines. transferred to EON as Special Project Executive.

30 EON BERHAD ANNUAL REPORT 2004 4 5 6

4. MD RASHID ABD RAHMAN 6. MS TANG SAW HUA Senior Manager, Pre-Delivery Inspection (PDI) Senior Manager, Finance

Encik Mohd Rashid Abd Rahman, 51, joined the company in Ms Tang Saw Hua joined EON in 1993 as Manager, Corporate 1985 as Manager – PDI. He has been in the automotive Finance and was promoted to Senior Manager, Finance in April industry since 1977 and has wide experience in various fields 2003. Prior to joining EON, she has 13 years of working such as sales, after sales, personnel, corporate affairs and experience, six years with a major accounting firm and seven logistics. He began his career with Borneo Motors under the years heading the finance functions of a property related group Inchcape Group of Companies as a Service cadet from 1977 and manufacturing group of companies. to 1978. She is a member of The Malaysian Institute of Certified Public Accountants (MICPA) and Malaysian Institute of 5. MS PUNG BEE TIN Accountants (MIA). Senior Manager, Group Finance

Ms Pung Bee Tin joined EON in April 1993 as Senior Manager, Group Finance. She is a member of the Malaysian Institute of Accountants (MIA) and Malaysian Institute of Certified Public Accountants (MICPA).

She is responsible for planning and coordinating the Group financial functions and ensuring compliance with all statutory and regulatory requirements pertaining to financial accounting and reporting and support the senior management in investors’ relations activities.

Ms Pung began her career with a professional firm with varied exposure in the audit and taxation matters of various industries including banking and financial institutions, insurance companies, trading and investment houses. Subsequently, she joined a financial institution and was responsible for the entire operations of the finance and treasury functions and corporate finance and services.

31 EON BERHAD ANNUAL REPORT 2004 Senior Management

7 89

7. ENCIK HOOD ABU BAKAR Puan Nor Rozita holds a Master of Science degree in Senior Manager, Management Information System Education – Instructional Systems Design (1984), a Bachelor of Arts degree in Linguistics, and a Bachelor of Science degree Encik Hood Abu Bakar, 42, joined the Company in October in Education. She is currently working on her doctorate in 1996. He graduated Summa Cum Laude with a Bachelor of Human Resources Development and Performance Management. Science in Information Systems from Southeastern University, U.S.A. and also holds a Master in Business Administration from Herriot Watt University, Scotland. Prior to joining EON, he was 9. ENCIK AHMAD FAIZAL BIN DATO’ MAHMUD the IT Manager of Group from 1993 to 1996, a Senior Manager, Human Resources and Administration consultant with Coopers & Lybrand Management Consultants in 1991 to 1993, a Systems Analyst with Esso Production Encik Ahmad Faizal bin Dato’ Mahmud, 46, joined the Company Malaysia Inc in 1988 to 1990 and an Analyst/Programmer with in December 2004. He holds a Master in Business Colgate Palmolive from 1986 to 1988. Administration from the University of Strathclyde, Glasgow. He began his career in Human Resource with Unilever East Asia Encik Hood was involved in various curricular activities and was Pacific Region based in Hong Kong in 1993 as Personnel the President of the Sports Club for the past four years. He Administration Manager where he was exposed to working at was also involved in coordinating sports activities organised by international level with other functional regional heads handling several companies in the Shah Alam community, such as Sukan strategic manpower planning and development. After the two 4 Penjuru and Suki games. years assignment in Hong Kong, he returned and resumed his HR roles as a Personnel Manager and later promoted to Personnel Director in 2002. Due to acquisition of Pamol by IOI 8. PUAN NOR ROZITA BINTI NORDIN Bhd, Encik Faizal was placed as Senior Manager of Senior Manager, Customer Service & Quality Administration where he was later posted to as a Group Human Resources Manager responsible for overall Puan Nor Rozita binti Nordin, 45, joined the company in human resources functions. January 1992. Nor Rozita is also the management representative and business driver for the ISO 9001 : 2000 – Quality Management Systems for the Company. Prior to her current position, Nor Rozita was Manager of Manpower Planning and Development, since January 1992. She was formerly Head of Management Training at UMBC Berhad – Malaysia from 1985 to 1992, Training Executive at Harris Semiconductor in Florida, U.S.A. from 1983 to 1985 and Teaching Assistant at the Southern Illinois University, U.S.A. from 1981 to 1983.

32 EON BERHAD ANNUAL REPORT 2004 10 11 12

10. YM TENGKU ZAINUDIN BIN TENGKU JAAFAR 12. MR JEFF YEE KEE LEN Senior Manager, Automotive Conversion Engineering Chief Executive Officer, Euromobil Sdn Bhd (ACE) Sdn Bhd Mr Jeff Yee Kee Len, 48, joined the EON group in January YM Tengku Zainudin bin Tengku Jaafar, 37, joined EON in 2005 as the Chief Executive Officer of Euromobil Sdn Bhd, a January 1994 and holds a Degree in Industrial Engineering wholly-owned subsidiary of EON Berhad. Prior to joining from the University of Miami, Florida, U.S.A. and is currently Euromobil, he has 12 years of working experience in the pursuing his MBA at Help College in collaboration with Stuart automotive industry in various capacities in Finance, Sales University, Australia. Prior to joining EON, he was an Industrial and Marketing. Engineer at one of PROTON’s major vendors. He is currently the President of EON Sports and Recreation Club. Mr Jeff holds a Diploma in Commerce (Financial Accounting) from Tunku Abdul Rahman College and is a finalist of the Association of Chartered Certified Accountant. 11. ENCIK ABD RASHID ANUAR BIN ZAKARIA Divisional Manager, EON Trading Sdn Bhd

Encik Abd Rashid Anuar bin Zakaria, 50, joined EON Trading in March 1994 as Divisional Manager. He is responsible for the development of new products in expanding the trading business both through the EON distribution network and external market channels.

Prior to joining EON Trading, he was attached to several multi- national companies dealing in fast moving consumer goods business namely Unilever, Procter & Gamble and Avon Cosmetics.

Encik Abd Rashid Anuar graduated with a Bachelor of Economics from University Malaya majoring in Business Administration and Master in Business Administration from Ohio University, U.S.A.

33 EON BERHAD ANNUAL REPORT 2004 Statement on Corporate Governance

The Board of Directors is committed to applying the principles and best practices recommended by the Malaysian Code on Corporate Governance (“Code”) to improve and enhance the standards of corporate governance practised within the Group as well as to protect and enhance shareholders’ value and financial performance. The Board believes that effective corporate governance is premised on three important cornerstones namely, independence, accountability and transparency.

34 EON BERHAD ANNUAL REPORT 2004 Towards achieving this, the Board not only observes the Principles of Corporate Governance and the Best Practices on Corporate Governance as set out in the Code, but has also put in place stringent parameters for adherence by the Management. The Board has adopted a Board Charter which provides amongst others guidance and clarity for directors and management with regard to the role of the Board and its committees, the requirements of the directors in carrying out their roles and in discharging their duties towards the Company as well as the Board’s operating practices besides emphasising the relationship between the Board, the management and the shareholders.

Set out below is a statement of how the Group has applied the principles and best practices of the Code during the financial year ended 31 December 2004. The principles of the Code enunciated in Part 1 are stated in five parts, namely:

ADirectors BDirectors’ Training CDirectors’ Remuneration D Shareholders E Accountability and Audit

The Code, in mandating the compliance with the principles stated, establishes the best practices in corporate governance in Part 2 which is divided into the following parts:

AA the Board of Directors BB Accountability and Audit CC Shareholders

The Board of Directors confirms that the Group has applied the principles set out in Part 1 of the Code to the circumstances of the Group and has complied with the best practices set out in Part 2 of the Code throughout the financial year from 1 January 2004 to 31 December 2004. The Directors further confirm that, going forward, the Group will continually apply the said principles and practices and where deemed appropriate, enhance the application thereof in pursuit of its commitment to the highest standards of Corporate Governance.

35 EON BERHAD ANNUAL REPORT 2004 Statement on Corporate Governance

DIRECTORS The Group considers that its complement of Non-Executive Directors provide an effective Board with a mix of industry- Composition of the Board specific knowledge and broad business and commercial The Board comprises members with relevant expertise and experience. The presence of independent non-executive experiences drawn from business, financial, technical and Directors is particularly important in corporate accountability as public service. The wide spectrum of skills and experiences they provide unbiased and independent views, advice and has given them an edge and an added strength in terms of judgement to take into account of the interests, not only of the leadership and management, thus ensuring that EON Berhad Group, but also of shareholders (majority and minority), and its subsidiaries is steered and guided by an accountable employees, customers, suppliers and the many communities in and competent Board. which the Group conducts business. This balance enables the Board to provide clear and effective leadership to the Group At the beginning of the financial year, the Company had sixteen and to bring informed and independent judgement to many (16) Directors on its Board of whom five were Independent aspects of the Group’s strategies and performance so as to Directors. There was a change in the Board membership ensure that the highest standards of conduct and integrity are whereby one director left the Board of the Company. To-date, maintained. The classification for independence is in there are fifteen (15) Directors of whom five (5) are accordance with paragraph 1.01 (Definition and Interpretations Independent. The composition of the Board was maintained so of the Bursa Malaysia Listing Requirements). that not less than one-third (1/3) were Independent Directors at all times. No individual or group of individuals dominated the In accordance with the requirements of the Code, YBhg Tan Sri Board’s decision making powers and processes. The number of Saw Huat Lye is currently the Senior Independent Non- Directors reflects fairly the investment of the shareholders. Executive Director who is available to deal with concerns affecting the Group, other than through the Chairman. During the financial year under review, four regular and two special board meetings were held. The names of the Directors Roles and Responsibilities of the Board in office during the year and their attendance at board The Board retains full and effective control of the Group. This meetings are as set out in the Directors’ Profiles from includes responsibility for determining the Group’s overall page 22 to 29. strategic direction as well as development and control of the Group. Key matters, such as approval of annual and quarterly Y Bhg Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong sits as results, acquisitions and disposals, as well as material the Chairman of the Board. This is perceived as appropriate agreements, major capital expenditures, budgets, long-term and of benefit to the Group for his experience and intimate plans and succession planning for top management are knowledge of the Group and its workings. The Board has reserved for the Board. These matters are set out in a formal always ensured compliance and best practices with respect to statement in the Board Charter. impartiality, conflict-avoidance, shareholders and stakeholders’ interest and protection, and good corporate governance. The Directors are required to make written declarations and it is their responsibility to declare whether they have a potential The Chairman is primarily responsible for ensuring Board or actual conflict of interest in any transaction. Where issues effectiveness and conduct whilst the Managing Director, Y Bhg involve conflict of interest, the interested Directors abstain Datuk Adzmi bin Abdul Wahab oversees the day-to-day running from discussing or voting on the matter. of the business including implementation of the policies and strategies adopted by the Board and clarifying matters relating The Board has four regularly scheduled meetings annually. to the Group’s business to the Board. The Managing Director’s Special Board meetings for particular matters are held as in-depth and intimate knowledge of the Group’s affairs necessary. In 2004, the Board held four regular meetings and contribute significantly towards managing the direction of the Group to achieve its goals and objectives.

36 EON BERHAD ANNUAL REPORT 2004 two Special Board meetings. At each regularly scheduled that can be implemented to mitigate the impact of any meeting, there was a full financial and business review and business risk. The External Auditors, also on annual basis, discussion, including trading performance to-date against the issue a Management Letter raising issues on risks affecting the annual budget and financial plan previously approved by the operations of the Group. The Board, through its various Board for that year. committees, addresses and monitors the risks and concerns affecting the Group. The Chairman of the Company plays a pivotal role in ensuring that Directors are properly briefed on issues arising at Board Committees meetings, so that they can make effective contributions as Specific responsibilities have been delegated to the Board Board members. As part of good corporate governance, the Committees, all of which have written constitutions and terms Chairman encourages a healthy debate on issues raised at of reference. These Committees have the authority to examine meetings, gives opportunity to Directors who wish to speak on particular issues and report back to the Board with their the motions, either for or against them. Every Board resolution recommendations. The ultimate responsibility for the final is then put on a vote which would reflect the collective decision decision on all matters however, lies with the entire Board. The of the Board, and not the views of an individual or an five principal Board Committees are as follows: interested group. 1. Board Audit Committee Minutes of every Board meeting are circulated to each Director Please refer to the Report of the Board Audit Committee for their perusal prior to confirmation of the minutes at the on pages 48 to 52. following Board meeting. Subsequently, all matters arising, deliberations and conclusions of the meetings of the Board are 2. Board Nomination Committee clearly and accurately recorded in minutes of meetings by the Y Bhg Datuk Ir. (Dr) Ahmad Zaidee bin Laidin, Chairman Company Secretary, confirmed by the Board and signed as a Y Bhg Dato’ Dr M SHANmughalingam correct record by the Chairman. The proceedings and Y Bhg Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong resolutions passed at each Board meeting are kept in the statutory register at the registered office of the Company. The members of the Nomination Committee are all Non- Executive Directors, a majority of whom are independent. The The consideration and approval of the Annual Management Plan Committee meets at least once a year and is responsible for: (AMP) is a significant annual exercise by the Board in • Determining the criteria for Board membership; establishing the goals of the Group for the following year which • Identifying and recommending to the Board, candidates involves an assessment of the projected performance of the for directorships of the Company and its subsidiaries; Group’s business. The Group AMP is revised quarterly based • Recommending to the Board on the appointment of on the actual performance of the preceding quarters and Directors on board Committees; expectations in performance of the preceding quarters and • Ensuring that adequate training and orientation is expectations in performance for the subsequent quarters. provided to the new Directors with respect to the business, structure and management of the Group as well At appropriate times, the Board also considers the principal as the expectations of the Board; risks affecting the business of the Group and the measures • Evaluating the effectiveness of the Board and Board that could be taken to mitigate such risks. A yearly audit Committees with regard to their structure, size, balance planning memorandum submitted by the External Auditors of and composition including the required mix of skills, the Group to the Audit Committee sets out the Strengths, experience and core competencies that Non-Executive Weaknesses, Opportunities and Threats (SWOT) Analysis for the Directors should bring to the Board, and contributions of Group which indemnifies and highlights the possible options each individual Director; • Recommending to the Board whether Directors retiring by rotation should be put forward for re-election; • Ensuring an appropriate framework and plan for Board and management succession for the Group;

37 EON BERHAD ANNUAL REPORT 2004 Statement on Corporate Governance

• Evaluating and approving the appointment, promotion, • Considering other matters as referred to the Committee transfer and dismissal of senior executive positions, by the Board; except that of the Managing Director and the Executive Directors which will be decided by the Board based on During the financial year, the Remuneration Committee held two the recommendation of the Committee. meetings i.e. on 13 February and 12 August 2004 respectively and all members were present. The Nomination Committee has developed and implemented procedures for evaluating the Board of Directors. The 4. Board Management Committee evaluation included the following: Y Bhg Datuk Adzmi bin Abdul Wahab, Chairman (i) Performance evaluation of the Board of Directors Y Bhg Dato’ Maznah bte Abdul Jalil (ii) Determination of the competency profile of the Board of Y Bhg Datuk Choo Keng Kit Directors Ms Vimala Menon (iii) Determination of the competency model of the new Board members The Management Committee consists of the Managing Director (iv) Performance evaluation of the Managing Director and and Executive Directors, meets on a regular basis and is Executive Directors responsible, within the limits of the policies determined and powers delegated by the Board, for: During the financial year, the Nomination Committee held one • Formulating Company and Group policies for meeting which was on 13 February 2004 and all members recommendation to, and further consideration by the Board; were present at the meeting. • Acting as an advisory body to the Board on operational and management matters; 3. Board Remuneration Committee • Discussing and deciding upon the implementation of key Y Bhg Dato’ Dr M SHANmughalingam, Chairman policy decisions of the Board; Y Bhg Tan Sri Saw Huat Lye • Discussing and recommending all matters important to Y Bhg Datuk Ir. (Dr) Ahmad Zaidee bin Laidin the strategic operations of the Company and Group; and Y Bhg Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong • Coordinating activities and building up synergies within the Group. The members of the Remuneration Committee are all Non- Executive Directors, a majority of whom are independent. The During the financial year, the Management Committee formally Committee meets at least once a year and is responsible for: met 10 times apart from having regular and frequent discussions • Establishing the Managing Director and the Executive amongst its members, in particular with the Chairman. Directors’ goals and objectives; • Reviewing the Managing Director and the Executive 5. Board Risk Management Committee Directors’ performance against the goals and Y Bhg Datuk Adzmi bin Abdul Wahab, Chairman objectives set; Y Bhg Dato’ Maznah bte Abdul Jalil • Establishing and recommending the remuneration Y Bhg Datuk Choo Keng Kit structure and policy for the Managing Director, Executive Ms Vimala Menon Directors and management; • The terms of employment/contract of employment/ service, any benefit, incentive scheme entitlement; and other bonuses, fees and expenses, compensation payable on the termination of the service contract by the Company and Group and to review for changes to the policy, as necessary; • Determining the remuneration of the Senior Managers and recommend the remuneration of the Managing Director and Executive Directors; • Reviewing and recommending to the Board on any new employees’ share option scheme and/or amendments to the existing scheme;

38 EON BERHAD ANNUAL REPORT 2004 The Risk Management Committee, consists of the Managing Minutes of every Board meeting are circulated to each Director Director and Executive Directors, meets on a regular basis and for their perusal prior to confirmation of the minutes at the is responsible, within the limits of the policies determined and following Board meeting. powers delegated by the Board for: • Aligning risk management strategies and policies with the The Board has access to the Company Secretary who is business strategies; available to provide the Directors with the appropriate advice • Ensuring completeness of risk identification and and services and also to ensure that the relevant procedures assessment; are followed. The Directors are constantly updated on the • Defining risk management policies; latest developments in the legislations as well as on statutory • Arbitrating risk management conflicts between functional and regulatory requirements pertaining to their duties and divisions; responsibilities. • Designating risk owners and establishing accountabilities; • Monitoring the implementation of any approved risk The Board also believes in adopting a hands-on approach to management action plans. the Group’s business activities as part of the Board’s assessment of its effectiveness, and the decision-making body During the financial year, the Risk Management Committee of the Group. When necessary, the Directors also visit locations formally met twice apart from having regular and frequent of business units that provide an insight on operational matters discussions amongst its members, in particular with which would assist the Board to make effective decisions the Chairman. relating to the Group.

Supply of Information Appointments to the Board All Directors have the same right of access to all information There is a formal and transparent procedure for the within the Group and the duty to make further enquiries appointment of new Directors to the Board, with the Board whenever deemed necessary whether as a full Board or in their Nomination Committee making recommendations to the Board. individual capacity, in furtherance of their duties. The Board is Please refer to page 37 for details of the Nomination supplied in a timely fashion with information in a form and of Committee. a quality appropriate to enable it to discharge its duties. In addition to financial information, other information deemed Following the appointment of new Directors to the Board, the suitable such as customer satisfaction, product and service Nomination Committee ensures that an induction programme is quality, and market share are also provided. arranged, including visits to the Group’s businesses and meetings with senior management as appropriate, to enable An agenda and a set of Board papers are sent to all Directors them to get a full understanding of the nature of the Group’s in advance prior to the meeting. The Board papers include, businesses, current issues within the Group and the Corporate among others, the following: Strategies as well as the structure and management of • Minutes of meetings of all Board Committees; the Group. •Current operating and business issues; • Annual management plan, forecasts and projections; • Quarterly and annual financial reports; DIRECTORS’ TRAINING • Acquisitions and disposals of assets of substantial value; All the Directors have attended the Mandatory Accreditation • Major investment and financial decisions; Programme (MAP) conducted by Research Institute of • Changes to management and control structure of Investment Analysis Malaysia (RIIAM) as prescribed by Bursa the Group, including key policies, procedures and Malaysia. They also continually attend education programs and authority limits; seminars to keep abreast with developments in the market •Reports, advices and opinions of the external place, such as seminars accredited under Bursa Malaysia’s consultants/advisors as had been sought for. Continuing Education Program (“CEP Program”).

39 EON BERHAD ANNUAL REPORT 2004 Statement on Corporate Governance

During the financial year ended 31 December 2004, two Retirement and Re-election in-house training programmes for Directors and Senior In accordance with the Company’s Articles of Association, all Management of the Company were conducted and facilitated Directors who are appointed by the Board are subject to by Industry experts. These training programmes were election by shareholders at the first Annual General Meeting accredited under the CEP Programme. The details of the following their appointment. training programmes are as follows: Pursuant to Section 129 (2) of the Companies Act, 1965, Directors who are over the age of seventy (70) years shall retire at every annual general meeting, may offer Date Course Title Organiser themselves for re-appointment to hold office until the next annual general meeting. 10 July 2004 Corporate Governance Bursa Malaysia The Articles also provide that all Directors shall retire from Assessment Framework Training Sdn Bhd office once in every three years but shall be eligible for 7 & 14 Corporate Disclosure Bursa Malaysia re-election. At each Annual General Meeting, one-third of the remaining Directors retire and offer themselves for re-election. August 2004 Rules and Regulations Training Sdn Bhd In practice, over a number of years, this means that every Director has stood for re-election at least once every three years.

Directors are also encouraged to attend talks, training programmes and seminars to update themselves on new DIRECTORS’ REMUNERATION developments in the business environment. In addition, The objective of the Group’s policy on Directors’ remuneration seminars and conferences organised by the relevant regulatory is to ensure that the Group attracts and retains Directors of authorities and professional bodies on, inter alia, areas relevant the calibre needed to run the Group successfully. In the case to the Company’s operations; Directors’ responsibilities and of Executive Directors, the component parts of remuneration corporate governance issues, as well as on changes to are structured so as to link rewards to corporate and individual statutory requirements and regulatory guidelines, are informed performances. In the case of Non-Executive Directors, the level to the Directors, for their participation. of remuneration reflects the experience and level of responsibilities undertaken by the Non-Executive Director Save for Mr Anthony Nightingale, Y Bhg Datuk William Chong concerned. Wei Yoon and Mr Adam Keswick, all other Directors of the Company have attended the CEP programme whether in The Remuneration Committee (details of the Remuneration their capacity as a Director of the Company or other public Committee are set out on page 38) is responsible for setting listed companies. the policy framework and for making recommendations to the Board on all elements of the remuneration and other terms of In addition, most of the directors of the Group’s non-listed employment of each Executive Director. Executive Directors subsidiaries have attended the Corporate Directors’ Training abstain from the deliberations and voting decisions in respect Programme as recommended by the Companies Commission to their remuneration. The remuneration of Non-Executive of Malaysia. Directors is decided by the Board.

In line with the recent amendment to Practice Note. 15/2003 The shareholders at the Annual General Meeting approve the which prescribed that the Board of Directors of all Public aggregate annual directors’ fees for Non-Executive Directors. Listed Companies shall be responsible for determining the The Board decides the determination of the fees for each Non- training needs of the Directors with effect from 1 January Executive Director. 2005, EON has initiated its own comprehensive and formal training program tailored to the needs of the Board of Directors.

40 EON BERHAD ANNUAL REPORT 2004 Details of Directors’ remuneration from the Group for the financial year ended 31 December 2004, distinguishing between Executive and Non-Executive Directors in aggregate, with categorisation into appropriate components and the number of Directors whose remuneration falls into each successive band of RM50,000 are set out below:

Executive Non-Executive Directors Directors Total RM RM RM

Directors’ Fees & allowances 229,206 726,955 956,161 Salaries 1,751,633 — 1,751,633 Bonus 754,128 — 754,128 Benefits-in-kind 205,327 99,909 305,236 Total 2,940,294 826,864 3,767,158

Executive Non-Executive Directors’ Remuneration Directors Directors Total

0–RM50,000 — 8 8 RM50,001 – RM100,000 — 8 8 RM100,001 – RM150,000 — 1 1 RM400,001 – RM450,000 1 — 1 RM750,001 – RM800,000 1 — 1 RM800,001 – RM850,000 1 — 1 RM850,001 – RM900,000 1 — 1 41721 a) Directors’ Fees & Meeting Allowances The shareholders at the Annual General Meeting approve the aggregate annual directors’ fees for Non-Executive Directors. The Board determines the fees payable to each Non-Executive Director after considering comparable organisations and the level of responsibilities undertaken by the Director. All Non-Executive Directors are paid meeting allowance to reimburse them for expenses incurred for attendance at each Board and Board Committee meeting. b) Salaries The basic salary inclusive of statutory employer contributions to the Employees Provident Fund for each Executive Director is recommended by the Remuneration Committee, taking into account the performance of the individual, the consumer price index and information from independent sources on the rates of salary for similar positions in a selected group of comparable companies. Salaries are reviewed annually.

41 EON BERHAD ANNUAL REPORT 2004 Statement on Corporate Governance

c) Bonus Malaysia also provides for the Company to electronically The Managing Director and Executive Directors are paid publish all its announcements including its quarterly results and a contractual bonus as well as discretionary bonus in line Annual Report through Bursa Malaysia’s internet website at with other employees. The criteria for the discretionary www.bursamalaysia.com. bonus is dependent on various performance measures of the Company together with an assessment of their Investor Relations individual performance during the period. Discretionary The Executive Directors and senior management have regular bonus for the Managing Director and Executive Directors dialogues with institutional investors, fund managers, analysts is approved by the Remuneration Committee. and research houses. Press conferences are held for analysts and investors to brief them on announcements relating to d) Benefits-in-Kind major corporate exercises and pertinent issues within the Other customary benefits, such as , driver, allowances, disclosure requirements of Bursa Malaysia. etc are made available to Directors as appropriate. While the Company endeavours to provide as much information e) Directors’ Share Options as possible to its shareholders and stakeholders, it must also The movement in Directors’ share options during the year be wary of the legal and regulatory framework governing the ended 31 December 2004 is set out in the Directors’ release of material and price-sensitive information. All corporate Report on page 105 of the Annual Report. disclosures take into account the prevailing legislative restrictions and requirements as well as the investors need for f) Service Contract timely release of price-sensitive information such as financial The Managing Director and two of the Executive Directors performance results and statements, material acquisitions, have service contracts with the Company. The notice significant corporate proposals as well as other significant period for termination of employment under the service corporate events. In all circumstances, the Group is cautious contracts for the Managing Director and the Executive not to provide undisclosed material information about the Director is three months. In the case of the Executive Group and continually stresses on the importance of timely and Directors who are on employment contracts, the notice equal dissemination of information to shareholders and period is two months. stakeholders.

Annual Report SHAREHOLDERS The Directors believe that an important channel to reach Dialogue between the Company shareholders and investors is through the Annual Report. and Shareholders/Investors Besides including the comprehensive financial performance and information on the business activities, the Group strives to The Board values dialogue with investors and appreciates the improve the contents of the Annual Report in line with keen interest of shareholders and investors in the Group’s developments in corporate governance practices. The performance. The Board acknowledges the need for Company’s Annual Report can be obtained by accessing the shareholders to be informed of all material business matters Company’s website at www.eon.com.my. affecting the Group. The Annual General Meeting (AGM) The Company supports the Code’s principle to encourage EON encourages the exercise of voting rights and constructive shareholders’ participation. The Company’s Articles of dialogue between the Board the shareholders at the Annual Association allows a member entitled to attend and vote to General Meeting (AGM), whereby shareholders are given appoint a proxy to attend and vote instead of the member and opportunity to pose their questions on proposed resolutions also provide that a proxy need not be a member of the and the Group’s operations. Notice of the AGM and annual Company. reports are sent out to shareholders at least 21 days before the date of the meeting. In addition to various announcements made during the year, the timely release of financial results on a quarterly basis in line with the Bursa Malaysia Securities Berhad’s (“Bursa Malaysia”) Listing Requirements provides shareholders with an overview of the Group’s performance and operations. Bursa

42 EON BERHAD ANNUAL REPORT 2004 Besides the normal agenda for the AGM, the Board presents the progress and performance of the business as contained in the Annual Report and provides opportunities for shareholders to raise questions pertaining to the business activities of the Group. All Directors are available to provide responses to questions from the shareholders during these meetings.

The turnout of shareholders at EON’s AGM has always been large; a total of 186 shareholders attended the AGM in 2003, while a total of about 202 shareholders attended in 2004.

In addition, a press conference is held immediately after the AGM where the Chairman and the Group Managing Director answer questions from the media on the Group plans and activities.

For re-election of Directors, the Board ensures that full information is disclosed through the notice of meetings regarding Directors who are retiring and who are willing to serve if re-elected.

Items of special business included in the notice of the meeting will be accompanied by an explanatory statement to facilitate full understanding and evaluation of the issues involved.

Shareholders can obtain up-to-date information on the Group’s various activities by accessing its website. Press releases and latest quarterly results announcements of the Group can also be found on this website.

Announcement of Quarterly Results for the financial year ended 31 December 2004 The Directors view the timely announcement of the quarterly financial results as vital to the dissemination of information to the shareholders and investors community. The Company has consistently announced its quarterly results before the Bursa Malaysia’s deadlines as indicated below:

Announcement of Quarterly Results for 2004 Date of Announcement

1st Quarter 20 May 2004 2nd Quarter 27 August 2004 3rd Quarter 29 November 2004 4th Quarter 24 February 2005

Continuing Disclosure of Material Information (i) Proposed Dividends in Specie of ECB Shares; Proposed EON has long observed the continuing disclosure obligation Bonus Issue; Proposed Capital Repayment of ECB Shares imposed upon a listed issuer by Bursa Malaysia. The Company and Proposed Increase in Authorised Share Capital by has constantly adopted and applied the principles of best AmMerchant Bank Berhad on 26 February 2004; practices in Corporate Disclosure Policy and Procedures as laid down by Bursa Malaysia. (ii) Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or The following material information and the material Trading Nature on 1 March 2004; development thereof have been released to shareholders via Bursa Malaysia Link on a timely basis: (iii) Super Dealership Agreement – Proton Marque Vehicles on 2 March 2004;

(iv) Changes in Substantial Shareholders’ Interest pursuant to Form 29B of the Companies Act, 1965;

43 EON BERHAD ANNUAL REPORT 2004 Statement on Corporate Governance

(v) Proposed Disposal of the entire shareholding in Leong & (vii) Edaran Otomobil Nasional Berhad (“EON” or the “Company”) Company Sdn Bhd (“L&C”) comprising 6,000,000 Dividends in Specie of EON Capital Berhad (“ECB”) Shares, Ordinary Shares of RM1.00 each (“Shares”) representing Capital Repayment of ECB Shares and Upliftment of 30% of the Issued and Paid-up Share Capital of L&C for Moratorium on the Shares of ECB (“Proposals”) by a Cash Consideration of RM48,098,388 (“Proposed AmMerchant Bank Berhad on 27 April 2004. Disposal of L&C”); and (viii) Edaran Otomobil Nasional Berhad (“EON” or the Proposed Disposal of the entire shareholding in MCIC “Company”) Dividends in Specie of EON Capital Berhad Holdings Sdn Bhd (“MCIC”) comprising 2,500,000 shares (“ECB”) Shares, and Proposed Capital Repayment of ECB representing 5% of the issued and paid-up share capital Shares (“Proposals”) by AmMerchant Bank Berhad on of MCIC for a Cash Consideration of RM2,750,000 13 May 2004. (“Proposed Disposal of MCIC”). (ix) Ordinary Resolutions passed under Special Business at (Collectively known as “Proposed Disposal”) on 16 March the 20th Annual General Meeting of Edaran Otomobil 2004 on 16 March 2004. Nasional Berhad on 20 May 2004.

(vi) A. Proposed Distribution of up to 347,270,469 (x) Agreement with Audi AG on 29 May 2004. Ordinary Shares of RM1.00 each (“Shares”) representing approximately 50.1% equity interest in (xi) Edaran Otomobil Nasional Berhad (“EON” or the EON Capital Berhad (“ECB”) by way of the following: “Company”) Dividends in Specie of EON Capital Berhad (“ECB”) Shares, and Capital Repayment of ECB Shares (i) Proposed Payment of Dividends in Specie of up (“Collectively referred to as the Distribution of ECB to 175,508,442 shares representing Shares”) by AmMerchant Bank Berhad on 18 June 2004. approximately 25.32% equity interest in ECB on a Basis of Entitlement to be determined (xii) Article entitled “DRB-HICOM Plans to Re-structure” on (“Proposed Dividends in Specie of ECB Shares”); 2 July 2004.

(ii) Proposed Bonus Issue of such number of (xiii) Proposed Disposal of the Entire Shareholding in Leong & shares in EON (“Bonus Shares”) to be credited Company Sdn Bhd (“L&C”) comprising 6,000,000 as fully paid-up and subsequently cancelled for Ordinary Shares of RM1.00 each representing 30% of the the purpose of implementing the proposed Issued and Paid-up Share Capital of L&C for a cash capital repayment of ECB Shares on a basis consideration of RM48,098,388 to Malaysian International of entitlement to be determined (“Proposed Merchant Bankers Berhad (“MIMB”) (“Proposed Disposal of Bonus Issue”); L&C”) by AmMerchant Bank Berhad on 23 July 2004.

(iii) Proposed Capital Repayment of the Remaining (xiv) Malay Mail Article Entitled “EON Sets Sights on USF- Shares in ECB not distributed pursuant to the HICOM” on 18 August 2004. Proposed Dividends in Specie of ECB Shares at zero subscription cost by utilising the (xv) Proposed Disposal of the Entire Shareholding in Leong & credits arising from the cancellation of the Company Sdn Bhd (“L&C”) comprising 6,000,000 Bonus Shares on a Basis of Entitlement to be Ordinary Shares of RM1.00 each (“Shares”) representing determined (“Proposed Capital Repayment of 30% of the Issued and paid-up Share Capital of L&C for ECB Shares”); a Cash Consideration of RM48,098,388 to Malaysian International Merchant Bankers Berhad (“MIMB”) B. Proposed Increase in the Authorised Share Capital of (“Proposed Disposal of L&C”); and the Company from RM500,000,000 comprising of 500,000,000 shares to RM1,000,000,000 comprising 1,000,000,000 shares (“Proposed Increase in Authorised Share Capital”) on 7 April 2004.

44 EON BERHAD ANNUAL REPORT 2004 Proposed Disposal of the Entire Shareholding in MCIC Internal Control Holdings Sdn Bhd (“MCIC”) comprising 2,500,000 shares The Code requires the Board to maintain a sound system of representing 5% of the Issued and Paid-up Share Capital internal control to safeguard shareholders’ investment and the of MCIC for a Cash Consideration of RM2,750,000 to Group’s assets. Information on the Group’s internal control is Kualapura (M) Sdn Bhd (“Kualapura”) (“Proposed Disposal presented in the Statement on Internal Control laid out on of MCIC”) on 25 August 2004. pages 54 to 55.

(xvi) Joint Venture Agreement (“Agreement”) between Edaran Otomobil Nasional Berhad (“EON or the “Company”) and Relationship with the Auditors Mitsubishi Corporation (“MC”) on 17 November 2004. The Group has always maintained a close and transparent relationship with its auditors in seeking professional advice and ensuring compliance with the accounting standards in Malaysia Senior Management Personnel in as well as meeting the auditors professional requirements. The Investor Relations Activities external auditors, Messrs. PricewaterhouseCoopers has Any queries regarding the EON Group may be conveyed to: continued to report to shareholders of the Company on its opinion which are included as part of the Group’s financial •YBhg Tan Sri Dato’ Seri (Dr.) Mohd Saleh bin Sulong, reports with respect to their audit on each year’s statutory Chairman financial statements. The auditors also highlight to the Board •YBhg Datuk Adzmi bin Abdul Wahab, Managing Audit Committee and Board of Directors on matters that Director require the Board’s attention. •YBhg Tan Sri Saw Huat Lye, Senior Independent Non-Executive Director A summary of the activities of the Board Audit Committee • Puan Noor Azwah Samsudin, Company Secretary during the financial year, including the evaluation of • Puan Fauziah Abdul Aziz, Manager, Marketing Services independent audit process, are set out in the Audit Committee Report on pages 48 to 52 of this Annual Report. Telephone number : 603-7711 2211 Facsimile number : 603-7805 3505 STATEMENT OF COMPLIANCE WITH THE BEST PRACTICES OF THE CODE ACCOUNTABILITY AND AUDIT This statement is made in accordance with a resolution of the Financial Reporting Board of Directors dated 24 February 2005. The Directors have a responsibility to present a fair assessment of the Group’s position and prospects in the quarterly reports to Bursa Malaysia and the annual report to shareholders. The Audit Committee assists the Board in scrutinising information for disclosure to ensure accuracy, adequacy and completeness. The Statement of Directors’ responsibility for preparing the financial statements is set out on page 99 of this annual report. Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong Chairman

Datuk Adzmi bin Abdul Wahab Managing Director

45 EON BERHAD ANNUAL REPORT 2004 EON recognises the importance of sound internal controls and risk management practices to good corporate governance. It is for this reason that it continues to embed the risk management process in the conduct of the day-to- day business operations to provide reasonable assurance of achieving the Group’s business objectives while at the same time safeguarding and enhancing shareholders’ investments and the company’s assets.

Risk Management

The main objectives of the risk management are as follows:

■ Ensuring proper framework for identifying and managing risk exposures. ■ Ensuring that contingency plans are in place to handle any crisis situation. ■ Improving business performance by improving decision-making and planning. ■ Providing a sound basis for integrated risk management and internal control as components of good corporate governance. ■ Promoting a more innovative culture in which the taking of calculated risks in various opportunities to benefit the organisation is encouraged. ■ Fostering an environment where staff assume responsibility for managing risks.

Risk Management Framework The Group has formalised its Risk Management Framework which encompasses the following key elements:-

•A Risk Management Committee. This is made up of four Directors and chaired by the Managing Director. It has been established with the objective to assist the Board of Directors in their responsibilities in establishing an effective risk management system. The Committee also serves as an oversight to the Board by providing the necessary information required to understand and assess the risks.

46 EON BERHAD ANNUAL REPORT 2004 The Risk Management Committee is guided by its Terms of Reference and the Risk Management Policy. It is assisted by a Risk Manager whose function is to facilitate the Risk Management Process.

•A database of all risks and its corresponding controls which have been identified has been created. The information is used to produce a detailed Risk Register, and individual risk profiles for the business and support units. Keys risks to each business and support unit’s objectives are identified and scored for likelihood of the risks occurring and the magnitude of impact.

•A consolidated risk profile of the Group was developed which, together with a report of the key findings was discussed in the Risk Management Committee meetings in February and November 2004 before being submitted to the Audit Committee and subsequently to the Board of Directors.

Risk Management Process There is in place a formal and on-going process to identify, evaluate and manage significant risks faced by the Group. This process entails the overall establishment of an appropriate framework to embed risk management in the process and activities of the Group.

47 EON BERHAD ANNUAL REPORT 2004 Report of the Board Audit Committee

The Board of Directors is pleased to present the Report of the Board Audit Committee for the year ended 31 December 2004.

COMPOSITION ensure adequate coverage over the activities of the respective The composition of the Audit Committee appointed by the business units. It met with the internal auditors to discuss the Board from amongst its members comprises the following five results of their examinations, management responses, follow-up members, three of whom are Independent Directors: action plans and their implementation status.

Chairman The Committee reviewed and approved the external audit plans Y Bhg Tan Sri Saw Huat Lye of the Company and its wholly-owned subsidiaries, and (Independent Non-Executive Director) discussed results of their examinations and recommendations.

Members The Committee reviewed the unaudited quarterly financial Y Bhg Datuk Wan Awang bin Wan Yaacob statements and audited annual financial statements of the (Independent Non-Executive Director) Company and the Group and ensured that the financial reporting and disclosure requirements of the relevant Encik Wan Mat bin Wan Sulaiman authorities had been complied with prior to submission to the (Independent Non-Executive Director) full Board for consideration and approval.

Y Bhg Datuk Haji Faisal bin Siraj (Non-Independent Non-Executive Director) INTERNAL AUDIT FUNCTION The Audit Committee is assisted by an Internal Audit Division, Y Bhg Datuk Adzmi bin Abdul Wahab which reports functionally to the Committee. The Internal Audit (Managing Director) has established an Audit Charter, which was approved by the Audit Committee, detailing its objectives, scope and function. Four Audit Committee meetings were held in 2004 and details of attendence of the Committee members were as follows: The Internal Audit Division’s role is to provide an independent, objective assurance and consulting services designed to add Members Attendance value and improve the company’s operations. It helps the Y Bhg Tan Sri Saw Huat Lye All 4 meetings Company accomplish its objectives by evaluating and improving Y Bhg Datuk Wan Awang bin Wan Yaacob All 4 meetings the effectiveness of risks management, internal control and Encik Wan Mat bin Wan Sulaiman All 4 meetings governance processes that includes:- Y Bhg Datuk Haji Faisal bin Siraj All 4 meetings Y Bhg Datuk Adzmi bin Abdul Wahab All 4 meetings i. Compliance with applicable laws, regulations, rules, directives and guidelines set up by the Management ACTIVITIES OF THE BOARD ii. Review of Business Plans and processes AUDIT COMMITTEE iii. Information Technology and system review During the year, the Audit Committee carried out its duties as set iv. Stock and Asset Management Audit out in its terms of reference. In performing its functions, the Audit v. Special review at the request of Management Committee reviewed and approved the overall scope of the vi. Review of Business Continuity Plan internal audit plans for the Company and the Group companies to

48 EON BERHAD ANNUAL REPORT 2004 Adopting a risk-based approach after evaluation and TERMS OF REFERENCE OF THE BOARD assessment of risk at Company and Divisional level, the AUDIT COMMITTEE Internal Audit Division formulated the Annual Audit Plan, which Quorum was approved by the Audit Committee, at its last meeting of The quorum for the Audit Committee meeting shall be two the preceding year. The scope of the Internal Audit function members and the majority of members present must be covers the audit of all business units and operations of the Independent Directors. Company and its subsidiaries. Terms of Reference The Internal Audit Plan was also consistent with the Company’s The Audit Committee has written terms of reference that deal current business initiatives and strategies. The Plan is also with its authority and duties. aimed at contributing to the Company’s internal control requirement and corporate governance processes. Meetings and Attendance (1) The Audit Committee shall meet at least on three In this financial year, Internal Audit completed a total of 104 occasions each year and the three occasions in which Audit Reports covering selected locations at Corporate Head they shall meet are as follows:- Office, Branches and Subsidiaries. Internal Audit contributed (a) prior to the current year’s audit; towards ensuring both Corporate Governance and issues (b) prior to the Board’s approval of the announcement relating to effectiveness of internal control are properly of the quarterly results to Bursa Malaysia Securities addressed. Berhad (Bursa Malaysia); and (c) prior to the approval of the financial statements by The Internal Audit reports, which included the issues and action the full Board. plans, were presented to and discussed with the Management. Internal Audit subsequently monitored the implementation of the (2) The external auditor has the right to appear and be heard agreed action plans to ensure full compliance. The reports at any meeting of the Audit Committee and shall appear together with the follow-up action plans and implementation before the Committee when required to do so by the status were presented to the Audit Committee for their Committee. deliberation and subsequent approval. (3) Upon the request of the external auditor, the Chairman of As at 31 December 2004, the Internal Audit Division has 9 the Audit Committee shall convene a meeting of the Auditors with various mix of expertise and experience. In order Committee to consider any matter the external auditor to ensure that its auditing approach is in line with current believes should be brought to the attention of the practice, the Internal Auditors are continuously being sent for Directors or shareholders. various relevant courses. (4) As necessary or desirable, the Chairman may request During the year, a number of internal control weaknesses were that other directors, members of management, the identified and brought to Management notice, all of which have internal auditor, employees and representatives of the been, or are being addressed. None of the weaknesses have external auditor attend at any particular Audit Committee resulted in any material losses, contingencies or uncertainties meeting only at the Audit Committee’s invitation, specific that would require separate disclosure in the Group’s to the relevant meeting. Annual Report.

49 EON BERHAD ANNUAL REPORT 2004 Report of the Board Audit Committee

(5) The Company Secretary of the Company shall be present (2) report formally to the Board of Directors and shall assist at all meetings to record minutes. the Board of Directors in fulfilling its fiduciary responsibilities as to accounting policies and reporting (6) Minutes of all meetings shall be prepared and sent to the practices of the Company and the sufficiency of auditing Audit Committee members and the Company Directors thereto; who are not members of the Audit Committee. A copy of the minutes shall be filed at the Company. (3) be the Board’s principal agent in assuring the independence of the Company’s external auditor, the Authority integrity of management and the adequacy of disclosures (1) The Audit Committee may regulate its own procedures, in to shareholders. The opportunity of the external auditor to particular, the calling of meetings, the notice to be given meet with the entire Board of Directors as needed is not of such meetings, the voting and proceedings of such restricted, however; meetings, the keeping of minutes and the custody, production and inspection of such minutes. (4) have familiarity through the individual efforts of its members, with the accounting and reporting principles (2) The Audit Committee in performance of its duties shall, in and practices applied by the Company in preparing its accordance with a procedure to be determined by the financial statements. The Audit Committee shall make or Board of Directors and at the cost of the Company:- cause to be made all necessary inquiries of management (a) have the authority to investigate any matter of the and the external auditor concerning established standards Company and its subsidiaries within its terms of of corporate conduct and performance and deviations reference and all employees shall be directed to therefrom. cooperate as requested by members of the Audit Committee; Scope and Functions (b) be empowered to retain persons having special The Audit Committee shall, amongst others, discharge the competence as necessary and have the resources following functions:- that are required to assist the Audit Committee in (1) Review the audit plan with the external auditor prior to the fulfilling its responsibilities; annual audit. The scope and general extent of the (c) have full and unrestricted access to any information external auditor’s audit examination, including the pertaining to the Company; engagement letter, and confirmation that management (d) have direct communication channels with the has placed no restrictions as to the scope and extent external and the internal auditors at all times and thereto. The external auditor’s fees are to be arranged the Chairman of the Audit Committee may call a with management and annually summarised for the Audit meeting whenever he deems it necessary; Committee’s review. The Audit Committee’s review should (e) be able to obtain independent professional or other entail an understanding from the external auditor of the advice; and factors considered by the external auditor in determining (f) be able to convene meetings with the external the audit scope including:- auditor, excluding the attendance of the executive (a) industry and business risk characteristics of the members of the Committee whenever deemed Company; necessary. (b) external reporting requirements; (c) materiality of the various segments of the (3) The Audit Committee shall have the power to instruct the Company’s consolidated and non-consolidated internal auditor to carry out investigations if deemed activities; necessary and to submit reports arising therefrom to the (d) quality of accounting and his evaluation of the Audit Committee. system of internal controls; (e) extent of involvement of internal audit in the audit Responsibilities examination; The Audit Committee shall: (1) serve as a focal point for communications between non- committee Directors, the external auditor, the internal auditor and the Company’s management as their duties relate to financial accounting, reporting and controls;

50 EON BERHAD ANNUAL REPORT 2004 (f) review of the scope, nature of work and results of (6) Review the extent of non-audit services provided by the the internal audit procedures; and external auditor and such other responsibilities as may be (g) other areas to be covered during the audit agreed to by the Audit Committee and the Board of engagement. Directors.

(2) Evaluate the cooperation received by the external auditor (7) Review with management and the external auditor, upon during the audit examination, including access to all completion of the audit, the financial results of the year requested records, data and information; elicit the prior to their release to the public. This review shall comments of management regarding the responsiveness encompass the following: of the external auditor to the Company’s needs; inquire of (a) the audit report; the external auditor whether there have been any (b) the Company’s Annual Report to shareholders disagreements with management which if not including the financial statements and supplemental satisfactorily resolved would have caused the issue of a disclosures required by generally accepted non-standard report on the Company’s financial accounting principles and approved accounting statements. standards; (c) the Corporate Governance Statement and Internal (3) Review the quarterly results, year end financial Control Statement in the Company’s Annual Report statements and press releases with management prior to to shareholders; them being approved by the Board of Directors focusing (d) significant related party transactions that may arise particularly on:- within the Company or Group; (a) changes in or implementation of major accounting (e) significant transactions not a normal part of the policy changes; Company and its subsidiaries’ operations; (b) significant and unusual events; and (f) significant adjustments proposed by the external (c) compliance with accounting standards and other auditor; legal requirements. (g) changes, if any, during the year in the Company’s accounting principles or their applications and the (4) Review any letter of resignation from the external auditor level of prudence applied in areas requiring of the Company: judgement; (h) the coordination of the audit approach between the Review as to whether there is reason (supported by external and internal auditors; and grounds) to believe that the Company’s external auditor is (i) the effectiveness of management information and not suitable for reappointment; other systems of control within the Company.

Recommend the nomination of a person or persons as (8) Identify principal risks and ensure the implementation of external auditor. appropriate systems to manage these risks;

(5) Review with the Company’s management, internal auditor (9) Review the adequacy and the integrity of the Company’s and external auditor, the suitability and adequacy of internal control systems and management information accounting policies and practices, its compliance with any systems, including systems for compliance with regulatory or other external financial reporting controls applicable laws, regulations, rules, directives and requirements. and guidelines;

51 EON BERHAD ANNUAL REPORT 2004 Report of the Board Audit Committee

(10) Review any related party transaction and conflict of (15) Discuss with the external auditor, the quality of the interests situation that may arise within the Company or financial and accounting personnel, and any relevant Group including any transaction, procedure or course of recommendations, which the external auditor may have, conduct that raises questions of management integrity; including those in the ‘letter of comments and recommendations’. Topics to be considered during this (11) Review the adequacy of the scope, functions and discussion include improving financial controls, the resources of the Internal Audit Division and that it has the selection of accounting principles and management necessary authority to carry out its work; reporting system. Review written responses of management through ‘letter of comments and (12) Review the internal audit programme, processes, the recommendations’ from the external auditor; results of the internal audit programme, processes or investigation undertaken and whether or not appropriate (16) Discuss with management, the scope and quality of action is taken on the recommendations of the internal accounting and financial reporting controls in effect; audit function; (17) Inform the Board of Directors, through minutes and (13) Review appraisal or assessment of the performance of special presentations as necessary, of significant members of the internal audit function, approve any developments in the course of performing the above appointment or termination of senior staff members of duties; the internal audit function and inform itself of resignations of internal audit staff members and provide the resigning (18) Recommend to the Board of Directors any appropriate staff member an opportunity to submit his reasons extension or changes in the duties of the Audit for resigning; Committee; and

(14) Consider the major findings of internal investigations and (19) Where the Audit Committee is of the view that a matter management’s responses; reported by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Bursa Malaysia’s Listing Requirements, the Audit Committee must promptly report such matter to Bursa Malaysia.

52 EON BERHAD ANNUAL REPORT 2004 Additional Compliance Information

The following information is provided in conformance to the Listing Requirements of Bursa Malaysia Securities Berhad:

1. SANCTIONS AND/OR PENALTIES During the financial year, there were no sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies. (ii) Conditional Agreement dated 16 March 2004 between Kualapura (M) Sdn Bhd and the Company 2. NON-AUDIT FEES for the proposed disposal of EON’s entire equity The amount of non-audit fees paid and payable to the interest of 5.0% in MCIC Holdings Sdn Bhd for a external auditors and their affiliated companies by the cash consideration of RM2,750,000. Company and its subsidiaries for the financial year ended 31 December 2004 was RM460,060. (iii) Joint Venture Agreement dated 15 November 2004 between Mitsubishi Corporation and the Company for the establishment of a new joint venture 3. MATERIAL CONTRACTS company to exclusively distribute motor vehicles, Save as disclosed below, there are no material contracts vehicle components, spare parts and accessories including contracts relating to loans (not being contracts designed and/or manufactured by Mitsubishi Motor entered into in the ordinary course of business) of the Corporation and/or its affiliates. Company and its subsidiaries, involving directors’ and major shareholders’ interests, either still subsisting at the 4. RECURRENT RELATED PARTY end of the financial year or entered into since the end of TRANSACTIONS the previous financial year. The Company had at the Annual General Meeting held on 20 May 2004 obtained the shareholders’ mandate for the (i) Conditional Share Sale Agreement dated 16 March Group to enter into recurrent transactions of a revenue or 2004 between Malaysian International Merchant trading nature which are necessary for its day-to-day Bankers Berhad and the shareholders of EONCAP operations and are in the ordinary course of business Securities Sdn Bhd (formerly known as Leong & with related parties. The said general mandate took effect Company Sdn Bhd) (“L&C”) for the proposed from 20 May 2004 until the conclusion of the acquisition of the entire equity interest in L&C for a forthcoming Annual General Meeting of the Company. The cash consideration of RM170.0 million (for which Company intends to seek a renewal of the said general EON’s portion is RM48,098,388). mandate and a proposed extension of the scope of the shareholders’ mandate to apply to recurrent related party transactions of a revenue or trading nature with new related parties at the forthcoming Annual General Meeting of the Company. The details of the new mandate to be sought are furnished in the Circular to Shareholders dated 5 May 2005 attached to this Annual Report.

53 EON BERHAD ANNUAL REPORT 2004 Statement of Internal Control

1. INTRODUCTION integrity of the system. This includes reviewing financial, The Board of Directors provides the following Statement organisational, management information system, of Internal Control of the Group pursuant to Paragraph operational and compliance controls as well as risk 15.27 (b) of the Listing Requirements of the Bursa management procedures. Malaysia Securities Berhad (Bursa Malaysia) and in accordance with the Statement of Internal Control: The system is designed to manage, rather than eliminate, Guidance for Directors of Public Listed Companies the risk of failure to achieve corporate objectives. adopted by Bursa Malaysia. Accordingly, it can only provide reasonable and not absolute assurance against material misstatement or loss.

2. BOARD RESPONSIBILITY The Board, recognising the importance of sound internal 3. RISK MANAGEMENT controls and risk management practices in establishing For the financial year under review, the Group has in place good Corporate Governance, acknowledges that it is an ongoing process in identifying, evaluating and responsible for the Group’s System of Internal Controls managing the principal risks faced by the Group. It is for and risk management and for reviewing the adequacy and this reason that it continues to embed the risk

54 EON BERHAD ANNUAL REPORT 2004 management process in the conduct of the day-to-day business operations to provide reasonable assurance of achieving the Group’s business objectives while at the same time safeguarding and enhancing shareholders’ investments and the company’s assets.

The main objectives of the risk management are as follows: • Ensuring proper framework for identifying and managing risk exposures • Ensuring that contingency plans are in place to handle any crisis situation •Improving business performance by improving decision making and planning •Providing a sound basis for integrated risk management and internal control as components of good corporate governance •Promoting a more innovative culture in which the taking of calculated risks in various opportunities to benefit the organisation is encouraged • Fostering an environment where staff assume responsibility for managing risks

RISK MANAGEMENT FRAMEWORK The Group has formalised its Risk Management Framework which encompasses the following key elements:-

➮ A Risk Management Committee. This is made up of four Directors and chaired by the Managing Director. It has been established with the objective to assist the Board of Directors in their responsibilities in establishing an effective risk management system. The Committee also serves as an oversight to the Board by providing the necessary information required to understand and assess the risks.

The Risk Management Committee is guided by its Terms of (iii) Budget preparation is done by the operating units, Reference and the Risk Management Policy. It is assisted by a reviewed by the Management Committee and Risk Manager whose function is to facilitate the Risk approved by the Board. Management Process. (iv) Management accounts and reports are prepared monthly for monitoring performances against budgets. ➮ A database of all risks and its corresponding controls (v) Board Committees comprising Audit Committee, which have been identified has been created. The Nomination Committee, Remuneration Committee, information is used to produce a detailed Risk Register, Management Committee and Risk Management and individual risk profiles for the business and support Committee with clearly defined terms of reference units. Key risk to each business and support unit’s and functions have been established. objectives are identified and scored for likelihood of the (vi) Standard Operating Procedures are documented and risks occurring and the magnitude of impact. regularly reviewed. ➮ A consolidated risk profile of the Group was developed (vii) Appointment of employees of the necessary calibre which, together with a report of the key findings, was to fulfil their responsibilities and also the provision of discussed in the Risk Management Committee meetings in continuous training and development of the February and November 2004 before being submitted to employees. the Audit Committee and subsequently to the Board of (viii) A Code of Ethics to support the business objectives. Directors. (ix) An MS ISO 9001:2000 Quality Management System which has been implemented to manage and control the quality requirement for the Company’s services. 4. KEY ELEMENTS OF INTERNAL CONTROLS The Internal Control mechanism established by the Board 5. ASSURANCE is embedded within the organisation structure and the The Audit Committee examines the effectiveness of the procedures for planning, capital expenditure, information Group’s systems of internal controls primarily through the and reporting systems and for monitoring the Group’s reviews of the annual and quarterly financial statements, performances. They are as follows: the Internal Audit plans and findings and the nature, scope (i) The organisation structure of the Group has clearly and findings of the external audit. defined lines of accountability, delegation of responsibility and levels of authorisation for all The Internal Audit Division reports its findings to the Audit aspects of the business. Committee of the Company. The Division’s work is in (ii) Management Committee meetings are held on a accordance with an annual audit plan approved each year regular basis to identify, discuss and resolve by the Audit Committee, and is focused on areas of operational, financial and key management issues. priority as identified by risk analysis.

55 EON BERHAD ANNUAL REPORT 2004 Chairman’s Statement

56 EON BERHAD ANNUAL REPORT 2004 DEAR SHAREHOLDERS,

The year under review was one of the most challenging periods in

EON’s corporate history. Profound changes with far-reaching

implications were thrust upon the Group with the implementation

of the Super Dealership Agreement (SDA) with Proton Edar Sdn

Bhd (Proton Edar) coupled with intense competition in the

automotive industry.

YBHG TAN SRI DATO’ SERI (DR) MOHD SALEH BIN SULONG

CHAIRMAN Navigating through the challenges of last year required much grit. It demanded a paradigm shift in all aspects of the way the Group conducted its businesses. As a result of the various initiatives implemented throughout the year, the Group has emerged as a leaner, more resilient and customer focused organisation. Our energies and resources over the past year were channelled towards positioning ourselves for future success and profitability.

I am pleased to report that your Company remains profitable notwithstanding the difficult operating environment.

FINANCIAL PERFORMANCE The Group recorded profit before tax (PBT) of RM300.5 million on a revenue of RM3,901.2 million for the financial year ended 31 December 2004. The 48.1% decline in PBT and 21.8% fall in revenue compared to 2003 were attributed mainly to the exclusion of the results of EON Capital Berhad (ECB) group effective July 2004 following the distribution of ECB shares to the shareholders. The distribution of ECB shares was part of the various initiatives implemented by the Group since 2002, which began with the divestment of interest in Jardine Cycle & Carriage Ltd (CCL) to unlock shareholders’ value and to remain focused on the Group’s core automotive business.

Excluding the earnings of ECB group, the Group’s PBT of RM109.3 million was 15.3% lower against 2003. The decline was mainly the result of the cost of implementing the voluntary staff separation (VSS) scheme of RM13.7 million as lower earnings from vehicle sales were effectively offset by lower overheads.

57 EON BERHAD ANNUAL REPORT 2004 Chairman’s Statement

The VSS exercise resulted from a realignment of the organisation structure to conform to the current business conditions and is expected to improve earnings and productivity of the Group going forward.

DIVIDENDS As demonstrated in previous years, your Company believes in sharing its success with the shareholders.

The Board of Directors is pleased to recommend a final dividend of 18 sen per share less 28% tax and a special dividend of 84 sen per share less 28% tax in respect of the financial year ended 31 December 2004. Subject to the approval of shareholders at the forthcoming Annual General Meeting, the proposed dividend will be paid on 22 June 2005. Together with the interim dividend of 10 sen per share less 28% tax paid in June 2004, total cash dividends for the year would amount to RM1.12 per share less 28% tax against RM0.42 per share less 28% tax paid in the previous financial year.

EON ranked among the top dividend paying public listed companies in Malaysia.

The proposed dividend payment for 2004 is part of EON’s ongoing efforts to enhance shareholders’ returns and thus, reinforces the Company’s policy of rewarding shareholders and ensuring steady returns on their investments.

Apart from cash dividends, your Company has also distributed its shares in CCL and ECB totaling RM1.1 billion (net of tax) to shareholders in the past two years.

I am proud to say that your Company ranked among the top dividend paying public listed companies in Malaysia.

SUPER DEALERSHIP AGREEMENT (SDA) Like all enduring organisations, EON has had to evolve and adapt to the new operating conditions. To recapitulate, the chronology of events affecting EON’s business was started in March 2003, when your Company came to an agreement with Perusahaan Otomobil Nasional Berhad (PROTON) on a new distribution arrangement for Proton vehicles. Arising from this, EON entered into a Memorandum of Agreement (MOA) with Proton Edar Sdn Bhd (Proton Edar), a wholly-owned subsidiary of PROTON responsible for the distribution of Proton . This paved the way for the signing of the SDA on 2 March 2004. The salient terms of the Agreement are as follows:

(1) EON is appointed as a Super Dealer effective 1 April 2003 to 30 September 2009;

(2) EON may maintain its existing network of sales branches and sales dealers dedicated to the sale of Proton marque vehicles throughout Malaysia;

58 EON BERHAD ANNUAL REPORT 2004 (3) EON shall be allocated not less than 100,000 units of Proton vehicles annually, subject to PROTON’s production plan;

(4) EON is allowed to distribute vehicles of other marques under separate legal entities and on separate premises;

(5) EON shall maintain a network of service centres to undertake the after sales and service of both the Proton and non-Proton vehicles. 70% of the service bays at these service centres shall be dedicated for the servicing of Proton vehicles.

The SDA cleared the uncertainties faced by EON for the past few years. It spelled out a new relationship between EON and Proton Edar. More significantly, it has opened windows of opportunity for EON as it is now allowed to pursue multi-brand business.

A more robust business A PARADIGM SHIFT model is required to Against the backdrop of the dynamic changes in the automotive industry landscape, the Board of Directors decided that a more robust business model maintain the Group’s is required to maintain the Group’s competitiveness and ensure its long-term competitiveness and growth and prospects. ensure its long-term The Group embarked on several key initiatives to diversify its business portfolio with increased contributions from multi-brand business, used car sales, fleet growth and prospects. sales and management, and after sales services.

59 EON BERHAD ANNUAL REPORT 2004 Chairman’s Statement

EON conducted a series of change management programme to ensure employees understand changing business conditions and the processes.

The Group has successfully added several new multi-brand businesses to its stable. The first agreement that paved the way for EON as a multi-brand distributor was signed on 4 December 2002, for the import and distribution of Audi passenger cars by its wholly-owned subsidiary, Euromobil Sdn Bhd. Subsequently, on 12 December 2003, another wholly-owned subsidiary, EONMobil Sdn Bhd, entered into an agreement with Hyundai- Motors Sdn Bhd (HSDM) for its appointment as a mega vehicle sales dealer for the promotion and sale of Inokom/Hyundai range of vehicles.

More recently, on 15 November 2004, EON reached an agreement with Mitsubishi Corporation (MC) to establish a joint-venture company in which EON has a 48% stake to exclusively distribute Mitsubishi motor vehicles, spare parts and accessories.

In tandem with the organisational changes, the Company conducted a series of change management programme to ensure employees understand changing business conditions and the processes taking place as well as the important role they play towards the achievement of corporate goals and aspirations. These programmes are also aimed at equipping the employees with the right mindset and necessary skills to lead EON into a new chapter of its development.

60 EON BERHAD ANNUAL REPORT 2004 AWARDS AND RECOGNITION The year began on an auspicious note when the Company was named the “Homegrown Franchisor of the Year 2002/2003” by the Malaysian Franchise Association. EON has helped to grow a significant number of new start-up businesses under its established brand name. To-date, EON has a network of 201 franchise service dealers.

EON’s commitment to the nation and society does not end with the above. Much importance is placed on various stakeholders. In ensuring that the shareholder’s value are protected and enhanced, EON conscientiously applies the principles and best practices of good corporate governance. In recognition of this continuous effort, EON was awarded with a Merit Award by the Malaysian Business for Corporate Governance.

Our human resource is the driving force towards achieving EON’s vision and In ensuring that the mission. Recognising the important role they play, EON ensures that their welfare are taken care of. Emerging as one of the runners up in the Best shareholder’s value are Workplace Practices category in the Asian Corporate Social Responsibility (CSR) protected and enhanced, Awards 2004 is testament to EON’s commitment.

EON conscientiously applies The year ended with five more awards presented by the Institute of Public the principles and best Relations Malaysia (IPRM) with the Company bagging the IPRM Kristal Awards for Best Environmental Practices, Best Employee Relations Practices, Best Public practices of good corporate Relations Practices, the Overall IPRM Kristal Award and a commendation for governance. image building as well as the Anugerah Citra Wangsa Malaysia (Radio Advertisement Category) from Dewan Bahasa & Pustaka.

PROSPECTS The Malaysian government expects growth prospects in 2005 to remain favourable after recording a growth of 7.1% in 2004. The Malaysian Automotive Association (MAA) predicts the passenger car market to further expand to 384,000 units in 2005 from a record 380,568 units achieved in 2004. Growth is expected to be spurred by new model launches, attractive financing packages and a positive economic outlook. However, the operating environment will be challenging and margins will continue to come under increasing pressure from intense competition.

The anticipated easing in production and supply constraints as well as new model launches from PROTON are expected to enhance EON’s Proton sales in 2005. Our multi-brand business is also set to pick up. Sales of Inokom/Hyundai cars are projected to grow as the network of 20 branches nationwide are fully operational whilst Audi sales are forecasted to improve with the launch of the Audi Hangar in August 2004 and the expansion of the retail network to Bahru, Prai and Kuching. The joint venture with MC which is expected to commence operations in mid-2005 will strengthen the multi-brand business.

61 EON BERHAD ANNUAL REPORT 2004 Chairman’s Statement

The Group’s strategy is to continue with its efforts to secure more multi-brand businesses to remain a dominant player in the automotive industry.

As a result of the ongoing profit improvement initiatives and enhanced processes, Group earnings are expected to improve in 2005. Going forward, the Group’s strategy is to continue with its efforts to secure more multi-brand businesses to remain a dominant player in the automotive industry. I remain optimistic about EON’s future. EON has the resources and capabilities to provide a solid foundation to build multi- brand business.

APPRECIATION In a year of great transition, we appreciate the hard work and dedication of management and staff. They performed with great professionalism, rising to the challenges of change.

Special mention must be made one of our greatest assets – our customers who have remained loyal despite the challenges and constraints faced by EON during the year.

To our principals, Proton Edar, Audi AG and HSDM, we thank you for your commitment and we look forward to enhancing our strategic alliances.

We are also fortunate that we have a strong support team comprising dealers, suppliers, contractors and various government authorities.

62 EON BERHAD ANNUAL REPORT 2004 To our shareholders, your continuous support has been invaluable. I am confident that with your continued support, EON will rise to the challenges as it moves into a new chapter in its corporate history.

On behalf of the Board, I wish to thank Encik Ahmad Othman Yahaya who ceased to be a director of the Company effective 18 February 2005 for his contribution and services during his tenure at the Board.

Thank you.

TAN SRI DATO’ SERI (DR) MOHD SALEH BIN SULONG CHAIRMAN

63 EON BERHAD ANNUAL REPORT 2004 Managing Director’s Review of Operations

64 EON BERHAD ANNUAL REPORT 2004 DEAR SHAREHOLDERS, The year under review marked EON’s twentieth anniversary as one of the key players in Malaysia’s automotive industry. As a Company set up by the Government in 1984 to spearhead the distribution of the national car, EON has helped grow the fledgeling national car industry, propelling the Proton brand to be the household name it enjoys today.

Y BHG DATUK ADZMI BIN ABDUL WAHAB

MANAGING DIRECTOR

2004 also marked the start of a fresh chapter in EON’s corporate history. For almost 20 years, we have built our business as a distributor of Proton cars. The signing of the Super Dealership Agreement (SDA) defined a new relationship between EON and the principal, Proton Edar Sdn Bhd and paved the way for the Group to reinvent itself to be a multi-brand distributor/retailer.

The Group is at a critical cross roads faced with great opportunities to successfully transform itself into a flexible and customer-focused organisation with a strong brand image. EON’s set of core values which focuses on integrity, customer service, learning, innovation and pride will set the foundation required The Group has embarked to propel the Group towards achieving its vision and mission. In this exciting on various initiatives to time, I would like you to join us in a common quest to steer EON to new and greater heights. It is a challenging journey, but one well within our means to transform its business achieve the vision of being the leading and most innovative multi-brand automotive retailer in the country. portfolio with increased contributions from multi-brand Accelerated Business Transformation business, used car sales, The landscape of the Malaysian automotive industry has undergone rapid and significant changes over the last few years. The consumers today have become corporate fleet management increasingly demanding as they are presented with more choices and competitive and after sales services. prices following the liberalisation of the Malaysian automotive market.

To respond to the realities and challenges of the new market place, the Group has embarked on various initiatives to transform its business portfolio with increased contributions from multi-brand business, used car sales, corporate fleet management and after sales services. Equally important is the transformation of EON into a customer-focused organisation with a strong brand image. The Board sees the successful execution of these initiatives as key to the Group’s continued growth and profitability.

65 EON BERHAD ANNUAL REPORT 2004 Managing Director’s Review of Operations

Our employees have fully embraced the paradigm shift demanded of them in adapting to the new challenges.

Among the various initiatives introduced during the year was the service profitability improvement plan, which encompasses a comprehensive programme designed to improve service standards and operational efficiencies to enhance customer experience and encourage repeat business. The plan also addresses key growth and profit levers, and we are already seeing results through improved demand for EON’s collision repair business.

A dedicated Corporate Fleet Management Department was set up to raise EON’s presence in the fleet sales and fleet management business. Innovative fleet programmes integrating sales, after sales services and other value-added services were developed to provide end-to-end fleet solutions to corporate customers.

New emphasis is given to customer relationship management (CRM) with several CRM initiatives implemented during the year. These include the upgrading of our Customer Communications Centre, a lynchpin in our effort to better serve customers and the development of an Enhanced Datamart (Data warehouse) which houses data from various business divisions pertaining to sales and customers. The establishment of the Data warehouse has facilitated ‘target marketing’ activities which allows us to customise products and services to meet the requirements of selected customer segments.

Change Management Programme Successful execution of the above initiatives will be a significant challenge and we need to change our mindset and the way we organise and work.

66 EON BERHAD ANNUAL REPORT 2004 A series of workshops and programmes were conducted for all levels of staff to ensure that the workforce understood the objectives of the initiatives, aspirations for the Group, and the important roles they play. The workshops also served to familiarise staff with external benchmarks and best industry practices which are vital tools to update and develop new standard operating procedures in line with EON’s new business initiatives. The workshops were also tailored to equip line managers with appropriate skills, knowledge and right attitude to manage the change process.

It is heartening to note that our employees have fully embraced the paradigm shift demanded of them in adapting to the new challenges. Our people will remain as one of the prime factors of success moving forward.

REVIEW OF OPERATIONS

Group The Group recorded profit before tax (PBT) of RM300.5 million for the financial year ended 31 December 2004, a decline of 48.1% against 2003 due mainly to the exclusion of the results of EON Capital Berhad (ECB) Group effective July 2004.

Excluding the earnings of ECB group, the Group’s PBT of RM109.3 million was 15.3% lower from the cost of implementing the voluntary staff separation (VSS) scheme of RM13.7 million.

EON Berhad The Company’s pre-tax profit of RM170.7 million was 29.5% higher compared to RM131.8 million recorded in 2003. This was largely attributable to the gain on disposal of investment in EONCAP Securities Sdn Bhd (formerly known as Leong & Company Sdn Bhd) of RM35.1 million, higher dividend income from subsidiaries and associates as well as the successful implementation of various cost reduction measures which mitigated the effects of lower earnings from vehicle sales and after sales services.

67 EON BERHAD ANNUAL REPORT 2004 Managing Director’s Review of Operations

The Group recorded profit before tax (PBT) of RM300.5 million for the financial year ended 31 December 2004.

Vehicle Sales The strong economic performance, attractive financing packages as well as new model launches contributed to the 19% increase in total industry volume for passenger cars to a record 380,568 units. This was led by the non-national car segment, which registered a growth of 68.7%. The national car segment grew at a slower rate of 10.2%, resulting in a corresponding drop in its market share to 79.0% from 85.0% in 2003.

Proton’s market share was reduced from 49.0% to 44.0% in 2004 despite a 7.3% increase in Proton sales volume. Against this scenario, EON’s new car sales volume declined by 5.4% to 68,224 units. The decline was mainly due to production and supply constraints as well as the increasingly competitive market forces.

The Company sold 25,328 units of the Iswara model in 2004, representing 37.1% of the total Proton cars sold by the Company, overtaking Proton Wira as the most popular car among buyers. Sales of Wira and Waja accounted for 20,569 units and 15,838 units respectively. Demand for the flagship Proton Perdana increased by 30.5% in 2004, with 3,427 units sold. The Company only commenced sales of the Gen.2 model in May 2004 which registered sales of 2,412 units for the year.

Used car sales registered 3,680 units in 2004, up by 93% from 1,906 units recorded in 2003 reflecting the Company’s increasing focus on used car sales.

68 EON BERHAD ANNUAL REPORT 2004 EON will continuously improve its nationwide sales network of 55 branches and 120 sales dealers to better serve customers.

After Sales Services EON’s after sales network currently comprises 39 service branches, 201 Franchise Service Dealers (FSD), 78 parts dealers and 16 fleet owners. Total service throughput for 2004 stood at 702,158 units of which branches accounted for 339,867 units or 48% while FSDs registered throughput of 362,291 units. Collision repairs throughput at branches grew by 20.4% to 8,855 units from 7,353 units in 2003.

Concerted efforts are being made to boost after sales activities. In line with the initiatives to diversify EON’s earnings base with increased contribution from after sales services, a total of 35 new FSD were appointed in 2004 and efforts are being stepped up to increase the number of FSD. In addition, a series of aggressive advertising and promotional campaigns were launched, packaged with innovative value-added services. Strategic alliances were forged with selected insurance companies to enhance the collision repair business at EON’s Concerted efforts are workshops. Continuous efforts are made to improve customer-facing functions through training and motivation programmes. being made to boost after sales activities.

69 EON BERHAD ANNUAL REPORT 2004 Managing Director’s Review of Operations

EON’s wholly-owned subsidiary, Euromobil, is committed to capture a bigger slice of the luxury car market by building the Audi brand presence, opening of more outlets to improve market reach as well as enhancing its product range.

Euromobil Sdn Bhd (Euromobil) The launch of the Audi Hangar in August 2004 reflects Euromobil’s commitment towards building the Audi brand in Malaysia and showcases the company’s emphasis on enhancing customer experience. The world class flagship facility, located on a 3.3 acre site at Temasya Glenmarie in Shah Alam, is the largest Audi showroom, parts and service centre in the South East Asia region and is equipped with the latest after sales facilities and state-of-the-art technology to meet the most exacting demands of customers.

In its initial year of operation, the company sold a total of 105 units of Audi cars. It recorded revenue of RM20.9 million and losses of RM6.1 million in 2004. The losses were attributable to start-up operating costs as well as investments to build the Audi brand. Moving forward, Euromobil is committed to capture a bigger slice of the luxury car market by building the Audi brand presence, opening of more outlets to improve market reach as well as enhancing its product range.

EONMobil Sdn Bhd (EONMobil) Following the appointment of EONMobil as the mega vehicle sales dealer by Hyundai-Sime Darby Motors Sdn Bhd in December 2003, sales of Hyundai/Inokom vehicles have taken off with a total of 2,227 units sold in 2004. The Company recorded revenue and profit before tax of RM98.6 million and RM2.2 million respectively.

EONMobil’s sales network of 20 branches to-date was set up progressively during the year.

70 EON BERHAD ANNUAL REPORT 2004 EON Trading Sdn Bhd (ETSB) ETSB’s core business is the marketing and trading of car accessories and car care products. For the year 2004, the company reported a loss before tax of RM0.8 million on a revenue of RM4.5 million as opposed to a pre-tax profit of RM4.0 million and revenue of RM28.3 million in 2003. The operations of ETSB were affected by the terms of the SDA that prohibit EON and its subsidiaries to market spare parts, car accessories and consumables not authorised by PROTON within the distribution network of EON.

ETSB has identified and is developing several new businesses to cushion the reduction in its existing businesses.

Automotive Conversion Engineering Sdn Bhd (ACE) ACE which is principally involved in the conversion and modification of Proton vehicles into Executive models posted a higher revenue of RM13.6 million in 2004, compared to RM6.3 million recorded in 2003. Accordingly, profit before tax rose to RM5.0 million from RM0.7 million in 2003. The improved financial performance was attributed to higher conversion volume of 310 units against 173 units in 2003.

Proton Parts Centre Sdn Bhd (PPC) PPC which is primarily involved in the warehousing and distribution of motor vehicle spare parts recorded revenue and pre-tax profit of RM214.1 million and RM37.4 million in 2004 compared to RM194.9 million and RM34.4 million recorded in 2003 respectively.

The company’s parts sales in the domestic market were adversely affected by the influx of spurious parts at lower prices. Despite this, the company’s revenue and pre-tax earnings were higher due to the increase in export sales.

71 EON BERHAD ANNUAL REPORT 2004 Managing Director’s Review of Operations

Johnson Controls Automotive Holding (M) Sdn Bhd The company’s main activities are the assembling and manufacturing of car seats, seat paddings, steering wheels and car interior parts. For the financial year 2004, revenue fell by 10.3% to RM88.6 million, due primarily to the loss of the Proton Gen.2 business for seats, door trims and headlining. Moreover, the launch of Gen.2 model also resulted in a drop in Proton Wira sales volume, for which the company has been supplying the aforementioned items.

As a result of the proactive measures taken by the company to improve product design and quality, the company has since, successfully secured the Gen.2 business. Consequently, the company is expected to supply 60% of Gen.2 model seats volume from January 2005.

72 EON BERHAD ANNUAL REPORT 2004 SRT-EON Security Services Sdn Bhd (SRT-EON) A security services provider, SRT-EON recorded revenue of RM31.0 million in 2004, marginally higher than RM30.2 million recorded in 2003. Profit before tax increased to RM1.5 million, compared to RM1.2 million registered in 2003. While its principal activity remains the provision of guard services, the company is tapping the potential of technology such as a central monitoring system to widen its business base.

Securing Our Future In our effort to ensure that EON remains a dominant player in the automotive industry, we have identified several key strategies that will be given high priority as we move into the new financial year. Our energies will be channelled towards building our multi-brand business as well as increasing revenue from after sales services, used car sales and fleet sales and management. Emphasis will also be given on CRM initiatives to transform the company into a customer-centric organisation.

We need to move swiftly to meet the dynamic changes in the market place and the aggressive competition that has become more intense with market liberalisation. As such, we have to embrace change and be proactive to face new possibilities and prospects. Our goal is to make EON the dealer of choice among customers. To this end, we need to collectively draw on all our efforts and determination to make our journey a success.

With that, I would like to express my gratitude to our customers for their loyal support, the management and staff for their hard work and to offer encouragement for their ongoing efforts in EON. On behalf of the Company, let me also thank the Board of Directors and our shareholders for their invaluable Our goal is to make support and guidance through all our endeavours. EON the dealer of choice among customers.

DATUK ADZMI BIN ABDUL WAHAB MANAGING DIRECTOR

73 EON BERHAD ANNUAL REPORT 2004 Our Commitment to Customer Service/Customer Relationship Management

PUTTING CUSTOMERS FIRST

TODAY’S DISCERNING CUSTOMER EXPECTS MORE AND EON IS GEARING ITSELF TOWARDS PROVIDING THE BEST POSSIBLE CUSTOMER EXPERIENCE. WE ARE CONVICTED THAT A HOLISTIC APPROACH TO MEETING CUSTOMER NEEDS AND A CONSISTENCY IN HIGH-QUALITY CUSTOMER EXPERIENCES WILL HELP REINFORCE EON’S BRAND AND REPUTATION, WHICH IN TURN WILL LOCK IN CUSTOMERS AND ENSURE REPEAT BUSINESS.

As EON embarks on its business transformation corporate customers can expect customised programme, several key customer relationship financing and insurance as well as fleet management (CRM) initiatives and development of maintenance, fleet management and fleet disposal expanding and improving network of sales and after packages. Value added services such as road tax sales throughout the country to better serve our and insurance renewals, towing and breakdown valuable customers at a cost of hundreds of millions of assistance, credit facilities, priority servicing, pick-up ringgit, continue to be implemented to ensure and delivery services, and even the provision of increased customer satisfaction, greater brand courtesy cars, have become the norm. awareness and continued profitability. In fact, we would like to think that the evolution at EON is translating into Customer Communications Centre. A great deal a group-wide customer service revolution. of energy and time has been invested in upgrading EON’s Customer Communications Centre (CCC) which One-stop Support. At EON, all innovation is driven serves as a platform for customers to communicate by the desire to meet customer needs. Our One- breakdowns, accidents, concerns and enquiries on a stop Centre was set up to meet individual 24/7 basis. The upgraded CCC allows customers to customers’ motoring needs from insurance and have consistent value-added experiences regardless financing to trade-ins and used car sales, among of the communication method they chose. Be it via others. In August 2004, a dedicated Corporate Fleet telephone, fax, email or even by walking into the Management Division supported by streamlined CCC in the wee hours of the morning, customers processes and attractive customer value can be assured of a quick and effective response. propositions, came into being. By offering corporate The CCC also facilitates faster response to customer customers a seamless array of innovative multi- enquiries through easy access to product information brand and attractive end-to-end fleet solutions that and customer contact history. In June 2004, the exceed their expectations, EON aims to capture a CCC was further upgraded to serve EONMobil bigger slice of this market segment. EON’s customers in addition to the existing PROTON and Euromobil customers.

74 EON BERHAD ANNUAL REPORT 2004 The newly integrated CCC also allows after sales customers, this CRM us to monitor our performance and initiative allows strategic business units benchmark ourselves against world within the Group to customise products class standards. Our responsiveness and services to meet the specific and contact management capabilities requirements of selected customer are continually being measured and segments. It also allows EON to monitored, with the results taken into measure and monitor the effectiveness consideration as one of the key of its promotional packages. A total of performance indicators of relevant staff. 10 sales and four after sales initiatives Training and development programmes have been identified for implementation for CCC staff help ensure that the in 2005. level of services provided meets customer expectations. After Sales Service. In ensuring customers needs are met, EON is looking Enhanced Datamart. The development to grow its after sales network currently of EON’s Enhanced Datamart comprising 39 service branches, 201 (Datahouse), which houses data from franchise service dealers (FSDs), 78 the various business divisions pertaining parts dealers and 16 fleet owners to sales and customers, is a key CRM nationwide. Our focus on customer initiative. Business intelligence is applied convenience and enhanced after sales to perform analysis, understand and activities will ramp up in the coming anticipate trends and patterns and help financial year via aggressive advertising us take remedial action while developing and promotional campaigns and the customer-centric strategies. bundling of innovated value-added services. The After Sales Division too, is Target Marketing. The establishment looking to forge strong alliances with of the Datahouse in turn, has facilitated selected insurance companies to get a the development of target marketing head-start in the collision repair business. initiatives. Targeting both sales and

75 EON BERHAD ANNUAL REPORT 2004 Our Commitment to Customer Service/Customer Relationship Management

Measuring Customer Satisfaction. Ultimately, the main arbiter of customer satisfaction is the customer. Rightly so, today’s customers are more demanding and vocal. During the year, EON intensified efforts to improve the monitoring and measuring of key performance indicators in relation to customer services. We actively pursued efforts to obtain feedback from randomly selected customers on the quality of services provided by both sales and after sales personnel. We also obtained feedback through focus group discussions (FGDs), surveys and our customer satisfaction index (CSI). This feedback was subsequently consolidated and channelled to the respective divisional heads for follow-up action. All these initiatives have gone a long way in helping us to customise products and services to meet customer needs and wants.

Based on feedback, the percentage of compliments and appreciation received from customers has increased to 27% in 2004, compared to 20% the previous year. Conversely, the number of complaints in the area of service recovery has fallen significantly to 37% in 2004, from 43% in 2003. The results are indeed gratifying and suggest that our efforts to improve customer satisfaction are bearing fruit.

Service Profitability Improvement. Another CRM initiative is the service profitability improvement plan. Incorporating a comprehensive programme aimed at improving service standards and operational efficiencies, it enhances the customer experience, encourages repeat business and addresses key growth and profit levers. As a result, there has been increased throughput of profitable repairs and higher demand for EON’s collision repair business. In moving towards a more customer-centric mindset and in ensuring that EON remains the customer’s preferred choice, we are providing customers with service level agreements (SLAs) that outline best-in-class service levels. In this increasingly competitive environment, the quality of the services we provide, will ultimately determine if customers stay or go.

Multi-brand Dealership. With the signing of the been conducting a series of training workshops and Super Dealership Agreement (SDA), we are now programmes for all levels of staff. The business both a super dealer of Proton vehicles and a multi- transformations taking place are communicated to brand dealer. With our customer base of 1.7 million, staff while they are educated on the important roles an extensive nationwide sales and after sales they in turn play in identifying key processes, service network, our established backroom improving productivity and setting new benchmarks. infrastructure support and a pool of experienced At our in-house Akademi Saga, training efforts too staff and established standard operating procedures, have been intensified. Staff with leadership potential we believe we are in an ideal position to better are identified, nurtured, placed on a steep learning serve customers, both old and new. Customers can curve and given the necessary exposure to prepare expect more from us as we strive to be the dealer them to propel EON into the front ranks of the multi- of choice through expanding the product and brand automotive business. In EON, we believe service offerings at our current franchises through highly trained and developed manpower can provide up, down and cross-sales, and through increasing excellent customer service. the number of marques in our portfolio. Ultimately, we want to offer total comfort, convenience and Technology Enhancements. Our multi-brand and satisfaction by being one-stop car supermarket that customer-centric strategies call for the deployment meets our customers motoring needs. of technology in a big way. By facilitating online linkages to our various principals, effective control People Development. As the winds of change at front-end offices and more accurate diagnosis of blow through EON, we are going all out to enhance vehicle problems, we are able to respond to our the competencies and mindset of our human capital. customers more efficiently and promptly. The We understand that our success in developing a implementation of an interactive voice response (IVR) customer-centric organisation will make us more system at our CCC enables customers to leave competitive and attractive. To this end, EON has voice messages for follow-up calls and prompt action. The Prospect Management System allows

76 EON BERHAD ANNUAL REPORT 2004 staff to follow-up on prospective new ISO 9001:2000. Quality is an integral business or clients while a data part of ensuring customer satisfaction warehousing capability allows follow-up and at EON, the quest for quality on cross-selling activities and other excellence is a continual journey. To this value added services. Elsewhere, a end, the Group has subscribed to the comprehensive customer repository internationally recognised ISO quality base allows for customer profiling, standards. In July 2004, EON was personalised campaigns and target audited by SIRIM and retained its ISO marketing, while our recently launched 9001:2000 accreditation. The year also E-Insurance system helps improve saw EON commencing the ISO customers’ registration processing time certification process for its subsidiaries, and reduces overhead costs. Euromobil Sdn Bhd and ACE Sdn Bhd. With documentation works already well Health, Safety and Environment. underway, both companies are expected Customers, staff and contractors to all to gain ISO 9001:2000 certification our sites can rest assured that their in 2005. safety is of paramount importance to us. EON’s commitment to ensuring all As we go into high gear in operations are conducted in a safe and implementing a holistic set of quality environmentally responsible manner has customer-centric initiatives, we will paid off with the Group achieving the undoubtedly begin to accelerate magical number zero in lost workdays towards realising our vision of being owing to accidents. In fact, the year Malaysia’s most innovative multi-brand under review saw EON winning the automotive distributor/retailer. Kristal Award from the Institute of Public Relations Malaysia for Best Environmental Practices.

77 EON BERHAD ANNUAL REPORT 2004 Maximising Shareholder Value

At EON, we have determined that one of the best Incorporated on 16 May 1984 in Malaysia as a private governing objectives is the maximisation of shareholder limited company, EON was converted into a public value, while simultaneously focusing on meeting customer company on 15 April 1990 and subsequently listed on the needs. The task of maximising shareholder value demands Main Board of Bursa Malaysia (then known as the Kuala a continual focus on corporate strategies that will provide Lumpur Sock Exchange) on 26 July 1990. Since EON’s the optimum return to shareholders. As such, any listing, the Company has worked hard to consistently pay company pursuing this course of action must immerse attractive dividends to our shareholders. itself in the unenviable position of setting and assessing benchmarks so that it operates in the best In 1991, our shareholders received a dividend of 10% manner possible. amounting to RM12.0 million. The dividend rate doubled to 20% in the following year and about RM36.0 million was We have continuously been reviewing our practices, paid out to shareholders. Over the years, we have systems and beliefs to transform ourselves into an distributed cash dividends on a progressively increasing organisation that lives up to such governing objective of basis up to a high of 65% by 1999. This rate was maximising shareholder value. This has ultimately maintained for a good four years until 2002, whereby, translated into a host of benefits for our shareholders, shareholders also enjoyed a windfall of 425% amounting amongst which, our long history of handsome dividend to almost RM1.0 billion of special dividends, in addition to payouts is the most impressive. the normal annual dividends. This was followed by another

78 EON BERHAD ANNUAL REPORT 2004 distribution of a special dividend of 14% amounting to approximately RM33.4 million in 2003. For the year under review, a special dividend of 84% amounting to about RM209.2 million is proposed for shareholders’ approval at this Annual General Meeting.

Cumulatively, a total cash dividend of approximately RM2.7 billion (gross) has been distributed to shareholders since EON’s listing. The consistent and high payouts have ranked EON as one of the highest dividend paying public listed companies in Malaysia.

In addition to the cash dividends, EON also distributed shares in Jardine Cycle & Carriage Limited (CCL) and EON Capital Berhad (ECB) to the shareholders in 2003 and 2004 respectively. These initiatives were consistent with our efforts to unlock shareholder value and return surplus capital through various means, including divesting investments that did not form part of the core automotive business.

Taking into consideration the distribution of cash dividends and shares in CCL and ECB, EON has returned approximately RM4.2 billion to our shareholders over the past 15 years.

As we focus on our mission of providing excellent customer service and our vision of being the leading and the most innovative automotive distributor/retailer, enhancing shareholder value will continue to be a key governing objective. We envisage that as we strive to meet this underlying objective, this will translate into higher overall productivity, and enhanced customer service both of which will create the momentum within EON to propel EON to greater heights.

79 EON BERHAD ANNUAL REPORT 2004 Human Resource Development

As the driving force towards Amid the challenging environment in 2004, training remained a priority. A total of RM2.2 million was invested achieving EON’s vision and mission, in staff training with a total of 219 internal and 74 external our employees must be instilled with training programmes conducted during the year. The training programmes were tailored to match the Group’s appropriate work ethics, attitudes and corporate direction to be a multi-brand distributor/retailer with emphasis on customer relationship management. the right mindset as well as the necessary skills and knowledge to As an employer that places a premium on learning and development, employees are encouraged to enhance their cope with the new demands of their academic qualifications and equip themselves for career progression within the organisation. Under the Educational jobs. In this regard, the Group’s Assistance Programme introduced in 1993, all confirmed human resource development’s employees are eligible to apply for financial assistance to pursue further studies on a part-time basis. To-date, a total objective is to continuously provide of 43 employees have benefited from the scheme by enrolling in various programmes at Certificate, Diploma, the right skills and knowledge, Degree and Masters levels. while enhancing leadership and management capabilities.

80 EON BERHAD ANNUAL REPORT 2004 Customised technical training programmes which focused EON’s core values which focus on integrity, customer- on various technical subjects such as electrical, engine and focused, learning organisation, innovation and pride or ICLIP fuel systems and manual/automatic transmission system underscore the importance of creating a positive are designed and conducted to enhance the efficiency and experience for internal and external customers, and productivity of technical staff. During the year under review, encourage continuous learning so as to add value to one’s a total of 2,253 participants from EON service centres and work and promote personal development while nurturing a franchise service dealers attended courses at Akademi sense of belonging of being part of the EON’s family. Saga, a training school for technical staff. Since its opening, Akademi Saga has established a firm reputation The Management also enjoys a good relationship with the for the quality and range of its training programmes. In four in-house unions where formal and informal dialogue 2004, the technical training courses also attracted sessions are being held regularly. Cohesiveness and a spirit 168 participants from various ministries as well as of esprit de corps are key factors of success navigating private enterprises. through these trying times. The bonds already established with staff are continuously renewed and strengthened Recognising that EON’s success depends on its employees, through social gatherings on festive occasions, sports and the Group continues to foster a conducive working other recreational activities. environment that nurtures employees’ capabilities and skills to achieve corporate and individual goals. Programmes are During the year under review, 192 employees received the in place to identify high potentials for succession planning. 10-year Service Awards, while another 20 were duly acknowledged for their 20 years of service with EON. To this end, EON’s Performance Management System has been strengthened to address key skills, knowledge and In due recognition of the importance EON places on its behaviours expected from all employees. It enables the human resources, it was awarded the Best Employee Company to identify competencies gap so that appropriate Relations Practices 2004 Award (“Better Trained, Better trainings and development programmes can be conducted Performance”) by the Institute of Public Relations Malaysia. to close the gap. EON will continue to motivate and inspire its human resources to maintain an edge in today’s competitive environment.

81 EON BERHAD ANNUAL REPORT 2004 Harnessing Information Technology

Information Technology (IT) plays a vital role in EON’s EON’s call centre was further upgraded with the continuous effort to improve the quality of its services and implementation of an interactive voice response (IVR) enhance customer experience. In the past 5 years, the system which enables customers to leave voice messages Company has invested RM35.9 million in developing, for follow-up calls. Operating round the clock, all calls to implementing and improving the various IT systems. the centre are closely monitored in accordance to ISO 9000 guidelines. Another IT initiative was the Today, the IT system in EON is an on-line real-time fully implementation of a data warehousing system that integrated system based on the latest SAP R/3 system facilitates the extraction of customers’ data for monitoring with applications that support various e-business systems, and analysis to better target customers for cross-selling its business partners (including all dealers and suppliers), activities and other value added services. several government bodies and financial institutions. EON’s IT Division continues to provide a range of comprehensive The year under review also saw the launch of the E- solutions to support the Group’s new business direction, Insurance System which helps improve registration improve customer service, boost productivity and enhance processing time and reduces overheads. The IT Division cost-efficient operations. also successfully rolled-out the Franchise Service Dealer Management System (FSDMS) in 2004. With this system During the year, all IT systems in both the sales and after in place, customer and vehicle service data can be sales service divisions were upgraded to support the tracked for follow-up and other value-added services. Group’s multi-brand strategy. These include the establishment of online linkages to the various principals, allowing for more effective control at the front-line service. It also facilitates more accurate diagnosis of vehicle problems, while serving customers more efficiently.

82 EON BERHAD ANNUAL REPORT 2004 Statement of Occupational Safety and Health and the Environment

Edaran Otomobil Nasional Berhad (EON) ensures the safety and health of its employees while they are at work by complying with the standards laid down in the Malaysian Occupational Safety and Health Act, 1994 as well as the Environment Quality Act, 1974. The Company places great importance on these issues and has developed internal policies and guidelines that set out requirements ensuring workplaces are safe and free from health risks. These requirements also outline the duties of different groups of people who play a role in workplace health and safety. At EON, the Safety and Health Committees, senior management and line management ensure conformance to the standards prescribed in law as well as Company operating procedures. In addition, line management has been given the additional responsibility of ensuring safety and health at their respective departments, branches, parts and service centres and its subsidiaries.

The Managing Director has the overall responsibility in coordinating and monitoring Occupational Safety and Health at EON. He is advised and assisted by safety & health committee members and safety officers from the Safety and Health Department set up in accordance with the Safety and Health Committee Regulations 1996.

The Company provides for the following:- • first aid, sanitary, welfare and personal facilities, and health services; • safety materials, personal protective equipment, devices and special clothing for employees where applicable; • information, training and supervision to ensure the safety and health of employees in the work place. The Company requires that each employee be made aware of every known or foreseeable hazard in the area where he or she works; •a Safety and Health Committee or representative with information considered necessary in identifying existing or potential hazards; • air quality monitoring programmes; • constant review of work practices in respect to occupational safety and health;

83 EON BERHAD ANNUAL REPORT 2004 Statement of Occupational Safety and Health and the Environment

•a statement of the employer’s safety and health policy, and any other material; • safety and health records in the prescribed manner; • the Safety and Health Committee or representative with a copy of any written directions or reports from a safety officer, and post them for the information of all employees; • that every employee is made aware of every known or foreseeable safety or health hazard in the work area, including bomb threats, threats of violence, noise hazards, radiation hazards, airborne contaminants, drug abuse and other workplace hazards; •prescribed standards relating to fire safety and emergency measures; •investigate, record and report all known accidents, occupational diseases and other hazardous occurrences; • that every employee or visitor knows how to use protective clothing or equipment required in the work areas to be occupied or visited.

Employees are responsible for taking all reasonable and necessary precautions to ensure their own safety and health and that of anyone affected by their work. Employees undertake to:- • comply with employer regulations and standards prescribed in law on procedures and instructions concerning safety and health while performing their duties; • cooperate with employer in implementing safety and health programmes and activities; •report any hazard or accident in the work place to the employer; and

• use safety materials, equipment, devices and/or During the year, EON provides every employee with a clothing either furnished by EON or prescribed by Safety Pocket Book to promote and ensure compliance regulation. with safety procedures in the Company.

All hazardous work and all work undertaken by contractors ENVIRONMENT at EON’s premises are controlled by a permit-to-work. With increasing emphasis in Malaysia and worldwide on environmental issues, EON has embarked on a proper environmental management system via the Environmental OCCUPATIONAL SAFETY AND HEALTH Management System (EMS) set-up according to ISO To achieve long-term zero injury and illness goals, the 14000 standards and has continuously improved its Company’s on-going objective is to continuously improve its performance. injury and illness rates over the previous year. The occupational accidents with lost workdays for the Company Good environment practices in conformance to the had been maintained at zero for two consecutive years. standards set by the Department of Environment are high Commuting accidents with lost workdays were reduced to on the agenda at EON. We ensure all our operations one in 2004 as opposed to three in 2003. comply with environmental legal requirements toward preserving the environment. EON ensures that all To ensure the risks are controlled and actions are taken for scheduled wastes are properly managed and disposed off. non-compliance, the Safety & Health Department also Furthermore, EON also ensures that effluent and air conducted intensive audit at all EON’s branches and discharge comply with the regulatory standard through departments on a yearly basis in addition to quarterly proper system maintenance and improvement. inspections conducted by the branches. In order to promote Consequently, in recognition of its efforts in preserving the fire safety awareness, two seminars and exhibitions had been environment, EON has been awarded the Kristal Award for conducted during the year. The seminars and exhibitions had Best Environmental Practices from IPRM. received good response from the participants.

84 EON BERHAD ANNUAL REPORT 2004 Corporate Social Responsibilities

SHARING OUR SUCCESS

In line with our operating philosophy of EON is also touching the lives of Malaysians putting people first, EON has a tradition of in more direct ways. We have not forgotten sharing its success with the community. the less fortunate among us, lending our support to many charitable and worthy A significant corporate sponsorship project is causes. In the recent Tsunami disaster that the annual contribution of RM1.0 million to struck parts of West Malaysia where lives and the Badminton Association of Malaysia in properties were destroyed, EON has support of its efforts to nurture a new contributed a sum of RM120,000 to the generation of badminton players. victims to help rebuild their lives again. Other regular recipients in our corporate sponsorship programmes are orphanages from all over the country.

Through our sponsorship programmes, EON earns its place in the fabric of Malaysian society, gaining the respect and trust of the communities we take pride in serving.

85 EON BERHAD ANNUAL REPORT 2004 Group Financial Review

Operating revenue The Group recorded revenue of RM3,901.2 million for the year ended 31 December 2004, 21.8% lower compared to RM4,987.1 million in 2003 due substantially to the exclusion of EON Capital (ECB) group results from July 2004 following the distribution of ECB shares to the shareholders.

Excluding the revenue of ECB group of RM925.7 million, Group’s revenue of RM2,975.5 million was 4.8% lower. This was mainly attributable to the decline in Proton new car sales which fell by 5.4% to 68,224 units from 72,092 units in 2003.

Vehicle sales The Company’s Proton sales were affected by production and supply constraints as well as the competitive market forces. As a result, revenue from new Proton cars of RM2,566.3 million was 8.9% lower than RM2,817.7 million recorded in 2003.

The decline in Proton sales was partly offset by sales of the non-Proton marques. Sales of Inokom/Hyundai cars stood at 2,227 units with revenue of RM97.0 million while sales of Audi cars was 105 units with revenue of RM12.4 million in their first full year operation.

Revenue from used car sales of RM91.1 million was 34.7% higher compared to 2003 of RM67.6 million on the back of a 75% surge in sales volume to 3,937 units (2003: 2,250 units). However, lower average revenue per car of RM21,800 (2003: RM30,000) partly offset the increase in revenue from higher sales volume.

Revenue from vehicle sales which accounted for 71% of Group revenue in 2004 fell by 4.1% to RM2,766.8 million.

After sales Service throughput at EON’s service centres of 339,867 units was 15.8% lower than 403,859 units recorded in 2003 due mainly to lower warranty jobs as new car sales fell.

Parts sales were also affected by lower throughput, increased competition as well as influx of imitation parts in the market.

Consequently, after sales revenue of RM213.7 million was 12.1% lower against 2003.

Group Revenue

Proton car 66%

Non-Proton car 3%

Used car 2%

After sales 5%

EON Capital group 24%

86 EON BERHAD ANNUAL REPORT 2004 Operating costs Group’s total operating costs of RM3,638.1 million in 2004 was 19.2% lower than RM4,504.0 million incurred in 2003 due largely to the exclusion of ECB group from July 2004. Excluding ECB group, Group’s operating costs amounted to RM2,934.5 million, 4.3% lower than RM3,064.8 million in 2003.

2004 2003 Increase/(decrease) RM million RM million RM million %

Cost of sales 2,746.1 2,873.2 (127.1) –4.4% Overheads 174.7 191.6 (16.9) –8.8% VSS cost 13.7 — 13.7

Operating cost (excluding ECB group) 2,934.5 3,064.8 (130.3) –4.3% Operating costs of ECB group 703.6 1,439.2 (735.6) –51.1%

Total operating costs 3,638.1 4,504.0 (865.9) –19.2%

Cost of sales was lower in line with the reduction in revenue.

Overheads was also lower by 8.8% as the Group took proactive measures to closely monitor and control overheads in view of the difficult operating conditions. These resulted in significantly lower advertising expenses, personnel cost and general administrative expenses which partly offset higher overheads incurred by Euromobil and EONMobil of RM9.1M (2003: RM3.3M) and RM3.5M (2003: Nil) respectively in their first full year of operations.

Amongst the key initiatives implemented during the year was the voluntary staff separation (VSS) exercise to realign the organisation structure to conform to current business conditions. The exercise, completed in January 2005 at a cost of RM13.7 million, is expected to improve earnings and productivity of the Group going forward.

Finance cost Finance cost of RM31.9 million was primarily in respect of the borrowings of ECB group comprising bonds with nominal amount of RM300 million issued in December 2002 and the subordinated notes of RM855 million issued in January 2004.

Excluding ECB group, the finance cost of the Group stood at only RM165,000 which was in respect of finance leases for the purchases of computer equipment.

Share of results of associates Share of results of associates of RM20.2 million, contributed primarily from Proton Parts Centre Sdn Bhd and Johnson Controls Automotive Holding (M) Sdn Bhd, was close to that achieved in 2003.

Net gain on disposal of investments The Group recorded gains of RM18.5 million from the disposal of investments in EONCAP Securities Sdn Bhd (formerly known as Leong & Company Sdn Bhd) and MCIC Holdings Sdn Bhd during the year.

87 EON BERHAD ANNUAL REPORT 2004 Group Financial Review

Profit attributable to shareholders The Group’s profit before tax of RM300.5 million was 48.1% lower against 2003 of RM579.7 million due mainly to the exclusion of ECB group results from July 2004. Excluding the results of ECB group, Group’s profit before tax was 15.3% lower at RM109.3 million. The decline was mainly the result of the cost of implementing the VSS exercise as lower earnings from vehicle sales were effectively offset by lower overheads.

Accordingly, profit attributable to shareholders was lower at RM148.0 million (2003: RM262.4 million) and earnings per share at 60 sen (2003: 111 sen). Excluding the results of ECB group, profit attributable to shareholders was RM81.5 million (2003: RM98.0 million) and earnings per share was 33 sen (2003: 42 sen).

The chart below shows the income distribution of the Group in 2004.

Distribution of Income

Operating costs 86%

Staff cost 6%

Tax 2%

Minority interests 2% Profit attributable to shareholders 4%

Assets Total assets of the Group stood at RM1,468.0 million as at 31 December 2004, 5.8% higher compared to RM1,386.9 million as at 31 December 2003 (adjusted to exclude assets of the banking group of RM31,285.7 million). The increase was attributable to profits retained (net of dividends paid) by the Group during the year.

Cash and cash equivalents which constituted a substantial 38% of the Group’s total assets stood at RM557.8 million as at end of 2004, up by 35.5% from RM411.6 million (excluding ECB group) as at end of 2003. The increase was mainly attributable to the net cash flow from its operations of RM113.3 million, proceeds from disposal of investments of RM50.9 million and proceeds from issuance of shares under the Company’s Employees’ Share Option Scheme of RM26.2 million partly offset by net dividends paid of RM57.3 million.

Property, plant and equipment which comprised mainly land and buildings used as showrooms and workshops was maintained at about RM306.8 million.

Inventories were lower at RM211.5 million (2003: RM357.9 million) as Proton vehicle stocks were lower due to production and supply constraints from Proton Edar.

Receivables, which comprised substantially of amounts due from dealers, increased from RM145.3 million to RM257.3 million as at 31 December 2004 arising from higher sales to dealers towards the end of the year.

88 EON BERHAD ANNUAL REPORT 2004 Investments of RM125.7 million was lower (2003: RM167.7 million) subsequent to the disposal of investments in EONCAP Securities Sdn Bhd (formerly known as Leong & Company Sdn Bhd) and MCIC Holdings Sdn Bhd.

An analysis of Group assets by major categories is shown in the table below.

Group Assets (RM' million) 557.8 411.6 357.9 306.8 298.6 257.3 211.5 167.7 8.8 145.3 5.8 125.7

Cash and Property, plant Inventories Receivables Investments Deferred cash equivalents and equipment tax assets

2003 2004

Shareholders’ funds Group’s shareholders’ funds stood at RM1,165.2 million as at 31 December 2004, lower than RM2,257.7 million as at 31 December 2003 due mainly to the distribution of ECB shares to the shareholders.

Accordingly, net tangible assets per share also registered a decrease to RM4.68 from RM9.23 as at 31 December 2003.

The Group’s funding requirements were derived from internal sources.

Shareholders' funds

Shareholders' funds 80%

Current liabilities 19%

Non-current liabilities 1%

89 EON BERHAD ANNUAL REPORT 2004 Calendar of Major Events

JANUARY

12 January 2004

Appreciation Dinner for Y Bhg Datuk Adzmi Abdul Wahab for being awarded the CEO of the Year (2003).

21-22 February 2004 FEBRUARY Sahabat EON supported the V-Sixers Annual Get-together in Penang. A total of 45 Proton Perdana V6 travelled from Shah Alam to Penang.

MARCH

2 March 2004 The official signing ceremony of Super Dealership Agreement between Proton Edar Sdn Bhd and EON Berhad was represented by its Directors, YBhg Datuk Maruan Mohd Said and Cik Nik Salina whilst EON Berhad was represented by the Managing Director, YBhg Datuk Adzmi Abdul Wahab and Executive Director, Motor Group, YBhg Datuk Choo Keng Kit.

90 EON BERHAD ANNUAL REPORT 2004 APRIL

5 April 2004 EON was listed in the Malaysian Book of Records for having the Largest Service Centre/Most Number of Showrooms/Most Number of Service Centres/Most Number of Cars Sold.

7 April 2004 Extraordinary General Meeting held at Pan Pacific Glenmarie Resort.

20-26 April 2004 EON participated in Minggu Amanah Saham Malaysia 2004 at Dewan Milenium, Kepala Batas, Penang which was officiated by the Prime Minister, YAB Dato’ Seri Abdullah Ahmad Badawi. EON took four booths and displayed one unit of Proton GEN.2 and one unit of Audi A4.

MAY

8 May 2004 50 staff participated in the “Perhimpunan Perpaduan Sempena Hari Pekerja 2004” held at Stadium Putra, Kompleks Sukan Negara, Bukit Jalil, Kuala Lumpur.

JUNE

25 June 2004 Executive Director, Motor Group, YBhg Datuk Choo Keng Kit presented a cheque of RM20,000 to Tabung Amanah Perwira dan Pertahanan Negara which was under the patronage of the Prime Minister, YAB Dato’ Seri Abdullah Ahmad Badawi held at Sunway Lagoon Resort Hotel, .

16 June 2004 EON was presented with a Merit Award for Corporate Governance 2003 on June 25 June, 2004 at Nikko Hotel Kuala Lumpur.

91 EON BERHAD ANNUAL REPORT 2004 Calendar of Major Events

AUGUST

6 August 2004 Memorandum of Understanding on the strategic alliance between UNI.ASIA and EON Berhad was executed.

8 August 2004 EON sponsored 1 unit of Proton Waja to the winner of the Malay Mail Big Walk held at Dataran Merdeka, Kuala Lumpur.

9 August 2004 11 August 2004 Audi A8 Launch Press Preview held at Launch of Audi Hangar by Minister of Carcosa Seri Negara, Kuala Lumpur. Science, Technology & Innovations, YB Datuk Dr Jamaludin Jarjis.

92 EON BERHAD ANNUAL REPORT 2004 22 September 2004 Memorandum of Understanding on the strategic alliance between MNI Berhad and EON Berhad was executed. SEPTEMBER

OCTOBER 11 October 2004 Launch of “Kempen Keselamatan Jalan Raya Bersama” by Deputy Transportation Minister 1, YB Datuk Douglas Uggah Embas held at EON Head Office Complex. It was jointly organised between Sahabat EON, Real Rewards, AIG and Puspakom in conjunction with the “Balik Kampung” campaign with the caption of “Have a Real Safe Journey”.

19 October 2004 Memorandums of Understanding on strategic alliance between EON Berhad and Berjaya General Insurance Berhad (BGI), Mitsui Sumitomo Insurance (M) Berhad (MSI), Tokio Marine Insurans Malaysia Berhad (TMI) and Takaful Ikhlas Sdn Bhd (TISB) were executed.

93 EON BERHAD ANNUAL REPORT 2004 Calendar of Major Events

NOVEMBER

6 November 2004 Memorandums of Understanding on strategic alliance between EON Berhad and Malaysian Assurance Alliance Berhad, Kurnia Insurans (M) Berhad and Multi-Purpose Insurans Berhad were executed.

7 November 2004 Hosted Majlis Kasih Ramadhan berbuka puasa with 400 orphans and senior citizens in collaboration with ‘Yayasan Seni Karya Prihatin Malaysia’.

29 November 2004 10 and 20 Years Service Awards Dinner in collaboration with the 20th Anniversary Celebration held at Sunway Lagoon Resort Hotel.

30 November 2004 EON received the Environmental Practices and Employee Relations Practices Awards from Duli Yang Teramat Mulia Raja Dr Nazrin Shah ibni Sultan Azlan Muhibbuddin Shah at the Anugerah Kristal 2004 organised by Institute of Public Relations Malaysia held at Shangri-La Hotel, Kuala Lumpur.

94 EON BERHAD ANNUAL REPORT 2004 JANUARY 2005

2 January 2005 EON sponsored a unit of Proton Iswara Aeroback 1.35 for the Festival Pelancongan Negeri Melaka 2004.

7 January 2005 EON won the “Anugerah Citra Wangsa Malaysia (Radio Advertisement Category)” organised by Dewan Bahasa & Pustaka.

3 March 2005 EON bagged the merit award in the 2005 Chinese New Year Greeting Advertisement Award Presentation organised by China Press/Nanyang Siang Pau.

95 EON BERHAD ANNUAL REPORT 2004 Awards and Recognition Within Two Decades

1991 1998 •World Executive Digest and AIM Award for •Listed in Malaysian Book of Records for winning the Marketing Management most Television Statue Awards

1993 1999 •Finalist London International Awards for Proton Wira • Franchisor of the Year Award and Malaysian Franchise launch commercial Association for Exemplary franchise standard

1995 2002 •Finalist London International Awards for Flying Ribbon •Highest contribution of Excise Duties by Royal Custom Hari Raya TV Commercial and Excise Department in conjunction with World • Finalist London International Awards for Proton Perdana Customs Day launch advertisement • PERT captured World Rally Championship •Mid Summer Awards (Bronze) for Chinese New Year • Award for Distinction Creative 31 – Nien Chinese New (Arowana) advertisement Year •Finalist Award for AME International Advertising/ • Award for Distinction Creative 31 – Playful Boy Marketing Effectiveness Competition organised by the • Hadiah Penghargaan for Anugerah Citra Iklan 2002 for New York Festival EON Corporate Television Commercial (Northpole •Television Awards (Finalist for Best Automotive) for Conquered) by Dewan Bahasa and Pustaka Iswara advertisement •Television Awards (Finalist – Playful Boy) •Television Awards (Finalist for Best Animation) for •Television Awards (Finalist – Nien) Chinese New Year Arowana • Logo 20002 New York for Rally of Malaysia 2000 •Television Awards (Finalist for Best Jingle) for Iswara Advertisement advertisement •Television Awards (Finalist for Best Jingle – Proud of my Proton) for television commercial 2003 •Television Awards, Statue Award for Best Animation – • Overall IPRM Kristal Award, Most PR Savvy CEO, Best Proton Wira Launch advertisement Consumer Relations Award •Television Awards, Statue Award for Best Animation – •MS ISO 9001:2000 for pre-sales, sales and after sales Hari Raya Flying Ribbon advertisement of motor vehicles by SIRIM Berhad and endorsed by the United Kingdom Accreditation System (UKAS) • Awarded Superbrand Status 1996 •Y Bhg Datuk Adzmi Abdul Wahab was conferred Malaysia’s •Television Awards, Statue Award for Best Automotive – CEO of the Year by AMEX and Business Times Proton Wira 1.8 Rally •Listed in Malaysia Book of Records in four categories •Television Awards, Statue Award for Best TV namely: Most Number of Showrooms, Most Number of Commercial for Deepavali (Peacock) Service Centres, Largest Service Centre and Most •Television Awards (Finalist for Statue Award for Best Number of Cars Sold Soundtrack) – EON Wira 1.8 Advertisement •Television Awards (Finalist for Proton Wira New Look Advertisement) 2004 •New York Festivals [Finalist for Proton Wira New Look • Homegrown Franchisor of the Year 2002/2003 by (Best Automotive)] Malaysian Franchise Association •Corporate Governance Merit Award by the Malaysian Business 1997 •Best Workplace Practices Category in the Asian • Most Television Awards (Statue Award for 1995 Corporate Social Responsibility (CSR) Award & 1996) •Best Environmental Practices Award by Institute of •Award for Distinction Creative 27 New York for Best Public Relations Malaysia (IPRM) Corporate TV Commercial Title: Elements • Best Employee Relations Practices Award by IPRM • Best Public Relations Practices Award by IPRM • Overall Champion IPRM Kristal Awards •Commendation for image building

96 EON BERHAD ANNUAL REPORT 2004 Milestones Within Two Decades

1979 1988 Tun Dr requested for a feasibility study •Production of Proton’s 100,000th car to be conducted for a Malaysian manufactured car •Proton Saga won two gold and one silver awards at the British International Motor Show 1980 Cabinet approved the establishment of Heavy Industries 1990 Corporation (Hicom) of Malaysia • The first unit of EON’s Proton stretched Limousine was presented to Tun Dr Mahathir Mohamad •Production of the 200,000th Saga • EON shares began trading on Bursa Malaysia 1981 Securities Berhad Tun Dr Mahathir Mohamad proposed the joint production of • Launch of EON’s new corporate logo a Malaysian car to Mr Yohei Mimura, President of Mitsubishi Corporation 1992 •Proton Saga Iswara was officially launched by Tun Dr 1982 Mahathir Mohamad at Dataran Merdeka •Tun Dr Mahathir Mohamad viewed the first sketch of • Kong Ming Bank Berhad was officially known as EON the proposed national car and subsequently followed Bank Berhad by a full-scale clay model presentation at Sultan Abdul • Datuk Adzmi Abdul Wahab was appointed Managing Aziz Shah Airport, Subang Director of EON Berhad • Cabinet approved the National Car Project and Tun Dr Mahathir officially announced that the joint venture negotiations were in progress •Hicom and Mitsubishi Corporation signed Letter of 1993 Intent and the Shah Alam land acquisition deal for • Launch of the Proton Wira Aeroback by the then Hicom’s Batu Tiga Industrial Estate was concluded Finance Minister, Dato Seri Anwar Ibrahim •Memorandum of Agreement between EON and Proton with Mr David Brown was signed to establish “Proton 1984 Cars Europe Ltd” to market Proton cars in Europe • Edaran Otomobil Nasional Sdn Bhd (EON) was incorporated as the sole national distributor of Proton cars 1994 •Saga was chosen as the official name of Proton’s first •Tun Dr Mahathir Mohamad presented a Proton model Limousine to the then President of Philippines, TYT •The late Tan Sri Jamil Jan and Tan Sri Eric Chia were Fidel Ramos the first appointed Chairman and Managing Director of •Proton and EON donated RM10.0 million each to Low EON respectively Cost Housing Project • EON opened public bookings for Proton Sagas •Dato’ Seri Najib Razak presented a Proton Limousine to President of Indonesia, TYT Suharto •EON Head Office in Glenmarie, Shah Alam was officiated by Tun Dr Mahathir Mohamad. A mock-key to 1985 the 521,000th customer was presented and the 24- EON organised a pre-launch “Sagarama”, a road tour of two hour Service Centre was officially open Saga 1.5S cars throughout Malaysia •Memorandum of Understanding between EON, EON Trading and Citra Lamtorogung Pesada to export Proton cars to Indonesia was signed

97 EON BERHAD ANNUAL REPORT 2004 Milestones Within Two Decades

1995 2001 • EON launched Proton Perdana, an instant seller in the • EON Autofair recorded a runaway success of more 2000cc category than 1,100 cars sold in one weekend •Membership for Sahabat EON rose to 123,298 as at 31 December 2001 from 9,910 in 2000 when it 1997 was launched • Launch of EON’s official homepage www.eon.com.my • EON dropped a Proton Wira in the North Pole to prove strength and prowess of the Malaysian car 2002 • EON won an award for its contribution to excise duties which exceeded RM7.2 billion since its inception by the Royal Customs and Excise Department in 1998 conjunction with World Customs Day •Mr Yeoh Eng Keat drove home RM10,000 richer in his • EON Sales and Service Dealers adopted new brand new Proton for being the one millionth customer standards whereby long-term partners were entitled to •Tun Dr Mahathir Mohamad officially launched the credit facilities, support and training Perdana V6 and Satria GTi at National Stadium, • PERT taking on the World’s Best Malaysian Team Bukit Jalil captures World Rally Championship 2002 • EON Merdeka Proton Drive – longest line up of 2,713 •EON posted the highest group pre-tax profit of Proton cars crossing the Penang Bridge led by RM905.9 million for the financial year ended 2002 Tun Dr Mahathir Mohamad • EON unlocked its shareholders value with special dividend of 450 sen • The official signing ceremony between Euromobil Sdn Bhd, a wholly-owned subsidiary of EON with Audi A.G. 1999 for the distribution and after sales service of their • EON was awarded Franchisor of the Year Award by vehicles in Malaysia Malaysian Franchise Association for its Exemplary franchise standards • EON&U magazine was introduced to enhance customer loyalty initiatives 2003 • EON launched affinity card programme Sahabat EON • EON participated in the 13th Non-Aligned Movement to offer customer convenience to Proton car owners (NAM) Summit in Kuala Lumpur. 130 Proton Perdana encountering breakdowns and accidents V6 Executive Special Edition Sedans were handed over •Proton Waja was launched to Wisma Putra •Distributorship Agreement with TD Cars (M) Sdn Bhd • EON bagged three IPRM Kristal Awards for Overall was signed at Putrajaya Crystal Award, Most PR Savvy CEO and Best Consumer Relations • EON was awarded MS ISO 9001:2000 certification for pre-sales, sales and after sales of motor vehicles by 2000 SIRIM Berhad and endorsed by the United Kingdom • Sahabat EON was launched by YB Dato’ Seri Dr Ling Accreditations System (UKAS) Liong Sik, then the Minister of Transport. Subscription • EON was awarded the Superbrands Status for the program exceeded 200,000 mark • Datuk Adzmi Abdul Wahab was awarded the Malaysia’s •A glossy customer relationship magazine that CEO of the Year which was organised by AMEX and educates, enlightens and entertains, EON&U magazine, Business Times was launched • Return of the Rings marked a grand launch of Audi • Launch of the classic TD • Hyundai marque was added to EON’s portfolio

98 EON BERHAD ANNUAL REPORT 2004 Statement of Directors’ Responsibility for Preparing the Financial Statements

The Directors are required by the

Companies Act, 1965 ("the Act") to prepare financial statements for each

In preparing the financial statements for the year ended financial year that give a true and fair 31 December 2004 set out on pages 100 to 163, the Directors have: view of the state of affairs of the • adopted appropriate accounting policies, consistently applied and supported by reasonable and prudent Company and the Group at the end judgements and estimates; • ensured that all applicable accounting standards have of the financial year and of the results been followed; and •prepared financial statements on the going concern and cash flows of the Company and basis as the Directors have a reasonable expectation, having made enquiries that the Company and the Group have adequate resources to continue in the Group for the financial year. As operational existence for the foreseeable future. required by the Act and the Listing The Directors have responsibility for ensuring that the Company and the Group keep accounting records that disclose with reasonable accuracy the financial position of Requirements of the Bursa Malaysia the Company and the Group that enable them to ensure that the financial statements comply with the Act. Securities Berhad, the financial The Directors have overall responsibility for taking such statements have been prepared in steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. accordance with the applicable This Statement is made in accordance with a resolution of approved accounting standards the Board of Directors dated 24 February 2005. in Malaysia and the provisions of the Act.

99 EON BERHAD ANNUAL REPORT 2004

102 Directors’ Report 108 Statement by Directors 108 Statutory Declaration 109 Report of the Auditors 110 Income Statements 111 Balance Sheets 113 Consolidated Statement of Changes in Equity

115 Company Statement of Changes in Equity FINANCIAL 116 Cash Flow Statements 118 Notes to the Financial STATEMENTS Statements Directors’ Report

The Directors have pleasure in submitting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2004.

PRINCIPAL ACTIVITIES The Company is principally engaged in the marketing of Proton motor vehicles and related spare parts and servicing of vehicles.

The principal activities of the subsidiaries and associates are described in Note 14 and 15 to the financial statements respectively.

There have been no significant changes in the activities of the Group and the Company during the financial year except for the Distribution of EON Capital Berhad (“ECB”) shares to the shareholders and the disposal of the Company’s interest in EONCAP Securities Sdn Bhd (formerly known as Leong & Company Sdn Bhd) (“L&C”) as disclosed in Note 32 to the financial statements.

FINANCIAL RESULTS Group Company RM’000 RM’000

Profit after tax 214,277 131,105 Minority interests (66,250) —

Net profit attributable to shareholders 148,027 131,105

DIVIDENDS The amount of dividends paid or declared by the Company since 31 December 2003 were as follows:

RM’000 In respect of the financial year ended 31 December 2003 as shown in the Directors’ Report of that year:

Final gross dividend of 22 sen per share, less income tax at 28%, paid on 14 June 2004 39,376

In respect of the financial year ended 31 December 2004:

Dividend in specie (net of tax) of ECB shares on the basis of 28.1 ECB shares for every 100 EON shares held, distributed on 14 July 2004 157,765

Interim gross dividend of 10 sen per share, less income tax at 28%, paid on 8 October 2004 17,906

175,671

The Directors now recommend the payment of a final gross dividend of 18 sen per share, less income tax at 28%, amounting to RM32,269,000 and a special gross dividend of 84 sen per share less income tax at 28%, amounting to RM150,591,000 for the financial year ended 31 December 2004, subject to shareholders’ approval at the forthcoming Annual General Meeting of the Company.

102 EON BERHAD ANNUAL REPORT 2004 Directors’ Report

RESERVES AND PROVISIONS All material transfers to or from reserves and provisions during the financial year are shown in the financial statements.

ISSUE OF SHARES During the financial year, 4,279,000 new ordinary shares of RM1.00 each were issued by the Company for cash by virtue of the exercise of options pursuant to the Company’s Employees’ Share Option Scheme at an average exercise price of RM6.12 per share.

The new ordinary shares issued during the financial year ranked pari passu in all respects with the existing ordinary shares of the Company.

A total of 626,237,823 ordinary shares were issued as bonus shares and immediately cancelled pursuant to the Court Order dated 14 June 2004 for the purpose of implementing the capital repayment of ECB shares as disclosed in Note 32 to the financial statements.

DIRECTORS The Directors who have held office during the period since the date of the last report are:

Y Bhg Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong Y Bhg Datuk Adzmi bin Abdul Wahab Y Bhg Dato’ Maznah bte Abdul Jalil Y Bhg Datuk Haji Faisal bin Siraj Mr Anthony Nightingale Y Bhg Datuk Choo Keng Kit Ms Vimala a/p V.R. Menon Y Bhg Dato’ Dr M. SHANmughalingam Y Bhg Datuk Wan Awang bin Wan Yaacob Y Bhg Tan Sri Saw Huat Lye Y Bhg Datuk Ir. (Dr) Ahmad Zaidee bin Laidin Encik Wan Mat bin Wan Sulaiman Y Bhg Dato’ Khalid bin Haji Ismail Encik Ahmad Othman bin Yahaya (ceased to be a director with effect from 18 February 2005) Mr Rin Nan Lun Puan Aziyah binti Bahauddin Y Bhg Datuk William Chong Wei Yoon (Alternate Director to Y Bhg Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong) Mr Adam Keswick (Alternate Director to Mr Anthony Nightingale) Mr Fumihiko Minami (Alternate Director to Mr Rin Nan Lun)

In accordance with Article 103 of the Company’s Articles of Association, Y Bhg Datuk Choo Keng Kit, Ms Vimala a/p V.R. Menon, Y Bhg Tan Sri Saw Huat Lye, Y Bhg Datuk Ir. (Dr) Ahmad Zaidee bin Laidin and Encik Wan Mat bin Wan Sulaiman retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for re-election.

103 EON BERHAD ANNUAL REPORT 2004 Directors’ Report

DIRECTORS’ BENEFITS During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being arrangements with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares of the Company or any other body corporate except for the options in respect of shares granted by the Company to eligible employees including certain Directors of the Company, pursuant to the Edaran Otomobil Nasional Berhad’s Employees’ Share Option Scheme.

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than benefits disclosed as Directors’ remuneration and benefits-in-kind in Note 6 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest other than as disclosed below and in Note 27 to the financial statements.

Y Bhg Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong and Mr Rin Nan Lun may be deemed to derive a benefit by virtue of credit facilities granted by ECB group (prior to the distribution of ECB shares to the shareholders) in the ordinary course of its business, to companies in which they are deemed to have an interest.

DIRECTORS’ INTERESTS IN SHARES According to the Register of Directors' shareholdings, the interests of Directors in office at the end of the financial year in shares in the Company and its related corporations were as follows:

Number of ordinary shares of RM1 each As at As at The Company 1.1.2004 Acquired Disposed 31.12.2004

Y Bhg Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong – direct 196,800 — — 196,800 – indirect * 72,968,000 — — 72,968,000 Y Bhg Datuk Adzmi bin Abdul Wahab – direct 78,000 125,000 — 203,000 Y Bhg Dato’ Maznah bte Abdul Jalil – direct 153,000 52,000 65,000 140,000 Y Bhg Datuk Choo Keng Kit – direct 71,000 62,000 133,000 — Ms Vimala a/p V.R. Menon – direct 67,000 112,000 67,000 112,000 Y Bhg Dato’ Khalid bin Haji Ismail – direct 5,000 — — 5,000 En Ahmad Othman bin Yahaya – indirect* 72,968,000 — — 72,968,000 Mr Rin Nan Lun – indirect* 25,277,000 4,876,400 — 30,153,400

104 EON BERHAD ANNUAL REPORT 2004 Directors’ Report

DIRECTORS’ INTERESTS IN SHARES (CONT’D.) Number of ordinary shares of RM1 each As at the date on which ECB As at ceased to be Subsidiary – EON Capital Berhad 1.1.2004 Acquired Disposed a subsidiary

Mr Rin Nan Lun – indirect* 36,289,367 9,380,319 — 45,669,686 Y Bhg Datuk Choo Keng Kit – direct 37 — 37 —

* Indirect interest represents shares held by companies in which the Directors are deemed to have an interest.

By virtue of their interests in shares in the Company, Y Bhg Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong, En Ahmad Othman bin Yahaya and Mr Rin Nan Lun are also deemed to have a substantial interest in the shares of the subsidiaries of the Company to the extent the Company has an interest.

DIRECTORS’ INTERESTS IN OPTIONS According to the Register of Directors’ shareholdings, the interests of Directors in office at the end of the financial year in the Employees’ Share Option Scheme of the Company were as follows:

Number of Share Options As at As at 1.1.2004 Granted Exercised 31.12.2004

Y Bhg Datuk Adzmi bin Abdul Wahab 125,000 — 125,000 — Y Bhg Dato’ Maznah bte Abdul Jalil 35,000 — 35,000 — Y Bhg Datuk Choo Keng Kit 62,000 — 62,000 — Ms Vimala a/p V.R. Menon 112,000 — 112,000 —

According to the Register of Directors’ shareholdings, no Director in office, other than those disclosed in the tables above, held any interest in shares and options over shares in the Company and its related corporations at the end of the financial year.

EMPLOYEES’ SHARE OPTION SCHEME The Edaran Otomobil Nasional Berhad’s Employees’ Share Option Scheme (“the Scheme”) which came into effect on 6 October 1999 expired on 5 October 2004. Details of the Scheme are set out in Note 25 to the financial statements.

No new options were granted under the Scheme during the financial year.

105 EON BERHAD ANNUAL REPORT 2004 Directors’ Report

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took reasonable steps:

(a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and

(b) to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business their values as shown in the accounting records of the Group and of the Company had been written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:

(a) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts, in the financial statements of the Group and of the Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

At the date of this report, there does not exist:

(a) any charge on the assets of the Group or the Company which has arisen since the end of the financial year which secures the liability of any other person; or

(b) any contingent liability of the Group or the Company which has arisen since the end of the financial year.

OTHER STATUTORY INFORMATION At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements that would render any amount stated in the financial statements misleading.

In the opinion of the Directors,

(a) except for the Distribution of ECB shares to the shareholders and the disposal of interest in L&C as disclosed in Note 32 to the financial statements, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and

(b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group or the Company for the financial year in which this report is made.

106 EON BERHAD ANNUAL REPORT 2004 Directors’ Report

AUDITORS The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with a resolution dated 24 February 2005.

TAN SRI DATO’ SERI (DR.) MOHD SALEH BIN SULONG CHAIRMAN

DATUK ADZMI BIN ABDUL WAHAB MANAGING DIRECTOR

Shah Alam 24 February 2005

107 EON BERHAD ANNUAL REPORT 2004 Statement by Directors pursuant to Section 169(15) of the Companies Act, 1965

We, Tan Sri Dato’ Seri (Dr.) Mohd Saleh bin Sulong and Datuk Adzmi bin Abdul Wahab, being two of the Directors of Edaran Otomobil Nasional Berhad, state that, in the opinion of the Directors, the financial statements set out on pages 110 to 163 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2004 and of the results and cash flows of the Group and of the Company for the financial year ended on that date and in accordance with the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965.

Signed on behalf of the Board of Directors in accordance with a resolution dated 24 February 2005.

TAN SRI DATO’ SERI (DR.) MOHD SALEH BIN SULONG DATUK ADZMI BIN ABDUL WAHAB CHAIRMAN MANAGING DIRECTOR

Shah Alam 24 February 2005

Statutory Declaration pursuant to Section 169(16) of the Companies Act, 1965

I, Vimala a/p V.R. Menon, the Director primarily responsible for the financial management of Edaran Otomobil Nasional Berhad, do solemnly and sincerely declare that the financial statements set out on pages 110 to 163 are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

VIMALA A/P V.R. MENON

Subscribed and solemnly declared by the abovenamed Vimala a/p V.R. Menon at Kuala Lumpur in Malaysia on 24 February 2005, before me.

JAYAM GNANAPRAGASAM COMMISSIONER FOR OATHS

108 EON BERHAD ANNUAL REPORT 2004 Report of the Auditors to the Shareholders of Edaran Otomobil Nasional Berhad (Company No. 119767-X)

We have audited the financial statements set out on pages 110 to 163. These financial statements are the responsibility of the Company’s Directors. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with approved auditing standards in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:

(a) the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true and fair view of:

(i) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and

(ii) the state of affairs of the Group and Company as at 31 December 2004 and of the results and cash flows of the Group and Company for the financial year ended on that date.

(b) the accounting and other records and the registers required by the Act to be kept by the Company and the subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company's financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under subsection (3) of Section 174 of the Act.

PRICEWATERHOUSECOOPERS MOHAMMAD FAIZ BIN MOHAMMAD AZMI (No. AF: 1146) (No. 2025/03/06 (J)) Chartered Accountants Partner of the firm

Kuala Lumpur 24 February 2005

109 EON BERHAD ANNUAL REPORT 2004 Income Statements for the financial year ended 31 December 2004

Group Company Note 2004 2003 2004 2003 RM'000 RM'000 RM'000 RM'000

Revenue 4 3,901,173 4,987,051 2,862,509 3,129,248 Cost of sales (3,114,746) (3,675,125) (2,636,625) (2,868,913)

Gross profit 786,427 1,311,926 225,884 260,335 Other operating income 30,697 88,644 94,578 66,750 Selling and distribution expenses (118,069) (146,925) (87,765) (101,187) Administrative expenses (284,693) (500,346) (86,106) (94,487) Loan loss and provisions (109,112) (177,348) — — Other operating expenses (11,510) (4,238) (10,874) (2,260)

Profit from operations 5 293,740 571,713 135,717 129,151 Finance cost 7 (31,916) (21,719) (165) (1,006) Share of results of associates 20,185 20,348 — — Net gain on disposal of investments 8 18,519 9,339 35,106 3,656

Profit before tax 300,528 579,681 170,658 131,801 Tax – Company and subsidiaries (80,292) (147,650) (39,553) (34,839) – Share of taxes in associates (5,959) (5,804) — —

9 (86,251) (153,454) (39,553) (34,839)

Profit after tax 214,277 426,227 131,105 96,962 Minority interests (66,250) (163,791) — —

Net profit attributable to shareholders 148,027 262,436 131,105 96,962

Gross dividends per share 10 200 sen 238 sen 200 sen 238 sen

Earnings per share – basic 11 60 sen 111 sen

110 EON BERHAD ANNUAL REPORT 2004 Balance Sheets as at 31 December 2004

Group Company Note 2004 2003 2004 2003 RM'000 RM'000 RM'000 RM'000

NON-CURRENT ASSETS

Property, plant and equipment 12 306,848 298,600 32,943 37,052 Investments 13 13,709 16,190 12,836 15,500 Subsidiaries 14 — — 65,432 848,770 Associates 15 111,984 151,539 40,421 52,578 Deferred tax assets 16 8,794 5,772 6,661 5,531

441,335 472,101 158,293 959,431

CURRENT ASSETS

Inventories 17 211,526 357,928 182,385 346,140 Receivables 18 256,440 101,382 220,690 98,576 Tax recoverable 885 43,892 — 34,826 Amounts due from subsidiaries 19 — — 296,626 221,637 Cash and bank balances and deposits with financial institutions 20 557,842 411,634 521,457 393,266

1,026,693 914,836 1,221,158 1,094,445

CURRENT LIABILITIES

Payables 21 242,903 244,971 226,449 240,693 Amounts due to subsidiaries 19 — — 11,381 1,234 Amounts due to associates 19 15,884 11,825 15,884 11,825 Taxation 15,857 5,659 13,901 4,168 Provisions for liabilities and charges 22 8,852 6,862 8,610 6,632

283,496 269,317 276,225 264,552

NET CURRENT ASSETS 743,197 645,519 944,933 829,893

NON-CURRENT LIABILITIES

Deferred tax liabilities 16 10,059 10,119 — — Provisions for retirement benefits 23 8,172 8,687 7,935 8,488 Long-term lease payables 24 1,056 580 1,056 580

19,287 19,386 8,991 9,068

111 EON BERHAD ANNUAL REPORT 2004 Balance Sheets as at 31 December 2004 (Cont’d.)

Group Company Note 2004 2003 2004 2003 RM'000 RM'000 RM'000 RM'000

DISCONTINUED OPERATIONS 26

BANKING ASSETS

Cash and bank balances and deposits with financial institutions 26(i) — 3,292,181 — — Dealing securities 26(ii) — 161,168 — — Investment securities 26(iii) — 4,443,270 — — Loans, advances and financing 26(iv) — 21,288,355 — — Statutory deposits with Bank Negara Malaysia 26(v) — 898,361 — — Receivables 26(vi) — 888,879 — — Tax recoverable — 5,194 — — Deferred tax assets 16 — 132,124 — — Property, plant and equipment 12 — 176,192 — —

— 31,285,724 — —

BANKING LIABILITIES

Deposits from customers 26(vii) — 20,522,860 — — Deposits and placements of banks and other financial institutions 26(viii) — 5,594,009 — — Obligation on securities sold under repurchase agreements — 402,119 — — Bills and acceptances payable — 1,114,764 — — Taxation — 71,010 — — Payables 26(ix) — 973,578 — — Provision for retirement benefits 23 — 2,605 — — Borrowings 26(x) — 290,563 — —

— 28,971,508 — —

NET BANKING ASSETS — 2,314,216 — —

1,165,245 3,412,450 1,094,235 1,780,256

SHARE CAPITAL 25 248,993 244,714 248,993 244,714 RESERVES 916,252 2,012,948 845,242 1,535,542

SHAREHOLDERS’ FUNDS 1,165,245 2,257,662 1,094,235 1,780,256 MINORITY INTERESTS — 1,154,788 — —

1,165,245 3,412,450 1,094,235 1,780,256

The banking assets and liabilities have been segregated in the balance sheet to reflect the discontinued operations following the distribution of ECB shares to the shareholders as disclosed in Note 32 to the financial statements.

112 EON BERHAD ANNUAL REPORT 2004 Consolidated Statement of Changes in Equity for the financial year ended 31 December 2004

Issued and fully paid ordinary shares Non-distributable Distributable Nominal Currency value of Share Statutory translation Other Retained Note RM1 each premium reserve differences reserves earnings Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2003 231,423 387,939 223,243 54,454 43,665 1,330,414 2,271,138

Reserves on consolidation —————4,582 4,582 Currency translation differences — — — 55 — — 55 Share of associates’ reserves — — — 843 — — 843 Share of an associate’s goodwill written off —————(153) (153) Reserves realised on divestment of interest in an investment* — — — (51,510) (43,665) 129,993 34,818 Incidental costs in connection with the dividend in specie of Jardine Cycle & Carriage Ltd’s (formerly known as Cycle & Carriage Ltd) (CCL) shares —————(2,401) (2,401)'

Net (losses)/gains not recognised in income statement — — — (50,612) (43,665) 132,021 37,744

Net profit attributable to shareholders —————262,436 262,436

Transfer to statutory reserve — — 79,169 — — (79,169) —

Dividends in respect of the financial year ended - 31 December 2002 —————(66,650) (66,650) - 31 December 2003 10 —————(334,336) (334,336)

Issue of shares - exercise of share options 25 13,291 74,039 ————87,330

At 31 December 2003 244,714 461,978 302,412 3,842 — 1,244,716 2,257,662

113 EON BERHAD ANNUAL REPORT 2004 Consolidated Statement of Changes in Equity for the financial year ended 31 December 2004 (Cont’d.)

Issued and fully paid ordinary shares Non-distributable Distributable Nominal Currency value of Share Statutory translation Retained Note RM1 each premium reserve differences earnings Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2004 244,714 461,978 302,412 3,842 1,244,716 2,257,662

Currency translation differences ———16—16 Share of associates’ reserves ———1,836 — 1,836 Effects on the distribution of ECB shares ——(332,224) — (92,946) (425,170) Incidental costs in connection with the distribution of ECB shares ————(2,020) (2,020)

Net (losses)/gains not recognised in income statement ——(332,224) 1,852 (94,966) (425,338)

Net profit attributable to shareholders ————148,027 148,027

Transfer to statutory reserve ——29,812 — (29,812) —

Dividends in respect of the financial year ended – 31 December 2003 10 ————(39,376) (39,376) – 31 December 2004 10 ————(175,671) (175,671)

Issue of shares – exercise of share options 25 4,279 21,899 — — — 26,178 – bonus issue 25 626,237 (475,510) — — (150,727) —

Cancellation of bonus shares 25 (626,237) ————(626,237)

At 31 December 2004 248,993 8,367 — 5,694 902,191 1,165,245

The Statutory Reserve was maintained by the banking group in compliance with Section 36 of the Banking and Financial Institutions Act, 1989.

* These reserves were in respect of the 13.1% equity interest in CCL retained by the Group after the completion of the partial divestment in the previous year.

114 EON BERHAD ANNUAL REPORT 2004 Company Statement of Changes in Equity for the financial year ended 31 December 2004

Issued and fully paid ordinary Non- shares distributable Distributable Nominal value of Share Retained Note RM1 each premium earnings Total RM’000 RM’000 RM’000 RM’000

At 1 January 2003 231,423 387,939 1,379,989 1,999,351

Incidental costs in connection with the dividend in specie of CCL shares — — (2,401) (2,401)

Net profit attributable to shareholders — — 96,962 96,962

Dividends in respect of the financial year ended – 31 December 2002 — — (66,650) (66,650) – 31 December 2003 10 — — (334,336) (334,336)

Issue of shares – exercise of share options 25 13,291 74,039 — 87,330

At 31 December 2003 244,714 461,978 1,073,564 1,780,256

At 1 January 2004 244,714 461,978 1,073,564 1,780,256

Incidental costs in connection with the distribution of ECB shares ——(2,020) (2,020)

Net profit attributable to shareholders ——131,105 131,105

Dividends in respect of the financial year ended – 31 December 2003 10 — — (39,376) (39,376) – 31 December 2004 10 — — (175,671) (175,671)

Issue of shares – exercise of share options 25 4,279 21,899 — 26,178 – bonus shares 626,237 (475,510) (150,727) —

Cancellation of bonus shares (626,237) — — (626,237)

At 31 December 2004 248,993 8,367 836,875 1,094,235

Retained earnings The Company has sufficient tax credits under Section 108 of the Income Tax Act, 1967 and tax exempt income under Section 12 of the Income Tax (Amendment) Act, 1999 to frank all of its retained earnings as dividends.

115 EON BERHAD ANNUAL REPORT 2004 Cash Flow Statements for the financial year ended 31 December 2004

Group Company Note 2004 2003 2004 2003 RM'000 RM'000 RM'000 RM'000

CASH FLOWS FROM OPERATING ACTIVITIES

Net profit attributable to shareholders 148,027 262,436 131,105 96,962

Adjustments for investing and financing items and non-cash items

Tax 86,251 153,454 39,553 34,839 Minority interests 66,250 163,791 — — Profit retained in associates (20,185) (20,348) — — Depreciation of property, plant and equipment 35,809 50,229 14,229 15,361 Amortisation of premium less accretion of discounts of investments 23,284 38,357 — — Loan loss and provisions 109,112 177,348 — — Net interest suspended 43,517 81,539 — — Property, plant and equipment written off 176 1,799 66 11 Unrealised loss/(gain) on foreign exchange of the banking group 7,146 (7,684) — — Net write-back for retirement benefits (222) (2,549) (410) (1,504) Provisions for liabilities and charges 10,674 7,299 10,332 7,203 Allowance for impairment of investment securities 5,278 34,948 501 — Allowance of doubtful amounts due from subsidiaries — — 1 32 Gain on disposal of an associate (18,281) — (34,868) — Net gain on sale of dealing and investment securities (10,901) (84,413) (238) (3,656) Gain on sale of property, plant and equipment (1,515) (2,794) (606) (702) Interest expense 31,916 21,719 165 1,006 Interest income (8,723) (1,698) (20,321) (14,961) Dividend income (1,363) (12,152) (65,649) (43,486) Income from investment securities (108,735) (218,136) — —

Operating profit before working capital changes 397,515 643,145 73,860 91,105 Decrease in dealing securities 77,864 824,517 — — Increase in loans, advances and financing (668,797) (1,218,085) — — Decrease in inventories 146,402 176,142 163,756 185,139 (Increase)/decrease in receivables (64,772) 224,384 (121,873) 114,368 Increase in statutory deposits with Bank Negara Malaysia (6,640) (33,148) — — Increase in deposits from customers 1,000,717 2,303,506 — — Decrease in deposits and placements of banks and other financial institutions (680,221) (1,668,131) — — Decrease in obligations on securities sold under repurchase agreements (188,338) (766,277) — — (Decrease)/increase in bills and acceptances payable (175,870) 959,199 — — Decrease in provisions for liabilities and charges (8,684) (11,222) (8,354) (11,079) Decrease in payables (385,551) (402,427) (15,326) (148,793) Increase in amount due from subsidiaries — — — (17,824) Increase in amount due to associates 4,059 2,018 4,059 2,018

Cash (used)/generated from operations (552,316) 1,033,621 96,122 214,934 Interest received 8,723 1,698 14,586 10,232 Interest paid (165) (1,006) (165) (1,006) Income tax paid, net of refund (27,900) (236,305) 21,718 (75,209)

Net cash flow from operating activities (571,658) 798,008 132,261 148,951

116 EON BERHAD ANNUAL REPORT 2004 Cash Flow Statements for the financial year ended 31 December 2004 (Cont’d.)

Group Company Note 2004 2003 2004 2003 RM'000 RM'000 RM'000 RM'000

CASH FLOWS FROM INVESTING ACTIVITIES

Interest received from investment securities 93,250 222,970 — — Dividends received from investment securities 1,029 3,872 172 172 Dividends received from associates 26,891 10,266 26,891 10,266 Dividends received from subsidiaries — — 20,744 14,992 Proceeds from sale of property, plant and equipment 4,407 5,861 2,595 1,483 Proceeds from disposal of an associate 48,135 — 48,135 — Purchase of property, plant and equipment (52,373) (70,522) (8,978) (13,510) Proceeds from sales, net of purchases of investment securities 754,780 153,896 2,738 49,547 Additional investment in an associate (1,110) (8,583) (1,110) (8,583) Additional investment in subsidiaries — (65,126) (1,000) (65,226) Advances to subsidiaries — — (59,351) — Cash and cash equivalent of ECB group excluded following the distribution of the shares 26 (4,231,972) — — —

Net cash flow from investing activities (3,356,963) 252,634 30,836 (10,859)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of shares 26,178 87,330 26,178 87,330 Proceeds/(repayment) from borrowings 843,079 (130,997) — (130,997) Payment of finance lease (1,782) (1,137) (1,782) (1,137) Payment of interest on bonds (9,336) (18,750) — — Payment of incidental costs in connection with distribution of ECB shares (2003: dividend the in specie of CCL shares) (2,020) (2,401) (2,020) (2,401) Payment of cash dividends (73,471) (119,131) (57,282) (119,131)

Net cash flow from financing activities 782,648 (185,086) (34,906) (166,336)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (3,145,973) 865,556 128,191 (28,244)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 3,703,815 2,838,259 393,266 421,510

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 557,842 3,703,815 521,457 393,266

Represented by:

Non-banking assets 20 557,842 411,634 521,457 393,266 Banking assets — 3,292,181 — —

557,842 3,703,815 521,457 393,266

117 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

1 GENERAL INFORMATION

The Company is principally engaged in the marketing of Proton motor vehicles and related spare parts and servicing of vehicles.

The principal activities of the subsidiaries and associates are described in Note 14 and 15 to the financial statements respectively.

There have been no significant changes in the activities of the Group and the Company during the financial year except for the Distribution of ECB shares to the shareholders and the disposal of the Company’s interest in L&C as disclosed in Note 32 to the financial statements.

The number of employees in the Group and in the Company at the end of the financial year were 3,029 (2003: 8,097) and 2,750 (2003: 2,985) respectively.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main Board of Bursa Malaysia.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 24 February 2005.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial statements of the Group and Company have been prepared under the historical cost convention except as disclosed in this summary of significant accounting policies.

The financial statements comply with the applicable approved accounting standards in Malaysia and the provisions of the Companies Act 1965.

There are no changes in the accounting policy of the Group during the financial year.

(b) Basis of consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to the end of the financial year. Subsidiaries are those companies in which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from their activities.

Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method of accounting, the results of subsidiaries acquired or disposed during the financial year are included in the consolidated income statement from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. At the date of acquisition, the fair values of the subsidiaries’ net assets are determined and these values are reflected in the consolidated financial statements. The difference between the cost of acquisition over the fair value of the Group’s share of the subsidiaries’ identifiable net assets at the date of acquisition is reflected as goodwill or reserve arising on consolidation.

All intercompany transactions, balances and unrealised profits or losses on transactions between group companies are eliminated on consolidation and the consolidated financial statements reflect external transactions only. Unrealised losses are not eliminated if the costs cannot be recovered.

118 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

(b) Basis of consolidation (Cont’d.)

Minority interest is measured at the minorities’ share of the post acquisition fair values of the identifiable assets and liabilities of the acquiree. Separate disclosure is made of minority interests.

(c) Goodwill or reserve arising on consolidation

Goodwill or reserve arising on consolidation represents the difference between the cost of acquisition of subsidiaries and associates over the fair value of the Group’s share of their identifiable net assets at the date of acquisition. Goodwill or reserve arising on consolidation is written off against reserves in the year of acquisition.

(d) Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Freehold land and construction-in-progress of properties are not depreciated. Other property, plant and equipment are depreciated on a straight line basis over their estimated useful lives at the following annual depreciation rates:

Leasehold land Over the period of the lease Buildings and renovations Freehold buildings and long term leasehold buildings 2% Short term leasehold buildings Over the period of the lease Renovations 20% to 33 1/3% Machinery, equipment and vehicles Plant and machinery 20% Furniture, fixtures, fittings and office equipment 15% to 33 1/3% Motor vehicles 20%

At each balance sheet date, the Group assesses whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of the property, plant and equipment is fully recoverable. A write down is made if the carrying amount exceeds the recoverable amount.

(e) Subsidiaries

Investment in subsidiaries are stated at cost and written down when, in the opinion of the Directors, there is an impairment in value of the investments.

(f) Associates

An associate is a company other than a subsidiary in which the Group has a long term equity investment of between 20% to 50% and where the Group has representation on the board and is in a position to exercise significant influence over its financial and operating policy decisions but not control over those policies.

119 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

(f) Associates (Cont’d.)

Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting. Equity accounting involves recognising in the income statement the Group’s share of the results of associates for the financial year based on the latest available audited or management financial statements of the associates concerned.

Unrealised gains on transactions between the group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence on impairment of the asset transferred.

The Group’s investment in associates is carried in the balance sheet at an amount that reflects its share of the net assets of the associates. Where necessary, in applying the equity method, adjustments are made to the financial statements of associates to ensure consistency of accounting policies with those of the Group.

Investments in associates are stated at cost and written down when, in the opinion of the Directors, there is an impairment in value of the investments.

(g) Investments

Investments are stated at cost. Where an indication of impairment exists, the carrying amount is assessed and written down immediately to its recoverable amount.

(h) Impairment of assets

Property, plant and equipment and other non-current assets are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s net selling price and value in use.

The impairment loss is included in the income statement in the period in which the impairment is identified.

(i) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost of vehicles and accessories are stated at purchase cost determined on the first-in, first-out basis. Cost comprises where appropriate, materials, labour, the appropriate proportion of overhead costs. Cost of spare parts is determined on the weighted average basis. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses.

(j) Trade receivables

Trade receivables are carried at invoiced amount less an estimate made for doubtful debts. Specific allowances are made for doubtful debts which have been individually reviewed and specifically identified as bad or doubtful.

120 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

(k) Cash and cash equivalents

Cash and cash equivalents consist of cash in hand, bank balances and deposits with financial institutions that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(l) Provisions for warranty and free service

Provisions are based on expected levels of claims arising during the warranty and free service period.

(m) Tax

Tax on the profit or loss for the year comprises current and deferred tax. Current tax expense is determined based on profit for the year adjusted for tax purposes to comply with Malaysian tax laws.

Deferred taxation is recognised in full using the liability method, on temporary differences arising between the amounts attributable to assets and liabilities for tax purposes and their carrying amounts in the financial statements.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and/or unutilised tax losses can be utilised.

(n) Revenue recognition

Revenue, net of taxes and discounts is recognised upon delivery of goods and services and customer acceptance.

(o) Other income recognition

(i) Interest income is recognised on an accrual basis unless collectibility is in doubt.

(ii) Dividend income is recognised when the shareholders’ right to receive is established.

(p) Employee benefits

(i) Short-term employee benefits

Wages, salaries, bonuses, annual leave entitlement, medical leave, and other short-term employee benefits are recognised in the period in which the associated services are rendered by the employees.

(ii) Post-employment benefits

Defined contribution plan

The Group contributes to the Employees Provident Fund which is a defined contribution plan regulated and managed by the government. The contributions are charged to the income statement in the period to which they relate.

121 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

(p) Employee benefits (Cont’d.)

Defined benefit plan

The Company operates an unfunded (where a separate fund is not set up) defined benefit scheme for all eligible employees as stipulated in the Collective Agreement with its union employees.

The retirement benefits provided in the financial statements of the Company have been calculated by reference to an actuarial valuation using the Projected Unit Credit method.

(iii) Equity compensation benefits

Details of the Company’s Employees’ Share Option Scheme are set out in Note 25 to the financial statements. The Company does not make a charge to the income statement in connection with the share options granted. When the share options are exercised, the proceeds, net of any transaction costs, are credited to the share capital and share premium accounts.

(q) Foreign currencies

Foreign currency transactions are accounted for at exchange rates prevailing at the transaction dates. Exchange differences arising from the settlement of foreign currency transactions are included in the income statement.

The principal closing rates used in the translation of foreign currency amounts were as follows:

Foreign currency 31.12.2004 31.12.2003 RM RM

1 United States Dollar 3.8000 3.800 1 Euro Dollar 5.1049 4.800 1 Australian Dollar 2.9310 2.825 100 Japanese Yen 3.4800 3.600

(r) Financial Instruments

A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.

(i) Financial instruments recognised in the balance sheet

The recognition method adopted is disclosed in the policy statement associated with each item.

(ii) Financial instruments not recognised in the balance sheet

Forward foreign exchange contract

The Group enters into forward foreign exchange contracts to hedge risks associated with foreign exchange fluctuations.

122 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

(r) Financial Instruments (Cont’d.)

(ii) Financial instruments not recognised in the balance sheet (Cont’d.)

Forward foreign exchange contract (Cont’d.)

Exchange gains and losses arising on contracts entered into as hedges of anticipated future transactions are deferred until the date of such transaction, at which time they are included in the measurement of such transactions. Exchange gains and losses relating to hedge instruments are recognised in the income statement in the same period as the exchange differences on the underlying hedged items.

(iii) Fair value estimation

Where available, quoted and observable market prices are used as the measure of fair values. Where such quoted and observable market prices are not available, fair values are estimated based on a range of methodologies and assumptions regarding risk characteristics of various financial instruments, discount rates, estimates of future cash flows, net tangible assets backing and other factors. Changes in the uncertainties and assumptions could materially affect these estimates and the resulting fair value estimates.

The carrying values for financial assets and liabilities with maturity of less than one year are assumed to approximate their fair values.

The carrying values for financial assets and liabilities of the Group and Company at the balance sheet date approximated their fair value except as disclosed in the relevant notes to the financial statements.

3 USE OF FINANCIAL INSTRUMENTS

Financial risk management objectives and policies

(a) Interest rate risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

The Group and Company’s interest rate risk exposure are limited to the impact of rate changes on their interest bearing assets such as deposits with financial institutions.

(b) Market risk

Market risk is the potential loss which can arise due to adverse changes in the level of market prices or price- influencing parameters in the financial markets. The adverse changes can occur in interest rate, foreign exchange and equity markets.

The Company does not have any significant exposure to market risk. The Group is exposed to foreign currency risk as a result of the foreign currency transactions entered into by the Group. To limit its exposure to foreign currency exchange movements, the Group enters into foreign currency forward contracts.

123 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

3 USE OF FINANCIAL INSTRUMENTS (CONT’D.)

(c) Credit risk

Credit risk is the potential loss arising from customers or counterparties failing to meet their financial contractual obligations.

The Group and Company have no significant concentration of credit risks. Allowances are made for bad and doubtful debts where necessary. The Group and Company’s historical experience in the collection of accounts receivable falls within the recorded allowances.

(d) Liquidity risk

Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet its current and future payment obligations associated with financial obligations when they fall due.

Prudent liquidity risk management implies maintaining sufficient cash, highly liquid investments and the availability of funding through an adequate amount of committed credit facilities. The Group and Company monitor their liquidity position on a daily basis.

(e) Operational risk

Operational risk, which is inherent in all business activities, is the risk of loss resulting from inadequate or failed internal processes or systems, human factors or external events. Such risk manifests itself in various breakdowns, errors and business interruptions and can potentially result in financial losses.

The operational risks within the Group and Company are fairly limited and managing these risks are primarily the responsibility of each business and support unit. Each level of management is responsible for the appropriateness and effectiveness of policies, processes, procedures and controls. The Group and Company have established clear lines of authority, responsibility and reporting to maintain accountability and ensure that the necessary resources are available to manage the operational risks. A risk management framework which has been established within the Group and Company further assists the business and support units in the management of the operational risks.

4 REVENUE

Revenue for the Group comprises sales of goods and services net of discounts, returns and government duties and taxes, net commission earned and rental income. Interest income, fee income and Islamic Banking income of the banking and financial services sector are included up to the completion of the distribution of ECB shares as disclosed in Note 32 to the financial statements.

Revenue for the Company comprises sales of motor vehicles, accessories and related spare parts net of discounts, returns and government duties and taxes, net commission earned and revenue from after sales services.

124 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

4 REVENUE (CONT’D.) Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Analysis of revenue:

Motor Vehicles and accessories 2,760,194 2,878,073 2,649,805 2,885,301 Parts, after sales services and others 215,222 246,958 212,704 243,947 Banking and financial services Interest income 806,293 1,662,412 — — Fee and Islamic Banking income 119,464 199,608 — —

3,901,173 4,987,051 2,862,509 3,129,248

5 PROFIT FROM OPERATIONS Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

The profit from operations is arrived at: After charging/(crediting):

Auditors’ remuneration 385 555 105 124 Staff costs 218,966 345,795 93,153 98,597 Voluntary staff separation (“VSS”) cost 13,662 — 12,500 — Directors’ remuneration (Note 6) 3,462 3,857 3,131 2,870 Depreciation of property, plant and equipment 35,809 50,229 14,229 15,361 Rental of premises from: – a subsidiary — — 12,086 14,662 – others 19,978 34,001 5,352 6,011 Property, plant and equipment written off 176 1,799 66 11 Rental of equipment 3,644 4,662 438 301 Amortisation of premium less accretion of discounts of investments 23,284 38,357 — — Allowance for impairment of investment securities 5,278 34,948 501 — Provisions of liabilities and charges 10,674 7,299 10,332 7,203 Net write-back for retirement benefits (222) (2,549) (410) (1,504) Allowances for doubtful amounts due from subsidiaries — — 1 32

125 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

5 PROFIT FROM OPERATIONS (CONT’D.) Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Gross dividends from investments in: – unquoted associates — — (37,333) (14,212) – unquoted subsidiaries — — (5,571) (20,822) – quoted subsidiaries in Malaysia — — (22,573) — – quoted investments in Malaysia (1,363) (3,872) (172) (172) – quoted investments outside Malaysia — (8,280) — (8,280) Rental income (388) (463) (124) (128) Interest income from: – subsidiaries — — (11,881) (13,341) – others (8,723) (1,698) (8,440) (1,620) Gain on sale of property, plant and equipment (1,515) (2,794) (606) (702) Net gain on sale of dealing and investment securities (10,663) (75,074) — — Net (gain)/loss on foreign exchange of the banking group – realised (10,388) 36 — — – unrealised 7,146 (7,684) — —

The contribution to the Employees Provident Fund included in staff cost and directors’ remuneration amounted to RM29,262,000 (2003: RM45,885,000) for the Group and RM12,635,000 (2003: RM13,483,000) for the Company.

6 DIRECTORS’ REMUNERATION Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Fees 859 1,497 575 612 Salaries, bonuses and allowances 2,603 2,360 2,556 2,258

3,462 3,857 3,131 2,870

The estimated monetary value of other benefits not included in the above received by Directors of the Company 305 252 299 247

126 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

7 FINANCE COST Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Interest expense from: – borrowings 31,751 21,664 — 951 – finance lease liabilities 165 55 165 55

31,916 21,719 165 1,006

8NET GAIN ON DISPOSAL OF INVESTMENTS

Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Gain on disposal of investments 238 9,339 238 3,656 Gain on disposal of investment in an associate 18,281 — 34,868 —

18,519 9,339 35,106 3,656

9TAX Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

In Malaysia Current tax: – Company and subsidiaries 90,851 159,226 40,287 31,411 – Associates 5,959 5,804 — — (Over)/under provision in prior years (4,419) (24,315) 396 (1,592) Deferred tax (Note 16) (6,140) 12,739 (1,130) 5,020

86,251 153,454 39,553 34,839

127 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

9TAX (CONT’D.) Deferred tax comprised the following: Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Origination and reversal of temporary differences: – property, plant and equipment 3,017 9,745 (571) (133) – provisions (5,855) 6,695 (559) 5,153 – general provisions for loan losses (1,845) (3,653) — — – profit equalisation reserves (902) (411) — — – amortisation of premium net of accretion of discounts 137 (12,041) — — – tax losses (692) 12,404 — —

(6,140) 12,739 (1,130) 5,020

Reconciliation of the profit before tax and tax expense:

Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Profit before tax 300,528 579,681 170,658 131,801

Tax at 28% (2003: 28%) 84,148 162,311 47,784 36,904 Tax effects of the following: – non-deductible expenses 13,911 12,499 1,742 1,129 – non-taxable income (5,757) (3,161) (10,369) (1,105) Differences in tax rates on foreign income — (497) — (497) Unrecognised tax losses 397 452 — — (Over)/under provision in prior years (4,419) (24,315) 396 (1,592) (Over)/under provision in prior years’ deferred tax (1,124) 6,165 — — Utilisation of prior years’ tax losses (905) — — —

Tax 86,251 153,454 39,553 34,839

128 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

10 DIVIDENDS

Dividends paid or proposed in respect of the financial years are as follows:

Group and Company 2004 2003 Amount of Amount of Gross dividend Gross dividend per share net of tax per share net of tax Sen RM’000 Sen RM’000

Dividend in specie of shares in CCL ——196 299,973 Dividend in specie of shares in ECB 88 157,765 —— Interim dividend 10 17,906 6 10,309 Special interim dividend 0014 24,054 Proposed final dividend 18 32,269 22 38,763 Proposed special final dividend 84 150,591 —— Final dividend underprovided — 613

200 358,531 238 373,712

At the forthcoming Annual General Meeting of the Company, a final gross dividend of 18 sen per share less income tax at 28% (2003: 22 sen per share less income tax at 28%), amounting to RM32,269,000 (2003: RM39,376,000) and a special final dividend of 84 sen per share less income tax at 28%, amounting to RM150,591,000 in respect of the financial year ended 31 December 2004 will be proposed for shareholders’ approval.

11 EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the financial year.

Group 2004 2003

Net profit attributable to shareholders (RM’000) 148,027 262,436 Weighted average number of ordinary shares in issue (‘000) 247,930 235,427

Basic earnings per share (sen) 60 111

The diluted earnings per share was not calculated as the conversion of the share options under the Company’s Employees’ Share Option Scheme which expired on 5 October 2004 were anti-dilutive.

129 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

12 PROPERTY, PLANT AND EQUIPMENT

Land Buildings Machinery, Construction Long-term Short-term and equipment in Freehold Leasehold Leasehold renovations and vehicles progress Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

2004

Cost

At 1 January – non-banking assets 112,832 8,032 12,714 181,982 145,604 1,822 462,986 – banking assets 10,836 7,804 1,250 93,854 152,884 — 266,628

123,668 15,836 13,964 275,836 298,488 1,822 729,614 Additions ———15,301 38,409 1,860 55,570 Disposals and write-offs ——(228) (783) (21,999) — (23,010) Effects on Distribution of ECB shares (10,836) (7,804) (1,022) (98,358) (170,708) — (288,728) Reclassifications ———1,462 — (1,462) —

At 31 December 112,832 8,032 12,714 193,458 144,190 2,220 473,446

Accumulated depreciation

At 1 January – non-banking assets — 820 2,975 49,393 111,198 — 164,386 – banking assets —86222 19,189 70,939 — 90,436

— 906 3,197 68,582 182,137 — 254,822 Charge for the year —86359 9,471 25,893 — 35,809 Disposals and write-offs —— (429) (19,513) — (19,942) Effects on Distribution of ECB shares — (88) (233) (22,989) (80,781) — (104,091)

At 31 December — 904 3,323 54,635 107,736 — 166,598

Net Book Value At 31 December 112,832 7,128 9,391 138,823 36,454 2,220 306,848

130 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

12 PROPERTY, PLANT AND EQUIPMENT (CONT’D.)

Land Buildings Machinery, Long-term Short-term and equipment Construction Freehold Leasehold Leasehold renovations and vehicles in progress Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

2003

Cost

At 1 January 123,684 15,836 13,720 314,218 347,035 297 814,790 Additions — — 697 12,609 56,030 2,535 71,871 Disposals and write-offs (16) — (413) (50,712) (105,906) — (157,047) Reclassifications — — (40) (279) 1,329 (1,010) —

At 31 December 123,668 15,836 13,964 275,836 298,488 1,822 729,614

Accumulated depreciation

At 1 January — 822 3,143 105,256 247,553 — 356,774 Charge for the year — 84 398 12,978 36,769 — 50,229 Disposals and write-offs — — (344) (49,652) (102,185) — (152,181)

At 31 December — 906 3,197 68,582 182,137 — 254,822

Net Book Value At 31 December 123,668 14,930 10,767 207,254 116,351 1,822 474,792

Represented by:

Non-banking assets 112,832 7,212 9,739 132,589 34,406 1,822 298,600 Banking assets 10,836 7,718 1,028 74,665 81,945 — 176,192

123,668 14,930 10,767 207,254 116,351 1,822 474,792

131 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

12 PROPERTY, PLANT AND EQUIPMENT (CONT’D.)

Long-term Buildings Machinery, leasehold and equipment land renovations and vehicles Total RM’000 RM’000 RM’000 RM’000

Company

2004

Cost

At 1 January 1,850 16,524 129,916 148,290 Additions — 1,640 10,535 12,175 Disposals and write-offs — (416) (19,067) (19,483)

At 31 December 1,850 17,748 121,384 140,982

Accumulated depreciation

At 1 January 191 11,128 99,919 111,238 Charge for the year 19 1,556 12,654 14,229 Disposals and write-offs — (398) (17,030) (17,428)

At 31 December 210 12,286 95,543 108,039

Net Book Value At 31 December 1,640 5,462 25,841 32,943

2003

Cost

At 1 January 1,850 15,546 122,938 140,334 Additions — 1,342 13,517 14,859 Disposals and write-offs — (364) (6,539) (6,903)

At 31 December 1,850 16,524 129,916 148,290

Accumulated depreciation

At 1 January 172 9,895 91,921 101,988 Charge for the year 19 1,597 13,745 15,361 Disposals and write-offs — (364) (5,747) (6,111)

At 31 December 191 11,128 99,919 111,238

Net Book Value At 31 December 1,659 5,396 29,997 37,052

132 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

12 PROPERTY, PLANT AND EQUIPMENT (CONT’D.)

During the year, the Group and Company acquired property, plant and equipment with a cost of RM3,197,000 (2003: RM1,349,000) by means of finance lease arrangements.

Net book value of property, plant and equipment for the Group and Company purchased under finance lease arrangement is RM2,745,000 (2003: RM1,229,000).

13 INVESTMENTS Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

At cost

Quoted shares in Malaysia 7,776 7,257 7,593 7,257 Unquoted shares 6,862 9,361 5,744 8,243

14,638 16,618 13,337 15,500 Less:Allowance for impairment in value of investments (929) (428) (501) —

13,709 16,190 12,836 15,500

Market value of quoted shares in Malaysia 9,144 7,250 9,144 7,250

14 SUBSIDIARIES Company 2004 2003 RM’000 RM’000

Quoted shares, at cost — 784,338

Unquoted shares, at cost 75,534 74,534 Less: Allowance for impairment in value of investments (10,102) (10,102)

65,432 64,432

65,432 848,770

Market value of quoted shares — 1,555,772

133 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

14 SUBSIDIARIES (CONT’D.)

The subsidiaries, all of which are incorporated in Malaysia, are as follows:

Effective Name of subsidiary equity interest Principal activities 2004 2003 % %

Held by the Company:

EON Trading Sdn Bhd 100.0 100.0 Marketing and trading of car accessories and car care products, selling of innovative merchandise and general trading

EON Properties Sdn Bhd 100.0 100.0 Investment in and management of properties

Automotive Conversion 100.0 100.0 Conversion and modification of Engineering Sdn Bhd motor vehicles and marketing and distribution of car accessories

Euromobil Sdn Bhd 100.0 100.0 Marketing of the Audi motor vehicles and related spare parts and servicing of vehicles

EONMobil Sdn Bhd 100.0 0.00 Distribution and marketing of non-Proton motor vehicles

EON Auto Mart Sdn Bhd 100.0 100.0 Dormant

Liku Nostalgia Sdn Bhd 100.0 100.0 Dormant

EON Technologies Sdn Bhd 100.0 100.0 Dormant

EON Resorts Sdn Bhd 100.0 100.0 Dormant

Corporate Galaxy Sdn Bhd 100.0 100.0 Dormant

EON Capital Berhad — 50.1 Investment holding company

134 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

14 SUBSIDIARIES (CONT’D.) Effective Name of subsidiary equity interest Principal activities 2004 2003 % %

Held by EON Trading Sdn Bhd:

EON Inovasi Sdn Bhd 100.0 100.0 Dormant

Held by EON Technologies Sdn Bhd:

EON Network Systems Sdn Bhd 100.0 100.0 Dormant

Held by EON Capital Berhad:

EON Bank Berhad — 50.1 Commercial banking

Held by EON Bank Berhad:

EON Finance Berhad — 50.1 Finance company Malaysian International Merchant Bankers Berhad — 50.1 Merchant banking EB Nominees (Tempatan) Sdn Bhd — 50.1 Nominees services EB Nominees (Asing) Sdn Bhd — 50.1 Nominees services EB Realty Sdn Bhd — 50.1 Property investment OBB Realty Sdn Bhd — 50.1 Property investment Oriental Nominee (Tempatan) Sdn Bhd — 50.1 Nominees services OFB Berhad — 50.1 Dormant

Held by EON Finance Berhad:

CFB Asa Berhad — 50.1 Dormant CFB Nominees (Tempatan) Sdn Bhd — 50.1 Dormant PFB Asa Berhad — 50.1 Dormant Perkasa Nominees (Tempatan) Sdn Bhd — 50.1 Dormant

Held by Malaysian International Merchant Bankers Berhad:

MIMB Nominees (Tempatan) Sdn Bhd — 50.1 Nominees services MIMB Nominees (Asing) Sdn Bhd — 50.1 Nominees services

135 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

15 ASSOCIATES Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Unquoted shares: Investment at cost 62,939 74,496 62,939 74,496 Goodwill written off (1,221) (8,488) — —

61,718 66,008 62,939 74,496 Advance subscription monies — 600 — 600 Share of post acquisition profits and reserves less losses 72,405 107,070 — —

134,123 173,678 62,939 75,096 Less: Allowance for impairment in value of investments (22,139) (22,139) (22,518) (22,518)

111,984 151,539 40,421 52,578

Total interest in associates is represented by: Share of net assets of associates 134,123 173,078 Add: Advance subscription monies — 600 Less: Allowance for impairment in value of unquoted investments (22,139) (22,139)

111,984 151,539

136 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

15 ASSOCIATES (CONT’D.)

The associates are as follows: Effective Name of associate equity interest Principal activities 2004 2003 % %

Incorporated in Malaysia:

Proton Parts Centre Sdn Bhd 40.0 40.0 Warehousing and distribution of motor vehicle spare parts and accessories

SRT-EON Security Services Sdn Bhd + 40.0 40.0 Provision of security services

HICOM Megah Sdn Bhd 36.0 36.0 Property development and investment holding

EONCAP Securities Sdn Bhd (formerly known as Leong & Company Sdn Bhd) + — 30.0 Stockbroking

Johnson Controls Automotive 30.0 30.0 Manufacturing of car seats, seat Holding (M) Sdn Bhd paddings, steering wheels, and other car interior parts for the group and investment holding and property letting for the company

Incorporated in the United Kingdom:

Proton Cars (Europe) Limited* 44.4 44.4 Dormant

+ Associates not audited by PricewaterhouseCoopers * Associates audited by PricewaterhouseCoopers’ associates

137 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

16 DEFERRED TAXATION

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same authority. The following amounts are determined after appropriate offsetting.

Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

At the beginning of the financial year 127,777 140,516 5,531 10,551 Credited/(charged) to the income statement 6,140 (12,739) 1,130 (5,020) Effects on Distribution of ECB shares (135,182) — — —

(1,265) 127,777 6,661 5,531

` Represented by: Deferred tax assets – non-banking assets 8,794 5,772 6,661 5,531 – banking assets — 132,124 — —

8,794 137,896 6,661 5,531 Deferred tax liabilities (10,059) (10,119) — —

(1,265) 127,777 6,661 5,531

The deferred tax assets are in respect of the following temporary differences:

Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Provisions 10,159 10,772 9,805 9,246 General provision for loan losses of the banking group — 109,230 — — Profit equalisation reserves of the banking group — 4,334 — — Amortisation of premium net of accretion of discounts of the banking group — 14,551 — — Unutilised tax losses and capital allowances 2,229 15,371 — —

12,388 154,258 9,805 9,246 Less: Offsetting (3,594) (16,362) (3,144) (3,715)

8,794 137,896 6,661 5,531

138 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

16 DEFERRED TAXATION (CONT’D.) Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

The deferred tax liabilities are in respect of the following temporary differences:

Property, plant and equipment (13,653) (26,481) (3,144) (3,715) Less: Offsetting 3,594 16,362 3,144 3,715

(10,059) (10,119) — —

Temporary differences and unutilised tax losses (with no expiry date) for which deferred tax benefits have not been accounted for in the financial statements are as follows:

Group 2004 2003 RM’000 RM’000

Unutilised tax losses 33,698 33,866 Unutilised capital allowances 3,154 3,156

36,852 37,022

17 INVENTORIES Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

At cost: Raw materials 531 330 — — Work-in-progress 22 241 — — Finished goods – vehicles 198,328 308,644 171,435 300,137 – spare parts, accessories and others 11,859 15,282 10,205 12,855

210,740 324,497 181,640 312,992

139 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

17 INVENTORIES (CONT’D.) Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

At net realisable value: Finished goods – vehicles 175 31,131 175 31,131 – spare parts, accessories and others 611 2,300 570 2,017

786 33,431 745 33,148

Total 211,526 357,928 182,385 346,140

18 RECEIVABLES Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Trade receivables 218,179 78,791 207,800 77,892 Less: Allowance for bad and doubtful debts (28) (207) (28) (28)

218,151 78,584 207,772 77,864 Other receivables, deposits and prepayments 38,289 22,798 12,918 20,712

256,440 101,382 220,690 98,576

Credit terms of trade receivables range from 10 to 90 days for the Group and from 45 to 60 days for the Company.

19 AMOUNTS DUE FROM/TO SUBSIDIARIES AND ASSOCIATES

Amounts due from subsidiaries are net of allowances for doubtful amounts amounting to RM28,864,000 (2003: RM28,864,000).

The amounts due from/to subsidiaries and associates are unsecured, interest free and payable at call, except for the amounts due from certain wholly owned subsidiaries which are charged interest at rates ranging from 2.84% to 2.94% (2003: 2.81% to 3.09%) per annum.

140 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

20 CASH AND BANK BALANCES AND DEPOSITS WITH FINANCIAL INSTITUTIONS

Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Cash and bank balances 53,994 35,845 46,697 31,716 Deposits with licensed banks 450,676 172,549 421,960 158,310 Deposits with licensed finance companies — 191,330 — 191,330 Deposits with other licensed financial institutions 53,172 11,910 52,800 11,910

557,842 411,634 521,457 393,266

The interest rates of deposits with licensed banks and financial institutions that were applicable as at the end of the financial year ranged from 2.15% to 3.70% (2003: 2.50% to 4.25%) per annum for the Group and 2.20% to 3.00% (2003: 2.50% to 3.00%) per annum for the Company.

Deposits with financial institutions of the Group and Company have a maturity of 30 days or less (2003: 30 days or less). Bank balances are deposits held at call with licensed banks.

Deposits pledged with a licensed bank to secure bank guarantee facilities of a subsidiary amounted to RM270,000 (2003: RM270,000).

21 PAYABLES

Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Trade payables 153,493 176,480 150,800 173,661 Other payables 89,410 68,491 75,649 67,032

242,903 244,971 226,449 240,693

Credit terms of the trade payables of the Group and Company range from 14 to 60 days.

141 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

22 PROVISIONS FOR LIABILITIES AND CHARGES

Free Warranty service Total RM’000 RM’000 RM’000

Group

At 1 January 2004 602 6,260 6,862 Charge to income statement 900 9,774 10,674 Utilised during the financial year (330) (8,354) (8,684)

At 31 December 2004 1,172 7,680 8,852

Company

At 1 January 2004 372 6,260 6,632 Charge to income statement 558 9,774 10,332 Utilised during the financial year — (8,354) (8,354)

At 31 December 2004 930 7,680 8,610

23 PROVISIONS FOR RETIREMENT BENEFITS

Group Company RM’000 RM’000

At 1 January 2004 – non-banking liabilities 8,687 8,488 – banking liabilities 2,605 —

11,292 8,488 Net credit to income statement (222) (410) Utilised during the financial year (143) (143) Effects on Distribution of ECB shares (2,755) —

At 31 December 2004 8,172 7,935

142 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

23 PROVISIONS FOR RETIREMENT BENEFITS (CONT’D.)

The Company operates an unfunded defined benefits scheme for all eligible employees as stipulated in the Collective Agreement with its union employees. The last actuarial valuation of the Company was done on 31 December 2003.

The amount recognised in the balance sheets comprised the following:

Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Present value of the unfunded obligations 8,172 11,292 7,935 8,488

The amount recognised in the income statements comprised the following:

Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Current service cost 822 766 739 671 Interest cost 692 825 587 515 Surplus pursuant to the VSS scheme written back (1,736) — (1,736) — Net transitional asset written back — (4,140) — (2,690)

(222) (2,549) (410) (1,504)

The net credit to the income statements were included in administrative expenses.

The principal actuarial assumptions used are as follows:

Group Company 2004 2003 2004 2003

Discount rate 7% 7% 7% 7% Expected rate of salary increase 0% – 6% 0% – 6% 0% – 6% 0% – 6%

143 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

24 LONG TERM LEASE PAYABLES Group and Company 2004 2003 RM’000 RM’000

Finance lease liabilities are repayable in the following periods: Within one year 1,599 592 Between one and two years 1,007 592 Between two to five years 84 —

2,690 1,184 Less: Finance charges (137) (45)

Present value of finance lease liabilities 2,553 1,139

Representing lease liabilities: Within one year 1,497 559

Between one and two years 973 580 Between two to five years 83 —

1,056 580

2,553 1,139

25 SHARE CAPITAL Group and Company 2004 2003 RM’000 RM’000

Authorised: Ordinary shares of RM1 each

At the beginning of the financial year 500,000 500,000 Increase during the year 500,000 —

At the end of the financial year 1,000,000 500,000

Issued and fully paid: Ordinary shares of RM1 each

At the beginning of the financial year 244,714 231,423 Issued during the year pursuant to the Edaran Otomobil Nasional Berhad Employees’ Share Option Scheme 4,279 13,291 Bonus issue 626,237 — Cancellation of bonus shares (626,237) —

At the end of the financial year 248,993 244,714

144 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

25 SHARE CAPITAL (CONT’D.)

The Edaran Otomobil Nasional Berhad Employees’ Share Option Scheme (“the Scheme”) came into effect on 6 October 1999 and expired on 5 October 2004.

The total number of ordinary shares issued by the Company under the Scheme as approved by the Securities Commission did not exceed ten per centum (10%) of the total issued and paid-up share capital of the Company at any one time during the existence of the Scheme.

The main features of the Scheme were:

(a) Eligible employees are those who have been confirmed with at least five years of continuous service in the Group or a Director of the Company holding executive position, whose specific entitlement under the Scheme has been approved by the shareholders in a General Meeting.

(b) The options offered may be exercised at any time within the option period.

(c) The option price at which the employees are offered to take up shares under the Scheme may be at a discount of not more than ten per cent (10%) (if deemed appropriate by the Company) from the five (5) day weighted average market price of the shares of the Company as at the offer date or the par value of the shares of the Company of RM1.00, whichever is higher.

(d) Subject to Bye-Law 16, the Company may, at any time and from time to time, before or after an option is granted, limit the exercise of the option to a maximum number of shares and/or such percentage of the total shares in the Company comprised in the option during the option period and impose any other terms and/or conditions deemed appropriate by the Company in its discretion including amending/varying any terms and conditions imposed earlier.

(e) Options granted under the Scheme carry no dividend or voting rights. Upon the exercise of the options, shares issued rank pari passu in all respects with existing ordinary shares of the Company.

(f) The grantees have no right to participate, by virtue of these options, in any share options of any other company within the Group.

Details of the share options granted and exercised under the Scheme during the financial year are as follows:

Number of Share Options Option Price Grant Balance at Balance at (RM) Date 1.1.2004 Granted Lapsed* Exercised 31.12.2004

1.73 13.10.99 1,558,000 — (38,000) (1,520,000) — 1.76 30.11.99 73,000 — — (73,000) — 2.24 1.1.00 143,000 — (22,000) (121,000) — 2.00 1.3.00 231,000 — (17,000) (214,000) — 2.00 1.5.00 141,000 — (1,000) (140,000) — 1.68 31.7.00 61,000 — (11,000) (50,000) — 1.01 30.11.00 1,000 — — (1,000) — 1.00 31.1.01 4,000 — — (4,000) — 1.00 28.4.01 6,000 — — (6,000) — 1.64 30.5.02 10,000 — (1,000) (9,000) — 1.75 15.5.03 2,182,000 — (41,000) (2,141,000) —

4,410,000 — (131,000) (4,279,000) —

* Options lapsed due to resignations and expiry.

145 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

25 SHARE CAPITAL (CONT’D.)

During the financial year, the option prices were adjusted pursuant to Bye-Law 16 of the Scheme to take into consideration the alterations in the capital structure of the Company.

During the financial year, 4,279,000 new ordinary shares of RM1.00 each were issued by the Company for cash by virtue of the exercise of options pursuant to the Scheme at the following issue prices:

Number of ordinary Exercise Fair Exercise date Shares of RM1.00 each price value Proceeds RM RM RM’000

October 2004 1,000 1.00 3.02 1 August – October 2004 347,000 1.64 – 1.75 3.02 – 3.10 604 August – October 2004 61,000 2.00 – 2.24 3.02 – 3.10 126 January – February 2004 9,000 3.59 – 3.67 8.05 – 8.55 33 May 2004 1,000 3.75 9.90 4 January – May 2004 55,000 6.09 – 6.22 8.10 – 10.30 341 January – May 2004 3,391,000 6.42 – 6.50 8.05 – 10.50 21,911 January – May 2004 311,000 7.40 – 7.42 8.25 – 10.50 2,304 February – May 2004 103,000 8.29 8.55 – 10.50 854

4,279,000 26,178

Fair value of shares issued under the Scheme at exercise date 38,703

The fair value of shares issued on the exercise of options is based on the closing price of the Company’s share on Bursa Malaysia on the date in which the shares were allotted.

The movement during the financial year in the number of options over the shares of the Company is as follows:

2004 2003

At 1 January 4,410,000 11,428,000 Granted — 7,245,000 Lapsed (131,000) (972,000) Exercised (4,279,000) (13,291,000)

At 31 December — 4,410,000

Number of options vested — 4,410,000

146 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

26 DISCONTINUED OPERATIONS

Following the Distribution of ECB shares as disclosed in Note 32 to the financial statements, the Group discontinued its banking and financial services activities which has been reported as a separate business segment.

The effects of the Distribution of ECB shares on the financial position of the Group were as follows:

Up to date of completion of distribution 2003 RM'000 RM'000

Revenue 925,757 1,862,020 Cost of sales (375,221) (811,115)

Gross profit 550,536 1,050,905 Other operating income 14,138 68,424 Selling and distribution expenses (28,947) (53,169) Administrative expenses (203,525) (417,039) Loan loss and provisions (109,112) (177,348) Other operating expenses (144) (529)

Profit from operations 222,946 471,244 Finance cost (31,751) (20,713)

Profit before tax 191,195 450,531 Tax (58,430) (122,282)

Profit after tax 132,765 328,249 Minority interests (66,250) (163,791)

Net profit attributable to shareholders 66,515 164,458

147 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

26 DISCONTINUED OPERATIONS (CONT’D.) As at date of completion of distribution 2003 RM'000 RM'000

Assets Cash and bank balances and deposits with financial institutions 4,231,972 3,292,181 Dealing securities 87,276 161,168 Investments securities 3,703,219 4,443,270 Loans, advances and financing 21,757,398 21,288,355 Statutory deposits with Bank Negara Malaysia 905,001 898,361 Receivables 823,019 888,879 Tax recoverable 5,247 5,194 Deferred tax assets 135,182 132,124 Property, plant and equipment 184,637 176,192

31,832,951 31,285,724

Liabilities Deposits from customers 21,523,577 20,522,860 Deposits and placements of banks and other financial institutions 4,913,788 5,594,009 Obligation on securities sold under repurchase agreements 213,781 402,119 Bills and acceptances payable 938,894 1,114,764 Taxation 73,834 71,010 Payables 616,150 973,578 Provisions for retirement benefits 2,755 2,605 Borrowings 1,135,632 290,563

29,418,411 28,971,508

Net assets 2,414,540 2,314,216

Minority interests (1,204,849) (1,154,788)

1,209,691 1,159,428

Less: ECB shares distributed: – Capital repayment (626,237) — – Dividend in specie (157,765) — Effects of distribution at Group level (425,170) — Reclassified to investments (519) —

— 1,159,428

148 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

26 DISCONTINUED OPERATIONS (CONT’D.)

The cash flows attributable to the discontinued operations are as follows:

Up to date of distribution 2003 RM'000 RM'000

Operating activities (667,919) 629,670 Investing activities 806,409 285,032 Financing activities 801,301 (18,750)

Net cash flow 939,791 895,952 Cash and cash equivalents at the beginning of the year 3,292,181 2,396,229

Cash and cash equivalent at the date of Distribution/end of the year 4,231,972 3,292,181

(i) CASH AND BANK BALANCES AND DEPOSITS WITH FINANCIAL INSTITUTIONS Group 2003 RM'000

Cash and bank balances 2,788,420 Deposits with licensed banks 155,000 Deposits with licensed finance companies 90,000 Deposits with other licensed financial institutions 258,761

3,292,181

(ii) DEALING SECURITIES Group 2003 RM’000

Quoted shares in Malaysia 4,447 (Market value: RM6,753,000)

Unquoted securities: Private and Islamic debt securities 156,721

161,168

149 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

26 DISCONTINUED OPERATIONS (CONT’D.)

(iii) INVESTMENT SECURITIES Group 2003 RM’000

Quoted money market instruments: Malaysian Government securities 2,441,804 Malaysian Government treasury bills 78,776 Bank Negara Malaysia bills 98,876 Cagamas bonds 605,458 Cagamas Mudharabah bonds 40,380 Khazanah bonds 25,191

3,290,485 Unquoted money market instruments: Negotiable instruments of deposits 19,994

Sub-total 3,310,479

Quoted securities in Malaysia: Shares 172,977 Private debt securities 32,702

Sub-total 205,679

Unquoted securities: Shares 21,921 Commercial papers 47,876 Islamic commercial papers (Murabahah Notes Issuance Facility) 34,017 Private and Islamic debt securities 1,100,981

Sub-total 1,204,795

4,720,953 Less: Amortisation of premium less accretion of discounts (51,969) Allowance for impairment in value of investment securities (225,714)

4,443,270

150 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

26 DISCONTINUED OPERATIONS (CONT’D.)

(iii) INVESTMENT SECURITIES (CONT’D.) Group 2003 RM’000

Market value of the quoted money market instruments and securities: Malaysian Government securities 2,361,920 Malaysian Government treasury bills 79,017 Bank Negara Malaysia bills 99,080 Cagamas bonds 590,781 Cagamas Mudharabah bonds 40,414 Khazanah bonds 25,627 Shares quoted in Malaysia 48,998 Quoted private debt securities 17,546

The maturity structure of the money market instruments are as follows: Maturity within one year 1,030,133 Maturity between one to three years 862,763 Maturity between three to five years 1,417,583

3,310,479

The aggregate carrying amounts of investment securities that have been mortgaged or pledged in the normal course of business to secure the liabilities of the banking group arising from obligations on securities sold under repurchase agreements amounted to approximately RM404,590,000 as at 31 December 2003.

151 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

26 DISCONTINUED OPERATIONS (CONT’D.)

(iv) LOANS, ADVANCES AND FINANCING Group 2003 RM’000

Overdrafts 2,797,140 Term loans 10,317,102 Hire purchase 9,738,272 Bills and lease receivable 12,906 Trust receipts 86,911 Claims on customers under acceptance credits 1,252,682 Staff loans 216,156 Other loans 699,028

25,120,197

Less: Unearned interest and income (2,570,189)

Gross loans, advances and financing 22,550,008

Less: Allowance for bad and doubtful debts and financing – Specific (576,553) – General (390,107) Interest in suspense (294,993)

Net loans, advances and financing 21,288,355

The maturity structure of loans, advances and financing are as follows:

Maturity within one year 6,141,842 Maturity between one to three years 2,292,158 Maturity between three to five years 4,147,106 Maturity more than five years 9,968,902

22,550,008

(v) STATUTORY DEPOSITS WITH BANK NEGARA MALAYSIA

The non-interest bearing statutory deposits are maintained with Bank Negara Malaysia in compliance with Section 37(1)(c) of the Central Bank of Malaysia Ordinance 1958 (Revised–1994). The amounts are determined as set percentages of total eligible liabilities.

152 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

26 DISCONTINUED OPERATIONS (CONT’D.)

(vi) RECEIVABLES Group 2003 RM’000

Other receivables, deposits and prepayments 323,224 Deferred asset 565,655

888,879

The deferred asset was in respect of the net asset deficiency representing the excess of liabilities over the assets transferred arising from EON Bank Berhad's acquisition of the assets and liabilities of Oriental Bank Berhad and is reduced progressively by an arrangement that has been agreed with Bank Negara Malaysia.

(vii) DEPOSITS FROM CUSTOMERS Group 2003 RM’000

Demand deposits 1,974,044 Savings deposits 1,758,717 Fixed deposits 16,790,099

20,522,860

Maturity structure of fixed deposits are as follows:

Maturity within six months 12,581,812 Maturity between six months to one year 3,345,644 Maturity between one to three years 845,810 Maturity between three to five years 16,833

16,790,099

153 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

26 DISCONTINUED OPERATIONS (CONT’D.)

(viii) DEPOSITS AND PLACEMENTS OF BANKS AND OTHER FINANCIAL INSTITUTIONS

Group 2003 RM’000

Licensed banks 1,096,478 Licensed finance companies 197,578 Other licensed financial institutions 4,299,953

5,594,009

(ix) PAYABLES Group 2003 RM’000

Amount due to Cagamas Berhad 572,168 Other payables 401,410

973,578

Amount due to Cagamas Berhad (“Cagamas”) relates to outstanding loan amount sold to Cagamas with recourse. In the normal course of the banking operations, the banking group sells loans to Cagamas. The banking group is liable in respect of the loans sold directly to Cagamas under the condition that the banking group undertakes to administer the loans on behalf of Cagamas and to buy back any loans which are regarded as defective based on prudence. Such financing transactions and the obligation to buy back the loans are reflected as a liability on the balance sheet.

(x) BORROWINGS Group 2003 RM’000

Bonds (secured) 290,563

On 12 December 2002, the banking group issued RM300 million nominal amount of secured fixed rate bonds which were rated at A2 by Rating Agency Malaysia Berhad (“RAM”). The ratings were reaffirmed in July 2003. The bonds were issued in three tranches as follows:

Tranche 1

5.25% RM50 million nominal value secured fixed rate 3 year bonds, maturing on 12 December 2005; and

154 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

26 DISCONTINUED OPERATIONS (CONT’D.)

(x) BORROWINGS (CONT’D.)

Tranche 2

6.00% RM100 million nominal value secured fixed rate 5 year bonds, maturing on 12 December 2007; and

Tranche 3

6.75% RM150 million nominal value secured fixed rate 7 year bonds, maturing on 12 December 2009.

The main features of the bonds are as follows:

(i) Each tranche of the bonds is represented by a Global Certificate to be deposited with Bank Negara Malaysia (“BNM”) and will be traded under the Scripless Securities Trading System maintained by BNM;

(ii) The bonds are in the denominations of RM1 million each and in integral multiples of RM1 million;

(iii) The bonds bear interest at 5.25% (Tranche 1), 6.00% (Tranche 2) and 6.75% (Tranche 3) on the nominal value of the outstanding bonds, payable semi annually;

(iv) The bonds are constituted by a Trust Deed dated 25 November 2002 made between the subsidiary and the Trustees, which are entrusted to act for the benefit of the bondholders;

(v) The bonds are secured against the Sinking Fund Accounts, solely operated and maintained by the Trustees;

(vi) The bonds will be redeemed by the banking group at their nominal value on the maturity date of each tranche or purchase the bonds by tender or private treaty for cancellation; and

(vii) The bonds shall constitute direct, secured and unconditional obligations of the banking group, ranking pari passu without any preference or priority amongst themselves and with all other present and future secured and unsubordinated obligations.

A2 rating is defined by RAM as being able to offer adequate degree of safety for timely repayment of interest and principal and more susceptible to changes in circumstances and economic conditions than debts in higher-rated categories.

155 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

27 SIGNIFICANT RELATED PARTY TRANSACTIONS

In addition to other related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party transactions and the recurrent related party transactions for which shareholders’ mandate has been obtained. These related party transactions were carried out on terms and conditions similar to those obtainable in other transactions with unrelated parties. All the related party transactions required by Bursa Malaysia Securities Listing Requirements to be mandated by shareholders were conducted in accordance with the general mandate obtained from shareholders.

The Company, Edaran Otomobil Nasional Berhad is controlled by Y Bhg Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong. The Company is also an associate of HICOM Holdings Berhad (“HICOM”), which is effectively a wholly-owned subsidiary of DRB- HICOM Berhad (“DRB-HICOM”).

Group 2004 2003 RM’000 RM’000

(I) Recurrent related party transactions for which shareholders’ mandate has been obtained.

(a) Sales of goods and services:

(i) Sales of motor vehicles, accessories, related spare parts/ servicing of vehicles to:

Cycle & Carriage (Malaysia) Sdn Bhd (a company in which a Major Shareholder has significant interests) 21,229 30,196 Auto Prominence (M) Sdn Bhd (a subsidiary of HICOM) 10,740 8,299 Auto-Elegance Car Centre Sdn Bhd (a company in which certain Directors have significant interests) 6,770 6,842 Mega Komposit Auto Sdn Bhd (a subsidiary of DRB-HICOM group) 10,129 10,712 EON Capital group (a former subsidiary and a company in which a Director is deemed to have an interest) 907 1,534 DRB-HICOM 30 241

(ii) Insurance commission and claims received/receivable from:

Uni Asia General Insurance Berhad (a subsidiary of DRB-HICOM group) 9,683 10,466

156 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

27 SIGNIFICANT RELATED PARTY TRANSACTIONS (CONT’D.)

Group 2004 2003 RM’000 RM’000

(b) Purchases of goods and services:

(i) Purchases of motor vehicles/related spare parts/ commercial vehicles from:

Perusahaan Otomobil Nasional Berhad (“PROTON”) 2,189 695,926 (a company in which a Major Shareholder has significant interests) Proton Edar Sdn Bhd (a subsidiary of PROTON) 2,370,254 1,825,662 Proton Parts Centre Sdn Bhd (an associate) 109,393 142,990 Malaysian Truck & Bus Sdn Bhd (a subsidiary of DRB-HICOM) 13,331 13,428

(ii) Rental of office space paid/payable to:

CCL (Cyclecarri) Properties Sdn Bhd (a company in which a Major Shareholder has significant interests) 3,787 10,686

(iii) Purchases of general/life insurance from:

Uni Asia General Insurance Berhad 1,563 8,251 Uni Asia Life Assurance Berhad (a subsidiary of DRB-HICOM group) 5 1,187

(iv) Transportation services paid/payable to:

Master-Freighters (M) Sdn Bhd (a company in which certain Directors have significant interests) 1,501 756

157 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

27 SIGNIFICANT RELATED PARTY TRANSACTIONS (CONT’D.)

Group 2004 2003 RM’000 RM’000

(II) Other significant related party transactions.

(a) Sales of goods and services:

(i) Sales of motor vehicles, accessories, related spare parts/ servicing of vehicles to:

Uni Asia General Insurance Berhad (a subsidiary of DRB-HICOM group) * 937

(ii) Handling fees received/receivable from:

EON Capital group (a former subsidiary and a company in which a Director is deemed to have an interest) 14,277 10,827

(b) Purchases of goods and services:

(i) Installation of accessories and staging of vehicles

Automotive Services (M) Sdn Bhd * 467 (a company in which certain Directors have significant interests)

(ii) Security services paid/payable to:

SRT-EON Security Services Sdn Bhd (an associate) 1,024 2,529

(c) In the normal course of the Group’s banking and finance business (prior to the distribution of ECB shares as disclosed in Note 32 to to the financial statements), a number of banking and financing transactions are entered into with related parties. These include loans, advances and deposits. These significant related party transactions were carried out on commercial terms and at market rates obtainable on transactions with unrelated parties.

(i) Interest income received/receivable from related parties 2,381 2,591

(ii) Interest expense on deposits and placements paid/payable to related parties 2,449 17,626

* Transactions are not disclosed as the amounts are not significant.

158 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

28 CAPITAL AND OTHER COMMITMENTS Group Company 2004 2003 2004 2003 RM’000 RM’000 RM’000 RM’000

Capital expenditure for property, plant and equipment: Approved and contracted for — 33,431 — — Approved but not contracted for 61,598 61,791 34,845 9,775

61,598 95,222 34,845 9,775 Approved but not contracted for: Equity participation in subsidiaries — — — 900 Equity participation in an associate — 3,774 — 3,774 Equity participation in a joint venture 28,800 — 28,800 —

90,398 98,996 63,645 14,449

29 SEGMENT REPORTING

Following the completion of the Distribution of ECB shares as disclosed in Note 32 to the financial statements, the Group’s activities which are substantially carried out in Malaysia are focussed on the motor sector. The activities of the motor sector include the marketing of motor vehicles and related spare parts, and servicing of vehicles.

Business segments Banking and financial Group Motor services eliminations Group RM’000 RM’000 RM’000 RM’000

2004

Revenue External revenue 2,975,416 925,757 — 3,901,173 Inter-segment revenue ^ 6,747 — (6,747) —

Total revenue 2,982,163 925,757 (6,747) 3,901,173

Results: Segment results 55,527 222,946 6,544 285,017 Interest income 15,267 — (6,544) 8,723 Interest expenses (165) (31,751) — (31,916)

70,629 191,195 — 261,824

159 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

29 SEGMENT REPORTING (CONT’D.) Banking and financial Group Motor services eliminations Group RM’000 RM’000 RM’000 RM’000

Share of results of associates 20,185 Net gain on disposal of investments 18,519

Profit before tax 300,528 Tax (86,251)

Profit after tax 214,277 Minority interests (66,250)

Profit attributable to shareholders 148,027

Other information

Segment assets 1,346,365 — — 1,346,365 Investment in associates 111,984 Income tax assets 9,679

Total assets 1,468,028

Segment liabilities 274,314 — — 274,314 Unallocated liabilities 28,469

Total liabilities 302,783

Capital expenditure 31,119 24,451 — 55,570 Depreciation and amortisation expenses 20,628 15,181 — 35,809 Other non-cash items 12,797 173,990 — 186,787

^ Intersegment revenue comprised hire purchase commission established on an arms length basis.

160 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

29 SEGMENT REPORTING (CONT’D.)

Business segments Banking and financial Group Motor services eliminations Group RM’000 RM’000 RM’000 RM’000

2003

Revenue External revenue 3,125,031 1,862,020 — 4,987,051 Inter-segment revenue 10,827 — (10,827) —

Total revenue 3,135,858 1,862,020 (10,827) 4,987,051

Results: Segment results 89,619 471,244 9,152 570,015 Interest income 10,850 — (9,152) 1,698 Interest expenses (1,006) (20,713) — (21,719)

99,463 450,531 — 549,994

Share of results of associates 20,348 Net gain on disposal of investments 9,339

Profit before tax 579,681 Tax (153,454)

Profit after tax 426,227 Minority interests (163,791)

Profit attributable to shareholders 262,436

Other information

Segment assets 1,185,734 31,503,564 (355,158) 32,334,140 Investment in associates 151,539 Income tax assets 186,982

Total assets 32,672,661

Segment liabilities 271,786 28,965,093 (355,158) 28,881,721 Unallocated liabilities 378,490

Total liabilities 29,260,211

Capital expenditure 21,509 50,362 — 71,871 Depreciation and amortisation expenses 21,019 29,210 — 50,229 Other non-cash items 5,233 247,956 — 253,189

161 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

30 COMMITMENTS AND CONTINGENT LIABILITIES

The Group did not have any material commitments and contingent liabilities as at 31 December 2004. The commitments and contingent liabilities as at 31 December 2003 were in respect of the banking group.

31 FORWARD FOREIGN EXCHANGE CONTRACTS

Forward foreign exchange contracts are entered into by the Group in currencies other than the functional currency to manage exposure to fluctuations in foreign currency exchange rates on specific transactions.

As at balance sheet date, the Group had entered into the following forward foreign exchange contracts.

Purchase contracts RM equivalent Contracted rate

Euro Dollar 3,157,142 5.1150

The fair value of the outstanding forward contracts of the Group at the balance sheet date was a favourable net position of RM107,460.

32 SIGNIFICANT EVENTS

AUDI distribution

On 29 May 2004, the Company announced that its wholly-owned subsidiary, Euromobil Sdn Bhd (“Euromobil”) has entered into an agreement with Audi AG for the appointment of Euromobil as the distributor responsible for the import and sale including after-sales service of the Audi marque in Malaysia. The agreement is concluded for an indefinite period of time and can be terminated by either party at any time by serving twelve months’ notice in writing.

Dividend in specie and capital repayment of ECB shares (“Distribution of ECB shares”)

The Distribution of ECB shares by way of dividend in specie and capital repayment was completed on 14 July 2004. Following which, ECB ceased to be a subsidiary of the Company.

Pursuant to the dividend in specie of ECB shares, shareholders of EON received their entitlement on the basis of 28.1 ECB shares for every 100 EON Shares held.

Pursuant to the capital repayment of ECB shares, shareholders of EON received their entitlement on the basis of 111.5 ECB shares for every 100 EON Shares held.

Disposal of interest in L&C and MCIC Holdings Sdn Bhd (“MCIC”)

The disposals of the Company's entire equity interest in L&C and MCIC were completed on 1 September 2004 and 30 September 2004 respectively.

162 EON BERHAD ANNUAL REPORT 2004 Notes to the Financial Statements – 31 December 2004

32 SIGNIFICANT EVENTS (CONT’D.)

Joint Venture Agreement with Mitsubishi Corporation (“MC”)

On 15 November 2004, the Company entered into a joint venture agreement with MC to establish a new joint venture company to exclusively distribute motor vehicles, vehicle components, spare parts and accessories designed and/or manufactured by Mitsubishi Motors Corporation and/or its affiliates.

33 SUBSEQUENT EVENTS

Volkswagen distribution

On 31 January 2005, the Company announced that the Letter of Intent with Volkswagen AG which expired on 31 December 2004 will not be renewed.

34 MAJOR SUPPLIER

The Company purchases PROTON passenger vehicles from the sole supplier, Proton Edar Sdn Bhd.

163 EON BERHAD ANNUAL REPORT 2004 Analysis of Shareholding as at 31 March 2005

Class of Shares : Ordinary shares of RM1.00 each fully paid Voting Rights : One vote per share

Number of Size of shareholding Shareholders Percentage Shareholding Percentage

Less than 100 60 1.08 961 0 100 – 1,000 2,696 48.59 2,372,294 0.95 1,001 – 10,000 2,462 44.38 8,493,750 3.41 10,001 – 100,000 275 4.96 7,946,082 3.19 100,001 – less than 5% of issued shares 50 0.90 37,040,269 14.88 5% and above of issued shares 5 0.09 193,139,467 77.57

Grand Total 5,548 100 248,992,823 100.0

SUBSTANTIAL SHAREHOLDERS as at 31 March 2005 Direct Indirect No. of % No. of % Shareholders Shares held held Shares held held

HICOM Holding Berhad (HICOM) 72,968,000 29.30 — — DRB-HICOM (DRB-HICOM) — — 72,968,000 (a) 29.30 Mega Consolidated Sdn Bhd — — 72,968,000 (b) 29.30 Gadek (Malaysia) Berhad — — 72,968,000 (b) 29.30 Tan Sri Dato’ Seri (Dr) Mohd Saleh bin Sulong 196,800 0.08 72,968,000 (c) 29.30 Citaria Sdn Bhd — — 72,968,000 (d) 29.30 Sharikat Manhamat Sdn Berhad — — 72,968,000 (d) 29.30 Billiards Distributors Sdn Bhd — — 72,968,000 (d) 29.30 Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad — — 72,968,000 (d) 29.30 Dato’ Yatina bte Yahaya — — 72,968,000 (e) 29.30 Dato’ Tik bin Mustaffa — — 72,968,000 (f) 29.30 Ahmad Othman bin Yahaya — — 72,968,000 (g) 29.30 Ahmad Faez bin Yahaya — — 72,968,000 (h) 29.30 Jardine Strategic Malaysian Investments Pte Ltd (JSMI) 44,639,100 17.93 — — Jardine Asian Holdings Limited (JSHA) — — 44,639,100(i) 17.93 Jardine Strategic Holdings Limited (JSH) — — 44,639,100(j) 17.93 JMH Investments Limited (JMHI) — — 44,639,100(k) 17.93 Jardine Matheson Holdings Limited — — 44,639,100(l) 17.93 Employee Provident Fund Board 29,879,136 12.00 746,700 (m) 0.30 Kualapura (M) Sdn Bhd (Kualapura) 30,153,400 12.11 — — Rin Kei Mei — — 30,153,400 (n) 12.11 Rin Nan Lun — — 30,153,400 (n) 12.11 Mitsubishi Motor Corporation 30,153,400 (o) 12.11 Mitsubishi Corporation — — 30,153,400 (o) 12.11 Khazanah Nasional Berhad 15,500,000 6.23 — —

Notes: (a) Deemed interested through its effectively wholly-owned subsidiary, HICOM which is a major shareholder of EON. (b) Deemed interested by virtue of its deemed interest in HICOM, which is a major shareholder of EON. (c) Deemed interested by virtue of his interest (direct and indirect) in DRB-HICOM, which in turn is deemed interested through its effectively wholly-owned subsidiary, HICOM. (d) Deemed interested by virtue of its interest (direct and indirect) in DRB-HICOM, which in turn is deemed interested through its effectively wholly-owned subsidiary, HICOM. (e) Deemed interested by virtue of her being a co-administrator and beneficiary of the Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad which has interest (direct and indirect) in DRB-HICOM, which in turn is deemed interested through its effectively wholly-owned subsidiary, HICOM. (f) Deemed interested by virtue of him being a co-administrator of the Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad which has interest (direct and indirect) in DRB-HICOM, which in turn is deemed interested through its effectively wholly-owned subsidiary, HICOM. (g) Deemed interested by virtue of him being a co-administrator and beneficiary of the Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad which has interest (direct and indirect) in DRB-HICOM, which in turn is deemed interested through its effectively wholly-owned subsidiary, HICOM. (h) Deemed interested by virtue of him being beneficiary of the Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad which has interest (direct and indirect) in DRB- HICOM, which in turn is deemed interested through its effectively wholly-owned subsidiary, HICOM. (i) Deemed interested through its wholly-owned subsidiary, JSMI which is a major shareholder of EON. (j) Deemed interested through its wholly-owned subsidiary, JSHA which in turn is deemed interested through its wholly-owned subsidiary, JSMI. (k) Deemed interested through its 79.39% owned subsidiary, JSH which in turn is deemed interested through its wholly-owned subsidiary, JSHA. (l) Deemed interested through its wholly-owned subsidiary, JMHI which in turn is deemed interested through its 79.39% owned subsidiary, JSH. (m) Deemed interested in EON by virtue that the shareholdings are registered in the names of Arab Malaysian Nominees (Tempatan) Sdn Bhd. (n) Deemed interested by virtue of his interest in Kualapura, which is a major shareholder of EON. (o) Deemed interested by virtue of its interest in Kualapura, which is a major shareholder of EON.

164 EON BERHAD ANNUAL REPORT 2004 List of Thirty (30) Largest Shareholders as at 31 March 2005

Name Shareholding Percentage

1. Malaysian Trustees Berhad [HICOM Holdings Berhad] 72,967,831 29.31 2. AMMB Nominees (Asing) Sdn Bhd 44,639,100 17.93 [AmTrustee Bhd for Jardine Strategic Malaysian Investment Pte Ltd] 3. Kualapura (M) Sdn Bhd 30,153,400 12.11 4. Employees Provident Fund Board 29,879,136 12.00 5. Khazanah Nasional Berhad 15,500,000 6.23 6. HSBC Nominees (Asing) Sdn Bhd 7,518,956 3.02 [BBH and Co Boston – GMO Emerging Markets Fund] 7. Permodalan Nasional Berhad 6,968,000 2.80 8. Malaysia Nominees (Tempatan) Sendirian Berhad 3,241,000 1.30 [Great Eastern Life Assurance (Malaysia) Berhad] 9. HSBC Nominees (Asing) Sdn Bhd 1,995,100 0.80 [MSCO NY – Torrey Pines Master Fund, Ltd] 10. Lembaga Tabung Angkatan Tentera 1,475,000 0.59 11. Pertubuhan Keselamatan Sosial 1,429,600 0.57 [Cawangan Pelaburan dan Harta] 12. Citicorp Nominees (Asing) Sdn Bhd 1,159,300 0.47 [CBNY for DFA Emerging Markets Fund] 13. Malaysia Nominees (Tempatan) Sendirian Berhad 1,084,500 0.44 [Amanah SSCM Asset Management Berhad for Amanah Small Cap Fund Bhd] 14. Amanah Raya Nominees (Tempatan) Sdn Bhd 972,000 0.39 [Sekim Amanah Saham Nasional] 15. AM Nominees (Tempatan) Sdn Bhd 746,700 0.30 [Employees Provident Fund Board (A/C 1)] 16. Tang Tuck Ngow 735,000 0.30 17. Citicorp Nominees (Tempatan) Sdn Bhd 729,600 0.29 [ING Insurance Berhad (INV–IL PAR) 18. Cartaban Nominees (Asing) Sdn Bhd 548,100 0.22 [Investors Bank and Trust Company for Ishares, Inc.] 19. Malaysia Nominees (Tempatan) Sendirian Berhad 526,000 0.21 [Great Eastern Life Assurance (Malaysia) Berhad] 20. HSBC Nominees (Asing) Sdn Bhd 485,700 0.20 UBS AG Zurich – SBC Lux Equity Portfolio Malaysia 21. HSBC Nominees (Asing) Sdn Bhd 428,914 0.17 [TNTC for Teachers Retirement System of Illinois] 22. HSBC Nominees (Asing) Sdn Bhd 402,242 0.16 [Stichting Pensioenfonds ABP] 23. HLB Nominees (Tempatan) Sdn Bhd 393,600 0.16 [Pledged Securities A/C – The Estate of Tan Sri Yahaya Ahmad] 24. HLB Nominees (Tempatan) Sdn Bhd 393,600 0.16 [Pledged Securities A/C – Othman Jaffar (HLF)] 25. Cartaban Nominees (Asing) Sdn Bhd 352,788 0.14 [SSBT Fund SC7U for State of Connecticut Retirement Plans & Trust] 26. AM Nominees (Tempatan) Sdn Bhd 342,900 0.14 [AmAssurance Berhad (Life Par 1)] 27. Asia Life (M) Berhad 318,100 0.13 [As Beneficial Owner (PF)] 28. Citicorp Nominees (Asing) Sdn Bhd 302,300 0.12 [CBNY for DFA Emerging Markets Small Cap Series] 29. Lin Chen Su–Chiung 290,000 0.12 30. Amanah Raya Nominees (Tempatan) Sdn Bhd 285,600 0.11 [AUTB Progress Fund]

Total 226,264,067 90.87

165 EON BERHAD ANNUAL REPORT 2004 Properties owned by Edaran Otomobil Nasional Berhad Group

Approximate Net Book Value Approximate Age of Date of (As At No. Location Land Area Property Acquisition Description Tenure 31 Dec 2004) (sq. ft.) (Years) RM’000

1 Lot PT 249, 250, 251, 252 & 253, 92,894 10 1 October 1991 2 storey building adjoining Leasehold 5,380 Section 25, Bandar Kota Bharu, to a single storey open (Expiring on . workshop. 3 April 2092)

2 Lot 11848 & 11849, Mukim of Kapar, 3,850 19 3 December 1992 2 adjoining units of 3 storey Freehold 880 District of Klang, Selangor. shophouse building used as No. 25 & 27, Jalan Satu, Showroom and Sales Office. Kawasan 16, Klang, Selangor.

3Lot 790, Jalan Simpang, 87,120 11 16 November 1992 2 storey office adjoining to Freehold 3,230 Mukim of Pengkalan AOR, single storey building used as Taiping, Perak. Showroom and Sales Office, Workshop and Parts Centre.

4Lot 25557, Mukim & District of 2,100 26 7 April 1993 3 storey shophouse building Freehold 1,293 Kuala Lumpur, Selangor. used as Showroom and No. 9, Jalan SS2/75, Sales Office. SEA Park, 47300 Petaling Jaya, Selangor.

5Lot 9818, Persiaran Mohagany, 69,795 12 10 June 1992 2 storey building office adjoining Freehold 5,916 Bandar Sri Damansara, to single storey building used as Mukim of Sungai Buloh, Showroom and Sales Office, Selangor. Workshop and Parts Centre.

6 Lot 1101, 1510, 1511 & 1512, 80,113 8 18 November 1992 2 storey building with Freehold 15,092 Lot 1100, Section 9W Georgetown, 12,932 13 July 1995 basement carpark used as Leasehold North East District, Penang. Showroom and Sales Office, (Expiring on No. 1A, Jalan Makloom, Penang. Workshop and Parts Centre. 2 March 2093)

7 Lot 262, Mukim 1, 102,392 10 7 January 1993 2 storey building adjoining to Freehold 7,776 Jalan Kikik, Taman Inderawasih, single storey building used as Prai, Penang. Showroom and Sales Office, Workshop and Parts Centre.

8 Lot 4209 & Lot 9877, 90,713 10 1 April 1993 2 storey building adjoining to Freehold 8,717 Mukim of Batu, 23,721 1 April 1993 single storey building used as Leasehold Segambut Pusat Dalam, Workshop and Parts Centre. (Expiring on Kuala Lumpur. 14 January 2073)

9 PT3603 89,216 10 28 October 1993 2 storey building used as Freehold 4,690 Mukim of Kuah, Langkawi, Showroom and Sales Office, . Workshop and Parts Centre.

10 5 1/2 Mile, Jalan Tuaran, 123,710 14 15 November 1993 5 blocks of building used as Leasehold 4,022 Inanam, Showroom and Sales Office, (Expiring on Kota Kinabalu, Workshop and Parts Centre. 14 June 2025) Sabah.

11 Lot 272, Mukim of Kluang, 142,930 7 13 October 1993 2 storey building used as Freehold 3,663 District of Kluang, Showroom and Sales Office, No. 15, Jalan Bintang 1, Workshop and Parts Centre. Taman Bintang, Kluang, Johor.

166 EON BERHAD ANNUAL REPORT 2004 Approximate Net Book Value Approximate Age of Date of (As At No. Location Land Area Property Acquisition Description Tenure 31 Dec 2004) (sq. ft.) (Years) RM’000

12 P.T. 706, Mukim of Peringgit, 66,450 13 15 February 1992 Single storey office building Freehold 3,000 District of Melaka Tengah, adjoining to single storey Melaka. building used as Showroom and Sales Office, Workshop and Parts Centre.

13 Lot 2 & 2A, Mukim of Damansara, 1,306,800 12 30 December 1992 Property used for the following Freehold 68,765 District of Petaling, purposes: Glenmarie Industrial Park, i) Main building used as EON’s Shah Alam, Headquarters and Showroom. Selangor. ii) Amenities block used as canteen, dining area, clinic, gymnasium and maintenance office. iii) Building for Workshop and Motorsports. iv) Building for Pre-Delivery Inspection. v) Building for Delivery Centre. vi) Building for Used Car Display. vii) Stockyard.

14 Lot 207527786, 47,252 9 7 October 1993 Single storey office building Leasehold 3,323 No. 1, Jalan Mustapha, annexed to single storey (Expiring on Wilayah Persekutuan Labuan. building used as Showroom 31 December 2042) and Sales Office, Workshop and Parts Centre.

15 Plot 10 & 11, 74,800 9 30 March 1994 2 storey building adjoining to Leasehold 5,961 Mukim of Mergong, single storey building used as (Expiring on District of Kota Kedah, Showroom and Sales Office, 14 May 2076) Kedah Darul Aman. Workshop and Parts Centre.

16 MDLD 3295, Lot 30, 2,000 13 20 May 1994 2 storey shophouse building Leasehold 463 Block 4, Fajar Centre, used as Showroom and Sales (Expiring on KM 1 Jalan Segama, Office. 1 October 2894) Lahad Datu, Sabah.

17 Lot No. 2/G10, Phase 1A, 2,689 10 7 February 1994 Two shoplots on the ground Leasehold 624 Api-Api Centre, and first floor of Api-Api (Expiring on Kota Kinabalu, Sabah. Commercial Centre used as 31 December 2087) Showroom and Sales Office.

18 PT 18198, Mukim of Sitiawan, 48,838 9 21 April 1994 Single storey office annexed to Leasehold 2,877 District of Manjung, single storey building used as (Expiring on Sitiawan, Perak. Showroom and Sales Office, 29 September 2094) Workshop and Parts Centre.

19 Lot 495, Persiaran Kuala Selangor, 554,633 20 2 April 1985 2 storey office block, warehouse Freehold 16,048 Section 26, Shah Alam. and office annexed used as Located at Hicom Industrial Estate, Pre-Delivery Inspection area and Batu Tiga, Shah Alam, Selangor. Distribution Centre.

167 EON BERHAD ANNUAL REPORT 2004 Properties owned by Edaran Otomobil Nasional Berhad Group

Approximate Net Book Value Approximate Age of Date of (As At No. Location Land Area Property Acquisition Description Tenure 31 Dec 2004) (sq. ft.) (Years) RM’000

20 Lot No. 22377, 1,817 20 22 February 1990 3 storey shophouse building Freehold 363 Mukim of Kuala Kuantan, Pahang. used as Showroom and Sales No. B-4344, Jalan Beserah, Office. Kuantan, Pahang Darul Makmur.

21 Lot No. 22378, 1,898 20 1 March 1990 3 storey shophouse building Freehold 365 Mukim of Kuala Kuantan, Pahang. used as Showroom and Sales No. B-4342, Jalan Beserah, Office. Kuantan, Pahang Darul Makmur.

22 Plot No. 38, Section 6, Bukit Mertajam, 1,293 28 15 January 1990 2 storey shophouse building Freehold 212 Seberang Prai Tengah. used as Showroom and Sales No. 17, Jalan Maju, Office. Bukit Mertajam, Penang.

23 Plot 39, Section 6, Bukit Mertajam, 1,298 28 15 January 1990 2 storey shophouse building Freehold 212 Seberang Prai Tengah. used as Showroom and Sales No. 19, Jalan Maju, Office. Bukit Mertajam, Penang.

24 Lot 1039, Section 66, 87,080 20 21 June 1990 2 storey office block and a single Leasehold 1,469 Kuching Town Land District, storey building used as (Expiring on Located at Jalan Kilang, Bintawa, Showroom and Sales Office, 3 January 2037) Kuching, . Workshop and Parts Centre.

25 Lot 33847, No. 29, Jalan Mutiara Raya, 2,568 23 16 August 1990 3 storey shophouse building Leasehold 539 Taman Mutiara, Batu 6, used as Showroom and Sales (Expiring on Jalan Cheras, Kuala Lumpur. Office. 7 January 2075)

26 Lot 685, Block 6, 10,016 15 23 April 1991 1 1/2 storey office annexed to Leasehold 591 No. 23, Jalan Lanang, single storey building used as (Expiring on Sibu, Sarawak. Showroom and Sales Office, 13 October 2914) Workshop and Parts Centre.

27 Plot 25, Mukim of Sungai Pasir, 1,400 14 16 September 1990 2 storey shophouse building Freehold 128 District of Kuala Muda, Kedah. used as Showroom and Sales C25, Lorong 8, Office. Taman Sejati Indah, Sungai Petani, Kedah.

28 Plot 26, Mukim of Sungai Pasir, 1,400 14 16 September 1990 2 storey shophouse building Freehold 128 District of Kuala Muda, Kedah. used as Showroom and Sales C26, Lorong 8, Office. Taman Sejati Indah, Sungai Petani, Kedah.

29 Lot 425, Section 1, Town of Banting, 3,090 17 17 May 1991 3 storey shophouse building Freehold 542 District of Kuala Langat, Selangor. used as Showroom and Sales No. 40, Jalan Besar, Office. Banting, Selangor.

168 EON BERHAD ANNUAL REPORT 2004 Approximate Net Book Value Approximate Age of Date of (As At No. Location Land Area Property Acquisition Description Tenure 31 Dec 2004) (sq. ft.) (Years) RM’000

30 P.T.TLO 1096, 108,900 13 27 May 1991 Double storey office annexed to Leasehold 3,925 Johor Bahru, Johor. single storey building used as (Expiring on No. 60, Jalan Langkasuka, Showroom and Sales Office, 20 October 2026) Kawasan Perusahaan Dato’ Onn, Workshop and Parts Centre. Johor Bahru.

31 Lot 164 & 165, Section 92, 105,057 13 10 February 1992 Single storey detached Freehold 10,638 Town & District of Kuala Lumpur, warehouse annexed to double Wilayah Persekutuan. storey office building used as No. 188, Jalan Sungai Besi, Showroom and Sales Office, Kuala Lumpur. Workshop and Parts Centre.

32 PTD 4870, 34,436 12 23 November 1990 Single storey building used as Leasehold 751 Mukim of Sungai Segamat, Workshop and Parts Centre. (Expiring on Jalan Genuang, 5 July 2047) Kawasan Perindustrian, District of Segamat, Johor.

33 PT 7138, 87,120 14 11 December 1990 3 single storey factory building Leasehold 1,611 Semambu Industrial Estate, used as Workshop and Parts (Expiring on Kuantan, Pahang. Centre. 27 October 2041)

34 PT 2721, 67,949 11 7 October 1991 One and a half storey workshop Leasehold 2,113 Mukim of Seremban, building used as Workshop and (Expiring on District of Seremban, Parts Centre. 26 April 2090) Light Industrial Park, .

35 PT 8872, 8873 & 8875, 43,669 14 26 March 1991 Single storey building used as Freehold 1,071 Mukim of Sungai Pasir, Workshop and Parts Centre. District of Kuala Muda, Kedah. Located at Bakar Arang Industrial Estate, Sungai Petani, Kedah.

36 K-31 & C-17, 75,350 — 20 April 1993 Industrial land. Freehold 473 Jalan Mentakab, Temerloh Industrial Park, Temerloh, Pahang.

37 Lot 5888, 28,365 3 16 March 1995 Single storey building used as Freehold 1,672 Jalan Tuanku Antah, Showroom. Town & District of Seremban, Negeri Sembilan.

38 Lot 2899 & 2900, 88,144 — 4 August 1994 Industrial land. Freehold 767 Mukim of Kuala Jempol, District of Kuala Pilah, Negeri Sembilan.

39 Lot 13303, Mukim of Simpang Kanan, 154,028 8 12 September 1994 Single storey office annexed to Freehold 6,015 District of Batu Pahat, single storey building used as Johor Darul Takzim. Showroom and Sales Office, No. 700, Jalan Bukit Pasir, Workshop and Parts Centre. Mukim of Simpang Kanan, Batu Pahat, Johor.

169 EON BERHAD ANNUAL REPORT 2004 Properties owned by Edaran Otomobil Nasional Berhad Group

Approximate Net Book Value Approximate Age of Date of (As At No. Location Land Area Property Acquisition Description Tenure 31 Dec 2004) (sq. ft.) (Years) RM’000

40 TL 107529779, 86,862 — 3 July 1995 Industrial land. Leasehold 2,551 Mukim of Tawau, (Expiring on District of Tawau, Sabah. 20 April 2914)

41 Lot 9587, Mukim 12, 122,540 3 15 August 1995 Single storey building used as Freehold 10,734 South West District, Showroom and Stockyard. Penang. No. 198, Jalan Sultan Azlan Shah, 11900 Bayan Lepas, Penang.

42 Lot 3893, Mukim of Ulu Kinta, 230,035 7 21 July 1995 5 blocks of building used as Leasehold 15,159 District of Kinta, Showroom and Sales Office, (Expiring on Perak. Workshop and Parts Centre. 3 January 2895)

43 Lot 13, 15 & 17, 6,000 9 29 January 1996 3 units of 1 1/2 storey light Freehold 1,314 Jalan Nilam 1/1, industrial building used as Taman Teknologi Tinggi, archives. Shah Alam, Selangor.

44 TLO 801, 87,129 34 4 August 1995 3 blocks of building used Leasehold 3,768 Township & District of Johor Bahru, as Showroom and Stockyard. (Expiring on Johor. 1 November 2029)

45 Lot 27, 95,337 — 3 April 1996 Industrial land. Freehold 2,341 Rawang Integrated Industrial Park, Rawang, Selangor.

46 Lot 206, 85,487 — 18 March 1996 Industrial land. Freehold 476 Mukim of Jejawi, Kangar, .

47 Lot 151, Block 19, 108,985 — 16 February 1996 Industrial land. Leasehold 2,009 Seduan Land District & Sibu (Expiring on Occupation Ticket No. 30933, 31 December 2033 & Sibu, Sarawak. 31 December 2039)

48 No. 687, 10,162 17 20 August 1997 A double storey detached Leasehold 699 Bintulu Light Industrial Estate, industrial building used (Expiring on 2 1/2 Mile, as a Workshop and 20 March 2046) Jalan Sultan Iskandar, Parts Centre. Bintulu, Sarawak.

49 H.S. (D) 102181, P.T. 15994 140,999 1 23 September 2002 Construction-in-progress for a Freehold 25,629 Mukim of Damansara, double storey building for District of Petaling & State of Selangor, Showroom and Workshop No. 27, Jalan Pelukis U1/46, usage. Temasya Industrial Park, Shah Alam, Selangor.

170 EON BERHAD ANNUAL REPORT 2004 Approximate Net Book Value Approximate Age of Date of (As At No. Location Land Area Property Acquisition Description Tenure 31 Dec 2004) (sq. ft.) (Years) RM’000

50 H.S. (D) 102182, P.T. 15995, 100,423 — 23 September 2002 Industrial Land. Freehold 11,711 Mukim of Damansara, District of Petaling & State of Selangor, No. 29, Jalan Pelukis U1/46, Temasya Industrial Park, Shah Alam, Selangor.

51 Lot 2795 at KM 2.3, Jalan Utara, 18,590 22 29 September 2003 Detached double storey building Leasehold 1,133 TL 077504771, District of Sandakan, with an attached single storey (Expiring on Sabah. high ceiling workshop building 9 September 2052) used as Workshop and Parts Centre.

171 EON BERHAD ANNUAL REPORT 2004 EON Group Branches

EON Berhad EONMobil Sdn Bhd Euromobil Sdn Bhd Edaran Otomobil Nasional Berhad Branches as at 31 March 2005

1. Pudu 14. Glenmarie – EON Branch 27. Ipoh – II 42. Bentong 2. Ampang &Service Centre 28. Sitiawan 43. Kuala 3. Jalan Chan Sow Lin 15. Glenmarie – New & Used 29. Telok Intan 44. Kota Bharu 4. Jalan Tuanku Abdul Rahman Car Dept 30. Taiping 45. Kota Kinabalu – I 5. Cheras 16. Seremban 31. Georgetown – I 46. Kota Kinabalu – II 6. Old Klang Road 17. Bahau 32. Georgetown – II 47. Tawau 7. Kepong 18. 33. Bayan Baru 48. Sandakan 8. SS2 19. Segamat 34. Butterworth 49. Labuan 9. Jalan Templer 20. Johor Bahru – I 35. Bukit Mertajam 50. Lahad Datu 10. Jalan Kemajuan – EON 21. Johor Bahru – II 36. Alor Star 51. Kuching – I Branch & Service Centre 22. Batu Pahat 37. Sungai Petani 52. Kuching – II 11. Jalan Kemajuan – Special 23. Muar 38. Langkawi 53. Sibu Sales Branch 24. Kulai 39. Kangar 54. Miri 12. Klang 25. Kluang 40. Kuantan 55. Bintulu 13. Banting 26. Ipoh – I 41. Temerloh

EONMobil Sdn Bhd Branches as at 31 March 2005

1. Jalan Imbi, Kuala Lumpur 6. Muar 11. Temerloh 16. Lahad Datu 2. Glenmarie 7. Ipoh 12. Kota Bharu 17. Kuching 3. Klang 8. Taiping 13. Kota Kinabalu 18. Sibu 4. Seremban 9. Georgetown 14. Tawau 19. Miri 5. Johor Bahru 10. Prai 15. Sandakan 20. Bintulu

Euromobil Sdn Bhd Branches as at 31 March 2005

1. Glenmarie 2. Johor Bahru 3. Prai

173 EON BERHAD ANNUAL REPORT 2004 Analysis of Proton Vehicles Sales Network as at 31 March 2005

Bumiputera Non-Bumiputera State Branches Sales Dealers Sales Dealers Total

Wilayah Persekutuan (WP) 7 16 7 30

Selangor 8 10 9 27

Negeri Sembilan 2 6 2 10

Melaka 1 2 2 5

Johor 7 5 6 18

Pahang 3 2 3 8

Terengganu 1 6 3 10

Kelantan 1 5 1 7

Perak 5 3 2 10

Pulau Pinang 5 5 3 13

Kedah 3 7 2 12

Perlis 1 — — 1

Sabah/WP Labuan 6 3 2 11

Sarawak 5 4 4 13

TOTAL 55 74 46 175

174 EON BERHAD ANNUAL REPORT 2004 Analysis of Non-Proton Vehicles Sales Network as at 31 March 2005

EONMobil Euromobil Euromobil State Branches Branches Dealers Total

Wilayah Persekutuan 1 — 1 3

Selangor 2 1 — 2

Negeri Sembilan 1 — — 1

Melaka — — 1 1

Johor 2 1 1 4

Perak 2 — — 2

Pulau Pinang 2 1 1 4

Kedah — — — —

Pahang 1 — — 1

Kuala Terengganu — — — —

Kelantan 1 — — 1

Sabah 4 — — 4

Sarawak 4 — 1 5

TOTAL 20 3 5 28

175 EON BERHAD ANNUAL REPORT 2004 EON List of Bumiputera Sales Dealers by State as at 31 March 2005

State No Dealer Location

Selangor 1 Auto Prominence (M) Sdn Bhd Batu Caves 2Dunia Saga Sdn Bhd Subang Jaya 3Intan Capital Sdn Bhd Klang 4 Pantai Bharu Autohaus Sdn Bhd Klang 5Liga Auto Sdn Bhd Sg Buloh 6Modan Automobile Sdn Bhd Batu Caves 7Kamaruddin Rahmat Motor Sdn Bhd Shah Alam 8Sunray Frontier (M) Sdn Bhd Seri Kembangan 9Trisilco Motors Sdn Bhd Puchong 10 Zaibar Corporation Sdn Bhd Damansara Jaya

Wilayah Persekutuan 11 Auto Elegance Car Centre Sdn Bhd Jalan Pahang 12 Auto Tulin Sdn Bhd Jalan Pahang 13 Rakyat Motor Sdn Bhd Jalan Pahang 14 Azumoto Sdn Bhd Pusat Bandar Melawati 15 Cempaka Aras Sdn Bhd Jalan Kg Pandan 16 Dakmaz Oto Edaran Sdn Bhd Persiaran Ampang 17 Early Crest (M) Sdn Bhd Taman Sungai Besi 18 Khidmat Imej Sdn Bhd Wangsa Melawati 19 Mega Komposit Auto Sdn Bhd Sentul Raya Off Jalan Sentul 20 Mesra Auto Sdn Bhd Komplek Bandar 21 Mofaz Otomobil Sdn Bhd Tmn Tun Dr Ismail 22 One-Cycle Sdn Bhd Jalan Gombak 23 Shahs Motors (M) Sdn Bhd Cheras 24 Shared Auto Sdn Bhd Jalan Bangsar 25 Sumision Automobile Sdn Bhd Jalan Ipoh 26 Tulisma Sdn Bhd Jalan Ampang

Negeri Sembilan 27 Art Nouveau Enterprise Sdn Bhd Jalan Tuanku Antah, Seremban 28 M & F Maju Auto Sdn Bhd Jalan Tun Dr Ismail, Seremban 29 Perisai Wira Saga Sdn Bhd Port Dickson, Seremban 30 Rusma Sdn Bhd Tampin, Seremban 31 Syarikat Darus Sdn Bhd Kuala Pilah, Seremban 32 Wanija Industries Sdn Bhd Senawang, Seremban

Pahang 33 Cepromas Motor Sdn Bhd Dagangan Kuantan, Kuantan 34 Jelai Auto Sdn Bhd Jalan Tanah Putih, Kuantan

Perak 35 Gagah Murni Sdn Bhd Pasir Putih, Ipoh 36 Hati Lurus Sdn Bhd Parit Buntar, Perak 37 Syarikat Saikat Sdn Bhd Jalan Dato Onn Jaafar, Ipoh

Pulau Pinang 38 Edaran Saga Pulau Pinang Sdn Bhd Lengkok Dumbar, Jelutong 39 Boustead Emastulin Sdn Bhd Jalan Chain Ferry, Prai 40 Keris General Agency Sdn Bhd Sg Ara, Bayan Lepas 41 Rampai Ulung Sdn Bhd Kepala Batas, Seberang Perai Utara 42 S.M. Nusantara Sdn Bhd Bandar Seberang Jaya, Perai

176 EON BERHAD ANNUAL REPORT 2004 State No Dealer Location

Johor 43 Ardhin Sdn Bhd Jalan Sulaiman, Muar 44 Hamawangsa Kredit Sdn Bhd Batu Pahat 45 Merdeka Auto Sdn Bhd Jalan Buloh Kasap, Segamat 46 Saksama Motor Sdn Bhd Taman Johor Jaya, Johor Bahru 47 Syarikat Rahman Brothers (Saga) Sdn Bhd Melodies Garden, Johor Bahru

Kedah 48 Ara Motor Trade Sdn Bhd Jalan Sultan Samb, A Setar 49 Kubang Jawi Otomobil Sdn Bhd Lebuhraya Darulaman, Alor Setar 50 Jerai Automobil Sdn Bhd Taman Suria, Gurun 51 KP Ekonomi Bersatu Sdn Bhd Kompleks Jitra 2, Jitra 52 DKSB Auto Sdn Bhd Jalan Kilang Lama, Kulim 53 Mercu Utama Maju Corporation Sdn Bhd Pekan Baru, Sungai Petani 54 Mohd Jelani Hj Ali Sdn Bhd Amanjaya, Sungai Petani

Kelantan 55 Aman Razak Saga Sdn Bhd Jalan Pengkalan Chepa Kota Bharu 56 D.N.A.S. Automobile (M) Sdn Bhd Jalan Jedok, Tanah Merah 57 HBA Enterprise Sdn Bhd Jalan Sultan Yahya Petra, Kota Bharu 58 JM Otomobil Sdn Bhd Wakaf Siku, Kota Bharu 59 Raz Million Auto Sdn Bhd Bandar Machang, Machang

Terengganu 60 Ambassador Automotive Sdn Bhd Jalan Kelantan, Kuala Terengganu 61 Ramaco Motor Sdn Bhd Durian Burung, Kuala Terengganu 62 Rmway Corporation Sdn Bhd Jalan Kubang Kurus, Kemaman 63 Sekata Tegas Sdn Bhd Jalan Kamaruddin, Kuala Terengganu 64 Serangkai Automobiles (2003) Sdn Bhd Jalan Tuan Hitam, Jerteh 65 Wawi Otomobil Sdn Bhd Jalan Kamaruddin, Kuala Terengganu

Sabah 66 Permaisaba Sdn Bhd Jalan Pantai Sembulan, Kota Kinabalu 67 Sabaramai Sdn Bhd Jalan Penampang, Kota Kinabalu 68 Ski Auto Sdn Bhd Jalan Tuaran, Kota Kinabalu

Sarawak 69 Azamrule Sdn Bhd Pujut Road, Miri 70 Champion Automobile Sdn Bhd Brooke Drive, Sibu 71 Ngap Sayot Sdn Bhd Green Road, Kuching 72 Sarasa Sdn Bhd Jalan Tun Abang Hj Openg, Kuching

Melaka 73 IMN Enterprise Sdn Bhd Semabok, Melaka 74 Senjivan Sdn Bhd Taman Melaka Raya

177 EON BERHAD ANNUAL REPORT 2004 EON List of Non-Bumiputera Sales Dealers by State

State No Dealer Location

Selangor 73 Atiara Otomobil Sdn Bhd Taman Megah, Petaling Jaya 74 Cycle & Carriage (M) Sdn Bhd Jalan 219, Petaling Jaya 75 Jutania Otomobil Sdn Bhd Sea Park, Petaling Jaya 76 Syarikat Motor Kerishna Sdn Bhd Jalan Othman, Petaling Jaya 77 Smaragdus Sdn Bhd Taman Sri Hijau, Rawang 78 S.W. Credit Sdn Bhd Jalan Sungai Chua, Kajang 79 Kwangly Auto Sdn Bhd Taman Chi Liung, Port Klang 80 Syarikat Talents Enterprise Sdn Bhd Taman Ria, Tanjung Karang 81 Tayih Enterprise Sdn Bhd Medan Sungai Besar, Sungai Besar

Wilayah Persekutuan 82 Auto Bistari Sdn Bhd Pandan Indah, Kuala Lumpur 83 Aveo Auto Sdn Bhd Jalan Dewan Bahasa, Kuala Lumpur 84 Ideal Wheels Sdn Bhd Bukit Damansara, Kuala Lumpur 85 Intan Saga Sdn Bhd Jalan Puchong, Kuala Lumpur 86 Onflo Marketing Sdn Bhd Jalan Kepong, Kuala Lumpur 87 Paling Indra Sdn Bhd Taman Connaught Cheras, Kuala Lumpur 88 Utama Tangkas Sdn Bhd Setapak, Kuala Lumpur

Johor 89 Autofin Associates (Johor) Sdn Bhd Century Garden, Johor Bahru 90 Chuan Yuan Motor Credit Sdn Bhd Perindustrian Taman Johor, Johor Bahru 91 Speedway Motor Credit Sdn Bhd Taman Sri Tebrau, Johor Bahru 92 Street Car Sdn Bhd Tampoi, Johor Bahru 93 Temaco Auto Kredit Sdn Bhd Taman Sentosa, Johor Bahru 94 Yong Ming Motor Sdn Bhd Jalan Kolam Air, Johor Bahru

Kedah 95 Haruman Jaya Sdn Bhd Mergong Seberang Perai Utara, Alor Setar 96 Lee Motors (Alor Setar) Sdn Bhd Jalan Telok Wanjah, Alor Setar

Kelantan 97 Harima Automobil Sdn Bhd Jalan Sultan Yahya Petra, Kota Bharu

Melaka 98 Bunga Raya Auto Credit Sdn Bhd Jalan Ong Kim Wee, Melaka 99 Seong Hoe Motors Sdn Bhd Jalan Bendahara, Melaka

Negeri Sembilan 100 Bin Lee Sdn Bhd Jalan Tampin, Seremban 101 Target Lotus (M) Sdn Bhd Taman Semarak Phase 1, Nilai

Pahang 102 Pesat Auto Sdn Bhd Jalan Lim Hoe Lek, Kuantan 103 Soon Fuat Auto Sdn Bhd Jalan Temerloh, Mentakab 104 Syarikat Putra Putri Auto Sdn Bhd Jalan Beserah, Kuantan

Perak 105 Budiraya Sdn Bhd Jalan Kampar, Ipoh 106 Jaya Setia Otomobil Sdn Bhd Hala Datoh 1, Ipoh

Pulau Pinang 107 Autofin Associates (PG) Sdn Bhd Tye Sin Street, Pulau Pinang 108 JECG Sdn Bhd Jalan Sungai Pinang, Pulau Pinang 109 Saber Motors Sdn Bhd Jalan Masjid Negeri, Georgetown

Terengganu 110 Newstate Motors Sdn Bhd Pulau Kambing, Kuala Terengganu 111 Rodawira Otomobil Sdn Bhd Jalan Hiliran, Kuala Terengganu 112 Tenaga Setia Enterprise Sdn Bhd Jalan Batas Baru, Kuala Terengganu

Sabah 113 SKI Segar (Sandakan) Sdn Bhd Labuk Road, Sandakan 114 SKI Segar (Tawau) Sdn Bhd Kuhara Road, Tawau

Sarawak 115 Kereta Mewah Sdn Bhd Jalan Sylvia, Miri 116 Leasewell Leasing Sdn Bhd Jalan Datuk Wee Kheng Chiang, Kuching 117 Mission Motor Sdn Bhd Jalan Abell Utara, Kuching 118 Rimbunan Hijau General Trading Sdn Bhd Lanang Road, Sibu

178 EON BERHAD ANNUAL REPORT 2004 EON List of Franchise Service Dealers (FSD) by State as at 31 March 2005

Franchise Service Dealers Location

SELANGOR DARUL EHSAN 1A.T. Auto Workshop Pusat Perindustrian Sg. Chua, Kajang 2 Ahlan Greenwood Servitekar Greenwood Park, Batu Caves 3Alpha Auto Service And Parts Sdn Bhd Taman Perindustrian Bukit Serdang 4Atiara Auto Services & Parts Sdn Bhd Taman SEA, Petaling Jaya 5 Automass Autoworks Section 33, Shah Alam 6Avisco Auto Services Sdn Bhd Kawasan Perindustrian Temasya, Shah Alam 7 Best Dragon Sdn Bhd Taman Klang Utama, Klang 8Cycle & Carriage (M) Sdn Bhd Petaling Jaya 9Elegant Performance Sdn Bhd Bandar Sunway 10 Enkai Holding Sdn Bhd Taman Bukit Mewah, Kajang 11 Ezra Motos Bandar Baru Bangi 12 Fizam Auto Service Sdn Bhd Bandar Baru Ampang 13 Gangsa Bitara Sdn Bhd Bandar Tasik Puteri, Rawang 14 Gerak Yakin Sdn Bhd Bandar Puchong Jaya 15 High Power Service Centre Sdn Bhd USJ 19, Subang Jaya 16 Juara Nurani (M) Sdn Bhd Kampung Jawa, Klang 17 Kamaruddin Rahmat Motor Sdn Bhd Seksyen 24, Shah Alam 18 Kar World Sdn Bhd Bukit Serdang Industrial Park, Seri Kembangan 19 KD Dynamic Auto Sdn Bhd Damansara Damai 20 Kereta Kawan Motor Service Sdn Bhd Taman Setia Rawang 21 Kim Ban Huat Auto Service Centre Banting 22 Kwangly Auto Service Sdn Bhd Taman Klang Jaya 23 LZ Speed Master Service Sdn Bhd Kapar, Klang 24 Magnavision (M) Sdn Bhd Taman Alam Megah, Seksyen 27, Shah Alam 25 Mutiara BBS Sdn Bhd Taman Perindustrian Ringan Selayang Utama 26 Nor’s Service Centre Sdn Bhd UEP Subang Jaya 27 O.E. Autocare Sdn Bhd Seksyen 18, Shah Alam 28 Pantai Bharu Holdings Sdn Bhd Jalan Meru, Klang 29 PJ Volcar Service Centre Sdn Bhd SEA Park, Petaling Jaya 30 Pride Legion Sdn Bhd Taman Seri Gombak, Batu Caves 31 Prima Auto Care Kota Kemuning, Shah Alam 32 Prospek Teguh Auto Sdn Bhd Rawang Integrated Industrial Park 33 Pusat Perkhidmatan Autotek Jalan Goh Hock Huat, Klang 34 Pusat Perkhidmatan Pro-Auto Sdn Bhd Kajang Utama 35 Pusat Perkhidmatan Saga Care Taman Cheras Perdana 36 Pusat Servis Auto Sinaran Sdn Bhd Taman Lestari Perdana, Serdang 37 Racing Skill Development Sdn Bhd Taman Sri Muda, Shah Alam 38 S.W. Credit Sdn Bhd Taman Kajang Baru 39 Servis Deras Layang Kawasan Perindustrian Bukit Raja Selatan, Shah Alam 40 Shahs Motos Malaysia (1986) Sdn Bhd Pandan Cahaya 41 Shared Auto Sdn Bhd Kg Kebun Bunga, Shah Alam 42 Sign-Up Ventures Sdn Bhd SS 19, Subang Jaya 43 SMZ United Sdn Bhd Bandar Baru Sungai Buloh 44 Suasa Tiara Sdn Bhd Kaw. Perdagangan Desa Ria, Seri Kembangan 45 Syarikat Auto Sin Kee Sang Taman Dato Maniam, Dengkil 46 Teguh Karia Auto Service Jalan Klang Banting, Kuala Langat 47 Talents Auto Service Sdn Bhd Tanjong Karang 48 Tayih Auto Service Sdn bhd Sungai Besar 49 Top Speed Auto Service Centre Bandar Sunway, Petaling Jaya 50 Trisilco Auto Services Sdn Bhd Taman Industri Puchong 51 Wargacorp Sdn Bhd Kawasan Perindustrian Selayang Baru 52 Wira Jernih Sdn Bhd Taman Maju Jaya, Jalan Klang Lama 53 Zaibar Corporation Sdn Bhd Mayang Industrial Park 54 Zamrudvest Sdn Bhd Taman Industri Sg Buloh 55 Puncak Merak Sdn Bhd Bandar Pinggiran Subang, Shah Alam

179 EON BERHAD ANNUAL REPORT 2004 EON List of Franchise Service Dealers (FSD) by State (cont’d) as at 31 March 2005

Service Dealers Location

WILAYAH PERSEKUTUAN 56 Carworld Auto Service Centre Sdn Bhd Jalan Klang Lama 57 Century Car Care Sdn Bhd Taman Perindustrian OUG 58 Dakmaz Oto Edaran Sdn Bhd Jalan Ipoh 59 East Trends (M) Sdn Bhd Pandan Indah 60 Kita Otomobil Sdn Bhd Taman City, Jalan Selinsing 61 Pansinar Sdn Bhd Kampung Baru 62 Pusat Perkhidmatan Carman Sdn Bhd Jalan Kuchai Lama 63 Rakyat Motor Sdn Bhd Jalan Gombak 64 Saga Parts & Service Centre Sdn Bhd Pandan Jaya, Cheras 65 Sagamax Auto Services Sdn Bhd Kawasan Perindustrian Ringan Setapak 66 SKC Tyre Sdn Bhd Desa Pandan 67 Syarikat Bengkel Setia Lorong Keramat 68 Tripple Lead Auto Services Sdn Bhd Desa Tun Razak II, Cheras 69 Uni-Motive Sdn Bhd Kepong Entrepreneurs Park 70 Vision Pit Stop Sdn Bhd Bangsar Baru 71 JM Mobile Service Sdn Bhd Batu 5, Jalan Ipoh

PERAK DARUL RIDZUAN 72 Awan Anggun Sdn Bhd Jalan Besar, Bidor 73 Bercham Motors Sdn Bhd Bercham, Ipoh 74 Budiraya Sdn Bhd Taman Perindustrian Chandan Raya, Menglembu 75 Deluxe Point Services Sdn Bhd Ipoh Garden East 76 Jaya Setia Otomobil Sdn Bhd Jalan Lahat, Ipoh 77 Karang Saujana Sdn Bhd Kampung Berop, Tanjong Malim 78 Modern Tune Sdn Bhd Kawasan Perusahaan Bercham, Ipoh 79 R & Y Khidmat Edar Sdn Bhd Jalan Jelapang, Ipoh 80 Soon Hin Motor Jalan Beruas, Ayer Tawar

KEDAH DARUL AMAN 81 ANK RR Auto Services Sdn Bhd Jalan Tunku Mohd Asaad, Kulim 82 Edamin Spare Parts & Service Sdn Bhd Jalan Raya, Gurun 83 Haruman Jaya Sdn Bhd Seberang Jalan Putra, Alor Setar 84 Lee Cheng Auto Services And Parts Sdn Bhd Jalan Kampong Bahru, Sungai Petani 85 Lee Motors (Alor Setar) Sdn Bhd Jalan Telok Wanjah, Alor Setar 86 NR Spare Parts & Services Sdn Bhd Taman Kempas Indah 3, Kulim 87 Pusat Servis Splus (Jitra) Sdn Bhd Komplek Pekan Jitra 2, Jitra 88 Ramli Motor Jalan Pengkalan Hulu, Baling

PULAU PINANG 89 Autofin Associates (Pg) Sdn Bhd Tye Sin Street 90 Automobile Body Works Co Tanjung Tokong 91 Cathay Auto Service Jalan Dato’ Keramat, Nibong Tebal 92 Edaran Saga Servis & Alat Ganti Sdn Bhd Lengkok Dumbar, Jelutong 93 Emastulin Automobile Sdn Bhd Jalan Chain Ferry, Prai 94 Jecg Services Sdn Bhd Jalan Sungai Pinang 95 Keris Etika Sdn Bhd Sungai Ara, Bayan Lepas 96 LHCG Auto Care (M) Sdn Bhd Lorong Birch 97 S.M. Nusantara Sdn Bhd Bandar Seberang Jaya, Prai 98 Tatt Seng Jaya Automobile Sdn Bhd Taman Perindustrian Bukit Minyak, Seberang Prai 99 Wellesley Motor Workshop (Pg) Sdn Bhd Jalan Mengkudu, Juru

KELANTAN DARUL NAIM 100 Harima Automobil Sdn Bhd Lundang, Kota Bharu 101 Masmurni Karklinik Jalan Long Yunus, Kota Bharu 102 Mekar Pusat Servis Jalan Dusun Muda, Kota Bharu 103 P.T. Pantas Niaga Sdn Bhd Tunjung Mulung, Kota Bharu 104 Pro-Enegry Automobile (M) Sdn Bhd Padang Pak Amat, Wakaf Lanas, Pasir Puteh 105 Sri Baru Motor Sdn Bhd Lundang, Kota Bharu

180 EON BERHAD ANNUAL REPORT 2004 Service Dealers Location

TERENGGANU DARUL IMAN 106 Energy Automobile Jalan Besar, Dungun 107 New State Motors Sdn Bhd Jalan Pulau Kambing, Kuala Terengganu 108 Ramaco Motor Sdn Bhd Jalan Kelantan, Kuala Terengganu 109 Rmway Autotech Sdn Bhd Kawasan Perindustrian Jakar 3, Kemaman 110 Rodawira Otomobil Service Sdn Bhd Jalan Kelantan, Kuala Terengganu 111 Serangkai Automobiles Sdn Bhd Kg Padang Luas, Jerteh 112 Tenaga Setia Service Sdn Bhd Jalan Bukit Kecil, Kuala Terengganu 113 United Agenda Sdn Bhd Paka, Dungun 114 Yoong Lee Ketok Bodi & Sembor Cat Kawasan Perindustrian Chendering, Kuala Terengganu

PAHANG DARUL MAKMUR 115 ACM Excite Automobile Parts & Service Centre Maran 116 Automotive Service Malaysia Sdn Bhd Jalan Bukit Ubi, Kuantan 117 Bestech Auto Accessories & Services Centre Kuala Rompin 118 Jelai Auto Sdn Bhd Jalan Tanah Putih, Kuantan 119 Koperasi Serbaguna Dara Berhad Muadzam Shah 120 Pusat Auto Service Centre Sdn Bhd Jalan Wong Ah Jang, Kuantan 121 Pusat Servis Raub Jalan Lipis, Raub 122 Sagatechnic Auto Service Centre Lorong Padang Lallang, Kuantan 123 Soon Fuat Auto Sdn Bhd Jalan Temerloh, Mentakab 124 Sri Jengka Sdn Bhd Nadikota, Bandar Jengka 125 Syarikat Putra Putri Auto Sdn Bhd Jalan Beserah, Kuantan 126 Tenaga Degadong Sdn Bhd Bandar Indera Mahkota, Kuantan

NEGERI SEMBILAN DARUL KHUSUS 127 Art Nouveau Enterprise Sdn Bhd Taman Perindustrian Kecil Seremban, Seremban 128 GT Innovater Sdn Bhd Senawang Industrial Area, Seremban 129 Lai Hon Ming Motors (M) Sdn Bhd Arab Malaysian Industrial Park, Nilai 130 Ling Lim Motor Taman Muhibbah, Bahau 131 M & F Maju Auto Sdn Bhd Kawasan Perindustrian Ringan, Seremban 132 Minsoon Credit Corporation (M) Sdn Bhd Taman Bukit Emas, Seremban 133 Motomania Sdn Bhd Kawasan Perindustrian Ringan, Nilai 134 Perisai Wira Saga Service Centre Sdn Bhd Perindustrian Lukut Indah, Port Dickson 135 Syarikat Darus Sdn Bhd Lorong Raja Melewar, Kuala Pilah 136 Tele Cekap Sdn Bhd Seremban 2 137 Wanija Industries (M) Sdn Bhd Kawasan Perindustrian Senawang, Seremban 138 Wira Saga Auto Service Enterprise Jalan Seremban, Tampin

MELAKA 139 Bunga Raya Parts & Services Sdn Bhd Taman Malim Jaya 140 GT One Autocare Sdn Bhd Taman Datuk Thamby Chik Karim, Batu Berendam 141 IMN Enterprise Sdn Bhd Taman Kasturi, Semabok 142 Kembara Hebat Sdn Bhd Taman Cheng Baru, Cheng 143 Kuang Auto Workshop Alor Gajah 144 One Step Service Taman Peringgit Jaya 145 Pusat Servis Mega Kawasan Perindustrian Ringan, Masjid Tanah 146 Senjuang Service Centre Sdn Bhd Kawasan Perindustrian Ringan Malim Jaya 147 Seong Hoe Motors Sdn Bhd Jalan Tun Sri Lanang 148 ZDR Maju Niaga Enterprise Taman Debunga, Jasin

181 EON BERHAD ANNUAL REPORT 2004 EON List of Franchise Service Dealers (FSD) by State (cont’d) as at 31 March 2005

Service Dealers Location

JOHOR DARUL TAKZIM 149 Aggresive Model Sdn Bhd Jalan Pasir Pelangi, Johor Bahru 150 Arilwangsa Pusat Servis Sdn Bhd Lorong Satu, Batu Pahat 151 Bengkel Memateri Kenderaan Tek Yee Taman Perindustrian, Pekan Nenas 152 Bestpark Service & Spare Parts Sdn Bhd Taman Sri Lalang, Kota Tinggi 153 Cahaya Bumi Sdn Bhd Jalan Sulaiman, Muar 154 Chuan Yuan Motor Credit Sdn Bhd Perindustrian Taman Johor, Johor Bahru 155 Cosmopolitan Auto Sdn Bhd Taman Sri Senai 156 Excel Motor Sdn Bhd Jalan Skudai, Johor Bahru 157 G.L. Service Centre Sdn Bhd Jalan Kemajuan, Tangkak 158 High Grade Garage Sdn Bhd Bandar Baru Permas Jaya, Johor Bahru 159 Hock Lee Motor Credit Sdn Bhd Jalan Dato Abdullah Tahir, Johor Bahru 160 Jet Auto Service Centre Jalan Bakri, Muar 161 Kasim Auto Enterprise Jalan Pontian-Benut, Pontian 162 Likly Autocare Sdn Bhd Taman Wawasan, Mersing 163 LTC Auto Services Sdn Bhd Bandar Indahpura, Kulai 164 Merdeka Auto Sdn Bhd Jalan Buluh Kasap, Segamat 165 Nadi Aidril Parts & Service Sdn Bhd Taman Sembrong Barat, Johor Bahru 166 P.G. Link Auto Service Sdn Bhd Kompleks Pusat Bandar, Pasir Gudang 167 PDP Auto Services Sdn Bhd Taman Universiti Industrial Park, Johor Bahru 168 Sagamart Auto Sdn Bhd Jalan Khalidi, Muar 169 Saksama Auto Services Sdn Bhd Taman Johor Jaya, Johor Bahru 170 Silver Champ Auto Service (M) Sdn Bhd Taman Tampoi Utama, Johor Bahru 171 Speedway Auto Service Centre Sdn Bhd Taman Johor Jaya, Johor Bahru 172 Street Car Sdn Bhd Kawasan Perindustrian Tampoi, Johor Bahru 173 Syarikat Rahman Brothers & Rakan-Rakan Sdn Bhd Taman Ungku Tun Aminah, Skudai 174 Teck Hiong Motors Sdn Bhd Taman Johor Jaya, Johor Bahru 175 Triumph Masters Trading Sdn Bhd Taman Putri Wangsa, Ulu Tiram 176 Union Auto Care Sdn Bhd Jalan Besar, Kluang 177 Vitara Parts & Services Sdn Bhd Taman Gembira, Johor Bahru 178 Yong Ming Auto Services & Parts Sdn Bhd Taman Desa Jaya, Johor Bahru 179 2K Auto Enterprise Taman Perbadanan Islam Kebun Teh, Johor Bahru

SABAH 180 J Enterprise Jalan Bakalau, Beaufort 181 K.B. Jaya Warisan Sdn Bhd Jalan Kota Kinabalu, Kota Belud 182 Keningau Saga Otomobil Keningau Woodlight Industrial Complex, Keningau 183 Kota Bumi Sdn Bhd Lok Kawi Industrial Estate, Kota Kinabalu 184 Permaisaba Sdn Bhd Jalan Bundusan, Penampang 185 Si Khiong Industries Sdn Bhd Jalan Tuaran, Kota Kinabalu 186 Si Khiong Industries Sdn Bhd Jalan Bahagia, Tawau 187 SMS Kg. Likas (Sabah) Sdn Bhd Kota Kinabalu

SARAWAK 188 ABC Motor Garage Co Bahagian Samarahan, Serian 189 Champion Automobile Services & Parts Sdn Bhd Brooke Drive, Sibu 190 Duckham’s Lub Express Jalan Kubong, Limbang, Sarawak 191 Heong Hua Motor Service New Shophouse Centre, Baram 192 Holy Auto Service Centre Jalan Bintulu/Tatau, Bintulu 193 Kereta Mewah Sdn Bhd Jalan Gudang Padi, Miri 194 Lee’s Workshop Batu Niah Bazaar, Batu Niah 195 MB Lim Motor Sdn Bhd Jalan Batu Kawa, Kuching 196 Mission Motor Sdn Bhd Jalan Abell Utara, Kuching 197 Ngap Sayot Sdn Bhd Green Road, Kuching 198 Rimbunan Hijau General Trading Sdn Bhd Upper Lanang Road, Sibu 199 Tan Khoon Sia Motor Repair Garage Sabu Road, Sri Aman 200 Wong Hock Hin Motor, Air Condition & Auto Service Jalan Ulu Sg Kapit, Kapit 201 LTL Friendship Car Services & Parts Centre Taman Perindustrian Ringan, Susur Jambu, Sarikei

182 EON BERHAD ANNUAL REPORT 2004 Euromobil List of Sales Dealers by State

State No Dealer Location

Melaka 1 Seong Yeong Enterprise Sdn Bhd Jalan Tun Sri Lanang, Melaka

Johor 2 Ottomers Vehicles Sdn Bhd Taman Molek, Johor Bahru

Pulau Pinang 3 Lancia Auto Enterprise Sdn Bhd Jalan Chain Ferry, Butterworth

Wilayah Persekutuan 4 Ideal Wheels Sdn Bhd Bukit Damansara, Kuala Lumpur

Sarawak 5 YLL Auto Sdn Bhd Tabuan Road, Kuching

183 EON BERHAD ANNUAL REPORT 2004 Corporate Directory

SUBSIDIARIES ASSOCIATES

1. EON Trading Sdn Bhd 1. Mitsubishi Motors Malaysia Sdn Bhd 1st Floor, Glenmarie Service Centre Level 48, Tower 2 EON Head Office Complex Petronas Twin Towers No. 2, Persiaran Kerjaya Kuala Lumpur City Centre Taman Perindustrian Glenmarie 50088 Kuala Lumpur. Seksyen U1 (Distribution of motor vehicles, vehicle components, spare 40150 Shah Alam parts and accessories) Selangor Darul Ehsan. (Marketing and trading of car accessories and car care 2. Proton Parts Centre Sdn Bhd products, selling of innovative merchandise, and general No. 1, Jalan Arkitek U1/22, Seksyen U1 trading) HICOM Glenmarie Industrial Park P.O. Box 7400 40150 Shah Alam 2. EON Properties Sdn Bhd Selangor Darul Ehsan. EON Head Office Complex (Warehousing and distribution of motor vehicle spare parts No. 2, Persiaran Kerjaya and accessories) Taman Perindustrian Glenmarie Seksyen U1 40150 Shah Alam 3. SRT-EON Security Services Sdn Bhd Selangor Darul Ehsan. Wisma Rahmat (Investment in and management of properties) 54, Jalan SS6/14 Kelana Jaya 47301 Petaling Jaya 3. Automotive Conversion Engineering Sdn Bhd Selangor Darul Ehsan. EON Head Office Complex (Provision of security services) No. 2, Persiaran Kerjaya Taman Perindustrian Glenmarie Seksyen U1 4. Hicom Megah Sdn Bhd 40150 Shah Alam Level 1, Wisma DRB-HICOM Selangor Darul Ehsan. No. 2, Jalan Usahawan U1/8 (Conversion and modification of motor vehicles and Seksyen U1 marketing of car accessories) 40150 Shah Alam Selangor Darul Ehsan. (Property development and investment holding) 4. Euromobil Sdn Bhd Audi Centre Glenmarie Lot 27, Jalan Pelukis U1/46 5. Johnson Controls Automotive Holding (M) Sdn Bhd Kawasan Perindustrian Temasya Lot 5, Persiaran Sabak Bernam Seksyen U1 Seksyen 26 40150 Shah Alam 40000 Shah Alam Selangor Darul Ehsan. Selangor Darul Ehsan. (Marketing of the Audi motor vehicles and related spare (Manufacturing of car seats, seat paddings, steering wheels, parts and servicing of vehicles) and other car interior parts for the group and investment holding and property letting for the company)

5. EONMOBIL Sdn Bhd EON Head Office Complex No. 2, Persiaran Kerjaya Taman Perindustrian Glenmarie Seksyen U1 40150 Shah Alam Selangor Darul Ehsan. (Distribution and marketing of non-Proton motor vehicles)

184 EON BERHAD ANNUAL REPORT 2004 Proxy Form

I/We, of being a member/members of EDARAN OTOMOBIL NASIONAL BERHAD, hereby appoint the Chairman of the Meeting or of as my/our proxy to vote for me/us on my/our behalf at the Twenty-first Annual General Meeting of the Company to be held at Glenmarie Ballroom A, The Pan Pacific Glenmarie Resort, 1, Jalan Usahawan U1/8, Seksyen U1, 40250 Shah Alam, Selangor Darul Ehsan on Monday, 30 May 2005 at 9.30 a.m. and at any adjournment thereof.

My/Our proxy is to vote as indicated below:

No. Resolutions For Against

1. Adoption of the Reports of the Directors and Auditors and the Audited Financial Statements for the year ended 31 December 2004. Resolution 1

2. Declaration of a final dividend of 18 sen per share less 28% Malaysian Income Tax and a special dividend of 84 sen per share less 28% Malaysian Income Tax. Resolution 2

3. Election of Directors Under Article 103: i. Y Bhg Tan Sri Saw Huat Lye Resolution 3 ii. Y Bhg Datuk Ir (Dr) Ahmad Zaidee bin Laidin Resolution 4 iii. Encik Wan Mat bin Wan Sulaiman Resolution 5 iv. Y Bhg Datuk Choo Keng Kit Resolution 6 v. Ms Vimala Menon Resolution 7

4. To approve the Directors’ fees amounting to RM574,611 for the year ended 31 December 2004. Resolution 8

5. Re-appointment of PricewaterhouseCoopers as Auditors and authorising the Directors to fix their remuneration. Resolution 9

6. Special Business: i. Authorising Directors to issue shares not exceeding 10 per cent of the Issued Share Capital. Resolution 10 ii. Renewal of Shareholders’ Mandate on recurrent related party transactions and extension of the scope of Shareholders’ Mandate to apply to recurrent related party transactions with new related parties. Resolution 11

(Please indicate with “X” how you wish to cast your vote)

Signed this day of 2005.

No. of Shares Signature/Seal

Notes: (i) A member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy need not be a member of the Company. (ii) The instrument appointing the proxy must be deposited at the Office of the Registrars, ShareWorks Sdn Bhd, No. 23, Jalan Sri Hartamas 7, Sri Hartamas, 50480 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting. I EON BERHAD ANNUAL REPORT 2004 FOLD HERE

FOLD HERE

STAMP

EON Head Office Complex No. 2, Persiaran Kerjaya, Seksyen U1 Taman Perindustrian Glenmarie 40150 Shah Alam Selangor Darul Ehsan