CORPORATE responsibility
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20 05 62
2005 ANNUAL REPORT DRB-HICOM BERHAD WE HELP MAKE THINGS BETTER
64 HUMAN RESOURCE DEVELOPMENT (203430-W)
66 INFORMATION TECHNOLOGY
67 CALENDAR OF EVENTS 61
20 05 2005 ANNUAL REPORT DRB-HICOM BERHAD (203430-W) 62
20 We Help Make Things Better 05 DRB-HICOM’S ADOPTION OF THE “PROFITABILITY WITH SOCIAL RESPONSIBILITY” CONCEPT IS 2005 ANNUAL REPORT DRB-HICOM BERHAD A REFLECTION OF ITS COMMITMENT AS A RESPONSIBLE CORPORATION, ENSURING THAT WHILE
THE COMPANY WILL STRIVE TO MAXIMISE PROFITS FOR ITS SHAREHOLDERS, IT WILL ALSO
CONTRIBUTE TO THE WELL-BEING OF SOCIETY AND THE NATION. (203430-W)
DRB-HICOM’s adoption of the “Profitability with Social In line with the Company’s vision, DRB-HICOM Berhad Responsibility” concept is a reflection of its commitment and the companies under the Group, together with help as a responsible corporation, ensuring that while the from staff members and PUTERI DRB-HICOM, answered company will strive to maximise profits for its the call to aid victims of the Tsunami tragedy of 26 shareholders, it will also contribute to the well-being of December 2004, with contributions in the form of cash, society and the nation. As such, DRB-HICOM has never vehicles, goods and services totalling RM1.17 million. hesitated to make charitable contributions, even for the smallest amounts, in support and recognition of charitable organisations and non-governmental organisations (NGOs) for their commendable efforts to help the needy and the underprivileged. 63
20 From time to time, DRB-HICOM also contributes to The Semai BAKTI project is a joint initiative between 05 various activities with the objective of helping needy BAKTI and “Gabungan Wawasan Generasi FELDA” in 2005 ANNUAL REPORT DRB-HICOM BERHAD communities, specifically cancer patients and the aid of underprivileged children living in FELDA handicapped. settlements throughout the country.
As one of its contributions, DRB-HICOM, through its In addition, DRB-HICOM and its subsidiaries have also subsidiary USF-HICOM (Malaysia) Sdn. Bhd., donated a continued to contribute to projects organised from time (203430-W) Mitsubishi Delica van worth RM91,000 to the “Yayasan to time by various foundations and charitable Budi Penyayang” who will be using the vehicle to organisations in the country. transport cancer patients.
In line with the same objectives, once again DRB- HICOM donated two units of Mitsubishi Space Gear vans worth RM158,000.00 each which will be used as mobile clinics under the Semai BAKTI project. Human Resource Development
INTRODUCTION
THE YEAR UNDER REVIEW WITNESSED THE IMPLEMENTATION OF A SERIES OF PROGRAMMES
AIMED AT FURTHER CONSOLIDATING DRB-HICOM BERHAD’S BUSINESS OPERATIONS TO MEET
THE CHALLENGES POSED BY AN INCREASINGLY COMPETITIVE AND RAPIDLY EVOLVING BUSINESS 64 ENVIRONMENT. A STABLE REVENUE GROWTH, COMBINED WITH REDUCED MANPOWER,
RESULTED IN HIGHER PRODUCTIVITY PER CAPITA. THE GROUP’S HEADCOUNT AT YEAR-END
20 STOOD AT 29,099 WITH 14,689 REPRESENTING THE SUBSIDIARIES. OVERALL, DESPITE THE TOUGH 05 BUSINESS ENVIRONMENT, OUR DEDICATED HUMAN RESOURCE HAS DELIVERED A VERY
2005 ANNUAL REPORT DRB-HICOM BERHAD COMMENDABLE PERFORMANCE.
(203430-W) ENHANCING BUSINESS VALUE stewardship enhancement helps to streamline our operations to be consistent with corporate governance With the improvement of stakeholder value as our top requirements and ensure transparency in every aspect priority, our goal is to nurture a performance-driven of our business. work culture by enhancing and adding value to processes and functional deliveries. At the heart of these initiatives, Our organisational capabilities, coupled with our the Group Human Resource practitioners have been passion and relentless emphasis on quality, have further imbued with a need for a higher-level business transcended into the global market and attracted sense and responsiveness. new world-class franchises, producers and suppliers including Daimler Chrysler and General Motors. The Group operates on a devolved set-up, with the In addition, our manufacturing operations have Group Corporate Office providing a consultative-cum- earned the recognition of being the first-tier European advisory role to other business units. Information flow, automotive component suppliers practising VDA 6.3 engagement and relationship building exercises are the Quality Audit. This has further strengthened our cornerstone in our human capital management. While reputation and base as the single largest integrated policies remain firmly in place, we recognise the need automotive company in Malaysia. to be flexible to refine procedures to take into account the dynamics of a constantly changing marketplace, while strengthening our internal partnership. This PERFORMANCE IMPERATIVES PEOPLE WELLNESS & WORKPLACE HARMONY Internal interventions and tools have been installed to A disciplined workforce well versed with the ethos of modernise and upgrade our operating performance. moral conduct is fundamental towards attaining better Training and development opportunities are regularly business performance. Recognising the need to have a provided by our in-house Learning Centre and reliable social balance, the Group has been actively supporting external consultants to enhance the flexibility and the activities undertaken by its sports and recreation club. employability of our workforce. A special financial assistance scheme has been set up to encourage Continued worker participation in national-level continuous education. The Group continues to focus on gatherings and Hadhari programmes are manifestation knowledge management with a firm belief that such of our commitment towards fulfilling the nation’s 65 intangible assets can offer the Group a distinct agenda. Coupled with a harmonious working competitive advantage. environment promising fair treatment, our employees remain inspired and committed to their jobs. Our Nurturing our staff has resulted in a pool of talent relationship with the trade unions continues to bear that we can deploy laterally and vertically within the meaningful results with no labour unrests arising. 20 Group. Infusion of new challenges and development 05 assignments within the job scope are inherent attributes A special programme has been established to provide of our talent retention strategy. This ease of Group financial relief to employees or their close dependents 2005 ANNUAL REPORT DRB-HICOM BERHAD deployment, together with leadership enrichment, who are stricken with critical illnesses or other has facilitated succession management in realising new misfortunes. Several Group employees also received perspective on management continuity. financial aid to rebuild their livelihood disrupted by the tsunami incident, which wrecked havoc in the region in The performance management system encompasses the December. Further exercise of our good corporate (203430-W) Group, various business units and individual employees. citizenry is making available opportunities to suitable It has gained greater significance as the accountability undergraduates to equip them with the necessary pre- and performance indicators of senior management are employment skills. cascaded down. We believe in linking rewards and compensation with profitability and performance The Group advocates the importance of safety and targets. The Group upholds the maintenance of internal health at work areas with the implementation and equity with increments being pegged not only to compliance of regulatory and statutory requirements. performance but also to salary compa-ratios as well. The installation of OSHAS 18001 and ILO-OSH 2001 Safety and Health Management System and the ISO 14001 Environmental Management System are testament to our commitment to safeguarding and preserving the environment. Regular workplace audits and continuous training ensure that safety, health and environment remain as essential features of the Group’s operations. Information Technology
AS PART OF A STRATEGIC ICT PLAN TO ELEVATE INFORMATION TECHNOLOGY UTILISATION ACROSS
THE ENTIRE DRB-HICOM GROUP, THE COMPANY LAUNCHED TWO NEW ICT INITIATIVES DURING
THE PERIOD UNDER REVIEW. THE PERIOD ALSO SAW THE COMPLETION OF TWO PREVIOUSLY
INITIATED APPLICATIONS, WHICH BECAME OPERATIONAL DURING THE SAME PERIOD. 66
20 The Electronic Document Management programme As a follow-up to the group information security policy, 05 commenced with the installation and implementation the Company commenced work on the Business of the Enterprise Document Management System, which Continuity Planning program. When completed, this
2005 ANNUAL REPORT DRB-HICOM BERHAD enables users to collaborate by providing simultaneous initiative will provide a set of standard operating access to digital documents and a host of efficiency procedures to ensure the continuity of critical business enabling functionalities. operations during a disaster.
A Shared Services model was launched with the To further improve corporate efficiency, a new workflow implementation of the Enterprise Resource Planning system was implemented to eliminate the need to move (203430-W) System for the automotive components manufacturing forms around the workplace and reduce the long cluster. Participating companies in the cluster access waiting time to get the forms endorsed. their system through the Group Virtual Private Network from a shared central system hosted by a group IT Most organisations deploy information technology to company. This model, while rationalising applications help run the business but the DRB-HICOM Technology within the Group, has enabled participating companies Division went a step further ahead by using IT to help to save substantial investments in computer resources as grow the business. The goal is to empower all aspects well as reduce operational costs. of the Group with technology to achieve its overall business targets. Calendar of Events
01 April 2004 Visit by a group of analysts and fund managers to HICOM Plastics Ltd. and General Motors plant in Rayong, Thailand. The purpose of the visit was to give a better insight into the operations of both companies that are involved in the manufacturing of the Chevrolet brand in Thailand. Also present were the Senior Management of 67 DRB-HICOM Berhad.
20 13 April 2004 05 In conjunction with the 9th Defence Services Asia Exhibition,
DRB-HICOM Defence Technologies Sdn. Bhd. (DEFTECH) held a 2005 ANNUAL REPORT DRB-HICOM BERHAD handing over ceremony of the new refurbished army vehicles by DEFTECH to the Ministry of Defence. (203430-W) 03 June 2004 Pusat Pemeriksaan Kenderaan Berkomputer Sdn. Bhd. (PUSPAKOM), signed a memorandum of understanding on the vehicle inspection scheme with 6 financial institutions namely Am Finance Berhad, Maybank Finance Berhad, Affin-ACF Finance, Bumiputra-Commerce Finance Berhad, Southern Finance Berhad, and EON Finance Berhad. Witnessing the event was Y.B. Dato’ Haji Mohd Shafie bin Haji Apdal, the Minister of Domestic Trade & Consumer Affairs.
10-12 June 2004 The 4th CEOs’ Conference was held in Shangri-la’s Tanjung Aru Resort, Kota Kinabalu, Sabah with the theme “Driving Alliances”. A total of 72 Chief Executive Officers and Senior Management attended the Conference. Calendar of Events
10-12 June 2004 The 1st Spouse Programme with the theme “We Are Family” was held in Shangri-la’s Tanjung Aru Resort, Kota Kinabalu, Sabah. The purpose was to bring the spouses of the Chief Executive Officers of the Group and Senior Management of DRB-HICOM Berhad together and to get them to know one another in a more 68 exciting environment.
20 05 17 June 2004 DRB-HICOM Defence Technologies Sdn. Bhd. (DEFTECH) signed a Memorandum of Understanding with Agusta SpA from Italy in the 2005 ANNUAL REPORT DRB-HICOM BERHAD presence of Y.A.B. Dato’ Seri Abdullah Haji Ahmad Badawi, the Prime Minister of Malaysia. With this signing, DEFTECH will be the official sales and marketing agent for Agusta helicopters in Malaysia. (203430-W) 16 July 2004 DRB-HICOM Information Technologies Sdn. Bhd. who had been appointed to assist in the setting up of the Open Source Competency Centre (OSCC) in Cyberjaya, came to its proud moment when the Government openly encouraged the use of the Open Source Software to the public sector at the opening ceremony of the OSCC by Y.Bhg. Tan Sri Samsudin Osman, the Chief Secretary of the Government of Malaysia.
23-25 July 2004 The 11th Human Resource Conference 2004 with the theme “Business Sense for Business Partnership” was held at Kenyir Lakeview Resort, Tasik Kenyir, Terengganu. 25 July 2004 Official opening of Modenas motorcycle showroom in Jakarta, Indonesia which marks another milestone for the Group going global.
69
26 July 2004 Launch of Citroen Xsara Picasso by Y.B. Dato’ Seri Dr. Lim Keng Yaik, 20 the Minister of Enery, Water and Telecommunication. Also present 05 were H.E. Jacques Lapouge, the French Ambassador, Y.Bhg. Tan Sri
Dato’ Seri Mohd Saleh Sulong, the Group Chairman, DRB-HICOM 2005 ANNUAL REPORT DRB-HICOM BERHAD Berhad, Y.Bhg. Dato’ Ismayudin Abd Manan, the Chairman of Directional (Malaysia) Sdn. Bhd. and Y.Bhg. Datuk William Chong, the Group Director, DRB-HICOM Berhad. The launch was held amidst grand fanfare and colour at the French Embassy in Kuala Lumpur. (203430-W)
07 August 2004 Launch of Modenas Kriss 100cc by Y.A.B. Dato’ Haji Abdul Ghani Othman, Menteri Besar Johor.
14 August 2004 DRB-HICOM’s 2004 ANNUAL DINNER with the theme “An Enchanting Evening of Pink and Green”, saw 51 employees of DRB-HICOM receiving the long service award for the 10, 15 and 20 years categories. Calendar of Events
28 August 2004 In conjunction with the Merdeka Day Celebration and the waving of the Jalur Gemilang campaign, Motosikal dan Enjin Nasional Sdn. Bhd. (MODENAS) and Edaran Modenas Sdn. Bhd. (EMOS) organised a convoy troop from Wisma DRB-HICOM to Kampung Endah Selangor, Putrajaya, Sepang, Bagan Lalang, Kampung Bakung, Morib, Banting and Shah Alam to distribute the Jalur Gemilang 70 flags. The event was officiated by Y.Bhg. Tan Sri Dato’ Seri Mohd Saleh Sulong, the Group Chairman, DRB-HICOM Berhad.
20 09-11 September 2004 05 The 2nd Marketing & Communications Conference was held in Guoman Beach Resort, Port Dickson for the public relation and
2005 ANNUAL REPORT DRB-HICOM BERHAD marketing practitioners of the Group with the theme “Partners for Strategic Branding”. Dr Paul Temporal, the branding “guru” was the main speaker who conducted the two-day workshop for over 50 participants. (203430-W)
15-17 September 2004 The inaugural Procurement Conference 2004 with the theme “Group Synergy Through Strategic Procument” was held at the Avillion Resort, Port Dickson.
23 September 2004 DRB-HICOM Berhad held its 14th Annual General Meeting at Pan Pacific Glenmarie Resort in Shah Alam. 09 October 2004 Launch of Modenas Kristar 110cc by Y.B. Dato’ Ahmad Husni Hanadzlah, the Deputy Minister of International Trade and Industry. 71
11 October 2004 20 Malaysian Truck & Bus Sdn. Bhd. (MTB) signed a business 05 agreement with Daimler Chrysler Malaysia Sdn. Bhd., the local
distributor of Mercedes-Benz, to locally assemble the Mercedes-Benz 2005 ANNUAL REPORT DRB-HICOM BERHAD E-Class at MTB’s plant in Pekan, Pahang. Also present to grace the event was Y.A.B. Dato’ Sri Mohd Najib bin Tun Haji Abdul Razak, the Deputy Prime Minister of Malaysia. (203430-W)
12 October 2004 Official opening of DRB-HICOM Sports Club’s recreational room and prize giving ceremony for the Intra Club Games 2004.
14 October 2004 Launch of Pusat Pemeriksaan Kenderaan Berkomputer Sdn. Bhd. (PUSPAKOM) “Balik Kampung” with artistes campaign at PUSPAKOM Wangsa Maju branch. The campaign was held in conjunction with the festive “Hari Raya” season with a message to remind all motorists the importance of road safety before a long journey. Calendar of Events
08 November 2004 DRB-HICOM Sports Club together with the Al-Hidayah Surau of Wisma DRB-HICOM held a breaking of fast dinner with orphans from Sekolah Menengah Kota Damansara Section 6, Selangor. The event was held at the main Lobby of Wisma DRB-HICOM 72 in Glenmarie.
20 05 01 December 2004 Launch of Chevrolet’s premium mini car, the Chevrolet Spark 2005 ANNUAL REPORT DRB-HICOM BERHAD at Wisma DRB-HICOM by Y.Bhg. Tan Sri Dato’ Seri Mohd Saleh Sulong, the Group Chairman, DRB-HICOM Berhad. (203430-W)
18 January 2005 Launch of EON Bank Platinum Mastercard credit card by Y.Bhg. Dato’ Maznah Abdul Jalil, the Director of EON Bank, representing Y.Bhg. Tan Sri Dato’ Seri Mohd Saleh Sulong, the Chairman, EON Bank Berhad. 25 February 2005 Official Rolled-Out ceremony of the Mercedes-Benz E-Class from MTB’s plant in Pekan, Pahang. The ceremony was graced by Y.A.B. Dato’ Sri Mohd Najib bin Tun Haji Abdul Razak, the Deputy Prime Minister of Malaysia. 73
19 March 2005 Handing over ceremony for 43 units of HICOM Perkasa trucks by 20 Automotive Corporation (Malaysia) Sdn. Bhd. (ACM), a subsidiary 05 of DRB-HICOM Berhad to “Lembaga Pertubuhan Peladang”. The ceremony was held in “Pusat Pertubuhan Peladang” Lahar 2005 ANNUAL REPORT DRB-HICOM BERHAD Bubu, Kepala Batas, Pulau Pinang and DRB-HICOM was represented by Y.Bhg. Datuk Abu Samah Bachik, the Senior Group Director, Operations while Y.B. Datuk Seri Haji Mohd Sharif Haji Omar, the Deputy Minister of Agriculture & Agro-Based Industries officiated the event. (203430-W) CORPORATE governance
74
20 05 76
2005 ANNUAL REPORT DRB-HICOM BERHAD STATEMENT ON CORPORATE GOVERNANCE
87 STATEMENT ON INTERNAL CONTROL (203430-W)
90 REPORT OF THE AUDIT COMMITTEE
98 BRIEF ON ENTERPRISE-WIDE OPPORTUNITY & RISK MANAGEMENT (EORM)
100 ADDITIONAL COMPLIANCE INFORMATION
114 STATEMENT OF DIRECTORS’ RESPONSIBILITY 75
20 05 2005 ANNUAL REPORT DRB-HICOM BERHAD (203430-W) Statement on Corporate Governance
The Board of Directors is committed to ensuring that the highest standards of corporate governance are practised 76 throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholder value and financial performance.
The principles and best practices of the Malaysian Code on Corporate Governance (the Code) issued in March 2000 20 were incorporated into the revamped Listing Requirements of the Kuala Lumpur Stock Exchange (KLSE) (now 05 known as Bursa Malaysia Securities Berhad) in January 2001. The principles of the Code enunciated in Part 1 are stated in four parts, namely:-
2005 ANNUAL REPORT DRB-HICOM BERHAD • A : Directors • B : Directors’ Remuneration • C : Shareholders • D : Accountability and Audit
The Code, in mandating the compliance with the principles stated, establishes the best practices in corporate (203430-W) 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 April 2004 and ended 31 March 2005. The Board of Directors further confirms 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. DIRECTORS The composition of the Board including Non-Executive Directors and the Independent Directors provided the 77 COMPOSITION OF THE BOARD Board with a good mix of industry-specific knowledge For two (2) months at the beginning of the financial and broad business and commercial experience. This year, the Board was made up of fifteen (15) members. balance enabled the Board to provide clear and Thereafter for the rest of the financial year, the Board effective leadership to the Group and to bring 20 had fourteen (14) members, seven (7) of whom being informed and independent judgement to many aspects 05 Non-Executive Directors. Five (5) of the latter were of the Group’s strategy and performance so as to Independent Directors. No individual or group of ensure that the highest standards of conduct and 2005 ANNUAL REPORT DRB-HICOM BERHAD individuals dominated the Board’s decision-making integrity were maintained by the Group. powers and processes and the number of Directors (not counting the Independent Directors) reflected fairly the investment of the shareholders. BOARD RESPONSIBILITIES The Board retains full and effective control of the Tan Sri Dato’ Seri Mohd Saleh Sulong was the Chairman Group. This includes responsibility for determining the (203430-W) of the Board and Chief Executive of the Company. This Group’s overall strategic direction as well as was perceived as appropriate and of benefit to the development and control of the Group. Key matters, Group for his experience and intimate knowledge of the such as approval of annual and interim results, Group and its workings while there was good check- acquisitions and disposals, investments and new and-balance with a strong independent element businesses, as well as material agreements, major capital including the appointment of a highly reputable and expenditures, budgets, long range plans, debt and experienced Referral Director. The Board as a whole had capital structuring, and succession planning for top always imposed on itself and the Chairman and ensured management are reserved for the Board. These matters compliance by the Board as a whole and by him of all are set out in a formal statement in the Board Charter. appropriate principles and best practices with regard to impartiality, conflict-avoidance and management, shareholder and stakeholder interest and protection, and good corporate governance. Statement on Corporate Governance
In the financial year, the Board held six (6) meetings. report back to the Board with their recommendations. 78 At each meeting, there was a full financial and The ultimate responsibility for the final decision on all business review and discussion, including trading matters lies with the Board. The four principal Board performance to date against the annual budget and committees are: financial plan previously approved by the Board for 1. Audit Committee that year. The Board received and discussed the full 20 Refer to the Report of the Audit Committee at array of reports from management and the Executive 05 Pages 90 to 97. Committee and made decisions and or give directions on recommendations made by the management and 2. Nomination Committee 2005 ANNUAL REPORT DRB-HICOM BERHAD Executive Committee. All Board members brought an The Nomination Committee comprises four (4) independent judgement to bear on issues of strategy, Independent Non-Executive Directors, one of whom performance, resources and standards of conduct. presides as Chairman. The Committee is to meet at Special and particular matters were also dealt with least once a year. The Committee is responsible to:- by the Board at the meetings including approval of a. Identify and recommend to the Board,
(203430-W) statements and reports for inclusion in the Annual candidates for directorships of the Company; Report, corporate exercises, reports of the Audit b. Recommend to the Board, directors to fill the Committee, the Nomination Committee and the seats on Board Committees; Remuneration Committee, amendments to the Articles c. Evaluate the effectiveness of the Board and of Association and the ESOS Bye-Laws to facilitate the Board Committees (including its size and grant of share options to Non-Executive Directors, composition) and of their members; mandate for recurrent related party transactions, d. Evaluate the performance of senior proposed issuance of up to RM1.0 billion nominal value management personnel of Grade 8 and above; Islamic Securities, and donations to Tsunami Disaster e. Review the Management’s recommendation Fund and affected employees. on appointments or promotions of senior management personnel of Grade 8 and above; Specific responsibilities have been delegated to the and Board committees, all of which have their written f. Ensure an appropriate framework and plan constitutions and terms of reference. These committees for Board succession for the Group. have the authority to examine particular issues and During the financial year, the Nomination Committee held three (3) meetings as follows:- 79 Date Business 31 May 2004 1. Proposal for confirmation of appointments of Group Directors 2. Status Report on Succession Planning and Management Development 13 July 2004 1. Review of structure, size, balance and composition of the Board and its Committees 20 2. Evaluation of the effectiveness of the Board and its Committees 05 3. Proposal for re-election/re-appointment of Directors 4. Proposal for promotion of Senior Management personnel 2005 ANNUAL REPORT DRB-HICOM BERHAD 23 February 2005 1. Report on Directors’ Competencies Profile 2. Training needs for Directors under the Continuing Education Programme (“CEP”) in compliance with the Bursa Securities Listing Requirements 3. Concepts and processes for the cascading of accountability to the Senior Management 4. Proposal for confirmation of appointments of Group Directors (203430-W)
3. Remuneration Committee The Remuneration Committee consists of three (3) Independent Non-Executive Directors and one (1) Non- Independent Executive Director, one of them as Chairman. The Committee is to meet at least once a year and is responsible to:- a. Establish and recommend the remuneration structure and policy for Executive Directors and top management; the terms of employment or contract of employment/service, any benefit, pension or incentive scheme entitlement; and other bonuses, fees and expenses; and any compensation payable on the termination of the service contract by the Company and/or the Group and to review for changes to the policy, as necessary; b. Ensure that a strong link is maintained between the level of remuneration and individual performance against agreed targets, the performance-related elements of remuneration forming a significant proportion of the total remuneration package of executive directors and top management; c. Review and recommend the entire individual remuneration packages for each of the executive directors and senior management personnel of Grade 8 and above; d. Review with the Chief Executive and the Executive Directors, their goals and objectives and to assess their performance against these objectives as well as contribution to the corporate strategy; Statement on Corporate Governance
e. Review and recommend to the Board regarding any proposed new employees’ share option scheme and/or 80 amendments to the existing scheme; and f. Consider other matters as referred to the Committee by the Board.
The proposed remuneration packages of Non-Executive Directors are presented to the Remuneration Committee 20 for notation only as to be presented to the Board and the shareholders at Annual General Meeting as relevant. 05 During the financial year, the Remuneration Committee held four (4) meetings. On 9 July 2004, the Committee
2005 ANNUAL REPORT DRB-HICOM BERHAD met specifically to review the remuneration packages of the Executive Directors and senior management personnel of Grade 8 and above as well as to consider recommendations on the Directors’ fees which were to be presented to the shareholders and other remuneration for Independent and Non-Independent Non- Executive Directors which were to be presented to the Board. At the Board, the individual directors concerned abstained from discussion of their own remuneration.
(203430-W) 4. Executive Committee The Executive Committee consists of the Chief Executive as Chairman and six (6) most senior management personnel designated Senior Group Directors and meets on a regular basis and is responsible, within the limits of the policies determined and powers delegated by the Board, for:-
• Formulating Company and Group policies for recommendation to, and further consideration by the Board; • Acting as an advisory body to the Board on operational and management matters; •Discussing and deciding upon the implementation of key policy decisions of the Board; •Discussing and recommending all matters important to the strategic operations of the Company and Group; •Discussing and recommending to the Board on all major matters and issues including but not limited to debt and capital structuring, new and or major businesses and or undertaking; and • Coordinating activities and building up synergies within the Group.
During the financial year, the Executive Committee formally met fourteen (14) times apart from having regular and frequent discussions amongst its members, in particular with the Chairman. SUPPLY OF INFORMATION 81 All Directors have the same right of access to all information within the Group and the duty to make further enquiries whenever deemed necessary in furtherance of their duties. The Board is supplied in a timely fashion with information in a form and of a quality as appropriate to enable it to discharge its duties. In addition to financial information, other information deemed suitable such as customer satisfaction, product and service quality, market share and market trends, manpower and human resource, and environmental issues are also provided. 20 05 An agenda and a set of Board papers are sent to all Directors in advance of Board meetings. The Board papers include, inter alia, the following: 2005 ANNUAL REPORT DRB-HICOM BERHAD
•Minutes of meetings of all Board Committees and their reports and recommendations; • Current operating and business issues; •Annual management plans, forecasts and projections; •Quarterly financial reports;
•Acquisitions and disposals of assets of substantial value; (203430-W) •Major investments and financial matters; • Changes to management and control structure of the Group, including key policies, procedures and authority limits; and • Reports, advices and opinions of external consultants or advisors as had been sought for.
All Directors have access to the advice and services of the Company Secretary and of independent professional advice at the Group’s expense. Statement on Corporate Governance
APPOINTMENT TO THE BOARD 82 There is a formal and transparent procedure for the appointment of new Directors to the Board, with the Nomination Committee making recommendations to the Board. Please refer to page 78 for details on the Nomination Committee.
20 Following the appointment of new Directors to the Board, the Nomination Committee will ensure that an induction 05 programme is arranged, including visits to the Group’s businesses and meetings with senior management as appropriate, to enable them to get a full understanding of the nature of the businesses, current issues within the
2005 ANNUAL REPORT DRB-HICOM BERHAD Group and the corporate strategies as well as the structure and management of the Group.
DIRECTORS’ TRAINING All members of the Board have attended the Mandatory Accreditation Programme organized by Research Institute of Investment Analysts Malaysia (now known as Bursa Malaysia Training Sdn Bhd). All Directors attend continuous (203430-W) education programmes and seminars to keep abreast with developments in the marketplace.
RE-ELECTION In accordance with the Company’s Articles of Association, all Directors who are appointed by the Board are subject to re-election by shareholders at the first Annual General Meeting after their appointment.
The Articles also provide that all Directors shall retire from office once in every three years but shall be eligible for re-election. At each Annual General Meeting one third of the remaining Directors are to offer themselves for re-election. DIRECTORS’ REMUNERATION 83 The objective of the Group’s policy on Directors’ remuneration is to ensure that the Group attracts and retains Directors of the caliber needed to run the Group successfully. In the case of Executive Directors, the component parts of remuneration are structured so as to link rewards to corporate and individual performances. In the case of Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities undertaken by the particular Non-Executive Director concerned. 20 05 The Remuneration Committee (details of the Remuneration Committee are set out at page 79) is responsible for setting the policy framework and for making recommendations to the Board on all elements of the remuneration 2005 ANNUAL REPORT DRB-HICOM BERHAD and other terms of employment of the Executive Directors and top management.
Executive Directors will abstain from the deliberations and voting on decisions in respect of their own remuneration. The remuneration of Non-Executive Directors is to be decided by the Board as a whole save for directors’ fees. (203430-W) The shareholders at the Annual General Meeting would approve the aggregate annual directors’ fees for all Directors.
Details of Directors’ remuneration for the financial year ended 31 March 2005, distinguishing between Executive and Non-Executive Directors in aggregate, with categorization into appropriate components and the number of Directors whose remuneration fell into each successive band of RM50,000, are set out below:-
Executive Directors Non-Executive Directors Total RM RM RM
Directors’ Fees* 120,000 365,356 485,356 Attendance Allowances** — 61,000 61,000 Salaries, Bonus & Allowances** 8,743,785 — 8,743,785 Benefits-in-kind** 704,186 — 704,186
Total 9,567,971 426,356 9,994,327 Statement on Corporate Governance
Directors’ Remuneration Executive Directors Non-Executive Directors Total 84 0 – RM50,000 — 2 2 RM50,001 – RM100,000 — 6 6 RM100,001 – RM400,000 — — — RM400,001 – RM450,000 1 — 1 20 RM450,001 – RM600,000 — — — 05 RM650,001 – RM700,000 1 — 1 RM700,001 – RM750,000 1 — 1
2005 ANNUAL REPORT DRB-HICOM BERHAD RM750,001 – RM800,000 — — — RM800,001 – RM850,000 1 — 1 RM850,001 – RM900,000 1 — 1 RM900,001 – RM950,000 1 — 1 RM950,001 – RM1,000,000 1 — 1 RM1,000,001 – RM1,050,000 — — — (203430-W) RM1,050,001 – RM1,100,000 1 — 1 RM1,100,001 – RM3,100,000 — — — RM3,100,001 – RM3,150,000 1 — 1
TOTAL 9 8 17
* To be approved at the forthcoming General Meeting ** Determined by Board
For security and confidentiality reasons the details of Directors’ remuneration are not shown with reference to Directors individually.
(a) Directors’ Fees & Meeting Allowances The shareholders are to approve the aggregate annual directors’ fees for all directors, Executive and Non-Executive, at the forthcoming Annual General Meeting. All Non-Executive Directors were paid meeting allowances as determined by the Board to reimburse them for expenses incurred for attendance at Board/Board Committee meetings and shareholders’ meetings. (b) Salaries, Bonuses & Allowances SHAREHOLDERS The basic salaries inclusive of statutory employer 85 contributions to the Employees Provident Fund for DIALOGUE BETWEEN THE COMPANY AND the Chief Executive and the Executive Directors are INVESTORS determined by the Board, taking into account the The Board values dialogue with investors and performance of the individual, the inflation price appreciates the keen interest of shareholders and index and information from independent sources on 20 investors in the Group’s performance. The Board the rates of salary for similar positions in a selected 05 group of comparable companies. Salaries are to be acknowledges the need for shareholders to be informed of all material business matters affecting the Group. reviewed annually by the Remuneration Committee. 2005 ANNUAL REPORT DRB-HICOM BERHAD
The Chief Executive and Executive Directors are paid In addition to various announcements made during the a discretionary bonus. The criteria for the year, the timely release of financial results on a discretionary bonus are dependent on various quarterly basis in line with Bursa Securities Listing performance measures of the Company together Requirements provide shareholders with an overview of
with an assessment of their individual performance the Group’s performance and operations. The Executive (203430-W) during the period. Bonuses for the Chief Executive Directors and top management had regular dialogues and Executive Directors and senior management with institutional investors, fund managers, analysts and personnel of Grade 8 and above are determined by research houses. Press conferences were held for the Board pursuant to recommendation of the analysts and investors to brief them of announcements Remuneration Committee which met on 9 July 2004. relating to major corporate exercises and pertinent (c) Benefits-In-Kind issues within the disclosure requirements of Bursa Other customary benefits, such as car, driver, Malaysia Securities Berhad. allowances, etc were made available to Directors as appropriate. THE ANNUAL GENERAL MEETING (d) Executive Directors’ Share Options The Annual General Meeting is the principal forum The movement in Directors’ share options during for dialogue with shareholders. Notice of the Annual the year ended 31 March 2005 is set out at page 120 of the Directors’ Report. General Meeting and annual reports are sent out to shareholders at least twenty-one (21) days before the (e) Terms and Conditions of Employment date of the meeting. The Chief Executive and the Executive Directors are employed on terms and conditions as approved by the Board. Statement on Corporate Governance
Besides the usual agenda for the Annual General Securities Berhad and the Annual Report to shareholders. 86 Meeting, the Board presents the progress and The Audit Committee assists the Board in scrutinizing performance of the business as contained in the Annual information for disclosure to ensure accuracy, adequacy Report and provides opportunities for shareholders to and completeness. raise questions pertaining to the business activities of 20 the Group. All Directors are available to provide 05 responses to questions from the shareholders during INTERNAL CONTROL these meetings. The Group’s Statement on Internal Control furnished
2005 ANNUAL REPORT DRB-HICOM BERHAD on pages 87 to 89 of the Annual Report provides For re-election of Directors, the Board ensures that full an overview of the state of internal controls within information is disclosed through the notice of meetings the Group. regarding Directors who were retiring and willing to serve if re-elected. RELATIONSHIP WITH THE AUDITORS
(203430-W) Items of special business included in the notice of the The role of the Audit Committee in relation to the meeting are to be accompanied by an explanatory External Auditors may be found in the Report of the statement to facilitate full understanding and Audit Committee set out at pages 90 to 97. The Group evaluation of the issues involved. has always maintained a close and transparent relationship with its auditors in seeking professional Shareholders can obtain up-to-date information on the advice and ensuring compliance with the appropriate Group’s various activities by accessing its website at accounting standards. www.drb-hicom.com. Press releases and latest quarterly results announcements of the Group can also be found on this website. STATEMENT OF COMPLIANCE WITH THE PRINCIPLES AND BEST PRACTICES OF THE CODE ACCOUNTABILITY AND AUDIT This statement is made in accordance with a resolution of the Board of Directors dated 19 July 2005. FINANCIAL REPORTING The Directors have a responsibility to present a true and fair assessment of the Group’s position and prospects in the quarterly reports to Bursa Malaysia Statement on Internal Control
INTRODUCTION Recognising the inherent limitations in any system of internal control, it is designed with the primary 87 Included in the Malaysian Code on Corporate objective of providing reasonable assurance as to the Governance is the principle that the Board should effectiveness of risk management, control and maintain a sound system of internal control to safeguard governance process, ensuring at all times that risks are shareholders’ investment and the company’s assets. contained within the accepted risk tolerances. 20 In meeting the above objective the Board of Directors The Group has established procedures to provide an 05 of DRB-HICOM Berhad has assumed the following ongoing process for identifying, evaluating, monitoring specific responsibilities, which facilitate the discharge of
and managing the significant risks faced by the Group, 2005 ANNUAL REPORT DRB-HICOM BERHAD their stewardship responsibilities:- including its associated companies, that may materially •Identifying principal risks and ensuring the affect the achievement of its corporate objectives. The implementation of appropriate systems to manage procedures which are in place throughout the financial these risks; year under review up to the date of this report, are subject to regular review by the Board and accords • Reviewing the adequacy and the integrity of the
with best practice guidance. (203430-W) company’s internal control systems and management information systems, including systems for • Audit Committee compliance with applicable laws, regulations, rules, The Audit Committee reviews the Group’s directives and guidelines. accounting and reporting policies and practices, reports of the internal and external auditors and In compliance with the paragraph 15.27(b) of Bursa the adequacy of the system of internal control. In Securities Listing Requirements, the Board’s statement addition, the Audit Committee has a key role in with regard to the financial year ended 31 March 2005 monitoring and reviewing the activities of the is as follows:- Group Internal Audit Division.
THE STATEMENT A Board Audit Committee report is provided on pages 90 to 97. The Board acknowledges and is committed to its responsibility for the Group’s system of internal control, being a component of the strong foundation for sound corporate governance. The system of internal control, designed to safeguard shareholders’ investments and Group’s assets, covers not only financial controls but also operational and compliance controls and risk management. Statement on Internal Control
•Internal Audit Function During the financial year under review, the Group 88 As an integral, and fundamentally important part of Internal Audit Division carried out regular and an effective governance, risk and control framework systematic reviews of the business processes of the the Group Internal Audit Division, which is operating entities within the Group in accordance independent of the activities or operations of the with the approved annual audit plan. The Group, provides the Audit Committee and the Board assignments included scheduled and routine audits, 20 with reasonable assurance on the adequacy and follow-up audits and special reviews that focused on 05 integrity of the system of internal control and specific functions across the companies within the effectiveness of the Group’s governance and risk Group, such as supply chain procurement system,
2005 ANNUAL REPORT DRB-HICOM BERHAD management processes. stock management system, accounting function, fund management, and management information system. The Division reports directly to the Audit Committee and the Group Director responsible for Internal Reporting by the Division were done on an ongoing Audit and the Chairman of the Audit Committee basis, with presentations to and discussions with the have direct access to each other. management of the operating entities immediately
(203430-W) following the conclusion of each assignment, and Adopting a risk-based approach, the Division’s Management Action Plans as prepared by those principal activity is to undertake regular and management presented to the respective Board of systematic reviews of the internal control systems in Directors at the following scheduled board meeting, the operating entities within the Group. In its thus ensuring a timely and effective reporting process. strategic formulation of the Annual Audit Plan, the Division use an Audit Risk Analysis Model, which The Division monitored the implementation of the essentially translates the principal and primary risks Management Action Plans in order to ensure that as identified in the risk registers and assesses the all major risks and controls concerns have been duly progress and effectiveness of management actions in addressed by the management of the operating their overall management of risks, the core of which entities. All audit reports together with the is the system of internal control. Management Action Plans and their implementation status have been presented to the Group The Audit Risk Analysis Model is used to establish management and the Audit Committee. audit priorities by applying certain defined criteria and consideration of various factors, including that The Division also examined the adequacy and of the results from previous audits and the stages of effectiveness of the review and disclosure procedures implementation of planned management actions in for related party transactions, recurrent or otherwise, their ongoing enhancement of the system of in conformance with paragraphs 10.08 and 10.09 of internal control. the Bursa Securities Listing Requirements. • Enterprise-Wide Opportunity & Risk Management The Oversight Committee is supported by a senior (EORM) officer that acts as a catalyst to provide lead, 89 The Board of Directors is responsible to identify key advisory and guidance for addressing key EORM opportunities and risks; and to ensure the matters within the Group. The Group Internal implementation of appropriate systems to manage Auditors have played an important role in this by these opportunities and risks. In relation to this, the providing management with an independent view of Board recognises that, among others, opportunity the adequacy and effectiveness of the entire process 20 and risk management is a continuous and an of opportunity and risk identification, assessment 05 ongoing process. and management. 2005 ANNUAL REPORT DRB-HICOM BERHAD Consistent with the above, the financial year under For a brief on EORM, refer to pages 98 to 99. review saw the continuation of opportunity and risk management activities that had taken place in the Overall, the Board is of the view that the system of previous financial year. The corporate level Oversight internal control of the Group is satisfactory. All the Committee had ensured that the previously results of the audit reviews carried out by the Group Internal Audit Division during the financial year under established detailed principal risk registers indicating (203430-W) mitigation plans were updated and reported by the review have been effectively communicated to the business unit EORM Committees for the Board of respective management of the operating entities and all Directors’ approval at the operating entities. control shortcomings and weaknesses identified have been addressed appropriately. The Group Internal Auditors have ensured and are satisfied that In addition, the financial year under review also saw recommended corrective actions have been efficiently the initiation of a series of interactive sessions and effected and the respective Boards of the operating commencement of a systematic implementation of entities and the Group have been kept well informed. the key performance indicators (KPIs) using the EORM Model which is a standardised tool that To the best of the Board’s knowledge, none of these facilitates the process for short and long term control shortcomings and weaknesses have resulted in strategy management with a built-in structured any material losses that would require disclosure in the assessment method to prioritise opportunities and Annual Report. risks for treatment. The Board is confident that with the continual quality The corporate level Oversight Committee and the improvement program embarked upon by the Group operating level EORM Committees drive to embed Internal Audit Division and the ongoing strengthening capabilities and culture for opportunity and risk of the risk management culture within the Group, the management in everyday activities across all functions focus on internal control will be continually maintained and divisions within the Group to ensure greater and enhanced. confidence that the key risks are being managed effectively and material opportunities are not ignored. This Statement has been approved by the Board of Directors at its meeting on 19 July 2005. Report of the Audit Committee
The Board of Directors is pleased to present the Report of the Audit Committee for the financial year ended 90 31 March 2005.
COMPOSITION OF MEMBERS 20 For the financial year under review, the Audit Committee comprised three (3) Independent Non-Executive Directors 05 and one (1) Non-Independent Non-Executive Director. They were as follows:-
2005 ANNUAL REPORT DRB-HICOM BERHAD Up to 31 May 2004, the Audit Committee comprised the following:
Name Status of Directorship Dato’ Haji Mohamad Nor Mohamad (Chairman) Independent Non-Executive Director Dato’ Kalsom Abdul Rahman Non-Independent Non-Executive Director Low Nyap Heng Independent Non-Executive Director (203430-W) Lee Yoon Min Independent Non-Executive Director
From 1 June 2004 the Audit Committee comprised the following:
Name Status of Directorship Dato’ Haji Mohamad Nor Mohamad (Chairman) Independent Non-Executive Director Datin Hjh Safiah Basrah Non-Independent Non-Executive Director Low Nyap Heng Independent Non-Executive Director Lee Yoon Min Independent Non-Executive Director
The Chairman is a member of the Malaysia Institute of Accountants (MIA).
The terms of reference of the Audit Committee are set out on pages 94 to 97. Five (5) Audit Committee Meetings were held in the The Company Secretary acts as the secretary to the financial year and details of attendance of the Audit Committee and was present at all Audit 91 Committee members are as follows: Committee Meetings. The minutes of the Audit Committee Meetings were circulated to all members of 1 April 2004 to 31 May 2004 the Audit Committee. The Chairman of the Audit Committee presented the Committee’s report to the Number of 20 Board at the Board Meeting immediately following. Name meetings attended 05
Dato’ Haji Mohamad 1 out of 1 meeting 2005 ANNUAL REPORT DRB-HICOM BERHAD Nor Mohamad SUMMARY OF ACTIVITIES Dato’ Kalsom Abd. Rahman 0 out of 1 meeting OF THE AUDIT COMMITTEE Low Nyap Heng 1 out of 1 meeting The Audit Committee (Committee) as established plays an important role in ensuring that sound corporate Lee Yoon Min 1 out of 1 meeting governance of a high standard is maintained by DRB- HICOM Berhad. The main responsibility of the Committee (203430-W) 1 June 2004 to 31 March 2005 is to assist the Board to implement and support the Number of oversight function for DRB-HICOM Group of Companies Name meetings attended in accordance with the terms of reference set out in its Audit Committee Charter. The Committee carried out the Dato’ Haji Mohamad 4 out of 4 meetings following activities during the financial year:- Nor Mohamad
Datin Hjh Safiah Basrah 3 out of 4 meetings With regard to External Audit Low Nyap Heng 3 out of 4 meetings • Reviewed with the External Auditors their Audit Scope and Engagement Memorandum prior to the Lee Yoon Min 4 out of 4 meetings commencement of the audit for the financial year.
The Group Chairman, together with the Senior Group • Reviewed with the External Auditors their Directors responsible for Corporate Finance & Advisory, Management Letter and the Management response. Financial Services & Treasury, Legal Affairs & Corporate • Evaluated the performance of the External Auditors Governance and Operations, and also the Group and made recommendations to the Board of Director responsible for Internal Audit attended, by Directors on their reappointment and audit fees. invitation, all the convened meetings. On appropriate occasions, representatives from the external auditors and relevant management divisions also attended the meetings by invitation. Report of the Audit Committee
• Reviewed the independence and objectivity of the • Recommended to the Board improvement 92 external auditors and the services provided, opportunities in internal control, procedures and risk including non-audit services. management. •Met with the external auditors during the year without the presence of any Executive Board member. With regard to Financial Statements 20 • Reviewed the unaudited quarterly financial results of 05 With regard to Internal Audit the Group before recommending to the Board of • Reviewed and approved the annual internal audit Directors.
2005 ANNUAL REPORT DRB-HICOM BERHAD plan and programmes for the financial year and • Reviewed the audited annual financial statements of assessed the performance of the Internal Audit the Company and Group prior to submission to the Division. Board of Directors for consideration and approval to • Reviewed the internal audit resources requirements submit the results to Bursa Malaysia Securities and the competencies of staff within the internal Berhad (“Bursa Securities”). audit activity to execute the plan as well as the • Ensured Group’s compliance with the Bursa Securities (203430-W) audit programmes used in the effective discharge of Listing Requirements, Applicable Accounting Standards its professional responsibilities. in Malaysia, provisions of the Companies Act 1965 and • Reviewed the recommendations made by the other legal and regulatory requirements. internal auditors and appraised the adequacy and • Reviewed the Audit Committee Report, Statement effectiveness of Management response in resolving on Internal Control and Statement on Corporate the audit issues reported. Governance prior to inclusion in the Company’s • Reviewed the results of ad-hoc special reviews Annual Report. undertaken by the internal auditors and the actions taken relating to those reviews. With regard to Related Party Transaction • Reviewed related party transactions (RPTs) for • Reviewed the extent of the Group’s compliance with compliance with the Bursa Securities Listing the provisions set out under the Malaysian Code on Requirements and the appropriateness of such Corporate Governance for the purpose of preparing transactions before recommending to the Board for the Corporate Governance Statement and Statement its approval. on Internal Control. • Reviewed the adequacy of the terms of reference of the Committee and Internal Audit (Audit Charter) as part of good corporate governance practice for the Group. • Reviewed the Group’s procedures in respect of The Group Director reports independently to the recurrent related party transactions (RRPTs) and Committee as required by the Audit Charter. The Division 93 propriety of proposed related party transactions to is adequately resourced with professionals and ensure that they were not more favorable to the benchmarks itself against prevailing best practices and related parties than those generally available to the industry standards in internal auditing. It adopts a risk- public and were not detrimental to minority based approach to audit, both at activity and entity-wide 20 shareholders. levels and its evaluations are communicated to both 05 Management and the Committee in a timely manner. With regard to DRB-HICOM Berhad Employees’ Share 2005 ANNUAL REPORT DRB-HICOM BERHAD Option Scheme (“ESOS”) All critical activities and operations are reviewed and the •Reviewed the allocation of options during the year implementation status of audit recommendations is under the ESOS to ensure that this was in compliance monitored and reported to the Committee with a view to with the allocation criteria determined by the ESOS providing reasonable assurance that key risk and control Committee and in accordance with the Bye-Laws of concerns are being effectively addressed and managed.
the ESOS. The details of the ESOS are set out in the (203430-W) Directors’ Report (page 118) of the Annual Report. During the financial year, the major areas of work accomplished by the Division and reported to the BRIEF ON INTERNAL AUDIT ACTIVITIES Committee and ultimately to the Board were as follows:-
The Group Internal Audit Division headed by a Group • Conducted audits including scheduled, follow-up and Director, assists the Committee in the effective discharge special assignments covering Automotive of their responsibilities, by providing an audit assurance Manufacturing and Distribution, Property service to the companies within the Group. This is Development and Construction, and Services; achieved through effective planning, risk focused audits, • Conducted special reviews on critical functions in progressive reporting and monitoring. Exercising at all accounting systems, supply chain procurement times its professionalism, expertise and trust, the systems and stock inventory management for Division aims to add value to the Group by promoting Automotive Production & Engineering companies in a control environment that is well managed and sound. the Group and also related management information system, and funds management function The Division has developed and maintained a quality for various companies in the Group; assurance and continual improvement program that covers all aspects of the internal audit activity and monitors its effectiveness. In December 2004, the Division has embarked on an initiative to obtain ISO9001: 2000 certification by next Financial Year. Report of the Audit Committee
• Monitored and conducted follow up work on issues 2. Composition 94 raised in previous audit reports, including those The Audit Committee shall be appointed by the raised by the external auditors in their Internal Board from among its members fulfilling the Control Memorandum; following requirements:-
• Reviewed related party transactions group wide and a. the Committee must be composed of no 20 made recommendation for improvement or fewer than three (3) members; 05 enhancement on review procedures. b. a majority of the Committee must be Independent Non-Executive Directors; 2005 ANNUAL REPORT DRB-HICOM BERHAD In line with the terms of reference of the Committee, the Internal Audit Division, in the discharge of its c. the Chairman of the Committee shall be duties, focuses on:- appointed by the Board from among the • Providing an assessment of the adequacy and Independent Non-Executive Directors; effectiveness of the system of internal control in the d. at least one member of the Committee:- Companies within the Group for the financial year (203430-W) •must be a member of the Malaysian under review; Institute of Accountants; or • Reporting significant control issues identified, with • if he/she is not a member of the Malaysian recommended action plans for the resolution of Institute of Accountants, he/she must have such issues, and improvement to the system of at least three (3) years’ working internal control; experience; and •Working with the operating management to • he/she must have passed the examinations monitor the implementation of their action plans, specified in Part I of the 1st Schedule of and reporting on the status on a quarterly basis. the Accountants Act 1967; or • he/she must be a member of one of the associations of accountants specified in AUDIT COMMITTEE Part II of the 1st Schedule of the Accountants Act 1967. Terms of Reference of the Audit Committee e. no Alternate Director shall be appointed as a 1. Constitution member of the Committee; and There shall be established an active Audit Committee to ensure the Company’s process of assessing internal controls and governance, including operational and financial controls, business ethics, risk management and compliances are properly managed and monitored. f. subject to any regulatory disqualification, 5. Meetings and Attendance members of the Committee shall not be a. Meetings shall be held not less than four (4) 95 removed except by the Board. In the event of times a year. However, the frequency of any vacancy in the Committee, the Board shall meetings would increase depending on the within three (3) months fill the same so as to scope of the audit activities and the number comply with all regulatory requirements. In any of audit reports produced. 20 event the Board shall review the term of office b. The meeting shall normally be attended by 05 and performance of the Committee and each of the Executive in charge of Finance, Internal its members at least once every three (3) years. Audit and Corporate Governance. 2005 ANNUAL REPORT DRB-HICOM BERHAD
3. Secretary c. The external auditors are normally invited to The Company Secretary shall be the Secretary of attend meetings as and when necessary. the Committee. d. Other Board Members and employees may attend meetings only upon the invitation of
4. Quorum and Voting (203430-W) the Audit Committee. The quorum for all meetings of the Committee shall be not less than three (3), a majority of e. However, at least once a year, the Committee whom shall be Independent Non-Executive shall meet with the external auditors without Directors. All meetings shall be chaired by the any Executive Board member present. The Chairman; if the Chairman is absent at any external auditors may request a meeting if meeting, it shall be chaired by another they consider it necessary. Independent Non-Executive Director. f. The Secretary of the Audit Committee shall provide the necessary administrative and All resolutions of the Committee shall be adopted secretarial services for the effective by a simple majority vote, each member having functioning of the Committee. The minutes one vote. In case of equality of votes, the shall be circulated to the Committee members Chairman of the meeting shall have a second or and to all other members of the Board. casting vote. Report of the Audit Committee
6. Duties and Functions e. to discuss problems and reservations arising 96 The functions of the Audit Committee have been from the interim and final audits, and any expanded to include the matters specified in the matter the external auditors may wish to Code of Corporate Governance as follows:- discuss (in the absence of management, where necessary); a. to consider the appointment, resignation, or 20 termination of external auditors and the audit f. to review the external auditors’ management 05 fee; letter and the management’s response;
b. to discuss with the external auditors, prior to g. to propose best practices on disclosure in 2005 ANNUAL REPORT DRB-HICOM BERHAD the commencement of audit, the nature and financial results and annual reports of the scope of audit and to ensure co-ordination Company in line with the principles set out in where more than one audit firm is involved; the Malaysian Code of Corporate Governance and other applicable laws, rules, directives and c. to review with external auditors, the audit guidelines; plan, their evaluation of the systems of (203430-W) internal accounting controls, their audit report h. to propose that the management has in place and the assistance given by the Company’s an adequate system of risk management to officers to the external auditors; safeguard the Company’s assets;
d. to review the quarterly and year-end annual i. to do the following in respect of the internal financial statements before submission to the audit function:- Board and announcements to Bursa Malaysia • review the adequacy of the scope, Securities Berhad, focusing particularly on:- functions and resources of the Group • any changes in accounting policies and Internal Audit Division and that it has the practices; necessary authority to carry out its work; • significant adjustments arising from the • review internal audit programme and audit; results of the internal audit process and • significant and unusual events; where necessary ensure that appropriate •the going concern assumption; and action is taken on the recommendations of •compliance with accounting standards and the Group Internal Audit Division; other legal requirements. • review any appraisal or assessment of the performance of the members of the internal audit function; and • approve any appointment or termination d. communicate directly with the external of senior staff members of the Group auditors, internal auditors and all employees 97 Internal Audit Division. of the Group;
j. to review and consider any related party e. report to the Stock Exchange matters duly transactions and conflict of interest situation reported by it to the Board which have not that may arise within the Company or group been satisfactorily resolved resulting in a 20 including any transaction, procedure or course breach of any regulatory requirements; and 05 of conduct that raises questions of f. make recommendations for improvements of management integrity; 2005 ANNUAL REPORT DRB-HICOM BERHAD operating performance and management k. to instruct the external and internal auditors control arising from internal and external that the Committee expects to be advised if audit recommendations. there are any areas that require its special attention including major findings of internal 8. Internal Audit Function
investigations and management’s response; and The Internal Auditors of the Company shall report (203430-W) directly to the Audit Committee. Its responsibilities, l. to consider and examine any other matters or which should be performed with impartiality, topics as defined by the Board. proficiency and due professional care, include the provision of independent reports to the Audit 7. Special Authority Committee on the systems of internal control. In view of its duties and functions, the Committee The Internal Auditors also conduct audits on all has the following additional powers, at the cost of operating units, which include a review of the the Company, to:- recurrent related party transactions entered into a. investigate any activity within the scope of pursuant to the shareholders’ mandate and submit the Committee’s duties and its terms of its findings to the Committee. reference; At all times, the Head of Group Internal Audit b. obtain independent legal or other professional Division and the Chairman of Audit Committee advice if it considers it necessary; have direct access to each other. c. secure full and unrestricted access to any information pertaining to the Group; Brief on Enterprise-wide Opportunity & Risk Management (EORM)
Philosophy Organizational Role & Structure 98 Being an integral part of the business operations, the To oversee the continuous development of the Group recognizes that effective opportunity and risk embedded capabilities and culture for opportunity and management is vital in the stride to achieve sustainable risk management within all functions, divisions and growth in shareholders’ value. Accordingly, the Group’s business units of the Group, the corporate level 20 focus is to balance risk awareness and control with the Oversight Committee and the operating level EORM 05 need to create and exploit opportunities. Committees play a leading role in aligning business and opportunity/risk management strategies. Framework & Policy 2005 ANNUAL REPORT DRB-HICOM BERHAD The main underlying principles of the Group’s The Oversight Committee is supported by a senior framework and policy in managing opportunities and officer that is responsible to establish and to co- risks as well as ensuring compliance with the applicable ordinate the Group’s enterprise-wide opportunity and laws and regulations are: risk management system. The senior officer acts as a catalyst that provides the lead, advisory and guidance • Informed opportunity and risk management is an (203430-W) for addressing key EORM matters within the Group. essential element of the Group’s business strategy •Effective opportunity and risk management provides System & Method greater assurance that the Group’s vision and The Group uses the EORM Model which is a systematic strategy will be achieved without surprises and standardized tool that incorporates key • Each corporate division and business unit is expressly performance indicators (KPIs) in facilitating the short responsible for managing opportunities and risks and long term strategy management with a built-in associated with its business objectives cascading structured assessment method to prioritize opportunities down to the appropriate individual and risks for treatment. •All material opportunities and risks are to be identified, analysed, treated, monitored and reported. Essentially, to improve decision-making and strategy management, the EORM Model incorporates the Opportunity and Risk defined objective setting and monitoring process which requires, Opportunities are the possibility that an event will among others, environmental and competitor scanning occur and positively affect the achievement of in addition to filtering internal weaknesses and core objectives. Conversely, risks are events with negative competencies. impact which can prevent value creation or erode existing value. The management and Board of each of the business Financial and non-financial targets in a scorecard view, units deliberate the comprehensive EORM model when were stretched and determined by each and every 99 planning for the following year’s business objectives business unit’s management based on their vision, and concluding the previous year’s business results. mission and competitive profile using the standardized EORM model to promote transparency, measurability, The Group Internal Auditors play an important role in manageability and accountability. 20 this as their assessment provides the management with 05 an independent view of the adequacy and effectiveness In addition to help filter objectives that were unique to of the enterprise-wide process for opportunity and risk the individual business units, the EORM Model also 2005 ANNUAL REPORT DRB-HICOM BERHAD identification, assessment and management. introduced a set of common strategic objectives that were communicated across the Group, namely: Recent Initiatives •Top-line revenue growth In continuously meeting expectations of the corporate • Bottom-line profit enhancement level Board of Directors, the Group has initiated a series •Maximum investment return of interactive sessions and facilitated a systematic (203430-W) • Optimal liquidity and gearing implementation of the key performance indicators (KPIs) • Sales competitiveness in addition to ensuring that the previously established • Customer service and satisfaction detailed principal risk registers indicating mitigation • Sustainable manpower return plans were updated and reported by the operating • Strategic learning level EORM Committees for approval of the business units’ Board of Directors. The corporate-level EORM initiatives also helped place the Group’s expectations with regards to performance- linked compensation on center stage for appropriate consideration within the Group. Additional Compliance Information
financial year ended 31 March 2005
1. UTILISATION OF PROCEED 100 Approved utilisation of funds by the Securities Commission (“SC”) in the year 2004/2005 is as follows:
Approved Actual Description utilisation utilisation Balance Comments 20 RM’million RM’million RM’million 05 Issuance of up to The SC had, vide their letter dated 23 RM1.0 billion Islamic June 2005 approved the utilisation of Securities as follows: proceeds. 2005 ANNUAL REPORT DRB-HICOM BERHAD (i) Bai’ Bithaman Ajil 680.0 680.0 — The BaIDS and RM50 million from the Islamic Debt Securities Underwritten Murabahah CP/MTN have (“BaIDS”) been utilised on 26 July 2005 to fully (ii) Underwritten Murabahah 200.0 50.0 150.0 redeem Gadek’s loan stocks i.e Commercial Papers (“CP”)/ Redeemable Secured Loan Stock and Medium Term Redeemable Exchangeable Secured Loan (203430-W) Notes (“MTN”) Stock. (iii) Murabahah CP/MTN 120.0 — 120.0
1,000.0 730.0 270.0
2. SHARE BUY-BACKS The Company has not purchased any of its own shares during the financial year ended 31 March 2005. As such, there is no treasury share maintained by the Company.
3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES The DRB-HICOM Berhad Employees’ Share Options Scheme (“ESOS”) came into effect on 10 April 2001. The details of the ESOS exercised is disclosed in page 118 of the financial statements. DRB-HICOM Berhad warrants have expired on 8 July 2005. A total of 500 warrants were exercised into 500 DRB-HICOM Berhad shares subsequent to the financial year ended 31 March 2005.
4. AMERICAN DEPOSITORY RECEIPT (“ADR”) OR GLOBAL DEPOSITORY RECEIPT (“GDR”) The Company has not sponsored any ADR or GDR programme in the financial year ended 31 March 2005. 5. VARIATION IN RESULTS 101 There is no significant variance in the DRB-HICOM Berhad’s audited financial results for the financial year ended 31 March 2005 from the unaudited results as previously announced. The Company has not released or announced any estimated profit, financial forecast and projection in the financial year ended 31 March 2005.
6. PROFIT GUARANTEE 20 The Company has not issued any profit guarantees in the financial year ended 31 March 2005. 05 2005 ANNUAL REPORT DRB-HICOM BERHAD 7. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE By Resolution of the Extraordinary General Meeting of the Company held on 23 September 2004 a mandate was granted by the shareholders for recurrent related party transactions of a revenue or trading nature, to be entered into during the period 24 September 2004 to 30 September 2005 between the Company or its subsidiaries and related parties, the latter being based on estimates. As required, below is a listing of the said transactions as having been actually entered during the financial year ended 31 March 2005: (203430-W)
Transacting values (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005
AUTOMOTIVE CORPORATION (MALAYSIA) SDN BHD 1Master-Builders (Malaysia) Sdn Bhd Director/Past Directors and past major Payment for body building 89.00 shareholders 2Master-Freighters (Malaysia) Sdn Bhd –Tan Sri Dato’ Seri Mohd Saleh Sulong Freight services 1,848.31 –Ahmad Faez Yahaya 3Multi Automotive Service –Ahmad Othman Yahaya (Alternate) Auto assist 433.00 and Assist Sdn Bhd Past major shareholders 4Automotive Service (Malaysia) –Citaria Sdn Bhd Quality control & inspection 1,170.00 Sdn Bhd –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad 5Master Radiators Sdn Bhd –Dato’ Yatina Yahaya Supplier-parts 73.00 –Dato’ Tik Mustaffa 6Master-Carriage (Malaysia) Sdn Bhd Management services 2,520.00 Additional Compliance Information
financial year ended 31 March 2005
102 Transacting values (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005 20 AUTO PROMINENCE (M) SDN BHD 1Master-Carriage (Malaysia) Sdn Bhd Past major shareholders Payment of management fees, 189 05 –Tan Sri Dato’ Seri Mohd Saleh Sulong inclusive of advisory and consultancy –Citaria Sdn Bhd services
2005 ANNUAL REPORT DRB-HICOM BERHAD –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa –Ahmad Othman Yahaya –Ahmad Faez Yahaya (203430-W) AUTOMOTIVE MANUFACTURERS (MALAYSIA) SDN BHD 1Automotive Service (Malaysia) Past major shareholders Payment for joint inspection charges 283.00 Sdn Bhd –Tan Sri Dato’ Seri Mohd Saleh Sulong and storage fees –Citaria Sdn Bhd 2Master Radiators Sdn Bhd –Estate of Allahyarham Tan Sri Charges for building rental and 156.00 Dato’ Seri Yahaya Ahmad recovery of security expenses –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa Payment for sub assembly 362.00 –Ahmad Othman Yahaya –Ahmad Faez Yahaya
ALAM FLORA SDN BHD 1 Edaran Modenas Sdn Bhd Major shareholder Purchase of motorbikes 18.91 –Khazanah Nasional Berhad 2Kumpulan Jetson Berhad Rental of machinery 402.30 Major shareholders 3PJS Environmental Services Sdn Bhd –Jetson Corporation Sdn Bhd Private contractor 242.54 –PJ Bumi Waste Management Sdn Bhd Rental of bins 73.17 (formerly known as 4Hebat Abadi Sdn Bhd Aeration Job Sdn Bhd) Private contractor 3,447.16 Rental of machinery 996.25 Maintenance 4.30 Transacting values 103 (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005 ALAM FLORA SDN BHD (CONTINUED) 20 5Segar Prima Sdn Bhd Purchase of bins 426.23 05 6PJ Bumi Waste Management Sdn Bhd Private contractor 5,477.40
(formerly known as 2005 ANNUAL REPORT DRB-HICOM BERHAD Aeration Job Sdn Bhd)
COMTRAC SDN BHD 1 Comtrac Precast Sdn Bhd Director and major shareholder Overhead reimbursement 55.00 –Ng Tet Min M & E work 50.00
Salary reimbursement 39.00 (203430-W)
2 Comtrac Glenview Sdn Bhd Construction works 34,553.00 Overhead reimbursement 540.00
3Glenmarie Cove Development Construction works 28,295.00 Sdn Bhd Overhead reimbursement 1,860.00 Other reimbursement 14.00
DRB-HICOM BERHAD 1Automotive Service (Malaysia) Director/Past Directors and past major Rental services income 660.00 Sdn Bhd shareholders –Tan Sri Dato’ Seri Mohd Saleh Sulong 2Master-Builders (Malaysia) Sdn Bhd –Dato’ Yatina Yahaya Rental services income 360.00 –Ahmad Othman Yahaya (Alternate)
Past major shareholders –Citaria Sdn Bhd –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad –Dato’ Tik Mustaffa –Ahmad Faez Yahaya
Past Director –Mark Aziz Salleh Additional Compliance Information
financial year ended 31 March 2005
104 Transacting values (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005 20 DRB-HICOM DEFENCE TECHNOLOGIES SDN BHD 1Master-Builders (Malaysia) Sdn Bhd Director and past major shareholder Body assembly of vehicles 2,736.00 05 –Tan Sri Dato’ Seri Mohd Saleh Sulong 2Master-Freighters (Malaysia) Sdn Bhd Freight services 76.00
2005 ANNUAL REPORT DRB-HICOM BERHAD Past major shareholders 3 Ramgate Systems Sdn Bhd –Citaria Sdn Bhd PC support & maintenance 15.00 –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa –Ahmad Othman Yahaya
(203430-W) –Ahmad Faez Yahaya
DRB-HICOM INFORMATION TECHNOLOGIES SDN BHD 1Multi Automotive Service Director and past major shareholder Auto assist services 3.00 and Assist Sdn Bhd –Dato’ Yatina Yahaya
Past major shareholders –Tan Sri Dato’ Seri Mohd Saleh Sulong –Citaria Sdn Bhd –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad –Dato’ Tik Mustaffa –Ahmad Othman Yahaya –Ahmad Faez Yahaya
DIRECTIONAL (MALAYSIA) SDN BHD 1Master-Builders (Malaysia) Sdn Bhd Past major shareholders Parts and services 44.00 –Tan Sri Dato’ Seri Mohd Saleh Sulong 2Master-Freighters (Malaysia) Sdn Bhd –Citaria Sdn Bhd Freight services 2,200.00 –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa –Ahmad Othman Yahaya –Ahmad Faez Yahaya Transacting values 105 (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005 EDARAN MODENAS SDN BHD 20 1Sojitz Corporation Major shareholder Purchase of spare parts 411.00 –Sojitz Corporation 05
2Master-Freighters (Malaysia) Sdn Bhd Past Directors and past major Freight services 3,792.00 2005 ANNUAL REPORT DRB-HICOM BERHAD shareholders –Ahmad Faez Yahaya –Ahmad Othman Yahaya (Alternate)
Past major shareholders –Tan Sri Dato’ Seri Mohd Saleh Sulong (203430-W) –Citaria Sdn Bhd –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa
EURO TRUCK & BUS (MALAYSIA) SDN BHD 1Master-Freighters (Malaysia) Sdn Bhd Past major shareholders Supply of parts & repair services 4.00 –Tan Sri Dato’ Seri Mohd Saleh Sulong –Citaria Sdn Bhd Freight services 209.00 –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa –Ahmad Othman Yahaya –Ahmad Faez Yahaya
HICOM BERHAD 1Proton City Development Major shareholder Office and car park rental 262.32 Corporation Sdn Bhd –Khazanah Nasional Berhad Additional Compliance Information
financial year ended 31 March 2005
106 Transacting values (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005 20 HICOM HOLDINGS BERHAD 1 Ramgate Systems Sdn Bhd Directors and past major shareholders IT equipment and services 132.00 05 –Tan Sri Dato’ Seri Mohd Saleh Sulong –Dato’ Yatina Yahaya 2005 ANNUAL REPORT DRB-HICOM BERHAD Past major shareholders –Citaria Sdn Bhd –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad –Dato’ Tik Mustaffa –Ahmad Othman Yahaya (203430-W) –Ahmad Faez Yahaya
HICOM DIECASTINGS SDN BHD 1Motosikal Dan Enjin Nasional Major shareholder Supply of parts and components 3,784.00 Sdn Bhd –Khazanah Nasional Berhad
2Master-Freighters (Malaysia) Sdn Bhd Past major shareholders Freight services 268.00 –Tan Sri Dato’ Seri Mohd Saleh Sulong –Citaria Sdn Bhd –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa –Ahmad Othman Yahaya –Ahmad Faez Yahaya Transacting values 107 (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005 HICOM ENGINEERING SDN BHD 20 1PHN Industry Sdn Bhd Major shareholder Purchase of loose scrap 3,765.23 –Khazanah Nasional Berhad 05 2Master-Freighters (Malaysia) Sdn Bhd Freight services 144.40 Past major shareholders 2005 ANNUAL REPORT DRB-HICOM BERHAD –Tan Sri Dato’ Seri Mohd Saleh Sulong –Citaria Sdn Bhd –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa –Ahmad Othman Yahaya –Ahmad Faez Yahaya (203430-W)
HICOM-TECK SEE MANUFACTURING MALAYSIA SDN BHD 1 Compounding and Colouring Sdn Bhd Directors Payment of goods and services 6,888.91 –Dato’ Wong Lum Kong 2Lipro Sdn Bhd –Lim How Ghee Payment of goods and services 1,836.41
3Teck See Plastic Sdn Bhd Major shareholders Payment of goods and services 3,348.46 –Oriental Holdings Berhad –Teck See Plastic Sdn Bhd
HICOM UNITED LEASING SDN BHD 1Scott & English Electronics Sdn Bhd Directors and Major Shareholders Rental of generating set, air 27.00 –Ng Kong Chin compressor, forklifts & excavators and –Tang Hon Shan purchase of parts 2Scott & English (Malaysia) Sdn Bhd Purchase of generating set, air 4,913.00 compressor and forklifts Rental of office space from Scott & 63.00 English (Malaysia) Sdn Bhd Rental of open yard to Scott & 114.00 English (Malaysia) Sdn Bhd Rental of generating set, air 1,564.00 compressor, forklifts & excavators Additional Compliance Information
financial year ended 31 March 2005
108 Transacting values (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005 20 KL AIRPORT SERVICES SDN BHD 1Mofaz Dagang Sdn Bhd Director and Major Shareholder Payment for food & beverages 161.00 05 –Tuan Haji Mohamed Fauzy Abdul Hamid 2005 ANNUAL REPORT DRB-HICOM BERHAD MEGA KOMPOSIT AUTO SDN BHD 1Auto Elegance Car Centre Sdn Bhd Past major shareholders Purchase of vehicles 302.25 –Tan Sri Dato’ Seri Mohd Saleh Sulong –Citaria Sdn Bhd –Estate of Allahyarham Tan Sri
(203430-W) Dato’ Seri Yahaya Ahmad –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa –Ahmad Othman Yahaya –Ahmad Faez Yahaya
2Proton Edar Sdn Bhd Major shareholder Purchase of vehicles 128.73 –Khazanah Nasional Berhad
MALAYSIAN TRUCK & BUS SDN BHD 1Master-Freighters (Malaysia) Sdn Bhd Director and past major shareholder Freight services 1,772.00 –Tan Sri Dato’ Seri Mohd Saleh Sulong 2Automotive Service (Malaysia) Vehicle servicing, maintenance, 505.00 Sdn Bhd Past major shareholders storage, gassing and etc –Citaria Sdn Bhd 3Master Radiators Sdn Bhd –Estate of Allahyarham Tan Sri Purchase of local parts 3,336.00 Dato’ Seri Yahaya Ahmad –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa –Ahmad Othman Yahaya –Ahmad Faez Yahaya Transacting values 109 (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005 MOTOSIKAL DAN ENJIN NASIONAL SDN BHD 20 1Master-Freighters (Malaysia) Sdn Bhd Director/Past Directors and past major Freight services 269.00 shareholders 05 –Tan Sri Dato’ Seri Mohd Saleh Sulong
–Ahmad Faez Yahaya 2005 ANNUAL REPORT DRB-HICOM BERHAD –Ahmad Othman Yahaya (Alternate)
Past major shareholders –Citaria Sdn Bhd –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad (203430-W) –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa
2Oriental Summit Industries Sdn Bhd Major shareholder Production parts and tooling 7,481.00 –Khazanah Nasional Berhad
3Kawasaki Heavy Industries Ltd Major shareholder Provision of technical support, 34,691.00 –Kawasaki Heavy Industries Ltd technology transfer, supply of CKD components and payment of royalties
Sale of component parts 10,630.00
4Sojitz Corporation Major shareholder Purchase of CKD parts 33,100.00 –Sojitz Corporation
ORIENTAL SUMMIT INDUSTRIES SDN BHD 1PHN Industry Sdn Bhd Major shareholder Supply of automotive parts 1,137.12 –Khazanah Nasional Berhad
PERSPEC PRIME (MALAYSIA) SDN BHD 1Spegabina Sdn Bhd Director and major shareholder Construction works 4,993.00 – Dato’ Hashimuddin Dato’ Abdul Kadir Additional Compliance Information
financial year ended 31 March 2005
110 Transacting values (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005 20 PROTON CITY DEVELOPMENT CORPORATION SDN BHD 1HICOM Teleservices Sdn Bhd Major shareholder Internet access & maintenance services 23.00 05 –Khazanah Nasional Berhad 2HICOM Communication Sdn Bhd Payment for telecommunication services 42.38 2005 ANNUAL REPORT DRB-HICOM BERHAD PUSAT PEMERIKSAAN KENDERAAN BERKOMPUTER SDN BHD 1 Ramgate Systems Sdn Bhd Past Directors and past major Sale of IT equipment & services 90.00 shareholders 2Master-Freighters (Malaysia) Sdn Bhd –Ahmad Othman Yahaya Freight services 4.90 –Ahmad Faez Yahaya (Alternate) (203430-W) Past major shareholders –Tan Sri Dato’ Seri Mohd Saleh Sulong –Citaria Sdn Bhd –Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad –Dato’ Yatina Yahaya –Dato’ Tik Mustaffa
SCOTT & ENGLISH (MALAYSIA) SDN BHD 1Master-Builders (Malaysia) Sdn Bhd Past major shareholders Rental of generating set, air 308.00 –Tan Sri Dato’ Seri Mohd Saleh Sulong compressor, forklifts, parts & services –Citaria Sdn Bhd –Estate of Allahyarham Tan Sri Purchase of bus, truck, body and 210.00 Dato’ Seri Yahaya Ahmad compactor unit –Dato’ Yatina Yahaya 2Master-Freighters (Malaysia) Sdn Bhd –Dato’ Tik Mustaffa Supply of generating set, air 13.00 –Ahmad Othman Yahaya compressor, forklifts, parts & services –Ahmad Faez Yahaya Freight services 139.00 Transacting values 111 (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005 SCOTT & ENGLISH (MALAYSIA) SDN BHD (CONTINUED) 20 3Automotive Service (Malaysia) Supply of generating set, air 67.00 Sdn Bhd compressor, forklifts, parts & services 05
PDI, custom documentation, 365.00 2005 ANNUAL REPORT DRB-HICOM BERHAD road test etc
4Master Radiators Sdn Bhd Fuel tanks 7.00
5Scott & English Trading (Sarawak) Directors and major shareholders Supply of generating set, air 9,641.00 Sdn Bhd –Ng Kong Chin compressor, forklifts, parts & services (203430-W) –Tan Hong Shan 6Scott & English (Cambodia) Ltd Supply of generating set, air 532.00 compressor, forklifts, parts & services
7Scott & English Electronics Sdn Bhd Rental of building space 855.00
8PHN Industry Sdn Bhd Major shareholder Supply of generating set, air 64.00 –Khazanah Nasional Berhad compressor, forklifts, parts & services
SCOTT & ENGLISH ELECTRONICS SDN BHD 1Proton City Development Major shareholder Sale of electrical goods 2.70 Corporation Sdn Bhd – Khazanah Nasional Berhad
2Scott & English Trading (Sarawak) Directors and major shareholders Sale of electrical goods 2,143.39 Sdn Bhd –Ng Kong Chin –Tan Hong Shan Additional Compliance Information
financial year ended 31 March 2005
112 Transacting values (RM‘000) Actual 1 April 2004 to No. Transacting Parties Interested Parties Nature of Transaction 31 March 2005 20 USF-HICOM (MALAYSIA) SDN BHD 1Auto Elegance Car Centre Sdn Bhd Director/Past Directors and past major Insurance agent 13.24 05 shareholders 2Automotive Service (Malaysia) –Tan Sri Dato’ Seri Mohd Saleh Sulong QC agent 581.00
2005 ANNUAL REPORT DRB-HICOM BERHAD Sdn Bhd –Ahmad Faez Yahaya Supply of vehicles 5.00 –Ahmad Othman Yahaya (Alternate) 3Master-Builders (Malaysia) Sdn Bhd Bodybuilding & assembly of chassis 555.68 Past major shareholders 4Master Carriage (Malaysia) Sdn Bhd –Citaria Sdn Bhd Management service 2,520.00 –Estate of Allahyarham Tan Sri 5Master Seats Sdn Bhd Dato’ Seri Yahaya Ahmad Purchase of seats for motor vehicles 2,105.76 (203430-W) –Dato’ Yatina Yahaya 6Master-Freighters (Malaysia) Sdn Bhd –Dato’ Tik Mustaffa Freight services 3,731.00 Sales of vehicles, parts & services 4,032.00
7 Ramgate Systems Sdn Bhd Rental of premises 78.00
8Multi Automotive Service Auto assist 8.57 and Assist Sdn Bhd
9 Edaran Modenas Sdn Bhd Major shareholder Parts & services 11.32 –Khazanah Nasional Berhad
UNI.ASIA GENERAL INSURANCE BERHAD 1 Bozell Worldwide Sdn Bhd Past Major Shareholder Advertising expenses 52.00 –Citaria Sdn Bhd 9. PENALTY 113 There was no significant penalty/ies imposed by any regulatory authorities on any of the companies in DRB-HICOM Group.
10. STATEMENT ON REVALUATION POLICY 20 The Group does not have any revaluation policy except for investment properties held by insurance subsidiary companies which is disclosed in Note 2(f) on the financial statements on page 135. 05 2005 ANNUAL REPORT DRB-HICOM BERHAD 11. NON-AUDIT FEES The amount of non-audit fees paid/payable to external auditors and their affiliated companies by the Group for the financial year ended 31 March 2005 are as follows: RM’000
PricewaterhouseCoopers 43 (203430-W) PricewaterhouseCoopers Taxation Services Sdn. Bhd. 1,268 PricewaterhouseCoopers Advisory Services Sdn. Bhd. 247
1,558 Statement of Directors’ Responsibility
in respect of the preparation of the Financial Statements for the financial year ended 31 March 2005
The Directors are required by the Companies Act, 1965 (“the Act”) to ensure that the financial statements prepared 114 for each financial year give a true and fair view of the state of affairs of the Group and the Company as at the end of the financial year and of the results and cashflows of the Group and the Company for the financial year. As required by the Act and the Listing Requirements of Bursa Malaysia Securities Berhad, the financial statements have been prepared in accordance with the applicable approved accounting standards in Malaysia and the 20 provisions of the Act. 05 The Directors consider that in preparing the financial statements for the financial year ended 31 March 2005 set out on pages 116 to 218, the Group has used appropriate accounting policies, consistently applied and supported 2005 ANNUAL REPORT DRB-HICOM BERHAD by reasonable and prudent judgements and estimates and ensured that all applicable approved accounting standards have been followed.
The Directors have ensured that the accounting records to be kept by the Group and the Company have been properly kept in accordance with the provisions of the Act, which disclose with reasonable accuracy the financial
(203430-W) position of the Group and of the Company.
This Statement is made in accordance with a resolution of the Board of Directors dated 19 July 2005. 116 Directors’ Report 124 Consolidated Income Statements 125 Company Income Statements 126 Balance Sheets 127 Consolidated Statement of Changes in Equity 128 Company Statement of Changes in Equity 129 Cash Flow Statements 133 Notes to the Financial Statements 219 Statement by Directors 219 Declaration 220 Report of the Auditors
Financial Statements ’05 Directors’ Report
The Directors of DRB-HICOM Berhad 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 March 2005.
PRINCIPAL ACTIVITIES The Company is an investment holding company with investments in the automotive, property and construction and services sectors. The Company is involved in the design and construction of the Electrified Double Track Project between Rawang and Ipoh.
The principal activities of the subsidiary companies, jointly controlled entities and associated companies are 116 described in Note 3 to the financial statements.
There have been no significant changes in these activities during the financial year.
20 FINANCIAL RESULTS 05 Group Company
2005 ANNUAL REPORT DRB-HICOM BERHAD RM’000 RM’000
Profit after taxation 198,259 103,875 Minority interests (56,852) —
Net profit attributable to shareholders 141,407 103,875 (203430-W)
DIVIDENDS The dividends paid by the Company since 31 March 2004 were as follows:
RM’000
In respect of the financial year ended 31 March 2004 as shown in the Directors’ report of that year:
First and final dividend of 2.5 sen gross per share, less taxation of 28% for the financial year ended 31 March 2004, paid on 18 October 2004. 17,652
First and final dividend of 2.5 sen gross per share, less taxation of 28% for the financial year ended 31 March 2004, paid on 18 October 2004, in respect of ordinary shares issued after 31 March 2004 but before book closure date of dividend entitlement. 36
17,688
The Directors recommend the payment of a first and final gross dividend of 3.0 sen per share, less taxation of 28%, amounting to RM21,290,471 in respect of the financial year ended 31 March 2005, subject to the approval of shareholders at the forthcoming Annual General Meeting of the Company. RESERVES AND PROVISIONS All material transfers to or from reserves and provisions during the financial year are shown in the financial statements.
SIGNIFICANT EVENT As at 31 March 2005, the Group’s shareholding in EON Capital Berhad (“ECB”) was 140,010,526 ordinary shares (“ECB shares”), representing 20.20% direct equity interest in ECB, which was obtained from the following transactions. As a result, ECB became an associated company of the Group.
117 (a) Edaran Otomobil Nasional Berhad’s (“EON”), an associated company of the Group, distributed its entire shareholding in ECB to the shareholders of EON by way of dividend in specie and capital repayment amounting to 20,504,007 ECB shares and 81,359,319 ECB shares respectively.
(b) Share swap of the Group’s existing short term investment in Jardine Cycle & Carriage Ltd (“JCCL”) (formerly 20 known as Cycle & Carriage Ltd) of 9,266,914 JCCL shares for 29,722,000 ECB shares held by Jardine Strategic Malaysian Investments Pte. Ltd. 05
(c) Acquisition of additional 8,425,200 ECB shares from the open market for a total purchase consideration of 2005 ANNUAL REPORT DRB-HICOM BERHAD approximately RM47,334,000.
SUBSEQUENT EVENT On 23 June 2005, as announced to Bursa Malaysia Securities Berhad, DRB-HICOM Berhad obtained approval from (203430-W) the Securities Commission for the issuance of up to RM1.0 billion Islamic Securities Facilities comprising of:
(a) up to RM680 million nominal value Bai’ Bithaman Ajil Islamic Debt Securities;
(b) up to RM200 million nominal value underwritten Murabahah Commercial Papers/Medium Term Notes Facility; and
(c) up to RM120 million nominal value Murabahah Commercial Papers/Medium Term Notes Facility.
The proceeds arising from the Facilities shall be utilised broadly as follows:
(i) to fully purchase/redeem and cancel the Redeemable Secured Loan Stocks (“RSLS”) of a subsidiary company;
(ii) to fully purchase/redeem and cancel the Redeemable Exchangeable Secured Loan Stocks (“RESLS”) of a subsidiary company;
(iii) to repay and refinance existing short term banking facilities of DRB-HICOM Berhad; and
(iv) to finance the general working capital requirements of DRB-HICOM Berhad and/or its subsidiary companies, which are Syariah compliant.
The issuance of the Islamic Securities is expected to be completed in the second quarter of the financial year ending 31 March 2006. Directors’ Report
ISSUE OF SHARES During the financial year, the Company’s issued and paid-up share capital was increased from RM980,672,647 to RM985,669,947 by way of the issue of 4,997,300 new ordinary shares of RM1.00 each for cash, pursuant to the exercise of 4,997,300 share options under the Employees’ Shares Option Scheme (“ESOS”), at option prices ranging from RM1.00 to RM2.06 per share.
Subsequent to the financial year end, the Company’s issued and paid-up share capital was further increased from RM985,669,947 to RM985,898,447 by way of the issue of 228,500 new ordinary shares of RM1.00 each for cash, pursuant to the exercise of 228,000 share options under the ESOS, at option prices ranging from RM1.00 to RM1.75 per share and the conversion of 500 warrants at an exercise price of RM2.88 per share. 118 The new shares rank pari passu in all respects with the existing shares of the Company including entitlement to the first and final dividend proposed for the financial year ended 31 March 2005.
20 EMPLOYEES’ SHARE OPTION SCHEME 05 The DRB-HICOM Berhad Employees’ Share Option Scheme (“ESOS”) came into effect on 10 April 2001. The ESOS shall be in force for a period of 5 years until 9 April 2006. The ESOS was implemented on 2 July 2001. 2005 ANNUAL REPORT DRB-HICOM BERHAD
The main features of the ESOS are:
(a) The total number of ordinary shares to be issued by the Company under the ESOS shall not exceed eleven point five per centum (11.5%) of the total issued and paid-up share capital of the Company at any one time during the existence of the ESOS. (203430-W)
(b) The options granted may be exercised at any time within the option period.
(c) The exercise price at which the employees are offered to take up shares under the ESOS is at a discount of 10% from the weighted average market price of the shares of the Company as quoted in the Daily Official List issued by Bursa Malaysia Securities Berhad for the five market days preceding the respective dates of offer of the options or the par value of the shares of the Company of RM1.00, whichever is higher.
(d) The grantees have no right to participate, by virtue of these options, in the ESOS scheme of any other company.
During the financial year ended 31 March 2005, a total of 4,997,300 ordinary shares were issued by virtue of the exercise of the options at prices ranging from RM1.00 to RM2.06 per share. As at 31 March 2005, there were 25,942,700 unissued ordinary shares under options granted pursuant to ESOS, at prices ranging from RM1.00 to RM2.21 per share. EMPLOYEES’ SHARE OPTION SCHEME (CONTINUED) Details of the share options granted and exercised under the ESOS during the financial year are set out in Note 29 (iii)(e).
The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the list of option holders and their holdings, except for eligible employees with share options allocation of 100,000 shares and above. Save as disclosed below, there were no other eligible employees allocated share options of 100,000 and above during the financial year.
No. of share options granted during the financial year 119
Philip Amir Salleh 266,000 Ahmad Othman Yahaya 170,000 Ooi Say Teng 160,000 20 05
DIRECTORS 2005 ANNUAL REPORT DRB-HICOM BERHAD The Directors who have held office during the period since the date of the last report are as follows:
Tan Sri Dato’ Seri Mohd. Saleh Sulong (Group Chairman) Datuk Mohd Khamil Jamil (Deputy Group Chairman) (Appointed on 19 July 2005) Dato’ Haji Mohamad Nor Mohamad
Datin Hajjah Safiah Basrah (203430-W) Ibrahim Taib Dato’ Yatina Yahaya Dato’ Maznah Abdul Jalil Dato’ Mohd Nor Mohamad Datuk Haji Faisal Siraj Mark Aziz Salleh Dato’ B. Bhaskaran Pillai Dato’ Syed Md. Amin Syed Jan Aljeffri Low Nyap Heng Lee Yoon Min Maj. Gen. (Rtd.) Dato’ Amir Baharudin Datuk Abu Samah Bachik (Alternate to Tan Sri Dato’ Seri Mohd. Saleh Sulong) Ahmad Othman Yahaya (Alternate to Dato’ Yatina Yahaya) Directors’ Report
DIRECTORS’ INTERESTS According to the Register of Directors’ Shareholdings, the interests of Directors in office at the end of the financial year in shares, warrants and share options in the Company and in shares in its related corporations, are as follows:
No. of ordinary shares of RM1.00 each As at As at 1.4.2004 Acquired Disposed 31.3.2005
In the Company 120 Direct Tan Sri Dato’ Seri Mohd. Saleh Sulong 621,000 — — 621,000 Dato’ Yatina Yahaya 57,600 — — 57,600 Dato’ Maznah Abdul Jalil 554,000 — (54,000) 500,000 Dato’ Mohd Nor Mohamad 72,000 90,000 (90,000) 72,000 20 Datuk Haji Faisal Siraj 162,000 1,104,000 (920,000) 346,000 05 Mark Aziz Salleh 162,000 — (132,000) 30,000 Dato’ B. Bhaskaran Pillai 130,000 104,000 (130,000) 104,000
2005 ANNUAL REPORT DRB-HICOM BERHAD Dato’ Syed Md. Amin Syed Jan Aljeffri 7,000 — — 7,000 Datuk Abu Samah Bachik 30,000 100,000 (20,000) 110,000 Ahmad Othman Yahaya 20,000 — — 20,000
Indirect Tan Sri Dato’ Seri Mohd. Saleh Sulong 195,612,654 — (56,643,471) 138,969,183
(203430-W) Dato’ Yatina Yahaya 195,624,654 — (56,643,471) 138,981,183 Ahmad Othman Yahaya 195,624,654 — (56,643,471) 138,981,183
No. of warrants 2000/2005 As at As at 1.4.2004 Acquired Disposed 31.3.2005
In the Company Indirect Tan Sri Dato’ Seri Mohd. Saleh Sulong 47,674,520 — — 47,674,520 Dato’ Yatina Yahaya 47,674,520 — — 47,674,520 Ahmad Othman Yahaya 47,674,520 — — 47,674,520 DIRECTORS’ INTERESTS (CONTINUED)
No. of share options over ordinary shares of RM1.00 each As at As at 1.4.2004 Granted Exercised 31.3.2005
In the Company Dato’ Yatina Yahaya 104,000 — — 104,000 Dato’ Maznah Abdul Jalil 104,000 — — 104,000 Dato’ Mohd Nor Mohamad 104,000 — (90,000) 14,000 Datuk Haji Faisal Siraj 104,000 — (104,000) — Mark Aziz Salleh 104,000 — — 104,000 121 Dato’ B. Bhaskaran Pillai 104,000 — (104,000) — Datuk Abu Samah Bachik 226,000 — (100,000) 126,000 Ahmad Othman Yahaya 56,000 170,000 — 226,000
By virtue of Tan Sri Dato’ Seri Mohd. Saleh Sulong’s interest in the shares in the Company, he is also deemed to 20 have an interest in the shares in the subsidiary companies to the extent the Company has an interest. 05
By virtue of Dato’ Yatina Yahaya being a co-administrator and beneficiary of the Estate of Allahyarham Tan Sri 2005 ANNUAL REPORT DRB-HICOM BERHAD Dato’ Seri Yahaya Ahmad and the Estate of Allahyarhamah Puan Sri Datin Seri Rahana Othman and Ahmad Othman Yahaya being a co-administrator and beneficiary of the Estate of Allahyarham Tan Sri Dato’ Seri Yahaya Ahmad and beneficiary of the Estate of Allahyarhamah Puan Sri Datin Seri Rahana Othman which have interests in the shares in the Company, they are deemed to have an interest in the shares in the subsidiary companies to the extent the Company has an interest.
In addition to the above, the indirect interests of certain Directors in office at the end of the financial year in (203430-W) the shares of certain subsidiary companies are as follows:
No. of ordinary shares of RM1.00 each As at As at 1.4.2004 Acquired Disposed 31.3.2005
In Intrakota Consolidated Berhad (Subsidiary company) Indirect Tan Sri Dato’ Seri Mohd. Saleh Sulong 4,101,000 — — 4,101,000 Dato’ Yatina Yahaya 4,101,000 — — 4,101,000 Ahmad Othman Yahaya 4,101,000 — — 4,101,000
In Multi Automotive Service and Assist Sdn. Bhd. (Subsidiary company) Indirect Tan Sri Dato’ Seri Mohd. Saleh Sulong 37,500 — — 37,500 Dato’ Yatina Yahaya 37,500 — — 37,500 Ahmad Othman Yahaya 37,500 — — 37,500
None of the other Directors in office at the end of the financial year held any interest in the shares, warrants and options in the Company or in its related corporations during the financial year. 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 in, or debentures of, the Company or any other body corporate except for the share options granted by the Company to eligible employees including Executive Directors of the Company, pursuant to ESOS.
Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than benefits disclosed 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 except for any deemed benefits that may accrue to certain 122 Directors by virtue of the following transactions between the Group and companies in which the Directors have significant financial interests:
(a) Management fees paid to Master-Carriage (Malaysia) Sdn. Bhd. as disclosed in Note 5 to the financial 20 statements; and 05 (b) Significant related party transactions as disclosed in Note 40 to the financial statements. 2005 ANNUAL REPORT DRB-HICOM BERHAD STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS Before the income statements and balance sheets 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 had satisfied themselves that all known bad debts had been written off
(203430-W) 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 value 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. STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (CONTINUED) 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 or of the Company to meet their obligations when they fall due.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group and of 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 and of the Company which has arisen since the end of the financial year. 123
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 which would render any amount stated in the financial statements misleading.
In the opinion of the Directors: 20 05 (a) the results of the Group’s and of the Company’s operations during the financial year were not substantially
affected by any item, transaction or event of a material and unusual nature; and 2005 ANNUAL REPORT DRB-HICOM BERHAD
(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 of the Company for the financial year in which this report is made. (203430-W) AUDITORS The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
In accordance with a resolution of the Board of Directors dated 19 July 2005.
TAN SRI DATO’ SERI MOHD. SALEH SULONG Chairman
DATO’ HAJI MOHAMAD NOR MOHAMAD Director Consolidated Income Statements
for the financial year ended 31 March 2005
2005 2004 Discontinued Continuing operations Note Total operations (Note 39) Total RM’000 RM’000 RM’000 RM’000
Revenue 4 4,506,595 4,417,991 82,264 4,500,255 Cost of sales (3,839,475) (3,650,465) (111,161) (3,761,626)
Gross profit/(loss) 667,120 767,526 (28,897) 738,629 Other operating income – partial waiver on principal borrowings — — 14,596 14,596 – others 128,561 117,448 1,786 119,234 124 128,561 117,448 16,382 133,830 Selling and distribution expenses (131,308) (119,225) — (119,225) Administrative expenses (400,992) (415,178) (10,753) (425,931) Other operating expenses 20 – loss on disposal of bus related assets — —(63,045) (63,045) 05 – others (70,123) (51,416) (14,626) (66,042) (70,123) (51,416) (77,671) (129,087) 2005 ANNUAL REPORT DRB-HICOM BERHAD Profit/(loss) from operations 5 193,258 299,155 (100,939) 198,216 Finance cost – interest waiver — — 155,097 155,097 – interest expense 8 (138,440) (136,534) (38,447) (174,981)
(138,440) (136,534) 116,650 (19,884) Share of results of jointly controlled entities 40,326 16,836 — 16,836 (203430-W) Share of results of associated companies 181,558 194,737 — 194,737
Profit from ordinary activities before taxation 276,702 374,194 15,711 389,905 Taxation – Company and subsidiary companies (23,714) (77,859) 4 (77,855) – Share of taxes of jointly controlled entities (12,965) (5,577) — (5,577) – Share of taxes of associated companies (41,764) (59,057) — (59,057)
9 (78,443) (142,493) 4 (142,489)
Profit from ordinary activities after taxation 198,259 231,701 15,715 247,416 Minority interests (56,852) (52,499)
Net profit attributable to shareholders 141,407 194,917
Gross dividends per share (sen) 10 3.00 2.50
Earnings per share (sen) – Basic 11(a) 14.39 20.01
– Fully diluted 11(b) 14.32 19.84
The accounting policies on pages 133 to 146 and the notes on pages 147 to 218 form an integral part of these financial statements. Company Income Statements
for the financial year ended 31 March 2005
Note 2005 2004 RM’000 RM’000
Revenue 4 470,505 881,845 Cost of sales (322,527) (688,692)
Gross profit 147,978 193,153 Other operating income 7,538 16,683 Administrative expenses (10,495) (15,791) Other operating expenses — (16,756) 125
Profit from operations 5 145,021 177,289 Finance cost 8 (17,206) (19,845)
Profit from ordinary activities before taxation 127,815 157,444 20 Taxation 9 (23,940) (44,200) 05
Profit from ordinary activities after taxation 103,875 113,244 2005 ANNUAL REPORT DRB-HICOM BERHAD (203430-W)
The accounting policies on pages 133 to 146 and the notes on pages 147 to 218 form an integral part of these financial statements. Balance Sheets
as at 31 March 2005
Group Company Note 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
CURRENT ASSETS Inventories 12 553,492 704,886 — 2,232 Property development costs 13(a) 101,967 39,455 — — Trade and other receivables 14 1,451,342 1,702,086 806,748 836,392 Tax recoverable 75,331 74,396 — — Short term investments 15 187,020 229,019 21,087 20,222 Short term deposits 16 1,148,583 998,617 41,786 95,240 Cash and bank balances 17 144,884 145,918 17,576 1,028 126 3,662,619 3,894,377 887,197 955,114
CURRENT LIABILITIES General and life insurance funds 18 356,796 373,663 — — Trade and other payables 19 1,425,866 1,528,185 444,171 549,773 Provision for liabilities and charges 20 37,451 26,336 — — 20 Bank borrowings 21 05 – Bank overdrafts 71,670 128,113 10,720 10,763 – Others 1,197,684 1,334,232 284,456 312,447 Current tax liabilities 30,058 55,945 2,098 10,191 2005 ANNUAL REPORT DRB-HICOM BERHAD 3,119,525 3,446,474 741,445 883,174
NET CURRENT ASSETS 543,094 447,903 145,752 71,940 NON CURRENT ASSETS Property, plant and equipment 22 2,392,425 2,451,156 84,687 91,678 Land held for property development 13(b) 279,355 305,272 — — (203430-W) Subsidiary companies 23 — — 3,410,577 3,393,815 Jointly controlled entities 24 347,431 342,129 7,350 — Associated companies 25 1,385,095 1,205,949 59,325 59,325 Other investments 26 533,504 427,608 — — Intangible assets 27 2,504 2,837 — — Deferred tax assets 28 25,412 23,047 758 —
4,965,726 4,757,998 3,562,697 3,544,818
5,508,820 5,205,901 3,708,449 3,616,758
FINANCED BY: SHARE CAPITAL 29 985,670 980,673 985,670 980,673 RESERVES 1,663,545 1,538,484 2,722,779 2,635,061
SHAREHOLDERS’ EQUITY 2,649,215 2,519,157 3,708,449 3,615,734 MINORITY INTERESTS 672,157 668,792 — — LIFE ASSURANCE FUND 30 582,560 370,842 — — DEFERRED INCOME 31 76,050 76,935 — — LONG TERM AND DEFERRED LIABILITIES Borrowings 32 1,477,197 1,519,811 — — Sinking fund 33 658 329 — — Deferred tax liabilities 28 50,983 50,035 — 1,024
1,528,838 1,570,175 — 1,024
5,508,820 5,205,901 3,708,449 3,616,758
The accounting policies on pages 133 to 146 and the notes on pages 147 to 218 form an integral part of these financial statements. Consolidated Statement Of Changes In Equity
for the financial year ended 31 March 2005
Issued and fully paid ordinary shares of RM1.00 each Non-distributable Distributable Currency Other Nominal Share Merger translation reserves Retained Note value premium reserve differences (Note 34) earnings Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2005 At beginning of the 127 financial year 980,673 5,454 914,434 4,514 98,567 515,515 2,519,157 Share of an associated company’s reserves ———1,288 (39,146) 39,900 2,042 Currency translation differences of subsidiary companies ———1,187 — — 1,187 20 Net goodwill arising from acquisition of 37(a)(iv), 05 subsidiary companies (vi)&(vii) ——(3,418) — — — (3,418)
Net (losses)/gains not recognised 2005 ANNUAL REPORT DRB-HICOM BERHAD in the income statement ——(3,418) 2,475 (39,146) 39,900 (189) Net profit for the financial year —————141,407 141,407 Transfer to other reserves ————49,860 (49,860) — Dividends in respect of the financial year ended 31 March 2004 10 —————(17,688) (17,688)
Issue of ordinary shares (203430-W) pursuant to ESOS 29 4,997 1,531 — — — — 6,528
At end of the financial year 985,670 6,985 911,016 6,989 109,281 629,274 2,649,215
2004 At beginning of the financial year 965,115 1,083 913,084 15,380 88,676 358,877 2,342,215 Share of an associated company’s reserves — — 1,366 (16,051) (14,307) — (28,992) Currency translation differences of subsidiary companies — — — 5,185 — — 5,185 Goodwill arising from acquisition of additional shares in a subsidiary company 37(d)(i) — — (16) — — — (16) Net gains/(losses) not recognised in the income statement — — 1,350 (10,866) (14,307) — (23,823) Net profit for the financial year — — — — — 194,917 194,917 Transfer to other reserves — — — — 24,198 (24,198) — Dividends in respect of the financial year ended 31 March 2003 10 — — — — — (14,081) (14,081) Issue of ordinary shares pursuant to ESOS 29 15,558 4,371 — — — — 19,929
At end of the financial year 980,673 5,454 914,434 4,514 98,567 515,515 2,519,157
The accounting policies on pages 133 to 146 and the notes on pages 147 to 218 form an integral part of these financial statements. Company Statement Of Changes In Equity
for the financial year ended 31 March 2005
Issued and fully paid ordinary shares of RM1.00 each Non-distributable Distributable Other Retained Nominal Share Merger reserves earnings Note value premium reserve (Note 34) (Note 36) Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 128 2005 At beginning of the financial year 980,673 5,454 2,318,321 20,383 290,903 3,615,734 Net profit for the financial year ————103,875 103,875 20 Dividends in respect of the 05 financial year ended 31 March 2004 10 ————(17,688) (17,688) Issue of ordinary shares 2005 ANNUAL REPORT DRB-HICOM BERHAD pursuant to ESOS 29 4,997 1,531 — — — 6,528
At end of the financial year 985,670 6,985 2,318,321 20,383 377,090 3,708,449
2004 (203430-W) At beginning of the financial year 965,115 1,083 2,318,321 20,383 191,740 3,496,642 Net profit for the financial year ————113,244 113,244 Dividends in respect of the financial year ended 31 March 2003 10 ————(14,081) (14,081) Issue of ordinary shares pursuant to ESOS 29 15,558 4,371 — — — 19,929
At end of the financial year 980,673 5,454 2,318,321 20,383 290,903 3,615,734
Pursuant to Section 60(4)(a) of the Companies Act, 1965, the premiums on the shares issued as consideration for the acquisitions of certain subsidiary companies in the financial year ended 31 March 2001 are not recorded as share premium. The difference between the issue price and the nominal value of share is classified as merger reserve.
The accounting policies on pages 133 to 146 and the notes on pages 147 to 218 form an integral part of these financial statements. Cash Flow Statements
for the financial year ended 31 March 2005
Group Company Note 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM OPERATING ACTIVITIES Net profit after taxation 141,407 194,917 103,875 113,244 Adjustments: Allowance for/(writeback of) impairment of short term investments 15,295 (13,258) (865) 6,054 Allowance for amounts due from 129 subsidiary companies — — — 10,702 Amortisation of intangible assets 341 319 — — Depreciation of property, plant and equipment 171,775 207,988 7,271 7,111 Dividend income (gross) (6,194) (6,574) (172,561) (138,016) 20 Finance cost – interest waiver — (155,097) — — 05 – interest expense 138,440 174,981 17,206 19,845 Gain on disposal of shares in 2005 ANNUAL REPORT DRB-HICOM BERHAD a jointly controlled entity (1,531) — — — (Gain)/loss on disposal of property, plant and equipment (6,663) (2,872) (3) 352 Impairment loss of property, plant and equipment 14,695 5,245 — —
Interest income (34,854) (37,582) (4,285) (15,829) (203430-W) Inventories written down (net of writeback) 3,939 11,021 — 1,920 Loss/(gain) on disposal of shares in associated companies 7,344 (2,184) — — Loss on disposal of bus related assets – property, plant and equipment — 20,549 — — – inventories — 42,496 — — Minority interests 56,852 52,499 — — Partial waiver of principal borrowings — (14,596) — — Property, plant and equipment written off 6,592 538 29 31 Provision for liabilities and charges (net of writeback) 13,328 13,393 — — Share of results of jointly controlled entities (40,326) (16,836) — — Share of results of associated companies (181,558) (194,737) — — Taxation 78,443 142,489 23,940 44,200 Unrealised (gain)/loss on foreign exchange (3,818) 27,736 — (508) (Writeback of)/allowance for doubtful debts (3,106) 12,551 — 10
Operating profit/(loss) before working capital changes 370,401 462,986 (25,393) 49,116 Inventories 150,896 (59,972) 2,232 10 Property development costs 23,550 (21,860) — — Trade and other receivables 205,914 184,709 6,635 99,099 Cash Flow Statements
for the financial year ended 31 March 2005
Group Company Note 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM OPERATING ACTIVITIES (Continued) General and life insurance funds 194,851 162,847 — — Trade and other payables (130,833) (56,827) (150,686) (63,199) Amounts due from customers on contracts 44,894 (166,674) 46,072 (191,075) 130 Amounts due to customers on contracts 5,146 (18,409) — — Balances with subsidiary companies — — 16,943 45,081 Balances with jointly controlled entities (2,644) 601 (35) (26) Balances with associated companies 4,178 (1,040) (209) 100
20 Net cash generated from/(used in) operations 866,353 486,361 (104,441) (60,894) 05 Interest received 32,750 41,887 2,361 2,827 Dividends received from subsidiary companies — — 42,221 3,754 Dividends received from jointly controlled entities 22,300 27,506 — — 2005 ANNUAL REPORT DRB-HICOM BERHAD Dividends received from associated companies 37,395 43,223 6,545 1,190 Dividends received from other investments 6,103 7,140 — 1,946 Taxation paid, net of refund (49,773) (92,528) 9,492 — Finance cost paid (80,730) (120,410) (15,342) (16,442)
Net cash inflow/(outflow) (203430-W) from operating activities 834,398 393,179 (59,164) (67,619)
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of a jointly controlled entity 38 8,640 — — — Proceeds from disposal of associated companies 38 79,375 1,946 — — Proceeds from disposal/maturity of investments 239,259 269,010 — — Proceeds from disposal of property, plant and equipment 23,988 10,554 11 29 Purchase of property, plant and equipment (136,346) (151,582) (317) (2,103) Net cash outflow from acquisition of subsidiary companies 37 (1,090) — — — Acquisition of land held for property development (57,654) (33,266) — — Acquisition of investments (418,518) (372,830) — — Acquisition of shares in: – subsidiary companies — — (5,000) (5,000) – a jointly controlled entity (7,350) — (7,350) — – an associated company (47,334) — — —
Net cash outflow from investing activities (317,030) (276,168) (12,656) (7,074) Group Company Note 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of ordinary shares 6,528 19,929 6,528 19,929 Proceeds from bank borrowings 491,253 428,843 — 60,000 Subscription for shares in subsidiary companies by minority interests 2,339 7,985 — — Fixed deposits held as security and 131 maintained as sinking fund (21,832) (2,124) (13,707) (3,081) Redemption of preference shares held by minority interests (8,350) (7,500) — — Repayment of bank borrowings (600,941) (465,385) (27,991) (15,100) Repayment of hire purchase and finance lease (138,694) (7,263) — — 20 Dividends paid to minority interests (46,828) (11,024) — — 05 Dividends paid to shareholders (17,688) (14,081) (17,688) (14,081) Proceeds from loans from a subsidiary company — — 85,379 39,170 2005 ANNUAL REPORT DRB-HICOM BERHAD Repayment of loan to a subsidiary company — — (403) — Loans to subsidiary companies — — (25,877) (104,193) Repayment of loans by subsidiary companies — — 15,009 —
Net cash (outflow)/inflow from financing activities (334,213) (50,620) 21,250 (17,356) (203430-W)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 183,155 66,391 (50,570) (92,049) Effects of foreign currency translation 388 410 — — CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 985,541 918,740 60,140 152,189
CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 1,169,084 985,541 9,570 60,140
(a) Cash and cash equivalents at end of the financial year comprise the following:-
Short term deposits 1,148,583 998,617 41,786 95,240 Cash and bank balances 144,884 145,918 17,576 1,028 Bank overdrafts (71,670) (128,113) (10,720) (10,763)
1,221,797 1,016,422 48,642 85,505 Less: Fixed deposits held as 16 security value/sinking fund (a)&(b) (52,713) (30,881) (39,072) (25,365)
1,169,084 985,541 9,570 60,140 Cash Flow Statements
for the financial year ended 31 March 2005
Group Company Note 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
(b) Non cash transactions The principal non cash transactions during the financial year comprises the following:
(i) Dividend in specie and capital repayment by an indirect 132 associated company 169,846 102,878 — —
(ii) Investment in an indirect associated company via share swap of 20 short term investment 113,964 — — — 05
2005 ANNUAL REPORT DRB-HICOM BERHAD (iii) Acquisition of property, plant and equipment by means of hire purchase and finance lease 22(b) 9,037 4,846 — —
(iv) Acquisition of a subsidiary company via conversion of debt 37(a)(vi) 404 — — — (203430-W)
(v) Dividend received from a subsidiary company off-set against the amount due to the subsidiary company — — 72,077 94,255
(vi) Interest waiver included in finance cost 39(a) — 155,097 — —
(vii) Partial waiver of principal borrowings included in other operating income 39(a) — 14,596 — —
The accounting policies on pages 133 to 146 and the notes on pages 147 to 218 form an integral part of these financial statements. Notes To The Financial Statements
– 31 March 2005
1PRINCIPAL ACTIVITIES The Company is an investment holding company with investments in the automotive, property and construction and services sectors. The Company is involved in the design and construction of the Electrified Double Track Project between Rawang and Ipoh.
The principal activities of the subsidiary companies, jointly controlled entities and associated companies are described in Note 3 to the financial statements.
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Bursa Malaysia Securities Berhad. 133
The address of the registered office and principal place of business of the Company is Level 5, Wisma DRB- HICOM, No. 2, Jalan Usahawan U1/8, Seksyen U1, 40150 Shah Alam, Selangor Darul Ehsan, Malaysia. 20 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 05 The following accounting policies have been used consistently in dealing with items which are considered 2005 ANNUAL REPORT DRB-HICOM BERHAD material in relation to the financial statements:
(a) Basis of preparation The financial statements of the Group and of the Company are prepared under the historical cost convention except as disclosed in this summary of significant accounting policies. (203430-W) The financial statements comply with the Malaysian Accounting Standards Board (“MASB”) approved accounting standards in Malaysia and the provisions of the Companies Act, 1965. New accounting standards that are effective for the financial year are adopted and applied by the Group and Company retrospectively or prospectively as allowed by the respective accounting standards.
The preparation of the financial statements in conformity with the MASB approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 requires the Directors to make estimates and assumptions that may affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported financial year. Actual results could differ from those estimates.
(b) Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiary companies made up to the end of the financial year. Subsidiary companies 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. The Group’s subsidiary companies are listed in Note 3 to the financial statements.
The total profits and losses of subsidiary companies are included in the Group’s income statement; the proportion of the profit or loss applicable to minority interests is deducted in arriving at the profit attributable to the shareholders of the Company. Notes To The Financial Statements
– 31 March 2005
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Basis of consolidation (Continued) All the subsidiary companies are consolidated on the acquisition method of accounting where the results of subsidiary companies acquired or disposed of during the financial year are included from the date on which control is transferred to the Group and are no longer consolidated from the date on which the control ceases. At the date of acquisition, the fair values of the subsidiary companies’ net assets are determined and these values are reflected in the consolidated financial statements. The profit or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group’s share of its net assets.
134 The total assets and liabilities of subsidiary companies are included in the Group’s balance sheet and the interests of minority shareholders in the net assets employed are stated separately. All significant inter- company transactions, balances and unrealised gains on transactions are eliminated on consolidation and unrealised losses on transactions are also eliminated. Where necessary, adjustments are made to the financial 20 statements of subsidiary companies to ensure consistency of accounting policies with those of the Group. 05 Minority interests are measured at the minorities’ share of post acquisition fair values of the identifiable assets and liabilities of the acquiree. Separate disclosure is made of minority interests. 2005 ANNUAL REPORT DRB-HICOM BERHAD
(c) Goodwill Goodwill arising on consolidation represents the excess of fair value of the purchase consideration over the fair value of the Group’s share of the separable net assets of the companies acquired, at the date of acquisition. Goodwill is written off against reserves in the financial year of acquisition. (203430-W) (d) Jointly controlled entities A jointly controlled entity is an enterprise which is neither a subsidiary nor an associated company of the Group but over which there is a contractually agreed sharing of control by the Group with one or more parties over the strategic operating, investing and financial policy decisions.
The Group’s share of results of jointly controlled entities is included in the consolidated income statements by the equity method of accounting. In the consolidated balance sheet, the Group’s interest in jointly controlled entities is stated at cost plus the Group’s share of post acquisition retained profits and reserves.
The Group’s jointly controlled entities are listed in Note 3 to the financial statements.
(e) Associated companies An associated company is a company in which the Group is in a position to exercise significant influence in its management and which is neither a subsidiary nor a jointly controlled entity. Significant influence is the power to participate in the financial and operating policy decisions of the associate but not control over those policies. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Associated companies (Continued) The Group’s share of results of associated companies is included in the consolidated income statement by the equity method of accounting. The share of the results of the associated company will not be taken into the Group’s income statement when the carrying value of the investment in an associated company reaches zero unless the Group has incurred obligations or guaranteed obligations in respect of the associated company. In the consolidated balance sheet, the Group’s interest in associated companies is stated at cost plus the Group’s share of post acquisition retained profits and reserves. These amounts are taken from the latest audited financial statements or management financial statements of the associated companies concerned made up to the end of their respective financial years. 135
The Group’s associated companies are listed in Note 3 to the financial statements.
(f) Investments Investments in subsidiary companies, jointly controlled entities, associated companies and other non 20 current investments are stated at cost. Where an indication of impairment exists, the carrying amount 05 of the investment is assessed and written down immediately to its recoverable amount. 2005 ANNUAL REPORT DRB-HICOM BERHAD
Short term investments are stated at the lower of cost and market value.
Investment properties of insurance subsidiary companies, principally comprising office buildings are held for long term rental yields and are not substantially occupied by the Group. Investment properties are stated at directors’ valuation based upon the latest independent valuation on the open market value (203430-W) basis by professional valuers after approval by the relevant government authorities, with subsequent additions stated at cost. No depreciation is provided on investment properties. These properties are revalued at regular intervals of at least once in every three years by independent professional valuers with additional valuation in the intervening years where market conditions indicate that the carrying values of the revalued properties are materially higher than the market values. Surpluses arising from revaluation of investment properties are credited directly to an asset revaluation reserve account. Deficits arising from revaluation of investment properties are charged against the asset revaluation reserve account to the extent of a previous surplus held in that account for that same asset. In all other cases, deficits arising from revaluation of these properties are recognised as expenses. Surpluses arising from revaluation for that same asset, that was previously recognised as an expense, are credited to income to the extent that it offsets the previous recorded deficits.
On disposal of an investment, the difference between the net disposal proceeds and its carrying amount is charged or credited to the income statement; any amount in revaluation reserve is transferred to retained earnings.
Malaysian Government Securities, Cagamas papers and unquoted approved debt securities are stated at cost adjusted for the amortisation of premiums or accretion of discounts calculated on a constant yield basis over the period from the date of purchase to maturity date. The amortisation of premiums and accretion of discounts are recognised in the income statement. Notes To The Financial Statements
– 31 March 2005
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (g) Inventories (i) Raw materials, work-in-progress, finished goods and consumables Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first- in, first-out basis. Work-in-progress and finished goods represent materials, direct labour, direct charges and process costs, where necessary.
(ii) Inventories of unsold properties The cost of unsold properties comprises cost associated with the acquisition of land, direct costs and 136 an appropriate allocation of allocated costs attributable to property development activities.
Net realisable value is the estimated selling price in the ordinary course of business less selling expenses.
(h) Property development activities 20 (i) Land held for property development 05 Land held for property development consist of land on which no significant development work has been undertaken or where development activities are not expected to be completed within the 2005 ANNUAL REPORT DRB-HICOM BERHAD normal operating cycle. Such land is classified as non-current assets and is stated at cost less accumulated impairment losses.
Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stamp duties, conversion fees and other relevant levies. Where an indication of impairment exists, the carrying amount of the asset is assessed and written down immediately to its recoverable amount. (203430-W)
Land held for property development is transferred to property development costs (within current assets) when development work is to be undertaken and is expected to be completed within the normal operating cycle.
(ii) Property development costs Where the outcome of a development can be reliably estimated, property development revenue and expenditure are recognised using the percentage of completion method. The percentage of completion is measured by reference to the development costs incurred to date in proportion to the estimated total costs for the property development.
Where the outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of costs incurred that is probable will be recoverable. The property development costs on the development units sold are recognised as an expense when incurred.
Irrespective of whether the outcome of a property development activity can be estimated reliably, when it is probable that total property development costs will exceed total property development revenue, the expected loss is recognised as an expense immediately. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (h) Property development activities (Continued) (ii) Property development costs (Continued) Property development costs is stated at lower of cost and net realisable value. Where revenue recognised in the income statement exceed billings to purchasers, the balance is shown as accrued billings under receivables (within current assets). Where billings to purchasers exceed revenue recognised, the balance is shown as progress billings under payables (within current liabilities).
Interest on borrowings incurred on property development costs are capitalised. Capitalisation of borrowing costs ceases upon completion of property development activities. 137
MASB 32 on “Property Development Activities” became operative to the Group beginning 1 April 2004. Consequently, in compliance with the Standard, Land and Development Expenditure and Real Property Assets have been renamed as Property Development Costs and Land Held for Property Development respectively. Comparatives have been adjusted to take into account the requirements 20 of MASB 32 as disclosed in Note 44 to the financial statements. 05
(i) Receivables 2005 ANNUAL REPORT DRB-HICOM BERHAD Receivables are carried at anticipated realisable value. An estimate is made for doubtful receivables based on a review of all outstanding amounts at the financial year end. Bad debts are written off in the financial year in which they are identified.
(j) Cash and cash equivalents (203430-W) For the purposes of the cash flow statements, cash and cash equivalents consist of cash in hand, bank balances, demand deposits, bank overdrafts and short term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(k) Intangible assets Intangible assets comprise plant and assembly licences and expenses incurred for development of products which are amortised equally over the period of their expected benefit or charged to income statement in the financial year in which the related plant or product is abandoned or considered to be of no value.
Where an indication of impairment exists, the carrying amount of the intangible assets is assessed and written down immediately to its recoverable amount.
Preliminary and pre-operating expenses are written off to the income statement in the financial year in which they are incurred. Notes To The Financial Statements
– 31 March 2005
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (l) Property, plant and equipment and depreciation Freehold land and capital work-in-progress are stated at cost. All other property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Interest costs on specific and identifiable borrowings used to finance the acquisition of property, plant and equipment are capitalised and carried forward as part of property, plant and equipment. Capitalisation of borrowing costs ceases when assets are ready for their intended use.
138 Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included in profit from operations.
Where an indication of impairment exists, the carrying amount of the property, plant and equipment is 20 assessed and written down immediately to its recoverable amount. 05 No depreciation is provided on freehold land as it has an infinite useful life and depreciation on capital work-in-progress commences when the assets are ready for their intended use. Leasehold land is 2005 ANNUAL REPORT DRB-HICOM BERHAD amortised on a straight line basis over the periods of the respective leases which range from 28 to 914 years. Other property, plant and equipment are depreciated on a straight line basis to write off the cost of these assets over their estimated useful lives.
The estimated useful lives in years are as follows:
(203430-W) Buildings, golf course and improvements 5 – 50 years Plant and machinery 5 – 15 years Motor vehicles 3 – 8 years Office equipment 3 – 10 years Furniture and fittings 3 – 10 years
(m) Deferred taxation Income tax on the profit or loss for the financial year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the financial year and is measured using the tax rates that have been enacted at the balance sheet date.
Deferred tax is provided for, using the ’liability method’ on temporary differences at the balance sheet date between the tax bases of assets and liabilities for tax purposes and their carrying amounts in the financial statements.
In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m) Deferred taxation (Continued) Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.
Deferred tax benefits are recognised to the extent that is probable that taxable profit will be available 139 against which the deductible temporary differences or unused tax losses can be utilised.
(n) Foreign currency translation Transactions in foreign currencies during the financial year are converted into Ringgit Malaysia at the rates of exchange ruling on the transaction dates unless hedged by forward foreign exchange contracts, 20 in which case the rates specified in such forward contracts are used. Monetary assets and liabilities in 05 foreign currency at the balance sheet date are translated into Ringgit Malaysia at rates of exchange approximating those ruling on that date. Non-monetary assets and liabilities in foreign currency at the 2005 ANNUAL REPORT DRB-HICOM BERHAD balance sheet date are translated into Ringgit Malaysia at rates of exchange approximating those ruling on that date of the transactions. Exchange gains and losses are dealt with in the income statement.
The financial statements of non-integral foreign subsidiary companies are translated into Ringgit Malaysia at the rate of exchange ruling at the balance sheet date. Exchange differences on the (203430-W) translation of the net assets of foreign subsidiary companies are dealt with through reserves. On disposal of foreign subsidiary companies, such translation differences are recognised in the income statement as part of the gain or loss on disposal.
The principal closing rates used in translation of foreign currency amounts were as follows:
Financial year end rates 2005 2004 RM RM
1 Australian Dollar 2.961 2.894 1 Brunei Dollar 2.329 2.284 1 Euro 4.966 4.673 100 Hungarian Forint 1.989 1.859 100 Indonesia Rupiah 0.043 0.047 100 Japanese Yen 3.576 3.626 1 Singapore Dollar 2.329 2.284 1 Sterling Pound 7.216 7.007 100 Thai Baht 9.880 9.800 1 US Dollar 3.825 3.825 Notes To The Financial Statements
– 31 March 2005
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (o) Construction contracts When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised over the period of the contract as revenue and expenses respectively. The Group uses the percentage of completion method to determine the appropriate amount of revenue and costs to be recognised in a given period; the percentage of completion is measured by reference to:
(i) Electrified Double Track Project the completion of physical proportion of the contract work.
(ii) Other contracts 140 the proportion of contract costs incurred for work performed to date to the estimated total costs.
When it is probable that the total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. 20 05 When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that is probable will be recoverable and contract costs are recognised as expenses when incurred. 2005 ANNUAL REPORT DRB-HICOM BERHAD
The aggregate of the costs incurred and the profit/loss recognised on each contract is compared against the progress billings up to the financial year end. Where costs incurred and recognised profit (less recognised losses) exceeds progress billings, the balance is shown as amounts due from customers on construction contracts under current assets. Where progress billings exceed costs incurred plus recognised
(203430-W) profit (less recognised losses), the balance is shown as amounts due to customers on construction contracts under current liabilities.
(p) Assets under lease arrangements (i) Finance leases Leases of property, plant and equipment where the Group assumes substantially all the benefits and risks of ownership are classified as finance leases. Assets acquired under finance lease arrangements are included in property, plant and equipment and the capital element of the leasing commitments is shown under borrowings. The lease rentals are treated as consisting of capital and interest element. The capital element is applied to reduce the outstanding obligations and the interest element is charged to income statement so as to give a constant periodic rate of interest on the outstanding liability at the end of each accounting period. Assets acquired under finance lease are depreciated over the useful lives of equivalent owned assets.
(ii) Operating leases Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rental payments on operating leases are charged to the income statement in the financial year they become payable.
When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (q) Revenue recognition (i) Income from sale of goods and services Sales are recognised upon delivery of goods and upon services rendered, net of sales tax, returns, discounts and allowances.
(ii) Club membership fees Annual licence fees disclosed as deferred income are recognised on a straight line basis over the duration of the membership. 141 (iii) Solid waste management Revenue from management services, solid waste disposal and tipping fees are recognised on billings upon performance of services less discounts.
(iv) Dividend and rental income 20 Rental income is accounted for on accrual basis. Dividend income is recognised when the 05 shareholders’ right to receive is established. 2005 ANNUAL REPORT DRB-HICOM BERHAD
(v) Development properties Profits from development projects are recognised at the point of signing of sale and purchase agreements in respect of units sold and is based on the percentage of completion method in cases where the outcome of the contract can be reliably estimated. Where foreseeable losses on development projects are anticipated, full allowance for losses is made in the financial statements. (203430-W)
(vi) Vehicle inspection income Income from inspection of vehicles are recognised upon the rendering of inspection services.
(r) General insurance underwriting results The general insurance underwriting results are determined for each class of business after taking into account reinsurances, commissions, unearned premiums and claims incurred.
Premium income Premium income is recognised in a financial year in respect of risks assumed during that particular financial year. Premiums from direct business are recognised during the financial year upon the issuance of insurance policies. Premiums in respect of risks incepted for which policies have not been issued as of the balance sheet date are accrued at that date.
Inward treaty reinsurance premiums are recognised on the basis of periodic advices received from ceding insurers.
Outward reinsurance premiums are recognised in the same accounting period as the original policy to which the reinsurance relates. Notes To The Financial Statements
– 31 March 2005
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (r) General insurance underwriting results (Continued) Unearned premium reserves Unearned premium reserves (“UPR”) represent the portion of the net premiums of insurance policies written that relate to the unexpired periods of the policies at the end of the financial year.
In determining the UPR at the balance sheet date, the method that most accurately reflects the actual unearned premium is used, as follows:
– 25% method for marine cargo, aviation cargo and transit; 142 – 1/24th method for all other classes of Malaysian general policies reduced by the percentage of accounted gross direct business commissions to the corresponding premiums, not exceeding limits specified by Bank Negara Malaysia; and – 1/8th method for all other classes of overseas inward business with a deduction of 20% for 20 acquisition costs. 05 Provision for claims A liability for outstanding claims is recognised in respect of both direct insurance and inward
2005 ANNUAL REPORT DRB-HICOM BERHAD reinsurance. The amount of outstanding claims is the best estimate of the expenditure required together with related expenses less recoveries to settle the present obligation at the balance sheet date.
Provision is also made for the cost of claims, together with related expenses, incurred but not reported at the balance sheet date, based on an actuarial valuation by an independent qualified actuary.
(203430-W) Acquisition costs The costs of acquiring and renewing insurance policies, net of income derived from ceding reinsurance premiums, are recognised as incurred and allocated to the periods in which they give rise to income.
(s) Life insurance underwriting results The surplus transferable from the life insurance fund to the income statement is based on the surplus determined by an annual actuarial valuation of the long term liabilities to policyholders, made in accordance with the provisions of the Insurance Act, 1996 by the appointed actuary. In the event the actuarial valuation indicates that a transfer is required from the shareholders’ fund, the transfer from the income statement to the life insurance fund is made in the year of the actuarial valuation.
Premium income Premium income includes premium recognised in the life fund.
Premium income of the Life fund is recognised as soon as the amount of the premium can be reliably measured. First premium is recognised from inception date and subsequent premium is recognised when it is due.
At the end of the financial year, all due premiums are accounted for to the extent that they can be reliably measured.
Outward reinsurance premiums are recognised in the same accounting period as the original policies to which the reinsurance relates. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (s) Life insurance underwriting results (Continued) Commission and agency expenses Commission and agency expenses, which are costs directly incurred in securing premium on insurance policies, net of income derived from reinsurers in the course of ceding of premium to reinsurers, are charged to the life insurance revenue account in the financial year in which they are incurred.
Provision for claims Claims and settlement costs that are incurred during the financial year are recognised when a claimable event occurs and/or the insurer is notified. 143
Recoveries on reinsurance claims are accountable for in the same financial year as the original claims are recognised.
Claims and provisions for claims arising on life insurance policies including settlement costs, less 20 reinsurance recoveries, are accounted for using the case basis method and for this purpose, the benefits 05 payable under a life insurance policy are recognised as follows:
(i) maturity or other policy benefit payments due on specified dates are treated as claims payable on 2005 ANNUAL REPORT DRB-HICOM BERHAD the due dates; and
(ii) death, surrender and other benefits without due dates are treated as claims payable, on the date of receipt of intimation of death of the assured or occurrence of contingency covered.
(t) Provisions (203430-W) (i) Warranty and sales returns Provision is made for estimated liability on all products still under warranty and provision for sales returns is made for estimated returns of goods at balance sheet date. These provisions are arrived at based on service and sales returns histories.
(ii) Restructuring costs Restructuring provisions mainly comprise employee termination costs and other related costs and are recognised in the financial year in which the Group becomes legally or constructively committed to payment.
(u) Financial Instruments Description 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.
A financial asset is any asset that is cash, a contractual right to receive cash or another financial assets from another enterprise, a contractual right to exchange financial instruments with another enterprise under conditions that are potentially favourable, or an equity instrument of another enterprise.
A financial liability is any liability that is a contractual obligation to deliver cash or other financial asset to another enterprise, or to exchange financial instruments with another enterprise under conditions that are potentially unfavourable. Notes To The Financial Statements
– 31 March 2005
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (u) Financial Instruments (Continued) Financial Instruments Recognised on the Balance Sheet The particular recognition and measurement method for financial instruments recognised on the balance sheet is disclosed in the individual policy statements associated with each item.
Financial Instruments Not Recognised on the Balance Sheet Financial derivative hedging instruments are used in the Group’s risk management of foreign currency exposures of its financial liabilities. Hedge accounting principles are applied for the accounting of the 144 underlying exposures and their hedge instruments.
Exchange gains and losses arising on contracts entered into as hedges of anticipated future transactions are deferred until the date of such transactions, at which time they are included in the measurement of such transactions. Exchange gains and losses relating to hedge instruments are recognised in the 20 income statement in the same period as the exchange differences on the underlying hedged items. No 05 amounts are recognised in respect of future periods.
2005 ANNUAL REPORT DRB-HICOM BERHAD Fair Value Estimation for Disclosure Purposes The fair value of publicly traded financial instruments is based on quoted market prices at the balance sheet date.
In assessing the fair value of non-traded financial instruments, the Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Quoted (203430-W) market prices are used if available or other techniques, such as estimated discounted value of future cash flows, are used to determine fair value. In particular, the fair value of financial liabilities is estimated by discounting the future contractual cash flows at the current market interest rate available to the Group for similar financial instruments.
The carrying value of 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.
The carrying values for financial assets and liabilities with a maturity of less than one year are assumed to approximate their fair values.
(v) Employee benefits (i) Short term employee benefits Wages, salaries, paid annual leave and sick leave, bonuses, and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group and Company. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (v) Employee benefits (Continued) (ii) Defined contribution plan A defined contribution plan is a pension plan under which the Group and Company pay fixed contributions into a separate entity (a fund) and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees benefits relating to employee service in the current and prior periods.
The Group’s and Company’s contributions to defined contribution plan are charged to the income statement in the period to which they relate. Once the contributions have been paid, the Group 145 and the Company have no further payment obligation.
(iii) Equity compensation benefits Details of the Group’s Employees’ Share Option Scheme are set out in Note 29 (iii) to the financial statements. The Group does not make a charge to the income statement in connection with share 20 options granted. When the share options are exercised, the proceeds received, net of any transaction 05 cost, are credited to share capital and share premium. 2005 ANNUAL REPORT DRB-HICOM BERHAD
(iv) Termination benefits Termination benefits are payable to an entitled employee whenever the employment has to be terminated before the normal retirement date or when the employee accepts voluntary redundancy.
(w) Share Capital (203430-W) (i) Classification Ordinary shares are classified as equity.
(ii) Dividends to shareholders of the Company Dividends on ordinary shares are recognised as liabilities when declared before the balance sheet date. A dividend proposed after the balance sheet date, but before the financial statements are authorised for issue, is not recognised as a liability at the balance sheet date. Upon the dividend becoming payable, it will be accounted for as a liability.
(x) Segment reporting Segment reporting is presented for enhanced assessment of the Group’s risks and returns. Business segments provide products or services that are subject to risk and returns that are different from those of other business segments.
Segment revenue, expense, assets and liabilities are those amounts resulting from the operating activities of a segment that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the segment. Segment revenue, expense, assets and liabilities are determined before intragroup balances and intragroup transactions are eliminated as part of the consolidation process, except to the extent that such intragroup balances and transactions are between group enterprises within a single segment. Notes To The Financial Statements
– 31 March 2005
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (y) Contingent liabilities and contingent assets The Group does not recognise a contingent liability but disclosed its existence in the financial statements. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare circumstance where there is a liability that cannot be recognised because it cannot be measured reliably.
146 A contingent asset is a possible asset that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.
20 05 2005 ANNUAL REPORT DRB-HICOM BERHAD (203430-W) 3COMPANIES IN THE GROUP The principal activities of the companies in the Group and the effective interest of the Group as at 31 March 2005 therein are shown below:
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
SUBSIDIARY COMPANIES 147 Subsidiary companies of DRB-HICOM Berhad: Gadek (Malaysia) Berhad 100.00 100.00 Investment holding, cultivation and 31 March marketing of rubber, oil palm and coffee 20 05 HICOM Holdings Berhad 100.00 100.00 Investment holding, cultivation of rubber 31 March and oil palm 2005 ANNUAL REPORT DRB-HICOM BERHAD
Pusat Pemeriksaan Kenderaan 100.00 100.00 Inspection of commercial vehicles for 31 March Berkomputer Sdn. Bhd. roadworthiness (“PUSPAKOM”)
Imatex Berhad 100.00 100.00 Property investment and development, 31 March (203430-W) civil engineering and building construction
DRB-HICOM Defence 100.00 100.00 Manufacture, supply, maintenance and 31 March Technologies Sdn. Bhd. marketing of military vehicles
*Hicomobil Sdn Bhd 100.00 100.00 Distribution of motor vehicles 31 March
Suzuki Malaysia Automobile 100.00 —Distribution of motor vehicles 31 March Sdn. Bhd.
*DRB-HICOM Information 90.00 90.00 Research and development, trading of 31 March Technologies Sdn. Bhd. computer hardware and software and provision of related consultancy services
Malaysian Truck & Bus 80.00 80.00 Manufacture, assembly and sale of 31 March Sdn. Bhd. commercial vehicles
DRB-HICOM Export 77.25 77.25 Dormant 31 March Corporation Sdn. Bhd. Notes To The Financial Statements
– 31 March 2005
3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
SUBSIDIARY COMPANIES
Subsidiary companies of 148 DRB-HICOM Berhad: (Continued) Intrakota Komposit Sdn. Bhd. 70.00 70.00 Investment holding 31 March
Motosikal Dan Enjin Nasional 55.00 55.00 Manufacture, assembly and distribute 31 March 20 Sdn. Bhd. (“MODENAS”) motorcycles and related spare parts 05 and accessories Subsidiary companies of 2005 ANNUAL REPORT DRB-HICOM BERHAD Gadek (Malaysia) Berhad: Mega Consolidated Sdn. Bhd. 100.00 100.00 Investment holding 31 March
*Ladang Gadek Development 100.00 100.00 Dormant 31 March Sdn. Bhd. (formerly known as Terengganu Integrated Resort (203430-W) Areas Sdn. Bhd.)
*Ladang Kupang Development 100.00 — Dormant 31 March Sdn. Bhd. (formerly known as Astra Delights Sdn. Bhd.)
Gadek-Perspec Consortium 85.00 85.00 Dormant 31 March Sdn. Bhd.
Perspec Prime (Malaysia) 70.00 70.00 Construction work and project 31 March Sdn. Bhd. management
Uni.Asia Capital Sdn. Bhd. 51.00 51.00 Investment holding 31 March
Subsidiary companies of Perspec Prime (Malaysia) Sdn. Bhd.: Spegabina Sdn. Bhd. 70.00 70.00 Construction of infrastructure and 31 March housing projects
The One Mix Sdn. Bhd. 56.28 56.28 Production and supply of ready-mixed 31 March concrete 3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
SUBSIDIARY COMPANIES
Subsidiary companies of Uni.Asia Capital Sdn. Bhd.: 149 Uni.Asia Life Assurance Berhad 51.00 51.00 Underwriting of life insurance business 31 March
Uni.Asia General Insurance Berhad 34.73 34.73 Underwriting of general insurance business 31 March
Subsidiary companies of Uni.Asia 20 General Insurance Berhad: 05 *South East Asia Management 34.73 34.73 Dormant 31 March Services Sdn. Bhd. 2005 ANNUAL REPORT DRB-HICOM BERHAD (under voluntary liquidation)
#*Seains Pte. Ltd. 34.73 34.73 Dormant 31 March (under voluntary liquidation) (203430-W) Subsidiary company of South East Asia Management Services Sdn. Bhd.: *Chattel Credit & Leasing Sdn. Bhd. 34.73 34.73 Dormant 31 March (under voluntary liquidation)
Subsidiary companies of HICOM Holdings Berhad: HICOM Berhad 100.00 100.00 Management of projects, rental of 31 March properties and investment holding
HICOM Diecastings Sdn. Bhd. 100.00 100.00 Manufacturing and supplying diecast 31 March parts for motorcycles, automobiles and other applications
*HICOM Engineering Sdn. Bhd. 100.00 100.00 Manufacturing casted and machined 31 March parts and components
HICOM Communications 100.00 100.00 Supply, installation and management 31 March Sdn. Bhd. of telecommunications and information technology products and systems Notes To The Financial Statements
– 31 March 2005
3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
SUBSIDIARY COMPANIES
Subsidiary companies of HICOM 150 Holdings Berhad: (Continued) USF-HICOM Holdings Sdn. Bhd. 100.00 100.00 Investment holding 31 March (formerly known as Emerald Assets Sdn. Bhd.)
20 Automotive Corporation 100.00 100.00 Investment holding 31 March 05 Holdings Sdn. Bhd. (formerly known as 2005 ANNUAL REPORT DRB-HICOM BERHAD Amity Portfolio Sdn. Bhd.)
Desa Puchong Sdn. Bhd. 100.00 100.00 Property development 31 March
HICOM Network Services 100.00 60.00 Provision of electronic communication, 31 March Sdn. Bhd. telecommunication and data (203430-W) processing services
HICOM Technical and 100.00 100.00 Dormant 31 March Engineering Services Sdn. Bhd.
*DRB-HICOM IT Solutions Sdn. Bhd. 100.00 100.00 Dormant 31 March
*Equality Services Sdn. Bhd. 100.00 100.00 Dormant 31 March
HICOM Dewan Development 100.00 100.00 Dormant 31 March Sdn. Bhd.
*NSE Development Sdn. Bhd. 100.00 — Dormant 31 March (formerly known as March Midas Sdn. Bhd.)
*Bukit Kledek Development Sdn. Bhd. (formerly known as Spring Stream Sdn. Bhd.) 100.00 — Dormant 31 March 3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
SUBSIDIARY COMPANIES
Subsidiary companies of HICOM Holdings Berhad: (Continued) 151 *Scott & English Electronics 70.00 70.00 Investment holding 31 March Holdings Sdn. Bhd. (formerly known as Affinity Products Sdn. Bhd.) 20 *Scott & English (Malaysia) 70.00 70.00 Importation, distribution and servicing 31 March 05 Sdn. Bhd. of industrial, construction, engineering and automotive products 2005 ANNUAL REPORT DRB-HICOM BERHAD
*Comtrac Sdn. Bhd. 70.00 70.00 Construction works and the provision 31 March of projects and development management services (203430-W) *Oriental Summit Industries 70.00 70.00 Contract manufacturing and trading of 31 March Sdn. Bhd. motorcycles and automobile parts and components
Proton City Development 60.00 60.00 Property development, civil and 31 March Corporation Sdn. Bhd. building construction
KL Airport Services Sdn. Bhd. 60.00 60.00 Superintend airport operation systems 31 March and provide related ground handling services and warehousing space
Alam Flora Sdn. Bhd. 55.00 55.00 Management of integrated solid waste 31 March
HICOM Petro-Pipes Sdn. Bhd. 51.00 65.64 Manufacturing and distributing product 31 March for the oil and gas industry and related industries. The company ceased operations in November 2004
HICOM-Teck See Manufacturing 51.00 51.00 Manufacturing and sale of thermo 31 March Malaysia Sdn. Bhd. plastic and thermo setting products Notes To The Financial Statements
– 31 March 2005
3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
SUBSIDIARY COMPANIES
Subsidiary companies of HICOM 152 Holdings Berhad: (Continued) HICOM Vertex Sdn. Bhd. 51.00 51.00 Providing consultancy and advisory 31 March services involving advanced information technology services
20 Subsidiary companies of 05 HICOM Berhad: *HICOM Properties Sdn. Bhd. 100.00 100.00 Investment holding 31 March 2005 ANNUAL REPORT DRB-HICOM BERHAD
*Connemara Development 100.00 100.00 Dormant 31 March Sdn. Bhd.
*HB Property Development 100.00 — Dormant 31 March Sdn. Bhd. (formerly known as (203430-W) Elegant Blooms Sdn. Bhd.)
*Glenmarie Cove Development 89.50 89.50 Investment holding and property 31 March Sdn. Bhd. development
HICOM Megah Sdn. Bhd. 74.63 74.63 Property development and investment 31 March holding
HICOM-Selangor Marine 51.00 51.00 Dormant 31 March Management Sdn. Bhd. (under voluntary liquidation)
Subsidiary companies of HICOM Communications Sdn. Bhd.: HICOM Teleservices Sdn. Bhd. 100.00 100.00 Provision of value-added 31 March telecommunication services
/* PT HICOM BMS 70.00 — Providing managed services and 31 March (formerly known as PT Bina system integration Mitra Serasi Haluan Lenggeng) 3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
SUBSIDIARY COMPANIES Subsidiary company of HICOM-Teck See Manufacturing Malaysia 153 Sdn. Bhd.: @* HICOM Automotive Plastic 50.99 50.99 Manufacture of plastic injected parts 31 March (Thailand) Ltd. for automotive industry
Subsidiary company of 20 USF-HICOM Holdings Sdn. Bhd. 05 (formerly known as Emerald Assets Sdn. Bhd.): 2005 ANNUAL REPORT DRB-HICOM BERHAD *USF-HICOM (Malaysia) Sdn. Bhd. 100.00 100.00 Sale of motor vehicles and their 31 March related spare parts and accessories
Subsidiary company of Automotive Corporation Holdings
Sdn. Bhd. (formerly known as (203430-W) Amity Portfolio Sdn. Bhd.): *Automotive Corporation 100.00 100.00 Sale of motor vehicles and their 31 March (Malaysia) Sdn. Bhd. related spares and accessories
Subsidiary company of USF-HICOM (Malaysia) Sdn. Bhd.: *Directional (Malaysia) Sdn. Bhd. 100.00 100.00 Importation and distribution of motor 31 March vehicles and their related spare parts and accessories and workshop servicing
Subsidiary company of Directional (Malaysia) Sdn. Bhd.: *Euro Truck & Bus (Malaysia) 100.00 100.00 Sale of commercial and other vehicles, 31 March Sdn. Bhd. related parts and accessories, repair and maintenance
Subsidiary companies of HICOM Technical and Engineering Services Sdn. Bhd.: HICOM Ventures Sdn. Bhd. 100.00 100.00 Dormant 31 March
HICOM Environmental Sdn. Bhd. 51.00 51.00 Dormant 31 March Notes To The Financial Statements
– 31 March 2005
3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
SUBSIDIARY COMPANIES
Subsidiary company of 154 Scott & English Electronics Holdings Sdn. Bhd. (formerly known as Affinity Products Sdn. Bhd.): *Scott & English Electronics 70.00 70.00 Trading in LG consumer electronic 31 March 20 Sdn. Bhd. products and domestic appliances. 05 The LG distributorship was terminated during the financial year 2005 ANNUAL REPORT DRB-HICOM BERHAD
Subsidiary companies of Scott & English (Malaysia) Sdn. Bhd.: *HICOM United Leasing Sdn. Bhd. 70.00 70.00 Sale, servicing and rental of machinery 31 March and equipment (203430-W) +*Scott & English (Cambodia) Ltd. 70.00 70.00 Trading in spare parts and heavy 31 March equipment
^*Myanmar Scott & English 70.00 70.00 Trading and servicing of machinery 31 March Company Ltd.
*Scott & English Trading 35.70 35.70 Trading of heavy machinery & equipment, 31 March (Sarawak) Sdn. Bhd. spare parts and electrical appliances
Subsidiary companies of Comtrac Sdn. Bhd.: *Comtrac Trading Sdn. Bhd. 70.00 70.00 Trading of construction materials 31 March
*Isti-Emas Sdn. Bhd. 70.00 70.00 Dormant 31 March
*Comtrac Properties Sdn. Bhd. 70.00 70.00 Dormant 31 March
*Comtrac Premises Sdn. Bhd. 70.00 70.00 Dormant 31 March
*Comtrac Precast Sdn. Bhd. 67.90 67.90 Supply, installation and construction 31 March of precast building works 3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
SUBSIDIARY COMPANIES Subsidiary companies of Comtrac Sdn. Bhd. (Continued): *Ciri-Alam Bina Sdn. Bhd. 56.00 56.00 Construction and property development, 31 March 155 rental of properties and maintenance services
HICOM-TNB Properties Sdn. Bhd. 42.00 42.00 Dormant 31 March 20 *Comtrac-Sabkar Development 35.70 35.70 Construction works and property 31 March 05 Sdn. Bhd. development 2005 ANNUAL REPORT DRB-HICOM BERHAD *Comtrac Glenview Sdn. Bhd. 35.70 35.70 Property development 31 March
Subsidiary companies of Oriental Summit Industries Sdn. Bhd.: *Automotive Components 70.00 — Dormant 31 March
Engineering Centre Sdn. Bhd. (203430-W)
*OSI Manufacturing Sdn. Bhd. 70.00 — Dormant 31 March
Subsidiary company of KL Airport Services Sdn. Bhd.: KLAS Engineering Services 60.00 60.00 Providing aircraft maintenance 31 March Sdn. Bhd. and engineering services
Subsidiary companies of HICOM Properties Sdn. Bhd.: *HICOM Indungan Sdn. Bhd. 100.00 100.00 Property development 31 March
*Kenyir Splendour Berhad 100.00 100.00 Property development and resort 31 March management
HICOM Facility Management 100.00 100.00 Provision of facility management services 31 March Berhad and resale and leasing of leisure club memberships
*Puncak Permai Sdn. Bhd. 58.00 58.00 Investment holding 31 March
*HICOM Menang Properties 51.00 51.00 Property development and rental of 31 March Sdn. Bhd. car park buildings Notes To The Financial Statements
– 31 March 2005
3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
SUBSIDIARY COMPANIES Subsidiary company of HICOM Megah Sdn. Bhd.: #& Corwin Holding Pte. Ltd. 67.17 67.17 Property development 31 March 156 Subsidiary companies of Automotive Corporation (Malaysia) Sdn. Bhd.: *Auto Prominence (M) Sdn. Bhd. 100.00 100.00 Sale of motor vehicles and their 31 March 20 related accessories 05 *Stagwell Sdn. Bhd. 100.00 100.00 Dormant 31 March
2005 ANNUAL REPORT DRB-HICOM BERHAD Automotive Manufacturers 93.00 93.00 Assembly of motor vehicles and other 31 March (Malaysia) Sdn. Bhd. road transport vehicles
Subsidiary companies of HICOM Indungan Sdn. Bhd.: *Rebak Island Marina Berhad 60.00 60.00 Operation of a marina resort and property development 31 March (203430-W)
*HICOM Tan & Tan Sdn. Bhd. 50.00 50.00 Dormant 31 March
Subsidiary company of Puncak Permai Sdn. Bhd.: *Horsedale Development Berhad 70.60 70.60 Property development, management 31 March of hotel and golf resort
Subsidiary company of Horsedale Development Berhad: *Kesturi Hektar Sdn. Bhd. 70.60 70.60 Dormant 31 March
Subsidiary companies of PUSPAKOM: Puspakom Teknik Sdn. Bhd. 100.00 100.00 Supply and maintenance of 31 March automobile associated equipment
Flora Areana Sdn. Bhd. 100.00 100.00 Investment holding 31 March
Subsidiary company of Flora Areana Sdn. Bhd.: Multi Automotive Service and 55.00 55.00 Membership recruitment, providing 31 March Assist Sdn. Bhd. vehicle assistance and supply of auto related products and services 3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
SUBSIDIARY COMPANIES
Subsidiary company of Imatex Berhad: 157 Imatex Management Services 100.00 100.00 Provision of management services 31 March Sdn. Bhd.
Subsidiary companies of Intrakota Komposit Sdn. Bhd.: 20 S.J. Kenderaan Sdn. Bhd. 70.00 70.00 Dormant 31 March 05
Mega Komposit Auto Sdn. Bhd. 70.00 70.00 Selling of motor vehicles and car 2005 ANNUAL REPORT DRB-HICOM BERHAD accessories 31 March
Gemilang Komposit 70.00 70.00 Selling of motor vehicles and car Auto Sdn. Bhd. accessories 31 March (203430-W) Syarikat Pengangkutan Malaysia 69.99 69.99 Dormant 31 March Sendirian Berhad
Intrakota Consolidated Berhad 47.34 47.34 Dormant 31 March
S.J. Binateknik Sdn. Bhd. 42.00 42.00 Dormant 31 March
Toong Fong Omnibus Company 39.06 39.06 Dormant 31 March Sendirian Berhad
Subsidiary companies of MODENAS: Edaran Modenas Sdn. Bhd. 55.00 55.00 Distribution of motorcycles, 31 March related spare parts and accessories and servicing of motorcycles
/*PT Modenas Putra 31.90 —Distribution of motorcycles, servicing 31 March Motor Indonesia and maintenance of motorcycles Notes To The Financial Statements
– 31 March 2005
3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
JOINTLY CONTROLLED ENTITIES Jointly controlled entity of DRB-HICOM Berhad: *Isuzu Malaysia Sdn. Bhd. 49.00 — Distribution of motor vehicles, 31 December 158 components and parts
Jointly controlled entities of HICOM Holdings Berhad: *HICOM-HONDA Manufacturing 48.00 48.00 Manufacturing and assembling of 31 March 20 Malaysia Sdn. Bhd. motorcycle engines and parts 05 ν*MBM Alam Flora W.L.L. 48.00 48.00 Provision of waste management 31 December
2005 ANNUAL REPORT DRB-HICOM BERHAD clearing services
*HICOM-YAMAHA Manufacturing 45.00 45.00 Manufacturing and assembling of 31 March Malaysia Sdn. Bhd. motorcycle engines
*HICOM-SUZUKI Manufacturing 45.00 45.00 Manufacturing and assembling of 31 December Malaysia Sdn. Bhd. motorcycle engines (203430-W)
PHN Industry Sdn. Bhd. 42.50 42.50 Manufacturing stamped metal parts, 31 March sub-assembly of automotive components and design and manufacture of dies
Aluminium Alloy Castings — 40.00 Manufacturing aluminium alloy castings, Sdn. Bhd. wheels and intake manifolds 31 March
Jointly controlled entity of HICOM Properties Sdn. Bhd.: Sucasa Sdn. Bhd. 30.00 30.00 Management of hotel and service 31 January apartments
Jointly controlled entities of Comtrac Sdn. Bhd.: *Comtrac Businessworld Sdn. Bhd. 35.00 35.00 Dormant 31 March
*Comtrac-Concrete Constructions 34.30 34.30 Dormant 31 March Sdn. Bhd.
Jointly controlled entity of Horsedale Development Berhad: *HICOM-Gamuda Development 35.30 35.30 Housing and property development 31 March Sdn. Bhd. and rental of properties 3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
ASSOCIATED COMPANIES: Associated companies of DRB-HICOM Berhad: 159 Honda Malaysia Sdn. Bhd. 34.00 34.00 Assembly, manufacture and sale of 31 March motor vehicles, accessories and components
*Marak Unggul Sdn. Bhd. 29.99 29.99 Dormant 31 December 20 05 *Gerbang Perdana Sdn. Bhd. 20.00 20.00 Designing and constructing of 31 December
Gerbang Selatan Bersepadu project 2005 ANNUAL REPORT DRB-HICOM BERHAD
Associated company of Gadek (Malaysia) Berhad: Clestra Hauserman (Malaysia) 50.00 50.00 Dormant 31 December Sdn. Bhd.
(under voluntary liquidation. (203430-W) Dissolved on 6 June 2005)
Associated company of Uni.Asia General Insurance Berhad: ~& South East Asia Insurance (B) 10.42 10.42 General insurance underwriter 31 December Sdn. Bhd.
Associated companies of Gadek-Perspec Consortium Sdn. Bhd.: South Klang Valley Expressway 42.50 42.50 Dormant 31 March Sdn. Bhd.
Central Eastern Link Expressway 42.50 42.50 Dormant 31 March Sdn. Bhd. Notes To The Financial Statements
– 31 March 2005
3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
ASSOCIATED COMPANIES (CONTINUED): Associated companies of HICOM Holdings Berhad: 160 *Siemens VDO Instruments 33.33 33.33 Manufacturing and sale of instrument 30 September MY Sdn. Bhd. panels/clusters, speedometers, tachometer and aircore movement for the transportation industry 20 05 *ZF Steerings (Malaysia) Sdn. Bhd. 30.00 30.00 Manufacturing and assembling of 31 December mechanical and power rack and
2005 ANNUAL REPORT DRB-HICOM BERHAD pinion steering systems
Edaran Otomobil Nasional Berhad 29.31 29.54 A conglomerate involved in the sale 31 December of motor vehicles, related spare parts and services of vehicles
(203430-W) *Boustead Heah Joo Seang 25.00 25.00 Cultivation and processing of oil 31 December Sdn. Bhd. palm
*Niro Ceramic (M) Sdn. Bhd. 24.50 24.50 Manufacturing and trading of 31 December ceramic tiles
EON Capital Berhad 20.20 — Investment holding company, 31 December banking and related financial services, stockbroking, nominee and custodian services
*TRW Steering & Suspension 20.00 20.00 Manufacturing and sale of automobile 31 December (Malaysia) Sdn. Bhd. tierods, tierod ends and suspension ball joints, stabilizer links, steering linkages and power steering gear
*PPSC Industrial Holdings Sdn. Bhd. — 35.35 Pipe coating services for oil and 31 December gas industry
*Petro-Pipes Industries (M) Sdn. Bhd. — 29.87 Manufacturing and sale of welded 31 December steel pipes and related products 3COMPANIES IN THE GROUP (CONTINUED)
Name of Company Effective Equity Financial Interest Principal Activities Year End 2005 2004 %%
ASSOCIATED COMPANIES (CONTINUED): Associated company of HICOM Berhad: 161 Selangor Marine Industrial — 35.00 Dormant 31 March Park Sdn. Bhd. (dissolved on 29 December 2004)
Associated company of Comtrac 20 Sdn. Bhd.: 05 *Comtrac-Concrete Constructions 34.30 34.30 Dormant 31 March
JV Sdn. Bhd. 2005 ANNUAL REPORT DRB-HICOM BERHAD
Associated company of Intrakota Komposit Sdn. Bhd.: *Airport Coach Sdn. Bhd. 25.56 25.56 Provision of bus transportation services 31 December
* These companies in the Group are audited by other firms of auditors other than PricewaterhouseCoopers, (203430-W) Malaysia. & These companies in the Group are audited by a member firm of PricewaterhouseCoopers International Limited which is a separate and independent legal entity from PricewaterhouseCoopers, Malaysia. # The country of incorporation is Singapore. + The country of incorporation is Cambodia. ^ The country of incorporation is Myanmar. ~The country of incorporation is Brunei. @The country of incorporation is Thailand. ν The country of incorporation is Bahrain. /The country of incorporation is Indonesia.
All the other companies are incorporated in Malaysia. Notes To The Financial Statements
– 31 March 2005
4 REVENUE
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Sale of goods 2,857,590 2,516,190 1,453 20 Rendering of services 845,748 765,579 — — Construction contracts 303,660 761,356 288,631 735,949 Insurance business 311,188 305,422 — — 162 Sale of land and development properties 162,579 130,842 — — Rental income 25,830 20,866 7,860 7,860 Dividends (gross) — — 172,561 138,016
20 4,506,595 4,500,255 470,505 881,845 05 2005 ANNUAL REPORT DRB-HICOM BERHAD 5 PROFIT FROM OPERATIONS
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000 (203430-W)
Profit from operations is arrived at after charging/(crediting) the following: Allowance for/(writeback of) impairment of short term investments 15,295 (13,258) (865) 6,054 Allowance for amounts due from subsidiary companies — — — 10,702 Amortisation of intangible assets 341 319 — — Auditors’ remuneration – current year 1,614 1,491 125 115 – under/(over) provision in previous years 46 (10) 10 10 Directors’ emoluments (Note 6) 9,800 10,090 1,103 1,172 Depreciation of property, plant and equipment 171,775 207,988 7,271 7,111 Impairment loss on property, plant and equipment 14,695 5,245 — — Inventories written down (net of writeback) 3,939 11,021 — 1,920 Loss on foreign exchange – unrealised — 27,991 — — – realised 2,799 8,887 — — Loss/(gain) on disposal of shares in associated companies 7,344 (2,184) — — 5 PROFIT FROM OPERATIONS (CONTINUED)
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Management fees paid to a company in which certain Directors have significant financial interest 4,980 4,980 — — Property, plant and equipment written off 6,592 538 29 31 Provision for liabilities and charges 163 (net of writeback) 13,328 13,393 — — Rental of plant and machinery and equipment 5,585 3,853 — — Rental of premises 17,887 15,645 — — Replanting expenditure 1,298 1,345 — — Staff costs (Note 7) 444,705 484,474 12,185 13,933 20 Dividend income (gross) 05 – subsidiary companies, unquoted — — (166,016) (134,663)
– associated company, unquoted — — (6,545) (1,190) 2005 ANNUAL REPORT DRB-HICOM BERHAD – other investments, unquoted (1,345) (730) — — – other investments, quoted – in Malaysia (2,380) (3,077) — — – outside Malaysia (2,469) (2,767) — (2,163) (Gain)/loss on disposal of property, plant and equipment (6,663) (2,872) (3) 352 (203430-W) Gain on disposal of shares in a jointly controlled entity (1,531) — — — Gain on foreign exchange – unrealised (3,818) (255) — (508) – realised (3,462) (2,949) (101) — Interest income – short term deposits (24,043) (25,664) (1,328) (2,828) – subsidiary companies — — (2,957) (13,001) – others (10,811) (11,918) — — Lease rental income (160) (153) — — (Writeback of)/allowance for doubtful debts (3,106) 12,551 — 10
Contract costs of the Group and of the Company recognised as an expense amounted to RM332,663,000 (2004: RM700,026,000) and RM320,295,000 (2004: RM686,761,000) respectively. Cost of inventories (including inventories written down) and services of the Group and of the Company recognised as an expense amounted to RM3,506,812,000 (2004: RM3,061,600,000) and RM2,232,000 (2004: RM1,931,000) respectively. Notes To The Financial Statements
– 31 March 2005
6DIRECTORS’ EMOLUMENTS
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Non-executive Directors: – fees 405 434 365 364 Executive Directors: – fees 250 227 120 120 – salaries, bonuses, allowances and other benefits: 164 – current year 8,024 7,845 556 558 – under provision in previous years — 701 — 70 – defined contribution retirement plan 1,121 883 62 60
20 9,800 10,090 1,103 1,172 05 The estimated monetary value of other benefits provided to Executive Directors of the Company amounted
2005 ANNUAL REPORT DRB-HICOM BERHAD to RM278,000 (2004: RM219,000).
Executive Directors of the Company have been granted share options under the Employees’ Shares Option Scheme on the same terms and conditions as those offered to other employees of the Group (Note 29 (iii)) as follows:
Number of share options (203430-W) Exercise 2005 Price Balance as Balance as Grant date RM at 1.4.2004 Granted Exercised at 31.3.2005
2 July 2001 1.00 850,000 — (398,000) 452,000 2 October 2003 2.11 56,000 — — 56,000 2 July 2004 1.44 — 170,000 — 170,000
906,000 170,000 (398,000) 678,000
Number of share options Exercise 2004 Price Balance as Balance as Grant date RM at 1.4.2003 Granted Exercised at 31.3.2004
2 July 2001 1.00 1,785,000 — (935,000) 850,000 2 October 2001 1.00 14,000 — (14,000) — 2 January 2003 1.75 5,000 — (5,000) — 2 October 2003 2.11 — 56,000 — 56,000
1,804,000 56,000 (954,000) 906,000 6DIRECTORS’ EMOLUMENTS (CONTINUED)
Group and Company 2005 2004 RM’000 RM’000
Ordinary share capital at par 398 954 Share premium — 4
Proceeds received on exercise of share options 398 958 165
Fair value at exercise date of shares issued 818 2,316 20 05 7STAFF COSTS 2005 ANNUAL REPORT DRB-HICOM BERHAD Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Salaries, wages, bonuses, allowances and other benefits 403,903 442,348 11,180 12,753 (203430-W) Defined contribution retirement plan 40,802 42,126 1,005 1,180
444,705 484,474 12,185 13,933
The number of employees at the end of the financial year totalled 14,689 (2004: 16,321) employees in the Group and 139 (2004: 171) employees in the Company.
8FINANCE COST
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Interest expense on borrowings 137,120 159,844 17,206 19,845 Hire purchase and finance lease charges 1,320 15,137 — —
138,440 174,981 17,206 19,845 Notes To The Financial Statements
– 31 March 2005
9TAXATION
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Arising in Malaysia: Current taxation 43,095 68,610 34,644 50,457 Deferred taxation (Note 28) (1,417) 5,249 (1,782) 527 Taxation on share of results of 166 jointly controlled entities 12,357 5,809 — — Taxation on share of results of associated companies 51,253 66,696 — — Outside Malaysia: 20 Current taxation 24 216 — 216 05 105,312 146,580 32,862 51,200 2005 ANNUAL REPORT DRB-HICOM BERHAD Arising in Malaysia: (Over)/under provision of taxation in respect of prior financial years – company and subsidiary companies (17,988) 3,780 (8,922) (7,000) – jointly controlled entities 608 (232) — — (203430-W) – associated companies (9,489) (7,639) — —
(26,869) (4,091) (8,922) (7,000)
Total taxation charge 78,443 142,489 23,940 44,200 9TAXATION (CONTINUED) The explanation of the relationship between tax expense and profit from ordinary activities before tax is as follows:
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Numerical reconciliation of effective tax expense Profit from ordinary activities before taxation 276,702 389,905 127,815 157,444 167
Tax calculated at the Malaysian tax rate of 28% (2004: 28%) 77,477 109,173 35,788 44,084 20 Tax effects of: 05 – expenses not deductible for tax purposes 48,182 59,675 4,208 8,890 – income not subject to tax (14,214) (57,994) (5,252) (1,384) 2005 ANNUAL REPORT DRB-HICOM BERHAD – current year’s tax losses not recognised 12,051 28,058 — — – different tax rates 692 (100) — (390) – previously unrecognised tax losses (2,557) (17,684) — — – temporary differences not recognised 4,400 28,793 (1,882) — – tax incentives (20,719) (3,341) — —
(Over)/under provision of taxation (203430-W) in respect of prior financial years – company and subsidiary companies (17,988) 3,780 (8,922) (7,000) – jointly controlled entities 608 (232) — — – associated companies (9,489) (7,639) — —
Tax expense 78,443 142,489 23,940 44,200
Unabsorbed tax losses, unutilised capital allowances, investment tax allowances and reinvestment allowances of the Group which are available for set-off against future chargeable income for which the tax effects have not been recognised in the financial statements are shown below.
Group 2005 2004 RM’000 RM’000
Unabsorbed tax losses 1,203,300 1,168,928 Unutilised capital allowances 380,982 357,378 Unutilised investment tax allowances 316,163 358,406 Unutilised reinvestment allowances 167,098 159,053 Notes To The Financial Statements
– 31 March 2005
10 DIVIDENDS Dividends in respect of the financial years are as follows:
Group and Company 2005 2004 RM’000 RM’000
(a) Dividend paid First and final dividend of 2.5 sen (2004: 2.0 sen) gross per share, 168 less taxation of 28% 17,652 13,898 Adjustment in respect of ordinary shares issued after 31 March but before book closure date for dividend entitlement 36 183
20 17,688 14,081 05 (b) Dividend proposed 2005 ANNUAL REPORT DRB-HICOM BERHAD First and final dividend of 3.0 sen (2004: 2.5 sen) gross per share, less taxation of 28% 21,290 17,652
At the forthcoming Annual General Meeting of the Company, a first and final gross dividend in respect of the financial year ended 31 March 2005 of 3.0 sen (2004: 2.5 sen) per share less taxation of 28%, amounting (203430-W) to RM21,290,471 (2004: RM17,652,108) will be proposed for shareholders’ approval. These financial statements do not reflect this first and final dividend which will be accrued as a liability in the financial year ending 31 March 2006 when approved by shareholders.
11 EARNINGS PER SHARE (a) Basic The basic earnings per share is calculated by dividing the Group’s net profit attributable to shareholders by the weighted average number of shares in issue during the financial year.
Group 2005 2004 RM’000 RM’000
Net profit attributable to shareholders (RM’000) 141,407 194,917
Weighted average number of ordinary shares in issue (’000) 982,702 974,231
Basic earnings per share (sen) 14.39 20.01 11 EARNINGS PER SHARE (CONTINUED) (b) Fully diluted (i) For the diluted earnings per share calculation, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive potential shares. The Company has three categories of dilutive potential ordinary shares: share options granted to employees pursuant to ESOS, Warrants 2000/2005 and redeemable exchangeable Loan Stocks in respect of a subsidiary company.
(ii) For the fully diluted earnings per share calculation in respect of share options granted to employees, a calculation is done to determine the number of shares that could have been acquired at market price (determined as the average annual share price of the Company’s shares) based on 169 the monetary value of the subscription rights attached to outstanding share options. This calculation serves to determine the ’bonus’ element to the ordinary shares outstanding for the purpose of computing the dilution.
Group 20 2005 2004 05
Net profit attributable to shareholders (RM’000) 141,407 194,917 2005 ANNUAL REPORT DRB-HICOM BERHAD
Weighted average number of ordinary shares in issue (’000) 982,702 974,231 Adjustment for share options (’000) 4,998 8,069 (203430-W) Weighted average number of ordinary shares for diluted earnings per share (’000) 987,700 982,300
Diluted earnings per share (sen) 14.32 19.84
(iii) The fully diluted earnings per share in respect of Warrants and redeemable exchangeable Loan Stocks are not presented as it is anti-dilutive. Notes To The Financial Statements
– 31 March 2005
12 INVENTORIES
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
At cost: Raw materials 90,280 88,230 — — Work-in-progress 36,633 65,583 — — Finished goods 258,921 341,845 — — 170 Consumables 48,295 66,579 — — Completed units of unsold properties 5,067 5,163 — —
439,196 567,400 — — 20 05 At net realisable value: Raw materials 10,958 13,756 — —
2005 ANNUAL REPORT DRB-HICOM BERHAD Work-in-progress 69 1,240 — 1,240 Finished goods 99,376 119,288 — 160 Consumables 3,593 1,702 — 832 Completed units of unsold properties 300 1,500 — —
114,296 137,486 — 2,232 (203430-W)
Total 553,492 704,886 — 2,232
Certain inventories of subsidiary companies amounting to RM3,599,000 (2004: RM2,778,000) have been pledged as security for bank borrowings (Note 21). 13 PROPERTY DEVELOPMENT ACTIVITIES (a) Property development costs
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
At beginning of the financial year – Land 139,293 136,520 — — – Development costs 577,218 431,381 — — 171 – Accumulated costs charged to income statement (677,056) (587,107) — —
39,455 (19,206) — — Add: Costs incurred during the financial year 20 – Land 8 374 — — 05 – Development costs 86,379 145,661 — — – Transfer from land held for 2005 ANNUAL REPORT DRB-HICOM BERHAD property development 83,571 7,025 — —
209,413 133,854 — — Less: Costs recognised as expense in income statement in the financial year (106,222) (94,399) — — (203430-W) Transfer to property, plant and equipment (1,224) — — —
101,967 39,455 — —
At end of the financial year – Land 150,756 139,293 — — – Development costs 672,538 577,218 — — – Less: Accumulated costs charged to income statement (721,327) (677,056) — —
101,967 39,455 — — Notes To The Financial Statements
– 31 March 2005
13 PROPERTY DEVELOPMENT ACTIVITIES (CONTINUED) (b) Land held for property development
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
At beginning of the financial year – Land 158,743 161,209 — — 172 – Development costs 146,529 117,822 — —
305,272 279,031 — — Add: Costs incurred during the financial year 20 – Land 8,674 1,344 — — 05 – Development costs 48,980 31,922 — — 362,926 312,297 — — 2005 ANNUAL REPORT DRB-HICOM BERHAD Transfer to property development costs (83,571) (7,025) — —
279,355 305,272 — —
At end of the financial year (203430-W) – Land 125,176 158,743 — — – Development costs 154,179 146,529 — —
279,355 305,272 — —
Included in property development costs is interest on borrowings capitalised for the financial year of RM3,684,000 (2004: RM3,212,000).
Freehold land amounting to RM148,683,000 (2004: RM50,801,000) belonging to subsidiary companies have been charged as security for bank borrowings (Note 32). 14 TRADE AND OTHER RECEIVABLES
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Trade receivables (see note (b) below) 1,171,685 1,131,640 483,734 448,935 Less: Allowance for doubtful debts (61,822) (70,282) — —
1,109,863 1,061,358 483,734 448,935 173
Other receivables 240,473 408,694 31,404 24,922 Less: Allowance for doubtful debts (8,259) (7,658) (10) (10)
232,214 401,036 31,394 24,912 20 05 Amounts due from subsidiary companies — — 272,746 249,927
Less: Allowance for doubtful debts — — (25,281) (25,281) 2005 ANNUAL REPORT DRB-HICOM BERHAD
— — 247,465 224,646
Accrued billings 14,116 49,371 — — Amounts due from customers on contracts (Note 35) 46,495 91,389 35,750 81,822 (203430-W) Advances to contractors on contracts (Note 35) 9,085 57,393 6,789 54,706 Deposits 21,307 25,566 613 629 Prepayments 12,187 13,561 137 120 Amounts due from jointly controlled entities 3,583 345 112 77 Amounts due from associated companies 2,492 2,067 754 545
109,265 239,692 44,155 137,899
Total 1,451,342 1,702,086 806,748 836,392
The currency exposure profile of trade receivables is as follows: – Ringgit Malaysia 1,101,951 1,038,557 483,734 448,935 – US Dollar 2,277 20,001 — — – Others 5,635 2,800 — —
1,109,863 1,061,358 483,734 448,935 Notes To The Financial Statements
– 31 March 2005
14 TRADE AND OTHER RECEIVABLES (CONTINUED) (a) The Group’s and the Company’s normal trade credit terms range from 30 to 60 days (2004: 30 to 60 days). Other credit terms are assessed and approved on a case by case basis.
(b) Included in trade receivables of the Group and the Company is an amount of RM475,416,000 (2004: RM441,989,000) owing by the Government in respect of Electrified Double Track Project as shown below:
2005 2004 RM’000 RM’000 174 Receivables based on billings 640,991 441,989 Less: Direct payment to sub-contractors made by the Government (165,575) —
20 475,416 441,989 05 (c) Included in other receivables for the Group are the following: 2005 ANNUAL REPORT DRB-HICOM BERHAD (i) An amount of RM42,054,000 (2004: RM35,320,000) in respect of reimbursement of certain operating expenditure of a subsidiary company from the Ministry of Finance.
(ii) An amount of RM782,000 (2004: RM828,000) in respect of housing loans to certain Executive Directors given under a subsidiary company’s approved housing loan scheme. (203430-W) (d) Included in amounts due from subsidiary companies are interest bearing loans amounting to RM10,680,000 (2004: RM128,209,000) and non-interest bearing loans amounting to RM144,334,000 (2004: RM15,937,000). Interest is charged at 4.65% (2004: 5.55% to 9.00%) per annum on the interest bearing loans. The loans are unsecured and have no fixed terms of repayment.
(e) All other amounts due from subsidiary companies, jointly controlled entities and associated companies are non-interest bearing, unsecured and have no fixed terms of repayment. 15 SHORT TERM INVESTMENTS
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Shares and warrants quoted in Malaysia, at cost 183,566 107,392 — — Less: Allowance for impairment in value (17,633) (1,473) — —
165,933 105,919 — — 175
Shares quoted outside Malaysia, at cost 38,781 141,659 38,781 38,781 Less: Allowance for impairment in value (17,694) (18,559) (17,694) (18,559)
21,087 123,100 21,087 20,222 20 05 Total 187,020 229,019 21,087 20,222 2005 ANNUAL REPORT DRB-HICOM BERHAD
Market value of quoted securities: In Malaysia: Quoted shares and warrants 165,927 113,399 — — (203430-W)
Outside Malaysia: Quoted shares 21,087 155,334 21,087 20,222
Shares quoted outside Malaysia amounting to RM NIL (2004: RM20,222,000) have been pledged as security for a term loan facility (Note 32).
16 SHORT TERM DEPOSITS
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Deposits with licensed financial institutions: Banks 886,343 610,728 39,586 94,240 Discount houses 190,568 266,343 2,200 1,000 Finance companies 71,672 121,546 — —
1,148,583 998,617 41,786 95,240 Notes To The Financial Statements
– 31 March 2005
16 SHORT TERM DEPOSITS (CONTINUED) (a) The deposits with licensed banks of the Group and of the Company amounting to RM13,641,000 (2004: RM9,030,000) and RM NIL (2004: RM3,514,000) have been pledged as security for banking facilities.
(b) Included in the deposits of the Group and of the Company is an amount of RM39,072,000 (2004: RM21,851,000) maintained as sinking fund for the Electrified Double Track Project (“EDTP”).
(c) The deposits of the Group and of the Company amounting to RM514,000 (2004: RM68,875,000) are to be utilised solely for the EDTP. 176 (d) Included in the deposits of the Group is an amount of RM12,915,000 (2004: RM86,800,000) in relation to a subsidiary company which is held in trust for certain specific purposes.
20 (e) The currency exposure profile of short term deposits is as follows: 05 Group Company 2005 2004 2005 2004 2005 ANNUAL REPORT DRB-HICOM BERHAD RM’000 RM’000 RM’000 RM’000
– Ringgit Malaysia 1,134,525 995,103 41,786 91,726 – Singapore Dollar 14,058 — — — – Hungarian Forint — 2,405 — 2,405 – US Dollar — 1,109 — 1,109 (203430-W)
1,148,583 998,617 41,786 95,240
(f) The weighted average effective annual interest rates of short term deposits at the end of the financial year are as follows:
Group Company 2005 2004 2005 2004 %%%%
Deposits with licensed financial institutions: Banks 2.72 2.83 2.63 2.52 Discount houses 2.64 2.72 2.66 2.69 Finance companies 2.93 3.12 — —
(g) Deposits of the Group and Company have an average maturity of 106 (2004: 111) and 80 (2004: 36) days respectively. 17 CASH AND BANK BALANCES (a) Bank balances are deposits held at call with banks.
(b) Included in cash and bank balances of the Group are bank accounts maintained pursuant to the Housing Developers (Control & Licensing) Act 1966, amounting to RM14,895,000 (2004: RM3,495,000).
(c) The currency exposure profile of cash and bank balances are as follows:
Group Company 2005 2004 2005 2004 177 RM’000 RM’000 RM’000 RM’000
– Ringgit Malaysia 138,046 137,699 17,576 1,028 – Singapore Dollar 5,775 7,014 — — 20 – Others 1,063 1,205 — — 05 144,884 145,918 17,576 1,028 2005 ANNUAL REPORT DRB-HICOM BERHAD
18 GENERAL AND LIFE INSURANCE FUNDS
Group Company (203430-W) 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Outstanding claims: Provision for outstanding claims 315,947 306,728 — — Recoverable from reinsurers (86,629) (49,098) — —
Net outstanding claims 229,318 257,630 — — Unearned premium reserves 127,478 116,033 — —
Total 356,796 373,663 — — Notes To The Financial Statements
– 31 March 2005
19 TRADE AND OTHER PAYABLES
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Trade payables 907,221 1,103,794 358,772 508,165 Other payables 294,972 243,658 6,949 5,785 Progress billings 34,483 16,286 — — Accruals 167,974 153,574 1,486 3,354 178 Amounts due to customers on contracts (Note 35) 14,312 9,166 — — Amounts due to subsidiary companies — — 76,964 32,469 Amounts due to a jointly controlled entity 594 — — — Amounts due to associated companies 6,310 1,707 — — 20 05 1,425,866 1,528,185 444,171 549,773 2005 ANNUAL REPORT DRB-HICOM BERHAD (a) The currency exposure profile of trade payables is as follows: – Ringgit Malaysia 802,786 1,074,161 358,772 508,165 – Japanese Yen 78,669 20,099 — — – Singapore Dollar 13,991 — — — (203430-W) – US Dollar 4,695 3,429 — — – Others 7,080 6,105 — —
907,221 1,103,794 358,772 508,165
(b) Credit terms of trade payables granted to the Group and Company vary from 30 to 90 days (2004: 30 to 90 days).
(c) Included in amounts due to subsidiary companies are interest bearing loans amounting to RM14,830,000 (2004: RM1,761,000) and non-interest bearing loans amounting to RM6,957,000 (2004: RM4,000,000). Interest is charged at 3.37% to 4.80% (2004: 3.37% to 4.90%) per annum on the interest bearing loans. The loans are unsecured and have no fixed terms of repayment.
(d) All other amounts due to subsidiary companies, jointly controlled entities and associated companies are non-interest bearing, unsecured and have no fixed terms of repayment. 20 PROVISION FOR LIABILITIES AND CHARGES
Sales Restructuring Warranty returns costs Total RM’000 RM’000 RM’000 RM’000
Group 2005 At beginning of the financial year 13,688 1,204 11,444 26,336 Charge during the financial year 12,909 419 — 13,328 179 Utilised during the financial year (1,748) (465) — (2,213)
At end of the financial year 24,849 1,158 11,444 37,451 20 2004 05 At beginning of the financial year 9,597 4,402 — 13,999
Charge/(writeback) during the financial year 5,090 (3,141) 11,444 13,393 2005 ANNUAL REPORT DRB-HICOM BERHAD Utilised during the financial year (999) (57) — (1,056)
At end of the financial year 13,688 1,204 11,444 26,336 (203430-W)
21 BANK BORROWINGS
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
(i) Bank overdrafts – secured 9,543 63,646 — — – unsecured 62,127 64,467 10,720 10,763
Sub-total 71,670 128,113 10,720 10,763 Notes To The Financial Statements
– 31 March 2005
21 BANK BORROWINGS (CONTINUED)
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
(ii) Others Secured Bankers acceptances 29,587 5,966 — — Letters of credit 4,359 3,880 — — 180 Trust receipts 15,831 204,681 — — Revolving credit 23,674 57,000 — — Short term loans 4,921 5,160 — — Hire purchase and finance lease liabilities 20 – portion repayable within 12 months 05 (Note 32) 16,239 214,152 — — Long term loans – portion repayable
2005 ANNUAL REPORT DRB-HICOM BERHAD within 12 months (Note 32) 85,787 141,188 — 8,592 Loan Stocks 2002/2007 – portion repayable within 12 months (Note 32) 406,689 — — —
Unsecured Bankers acceptances 165,911 224,921 — —
(203430-W) Revolving credit 397,660 414,845 281,101 286,500 Short term loans 13,595 21,630 3,355 17,355 Long term loans – portion repayable within 12 months (Note 32) 33,431 40,809 — —
Sub-total 1,197,684 1,334,232 284,456 312,447
Total 1,269,354 1,462,345 295,176 323,210 21 BANK BORROWINGS (CONTINUED) (a) The currency exposure profile of bank overdrafts and other bank borrowings are as follows:
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
– Ringgit Malaysia 1,045,150 1,452,553 295,176 314,618 – US Dollar 221,918 8,592 — 8,592 – Japanese Yen 1,200 1,200 — — 181 – Others 1,086 — — —
1,269,354 1,462,345 295,176 323,210 20 (b) The secured bank overdrafts, bankers acceptances, letters of credit, trust receipts, revolving credit, and 05 short term loans are secured by way of fixed and floating charges over inventories and certain property, plant and equipment (Notes 12 and 22). 2005 ANNUAL REPORT DRB-HICOM BERHAD
(c) The interest on short term borrowings is charged at annual rates ranging from 2.62% to 8.75% (2004: 2.95% to 9.90%) per annum.
(d) The weighted average effective annual interest rates of the short term bank borrowings at the end of (203430-W) the financial year are as follows:
Group Company 2005 2004 2005 2004 %%%%
Bank overdrafts 7.95 8.68 7.75 7.76 Bankers acceptances 3.20 3.23 — — Trust receipts 7.50 7.78 — — Revolving credit 5.55 5.84 5.82 5.93 Short term loans 3.79 5.75 8.00 8.00 Notes To The Financial Statements
– 31 March 2005 2PROPERTY, PLANT AND EQUIPMENT 22 Adjustment to cost Tr Reclassifications Adjustment arising from Impairment losses Depreciation charge Write- Disposals e okvle324938121401209128353,9 6,1 1383,0 2,451,156 31,307 3,775,381 31,318 31,307 — 93,771 9,745 (1,314,111) 166,819 — 472,064 30,395 (62,453) 77,101 258,375 (6,834) 852,357 1,270,911 (305,245) 1,558,294 1,470 (46,706) 2,108 (593,982) 328,112 (287,383) 332,449 346,185 332,449 (638) (10,870) Net book value — Accumulated impairment Accumulated depreciation Cost NET BOOK VALUE Net book value NET BOOK VALUE Net book value at Acquisition of subsidiaries Additions Net book value RU M00R’0 M00R’0 M00R’0 M00R’0 M00R’0 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 GROUP Accumulated impairment Accumulated depreciation Cost oss—(,0)—————(,1)——(10,114) — — (2,911) — — — — — (7,203) — losses AT ansfer foreign currency translation AT 31 March 2005 at 1 April 2004 losses
31 MARCH 2004 31 MARCH 2005 off reodlaeodlaeodadPatadMtrOfc eae n work-in- and related Office Motor Plant and and leasehold leasehold Freehold 3,8 2,5 ,1 ,2,5 3,1 6961682—2,0 0792,392,425 60,789 29,307 — 146,832 26,976 236,714 1,228,450 2,451,156 31,307 1,414 31,318 323,058 — 338,885 166,819 30,395 258,375 1,270,911 1,470 328,112 332,449 3,8 2,5 ,1 ,2,5 3,1 6961682—2,0 0792,392,425 60,789 29,307 — 146,832 26,976 236,714 1,228,450 1,414 323,058 338,885 3,8 4,2 ,0 ,6,1 3,1 5254642—10146,8 3,795,076 60,789 100,144 — 476,472 75,225 833,717 1,563,713 2,108 344,023 338,885
182 (17,325) (2,561) (26) — (96) (3,203) (303) (5,281) — (2,335) (3,520) ,8 ,7 30 205 4 1,987 147 — — (2,075) — (350) 1,077 — — 3,188 ,4 ,2 6423,3 0272,8 ,7 432143,945 44,362 5,371 — 26,084 10,277 33,430 16,452 — 1,225 6,744 adln adipoeet ahnr eilseupetast itnspors Total progress fittings assets equipment vehicles machinery improvements land land land 4441—20518314—2 6,887 — 22 — 174 3 158 2,065 — 4,441 24 —( ——— ——— —( ——— — 118——— — —( —( 372 64 3509 5703 4,4)(2,4)—(087 (1,380,753) — (70,837) — (325,149) (48,249) (597,003) (325,059) (694) 13,762) ,4)———— — — — 4,146) ,3)(6 4,2)(688 1,2)(126 727 (171,775) — (7,247) — (41,286) (10,328) (66,898) (41,721) (56) 4,239) ,0)—(024 441 (21,898) — — — (4,491) — — (10,204) — 7,203) ogSotgl oreBssadFriueCapital Furniture Buses and golf course Short Long 20 05 2005 ANNUAL REPORT DRB-HICOM BERHAD Buildings, 1,0)——(,9)———(14,695) — — — (4,491) — — (10,204) 577 18 23 13 14 17 (6,592) (197) (104) — (113) (283) (118) (5,777) 1 2402(6)—(9)(229 — (12,269) (294) — (669) 2 12,420 810 (203430-W) 1 ,8 6 2,983 — 267 — 2,485 113 ————(4, 146) 22 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Long Buildings leasehold and Plant and Motor Office Furniture land improvements machinery vehicles equipment and fittings Total COMPANY RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Net book value at 1 April 2004 6,074 72,458 2,046 4,951 3,939 2,210 91,678 Additions ————295 22 317 183 Disposal ———(8)——(8) Write-off ———(29) — — (29) Depreciation charge (91) (2,706) (1,016) (1,988) (1,155) (315) (7,271)
Net book value 20 at 31 March 2005 5,983 69,752 1,030 2,926 3,079 1,917 84,687 05 2005 ANNUAL REPORT DRB-HICOM BERHAD NET BOOK VALUE AT 31 MARCH 2005 Cost 6,584 87,357 10,154 9,955 6,935 3,164 124,149 Accumulated depreciation (601) (17,605) (9,124) (7,029) (3,856) (1,247) (39,462)
Net book value 5,983 69,752 1,030 2,926 3,079 1,917 84,687 (203430-W)
NET BOOK VALUE AT 31 MARCH 2004 Cost 6,584 87,357 10,154 10,088 6,640 3,142 123,965 Accumulated depreciation (510) (14,899) (8,108) (5,137) (2,701) (932) (32,287)
Net book value 6,074 72,458 2,046 4,951 3,939 2,210 91,678
(a) Certain property, plant and equipment of the Group at a net book value of RM846,387,000 (2004: RM853,713,000) have been charged as security for borrowings (Notes 21 and 32). Notes To The Financial Statements
– 31 March 2005
22 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) (b) The details of plant and machinery, motor vehicles and buses acquired under hire purchase and finance lease agreements of the Group are as follows:
Hire Purchase & Finance Lease 2005 2004 RM’000 RM’000 184 Additions during the financial year: – Motor vehicles 2,643 4,846 – Plant and machinery 6,394 — 20 05 Net book value at financial year end: – Plant and machinery 18,210 16,371 2005 ANNUAL REPORT DRB-HICOM BERHAD – Motor vehicles 5,401 8,502
(c) Included in property, plant and equipment is interest on borrowings capitalised for the financial year of RM459,000 (2004: RM477,000). (203430-W) (d) Title deeds to the freehold and leasehold land of certain subsidiary companies amounting to RM68,251,000 (2004: RM57,691,000) are in the process of being registered in the names of the subsidiary companies.
(e) Freehold land amounting to RM15,000,000 (2004: RM15,000,000) of a subsidiary company is registered in the name of a third party held in trust for the subsidiary company.
(f) The adjustment to cost relates to refund received by a subsidiary company in relation to excess payment made to Land Authority. 23 SUBSIDIARY COMPANIES
Company 2005 2004 RM’000 RM’000
Unquoted shares, at cost 3,165,574 3,160,574 Less: Allowance for impairment in value (83,677) (83,677)
3,081,897 3,076,897 185
Amounts due from subsidiary companies 543,732 531,970 Less: Allowance for doubtful debts (215,052) (215,052)
328,680 316,918 20 05 3,410,577 3,393,815 2005 ANNUAL REPORT DRB-HICOM BERHAD
The details of the subsidiary companies are listed in Note 3 to the financial statements.
The amounts due from subsidiary companies are unsecured, have no fixed terms of repayment and are not repayable within the next 12 months. Interest is charged at an annual rate of 9.00% (2004: 9.00%) on RM26,580,000 (2004: RM26,580,000). (203430-W)
24 JOINTLY CONTROLLED ENTITIES
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Unquoted shares in Malaysia, at cost 155,921 156,300 7,350 — Share of post acquisition reserves 191,510 185,829 — —
347,431 342,129 7,350 —
Unquoted shares of a jointly controlled entity with carrying value of RM5,587,000 (2004: RM NIL) are pledged as security for bank borrowing facilities obtained by the jointly controlled entity. Notes To The Financial Statements
– 31 March 2005
24 JOINTLY CONTROLLED ENTITIES (CONTINUED) The Group’s share of the assets, liabilities, revenue and expenses of the jointly controlled entities are as follows:
Group 2005 2004 RM’000 RM’000
Current assets 337,811 318,828 186 Non current assets 148,529 145,298 Current liabilities (99,649) (77,167) Non current liabilities (39,260) (44,830)
20 Net assets 347,431 342,129 05 Revenue 376,590 271,702 2005 ANNUAL REPORT DRB-HICOM BERHAD Expenses (336,264) (254,866)
Profit from ordinary activities before taxation 40,326 16,836 Taxation (12,965) (5,577)
Profit from ordinary activities after taxation 27,361 11,259 (203430-W)
(a) Capital commitments for property, plant and equipment – contracted 1,738 1,085 – not contracted 21,436 9,380
23,174 10,465
(b) There are no contingencies relating to jointly controlled entities. 25 ASSOCIATED COMPANIES
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Quoted shares in Malaysia, at cost 1,071,465 740,321 — — Unquoted shares in Malaysia, at cost 125,599 169,539 59,325 59,325
1,197,064 909,860 59,325 59,325 187 Share of post acquisition results 87,063 228,402 — — Share of post acquisition capital reserves 100,968 67,687 — —
Total interest in associated companies 1,385,095 1,205,949 59,325 59,325 20 05 Total interest in associated companies
is represented by: 2005 ANNUAL REPORT DRB-HICOM BERHAD Share of net assets of associated companies 1,385,095 1,205,949
Market value of quoted shares 1,163,196 736,977 (203430-W)
The details of the associated companies are listed in Note 3 to the financial statements.
The quoted shares have been deposited in an escrow account in relation to the redeemable secured Loan Stocks 2002/2007 of a subsidiary company (Note 32(c)). Notes To The Financial Statements
– 31 March 2005
26 OTHER INVESTMENTS
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Investment properties: Freehold land and buildings: – at cost 13,126 16,535 — — – at valuation 575 575 — — Leasehold land and buildings: 188 – at cost 32,324 32,324 — —
46,025 49,434 — —
Malaysian Government Securities, at cost 74,669 50,804 — — 20 Amortisation of premiums (1,234) (1,966) — — 05 73,435 48,838 — — 2005 ANNUAL REPORT DRB-HICOM BERHAD Cagamas papers, at cost 30,077 30,051 — Amortisation of premiums (28) (9) — —
30,049 30,042 — —
Quoted shares in Malaysia, at cost 3,610 3,638 — — (203430-W) Less: Allowance for impairment in value (1,841) (1,084) — —
1,769 2,554 — —
Corporate debts securities quoted in Malaysia, at cost 8,365 — — — Accretion of discounts 79 — — —
8,444 — — —
Unquoted securities: Corporate debt securities, at cost 323,446 241,701 — — Accretion of discounts net of amortisation of premiums 3,990 8,693 — —
327,436 250,394 — —
Unquoted shares, at cost 50,683 50,683 — — Less: Allowance for impairment in value (4,337) (4,337) — —
46,346 46,346 — —
Total 533,504 427,608 — — 26 OTHER INVESTMENTS (CONTINUED) (a) The carrying amounts of other investments at balance sheet date approximate their fair value except for the following:
Group Group 2005 2004 Carrying Fair Carrying Fair amount value amount value RM’000 RM’000 RM’000 RM’000
Malaysian Government Securities 73,435 72,619 48,838 49,426 189 Cagamas papers 30,049 30,227 30,042 30,216 Quoted shares 1,769 4,338 2,554 5,508 Corporate debt securities 335,880 342,042 250,394 248,671
441,133 449,226 331,828 333,821 20 05
(b) The titles to certain properties included in investment properties at carrying value of RM28,232,000 2005 ANNUAL REPORT DRB-HICOM BERHAD (2004: RM28,862,000) are in the process of being transferred to an insurance subsidiary company.
27 INTANGIBLE ASSETS
Group Company (203430-W) 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Project expenditure, at cost: At beginning of the financial year 7,759 7,250 — — Incurred during the year 8 509 — — Write off during the year (327) — — —
At end of the financial year 7,440 7,759 — —
Accumulated amortisation: At beginning of the financial year 4,922 4,603 — — Amortisation during the financial year 341 319 — — Write off during the year (327) — — —
At end of the financial year 4,936 4,922 — —
Net balance 2,504 2,837 — — Notes To The Financial Statements
– 31 March 2005
28 DEFERRED TAXATION
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
At beginning of the financial year (26,988) (21,739) (1,024) (497) Transfer to/(from) income statement (Note 9) 1,417 (5,249) 1,782 (527)
At end of the financial year (25,571) (26,988) 758 (1,024) 190
Subject to income tax
20 Group Company 05 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000 2005 ANNUAL REPORT DRB-HICOM BERHAD Deferred tax assets (before offsetting) Property, plant and equipment 17,413 10,759 5,341 3,689 Provisions 9,923 5,488 — — Payables 1,197 4,013 — — Tax losses 15,457 20,668 — — (203430-W) Investments 7,381 5,403 — — Unearned premium reserve 1,067 17 — —
52,438 46,348 5,341 3,689 Offsetting (27,026) (23,301) (4,583) (3,689)
Deferred tax assets (after offsetting) 25,412 23,047 758 —
Deferred tax liabilities (before offsetting) Property, plant and equipment (63,629) (62,010) (4,583) (4,713) Payables (414) (394) — — Investment (6,265) (3,172) — — Intangible (350) (409) — —
(70,658) (65,985) (4,583) (4,713) Offsetting 27,026 23,301 4,583 3,689
Deferred tax liabilities (after offsetting) (43,632) (42,684) — (1,024) 28 DEFERRED TAXATION (CONTINUED)
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Subject to capital gains tax Deferred tax liabilities Property, plant and equipment (7,351) (7,351) — —
191 Presented after appropriate offsetting as follows: Deferred tax assets 25,412 23,047 758 — Deferred tax liabilities (50,983) (50,035) — (1,024)
(25,571) (26,988) 758 (1,024) 20 05 2005 ANNUAL REPORT DRB-HICOM BERHAD 29 SHARE CAPITAL
Group and Company 2005 2004 No. of Nominal No. of Nominal
Shares Value Shares Value (203430-W) ’000 RM’000 ’000 RM’000
Authorised: Ordinary shares of RM1.00 each 2,000,000 2,000,000 2,000,000 2,000,000
Issued and fully paid: Ordinary shares of RM1.00 each: At beginning of the financial year 980,673 980,673 965,115 965,115 Issued during the financial year 4,997 4,997 15,558 15,558
At end of the financial year 985,670 985,670 980,673 980,673 Notes To The Financial Statements
– 31 March 2005
29 SHARE CAPITAL (CONTINUED) (i) During the financial year, the Company’s issued and paid-up share capital was increased from RM980,672,647 to RM985,669,947 by way of the issue of 4,997,300 new ordinary shares of RM1.00 each for cash, pursuant to the exercise of 4,997,300 share options under the ESOS, at option prices ranging from RM1.00 to RM2.06 per share.
Subsequent to the financial year end, the Company’s issued and paid-up share capital was further increased from RM985,669,947 to RM985,898,447 by way of the issue of 228,500 new ordinary shares of RM1.00 each for cash, pursuant to the exercise of 228,000 share options under the ESOS, at option prices 192 ranging from RM1.00 to RM1.75 per share and the conversion of 500 warrants at an exercise price of RM2.88 per share.
The new shares rank pari passu in all respects with the existing shares of the Company including 20 entitlement to the first and final dividend proposed for the financial year ended 31 March 2005. 05 (ii) As at 31 March 2005, the outstanding Warrants 2000/2005 totalling RM122,600,020 (2004: RM122,600,020) have not been exercised. 2005 ANNUAL REPORT DRB-HICOM BERHAD
The details of the Warrants are as follows:-
The Warrants were constituted under a Deed Poll dated 7 July 2000 and each Warrant entitles its registered holder to subscribe for one (1) new ordinary share of RM1.00 each in the Company at the exercise price of RM2.88 payable in cash. The exercise price is subject to adjustment in accordance with (203430-W) the basis set out in the Deed Poll. The Warrants may be exercised at any time commencing on the date of issue of Warrants and ending on 9 July 2005. Any Warrants which have not been exercised at date of expiry will lapse and cease to be valid for any purpose.
The new ordinary shares allotted and issued upon exercise of the Warrants shall be fully paid-up and shall rank pari passu in all respects with the then existing ordinary shares of the Company except that they shall not be entitled to any dividends, rights, entitlements and/or other distributions, the record date which is prior to the relevant subscription date (record date means, in relation to any dividends, rights, allotments or other distributions, the date on which the shareholders of the Company must be registered in order to participate in such dividends, rights, allotments or other distributions).
(iii) The DRB-HICOM Berhad Employees’ Share Option Scheme (“ESOS”) came into effect on 10 April 2001. The ESOS shall be in force for a period of 5 years until 9 April 2006. The ESOS was implemented on 2 July 2001.
The main features of the ESOS are:
(a) The total number of ordinary shares to be issued by the Company under the ESOS shall not exceed eleven point five per centum (11.5%) of the total issued and paid-up share capital of the Company at any one time during the existence of the ESOS. 29 SHARE CAPITAL (CONTINUED) (b) The options granted may be exercised at any time within the option period.
(c) The exercise price at which the employees are offered to take up shares under the ESOS is at a discount of 10% from the weighted average market price of the shares of the Company as quoted in the Daily Official List issued by the Bursa Malaysia Securities Berhad for the five market days preceding the respective dates of offer of the options or the par value of the shares of the Company of RM1.00, whichever is higher.
(d) The grantees have no right to participate, by virtue of these options, in the ESOS scheme of any 193 other company.
(e) Set out below are details of options over the ordinary shares of the Company granted under the ESOS and the expiry date of the options is 9 April 2006. 20 Number of share options 05 Exercise 2005 Price Balance at Balance at 2005 ANNUAL REPORT DRB-HICOM BERHAD Grant date RM 1.4.2004 Granted Exercised Lapsed* 31.3.2005
2 July 2001 1.00 9,395,000 — (2,341,300) (100,000) 6,953,700 2 October 2001 1.00 667,000 — (128,000) (9,000) 530,000 18 October 2001 1.04 162,000 — — — 162,000 (203430-W) 2 January 2002 1.21 555,000 — (269,000) (6,000) 280,000 2 April 2002 1.81 1,172,000 — (84,000) (13,000) 1,075,000 2 July 2002 2.06 1,554,000 — (13,000) (135,000) 1,406,000 2 October 2002 1.67 1,246,000 — (164,000) (24,000) 1,058,000 2 January 2003 1.75 2,317,000 — (400,200) (209,000) 1,707,800 2 April 2003 1.61 798,500 — (144,000) (86,000) 568,500 2 July 2003 2.21 1,837,000 — — (182,000) 1,655,000 2 October 2003 2.11 2,434,000 — — (274,000) 2,160,000 2 January 2004 1.87 2,265,500 — (298,000) (135,000) 1,832,500 2 April 2004 1.84 — 1,915,000 (203,000) (140,000) 1,572,000 2 July 2004 1.44 — 1,666,000 (850,800) (47,000) 768,200 4 October 2004 1.88 — 1,916,000 (93,000) (28,000) 1,795,000 3 January 2005 1.98 — 2,441,000 (9,000) (13,000) 2,419,000
24,403,000 7,938,000 (4,997,300) (1,401,000) 25,942,700 Notes To The Financial Statements
– 31 March 2005
29 SHARE CAPITAL (CONTINUED)
Number of share options Exercise 2004 Price Balance at Balance at Grant date RM 1.4.2003 Granted Exercised Lapsed* 31.3.2004
2 July 2001 1.00 18,168,000 — (8,461,000) (312,000) 9,395,000 2 October 2001 1.00 1,626,000 — (919,000) (40,000) 667,000 18 October 2001 1.04 212,000 — (50,000) — 162,000 2 January 2002 1.21 962,000 — (384,000) (23,000) 555,000 194 2 April 2002 1.81 1,826,000 — (517,000) (137,000) 1,172,000 2 July 2002 2.06 2,292,000 — (492,000) (246,000) 1,554,000 2 October 2002 1.67 2,898,000 — (1,535,000) (117,000) 1,246,000 2 January 2003 1.75 4,447,000 — (1,985,000) (145,000) 2,317,000 2 April 2003 1.61 — 1,837,000 (986,500) (52,000) 798,500 20 2 July 2003 2.21 — 1,979,000 (66,000) (76,000) 1,837,000 2 October 2003 2.11 — 2,522,000 (31,000) (57,000) 2,434,000 05 2 January 2004 1.87 — 2,427,000 (131,500) (30,000) 2,265,500
2005 ANNUAL REPORT DRB-HICOM BERHAD 32,431,000 8,765,000 (15,558,000) (1,235,000) 24,403,000
*Options lapsed due to resignations.
Details relating to share options exercised during the financial year are as follows:
Exercise Number of ordinary shares issued
(203430-W) 2005 Fair value Price during the financial year ended Exercise date RM RM 31 March 2005
April 2004 2.02 – 2.08 1.00 – 1.87 346,000 May 2004 1.72 – 1.93 1.00 – 1.81 97,000 June 2004 1.67 – 1.86 1.00 44,000 July 2004 1.58 – 2.03 1.00 – 1.75 352,000 August 2004 1.89 – 1.94 1.00 – 1.75 332,400 September 2004 2.14 – 2.22 1.00 – 2.06 846,000 October 2004 2.10 – 2.19 1.00 – 2.06 591,300 November 2004 2.13 – 2.29 1.00 – 2.06 639,300 December 2004 2.14 – 2.24 1.00 – 1.88 816,100 January 2005 2.13 – 2.21 1.00 – 1.88 333,200 February 2005 2.08 – 2.14 1.00 – 2.06 335,000 March 2005 1.88 – 2.11 1.00 – 1.88 265,000
4,997,300
Ordinary share capital at par (RM’000) 4,997 Share premium (RM’000) 1,531
Proceeds received on exercise of share options (RM’000) 6,528
Fair value at exercise date of shares issued (RM’000) 10,535 29 SHARE CAPITAL (CONTINUED)
Exercise Number of ordinary shares issued 2004 Fair value Price during the financial year ended Exercise date RM RM 31 March 2004
April 2003 1.83 – 1.86 1.00 – 1.21 399,000 May 2003 1.87 – 2.12 1.00 – 1.21 946,000 June 2003 2.22 – 2.43 1.00 – 2.06 2,128,000 July 2003 2.63 – 2.80 1.21 – 2.06 5,775,000 195 August 2003 2.66 – 2.76 1.21 – 2.21 2,122,000 September 2003 2.34 – 2.47 1.21 – 2.21 1,350,000 October 2003 2.34 – 2.39 1.21 – 2.06 699,000 November 2003 2.13 – 2.24 1.21 – 2.21 595,000 December 2003 2.01 – 2.17 1.21 – 2.11 182,500 20 January 2004 2.10 – 2.18 1.21 – 2.11 242,000 05 February 2004 2.13 – 2.40 1.21 – 2.06 339,500 March 2004 2.01 – 2.22 1.04 – 2.11 780,000 2005 ANNUAL REPORT DRB-HICOM BERHAD
15,558,000
Ordinary share capital at par (RM’000) 15,558 (203430-W) Share premium (RM’000) 4,371
Proceeds received on exercise of share options (RM’000) 19,929
Fair value at exercise date of shares issued (RM’000) 38,584
(iv) Pursuant to the issuance of RESLS and REULS by a subsidiary company during the financial year ended 31 March 2003, the holders of RESLS and REULS have the right to exchange these Loan Stocks into DRB- HICOM ordinary shares of RM1.00 each, at an exercise price of RM1.84 per share if these Loan Stocks are not redeemed by the subsidiary company (Note 32(c)).
30 LIFE ASSURANCE FUND Based on the actuarial valuation of the Life Fund made up to 31 March 2005, the Actuary was satisfied that the assets available in the Life Fund are sufficient to meet its long term liabilities to policyholders. Notes To The Financial Statements
– 31 March 2005
31 DEFERRED INCOME This represents club membership licence fees received in advance by a subsidiary company. Income is recognised over the duration of the membership.
32 LONG TERM BORROWINGS
Group Company 2005 2004 2005 2004 196 RM’000 RM’000 RM’000 RM’000
Secured Hire purchase and finance lease liabilities 25,476 221,629 — — – Portion repayable within 12 months 20 included under borrowings (Note 21) (16,239) (214,152) — — 05 9,237 7,477 — — 2005 ANNUAL REPORT DRB-HICOM BERHAD Long term loans 824,772 493,336 — 8,592 – Portion repayable within 12 months included under borrowings (Note 21) (85,787) (141,188) — (8,592)
738,985 352,148 — — (203430-W)
Loan Stocks 2002/2007 Secured 640,405 639,567 — — – Portion repayable within 12 months included under borrowings (Note 21) (406,689) — — —
233,716 639,567 — — Unsecured 199,838 190,340 — —
433,554 829,907 — —
Unsecured Long term loans 302,396 344,632 — — – Portion repayable within 12 months included under borrowings (Note 21) (33,431) (40,809) — —
268,965 303,823 — —
Deferred liability 26,456 26,456 — —
1,477,197 1,519,811 — — 32 LONG TERM BORROWINGS (CONTINUED) (a) The secured hire purchase and finance lease liabilities and term loans are secured against certain freehold land under development, quoted shares and certain property, plant and equipment (Notes 13, 15 and 22). Interest rates is charged at annual rates ranging from 1.88% to 10.66% (2004: 2.00% to 11.00%).
(b) The weighted average effective annual interest rates at the end of the financial year are as follows:
Group Company 2005 2004 2005 2004 %%%%197
Hire purchase and finance lease liabilities 7.09 10.38 — — Term loans 4.73 4.72 — 2.76 20 (c) On 20 November 2002, a subsidiary company issued RM871.934 million Loan Stocks 2002/2007 to the lenders, 05 pursuant to the Debt Restructuring Agreement signed on 9 January 2002. The Loan Stocks carry a coupon rate of 2% per annum with a yield to maturity of 7%. During the financial year, the subsidiary company 2005 ANNUAL REPORT DRB-HICOM BERHAD redeemed RM27.681 million of RSLS and interest thereon. The outstanding Loan Stocks are as follows:
Group 2005 2004 RM’000 RM’000 (203430-W)
(i) Redeemable secured loan stocks (RSLS) 362,374 390,055 (ii) Redeemable exchangeable secured loan stocks (RESLS) 208,167 208,167 (iii) Redeemable exchangeable unsecured loan stocks (REULS) 178,039 178,039
748,580 776,261 Accrued finance cost 91,663 53,646
840,243 829,907 Portion repayable within 12 months (406,689) —
433,554 829,907
If the RESLS and REULS are not redeemed on the respective anniversary dates, the holders of the RESLS and REULS have the right to exchange the Loan Stocks into DRB-HICOM Berhad’s ordinary shares of RM1.00 each at an exchange price of RM1.84 per share, at the third anniversary date (up to 25%), at the fourth anniversary date (up to 25%) and the fifth anniversary date (the outstanding balance). The RSLS and RESLS are secured against certain pieces of properties (Note 22) and certain shares in another subsidiary company of the Group. In addition, shares in an indirect subsidiary company and quoted shares in associated companies (Note 25) have been deposited in an escrow account. Notes To The Financial Statements
– 31 March 2005
32 LONG TERM BORROWINGS (CONTINUED) (d) The deferred liability for the current financial year is in respect of amounts owing of RM26,456,000 (2004: RM26,456,000) by a solid waste subsidiary company to municipalities in relation to the transfer of 818 units of movables assets from these municipalities to the subsidiary company.
(e) The currency exposure profile of total borrowings are as follows:
Group Company 2005 2004 2005 2004 198 RM’000 RM’000 RM’000 RM’000
– Ringgit Malaysia 908,380 735,697 — — – Singapore Dollar 222,425 218,126 — — – Japanese Yen 217,562 221,833 — — 20 – US Dollar 123,643 337,295 — — 05 – Thai Baht 5,187 6,860 — —
2005 ANNUAL REPORT DRB-HICOM BERHAD 1,477,197 1,519,811 — —
(f) Hire purchase and finance lease liabilities
Group Company (203430-W) 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Minimum hire purchase and finance lease payments: – not later than 1 year 17,242 215,361 — — – later than 1 year and not later than 2 years 3,842 3,727 — — – later than 2 years and not later than 5 years 6,169 4,365 — — – later than 5 years 524 213 — —
27,777 223,666 — — Future finance charges on hire purchase and finance lease (2,301) (2,037) — —
Present value of hire purchase and finance lease liabilities 25,476 221,629 — — 32 LONG TERM BORROWINGS (CONTINUED)
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Representing hire purchase and finance lease liabilities:
– current (included in Note 21) 16,239 214,152 — — – non current 9,237 7,477 — — 199
25,476 221,629 — —
Present value of hire purchase 20 and finance lease liabilities: 05 – not later than 1 year 16,239 214,152 — —
– later than 1 year and 2005 ANNUAL REPORT DRB-HICOM BERHAD not later than 2 years 3,318 3,422 — — – later than 2 years and not later than 5 years 5,793 3,850 — — – later than 5 years 126 205 — —
25,476 221,629 — — (203430-W)
(g) The maturity structure of the long term borrowings (excluding hire purchase and finance lease liabilities and deferred liability) are as follows:
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
– later than 1 year and not later than 2 years 247,688 607,339 — — – later than 2 years and not later than 5 years 941,878 870,460 — — – later than 5 years 251,938 8,079 — —
1,441,504 1,485,878 — — Notes To The Financial Statements
– 31 March 2005
32 LONG TERM BORROWINGS (CONTINUED) (h) Fair value (i) The carrying value of the long term borrowings (excluding deferred liability) approximate their fair values.
The fair value information for borrowings under the Islamic Principles have been excluded as they do not fall within the scope of MASB 24.
(ii) Deferred liability 200 It is not practicable to determine the fair value of amounts owing to municipalities by a solid waste subsidiary company as the obligation to pay for these amounts will only crystallise upon the finalisation of the National Privatisation Concession Agreement. However, the fair value will not be materially different from the carrying value. 20 05 33 SINKING FUND
2005 ANNUAL REPORT DRB-HICOM BERHAD Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
At beginning of the financial year 329 295 — — Charge during the financial year 354 333 — — (203430-W) Utilised during the financial year (25) (299) — —
At end of the financial year 658 329 — —
The sinking fund of subsidiary companies were established pursuant to the Trust Deeds dated 23 March 1993 and 7 September 1999 respectively for the purpose of covering the cost of periodic major repairs or replacement of the golf course and building managed by the subsidiary companies. 34 OTHER RESERVES
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Non-distributable Capital reserves arising from issuance of Warrants 20,383 20,383 20,383 20,383 Capital reserves arising from bonus issue 7,000 7,000 — — 201 Capital redemption reserve arising from redemption of preference shares 2,696 1,652 — — Revaluation reserve of investment properties 282 282 — — Share of an associated company’s statutory reserve 78,920 69,250 — — 20 05 109,281 98,567 20,383 20,383 2005 ANNUAL REPORT DRB-HICOM BERHAD
At beginning of the financial year 98,567 88,676 20,383 20,383 Group’s share of subsidiary companies retained earnings transferred to capital redemption reserve and capitalisation for bonus issue 1,044 811 — — (203430-W) Share of an associated company’s reserve 48,816 9,080 — — Realisation of an associated company’s reserve (39,146) — — —
At end of the financial year 109,281 98,567 20,383 20,383
(a) The Warrants represents the proceeds received from the Rights Issue of 65,751,251 new Warrants in the Company at RM0.31 per Warrant which was implemented in the financial year ended 31 March 2001.
(b) The Group’s share of an associated company’s statutory reserve is maintained in compliance with Section 36 of the Banking and Financial Institutions Act, 1989. Notes To The Financial Statements
– 31 March 2005
35 CONSTRUCTION CONTRACTS
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
Aggregate contract costs incurred 3,134,987 2,976,690 2,681,934 2,361,639 Recognised profits less losses 205,542 244,546 164,624 196,288
3,340,529 3,221,236 2,846,558 2,557,927 202 Less: Progress billings (3,308,346) (3,139,013) (2,810,808) (2,476,105)
32,183 82,223 35,750 81,822 20 05 Analysed as follows: Amounts due from customers 2005 ANNUAL REPORT DRB-HICOM BERHAD on contracts (Note 14) 46,495 91,389 35,750 81,822 Amounts due to customers on contracts (Note 19) (14,312) (9,166) — —
32,183 82,223 35,750 81,822 (203430-W)
Advances to contractors on contracts (Note 14) 9,085 57,393 6,789 54,706
Retention on contracts 6,031 7,894 — —
The EDT Project awarded to the Company by the Government of Malaysia (Ministry of Transport) on 3 July 2000 is for a contract sum of approximately RM2.579 billion. The infrastructure works undertaken by the Company as the Main Contractor, on a Design and Build basis, involved the construction of a new track, the renewal and realignment (both horizontally and vertically) of the existing track, replacement of railway bridges, upgrading of level crossings with overhead bridges, replacement of existing overhead road bridges, construction of new station yards, construction of new station buildings and the refurbishment of Ipoh Railway Station. Overall, the EDT Project will also provide a dual one-meter gauge track between Rawang and Ipoh, which is a distance of approximately 180 KMs.
As at 31 March 2005, the EDT Project had reached percentage of completion of 86.96%, giving rise to cumulative attributable profits of approximately RM164 million. 35 CONSTRUCTION CONTRACTS (CONTINUED) The amount due from the Government for the Group and the Company is approximately RM475.4 million (Note 14(b)). Included in “Receivables based on billings” as referred to in Note 14 (b) is an amount of RM603 million attributable to the Variation Orders (“VO”) and Loss & Expense (“L&E”) claims submitted by the Company in relation to the EDT Project. In addition, there is an “Amount due from customers on contracts” amounting to RM35.7 million indicated above for work done but not billed as at 31 March 2005, which also relates to the EDT Project.
During the course of construction following instructions from the Government, the Company had carried out additional works and had, as in normal acceptable practice in the industry, submitted VO claims to the 203 Government. Such additional works, in the opinion of the Company, constitute VO claims under Clause 27 of the EDT Contract (“Contract”) as a result of instructions requested by the Government.
The VO claims were prepared on the advice of a reputable Claims Consultant and the Company’s in-house 20 Quantity Surveyors. The Company had also obtained legal opinion from its solicitors to support the claims. 05 The Company has also submitted an L&E claim to the Government. The L&E claim relates to the direct loss and expenses, which have been incurred by the Company which in the opinion of the Company are due to 2005 ANNUAL REPORT DRB-HICOM BERHAD the delay in the construction of the EDT Project which had been primarily caused by the change in the fundamental design and late possession of site. The Company is of the opinion that based on Clause 44.2 of the Contract, it has a contractual right to claim cost recoveries as the delays are due to reasons set out in the Contract. Furthermore, these circumstances gave rise to the need for an extension of time (“EOT”). The Board of Directors are confident that the Government will agree to the EOT and thus, no Liquidated (203430-W) Ascertained Damages (“LADs”) is expected to arise.
Subsequent to the financial year-end, the Company has on 2 June 2005 announced to Bursa Malaysia pursuant to a Letter of Understanding executed between the Government and the Company on 26 May 2005 agreed to a mutual termination of the Contract on terms and conditions to be agreed upon by both parties. Following this, the Company has on 1 June 2005 handed over site possession to the Government. The negotiations on the terms and conditions, including the approval of the VO and L&E claims, are currently in progress.
The Board of Directors have reviewed the above matter and, having considered all available known facts and information, are confident that the VO and L&E claims will be accepted and the EOT will be agreed by the Government. Accordingly, the Board of Directors are of the opinion that the construction contract revenue and costs are appropriately recognized, all amounts receivable will be recovered, and no contingent cost is expected to arise.
36 RETAINED EARNINGS The Company has sufficient tax credit balance under Section 108(6) of the Income Tax Act, 1967 to frank up to approximately RM347,122,000 of its retained profits as at 31 March 2005 if paid out as dividends. The Company also has tax exempt income amounting to RM52,106,000 available for distribution as tax exempt dividends to shareholders. Notes To The Financial Statements
– 31 March 2005
37 SUMMARY OF EFFECT OF ACQUISITION OF COMPANIES (a) Subsidiary companies During the financial year, the Group acquired the following investments:
(i) On 26 May 2004, Gadek (Malaysia) Berhad acquired the entire equity interest comprising two ordinary shares of RM1.00 each in Ladang Kupang Development Sdn. Bhd. (formerly known as Astra Delight Sdn. Bhd.). As a result, Ladang Kupang Development Sdn. Bhd. became a wholly-owned subsidiary company of the Group.
204 (ii) On 26 May 2004, HICOM Holdings Berhad acquired the entire equity interest comprising two ordinary shares of RM1.00 each in NSE Development Sdn. Bhd. (formerly known as March Midas Sdn. Bhd.) and Bukit Kledek Development Sdn. Bhd. (formerly known as Spring Stream Sdn. Bhd.) respectively. As a result, these companies became wholly-owned subsidiary companies of the Group. 20 05 (iii) On 26 May 2004, HICOM Berhad acquired the entire equity interest comprising two ordinary shares of RM1.00 each in HB Property Development Sdn. Bhd. (formerly known as Elegant Blooms Sdn. Bhd.). As a result, HB Property Development Sdn. Bhd. became a wholly-owned subsidiary company 2005 ANNUAL REPORT DRB-HICOM BERHAD of the Group.
(iv) On 16 and 27 September 2004, HICOM Holdings Berhad acquired an additional 40% equity interest in HICOM Network Services Sdn. Bhd. (“HNS”). As a result, HNS became a wholly-owned subsidiary company of the Group. (203430-W) (v) In September 2004, Oriental Summit Industries Sdn. Bhd. acquired the entire equity interest comprising two ordinary shares of RM1.00 each in OSI Manufacturing Sdn. Bhd. (“OSIM”) and Automotive Components Engineering Centre Sdn. Bhd. (“ACEC”) respectively. As a result, these companies became subsidiary companies of the Group.
(vi) On 18 October 2004, Motosikal Dan Enjin Nasional Sdn. Bhd. (“MODENAS”) acquired 40% equity interest in P.T. Modenas Putra Motor Indonesia (“PT MODENAS”). Subsequently, MODENAS increased its equity interest from 40% to 58%. As a result, PT Modenas became a subsidiary company of the Group.
(vii) On 24 December 2004, HICOM Communications Sdn. Bhd. acquired 70% equity interest in PT HICOM BMS (formerly known as PT Bina Mitra Serasi Haluan Lenggeng). As a result, PT HICOM BMS became a subsidiary company of the Group.
(viii) On 3 March 2005, the Company acquired the entire equity interest comprising two ordinary shares of RM1.00 each in Suzuki Malaysia Automobile Sdn. Bhd. (“SMA”). As a result, SMA became a wholly-owned subsidiary company of the Group. 37 SUMMARY OF EFFECT OF ACQUISITION OF COMPANIES (CONTINUED) In respect of items (iv),(vi) and (vii) • The effect of the acquisitions in respect of the above items on the financial results of the Group is shown below:
2005 RM’000
Revenue 765 Cost of sales (757) 205
Gross profit 8 Other operating income 1 Selling and distribution expenses (23) 20 Administrative expenses (927) 05
Loss from ordinary activities before taxation (941) 2005 ANNUAL REPORT DRB-HICOM BERHAD Taxation —
Loss from ordinary activities after taxation (941) Minority interests 294
Decrease in Group’s net profits (647) (203430-W)
• The effect of these acquisitions on the financial position of the Group as at 31 March 2005 is as follows:
2005 RM’000
Inventories 979 Trade and other receivables 3,669 Cash and bank balances 78 Trade and other payables (10,236) Property, plant and equipment 2,887 Minority interests 2,558
Decrease in Group’s net assets (65) Notes To The Financial Statements
– 31 March 2005
37 SUMMARY OF EFFECT OF ACQUISITION OF COMPANIES (CONTINUED) • Details of net liabilities assumed, goodwill and cash flow of the Group arising from the acquisitions are as follows:
At date of acquisition RM’000
Inventories 1,395 Trade and other receivables 3,441 206 Cash and bank balances 460 Trade and other payables (12,332) Property, plant and equipment 2,983 Minority interests 2,589
20 Net liabilities assumed (1,464) 05 Goodwill on acquisitions 3,418
2005 ANNUAL REPORT DRB-HICOM BERHAD Purchase consideration 1,954 Purchase consideration discharged by conversion of debt (404)
Purchase consideration discharged by cash 1,550 Cash and cash equivalents arising from acquisitions of subsidiary companies (460) (203430-W) Cash outflow on acquisitions 1,090
In respect of items (i),(ii),(iii),(v) and (viii) The acquisitions in respect of the above items do not have any material effect on the financial position and results of the Group and Company.
(b) A jointly controlled entity
During the financial year, the Company acquired a 49% equity interest in a jointly controlled entity, Isuzu Malaysia Sdn. Bhd. 37 SUMMARY OF EFFECT OF ACQUISITION OF COMPANIES (CONTINUED) (c) An associated company As at 31 March 2005, the Group’s shareholding in EON Capital Berhad (“ECB”) was 140,010,526 ordinary shares (“ECB shares”), representing 20.20% direct equity interest in ECB, which was obtained from the following transactions. As a result, ECB became an associated company of the Group.
(i) Edaran Otomobil Nasional Berhad’s (“EON”), an associated company of the Group, distributed its entire shareholding in ECB to the shareholders of EON by way of dividend in specie and capital repayment amounting to 20,504,007 ECB shares and 81,359,319 ECB shares respectively. 207 (ii) Share swap of the Group’s existing short term investment in Jardine Cycle & Carriage Ltd (“JCCL”) (formerly known as Cycle & Carriage Ltd) of 9,266,914 JCCL shares for 29,722,000 ECB shares held by Jardine Strategic Malaysian Investments Pte. Ltd. 20 (iii) Acquisition of additional 8,425,200 ECB shares from the open market for a total purchase 05 consideration of approximately RM47,334,000. 2005 ANNUAL REPORT DRB-HICOM BERHAD (d) During the previous financial year, the Group acquired the following investments:
(i) On 26 June 2003, HICOM Berhad and Comtrac Sdn. Bhd. acquired additional equity interests of 15% and 5% respectively in Glenmarie Cove Development Sdn. Bhd. Following the acquisition, the Group’s effective equity interest in Glenmarie Cove Development Sdn. Bhd. increased from 71.00%
to 89.50%. (203430-W)
(ii) On 28 June 2003, the Company acquired the entire equity interest comprising two ordinary shares of RM1.00 each in Hicomobil Sdn. Bhd. As a result, Hicomobil Sdn. Bhd. became a wholly-owned subsidiary company of the Group.
The acquisitions of the above subsidiary companies do not have any material effect on the financial position and results of the Group. Notes To The Financial Statements
– 31 March 2005
38 SUMMARY OF EFFECT OF DISPOSAL OF SHARES/DILUTION OF EQUITY INTEREST (a) During the financial year, the Group disposed the following investments:
(i) On 6 May 2004, HICOM Holdings Berhad disposed of its 29.86% equity interest in Petro-Pipe Industries (M) Sdn. Bhd. (“PPI”). As a result, PPI ceased to be an associated company of the Group.
(ii) On 6 May 2004 and 13 August 2004, HICOM Holdings Berhad disposed of its 20.29% equity interest in PPSC Industrial Holdings Sdn. Bhd. (“PPSCIH”). As a result, PPSCIH ceased to be an associated company of the Group. 208 (iii) On 16 June 2004, HICOM Holdings Berhad disposed of its 40% equity interest in Aluminium Alloy Castings Sdn. Bhd. (“AAC”). As a result, AAC ceased to be a jointly controlled entity of the Group.
20 The proceeds and net loss arising from the above disposals amounted to approximately RM88.0 million 05 and RM5.8 million respectively. The above mentioned disposals of equity interests have no effect on the Company’s financial statements 2005 ANNUAL REPORT DRB-HICOM BERHAD as the disposals were undertaken by the Company’s subsidiary companies.
(b) In the previous financial year, the Group disposed the following investments:
(i) On 6 June 2003, HICOM Communications Sdn. Bhd., a wholly-owned subsidiary company of the Group entered into a Share Purchase Agreement to dispose its 49.00% shareholding in Asian (203430-W) Satellite Venture Sdn. Bhd. As a result, Asian Satellite Venture Sdn. Bhd. ceased to be an associated company of the Group.
(i) On 16 July 2003, Scott & English (Malaysia) Sdn. Bhd. disposed 49.00% of its shareholding in Scott & English Trading (Sarawak) Sdn. Bhd. (formerly known as Harimau Teknik Sdn. Bhd.). As a result, the Group’s effective equity interest in Scott & English Trading (Sarawak) Sdn. Bhd. reduced from 70.00% to 35.70%.
(iii) On 31 March 2004, the Group disposed of its entire shareholding in IMPSA (Malaysia) Sdn. Bhd. As a result, IMPSA (Malaysia) Sdn. Bhd. ceased to be an associated company of the Group.
The proceeds and net gain arising from the above disposals amounted to approximately RM1.9 million and RM2.2 million respectively.
The above mentioned disposals/dilution of equity interest have no effect on the Company’s financial statements as the disposals/dilution were undertaken by the Company’s subsidiary companies. 39 DISCONTINUED OPERATIONS IN THE PREVIOUS FINANCIAL YEAR (a) Discontinued operations On 29 October 2003, the Group via its subsidiary companies namely Intrakota Komposit Sdn. Bhd. (“IKSB”), Intrakota Consolidated Berhad, S.J. Kenderaan Sdn. Bhd., Toong Fong Omnibus Company Sdn. Bhd., Syarikat Pengangkutan Malaysia Sdn. Bhd., S.J. Binateknik Sdn. Bhd. and Euro Truck & Bus (Malaysia) Sdn. Bhd. (“ETB”) entered into a Sale and Purchase Agreement with Syarikat Prasarana Negara Berhad (“SPNB”) for the disposal of their bus related assets. The shareholders of the Company approved the disposal on 13 March 2004.
In line with this, the Group ceased operations of the bus transportation services and other bus related 209 activities, which have been disclosed previously under the services segment. In conjunction with the disposal, the Group presented the debt restructuring schemes involving the outstanding borrowings of IKSB group, Directional (M) Sdn. Bhd. (“Directional”) and ETB to the respective lenders. The debt restructuring schemes encompass partial repayment of debts from the proceeds arising on the disposal of 20 assets, waiver of interest, partial waiver of the principal borrowings and the balance to be termed out. 05
The financial effects of the above disposal and debt restructuring schemes are as follows: 2005 ANNUAL REPORT DRB-HICOM BERHAD
2004 RM’000
Revenue 82,264
Cost of sales (111,161) (203430-W)
Gross loss (28,897) Other operating income – partial waiver on principal borrowings 14,596 – others 1,786 Administrative expenses (10,753) Other operating expenses – loss on disposal of bus related assets (63,045) – others (14,626)
Loss from operations (100,939) Finance cost – interest waiver 155,097 – interest expense (38,447)
Profit before taxation 15,711 Taxation 4
Profit after taxation 15,715 Notes To The Financial Statements
– 31 March 2005
39 DISCONTINUED OPERATIONS IN THE PREVIOUS FINANCIAL YEAR (CONTINUED) (b) The effects of the discontinuing operations on the financial position of the Group are as follows:
2004 RM’000
Current assets 197,758 Current liabilities (420,610)
210 Net liabilities (222,852)
(c) The cash flows attributable to the discontinuing operations during the financial year of the Group were 20 as follows: 05 2004 RM’000 2005 ANNUAL REPORT DRB-HICOM BERHAD
Operating activities (7,761) Investing activities 3,932
Net cash outflow (3,829) (203430-W)
40 SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party transactions which were carried out on terms and conditions attainable in transactions with unrelated parties.
Related parties Relationship
Edaran Otomobil Nasional Berhad Associated company of the Group Siemens VDO Instruments MY Sdn. Bhd. Associated company of the Group ZF Steerings (Malaysia) Sdn. Bhd. Associated company of the Group Master-Freighters (Malaysia) Sdn. Bhd. A company in which certain Directors have significant financial interests 40 SIGNIFICANT RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)
Group 2005 2004 RM’000 RM’000
(a) Sales of goods and services to: Edaran Otomobil Nasional Berhad * 15,858
(b) Purchase of goods and services from: Edaran Otomobil Nasional Berhad 15,911 19,693 211 Siemens VDO Instruments MY Sdn. Bhd. 15,266 11,916 ZF Steerings (Malaysia) Sdn. Bhd. 11,077 10,513 Master-Freighters (Malaysia) Sdn. Bhd. 10,940 11,594 20 *Transactions are not disclosed as the amounts are not significant. 05
The outstanding year end balances of related party transactions with the associated companies of the 2005 ANNUAL REPORT DRB-HICOM BERHAD Group are disclosed in Notes 14 and 19 to the financial statements.
The outstanding year end balances for related party transactions with the related parties in which certain Directors have significant financial interests are as below:
Group (203430-W) 2005 2004 RM’000 RM’000
Amounts due from related parties 22,245 25,652
Amounts due to related parties 15,966 22,000 Notes To The Financial Statements
– 31 March 2005
41 CAPITAL AND OTHER COMMITMENTS
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
(i) Authorised capital expenditure not provided for in the financial statements – contracted 33,295 44,023 — — – not contracted for 63,350 58,808 2,450 7,158 212 96,645 102,831 2,450 7,158
Analysed as follows: 20 Property, plant and equipment 93,695 92,384 — — 05 Property development expenditure — 8,289 — — Additional investments in: – a subsidiary company — — — 5,000 2005 ANNUAL REPORT DRB-HICOM BERHAD – jointly controlled entities 2,950 — 2,450 — – an associated company — 2,158 — 2,158
96,645 102,831 2,450 7,158
(203430-W) (ii) Lease commitments: Commitments under non-cancellable operating leases: – repayable within 1 year 1,417 1,461 — — – repayable within 2 to 5 years 4,439 5,269 — — – repayable more than 5 years — 636 — —
5,856 7,366 — —
(iii) Commitments for foreign exchange contracts 66,945 31,646 — —
The currency exposure profile and the expiry period for the foreign exchange contracts are as follows:
Group 2005
Contract Equivalent amount amounts in Ringgit Malaysia (’000) (’000) Expiry dates
Japanese Yen 1,864,819 66,945 4 April 2005 – 25 September 2005 42 CONTINGENT LIABILITIES (UNSECURED)
Group Company 2005 2004 2005 2004 RM’000 RM’000 RM’000 RM’000
(a) Guarantees given to financial institutions in respect of facilities granted to subsidiary companies — — 430,770 270,304
(b) Performance bonds and guarantees 213 given to third parties. — — 398 6,539
43 GROUP SEGMENT REPORTING 20 During the financial year, the Group principally operates in Malaysia in the following main industry segments: 05
Industry segment Description 2005 ANNUAL REPORT DRB-HICOM BERHAD
Automotive Manufacturing, assembly and sale of motor and military vehicles including sale of related spares and services.
Property and construction Property holding and development and construction work.
Services It includes trading in electrical and engineering products, hotel and resort (203430-W) management services, airport ground handling services, solid waste management services, vehicle inspection, telecommunication services and underwriting of general and life insurance.
(a) Primary reporting format – business segment Inter-segment revenue comprise revenue to other business segment carried out on an arm’s length basis.
Segment results represent segment revenue less segment expenses. Unallocated expenses represent corporate operating and administrative expenses.
Segment assets consist primarily of property, plant and equipment, inventories, receivables, property development costs, land held for property development, short term and other investments and cash and bank balances and exclude interest bearing short term deposits, taxation assets and investments in jointly controlled entities and associated companies. Segment liabilities comprise mainly of general and life insurance funds, payables and exclude items such as interest bearing borrowings and taxation. Unallocated liabilities consist of accruals on corporate operating and administrative expenses.
Capital expenditure comprise additions to property, plant and equipment.
(b) Secondary reporting format – geographical segments The Group’s secondary format by geographical location, is not shown as the activities of the Group are predominantly in Malaysia and the overseas segment does not contribute to more than 10% of the consolidated revenue and assets. Notes To The Financial Statements
– 31 March 2005
43 GROUP SEGMENT REPORTING (CONTINUED) Primary reporting format – business segment
Property & Investment Automotive Construction Services Holding Group RM’000 RM’000 RM’000 RM’000 RM’000
Financial year ended 31 March 2005 Revenue Total revenue 2,458,282 552,291 1,523,557 31,788 4,565,918 Inter-segment revenue (5,181) (16,270) (18,846) (19,026) (59,323) 214 External revenue 2,453,101 536,021 1,504,711 12,762 4,506,595
Segment results 145,793 (24,574) 69,180 17,511 207,910 Unallocated expenses (49,506) 20 Interest income 34,854 05 Finance cost (138,440) Share of results of jointly
2005 ANNUAL REPORT DRB-HICOM BERHAD controlled entities 12,779 26,332 1,215 — 40,326 Share of results of associated companies 135,737 3,749 42,072 — 181,558
Profit from ordinary activities before taxation 276,702 Taxation (78,443)
Profit from ordinary activities after taxation 198,259
(203430-W) Minority interests (56,852)
Net profit attributable to shareholders 141,407
Other information Segment assets 1,747,298 1,932,355 1,643,305 323,535 5,646,493 Interest bearing short term deposits 1,148,583 Taxation assets 100,743 Jointly controlled entities 119,186 209,559 18,686 — 347,431 Associated companies 669,475 41,642 673,978 — 1,385,095
Total assets 8,628,345
Segment liabilities 419,011 718,865 1,337,040 26,816 2,501,732 Interest bearing borrowings 2,720,095 Taxation liabilities 81,041 Unallocated liabilities 4,105
Total liabilities 5,306,973
Capital expenditure 106,216 9,248 25,853 2,628 143,945
Depreciation 91,237 29,024 46,067 5,447 171,775 43 GROUP SEGMENT REPORTING (CONTINUED) Primary reporting format – business segment
Discontinued Operations Property & (transportation Investment Automotive Construction Services services) Holding Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Financial year ended 31 March 2004 Revenue Total revenue 2,107,398 971,820 1,364,996 82,264 29,203 4,555,681 Inter-segment revenue (7,817) (12,664) (19,348) — (15,597) (55,426) 215 External revenue 2,099,581 959,156 1,345,648 82,264 13,606 4,500,255
Segment results 142,431 70,812 79,530 (37,964) 23,168 277,977 Unallocated expenses (54,298) 20 Interest income 37,582 Loss on disposal of bus related assets (63,045) 05 Waiver of finance cost 155,097 Finance cost (174,981) Share of results of jointly 2005 ANNUAL REPORT DRB-HICOM BERHAD controlled entities 3,754 16,236 (3,154) — — 16,836 Share of results of associated companies 175,984 9,271 9,482 — — 194,737
Profit from ordinary activities before taxation 389,905
Taxation (142,489) (203430-W)
Profit from ordinary activities after taxation 247,416 Minority interests (52,499)
Net profit attributable to shareholders 194,917
Other information Segment assets 1,830,208 2,066,919 1,577,737 193,542 339,831 6,008,237 Interest bearing short term deposits 998,617 Taxation assets 97,443 Jointly controlled entities 119,868 204,604 17,657 — — 342,129 Associated companies 1,080,507 96,049 29,393 — — 1,205,949
Total assets 8,652,375
Segment liabilities 406,332 863,003 1,065,812 52,224 10,547 2,397,918 Interest bearing borrowings 2,955,700 Taxation liabilities 105,980 Unallocated liabilities 4,828
Total liabilities 5,464,426
Capital expenditure 96,558 33,254 22,736 78 4,670 157,296
Depreciation 93,857 21,995 45,378 37,604 9,154 207,988 Notes To The Financial Statements
– 31 March 2005
44 CHANGE IN ACCOUNTING POLICY The Group adopted MASB 32 in respect of property development activities, which became applicable to the Group beginning 1 April 2004.
In compliance with the Standard, Land and Development Expenditure and Real Property Assets have been renamed as Property Development Costs and Land Held for Property Development respectively. Accrued billings represent the excess of revenue recognised over billings to purchasers.
The change in accounting policy has been accounted for retrospectively. Whilst there is no impact on the income statement, the effects of the reclassification on the balance sheet for the financial year ended 216 31 March 2004 is shown below:
As previously Effect of As reported change restated 20 RM’000 RM’000 RM’000 05 Current Assets Property development costs 88,826 (49,371) 39,455
2005 ANNUAL REPORT DRB-HICOM BERHAD Accrued billings (included in trade and other receivables) — 49,371 49,371
45 SUBSEQUENT EVENT On 23 June 2005, as announced to Bursa Malaysia Securities Berhad, DRB-HICOM Berhad obtained approval
(203430-W) from the Securities Commission for the issuance of up to RM1.0 billion Islamic Securities Facilities comprising of:
(a) up to RM680 million nominal value Bai’ Bithaman Ajil Islamic Debt Securities;
(b) up to RM200 million nominal value underwritten Murabahah Commercial Papers/Medium Term Notes Facility; and
(c) up to RM120 million nominal value Murabahah Commercial Papers/Medium Term Notes Facility.
The proceeds arising from the Facilities shall be utilised broadly as follows:
(i) to fully purchase/redeem and cancel the Redeemable Secured Loan Stocks (“RSLS”) of a subsidiary company;
(ii) to fully purchase/redeem and cancel the Redeemable Exchangeable Secured Loan Stocks (“RESLS”) of a subsidiary company;
(iii) to repay and refinance existing short term banking facilities of DRB-HICOM Berhad; and
(iv) to finance the general working capital requirements of DRB-HICOM Berhad and/or its subsidiary companies, which are Syariah compliant.
The issuance of the Islamic Securities is expected to be completed in the second quarter of the financial year ending 31 March 2006. 46 FINANCIAL INSTRUMENTS Financial risk management objectives and policies
The Group’s overall financial risk management objective is to ensure that the Group creates value for its shareholders. The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its interest rate, foreign currency exchange, credit, liquidity and cash flow, market, insurance and pricing risks.
(i) Interest rate risk The Group’s primary interest rate risk relates to interest-bearing debts and investments in marketable 217 securities and other interest-bearing financial instruments. The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate debt instruments.
(ii) Foreign exchange risk The Group is exposed to currency risk as a result of the foreign currency transactions entered into by 20 subsidiary companies in currencies other than the functional currency. Foreign exchange exposures in 05 transactional currencies other than functional currency of the operating entities are kept to an acceptable level. Material foreign currencies transaction exposures are hedged, mainly with forward 2005 ANNUAL REPORT DRB-HICOM BERHAD foreign exchange contracts.
(iii) Credit risk Credit risk is the potential loss arising from customers or counterparties failing to meet their financial contractual obligations. The Group seeks to control credit risk by ensuring its customers or counterparties (203430-W) have sound financial standing and credit history.
The Group has no significant concentration of credit risk due to its diverse customer base and minimal credit risk is expected in respect of amounts due from the Government as disclosed in Note 14(b) to the financial statements.
(iv) Liquidity and cash flow risk The Group manages its debt maturity profile, operating cash flows and availability of funding so as to ensure that all repayment and funding requirements are met. As part of its overall prudent liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. Due to the dynamic nature of the underlying businesses, the Group aims at maintaining flexibility in funding by keeping committed credit lines available. Notes To The Financial Statements
– 31 March 2005
46 FINANCIAL INSTRUMENTS (CONTINUED) (v) Market risk Market risk is the potential loss which can arise for positions held by the Group 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 Group regularly reviews these risks and takes proactive measures to mitigate the potential impact of such risks.
(vi) Insurance and pricing risks The principal activity of a life insurance subsidiary company is to provide insurance protection against 218 risks such as mortality, morbidity, disability and personal accidents. The mortality and morbidity risks are managed through risk assessment before a policy is underwritten. The maximum underwriting exposure is limited through exclusion, cover limits and reinsurance arrangements. The pricing risk relates to the risk of inadequacy of premium. Re-pricing of product is conducted at regular interval of two (2) years 20 or shorter, if required. Experience studies are conducted to determine realistic assumptions. Stress tests 05 and bonus reserve valuations are done by the appointed actuary to assess the solvency position.
2005 ANNUAL REPORT DRB-HICOM BERHAD 47 APPROVAL OF FINANCIAL STATEMENTS The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on 19 July 2005. (203430-W) Statement By Directors
pursuant to Section 169(15) of The Companies Act, 1965
We, Tan Sri Dato’ Seri Mohd. Saleh Sulong and Dato’ Haji Mohamad Nor Mohamad, two of the Directors of DRB- HICOM Berhad, state that, in the opinion of the Directors, the financial statements set out on pages 124 to 218 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 March 2005 and of the results and the cash flows of the Group and of the Company for the financial year ended on that date in accordance with the MASB approved accounting standards in Malaysia and the provisions of the Companies Act, 1965.
In accordance with a resolution of the Board of Directors dated 19 July 2005.
219
TAN SRI DATO’ SERI MOHD. SALEH SULONG Chairman 20 05
DATO’ HAJI MOHAMAD NOR MOHAMAD 2005 ANNUAL REPORT DRB-HICOM BERHAD Director
Declaration (203430-W) pursuant to Section 169(16) of The Companies Act, 1965
I, Datuk Haji Faisal Siraj, the Director primarily responsible for the financial management of DRB-HICOM Berhad, do solemnly and sincerely declare that the financial statements set out on pages 124 to 218 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.
DATUK HAJI FAISAL SIRAJ Director
Subscribed and solemnly declared by the abovenamed Datuk Haji Faisal Siraj at Shah Alam in Malaysia on 19 July 2005.
Before me,
TENGKU MOHD HASHIM BIN TENGKU MOHAMED Commissioner for Oaths Report Of The Auditors
to the members of DRB-HICOM Berhad
We have audited the financial statements set out on pages 124 to 218. These financial statements are the responsibility of the Company’s Directors. It is our responsibility to form an independent opinion, based on our audit, on these financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume the responsibility to any other person for the content of this report.
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 the Directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
220 In our opinion: (a) the financial statements have been prepared in accordance with the provisions of the Companies Act 1965 and applicable MASB 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 20 (ii) the state of affairs of the Group and Company as at 31 March 2005, and of the results and cash flows of the Group and Company for the financial year ended on that date; 05 and (b) the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiary 2005 ANNUAL REPORT DRB-HICOM BERHAD companies of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
The names of the subsidiary companies of which we have not acted as auditors are indicated in Note 3 to the financial statements. We have considered the financial statements of these subsidiary companies and the auditors’ reports thereon.
We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company’s (203430-W) 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.
Without qualifying our opinion, we draw attention to Note 35 of the financial statements which explains the circumstances surrounding the Electrified Double Track (“EDT”) Project. The Board of Directors, having reviewed and considered all available known facts and information and the status of the negotiations with the Government of Malaysia (“Government”), are confident that the variation orders and the loss and expense claims referred to therein will be accepted and the extension of time will be granted by the Government. Accordingly, the Board of Directors are of the opinion that the construction contract revenue and costs are appropriately recognized, all amounts receivable will be recovered, and no contingent cost is expected to arise. The negotiations with the Government are still ongoing and the outcome of these negotiations may have a significant effect on the financial position of the Group and the Company as at 31 March 2005 and their results for the financial year then ended.
The auditors’ reports on the financial statements of the subsidiary companies were not subject to any qualification and did not include any comment made under subsection 3 of Section 174 of the Act.
PRICEWATERHOUSECOOPERS DATO’ AHMAD JOHAN BIN MOHAMMAD RASLAN (No AF: 1146) [1867/09/06(J)] Chartered Accountants Partner of The Firm
Kuala Lumpur 19 July 2005 Other Information
222 Share Movement Chart 223 Analysis of Shareholdings 227 Properties of DRB-HICOM Group 242 Notice of Annual General Meeting 244 Statement Accompanying Notice of Annual General Meeting Form of Proxy / Borang Proksi Share Movement Chart
Share Prices and Trading Volume on the Bursa Malaysia Securities Berhad
Price Volume (RM) (‘000)
3.00 40,000
222 2.40 32,000
20 1.80 24,000 05
2005 ANNUAL REPORT DRB-HICOM BERHAD 1.20 16,000
0.60 8,000 (203430-W)
0.00 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar ‘04 ‘04 ‘04 ‘04 ‘04 ‘04 ‘04 ‘04 ‘04 ‘05 ‘05 ‘05
Volume High (RM) Low (RM) Analysis of Shareholdings
as at 25 July 2005
Class of Securities : Ordinary shares of RM1.00 each Authorised Share Capital : RM2,000,000,000.00 Issued and Fully Paid-up Capital : RM985,960,447.00 Voting Rights : Shareholders Every member of the Company present in person or by proxy shall have one vote on a show of hands, and in the case of poll, shall have one vote for every share of which he is the holder. Number of Shareholders : 59,446
223 ANALYSIS OF SHAREHOLDINGS
Holdings No. of Holders Percentage No. of Shares Percentage
1 – 99 343 0.58 8,098 — 20 100 – 1,000 29,262 49.22 21,976,155 2.23 05 1,001 – 10,000 26,393 44.40 89,019,544 9.03 10,001 – 100,000 3,110 5.23 78,795,776 7.99 100,001 – 49,298,021(*) 334 0.56 331,110,112 33.58 2005 ANNUAL REPORT DRB-HICOM BERHAD 49,298,022 and above(**) 4 0.01 465,050,762 47.17
Total 59,446 100.0 985,960,447 100.00
Remarks: * Less than 5% of issued shares
** 5% and above of issued shares (203430-W)
THIRTY LARGEST REGISTERED SHAREHOLDERS
Name No. of Shares Held Percentage
1. Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd 155,431,725 15.76 Pledged Securities Account for Etika Strategi Sdn Bhd (26940 JTRK) 2. Employees Provident Fund Board 116,594,400 11.83 3. Khazanah Nasional Berhad 104,124,637 10.56 4. Amanah Raya Nominees (Tempatan) Sdn Bhd 88,900,000 9.02 Skim Amanah Saham Bumiputera 5. Kumpulan Wang Amanah Pencen 14,035,000 1.42 6. Malaysia Nominees (Tempatan) Sendirian Berhad 13,001,900 1.32 Great Eastern Life Assurance (Malaysia) Berhad (PAR 1) 7. Citicorp Nominees (Asing) Sdn Bhd 11,612,526 1.18 UBS AG Singapore for Creon Investments Limited 8. HSBC Nominees (Asing) Sdn Bhd 11,474,800 1.16 BNY Brussels for Asian Dragon Fund (MLIIF) 9. Tai Tak Estates Sdn Bhd 10,952,653 1.11 Analysis of Shareholdings
as at 25 July 2005
THIRTY LARGEST REGISTERED SHAREHOLDERS (CONTINUED)
Name No. of Shares Held Percentage
10. Citaria Sdn Bhd 8,973,972 0.91 11. Alliancegroup Nominees (Tempatan) Sdn Bhd 7,860,900 0.80 PHEIM Asset Management Sdn Bhd for Employees Provident Fund 12. Universal Trustee (Malaysia) Berhad 7,717,600 0.78 Mayban Unit Trust Fund
224 13. Permodalan Nasional Berhad 6,924,200 0.70 14. Lembaga Tabung Angkatan Tentera 6,137,100 0.62 15. Citicorp Nominees (Asing) Sdn Bhd 6,048,600 0.61 CBNY for DFA Emerging Markets Fund 20 16. Pertubuhan Keselamatan Sosial 5,998,000 0.61 05 17. AM Nominees (Tempatan) Sdn Bhd 5,713,000 0.58 Employees Provident Fund Board (A/C 1)
2005 ANNUAL REPORT DRB-HICOM BERHAD 18. HSBC Nominees (Tempatan) Sdn Bhd 5,409,100 0.55 Nomura Asset Mgmt Sg for Employees Provident Fund 19. Mayban Nominees (Tempatan) Sdn Bhd 5,154,300 0.52 Mayban Investment Management Sdn Bhd for Kumpulan Wang Simpanan Pekerja (N14011980810)
(203430-W) 20. HSBC Nominees (Asing) Sdn Bhd 5,002,500 0.51 Abu Dhabi Investment Authority 21. Amanah Raya Nominees (Tempatan) Sdn Bhd 4,970,600 0.50 Amanah Saham Wawasan 2020 22. AM Nominees (Tempatan) Sdn Bhd 4,746,166 0.48 Pertubuhan Keselamatan Sosial 23. RHB Nominees (Tempatan) Sdn Bhd 4,437,000 0.45 RHB Asset Management Sdn Bhd for Kumpulan Wang Simpanan Pekerja 24. Malaysian Assurance Alliance Berhad 4,211,700 0.43 25. Citicorp Nominees (Asing) Sdn Bhd 4,044,200 0.41 American International Assurance Company Limited (P Core) 26. Asia Life (M) Berhad 4,035,729 0.41 As Beneficial Owner (PF) 27. HSBC Nominees (Asing) Sdn Bhd 3,659,000 0.37 JPMCB for the Malaysia Fund Incorporated 28. Vivien Joan Salleh 3,420,000 0.35 29. Universal Trustee (Malaysia) Berhad 2,979,300 0.30 Mayban Balanced Trust Fund 30. HSBC Nominees (Asing) Sdn Bhd 2,962,747 0.30 HSBC Sg for Lee Rubber Company Pte Ltd SUBSTANTIAL SHAREHOLDERS (HOLDING 5% OR MORE IN THE SHARE CAPITAL) (per Register of Substantial Shareholders)
Direct Indirect Total Percentage Name No. of No. of of Issued Shares Held Percentage Shares Held Percentage Capital
Etika Strategi Sdn Bhd 155,431,725 15.76 — — 15.76 Employees Provident Fund Board 153,081,600 15.53 — — 15.53 225 Khazanah Nasional Berhad 104,124,637 10.56 — — 10.56 Amanah Raya Nominees (Tempatan) Sdn Bhd – Skim Amanah Saham Bumiputera 88,900,000 a 9.02 — — 9.02 Tan Sri Dato’ Syed Mokhtar — — 155,431,725 b 15.76 15.76 20 Shah Syed Nor 05 Datuk Mohd Khamil Jamil — — 155,431,725 b 15.76 15.76 2005 ANNUAL REPORT DRB-HICOM BERHAD
Notes: a Shares are held in trust for Skim Amanah Saham Bumiputera, a unit trust scheme. b By virtue of his deemed interest in the shares through Etika Strategi Sdn Bhd in accordance with Section 6A of the Companies Act, 1965.
DIRECTORS’ INTERESTS IN THE COMPANY AND RELATED CORPORATIONS (203430-W)
No. of Shares Held No. of Shares Held Percentage of Name Direct Indirect Issued Capital
In DRB-HICOM Berhad:- Tan Sri Dato’ Seri Mohd Saleh Sulong 621,000 — 0.06 Datuk Mohd Khamil Jamil — 155,431,725 15.76 Dato’ Haji Mohamad Nor Mohamad — — — Datin Hjh. Safiah Basrah — — — Ibrahim Taib — — — Dato’ Syed Md. Amin Syed Jan Aljeffri 7,000 — 0.0007 Low Nyap Heng — — — Lee Yoon Min — — — Maj. Gen. (Rtd.) Dato’ Amir Baharudin 3,000 — 0.0003 Datuk Abu Samah Bachik 110,000 — 0.01 (Alternate to Tan Sri Dato’ Seri Mohd Saleh Sulong) Analysis of Shareholdings
as at 25 July 2005
DIRECTORS’ INTERESTS IN THE COMPANY AND RELATED CORPORATIONS (CONTINUED)
No. of Options Option Options Balance Name Granted Price Exercised Options (RM)
In DRB-HICOM Berhad:- Tan Sri Dato’ Seri Mohd Saleh Sulong 266,000 1.00 266,000 — Datuk Mohd Khamil Jamil — — — — Dato’ Haji Mohamad Nor Mohamad 60,000 1.62 — 60,000 226 Datin Hjh. Safiah Basrah — — — — Ibrahim Taib — — — — Dato’ Syed Md. Amin Syed Jan Aljeffri 40,000 1.62 — 40,000 Low Nyap Heng 100,000 1.62 — 100,000 Lee Yoon Min 60,000 1.62 — 60,000 20 Maj. Gen. (Rtd.) Dato’ Amir Baharudin 20,000 1.62 3,000 17,000 05 Datuk Abu Samah Bachik 266,000 1.00 140,000 126,000 (Alternate to Tan Sri Dato’ Seri Mohd Saleh Sulong) 2005 ANNUAL REPORT DRB-HICOM BERHAD By virtue of Datuk Mohd Khamil Jamil’s interest in the shares in the Company, he is also deemed to have an interest in the shares in the subsidiary companies to the extent the Company has an interest.
The indirect interests of a Director in the shares of certain subsidiary companies as at 25 July 2005 were as follows:- (203430-W) No. of Shares Held No. of Shares Held Percentage of Name Direct Indirect Issued Capital
In Intrakota Consolidated Berhad:- (Subsidiary Company) Tan Sri Dato’ Seri Mohd Saleh Sulong — 4,101,000 (N1) 20.51%
In Multi Automotive Service and Assist Sdn Bhd:- (Subsidiary Company) Tan Sri Dato’ Seri Mohd Saleh Sulong — 37,500 (N1) 15%
N1: Deemed interest through Saripati (Malaysia) Sdn Bhd, in accordance with Section 6A of the Companies Act, 1965
None of the other Directors in office as at 25 July 2005 held any interest in shares in the related corporations of DRB-HICOM Berhad. Properties of DRB-HICOM Group
for the financial year ended 31 March 2005
Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
Lot No. 120-123, P.N. No. 2557 Leasehold industrial 8 yrs Leasehold 66 years 68,700 sq.m 12,686 Kawasan Perindustrian Peramu land with office and expiring in year 2052 Mukim of Pekan factory blocks Pahang Darul Makmur
Lot No. 126-133, H.S.(D) No. 3579 Leasehold industrial 8 yrs Leasehold 66 years 60,784 sq.m 22,955 227 Kawasan Perindustrian Peramu land with office and expiring in year 2065 Mukim of Pekan factory blocks Pahang Darul Makmur
Lot No. 134, H.S.(D) No. 2233 Leasehold industrial 8 yrs Leasehold 66 years 31,970 sq.m 14,341 Kawasan Perindustrian Peramu land with office and expiring in year 2061 20 Mukim of Pekan factory blocks 05 Pahang Darul Makmur 2005 ANNUAL REPORT DRB-HICOM BERHAD Lot No. 142, H.S.(D) No. 2211 Leasehold industrial 8 yrs Leasehold 66 years 60,784 sq.m 21,022 Kawasan Perindustrian Peramu land with office and expiring in year 2060 Mukim of Pekan factory blocks Pahang Darul Makmur
Lot 140, H.S.(D) No. 3421 Leasehold industrial 8 yrs Leasehold 66 years 420,873 sq.m 2,914
Kawasan Perindustrian Peramu land expiring in year 2062 (203430-W) Mukim of Pekan Pahang Darul Makmur
Lot No. 032033-032137 Properties for — Leasehold 99 years 61,188 sq.m 5,631 Pekan Desa Puchong development into expiring in year 2097 District of Petaling residential and Selangor Darul Ehsan commercial buildings
Petak F7, (KPT 11) Industrial land with 9 yrs Leasehold 66 years 28,547 sq.m 3,696 Kawasan Perusahaan inspection centre Pengkalan Chepa, Kota Bharu Kelantan Darul Naim
Lot No. 219 Industrial land with 8 yrs Leasehold 60 years 16,643 sq.m 7,873 Kawasan Perusahaan Tebrau III inspection centre Mukim Tebrau, Johor Bahru Johor Darul Takzim
Lot 17B, PT No. 296 Industrial land with 8 yrs Freehold 13,530 sq.m 3,582 Mukim of Sungai Petani inspection centre Alor Gajah Melaka
MG 43, Lot No. 3587 Industrial land with 9 yrs Freehold 17,199 sq.m 3,936 Mukim of Parit Bakar inspection centre Muar, Johor Darul Takzim Properties of DRB-HICOM Group
for the financial year ended 31 March 2005
Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
Lot No. CL 1053, 1528 Industrial land with 8 yrs Freehold 19,992 sq.m 3,157 51⁄2 Mile, Jalan Apas inspection centre Tawau, Sabah
Lot 70 & 71, Lambir Land Industrial land with 8 yrs Leasehold 60 years 10,684 sq.m 3,601 District of Miri, Sarawak inspection centre expiring in year 2025 228 EMR 1833 Lot 1193 Industrial land with 9 yrs Freehold 17,805 sq.m 3,959 Mukim of Kluang inspection centre Johor Darul Takzim
20 H.S.(M) 4328, PT 3969 Industrial land with 9 yrs Freehold 8,100 sq.m 2,903 05 Teluk Datuk inspection centre Mukim of Tanjung Duabelas Banting, Selangor Darul Ehsan 2005 ANNUAL REPORT DRB-HICOM BERHAD
H.S.(D) 92322, PT 387 Industrial land with 8 yrs Freehold 15,459 sq.m 4,666 Senawang, Negeri Sembilan inspection centre
GM 68 & 69, Lot No. 979 & 981 Industrial land with 8 yrs Freehold 8,174 sq.m 4,280 Mukim 9 South West inspection centre
(203430-W) Pulau Pinang
KRM 485, Lot 583 Industrial land with 9 yrs Freehold 13,330 sq.m 641 Mukim of Kijal inspection centre District of Kemaman Terengganu Darul Iman
Lot 74, Surat Putus 4502 Industrial land with 9 yrs Leasehold 6,269 sq.m 3,433 Mukim of Mergong, Kota Setar inspection centre Kedah Darul Aman
Lot 9661, Seksyen 64 Building used as 8 yrs Leasehold 15 years 39,822 sq.m 2,211 Pending Industrial Estate inspection centre Jalan Dato Merican Salleh Kuching, Sarawak
Lot 4, Jalan Limau Manis Building used as 9 yrs Leasehold 15 years 39,822 sq.m 2,085 Off Jalan Lintas, Inanam inspection centre Kota Kinabalu, Sabah
Lorong Mak Mandin 3 Industrial land with 10 yrs Leasehold 99 years 19,281 sq.m 10,905 Kawasan Perindustrian inspection centre expiring in year 2089 Mak Mandin, Butterworth Pulau Pinang Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
Lot 3016, Kampung Kubang Ikan Industrial land with 10 yrs Leasehold 60 years 33,661 sq.m 5,150 Mukim of Chendering inspection centre Kuala Terengganu Terengganu Darul Iman
Lot 3904/A, Mukim of Chenor Building used as 9 yrs Government Land 28,547 sq.m 222 229 District of Batu Mengkebang inspection centre Kuala Krai, Kelantan Darul Naim
Lot 1, Jalan Sungai Rasah Building used as 11 yrs Government Land 12,141 sq.m 4,592 Padang Jawa, Shah Alam inspection centre Selangor Darul Ehsan 20 05 Wangsa Maju Building used as 10 yrs Government Land 17,959 sq.m 3,084 Jalan Genting Kelang inspection centre 2005 ANNUAL REPORT DRB-HICOM BERHAD Setapak, Kuala Lumpur Wilayah Persekutuan
Lot 18477, Jalan Kuala Ketil Building used as 10 yrs Government Land 12,343 sq.m 2,474 District of Kuala Muda inspection centre Sungai Petani
Kedah Darul Aman (203430-W)
Lot 1717, Jalan Jajawi Building used as 10 yrs Government Land 16,147 sq.m 2,289 Permatang Arau inspection centre Perlis Indera Kayangan
Sektor 1, Bandar Indera Mahkota Industrial land with 10 yrs Leasehold 66 years 19,425 sq.m 5,827 25200 Kuantan inspection centre Pahang Darul Makmur
Lot No. 46 & 47 Industrial land with 9 yrs Leasehold 60 years 21,042 sq.m 5,149 Gopeng Industrial Park Phase II inspection centre Gopeng, Perak Darul Ridzuan
Lot 1, 12113 Industrial land with 9 yrs 999 years expiring in 14,083 sq.m 2,888 Batu 8, Jalan Labuk inspection centre year 2892 Sandakan Sabah
Lot 14253 Building used as 9 yrs Government Land 39,822 sq.m 1,426 Mukim of Durian Sebatang inspection centre District of Hilir Perak Batu 5, Jalan Maharajalela Teluk Intan Perak Darul Ridzuan Properties of DRB-HICOM Group
for the financial year ended 31 March 2005
Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
Mukim of Asam Kumbang Building used as 9 yrs Government Land 66,370 sq.m 1,396 Jalan Kampung Dewa inspection centre Simpang Taiping Perak Darul Ridzuan
H.S.(D) 115082 Lot 36417 Vacant land — Leasehold 99 years 15,507 sq.m 3,500 230 Subang Jaya expiring in 2096 Mah Sing Integrated Industrial Park
LMS No. A6857 Bus depot and 8 yrs — 12,140 sq.m 1,776 Jalan Pandan Indah 4/34 workshop 20 Pandan Indah 05 55100 Kuala Lumpur
Lot PT 5690 & 5689 Industrial land 9 yrs Freehold 650,360 sq.m 171,442 2005 ANNUAL REPORT DRB-HICOM BERHAD Mukim of Gurun with office District of Kuala Muda and factory building Kedah Darul Aman
Ladang Gadek Rubber and 20-48 Freehold and leasehold 499 hectares 5,268 Alor Gajah, Melaka oil palm estate yrs 67 years expiring
(203430-W) with bungalow on 21.05.2033 and staff quarters
Ladang Kupang Rubber and coffee 6-77 Freehold 560 hectares 6,671 Baling, Kedah estate with bungalow yrs and staff quarters
No. 1008, Menara Uni.Asia Ground, mezzanine, 6 yrs Leasehold 99 years 11,975 sq.m 50,029 Jalan Sultan Ismail 6th to 10th floor used expiring on 06.02.2078 50250 Kuala Lumpur as Uni.Asia General Insurance Corporate Head Office 13th to 13th A, floors under Guaranteed Rental and 11th – 13th A floors currently vacant
Adjacent land Vacant land — Leasehold 82 years 256 sq.m 827 (Plot A) Menara Uni.Asia expiring on 15.08.2083
122 & 122A 2 units of 3 storey 23 yrs Leasehold 999 years 866 sq.m 612 Jalan Raja Musa Aziz, Ipoh shophouse used as expiring on 21.09.2894 Perak Darul Ridzuan branch office Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
16, Jalan Pejabat Pos 3 storey shophouse 22 yrs Freehold 358 sq.m 258 Batu Gajah, Perak Darul Ridzuan used as branch office
120, Jalan Kota Double storey 21 yrs Freehold 259 sq.m 251 Taiping, Perak shophouse used as branch office 231 17 & 18, Jalan Tebrau Ground, 1st & 22 yrs Freehold 1,138 sq.m 1,516 Johor Bahru 2nd floors of Johor Darul Takzim Lot 17 & 18 used as branch office and Regional office 20 05 688-C, Jalan Bukit Ubi 3 storey shophouse 23 yrs Freehold 403 sq.m 225 Kuantan, Pahang Darul Makmur used as branch office 2005 ANNUAL REPORT DRB-HICOM BERHAD
Lot 7651 & 7658 Lot 7658 is detached 23 yrs Freehold 895 sq.m 153 Taman Desa Jaya with single storey Sg. Petani, Kedah house – used as store by Sg. Petani Branch and Lot 7651
is a vacant land (203430-W)
9B Condominium Type A Condominium 19 yrs Leasehold 99 years 166 sq.m 203 Frasers Hill, Raub for staff use expiring on 23.05.2082 Pahang Darul Makmur
38, Jalan Tingkat Siakap 4 Bungalow for 21 yrs Freehold 623 sq.m 136 Taman Mutiara, Port Dickson staff use Negeri Sembilan Darul Khusus
Lot 951(471) & 801 Vacant land — Freehold 8,551 sq.m 1,861 Mukim 11 Barat Daya, Penang
Suite 3.1, 3.2 & 3.3 Branch office for 11 yrs Freehold 574 sq.m 1,516 Menara Penang Garden suite 3.1, 3.2 and Penang suite 3.3 are used as branch office
360, Taman Melaka Raya 3 storey shophouse 12 yrs Leasehold 99 years 368 sq.m 262 Melaka used as branch office expiring on 04.10.2082
Lot 329 & 330 1st floor of Lot 329 10 yrs Leasehold 999 years 687 sq.m 893 Central Road East is rented out, expiring on 03.05.2781 Kuching, Sarawak 2nd floor is vacant and others are used as branch office Properties of DRB-HICOM Group
for the financial year ended 31 March 2005
Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
Lot 5453, A-4, Jalan Kg. Baru 4 storey shophouse 10 yrs Freehold 433 sq.m 560 Sg. Petani, Kedah used as branch office
No. 361, Taman Bukit Emas, 3 storey shophouse 24 yrs Freehold 470 sq.m 311 Jalan Tampin, Seremban, used as branch office Negeri Sembilan 232 13, Jalan Melur 8 4 storey terrace 22 yrs Leasehold 99 years 544 sq.m 350 Taman Suria Jaya shophouse being expiring on 23.01.2085 Cheras, Kuala Lumpur used as store
20 9th-12th floor, 9th & 10th floor are 22 yrs Freehold 1,785 sq.m 6,468 05 Menara Safuan rented out in April 2004, Kuala Lumpur 11th & 12th floor used as Central KL branch 2005 ANNUAL REPORT DRB-HICOM BERHAD
Lot 1A Industrial land and 10 yrs Freehold 5.62 hectares 62,897 HICOM Glenmarie Industrial Park HICOM Corporate Mukim of Damansara Office District of Petaling Selangor Darul Ehsan (203430-W) H.S.(D) 2078, P.T. No. 215/95 Holiday Condominium 19 yrs Freehold 117 sq.m 355 Mukim of Bentong for staff – 1 unit Pahang Darul Makmur
H.S.(D) 65, No. L.O. 50 Holiday Apartments 17 yrs Leasehold 242 sq.m 402 Mukim of Si-Rusa for staff – 2 units expiring in 2084 District of Port Dickson Negeri Sembilan Darul Khusus
Lot No. 386, Seksyen 87A Land with 3 blocks 48 yrs Leasehold 1.22 hectares 2,959 Bandar Kuala Lumpur of double storey expiring in 2083 District of Wilayah Persekutuan building
PT 5143, H.S.(D) 80124 Land with office and 7 yrs and Freehold 65,154 sq.m 12,528 Mukim of Damansara factory buildings 15 yrs District of Petaling (Lot 1229, Jalan Jijan 28/35 Persiaran Kuala Langat Seksyen 28, Shah Alam Selangor Darul Ehsan) Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
PT 616, H.S.(D) 63616 28 units of flats for 6 yrs Freehold 1,561 sq.m 624 Mukim of Damansara staff residential District of Petaling Selangor Darul Ehsan (Taman Bunga Negara HICOM Sector B 233 Seksyen 26/27, Shah Alam Selangor Darul Ehsan)
PT 5011 & 5012 Land with office and 15 yrs Freehold 4,334 sq.m 5,410 Jalan Pendamar 27/90 factory buildings Seksyen 27, Shah Alam 20 Selangor Darul Ehsan 05
Lot 16, Jalan Sementa 27/91 Land with office and 11 yrs Freehold 10,916.24 sq.m 12,577 2005 ANNUAL REPORT DRB-HICOM BERHAD Seksyen 27, Shah Alam factory buildings Selangor Darul Ehsan
Blok 35, Jalan Selayang 1 34 units of flats 7 yrs Freehold 1,882 sq.m 734 Taman Bunga Negara used as staff hostel Seksyen 27, 40400 Shah Alam
Selangor Darul Ehsan (203430-W)
PT 1228, Mukim of Damansara Land — Freehold 7,967 sq.m 582 District of Petaling Selangor Darul Ehsan
PT 710, Mukim of Damansara Land — Freehold 20,236 sq.m 4,442 District of Petaling Selangor Darul Ehsan
H.S.(D) 6820 PT 75 Land held for 10 yrs Freehold 2,639,337 sq.m 96,181 H.S.(D) 6821 PT 76 commercial and H.S.(D) 6822 PT 77 industrial H.S.(D) 6823 PT 78 development H.S.(D) 6824 PT 79 Kawasan Perindustrian Peguh Mukim of Peguh District of Alor Gajah Melaka Bandar Bersejarah
Lot 1, HICOM Glenmarie Land held for 13 yrs Freehold 60,020 sq.m 14,986 Industrial Park commercial Mukim of Damansara development Daerah Petaling Selangor Darul Ehsan Properties of DRB-HICOM Group
for the financial year ended 31 March 2005
Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
GRN 52496 Lot 14813 Land held for 11 yrs Freehold 205,947 sq.m 45,449 GRN 52494 Lot 40325 commercial GRN 52495 Lot 40326 development Mukim of Damansara District of Petaling Selangor Darul Ehsan 234 H.S.(D) 5/94 PT 623 – Land held for — ) Leasehold 1,347,561 sq.m 19,311 Mukim of Kedawang development ) expiring in District of Langkawi – Marina and resorts 5 – 8 yrs ) 2054 190,555 sq.m 133,094 20 Kedah Darul Aman with hardstands 05 SPK 4821 PT 1468 Development of 6 – 8 yrs Freehold 19,026 sq.m 453 Mukim of Kedawang marina resort District of Langkawi 2005 ANNUAL REPORT DRB-HICOM BERHAD Kedah Darul Aman
H.S.(D) 734 PT 0125 Resort 9 yrs Leasehold 269,692 sq.m 52,263 Mainland, Tasik Kenyir expiring in 2056 Mukim of Hulu Terengganu District of Hulu Terengganu (203430-W) PT 0126, Pulau Merbau Land held for — Leasehold 14,605 sq.m 2 Mukim of Hulu Terengganu development expiring in 2057 District of Hulu Terengganu
PT 0136, Pulau Gawi Land held for — Leasehold 1,793,313 sq.m 213 Mukim of Hulu Terengganu development expiring in 2057 District of Hulu Terengganu
H.S.(D) 735 PT 0137 Golf course and 9 yrs Leasehold 2,068,207 sq.m 14,512 Pulau Pupi corporate bungalow expiring in 2056 Mukim of Hulu Terengganu under development District of Hulu Terengganu
PT 3870, Kelana Jaya Land for commercial — Freehold 20,503 sq.m 16,390 Mukim of Damansara development District of Petaling Selangor Darul Ehsan
Lot No. 95 Land held for — Leasehold 3,970 sq.m 287 Mukim of Ulu Telom development expiring in 2039 Cameron Highlands Pahang Darul Makmur Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
16, Jalan Chan Sow Lin Land with three storey 42 yrs Leasehold 3,637 sq.m 2,832 Kuala Lumpur industrial building expiring in 2058 Wilayah Persekutuan
Lot 1351 (Sub-lots 1450 & 1451) Land with double 13 yrs Leasehold 986 sq.m 486 Piasau Industrial Estate storey semi-detached expiring in 2047 235 Miri, Sarawak industrial building
Plot 498, Taman Nagasari Land with double storey — Freehold 2,393 sq.m 580 Lot No. 2901, 2950 industrial building Phase 2, Prai, Pulau Pinang 20 Lot 1D, BDC Industrial Estate Land with double storey 15 yrs Leasehold 1,452 sq.m 673 05 Jalan Kolombong detached industrial expiring in 2034 Off Mile 51⁄2, Jalan Tuaran building 2005 ANNUAL REPORT DRB-HICOM BERHAD Kota Kinabalu, Sabah
Lot No. B27 Land with single storey 14 yrs Leasehold 1,264 sq.m 300 SEDCO Light Industrial Area detached industrial expiring in 2042 Off 3rd Mile, Jalan Apas building Tawau, Sabah (203430-W) No. 12, Jalan Pemaju U1/15 Land with three storey 9 yrs Freehold 22,998 sq.m 24,975 Seksyen U1 industrial building HICOM Glenmarie Industrial Park 40150 Shah Alam Selangor Darul Ehsan
Lot Nos. 178 & 179 Land held for — Leasehold 3,993 sq.m 324 SEDCO Industrial Estate development expiring in 2037 Phase 11A, Mile 3 North Road, Sandakan, Sabah
Plot 98 Land held for — Leasehold 24,281 sq.m 3,356 Bukit Muryat Industrial Park development expiring in 2057 Prai, Pulau Pinang
Lot No. PLO 255 Land with three storey 7 yrs Leasehold 10,101 sq.m 7,233 Mukim of Tebrau detached industrial expiring in 2056 Johor Bahru building Johor Darul Takzim
Part of Lot PT 61712 Hotel Resort 16 yrs Freehold 23,957 sq.m 45,347 Glenmarie Estate Mukim of Damansara Selangor Darul Ehsan Properties of DRB-HICOM Group
for the financial year ended 31 March 2005
Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
Part of Lot PT 61712 & 61713 Golf and Country Club 16 yrs Freehold 1,429,633 sq.m 133,916 Glenmarie Estate Mukim of Damansara Selangor Darul Ehsan
Part of Lot PT 1 Land for development — Freehold 255,728 sq.m 59,304 236 61712, 61713 & 61714 Glenmarie Estate Mukim of Damansara Selangor Darul Ehsan
20 Lot PT 9259 & PT 3587 Land for development — Freehold 10,608 sq.m 570 05 Glenmarie Estate Mukim of Damansara Selangor Darul Ehsan 2005 ANNUAL REPORT DRB-HICOM BERHAD
Connemare Estate Agricultural land and — Freehold 601.86 hectares 63,200 Lots 35, 1252, 1365 and 1463 staff quarters Mukim of Beranang – rubber and oil palm District of Ulu Langat cultivation Selangor Darul Ehsan (203430-W) Bukit Kledek Estate Agricultural land and — Freehold 621 hectares 10,300 Lots 563, 564, 893 staff quarters – rubber and 1025 (part) and oil palm cultivation Mukim of Air Kuning District of Tampin Negeri Sembilan Darul Khusus
Bukit Kledek Estate Agricultural land and — Leasehold 245 hectares 1,784 Lot 1025 (part) staff quarters – rubber expiring in 2022 Mukim of Air Kuning and oil palm cultivation District of Tampin Negeri Sembilan Darul Khusus
Serendah Estate Agricultural land and — Freehold 245 hectares 45,000 comprising forty-four staff quarters – rubber (44) parcels of land and oil palm cultivation Mukim of Serendah District of Ulu Selangor Selangor Darul Ehsan
Lot No. 81, Phase 2A Used as a lorry — Freehold 5,600 sq.m 4,412 HICOM Glenmarie Industrial Park storage yard 40000 Shah Alam Selangor Darul Ehsan Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
PT 18945 H.S.(D) 166/92 Land with office and 10 yrs Freehold 80,840 sq.m 17,404 Mukim of Sg. Petani factory buildings Lot 250, Jalan PKNK 3, Fasa 2 Kaw. Perindustrian Sungai Petani 08000 Sungai Petani Kedah Darul Aman 237
PT Nos. 23246 & 23247 Two 41⁄2 storey 14 yrs Leasehold 99 years 306 sq.m 1,322 Title Nos. H.S.(M) 23286 & 23287 shophouses currently expiring in 2088 Mukim of Ampang being rented out as District of Ulu Langat showroom and office Selangor Darul Ehsan 20 05 Lot Nos. 4189 and 3972 Building used as various Freehold 3.88 hectares 11,148 Title Nos. G 25096 & G 9442 a centre for parts 2005 ANNUAL REPORT DRB-HICOM BERHAD Mukim of Batu and service and Wilayah Persekutuan government sales department
Title No. H.S.(D) 78383 Wisma USF, 61⁄2 30 yrs Leasehold 99 years 182 sq.m 2,254 Section 68 storey commercial expiring in 2067
City of Kuala Lumpur building currently used as (203430-W) Wilayah Persekutuan showroom and office (No. 30, Jalan Ampang, K. Lumpur)
P.T. Nos. 6167 and 6168 Two double strorey 25 yrs Freehold 282 sq.m 498 Title Nos. H.S.(M) 6943 and shophouses used as H.S.(M) 6944 showroom and office Mukim of Kuala Kuantan District of Kuantan Pahang Darul Makmur (Shophouse Nos. B 1570 and B1572, Jalan Beserah Taman LKNP, Kuantan)
Lot 678 & 679, Town Area II (2) Vacant land — Freehold 22,245 sq.m ) District of Central Malacca ) Melaka Bandar Bersejarah ) ) 15,000 Lot 354 (formerly 136) Vacant land — Freehold 21,954 sq.m ) Town Area XXXI ) District of Central Malacca ) Melaka Bandar Bersejarah ) Properties of DRB-HICOM Group
for the financial year ended 31 March 2005
Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
Lot No. 3, Jalan Perusahaan 2 Industrial land with 1-28 yrs Leasehold 99 years 26,272 sq.m 20,720 Kaw. Perindustrian Batu Caves office block, 2 factories expiring in 2074 Mukim of Batu District and 2 workshop Selangor Darul Ehsan buildings – ACM Complex
238 H.S.(D) 305, PT 1580 Land with factory 21 yrs Leasehold 66 years 10.64 hectares 112,933 Mukim of Pekan and office block expiring in 2043 Pahang Darul Makmur – assembly plant
Lot No. 31D H.S.(D) 3365 PT 2205 Land with factory 20 yrs Leasehold 66 years 1.82 hectares 1,276 20 Mukim of Pekan and office block expiring in 2063 05 Pahang Darul Makmur – assembly plant
PTP 2-2-9632 & 2-2-9633 Land with industrial 9 yrs Leasehold 66 years 5.90 hectares 4,143 2005 ANNUAL REPORT DRB-HICOM BERHAD Mukim of Pekan office building expiring in 2067 Pahang Darul Makmur
Lot No. 31A, PTP 2-2-4455 Land with industrial 9 yrs Leasehold 1.63 hectares 3,016 Mukim of Langgar office building expiring in 2061 Pekan, Pahang Darul Makmur (203430-W) Lot No. 31B, PT 1814 Land with industrial 11 yrs Leasehold 1.85 hectares 525 H.S.D 2227, Mukim of Langgar office building expiring in 2061 Pekan, Pahang Darul Makmur
Lot No. 31C, PT 1490 Land with industrial 11 yrs Leasehold 1.69 hectares 1,161 H.S.D 1950, Mukim of Langgar office building expiring in 2057 Pekan, Pahang Darul Makmur
PTG PK 251/6-88 (D) Land held for — Leasehold 771.69 hectares 1,975 Mukim of Ulu Bernam Timur development expiring in 2095 District of Batang Padang Perak Darul Ridzuan
Parcel A & Parcel B Retail and car park 2 yrs Leasehold 6,332 sq.m 328,983 Lots 629pt, 628pt and 974pt complex expiring in 2096 44-2, 44-1pt, 631pt, 630pt, 633pt 632pt, 637pt, 636pt, 635pt, 634pt 639pt, 638pt, 975pt, 22-4pt, 22-3pt 641pt, 640pt, 643pt, 642pt, 645pt 644pt, 647pt, 22-1pt and 18-1pt of TS 16 Republic of Singapore Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
PT 6108, H.S.(D) 51058 Land with office 25 yrs Freehold 153 sq.m 1,309 Mukim of Sungai Buloh building District of Petaling (74, Jalan SS 2/39, Damansara Utama, Petaling Jaya)
239 GM 939 (EMR 2887), Lot 1272, Land held for — Freehold 21.12 hectares 6,491 GM 937 (EMR 2722), Lot 215, development GM 938 (EMR 2738), Lot 961, GM 940 (EMR 2888), Lot 1273, GRN 6035 (CT 3033), Lot 1602, GRN 6036 (CT 3034), Lot 1791, 20 GM 216 (EMR 1481), Lot 2619 05 MG 22 (EMR 1483), Lot 2622 Mukim of Bentong, Pahang 2005 ANNUAL REPORT DRB-HICOM BERHAD
H.S.(M) 23913, PT No. 25752 Land held for — Leasehold 99 years 2.023 hectares 4,691 Mukim of Kuantan, development expiring in 2090 District of Kuantan, Pahang
Block 40, Taman Bunga Negara 21 units of low cost 10 yrs Freehold 1,163 sq.m 525
(HICOM Sector B) flats for staff hostel (203430-W) Seksyen 26/27, Shah Alam Selangor Darul Ehsan
Seri Hijauan Condominium Condominium 11 yrs Freehold 199 sq.m 356 A-17-01 and C-4-12 Jalan Bukit Hijau 26/24 Seri Hijauan No. 1 Seksyen 26, 40400 Shah Alam Selangor Darul Ehsan
H.S.(D) 29654 & 29655 Land with factory 15 yrs and Freehold 20,080 sq.m 14,300 Lot 5032 and 5033 and office building 10 yrs Jalan Teluk Datuk 28/40 Seksyen 28, 40000 Shah Alam Selangor Darul Ehsan
Lot No. 1 – 4 H.S.(D) 6976 & 6977 Land with factory 2 yrs Freehold 40,807 sq.m 10,418 PT No. 10191 & 10192 and office building Mukim of Ulu Bernam Timur District of Batang Padang, Perak
Head Office, Jalan KLIA S6 Office, Cargo Complex, 7 yrs Leasehold 50 years 48,211 sq.m 147,202 Southern Support Zone Workshop and Inflight expiring in 2048 KL International Airport Catering 64000 Sepang Selangor Darul Ehsan Properties of DRB-HICOM Group
for the financial year ended 31 March 2005
Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
PT 714 H.S.(D) 63709 Land with office, 9 – 13 yrs Freehold 39,841 sq.m 20,213 Mukim of Damansara factory and District of Petaling warehouse building Lot 75A & 76, Jalan Sementa 27/91 Seksyen 27, 40000 Shah Alam 240 Selangor Darul Ehsan
Block 35, Phase 5 35 units of low cost 10 yrs Freehold 1,938 sq.m 612 Taman Bunga Negara flats for staff hostel (HICOM Sector B) 20 Seksyen 27, Shah Alam 05 Selangor Darul Ehsan
PT 713 H.S.(D) 63708 R&D building under 3 yrs Freehold 12,140 sq.m 4,472 2005 ANNUAL REPORT DRB-HICOM BERHAD Mukim of Damansara construction District of Petaling
64/30 Moo 4, Land with buildings 2 yrs Freehold 22,384 sq.m 10,681 Eastern Seaboard Industrial Estate comprising office factory, T. Pluakdaeng, A. Pluakdaeng warehouse &
(203430-W) Rayong 21140, Thailand painting line
H.S.(D) 6976 PT No. 10191 & Vacant land 1 yr Freehold 52,162 sq.m 6,738 H.S.(D) 6977 PT No. 10192 Tanjung Malim Perak Darul Ridzuan
Lot 53A Land 1 yr Freehold 37,919 sq.m 1,225 Kawasan Perindustrian Berat Gurun, Mukim of Gurun Kedah Darul Aman
Kawasan Perindustrian Factory and 8 yrs Leasehold 66 years 101,582 sq.m 102,225 Peramu Jaya, P.O. Box 6 office building expiring in year 2062 26000 Pekan, Pahang
Lot 1.01, Menara PGRM Headquarters/ 8 yrs Leasehold 1,191 sq.m 4,759 No. 8, Jalan Pudu Ulu, showroom Commercial Cheras, 56100 Kuala Lumpur Unit – 99 yrs
Lot 1888, Geran Mukim 253 Vacant land — Freehold land 23,674 sq.m 2,550 Mukim of Pasir Panjang Port Dickson, Negeri Sembilan Approx. Net book Description/ age of Approx. value as at Location existing use building Tenure area 31/03/2005 RM’000
16, Jalan Tan Siew Sin Eleven storey office 44 yrs Freehold 487 sq.m 8,500 50050 Kuala Lumpur building
1, Jalan Segunting Six storey office 39 yrs Leasehold 949 sq.m 9,000 88000 Kota Kinabalu, Sabah building
241 42, Jalan Merdeka Three storey office 9 yrs Leasehold 143 sq.m 400 Taman Melaka Raya building 75000 Melaka
97, Jalan SS21/1A, Three and half storey 15 yrs Freehold 153 sq.m 1,470 Damansara Utama midterrace shop office 20 47400 Petaling Jaya building 05
Geran No. 43549, Lot 77170 Land held for residential — Freehold 996,053 sq.m 59,742 2005 ANNUAL REPORT DRB-HICOM BERHAD Geran No. 43552, Lot 77174 development over 2km Geran No. 31576, Lot 77175 river view frontage Mukim and District of Klang Selangor Darul Ehsan
Lot 105, Section 088A Land with 2 storey 33 yrs Leasehold 99 years 1,723 sq.m 2,143
64, Jalan Damai, bungalow expiring (203430-W) 55000 Kuala Lumpur 31 December 2064
PT37, Bandar Shah Alam Land with single storey 21 yrs Leasehold 99 years 7,386 sq.m 6,237 District of Petaling detached factory expiring Selangor Darul Ehsan with 3 storey factory 5 September 2083
H.S.(M) 27801, PT27436 Land held for the — Leasehold 99 years 372 sq.m 120 Lot 444, Kg. Cheras Baru proposed development expiring Mukim of Ampang of apartments, shops, 10 October 2090 District of Ulu Langat shop offices known Selangor Darul Ehsan as ‘Glenview Villa’ Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Fifteenth Annual General Meeting of DRB-HICOM Berhad (“the Company”) will be held at the Glenmarie Ballroom, The Pan Pacific Glenmarie Resort, No. 1, Jalan Usahawan U1/8, Seksyen U1, 40150 Shah Alam, Selangor Darul Ehsan on Thursday, 22 September 2005 at 4.00 p.m. to transact the following business:-
1. To receive and adopt the Audited Financial 6. To re-appoint Messrs PricewaterhouseCoopers as Statements for the financial year ended 31 March Auditors and to authorise the Directors to fix 2005 together with the Directors’ and Auditors’ their remuneration. (Resolution 8) 242 Reports thereon. (Resolution 1) 7. As Special Business:- 2. To approve a first and final dividend of 3.0 sen To consider and if thought fit, to pass the gross per share less income tax of 28% for the following resolutions, with or without any 20 financial year ended 31 March 2005. modification, as Ordinary Resolutions of the 05 (Resolution 2) Company:-
3. To approve the payment of Directors’ fees for (A) AUTHORITY FOR THE DIRECTORS TO ISSUE 2005 ANNUAL REPORT DRB-HICOM BERHAD the financial year ended 31 March 2005. SHARES PURSUANT TO THE EMPLOYEES’ (Resolution 3) SHARE OPTION SCHEME “THAT pursuant to the DRB-HICOM Berhad 4. To re-elect the following Directors who retire in Employees’ Share Option Scheme (“the accordance with the Company’s Articles of Scheme”) as approved at the Extraordinary
(203430-W) Association:- General Meeting of the Company held on Article 80 26 April 2000, approval be and is hereby (i) Tan Sri Dato’ Seri Mohd Saleh Sulong given to the Directors pursuant to Section (Resolution 4) 132D of the Companies Act, 1965, to issue (ii) Dato’ Syed Md. Amin Syed Jan Aljeffri shares in the Company at any time and in (Resolution 5) accordance with the terms and conditions of the Scheme.” (Resolution 9) Article 86 (i) Datuk Mohd Khamil Jamil (Resolution 6) (B) GENERAL AUTHORITY FOR THE DIRECTORS TO ISSUE SHARES 5. To consider and if thought fit, to pass the following resolution in accordance with Section “THAT subject always to the Companies Act, 129 of the Companies Act, 1965:- 1965, and the approvals of the relevant Governmental and/or regulatory authorities, “THAT Dato’ Haji Mohamad Nor Mohamad who the Directors be and are hereby empowered, is over the age of seventy years and retiring in pursuant to Section 132D of the Companies accordance with Section 129 of the Companies Act, 1965, to issue shares in the Company Act, 1965, be and is hereby re-appointed a from time to time at such price, upon such Director of the Company to hold office until the terms and conditions, for such purposes and next Annual General Meeting of the Company.” to such person or persons whomsoever as (Resolution 7) the Directors may deem fit provided that the aggregate number of shares issued NOTES:- pursuant to this resolution does not exceed 1. A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy or proxies to 10% of the issued share capital of the attend and vote in his stead. A proxy may but need not Company for the time being AND THAT the be a member of the Company. Directors be and are also empowered to 2. The instrument appointing a proxy shall be in writing under obtain approval from Bursa Malaysia the hand of the appointor or his attorney duly authorised in Securities Berhad for the listing of and writing or if the appointor is a corporation either under its quotation for the additional shares so issued common seal or under the hand of an officer or attorney duly authorised in writing. AND THAT such authority shall continue in
force until the conclusion of the next 3. The instrument appointing a proxy together with the power 243 Annual General Meeting of the Company.” of attorney or other authority, if any, under which it is (Resolution 10) signed or a certified copy thereof, shall be deposited at the Share Registrar’s Office, PFA Registration Services Sdn. Bhd., 1301, Level 13, Uptown 1, No. 1, Jalan SS21/58, Damansara Uptown, 47400 Petaling Jaya, Selangor Darul Ehsan not less NOTICE OF DIVIDEND PAYMENT than forty-eight (48) hours before the time set for holding 20 this meeting or at any adjournment thereof. AND BOOK CLOSURE 05 NOTICE IS HEREBY GIVEN that a first and final EXPLANATORY NOTES ON SPECIAL BUSINESS:- 1. The Ordinary Resolution proposed under Agenda 7A, if passed, dividend of 3.0 sen gross per share less income tax of 2005 ANNUAL REPORT DRB-HICOM BERHAD will empower the Directors to issue shares in the Company 28% in respect of the financial year ended 31 March pursuant to the terms and conditions of the Employees’ Share 2005, if approved by the shareholders at the Annual Option Scheme which was approved at the Extraordinary General Meeting, will be paid on 18 October 2005 to General Meeting of the Company held on 26 April 2000. the shareholders whose names appear in the Record 2. The Ordinary Resolution proposed under Agenda 7B, if passed, of Depositors of the Company at the close of business will give the Directors of the Company, from the date of the on 23 September 2005. forthcoming Annual General Meeting, authority to issue (203430-W) ordinary shares from the unissued capital of the Company being for such purposes as the Directors consider would be in A depositor shall qualify for entitlement to the the interest of the Company. This authority will, unless revoked dividend only in respect of:- or varied by the Company in a general meeting, expire at the conclusion of the next Annual General Meeting or the (a) Shares transferred into the depositor’s securities expiration of the period within which the next Annual General account before 4.00 p.m. on 23 September 2005 Meeting is required by law to be held, whichever is earlier. in respect of ordinary transfers; and
(b) Shares bought on Bursa Malaysia Securities Berhad on a cum-entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.
By Order of the Board
CHOO CHOCK FAH (LS 04409) CHANG PIE HOON (MAICSA 7000388) Company Secretaries
Shah Alam, Selangor Darul Ehsan 30 August 2005 Statement Accompanying Notice of Annual General Meeting
Pursuant to Paragraph 8.28 (2) of Bursa Securities Listing Requirements
1. NAMES OF DIRECTORS WHO ARE STANDING FOR RE-ELECTION/RE-APPOINTMENT:- (A) Directors retiring pursuant to Article 80 of the Company’s Articles of Association:- (i) Tan Sri Dato’ Seri Mohd Saleh Sulong (ii) Dato’ Syed Md. Amin Syed Jan Aljeffri
(B) Director retiring pursuant to Article 86 of the Company’s Articles of Association:- – Datuk Mohd Khamil Jamil
(C) Director retiring pursuant to Section 129 of the Companies Act, 1965:- – Dato’ Haji Mohamad Nor Mohamad 244 The details of the abovenamed Directors who are standing for re-election/re-appointment are set out in the Directors’ Profiles (pages 14 to 21 of the Annual Report); while their securities holdings (where applicable) are set out in the Analysis of Shareholdings – Directors’ Interests in the Company and Related Corporations (pages 225 to 226 of the Annual Report). 20 05 2. DETAILS OF ATTENDANCE OF DIRECTORS AT BOARD MEETINGS A total of six Board Meetings were held during the financial year ended 31 March 2005. Details of attendance 2005 ANNUAL REPORT DRB-HICOM BERHAD of Directors holding office at the end of the financial year are as follows:-
Name Attendance Tan Sri Dato’ Seri Mohd Saleh Sulong 6 out of 6 meetings Dato’ Haji Mohamad Nor Mohamad 6 out of 6 meetings Datin Hjh. Safiah Basrah 5 out of 6 meetings
(203430-W) Ibrahim Taib 6 out of 6 meetings Dato’ Yatina Yahaya 5 out of 6 meetings Dato’ Maznah Abdul Jalil 6 out of 6 meetings Dato’ Mohd Nor Mohamad 6 out of 6 meetings Datuk Haji Faisal @ Ibrahim Siraj 6 out of 6 meetings Mark Aziz Salleh 5 out of 6 meetings Dato’ B. Bhaskaran Pillai 6 out of 6 meetings Dato’ Syed Md. Amin Syed Jan Aljeffri 4 out of 6 meetings Low Nyap Heng 5 out of 6 meetings Lee Yoon Min 6 out of 6 meetings Maj. Gen. (Rtd) Dato’ Amir Baharudin 6 out of 6 meetings
3. DATE, TIME AND PLACE OF THE MEETING:- Type of Meeting Date Time Place Fifteenth Thursday, 4.00 p.m. Glenmarie Ballroom Annual General Meeting 22 September 2005 The Pan Pacific Glenmarie Resort, No. 1, Jalan Usahawan U1/8, Seksyen U1, 40150 Shah Alam, Selangor Darul Ehsan Form of Proxy
Number of Shares held
I/We NRIC/Company No. (FULL NAME IN BLOCK LETTERS) of (FULL ADDRESS) being a Member/Members of DRB-HICOM BERHAD, hereby appoint
(FULL NAME IN BLOCK LETTERS) of (FULL ADDRESS) or failing him/her, the Chairman of the Meeting as my/our proxy to attend and vote for me/us on my/our behalf at the FIFTEENTH ANNUAL GENERAL MEETING of the Company to be held at the Glenmarie Ballroom, The Pan Pacific Glenmarie Resort, No. 1, Jalan Usahawan U1/8, Seksyen U1, 40150 Shah Alam, Selangor Darul Ehsan on Thursday, 22 September 2005 at 4.00 p.m. and at any adjournment thereof. The proxy is to vote in the manner indicated below with an “X” in the appropriate spaces. If no specific direction as to voting is given, the proxy will vote or abstain from voting at his/her discretion.
Resolutions For Against Resolution 1 Receipt and adoption of the Audited Financial Statements for the financial year 20 ended 31 March 2005. 05 Resolution 2 Approval for the first and final dividend of 3.0 sen gross per share less income tax of 28% for the financial year ended 31 March 2005. 2005 ANNUAL REPORT DRB-HICOM BERHAD Resolution 3 Approval for the payment of the Directors’ fees for the financial year ended 31 March 2005. Resolution 4 Re-election of Tan Sri Dato’ Seri Mohd Saleh Sulong, a Director retiring under Article 80 of the Company’s Articles of Association. Resolution 5 Re-election of Dato’ Syed Md. Amin Syed Jan Aljeffri, a Director retiring under Article 80 of the Company’s Articles of Association. Resolution 6 Re-election of Datuk Mohd Khamil Jamil, a Director retiring under Article 86 (203430-W) of the Company’s Articles of Association. Resolution 7 Re-appointment of Dato’ Haji Mohamad Nor Mohamad, as Director pursuant to Section 129 of the Companies Act, 1965. Resolution 8 Re-appointment of Messrs PricewaterhouseCoopers as Auditors and authorising the Directors to fix their remuneration. Resolution 9 Authority for the Directors to issue shares pursuant to the Employees’ Share Option Scheme. Resolution 10 General Authority for the Directors to issue shares.
Dated this ______day of ______2005.
Signature(s)/Company Seal
NOTES AND INSTRUCTIONS:- 1. A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a member of the Company. 2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation either under its common seal or under the hand of an officer or attorney duly authorised in writing. 3. The instrument appointing a proxy together with the power of attorney or other authority, if any, under which it is signed or a certified copy thereof, shall be deposited at the Share Registrar’s Office, PFA Registration Services Sdn Bhd, 1301, Level 13, Uptown 1, No. 1, Jalan SS21/58, Damansara Uptown, 47400 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding this meeting or at any adjournment thereof. STAMP
PFA Registration Services Sdn Bhd (192340-W) Registrar for DRB-HICOM Berhad Level 13, Uptown 1 No. 1, Jalan SS21/58 Damansara Uptown 47400 Petaling Jaya Selangor Darul Ehsan Malaysia Borang Proksi
Bilangan Saham
Saya/Kami No. K/P/Syarikat (NAMA PENUH DENGAN HURUF BESAR) dari (ALAMAT PENUH) sebagai ahli/ahli-ahli DRB-HICOM BERHAD, dengan ini melantik
(NAMA PENUH DENGAN HURUF BESAR) dari (ALAMAT PENUH) atau sekiranya beliau tidak dapat hadir, melantik Pengerusi Mesyuarat sebagai proksi saya/kami untuk mengundi bagi pihak saya/kami di MESYUARAT AGUNG TAHUNAN YANG KE LIMABELAS Syarikat yang akan diadakan di Glenmarie Ballroom, The Pan Pacific Glenmarie Resort, No. 1, Jalan Usahawan U1/8, Seksyen U1, 40150 Shah Alam, Selangor Darul Ehsan pada hari Khamis, 22 September 2005 jam 4.00 petang dan pada sebarang penangguhannya. Proksi hendaklah mengundi mengikut cara yang dinyatakan di bawah, dengan menandakan “X” dalam ruang yang ditetapkan. Jika tiada sebarang arahan khusus diberikan mengenai pengundian, proksi akan mengundi atau berkecuali mengikut budi bicaranya.
Resolusi-Resolusi Menyokong Menentang Resolusi 1 Penerimaan Penyata Kewangan yang telah diaudit bagi tahun kewangan 20 berakhir 31 Mac 2005 dan Laporan-laporan Para Pengarah dan Juruaudit mengenainya. 05 Resolusi 2 Kelulusan dividen pertama dan akhir sebanyak 3.0 sen kasar sesaham
ditolak cukai pendapatan sebanyak 28% bagi tahun kewangan berakhir 2005 ANNUAL REPORT DRB-HICOM BERHAD 31 Mac 2005. Resolusi 3 Kelulusan ganjaran Para Pengarah bagi tahun kewangan berakhir 31 Mac 2005. Resolusi 4 Pemilihan semula Tan Sri Dato’ Seri Mohd Saleh Sulong, Pengarah yang bersara menurut Artikel 80, Tataurusan Syarikat.
Resolusi 5 Pemilihan semula Dato’ Syed Md. Amin Syed Jan Aljeffri, Pengarah yang (203430-W) bersara menurut Artikel 80, Tataurusan Syarikat. Resolusi 6 Pemilihan semula Datuk Mohd Khamil Jamil, Pengarah yang bersara menurut Artikel 86, Tataurusan Syarikat. Resolusi 7 Perlantikan semula Dato’ Haji Mohamad Nor Mohamad, Pengarah yang bersara menurut Seksyen 129, Akta Syarikat, 1965. Resolusi 8 Perlantikan semula Tetuan PricewaterhouseCoopers sebagai Juruaudit Syarikat dan pemberian kuasa kepada Para Pengarah untuk menetapkan ganjaran mereka. Resolusi 9 Kuasa kepada Para Pengarah untuk menerbitkan saham selaras dengan Skim Opsyen Saham Kakitangan. Resolusi 10 Kuasa Umum kepada Para Pengarah untuk menerbitkan saham.
Bertarikh ______haribulan ______2005.
Tandatangan /Meterai NOTA-NOTA:- 1. Seseorang ahli Syarikat yang berhak menghadiri dan mengundi di mesyuarat ini, berhak melantik seorang proksi atau proksi-proksi untuk menghadiri dan mengundi bagi pihaknya. Seseorang proksi tidak semestinya ahli Syarikat. 2. Suratcara perlantikan proksi hendaklah secara bertulis dan ditandatangani oleh pelantik atau wakil beliau yang diberi kuasa secara bertulis, atau sekiranya pelantik itu sebuah perbadanan sama ada menurut meterai rasminya atau atas arahan pegawai atau wakil yang diberi kuasa secara bertulis. 3. Suratcara perlantikan proksi berserta surat kuasa wakil atau pihak berkuasa lain, sekiranya ada, yang ditandatangani atau merupakan salinan yang disahkan perlu dihantar ke Pejabat Pendaftar Saham, PFA Registration Services Sdn Bhd, 1301, Aras 13, Uptown 1, No. 1, Jalan SS21/58, Damansara Uptown, 47400 Petaling Jaya, Selangor Darul Ehsan, tidak lewat daripada empat puluh lapan (48) jam sebelum waktu yang dijadualkan untuk mesyuarat berlangsung atau pada sebarang penangguhannya. SETEM
PFA Registration Services Sdn Bhd (192340-W) Pendaftar kepada DRB-HICOM Berhad Aras 13, Uptown 1 No. 1, Jalan SS21/58 Damansara Uptown 47400 Petaling Jaya Selangor Darul Ehsan Malaysia CORPORATE SONG
DRB-HICOMKU Bumi mana kaki berpijak Di situlah langit dijunjung Di sini kami tinggalkan jejak Mendukung nama DRB-HICOM
Kami kukuhkan jati diri Jujur pada diri sendiri Cekap bekerja seikhlas hati Hasil usaha pasti berkualiti
Memegang amanah bangsa Malaysia Kami bersemangat tiap masa Di pentas dunia namamu mengharum Tertera lambang DRB-HICOM
Bertekad menambahkan ilmu Di alaf baru terus maju Tetap setia selamanya denganmu Kebanggaanku DRB-HICOMku