Innovation in Motion
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Innovation in Motion PROTON ANNUAL REPORT 2009 Success. Challenges. Responsibility. PROTON Holdings Berhad (Company No.623177-A) UNITED KINGDOM TURKEY SYRIA Cyprus CHINA Lebanon IRAQ EGYPT IRAN Cairo Kingdom of Bahrain Qatar TAIWAN United Arab Emirates BANGLADESH Oman SAUDI THAILAND ARABIA Yemen MALAYSIA BRUNEI SINGAPORE INDONESIA MAURITIUS AUSTRALIA SOUTH AFRICA Innovation in Motion The essence of PROTON lies in its cars. With the Group striving to reach new heights with the right car, for the right market, at the right price and at the right time, PROTON is truly Malaysian ‘Innovation in Motion’ with global presence. By constantly innovating itself, PROTON continues to build a presence in domestic and international markets. EVORA – the first new model to be introduced by LOTUS in 13 years, was unveiled at the British Motorshow in July 2008 to rave reviews from the foreign media. EXORA – the country’s first homegrown MPV, was officiated by Prime Minister YAB Dato’ Sri Mohd Najib Bin Tun Abdul Razak in the presence of ‘Bapa PROTON’ Tun Dr Mahathir Mohamad. A Life Companion PROTON is synonymous with building cars and mobilising Malaysians. It has brought the country forward by leaps and bounds in the automobile industry. From our first ever production, the Saga, to the latest launch of the Exora - Malaysia’s first home-grown MPV, the brand has indeed been faithfully planning, designing, and manufacturing cars with Malaysians’ needs and wants in mind. At PROTON, it is our vision to become Asia’s premier automotive brand; a brand that connects with people and provides products which become life companions. PROTON has a unique ability to understand people’s needs and provide the right product with efficient service and genuine quality. We build cars with care for passenger safety and genuine quality in order to provide high durability and lifelong companionship. Our wide portfolio ensures that we meet smart personality needs in terms of design, power and size for different age groups so PROTON can be the right companion for life. It is an integral part of our business and our brand, without which, we would not have either share of market or share of heart. 1985 marked a momentous year in Malaysia’s history – it was the year in which the country’s first national car was born. Today, PROTON has emerged as the only full-fledged car manufacturer in the country. PROTON’s current line- up includes the Saga, Iswara, Wira, Satria, Perdana, Putra, Satria GTi, Juara, Waja, Arena (Jumbuck), Gen.2, Savvy, Satria Neo, Persona and our very latest, the Exora. PROTON not only commands a substantial share of the domestic market for passenger cars, but over the years we have also been building distribution networks in key market centres across the four regions of South East Asia, the Middle East, United Kingdom/Western Europe and Australia, where PROTON has become a hit with many car buyers. The imperative factor for success lies in the people and the products. PROTON employs a brand philosophy that spells out Companionship. PROTON’s core values of Companionship are in the areas of placing customers first, even before profits. Customer satisfaction and lifelong relationships stay at the heart of our organisation. At PROTON, we nurture the power of humanity. Our attitude remains humble, approachable and thoughtful. Togetherness and Teamwork make us stronger, better and more proactive. We work towards creating a unique bond between our staff, customers and our product promise – “Life Companion”. PROTON constantly strives for manufacturing excellence and continuous quality improvements, while introducing cost reduction initiatives and vendor rationalisation plans to become a more dynamic and competitive car manufacturer. Today, we are able to differentiate ourselves from the others, stand out from the competition, influence customers’ purchase decision, build customer loyalty and as a result boost the company’s financial performance, image and brand. PROTON 2009 ANNUAL REPORT 1 Corporate Mantra & Core Values The PROTON Way PROTON employees are dedicated to the Group’s long-term success. Every PROTON employee shall operate under the Group’s shared values and rely on these values to guide their behaviour with each other and the customers. These values form the foundation of how we work and conduct business. 2 Corporate Mantra & Core Values Core Ideology Audacious Goal Purpose Driving Malaysia’s transformation into a leader in We are a passionate group of people working technology and quality. together, creating exhilarating products and services for global markets, synonymous with great styling, Vivid Description innovation and leading technology. We deliver innovative and superior quality products and services. Our brands inspire confidence and pride. Core Values Quality Teamwork We make products that work the first time, every We trust, respect and share knowledge to foster time. teamwork at the workplace. Customer Focus Speed Customers are the source of our income. We deliver We have a “can-do” attitude and will not rest until on our promises to our customers’ satisfaction. the problem is solved. We have an inherent sense of urgency in everything we do. Innovation We challenge convention, always seeking new and Caring better ways of doing things. We view change as As a responsible corporate citizen, we invest in safety, opportunity. health and the environment. PROTON 2009 ANNUAL REPORT 3 PROTON’s Policies Environmental, Health and Safety Policy The Company’s mission is to strive towards excellence • Provide adequate information and assistance in all aspects of PROTON’s operations. In achieving to our employees and our neighbours to avoid our goal, it is necessary to promote and protect the unacceptable effects on the environment. health and safety of PROTON employees and ensure that the environment is unharmed. To assist the Company in achieving our goals, we shall work together and towards this end, employees The Group is committed to providing a conducive, shall:- safe and healthy working environment for our • Abide by all rules and regulations concerning the employees and to ensure this, it is our policy to:- workplace; • Take responsibility for the safety and health of • Utilise all the facilities provided by the our employees; management in a safe and proper manner; • Provide the appropriate resources; • Maintain good work practices; • Take all action necessary to remedy any non- • Actively participate in all the Environmental, compliance; Health and Safety (EHS) programmes. • Monitor and maintain high standards in environmental protection as well as health and This is our objective and it is our intention to put safety measures. this EHS Policy into action and to make it our way of life. In implementing the Company’s policy, we shall, where reasonably practicable:- Environment, health and safety are our priority. • Comply with all rules and regulations concerning the environment, health and safety; • Provide all the necessary facilities and equipment for the employees; • Actively promote programmes for the employees to instill awareness for the safety and health of the employees, our business associates and the public; 4 PROTON’s Policies Quality Policy To achieve the above commitment, PROTON will:- • Ensure quality as the Number One work ethics in all operations; • Establish an effective and efficient Quality System based on the requirements of ISO 9001:2008 standards; • Provide adequate skills and knowledge to all levels of personnel through systematic and structured training programmes; • Provide a culture and environment of continuous learning, improvement and innovation towards total quality excellence; • Provide a conducive, safe and healthy working environment in which people like to work and prosper. PROTON 2009 ANNUAL REPORT 5 PROTON 2009 Annual Report Contents 02 Corporate Mantra & Core Values 04 PROTON’s Policies 10 Financial Calendar 11 Key Financial Indicators 12 Summary of Financial Highlights for Five Years 16 Corporate Profile 20 Awards and Recognition 22 Corporate Information 24 Group Operations 26 Board of Directors 28 Profile of Directors 36 PROTON Group Management Committee Members 38 Other Senior Officers 42 Chairman’s Statement 58 Managing Director’s Review 6 68 Operations Review 138 Statement on Corporate Governance 156 Additional Compliance Information 160 Statement on Internal Control 166 Risk Management 172 Calendar of Events 2008 - 2009 180 Statutory Financial Statements 283 Shareholding Statistics 286 Properties Owned by PROTON Group 292 Share Price and Volume Traded 293 Notice of Annual General Meeting 295 Statement Accompanying the Notice of Annual General Meeting Form of Proxy PROTON 2009 ANNUAL REPORT 7 Passion to Innovate Passion to Innovate By pushing the envelope of innovation, PROTON strives to build vehicles that go beyond the expected. Innovation in Motion Financial Calendar Announcement of Unaudited First Date of Payment of the interim 27 Aug 2008 (1st) Quarter results for the period 14 Jan 2009 dividend of 5 sen (less 25% ended 30 June 2008 income tax) for the financial year ended 31 March 2009 Fifth (5th) 28 Aug 2008 Annual General Meeting Announcement of Unaudited 27 Feb 2009 Third (3rd) Quarter results for the Announcement of Unaudited period ended 31 December 2008 27 Nov 2008 Second (2nd) Quarter results for the period ended 30 September Announcement of Unaudited 29 May 2009 2008 and declaration of an interim Fourth (4th) Quarter results for the dividend of 5 sen per share (less period ended