DRB-HICOM Berhad DRB-HICOM DEFINITION: REACHING Borders, Frontiers, Edge, BOUNDARIES Limits, Margin Periphery. (Incorporated in Malaysia) BEYOND That which indicates or fixes a limit of extent, (203430-W) (Incorporated in Malaysia) (203430-W) (Incorporated BOUNDARIES or marks a bound, as of a territory, a bounding 365 DAYS or separating line; a real or imaginary limit. 24 HOURS RE A Rationale CHING BEYOND A dramatic moment on earth, seen from the glimpse of an all emerging sun on the horizon, brings forth the light and surging energy of a new day and its dawning. Earth’s constant rotation (Incorporated in Malaysia) encompasses time, distance and space that in effect, has much influence on our surrounding environment, our lives and the relationship of our existence to everything that we do. B O U ND Drawing parallel to a world demarcated by boundaries, the infinite perimeters of unabated depth lie in the realm of the imagination. AR Stirring and fostering creativity, imagination is the catalyst of all IE S innovation that permeates every sphere of our business operations. DRB-HICOM is what and where we are today because of the spark that equates to our edge in the way we run our businesses. Annual Report This cover holds the promise of DRB-HICOM’s strategic step it takes to consistently strike a balance of its diversity, reaffirmed in Level 5, Wisma DRB-HICOM, No. 2, Jalan Usahawan U1/8, Seksyen U1, 40150 Shah Alam, Selangor Darul Ehsan a belief that there are no limits to our imagination, if we set our 603 2052 8000 603 2052 8099 minds to it. The Group is reaching beyond boundaries, turning ideas 2011 into value, crafting solutions and establishing new markets through ANNUAL REPORT 2 011 unprecedented opportunities. CHARTING ON TO THE NEXT FRONTIER The solar system as we know it supports the aligned network that forms the cohesion in the empire of the sun, and its pivotal role as a long-lived body emanating the constant conditions of warmth and light that are necessary for life on our earth, defines our very own existence. At DRB-HICOM, we draw inspiration from our journey of achievements as a diversified business entity that derives strength from our very own available resources. Our path that we took remains strategic, balancing and charting on to the next frontier that awaits with infinite anticipation. REACHING BEYOND BOUNDARIES Contents 01 04 07 HIGHLIGHTS LEADERSHIP KEY INITIATIVES Notice of Annual General Meeting 002 Board of Directors 040 Human Capital Development 138 Statement Accompanying Profile of Directors 042 Corporate Responsibility 141 Notice of Annual General Meeting 003 Management Team 050 Profile of Management Team 052 08 02 FINANCIAL STATEMENTS CORPORATE DISCLOSURE 05 Directors’ Report 148 Corporate Profile 009 AccOUNTABILITY Financial Statements Media Highlights 010 Statement on Corporate Governance 060 – Statements of Comprehensive Income 153 Calendar of Events 012 Directors’ Statement on Internal Control 074 – Statements of Financial Position 154 Awards & Recognitions FY 2010-2011 020 Audit Committee Report 077 – Statements of Changes in Equity 158 Financial Calendar 022 Additional Compliance Information 082 – Statements of Cash Flows 161 Corporate Information 023 Statement of Directors’ Responsibility 084 – Notes to the Financial Statements 165 Group Corporate Structure 024 Risk Management 085 Statement by Directors 280 Group Corporate Structure by Sector 026 Code of Ethics and Business Practice 087 Statutory Declaration 281 Investor Relations 028 Independent Auditors’ Report 282 06 03 PERSPECTIVE 09 PERFORMANCE REVIEW Chairman’s Statement 092 OTHER INFORMATION Group’s Five Years Financial Highlights 034 Group Managing Director’s Review of Operations 106 Analysis of Shareholdings 285 – Automotive Sector 114 Share Performance Chart 288 – Services Sector 122 Material Properties of DRB-HICOM Group 289 – Property, Asset & Construction Sector 128 Group Corporate Directory 291 Form of Proxy • DRB-HicOM BERHAD 002 Notice of Annual AnnUAL report 2011 General Meeting NOTICE IS HEREBY GIVEN that the Twenty-First Annual General Meeting of DRB-HICOM Berhad (“the Company”) will be held at the Glenmarie Ballroom, Holiday Inn Kuala Lumpur Glenmarie, No. 1, Jalan Usahawan U1/8, Seksyen U1, 40250 Shah Alam, Selangor Darul Ehsan on Thursday, 8 September 2011 at 9.00 a.m. for the following purposes:- ORDINARY BUSINESS 1. To receive and adopt the Audited Financial Statements for the financial year ended 31 March 2011 together with the Reports of Directors and Independent Auditors thereon. 2. To approve the declaration of a final gross dividend of 4.00 sen per share, less taxation of 25% for the financial year ended 31 March 2011. (Resolution 1) 3. To re-elect the following Directors who retire by rotation in accordance with Article 79 of the Company’s Articles of Association:- (i) YBhg Dato’ Ibrahim bin Taib. (Resolution 2) (ii) YBhg Dato’ Syed Mohamad bin Syed Murtaza. (Resolution 3) 4. To consider and if thought fit, to pass the following Ordinary Resolutions in accordance with Section 129 of the Companies Act, 1965:- (i) “THAT YBhg Datuk Haji Abdul Rahman bin Mohd Ramli, retiring pursuant to Section 129 of the Companies Act, 1965, be and is hereby reappointed a Director of the Company to hold office until the conclusion of the next Annual General Meeting.” (Resolution 4) (ii) “THAT Mr Ong Ie Cheong, retiring pursuant to Section 129 of the Companies Act, 1965, be and is hereby reappointed a Director of the Company to hold office until the conclusion of the next Annual General Meeting.” (Resolution 5) 5. To reappoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors to fix their remuneration. (Resolution 6) REACHING DRB-HicOM BERHAD BEYOND AnnUAL report 2011 003 BOUNDARIES NOTICE OF DIVIDEND PAYMENT Statement Accompanying NOTICE IS HEREBY GIVEN that the final gross dividend of 4.00 sen per share, less taxation of 25% in respect of the financial year ended 31 March 2011, if approved by the shareholders at the Annual General Meeting, will be paid on Notice of Annual General 7 October 2011 to the shareholders whose names appear in the Record of Depositors of the Company at the close of business on 15 September 2011. Meeting A depositor shall qualify for entitlement to the dividend only in respect of:- Names of Directors who are standing for re-election/ reappointment:- (a) Shares deposited into the depositor’s securities account before 12.30 p.m. on 13 September 2011 in respect of shares exempted from mandatory deposit; Under Article 79 of the Company’s Articles of Association (b) Shares transferred into the depositor’s securities account before 4.00 p.m. on 15 September 2011 in respect of transfers; YBhg Dato’ Ibrahim bin Taib and YBhg Dato’ Syed Mohamad bin Syed Murtaza (c) Shares bought on Bursa Malaysia Securities Berhad on a cum-entitlement basis according to the Rules of Bursa Malaysia Under Section 129 of the Companies Act, 1965 Securities Berhad. YBhg Datuk Haji Abdul Rahman bin Mohd Ramli Mr Ong Ie Cheong By Order of the Board The details of the abovenamed Directors who are standing for re-election/reappointment are set out in the Directors’ CHAN CHOY LIN, CAROL (MIA 3930) Profile (pages 042 to 049 of the Annual Report). Company Secretary Shah Alam, Selangor Darul Ehsan 15 August 2011 NOTES:- 1. Agenda 1 – Audited Financial Statements This agenda item is meant for discussion only as the provision of Section 169 (1) of the Companies Act, 1965 does not require a formal approval of the shareholders and hence is not put forward for voting. 2. Proxy a. A member entitled to attend the meeting may appoint not more than two (2) proxies who may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. b. 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. c. 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, Symphony Share Registrars Sdn. Bhd., Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding this meeting. DRB-HicOM BERHAD AnnUAL report 2011 004 Synergy in Diversity As in the beginnings of a solar system which brought the highly complex “Fusion” of the Sun and its planets, the diversified businesses of DRB-HICOM draws parallel in the synergy of its Group companies that is poised to become truly world class. REACHING DRB-HicOM BERHAD BEYOND AnnUAL report 2011 005 BOUNDARIES DRB-HicOM BERHAD AnnUAL report 2011 006 REACHING DRB-HicOM BERHAD BEYOND AnnUAL report 2011 007 BOUNDARIES EXCELLENCE Our values of Excellence have helped us shape the business world we are in and know today, and continue to thrive in an environment that conducively brings to focus the best of our people together. DRB-HicOM BERHAD AnnUAL report 2011 008 REACHING DRB-HicOM BERHAD BEYOND AnnUAL report 2011 009 BOUNDARIES Corporate Profile OUR VISION • A prominent player and leading Malaysian’s diversified yet integrated conglomerate since 1980, with a market capitalisation of RM4.45 billion listed on the Main Board of Bursa Malaysia To be Number 1 and continuously excel in all • Our corporate stable speaks volume of our foundational stability, that includes more than 60 subsidiaries, associate companies and jointly-controlled entities providing employment for over 24,000 people that we do.