Level 5, Wisma DRB-HICOM, No
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DRB-HICOM Berhad DRB-HICOM DRB-HICOM Berhad (203430-W) (203430-W) Annual Report 2005 DRB-HICOM Berhad (203430-W) www.drb-hicom.com Level 5, Wisma DRB-HICOM, No. 2, Jalan Usahawan U1/8 Strategically Positioned Seksyen U1, 40150 Shah Alam, Selangor Darul Ehsan Strategically Positioned Annual Report 2005 Strategically Positioned DRB-HICOM BERHAD (203430-W) 2005 ANNUAL REPORT VALUES VISION Excellence • Teamwork • Innovation To be a leading regional conglomerate • Integrity through the provision of competitive world-class products and services. MISSION • We are committed to the creation of • We are committed to being socially and brand name recognition by adding value environmentally responsible corporate and exceeding customers’ expectation. citizens, improving the lives of the community we live in. • We are committed to the development of a knowledgeable, dynamic and motivated • We are committed to continue to lead the workforce. growth of Malaysia’s industrialisation. • We are committed to the creation and application of innovative technology through strategic alliances. COVER RATIONALE In every evolving business environment, it is important to understand the terrain and to adapt to its unwavering demands. The challenges faced are opportunities waiting to be realised if we are able to identify its value. Being proactive in our pursuit to be strategically positioned is our primary focus to succeed at the highest level. The image of the blue marble featured on the cover design is a conceptual representation of our confidence to be placed in a competitive environment and succeed whilst staying steadfast to our intrinsic value of consistently re-innovating and re-engineering our products and services to meet the demands of our customers. CONTENTS Group’s Six Years Financial Highlights 2 Corporate Governance Statement on Corporate Governance 76 Corporate Profile 4 Statement on Internal Control 87 Quality Achievements 6 Report of the Audit Committee 90 Brief on Enterprise-wide Opportunity Financial Calendar 8 & Risk Management (EORM) 98 Corporate Information 10 Additional Compliance Information 100 Statement of Directors’ Responsibility 114 Board of Directors 12 Financial Statements 115 Profile of Board of Directors 14 Other Information Management Team 22 Share Movement Chart 222 Corporate Structure 24 Analysis of Shareholdings 223 Properties of DRB-HICOM Group 227 Performance Review Notice of Annual General Meeting 242 Chairman’s Statement 28 Statement Accompanying 244 Operations Review Notice of Annual General Meeting Automotive Manufacturing & Distribution 38 Form of Proxy / Borang Proksi Property Development & Construction 48 Services 54 Corporate Responsibility We Help Make Things Better 62 Human Resource Development 64 Information Technology 66 Calendar of Events 67 Group’s Six Years Financial Highlights Shareholders’ Equity Net Tangible Assets Earnings/(Loss) 2 Per Share Per Share (Basic) (RM’000) (RM) (Sen) 0.34 2.35 2.48 2.42 2.57 2.69 21.03 19.28 21.66 20.01 14.39 89,298 (156.94) 2,163,242 2,284,864 2,342,215 2,519,157 2,649,215 20 05 2005 ANNUAL REPORT DRB-HICOM BERHAD (203430-W) ’00 ’01 ’02 ’03 ’04 ’05 ’00 ’01 ’02 ’03 ’04 ’05 ’00 ’01 ’02 ’03 ’04 ’05 2005 2004 *2003 *2002 **2001 **2000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Share Capital 985,670 980,673 965,115 919,483 912,395 263,005 Retained Earnings/ (Accumulated Losses) 629,274 515,515 358,877 185,887 31,866 (100,348) Shareholders’ Equity 2,649,215 2,519,157 2,342,215 2,284,864 2,163,242 89,298 Minority Interests 672,157 668,792 623,612 481,053 399,869 249,093 Long Term and Deferred Liabilities 1,477,197 1,570,175 1,776,567 779,875 819,833 260,589 Current Assets 3,662,619 3,894,377 3,617,962 3,421,604 3,434,834 906,824 Current Liabilities 3,119,525 3,446,474 3,482,756 4,662,384 4,741,473 1,436,893 Net Current Assets/(Liabilities) 543,094 447,903 135,206 (1,240,780) (1,319,777) (530,069) Property, Plant and Equipment 2,392,425 2,451,156 2,644,313 2,691,844 2,795,835 1,014,913 Investments 2,453,050 2,204,705 2,038,373 2,008,411 2,008,432 152,214 Total Assets 8,628,345 8,652,375 8,459,356 8,280,727 8,202,519 2,035,873 Operating Revenue Profit/(Loss) Total Assets 3 Before Taxation (RM’000) (RM’000) (RM’000) 411,536 391,108 457,826 389,905 276,702 (277,648) 2,611,499 4,968,670 4,329,289 4,898,043 4,500,255 4,506,595 2,035,873 8,202,519 8,280,727 8,459,356 8,652,375 8,628,345 20 05 2005 ANNUAL REPORT DRB-HICOM BERHAD (203430-W) ’00 ’01 ’02 ’03 ’04 ’05 ’00 ’01 ’02 ’03 ’04 ’05 ’00 ’01 ’02 ’03 ’04 ’05 2005 2004 *2003 *2002 **2001 **2000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Operating Revenue 4,506,595 4,500,255 4,898,043 4,329,289 4,968,670 2,611,499 Profit/(Loss) Before Taxation 276,702 389,905 457,826 391,108 411,536 (277,648) Profit/(Loss) After Taxation 198,259 247,416 268,572 227,749 235,758 (327,691) Profit/(Loss) After Taxation and Minority Interests 141,407 194,917 206,784 176,112 156,184 (412,750) Dividend Less Taxation 17,688 14,081 13,866 13,156 — — Net Tangible Assets Per Share (RM) 2.69 2.57 2.42 2.48 2.35 0.34 Debt/Equity Ratio 0.8 0.9 1.1 1.1 1.2 3.0 Return on Shareholders’ Equity (%) 5.3 7.7 8.8 7.7 7.2 (462.2) Earnings/(Loss) Per Share (sen) (Basic) 14.39 20.01 21.66 19.28 21.03 (156.94) * Certain figures have been restated to conform with the requirements of new MASB Standards. ** The figures are as disclosed previously. Corporate Profile 4 DRB-HICOM Berhad is one of Malaysia’s leading automotive groups, playing an integral role in the nation’s road to industrialisation. 20 We are diversified yet focused, and have interests in key sectors of the 05 economy mainly:- ■ Automotive Manufacturing & Distribution 2005 ANNUAL REPORT DRB-HICOM BERHAD ■ Property Development & Construction ■ Services DRB-HICOM will continue to look for opportunities that will benefit the Group and the country. (203430-W) AUTOMOTIVE MANUFACTURING PROPERTY DEVELOPMENT & SERVICES & DISTRIBUTION CONSTRUCTION The rapidly growing service- The Group’s leadership within DRB-HICOM is extensively based industry represents new this sector is reflected through involved in retail, commercial opportunities for DRB-HICOM. niche segmentation via new and residential property Our interests include IT, solid technology development and development, and has made waste management, financial continued strategic alliances strong inroads in the services, automotive services, with renowned global names construction sector. tourism and transportation. such as Mitsubishi, Isuzu, Citroen, Kawasaki, Tata, Honda, General Motors, Mahindra and Suzuki. We continuously seek new alliances to strengthen our base further and develop new business potential that will strengthen both DRB-HICOM and our partners. 5 20 05 2005 ANNUAL REPORT DRB-HICOM BERHAD (203430-W) Quality Achievements DRB-HICOM companies awarded with the ISO/QS certification as at 25 May 2004 ALAM FLORA SDN. BHD. 18 August 1999 ISO 9001:1994 Project Management of Solid HICOM PROPERTIES Waste Management System SDN. BHD. 22 December 1999 26 August 2003 ISO 9002:1994 ISO 9001:2000 Operation Management of solid HICOM-TECK SEE waste, collection, cleansing, MANUFACTURING disposal and similar activities MALAYSIA SDN. BHD. 6 SCOTT & ENGLISH 19 May 2003 (MALAYSIA) SDN. BHD. 24 February 1995 ISO 9001:2000 ISO 9002 Operation Management of solid 15 August 2002 waste, collection, cleansing, 16 February 2001 ISO 9001 (2000) disposal and similar activities 20 QS 9000 18 February 2004 05 May 2005 ISO 14001:1996 ISO/TS 16949:2002 2005 ANNUAL REPORT DRB-HICOM BERHAD HICOM-YAMAHA MOTOSIKAL DAN ENJIN KL AIRPORT SERVICES MANUFACTURING MALAYSIA NASIONAL SDN. BHD. SDN. BHD. SDN. BHD. 11 January 2002 October 1999 December 1997 ISO 9002:9004 Ground Handling (203430-W) ISO 9002 ISO 9002 October 2003 August 2000 Recertified and converted to HICOM-HONDA Cargo ISO 9001:2000 MANUFACTURING ISO 9002 MALAYSIA SDN. BHD. May 2001 November 2002 In Flight Catering ISO 9002 “ISO Lloyd Register ORIENTAL SUMMIT Det Norske Veritas (DNV) Assurance” INDUSTRIES SDN. BHD. January 2003 7 December 1998 Recertified and converted ISO 9002 HICOM ENGINEERING to ISO 9001:2000 21 November 2002 SDN. BHD. QS 9000 January 1997 ISO 9002 1 March 2005 HICOM COMMUNICATIONS ISO/TS 16949:2002 July 2001 SDN. BHD. QS 9000 20 August 2004 14 October 2004 ISO 9001:2000 ISO/TS 16949:2002 Operation and Maintenance of Computer Equipment and Server for Data Management PUSAT PEMERIKSAAN KENDERAAN AUTOMOTIVE BERKOMPUTER SDN. BHD. MANUFACTURERS (PUSPAKOM) CENTRES (MALAYSIA) SDN. BHD. WANGSA MAJU December 1997 TRW STEERING & SUSPENSION August 1999 ISO 9002 (M) SDN. BHD. ISO 9002:1994 January 1998 February 1999 PADANG JAWA “Vehicles Certification ISO 9002 JOHOR BAHRU Authority, United Kingdom (VCA)” IPOH February 2002 KUANTAN QS 9000 February 2001 7 ISO 9002:1994 February 2002 MALAYSIAN TRUCK & BUS TS 16949 February 2004 SDN. BHD. Recertified and converted to December 2002 ISO 9001:2000 4 August 2000 ISO 14001 ISO 9002 20 SEREMBAN 05 ALOR SETAR 4 August 2000 KOTA BHARU UKAS TAMAN BUKIT MALURI ZF STEERINGS (MALAYSIA) 2005 ANNUAL REPORT DRB-HICOM BERHAD February 2002 SDN. BHD. ISO 9002:1994 PHN INDUSTRY SDN. BHD. October 1995 February 2004 ISO 9002 Recertified and converted to March 1999 5 October 1999 ISO 9001:2000 MS ISO 9002:1994 QS 9000 (203430-W) HEAD OFFICE January 2003 8 February 2002 ALOR GAJAH MS IS0 9001:2000 ISO 14001 MAK MANDIN January 2003 KUALA TERENGGANU QS 9000:1998 February 2003 ISO 9002:1994 SIEMENS VDO INSTRUMENTS MY SDN.