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Transcript of Proton c1 - ChartNexusir.chartnexus.com/proton/website_HTML/attachments/...PROTON’s Policies THE...
PROTON 2010 ANNUAL REPORT
CONTENTS
02 Corporate Mantra & Core Values
04 PROTON’s Policies
08 Financial Calendar
09 Key Financial Indicators
10 Summary of Financial Highlights for Five Years
14 Corporate Profile
18 Corporate Information
20 Group Operations
PROTON ANNUAL REPORT 2010PROTON Holdings Berhad (623177-A)
Chairman’s Statement 40 Operations
Review 54Managing Director’s Review
48
24 Board of Directors
26 Profile of Directors
34 PROTON Group Management Committee Members
36 Heads of International Subsidiaries
40 Chairman’s Statement
48 Managing Director’s Review
54 Operations Review
140 Statement on Corporate Governance
158 Additional Compliance Information
162 Statement on Internal Control
166 Risk Management
170 Calendar of Events 2009 – 2010
180 Statutory Financial Statements
287 Shareholding Statistics
290 Properties Owned by PROTON Group
295 Share Price and Volume Traded
296 Notice of 7th Annual General Meeting
299 Statement Accompanying the Notice of 7th Annual General Meeting
Form of Proxy
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.
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Core IdeologyAudacious GoalDriving Malaysia’s transformation into a leader in technology and quality.
Vivid DescriptionWe deliver innovative and superior quality products and services. Our brands inspire confidence and pride.
PurposeWe are a passionate group of people working together, creating exhilarating products and services for global markets, synonymous with great styling, innovation and leading technology.
Core ValuesQualityWe make products that work the first time, every time.
Customer FocusCustomers are the source of our income. We deliver on our promises to our customers’ satisfaction.
InnovationWe challenge convention, always seeking new and better ways of doing things. We view change as opportunity.
TeamworkWe trust, respect and share knowledge to foster teamwork at the workplace.
SpeedWe have a “can-do” attitude and will not rest until the problem is solved. We have an inherent sense of urgency in everything we do.
CaringAs a responsible corporate citizen, we invest in safety, health and the environment.
Corporate Mantra & Core Values
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PROTON’s Policies
THE COMPANY’S MISSION IS TO STRIVE TOWARDS EXCELLENCE IN ALL ASPECTS OF PROTON’S OPERATIONS. IN ACHIEVING OUR GOAL, IT IS NECESSARY TO PROMOTE AND PROTECT THE HEALTH AND SAFETY OF PROTON EMPLOYEES AND ENSURE THAT THE ENVIRONMENT IS UNHARMED.
The Group is committed to providing a conducive, safe and healthy working environment for our employees and to ensure this, it is our policy to:-
• Take responsibility for the safety and health of our employees;
• Provide the appropriate resources;
• Take all action necessary to remedy any non-compliance;
• Monitor and maintain high standards in environmental protection as well as health and safety measures.
ENVIRONMENTAL, HEALTH AND SAFETY POLICY
TO ACHIEVE OUR COMMITMENT TO QUALITY, PROTON WILL:-
QUALITY POLICY
Environment, health and safety are our priority.
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PROTON’s Policies
In implementing the Company’s policy, we shall, where reasonably practicable:-
• 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;
• Provide adequate information and assistance to our employees and our neighbours to avoid unacceptable effects on the environment.
To assist the Company in achieving our goals, we shall work together and towards this end, employees shall:-
• Abide by all rules and regulations concerning the workplace;
• Utilise all the facilities provided by the management in a safe and proper manner;
• Maintain good work practices;
• Actively participate in all the Environmental, Health and Safety (EHS) programmes.
This is our objective and it is our intention to put this EHS Policy into action and to make it our way of life.
• 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.
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A New Dawn in Expertise
In the areas of technology, design, quality and marketing,
PROTON has come a long way by riding on creative strategies and
partnering the world’s best. We are now in full gear optimising
operations to accelerate improved levels of expertise.
We are a global automotive player.
Financial Calendar
2009
2010
JUL30
Declaration of proposed First & Final Dividend of
20 sen per share (less 25% tax)
for Financial Year ended 31 March 2010
OCT22
Payment of First & Final Dividend of
20 sen (less 25% tax)
NOV23
2nd QUARTER Financial Results for period ended
30 September 2009
JUL30
Audited FinancialStatement for
Financial Year ended 31 March 2010
SEP30
Entitlement Date for First & Final Dividend
of 20 sen (less 25% tax)
AUG21
6th Annual General Meeting
JUL30
1st QUARTER Financial Results for period ended 30 June 2009
MAY26
4th QUARTER Financial Results for period ended 31 March 2010
SEP23
7th Annual General Meeting
FEB19
3rd QUARTER Financial Results for period ended
31 December 2009
AUG30
Notice of 7th Annual General Meeting
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Basic Earnings/(loss) Per Share (Sen)
Dividend Paid(RM’ million)
Net Assets Per Share(RM)
Retained EarningsCarried Forward (RM’ million)
Key Financial Indicators
06 07 08 09 10
06 07 08 09 10
4,908.7 4,291.7 4,476.2 4,153.9 4,372.8
10.7 9.5 9.9 9.3 9.7
06 07 08 09 10
06 07 08 09 10
54.9 27.5 - 20.6 -
8.5 (107.3) 33.6 (54.9) 39.9
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Summary of Financial Highlights for Five Years
BALANCE SHEETS AS AT 31 MARCH
RM’ million 2010 2009 2008 2007 2006
NON-CURRENT ASSETS
Property, plant and equipment 2,624.4 2,827.1 3,150.4 3,169.5 3,302.9
Prepaid land lease payments - - 24.1 9.9 10.0
Goodwill 29.0 29.0 29.0 29.0 29.0
Intangibles assets 564.0 431.7 275.2 169.1 18.0
Associated companies 152.6 158.4 165.4 169.8 160.4
Jointly controlled entities 202.6 195.6 192.7 223.6 245.3
Investments - 10.4 10.4 10.4 10.4
Deferred tax assets 15.0 5.7 - - 105.8
3,587.6 3,657.9 3,847.2 3,781.3 3,881.8
CURRENT ASSETS
Inventories 1,227.2 1,395.1 1,100.3 1,273.6 1,389.0
Receivables 991.6 1,080.3 1,099.0 1,192.0 1,244.0
Current investments 9.7 15.3 20.8 73.4 212.0
Deposits, bank and cash balances 1,652.1 913.9 1,226.0 626.5 1,586.0
3,880.6 3,404.6 3,446.1 3,165.5 4,431.0
Non-current assets held for sale 36.9 36.4 - - -
TOTAL ASSETS 7,505.1 7,098.9 7,293.3 6,946.8 8,312.8
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Summary of Financial Highlights for Five Years
RM’ million 2010 2009 2008 2007 2006
CAPITAL AND RESERVES
Share capital 549.2 549.2 549.2 549.2 549.2
Other reserves 411.0 398.5 395.8 389.7 412.7
Retained earnings 4,372.8 4,153.9 4,476.2 4,291.7 4,908.7
Equity attributable to equity holders of the Company 5,333.0 5,101.6 5,421.2 5,230.6 5,870.6
Minority interest - - - - -
TOTAL EQUITY 5,333.0 5,101.6 5,421.2 5,230.6 5,870.6
NON-CURRENT LIABILITIES
Long term liabilities 88.6 101.5 230.5 181.6 100.3
Deferred tax liabilities 10.8 12.2 2.4 0.8 0.8
99.4 113.7 232.9 182.4 101.1
CURRENT LIABILITIES
Payables 2,060.6 1,877.3 1,637.6 1,531.6 2,324.2
Taxation 12.1 6.3 1.6 2.2 16.9
2,072.7 1,883.6 1,639.2 1,533.8 2,341.1
TOTAL LIABILITIES 2,172.1 1,997.3 1,872.1 1,716.2 2,442.2
TOTAL EQUITY AND LIABILITIES 7,505.1 7,098.9 7,293.3 6,946.8 8,312.8
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Summary of Financial Highlights for Five Years
INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH
RM’ million 2010 2009 2008 2007 2006
Revenue 8,226.9 6,518.7 5,621.6 4,687.3 7,796.9
Profit/(loss) before taxation 260.9 (319.2) 144.3 (618.1) 18.0
Profit/(loss) after taxation 218.9 (301.8) 184.6 (589.5) 46.7
Retained earnings attributable to shareholders 4,372.8 4,174.5 4,476.2 4,319.2 4,963.6
Dividend paid - (20.6) - (27.5) (54.9)
Retained earnings carried forward 4,372.8 4,153.9 4,476.2 4,291.7 4,908.7
SHARE INFORMATION
Per share
Basic earnings/(loss) (sen) 39.9 (54.9) 33.6 (107.3) 8 .5
Dividend paid (sen) - 5.0 - 5.0 10.0
Net assets (RM) 9.71 9.29 9.87 9.52 10.69
Issued share capital (‘000) 549,213 549,213 549,213 549,213 549,213
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Corporate Profile
Corporate Profile
• To spearhead the automotive industrialisation process and manufacturing industries;
• To acquire/upgrade technology and industrial skills within the automotive manufacturing industry; and
• To strengthen the international competitiveness of Malaysia’s industrial capability
With substantial capital investment over the last 25 years and the corporate philosophy that success can be achieved by having ‘the right car for the right market, at the right price and at the right time’, PROTON commands a substantial share of the domestic market for passenger cars and through the years, has expanded its international footprint in the following regions:
• ASEAN • United Kingdom – Western Europe• China • Australia• Indian Subcontinent • South Africa• Middle East – North Africa
PROTON’s main business activities encompass vehicle engineering, research and development, manufacturing, distribution, sales and after-sales services. The Group is also involved in fi nancial services and property management as supporting activities.
SINCE INCORPORATION ON 7 MAY 1983, PROTON REMAINS AMONG ALL NATIONAL CAR COMPANIES, THE LARGEST CONTRIBUTOR TOWARDS THE THREE PRIMARY NATIONAL POLICY OBJECTIVES:
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The foundation of the Group’s growth over the last 25 years is due to the understanding of the economic development stimulus, diverse customer needs and the abilility to translate them into products that customers want, through research and development.
The current portfolio of PROTON models includes the Saga, which was named Best Model of the Year for two consecutive years 2009 and 2010; the Persona, winner of the 2008 ASEAN Automotive Award for Best Model of the Year; the reliable family-sedan, Waja; the stylish and ergonomic Gen.2; the fun-to-drive Savvy; the desirable sporty Satria Neo; elegant Perdana and Malaysia’s first home-grown multipurpose vehicle (MPV), the Exora, which marked PROTON’s entry into the MPV market – a market that is growing domestically and regionally.
Also in the Group’s portfolio, is the world-renowned Lotus sportscar brand, with models such as Elise, Exige, Europa and the Evora, the latest supercar that remains true to Lotus’ heritage and core philosophies of being Visually Stunning, Exhilarating, Agile and Responsive, to suit a range of customer demands and preferences.
Corporate Profile
In 2009, PROTON clinched two awards by Frost & Sullivan:
• Best Passenger Car Model of the Year for the Proton Saga; and
• Best Automotive Debut Model of the Year for the Proton Exora.
These awards recognise PROTON’s commitment to continuously offer products that are customer-centric in terms of specifications and pricing.
Other awards for the year include:
• Asian Auto-VCA Auto Industry Awards 2009 for Best Local Assembly MPV for Exora, and
• Asian Auto-VCA Auto Industry Awards 2009 for Best Local Assembly Sports Car for Satria Neo CPS.
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Corporate Profile
The Group conducts research in its centres in Malaysia and the United Kingdom on new technologies to create cars that are unique in both design and driving performance. Through Lotus, the Group provides comprehensive and versatile consultancy services to many of the world’s OEMs and Tier 1 suppliers. Today, Group Lotus is organised into two business divisions. Lotus Cars focuses on sales of world-class, prestigious, high-performance sports cars, whilst Lotus Engineering provides engineering solutions for automotive manufacturers and suppliers.
To boost the quality of its products, PROTON has introduced a Company-wide quality improvement programme and quality-conscious work culture that assures:
• Quality in everything (products and individuals);
• Quality in the way things are done (doing it right the first time);
• Quality in spending, including reducing materials costs;
• High-quality products (end products must be of the right technology and designed to meet market expectations); and
• Quality services to customers, including after-sales support.
At present, the Group has close to 12,000 employees who are involved in the whole value chain of the business from research, design, development, testing, stamping, casting, machining and assembly to marketing, distribution, after-sales services, as well as corporate services.
Strong customer orientation and competitively priced products drive our business and are essential to our success. We aim to maintain market leadership by continuing to develop innovative products and satisfying our customers; thereby enhancing profitability.
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BOARD EXECUTIVE COMMITTEE (“EXCO”)(The Board Executive Committee was subsequently disbanded w.e.f. 1 Aug 2010)• Dato’ Sri Mohd Nadzmi Bin Mohd Salleh – Chairman
• Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir
• Dato’ Michael Lim Heen Peok• Encik Azhar Bin Othman (Appointed w.e.f. 22 July 2009)
• MsVimalaMenon (Resigned w.e.f. 31 August 2009)
BOARD AUDIT COMMITTEE• Encik Abdul Rahim Bin Abdul Hamid – Chairman (Appointed w.e.f. 20 July 2010)
• Dato’ Michael Lim Heen Peok• Dato’ Zalekha Binti Hassan (Appointed w.e.f. 27 May 2010)
• Tan Sri Rainer Althoff (Appointed w.e.f. 20 July 2010)
• EncikAbdulJabbarBinAbdulMajid (Resigned w.e.f. 21 August 2009)
• Mr.OhKimSun (Resigned w.e.f. 27 May 2010)
• TuanHajiAbdulKadirBinMd.Kassim (Resigned w.e.f. 27 May 2010)
• Mr.BeharaVenkataRamaSubbu (Resigned w.e.f. 20 July 2010)
BOARD NOMINATION & REMUNERATION COMMITTEE• Dato’ Sri Mohd Nadzmi Bin Mohd Salleh – Chairman
• Encik Ahmad Tajuddin Bin Abdul Carrim• Dato’ Michael Lim Heen Peok• Dato’ Zalekha Binti Hassan (Appointed w.e.f. 1 August 2010)
• EncikMd.AliBinMd.Dewal (Resigned w.e.f. 27 May 2010)
BOARD RISK MANAGEMENT COMMITTEE(The Board Risk Management Committee was subsequently disbanded w.e.f. 1 Aug 2010)• Datuk Tan Kim Leong • Dato’ Zainuddin Bin Che Din• TuanHajiAbdulKadirBinMd.Kassim (Resigned w.e.f. 27 May 2010)
BOARD DISCIPLINARY COMMITTEE(The Board Disciplinary Committee was subsequently disbanded w.e.f. 1 Aug 2010)• Dato’ Sri Mohd Nadzmi Bin Mohd Salleh – Chairman
• Tuan Haji Yusof Bin Ahmad• TuanHajiAbdulKadirBinMd.Kassim (Resigned w.e.f. 27 May 2010)
• EncikMd.AliBinMd.Dewal (Resigned w.e.f. 27 May 2010)
Corporate Information
COMMITTEES
BOARD OF DIRECTORS DATE OF APPOINTMENTDato’ Sri Mohd Nadzmi Bin Mohd Salleh – Chairman 1 January 2009
Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir 1 January 2006
Dato’ Michael Lim Heen Peok 15 September 2006
Dato’ Zalekha Binti Hassan 11 February 2008
Mr. Behara Venkata Rama Subbu 1 March 2010
Tan Sri Rainer Althoff 22 June 2010
Encik Abdul Rahim Bin Abdul Hamid 20 July 2010
Tuan Haji Abdul Jabbar Bin Abdul Majid 12 April 2004 (Resigned w.e.f. 21 August 2009)
Tuan Haji Abdul Kadir Bin Md Kassim 10 March 2005 (Resigned w.e.f. 27 May 2010)
Mr. Oh Kim Sun 13 May 2009 (Resigned w.e.f. 27 May 2010)
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AUDITORS PRICEWATERHOUSECOOPERS(Chartered Accountants)Level 10, 1 Sentral, Jalan TraversKuala Lumpur Sentral, PO Box 1019250706 Kuala Lumpur, MalaysiaTel : 03 - 2173 1188Fax : 03 - 2173 1288
REGISTERED OFFICEPROTON CENTRE OF EXCELLENCEKM 33.8, Westbound Shah Alam Expressway47600 Subang Jaya, Selangor Darul EhsanTel : 03 - 8026 9741Fax : 03 - 8026 9744
MAIN BANKERSMalayan Banking Berhad
CIMB Bank Berhad
RHB Bank Bhd
REGISTRAR TRICOR INVESTOR SERVICES SDN. BHD.(formerly known as Tenaga Koperat Sdn. Bhd.)Level 17, The Gardens, North Tower,Midvalley City, Lingkaran Syed Putra59200 Kuala LumpurTel : 03 - 2264 3883Fax : 03 - 2282 1886
STOCK EXCHANGE LISTINGMain Market of Bursa Malaysia Securities Berhad
COMPANY SECRETARYEncik Mohd Nizamuddin Bin Mokhtar (LS 006128)
INVESTOR RELATIONSEncik Izwan Bin ZainuddinTel : 03 - 8026 9094
Corporate Information
BOARD OF DIRECTORS DATE OF APPOINTMENTDato’ Sri Mohd Nadzmi Bin Mohd Salleh – Chairman 1 January 2009
Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir 1 January 2006
Dato’ Michael Lim Heen Peok 15 September 2006
Dato’ Zalekha Binti Hassan 11 February 2008
Mr. Behara Venkata Rama Subbu 1 March 2010
Tan Sri Rainer Althoff 22 June 2010
Encik Abdul Rahim Bin Abdul Hamid 20 July 2010
Tuan Haji Abdul Jabbar Bin Abdul Majid 12 April 2004 (Resigned w.e.f. 21 August 2009)
Tuan Haji Abdul Kadir Bin Md Kassim 10 March 2005 (Resigned w.e.f. 27 May 2010)
Mr. Oh Kim Sun 13 May 2009 (Resigned w.e.f. 27 May 2010)
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100% Lotus Advance Technologies Sdn. Bhd.
100% Proton Engineering Research Technology Sdn. Bhd.
100% Lotus Group International Limited (UK)
100% Group Lotus Plc (UK)
100% Lotus Engineering Ltd (UK)
100% Lotus Engineering (Shanghai) Co Ltd (China)
100% Lotus Engineering (M) Sdn. Bhd.
100% Lotus Body Engineering Ltd (UK)
100% Lotus Motorsport Ltd (UK)
100% Lotus Holdings Inc (USA)
100% Lotus Engineering Inc (USA)
Engineering Services
100% Perusahaan Otomobil Nasional Sdn. Bhd.
100% Proton Tanjung Malim Sdn. Bhd.
100% PT Proton Cikarang Motors (Indonesia)
100% Proton Automobiles China Ltd (BVI)
100% Lotus Cars Ltd (UK)
100% Lotus Lightweight Structures Holdings Limited (UK)
100% Lotus Lightweight Structures Limited (UK)
51% Miyazu (Malaysia) Sdn. Bhd.
49% Goldstar Proton Automobiles Co Ltd (China)
Manufacturing
PROTON Holdings Berhad
Group Operations
PROTON ANNUAL REPORT 2010PROTON Holdings Berhad (623177-A)
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100% Proton Marketing Sdn. Bhd.
100% Proton Edar Sdn. Bhd.
100% Proton Cars (UK) Ltd
100% Proton Cars Australia Pty Limited
100% Proton Motors (Thailand) Limited
100% Proton Singapore Pte Ltd
100% PT Proton Edar Indonesia
100% Lotus Cars Australia Pty Limited
100% Lotus Cars USA Inc
55% Proton Parts Centre Sdn. Bhd.
45% Exedy (Malaysia) Sdn. Bhd.
40% Netstar Advanced Systems Sdn. Bhd.
35% PHN Industry Sdn. Bhd.
25% Marutech Elastomer Industries Sdn. Bhd.
25% Vina Star Motors (Vietnam) Corporation
16% Aluminium Alloy Industries Sdn. Bhd.
15% Technomeiji Rubber Sdn. Bhd.
6.7% Ara Borgstena Sdn. Bhd.
4.2% Peps-JV Sdn. Bhd.
100% Proton Hartanah Sdn. Bhd.
100% Proton Properties Sdn. Bhd.
40% Proton City Development Corporation Sdn. Bhd. Yayasan Proton
Lotus Pension Trustees Ltd (UK)
Lotus Cars Foundation (UK)
50% Proton Commerce Sdn. Bhd.
49.9% Lotus Finance Ltd (UK)
49.9% Proton Finance Ltd (UK)
Sales & Distribution Investee & Associate Companies
Property
Others
Financial Services
Group Operations
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A New Dawn in Service
Despite the current challenges faced by the automotive industry
PROTON continues to grow by delivering “The Right Car for the
Right Market, at the Right Price and at the Right Time”. As green
trends emerge, we are now working towards the development of
an efficient hybrid electric vehicle.
We are highly customer oriented.
Sitting
Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir
Standing (left to right)
Dato’ Michael Lim Heen Peok Dato’ Zalekha Binti Hassan
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Dato’ Sri Mohd Nadzmi Bin Mohd Salleh
Standing (left to right)
Mr. Behara Venkata Rama Subbu Tan Sri Rainer Althoff Encik Abdul Rahim Bin Abdul Hamid
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Dato’ Sri Mohd Nadzmi Mohd Salleh was appointed Chairman of PROTON on 1 January 2009 and is also the Chairman of the Boards of various subsidiaries within the PROTON Group of Companies.
Dato’ Sri Mohd Nadzmi graduated with a Bachelor of Arts in Economics from Ohio University, United States of America, and also holds a Bachelor of Science in Chemistry and Mathematics from the same university. He subsequently obtained a Masters of Arts in Economics and Statistics from Miami University, USA.
Dato’ Sri Mohd Nadzmi began his career as a lecturer in the Faculty of Economic Resources and Agriculture in Universiti Pertanian Malaysia. Thereafter he held various executive positions in Petroleum Nasional Berhad and Heavy Industries Corporation Malaysia Berhad. He then left to join Edaran Otomobil Nasional Berhad as Manager in the Marketing Services Department in 1984, and later assumed the positions of Executive Director and Chief Executive Officer. In 1993 Dato’ Sri Nadzmi was appointed Managing Director of Perusahaan Otomobil Nasional Berhad, a post he held until 1996.
Dato’ Sri Mohd Nadzmi is also currently the Executive Chairman of Nadicorp Holdings Sdn. Bhd. and Express Rail Link Sdn. Bhd.. He also sits on the Boards of, J.T. International Berhad, V.S. Industry Berhad, Konsortium Transnasional Berhad and Transocean Berhad as well as several private limited companies. He is also the President of the Badminton Association of Malaysia.
Dato’ Sri Mohd Nadzmi has attended all Board of Directors’ Meetings held during the Financial Year. He has no conflict of interest with the Company and does not have any family relationships with any Director and/or major shareholder of the Company. He has had no conviction for any offences within the past ten (10) years.
DATO’ SRI MOHD NADZMI MOHD SALLEH
Chairman | Aged 56, Malaysian
Profile of Directors
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Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir was appointed Managing Director of PROTON on 1 January 2006. He also sits on the Boards of various subsidiaries within the PROTON Group of companies.
Dato’ Haji Syed Zainal Abidin graduated with a Bachelor of Science in Engineering from the University of Maryland, USA and began his career as a Project Engineer with Petronas Gas Sdn. Bhd. in 1987, prior to joining Petroliam Nasional Berhad in 1992 as the Senior Executive of Corporate Planning & International Business Development. He then left to join HICOM Holdings Berhad in 1995, where he assumed various senior positions in the company.
Dato’ Haji Syed Zainal Abidin was appointed as Senior General Manager of PERODUA in 1999. Subsequently, he was appointed Executive Director of PERODUA Auto Corporation Sdn. Bhd. in 2002, and in October 2005, promoted to Deputy Managing Director.
In November 2008, Dato’ Haji Syed Zainal Abidin was named the “Automotive Man of the Year” by the New Straits Times/Maybank Car of the Year 2008 Awards for his strong management and leadership qualities in steering PROTON by strengthening its position in the domestic market while making significant breakthrough in the international markets. Most recently, Dato’ Haji Syed Zainal Abidin received the International Business Leader in Automotive Sector Award at the 2010 Middle East Business Leadership Summit Awards, and the Masterclass Bumiputra CEO of the Year Award at the 2nd Malaysia Business Leadership Awards 2010.
Dato’ Haji Syed Zainal Abidin has attended all Board of Directors’ Meetings held during the Financial Year. He has no conflict of interest with the Company and does not have any family relationships with any Director and/or major shareholder of the Company. He has had no conviction for any offences within the past ten (10) years.
Profile of Directors
DATO’ SYED ZAINAL ABIDIN B SYED MOHAMED TAHIR
Managing Director | Aged 48, Malaysian PR
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Dato’ Michael Lim was appointed a Director of PROTON on 15 September 2006 and is also a Member of the Board Audit Committee and Board Nomination & Remuneration Committee. Dato’ Michael Lim also sits on the Boards of various companies within the PROTON Group.
Dato’ Michael Lim who holds a First Class Honours Degree in Engineering from the University of Strathclyde, in the United Kingdom, began his career with the UMW Group in 1975 and held various senior managerial positions. In 1986 Dato’ Michael Lim was appointed Managing Director/Chief Executive Officer of UMW Toyota Motor Sdn. Bhd., a joint venture company between UMW and Toyota Motor Corporation of Japan. Dato’ Michael Lim retired in 2004 having led the company for 18 years.
Currently, Dato’ Michael Lim is the Chairman of Furniweb Industrial Products Bhd, an export oriented manufacturing company with plants in Malaysia and Vietnam.
Dato’ Michael Lim has attended all the Board of Directors’ meetings held during the Financial Year. He has no conflict of interest with the Company and has no family relationships with any other Director and/or major shareholder of the Company. He has had no conviction for any offences within the past ten (10) years.
Profile of Directors
DATO’ MICHAEL LIM HEEN PEOK
Independent Non-Executive Director | Aged 62, Malaysian
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Dato’ Zalekha, who was appointed a Director of PROTON on 11 February 2008, is also a Member of PROTON’s Board Audit Committee and Board Nomination & Remuneration Committee. Dato’ Zalekha sits on the Board of Governors of Yayasan PROTON as well.
Dato’ Zalekha who is currently the Deputy Secretary General of Management at the Ministry of Finance, holds a Bachelor of Arts (Hons) Degree from University of Malaya.
Dato’ Zalekha was previously with Tenaga Nasional Berhad, Putrajaya Holdings and Multimedia Development Corporation (“MDEC”)
Dato’ Zalekha sits on the Board of Directors of Telekom Malaysia Berhad, and Perbadanan Kemajuan Negeri Selangor (“PKNS”).
Dato’ Zalekha has attended all Board Meetings held during the Financial Year. She has no conflict of interest with the Company and has no family relationships with any other Director and/or major shareholder of the Company. She has had no conviction for any offences within the past ten (10) years.
DATO’ ZALEKHA BINTI HASSAN
Non-Independent Non-Executive Director | Aged 57, Malaysian
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Mr. B.V.R. Subbu was appointed a Director of PROTON on 1 March 2010.
Mr. Subbu holds a Masters in Economics from the Jawaharlal Nehru University, New Delhi, India. He began his career with the Tata Administrative Service and was deputed to Tata Motors where he held a variety of senior line and staff responsibilities in the areas of CV Marketing, Sales, Service, Spare Parts and Sales Finance between 1978 and 1996.
In 1997, Mr. Subbu moved to Hyundai Motor, India as Director of Marketing & Sales and thereafter promoted to President in 2002, a position he held until 2006.
Mr. Subbu is currently the Director of NMC Automotive Infrastructure Pvt. Ltd, a company engaged in establishing a CV manufacturing project in India. He is also promoter of various companies including Pan India Motors, Altius Autoworld and Altius Advanced Technologies.
No Board Meetings were held from the time Mr. Subbu was appointed as Director of PROTON up until the end of the financial year. He has no conflict of interest with the Company and has no family relationships with any other Director and/or major shareholder of the Company. He has had no conviction for any offences within the past ten (10) years.
MR. BEHARA VENKATA RAMA SUBBU
Independent Non-Executive Director | Aged 56, Indian National
Profile of Directors
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Tan Sri Rainer Althoff who was appointed Director of PROTON on 22 June 2010, is also a Member of the Board Audit Committee, and sits on the boards of various companies within the PROTON Group.
Tan Sri Rainer holds a Masters in Electronics and Electrical Engineering from Bergische University Wuppertal, Germany in 1969 and has spent a majority of his working life with Siemens AG. Tan Sri Rainer was the President and Chief Executive Officer of Siemens Malaysia Sdn. Bhd. and also the Siemens spokesperson for all Siemens operations and affiliate companies in Malaysia from 1 January 1999 until 30 November 2009.
Tan Sri Rainer is currently the Non-Executive Chairman of Nokia Siemens Networks Sdn. Bhd. He is also a Member of the International Advisory Panel to the board of directors of CIMB Bank, Trustee of Jeffrey Chia Foundation Malaysia and Managing Director of Jatro AG, Singapore.
Tan Sri Rainer was appointed in June 2010 and therefore has not attended any Board meetings held during the Financial Year ended 31 March 2010. He has no conflict of interest with the Company and has no family relationships with any other Director and/or major shareholder of the Company. He has never been convicted for any offence within the past ten (10) years.
TAN SRI RAINER ALTHOFF
Independent Non-Executive Director | Aged 64, German National
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Encik Abdul Rahim Bin Abdul Hamid was appointed Independent Non-Executive Director of PROTON on 20 July 2010. He was also appointed Chairman of the Board Audit Committee effective the same date.
Encik Abdul Rahim who is a Qualified Certified Accountant began his career in Coopers & Lybrand in 1971 and became the Managing Partner/Chief Executive of the firm in 1993. In 1998, he assumed the position of Deputy Executive Chairman of PricewaterhouseCoopers until his retirement in 2004.
Encik Abdul Rahim is currently the President of the Malaysian Institute of Accountants as well as the ASEAN Federation of Accountants.
Encik Abdul Rahim is a director of Chemical Company of Malaysia Berhad, MIDF Amanah Asset Management Berhad and Petra Energy Berhad. He represents the Ministry of Finance on the board of MIMOS Berhad.
Encik Abdul Rahim was appointed in July 2010 and therefore has not attended any Board meetings held during the Financial Year ended 31 March 2010. He has no conflict of interest with the Company and has no family relationships with any other Director and/or major shareholder of the Company. He has never been convicted for any offence within the past ten (10) years.
ENCIK ABDUL RAHIM BIN ABDUL HAMID
Independent Non-Executive Director | Aged 60, Malaysian
Profile of Directors
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PROTON GROUP MANAGEMENT COMMITTEE MEMBERS
(left to right)
Klaus E. Liske Azmi Bin Idris Muhammad Aris Bin Anuar
Tajul Zahari Bin Abu Bakar
Michele Kythe Lim Beng Sze
Azhar Bin Othman Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir
Director, Group Procurement
Director, Group Quality
General Manager, Manufacturing
Director, Engineering
Chief Legal Counsel
Chief Financial Officer
Managing Director
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Dr. Wolfgang Karl Epple
Mohd Nizamuddin Bin Mokhtar
Yohani Binti Mohd Yusof
Mohamad Shukor Bin Ibrahim
Claudius Meynert Dr. Badrulhisham Bin Mohd Ghazali
Senior Director, Group Operations
Group Company Secretary & Compliance
Director, Group Marketing & After Sales
Chief Executive Officer, Proton Edar Sdn. Bhd.
Director, Export
General Manager, Corporate Planning
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HEADS OF INTERNATIONAL SUBSIDIARIES
Brian CollierManaging Director, Proton Cars (UK) Ltd
John StartariManaging Director, Proton Cars Australia Pty Limited
Dany Taner BaharChief Executive Officer, Group Lotus Plc
Ricky Too Heng KeongPresident Director, PT Proton Edar Indonesia
Gunther ScherzActing Managing Director, Proton Singapore Pte Ltd
Philipe ChengOperations Manager, Proton Motors (Thailand) Co. Ltd.
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Heads of International Subsidiaries
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A New Dawn in Performance
PROTON’s entry into F1 marks the growth of our repute as a
leader in the global automotive industry. Leveraging on our
established R&D capabilities with LOTUS, we are working to
develop enhanced racing engine technology.
We now perform on the world arena.
CHAIRMAN’S STATEMENT
IT HAS BEEN A GOOD FINANCIAL YEAR AND MORE IMPORTANTLY, AS WE CELEBRATE OUR SILVER JUBILEE, IT HAS BEEN A THOROUGHLY CHALLENGING, HUMBLING AND EXHILARATING 25 YEARS FOR PROTON AND IN MY PERSONAL OPINION, DESPITE THE PEAKS AND TROUGHS, WE ARE NOW IN A BETTER POSITION THAN EVER TO FORTIFY OUR POSITION AS A TRUE AUTOMOTIVE ORIGINAL EQUIPMENT MANUFACTURER (OEM) WITH CLEAR AND REALISTIC ASPIRATIONS.
ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY, I AM PLEASED TO PRESENT THE ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS OF THE PROTON GROUP FOR THE FINANCIAL YEAR 2009/10 (FY09/10).
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Dato’ Sri Mohd NadzmiBin Mohd Salleh
Chairman/Non-Independent Non-Executive Director
Chairman’s Statement
INDUSTRY OVERVIEWThe aftermath of the global economic crisis continued to batter the global automotive industry, especially in the United States, where we saw several iconic brands reduced to mere chapters in the annals of automobile history. Although not as dramatic, the Malaysian automotive industry suffered a worryingly lacklustre start to 2009. Thanks to the immediate and proactive action by the Government of Malaysia, the Second Stimulus Plan, which was announced by the Prime Minister YAB Dato’ Sri Mohd Najib Tun Razak in March 2009, ignited the resuscitative spark.
By July 2009, the monthly Total Industry Volume (TIV) was already showing very positive signs of recovery and the industry performance in the last quarter of 2009 outperformed the corresponding period in 2008 by a whopping 18%, closing the year with an annual TIV of 536,905 units, just 2% shy of the 2008 TIV but surpassing even Malaysian Automotive Association’s (MAA) revised forecast of 500,000 units by a commanding 7%.
The momentum from the last quarter of 2009 continued in 2010 and the numbers thus far have simply been record breaking. The recorded TIV for the months of January to March 2010 are, 33%, 9% and 25% higher respectively than they were in the corresponding months of the previous year and an encouragingly superior 22% compared to the same quarter last year.
Nevertheless, despite a marginal shrink of 2% in the TIV (all vehicles and passenger vehicles), PROTON recorded a commendable increase in market share in both categories; from 25.9% in 2008 to 27.6% in 2009 (TIV all vehicles) and 28.5% in 2008 to 30.4% in 2009 (TIV passenger vehicles).
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Chairman’s Statement
The 2010 Frost & Sullivan Malaysia Excellence Awards: Best Passenger Car Model of the Year recipient – the Saga – led the way for PROTON, with more than 70,000 units sold in 2009. The Persona, our “Pride and Joy” which started the revival of the Company, continues to be a favourite by breaching the 40,000 mark. Another noteworthy achievement is the Exora, PROTON’s first multi-purpose vehicle (MPV) and recipient of the 2010 Frost & Sullivan Malaysia Excellence Award for Best Automotive Debut Model of the Year, which recorded unit sales of more than 18,000. This not only contributed to the increase in PROTON’s unit sales but also added to the increase in the TIV (multi-purpose vehicles category) which bucked the declining trend.
Moving forward, MAA has revised its initial 2010 TIV forecast of 550,000 by an additional 20,000. This is primarily driven by the bumper first half of 2010 and if the 570,000 target is achieved, the benchmark set in 2005 of 552,316 units will be surpassed. This improved outlook is based on better consumer sentiment, enhanced business confidence, global economic recovery and stable interest rates.
Cautiously optimistic, PROTON remains committed to developing the right car for the right market, at the right price and at the right time – a simple yet burgeoning aspiration for the Company. Growing consumer confidence in the brand has been a great motivation for PROTON not only to intensify but also expedite efforts to introduce even better quality, more appealing and competitive models aimed at both strengthening our position in the domestic market and continuing with our efforts for an even greater acceptance in the international market.
Export wise, PROTON also recorded a jump in sales of more than 35% as compared to the previous financial year and this is largely attributable to the much improved performances in China (with our business partner, Youngman), Thailand, Indonesia, Australia and Taiwan. Moving forward, the Asian Multi-Local OEM (AMLO) strategy remains the key driving factor with regard to our international programme. Thailand and China remain our most successful export markets and with our Completely Knocked-Down (CKD) programme with Youngman steadily progressing, we are very confident that China will be a very successful international venture for the Company.
Proton Exora being given the thumbs up during the launch in Indonesia.
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Chairman’s Statement
FINANCIAL PERFORMANCEFor FY09/10, PROTON Holdings Berhad posted a consolidated profit before tax of RM261 million, which is a marked improvement compared to the loss before tax of RM319 million in the last financial year.
Despite a contraction in the TIV, revenue for the year ended 31 March 2010 grew by 26% to RM8.23 billion compared to RM6.52 billion posted in the last financial year. This performance was the result of encouraging sales recorded by three core models – the Saga, Persona and Exora.
The marked improvement in performance is also a result of cumulative initiatives launched by the Management over the last few years, which included amongst others, enhancing product portfolio, tightening cost management, ensuring manufacturing efficiency, improving quality and strengthening the automotive ecosystem through dealer and vendor consolidation initiatives.
Additionally, PROTON’s cash and cash equivalents recorded an increase of 79%, up to RM1.6 billion and this augurs well for the Group as cash resources are required for continued investments in the development of newer, better and greener products.
DIVIDENDSOn the back of a significantly improved FY09/10, the Board of Directors of PROTON recommends the payment of a First and Final dividend of 20 sen per ordinary share of RM1.00 each less tax at 25% on 549,213,002 ordinary shares amounting to RM82,381,950 in respect of the financial year ended 31 March 2010, subject to the approval of our Shareholders at the Company’s forthcoming Annual General Meeting.
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Chairman’s Statement
TOWARDS A NEW DAWNIt must be appreciated that as the world moves more and more towards globalisation, rationalisation and liberalisation, companies and industries which are not lean and streamlined will be mired by its uncompetitiveness, suffering almost certain degradation and ultimately, limply bandied about in a highly charged industry until it is rendered obsolete and irrelevant.
The future is upon us and, with a score and five years under our belt, we have taken stock of our strengths and weaknesses and the Board has accordingly instructed Management to proceed with the internal restructuring of the Company with the aim of making each and every core division in the Company leaner, globally competitive and potentially less dependant on PROTON’s captive businesses.
As a company is defined by its product, the more than encouraging market acceptance of our Persona, Saga and Exora exemplifies PROTON’s commitment towards excellence. Moving forward, newer and more exciting products are in the pipeline and we believe that these will not only cement our presence in the global automotive industry but will also expand our market and customer base.
His Majesty DYMM Seri Paduka Baginda Yang di-Pertuan Agong Al-Wathiqu Billah Tuanku Mizan Zainal Abidin Ibni Al-Marhum Sultan Mahmud Al-Muktafi Billah Shah taking a closer look at the Evora during his visit to Lotus in the UK.
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Chairman’s Statement
By the end of 2010, one new product will be launched in collaboration with Mitsubishi and a facelift of an existing model will be produced to ensure the continuous growth and development of our product range and line-up. Thereon, PROTON will be focusing on a very exciting 2011 with the introduction of our turbo engine, two facelifts and another brand new product which will signal PROTON’s transformation in terms of design and styling.
Beyond 2012, the EMAS (Eco-Mobility Advanced Solution), which was unveiled at the recent Geneva Motor Show, is merely, for the lack of a better expression, the tip of the primordial iceberg. The EMAS is not merely a concept car but it is the physical embodiment of the pride, passion and progress that has charged the Company through all these years and it is also a snippet of our dreams and aspirations, in terms of concept, styling, design, technology and elements of these will be incorporated in all our future products and technological offerings.
In terms of technology, since 2008, greater emphasis has been placed on electric and hybrid technology and today, we can see breakthroughs being made. Although it may be some time before mass production takes place, if all goes according to plan, units will be made ready in the very near future for market testing. Additionally, as a direct consequence of our investment in these new technologies, there is a clear up-skilling of human capital which translates to the development of our engineers and technicians and it is already foreseeable that this select group of people will be the pioneers of the future PROTON.
With regards to Lotus, I am also very happy to announce that with the successful launch of the Evora, Lotus has, to a certain extent, regained some of its former glory. The Evora has won many accolades and garnered rave reviews all around the world. Nonetheless, to ensure that Lotus lives up to its iconic brand, the recent appointment of Mr Dany Bahar, as Chief Executive Officer, who was formerly of Ferrari, and with the injection of key personnel from established OEMs and engineering companies into the current management of Lotus, we strongly believe that there will be stronger cooperation and understanding between PROTON and Lotus. What needs to be done now is the turnaround of a legendary car company and with more aggressive and business minded management teams on both sides of the world, I believe the equation will be one of success.
PROTON’s Advisor, Chairman and Managing Director at the unveiling of the EMAS at the Geneva Motorshow.
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ACKNOWLEDGEMENTPROTON’s improvement in FY09/10 and more so, its growth in the past 25 years, is a clear message to the rest of the world that PROTON is more than just a car company. PROTON is the realisation of the dream and the dogged determination of a leader leading its nation from an agrarian-based economy towards industrialisation. We are the personification of the collective pride of the nation, powerfully driven by passion, and perseveringly focused on progress. In spite of all the cynical criticisms, doubts and scepticisms, we have continued to be the champion of the industry – and we intend to remain as the only one and true champion of the national automotive industry.
Like its scientific namesake, PROTON is positively charged at the core by its people and throughout the quarter of the century, we have been blessed with the pride, passion and progress of tens of thousands of PROTONians. Although many have left, many more still remain and I am certain we will welcome many more in the years to come. To each and every one of you who was and those of you who are still with PROTON, on behalf of the Board of Directors, I extend a sincerely humble heartfelt Thank You for your generous contributions to the development of this national car project. In addition, as we celebrate our 25th Anniversary, a very special Thank You also goes out to the 651 employees who have served the Company for 25 years or more. Although individually, a quarter of a century might seem pedestrian, collectively, you are an automotive treasure trove of a staggering 16 millennia.
Chairman’s Statement
PROTON’s 25th Anniversary commemorative book, “A Saga - PROTON’s 25 year story”, was launched by Prime Minister Dato’ Sri Mohd Najib Tun Razak during PROTON’s 25th Anniversary Gala Celebration.
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I would also like to take this opportunity to thank the members of the Board who have recently resigned, namely Tuan Haji Abdul Jabbar Abdul Majid, Tuan Haji Abdul Kadir Md Kassim and Mr Oh Kim Sun for their invaluable contribution and guidance during their years of service with the Group. At the same time, I would like to welcome Mr Behara Venkata Rama Subbu, the former President of Hyundai Motor India, YBhg Tan Sri Rainer Althoff, the former President and CEO of Siemens Malaysia and En Abdul Rahim Hamid, the current President of Malaysian Institute of Accountants, onto the Board of Directors of PROTON. I am very certain that your collective and illustrious experiences in a mosaic of industries will be a boon to the Group as we continue our journey towards excellence.
To the extended PROTON family – our shareholders, sales/service dealers and vendors and business partners domestically and internationally – goes our sincerest appreciation for your continued perseverance and dedication through the years. Rest assured, we are committed to an exciting future and we hope that you will be with us every step of the way.
I would also like to record my gratitude to the remaining members of the Board of Directors and the Management Team, ably led by YBhg Dato’ Syed Zainal Abidin Syed Mohamed Tahir, for their vision and commitment to guide PROTON in achieving our strategic objectives.
Our sincerest gratitude also goes to our Prime Minister YAB Dato’ Sri Mohd Najib Tun Razak, our adviser YABhg Tun Dr Mahathir Mohamed, and the Malaysian Government under the leadership of three Prime Ministers, for their continued support and guidance of PROTON and the Malaysian automotive industry, without which, our progress and the growth of the industry in the past 25 years would have been greatly reduced and immaterial.
Finally, to our ever increasing customers around the globe, thank you for your renewed confidence and continued support. Our promise is simple – it will be an even better and greater 25 years. Many more exciting products are in the pipeline and we have committed to double our efforts in ensuring uncompromising customer satisfaction.
To the next 25 years of Pride Passion and Progress – I am Positively PROTON.
Thank you
Dato’ Sri Mohd Nadzmi Bin Mohd SallehChairman
Chairman’s Statement
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Managing Director’s Review
CELEBRATING OUR PAST,PRESENT AND FUTUREOriginally conceived by Yang Amat BerbahagiaTun Dr. Mahathir Mohamad, the then Prime Minister of Malaysia, PROTON was incorporated on 7th of May 1983 with the aim of building a national car company that will act as a key driver of national development to accelerate the nation’s auto manufacturing capabilities through technology transfer with strategic partnerships and technical collaborations.
Twenty-fi ve years on, from a mere car assembler to a full-fl edged car manufacturer and weathering the best and worst of times, PROTON stands on a foundation of sterling strength as Malaysia’s largest auto manufacturer, the only full-fl edged OEM car manufacturer in South-East Asia with international engineering expertise as a result of our 100% stake in Lotus Group.
“IN THE 25 YEARS OF OUR OPERATIONS, WE HAVE ACQUIRED NOT ONLY THE KNOWLEDGE BUT ALSO THE RIGHT SKILLS AND EXPERTISE TO BUILD GOOD, COMPETITIVE CARS, AND NOW WE ARE STRENGTHENING OUR FUTURE STRATEGIES TO SUCCESSFULLY COMPETE IN THE GLOBAL MARKET.”
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MANAGING DIRECTOR’SREVIEW
DATO’ HAJI SYED ZAINAL ABIDIN B SYED MOHAMED TAHIR
Managing Director
Today, our operations have extended across South-East Asia to the Middle East, China, Australia and the United Kingdom. Our global workforce totals over 11,789 personnel working in all areas of vehicle design, R&D, manufacturing, marketing, sales & distribution and corporate services. We have a team of Lotus engineers permanently based at the design and development centre in Shah Alam, Malaysia. We have also achieved a stable of well-proven and well-received products that enables the brand to seize market share at home as well as abroad – ranging from versatile and reliable four-door family vehicles, two-door hatchbacks for the young-at-heart, stylish executive sedans, spacious and affordable multi-purpose vehicles to the world-renowned sports cars from Lotus.
It is truly inspiring to be able to see our efforts and achievements over the years coming to fruition and how PROTON has managed to rise above the various challenges and hurdles throughout the years. To succeed in providing competitively priced and high quality vehicles to all our customers has also been truly motivating.
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Managing Director’s Review
During the year under review, the launch of PROTON’s first multi-purpose vehicle, Proton Exora, in April 2009 was followed by the introduction of several refreshers such as the Saga SE, Persona Elegance and the Satria Neo Lotus Racing Edition. These models were well-accepted by the market, with consistent orders received. As promised, PROTON keeps enhancing its operations, processes and quality to drive and strengthen the company further, year after year.
CELEBRATING OUR BRANDHaving achieved our initial goals, we are now in the position to go further and strengthen our global presence. Building a brand globally requires PROTON to energise, transform and raise the brand consciousness among a greater diversity of consumers. As mentioned last year, we have always believed that the value of the PROTON Brand is a result of many factors including products and services, customer experiences and marketing. Thus, after 25 years, it is with this sense of maturity that the PROTON Brand is evolving, to focus on its customers’ needs and wants.
CELEBRATING RESEARCH & DEVELOPMENTPROTON’s Research and Development facility has contributed a most critical activity to the Company; innovation in design and creative engineering methods. Consumers can now expect PROTON to deliver more unique, stylish and attractively priced cars.
In March 2010, we unveiled the EMAS concept cars at the prestigious Geneva Motorshow. EMAS, which stands for Eco Mobility Advance Solution, marks the commencement of our global small car feasibility study which is part of PROTON’s plan to enhance its product line-up. This vehicle is not only a show vehicle but also illustrates PROTON’s innovative thinking into the future of small cars.
With the EMAS project, PROTON has stepped up to meet global trends by committing to deliver a world class and eco-friendly vehicle that is spacious and stylish. The global small car will be a major product drive for PROTON in all our targeted markets.
Moving forward, we aim to be the driver for green initiatives in Malaysia through close collaboration with the Malaysian Government. We have outlined a strategic plan in relation to this field and are expecting to proceed with the implementation soon. At the same time, we have also embarked on hybrid and electric vehicle projects in which our test fleet vehicles are expected to roll out by 2012.
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CELEBRATING QUALITYOur quest to deliver quality has been recognised through numerous awards bestowed upon the Group throughout the years.
Recently, PROTON received two distinguished awards for the Proton Saga and Proton Exora at the 2010 Frost & Sullivan Malaysia Excellence Awards. These were the awards for the Best Passenger Model Car of the Year for the Proton Saga, and Best Automotive Debut Model of the Year, for the Proton Exora. PROTON had previously received the Frost & Sullivan award in 2008, when the Persona was named Best Model of The Year.
The Saga and Exora were evaluated on a variety of market performance indicators including revenue growth; market share; leadership in product innovation; marketing strategy and business development strategy.
These awards endorse the success of PROTON and are true indications of how the Company has progressed and stamped its mark in the industry.
PROTON’s achievements have also been acknowledged by several other awards for its cars, namely, the Best Model of the Year for the Saga by the 2009 Asia Pacific Frost & Sullivan Automotive Award, Best Local Assembly Sports Car for the Satria Neo CPS and the Best Local Assembly MPV for the Exora by the Asian-Auto VCA Auto Industry Awards 2009, and the Car of the Year Award for the Small/Medium MPV for the Exora by the Autocar Asean Awards 2009.
PROTON’s Managing Director, Chairman and Advisor look on as Prime Minister YAB Dato’ Sri Mohd Najib Tun Razak unveils the EMAS concept car during PROTON’s 25th Anniversary Gala Celebration.
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Managing Director’s Review
CELEBRATING EXCELLENCEIn May 2009 we signed a new Master Dealership Agreement with Edaran Otomobil Nasional Berhad (EON) in a move to rationalise the sales and services network of Proton vehicles. The Rationalisation Programme was implemented to establish the right number of dealers according to the needs of PROTON.
With the signing of the new agreement, all EON sales and service dealers underwent a migration process into the EDAR sales and service network and subsequently, EON no longer had any sub-dealers, be it sales or after-sales for, Proton vehicles.
In our effort to further rationalise operational processes and costs, we had also initiated a Vendor Rationalisation Programme. The supplier base was restructured using a Tiering System based on vehicle modules as well as vendor specialisations.
PROTON’s original factory plant, covering 99,400 sqm, is located at Shah Alam near Kuala Lumpur in central Malaysia. The site houses an engine and transmission factory, 2 assembly plants, R&D centre and a semi-high speed test track. The factory has the capacity to produce 240,000 units vehicles per annum.
In 2005, PROTON’s second production facility in Tanjung Malim was inaugurated to cater to the projected increase from both the domestic and export markets. Mostly automated, the Tanjung Malim plant is five times larger than the existing facility in Shah Alam and incorporates the latest manufacturing systems and technology designed for better efficiency, productivity and quality.
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Designed to be flexible, each production line in Tanjung Malim is capable of assembling vehicles on three different platforms and producing up to nine different models at any one time. The production line at Tanjung Malim also benefits from an Automated Line Control (ALC) or error-proof system integrated to maintain higher efficiency and higher quality of cars. Operating with an 85 per cent pass ratio compared to the existing 65 per cent pass ratio at Shah Alam, the new plant has recorded a reduction in operational costs by 20 per cent.
CELEBRATING PASSION, UNITY AND COMMITMENTAs we celebrate our 25th Anniversary, I take the opportunity to thank all PROTON staff members for their dedication and contribution to the Company, without whom our growth and success for the past 25 years would not have been possible. The hard work and loyalty of the PROTON family paved our journey and we shall continue the quest to take this Company to greater heights.
With hard work and determination from the workforce, I am optimistic that PROTON will stand the test of time, by being progressive and dynamic, despite the challenges that will come our way. Nothing is impossible, and with everyone’s continuous determination and hard work, I am confident that PROTON will one day conquer the world market and stand tall on the world map of the automotive industry.
On this note, I am pleased to present you our Operations Review that highlights the key developments and initiatives of the Group, which is a clear reflection of our achievements to date.
Thank you
DATO’ HAJI SYED ZAINAL ABIDIN B SYED MOHAMED TAHIRManaging Director
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A new milestone was reached in 2010 with PROTON’s maiden success in developing new age hybrid and electric cars. The Division achieved a series of outstanding successes in engineering, style and technology development which was evidently on display at the launch of the EMAS Concept cars at the Geneva Motorshow in March 2010.
While breaking new ground in our design and engineering capabilities, the Division continued upgrading features and performance with the release of new and enhanced models. During the year under review, PROTON also achieved local and regional recognition for several research and development works on various aspects of automotive engineering.
Powering the development of home-grown talent, PROTON’s Engineering Division continues to collaborate with local institutions of higher learning and corporations, as well as support the advancement of automotive engineering as a course of study at university levels.
To keep pace with our global aspirations, the Division is also focused on ensuring optimum engineering support to overseas partners, and Product Lifecycle Management (PLM) to cut down on time and costs in delivering new models to the market.
ENGINEERING SERVICES
AS THE ENGINE POWERS ACCELERATION, THE ENGINEERING DIVISION EMPOWERS PROTON’S EMERGENCE INTO A NEW DAWN. THE VITAL HUBS OF VEHICLE DEVELOPMENT, ENGINE DEVELOPMENT, STYLING & TECHNOLOGY DEVELOPMENT AND RESEARCH, MAKE THIS DIVISION THE CORE WITHIN WHICH POSSIBILITIES ARE CONCEIVED, INCUBATED, GERMINATED AND HATCHED.
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Becoming the No. 1 Choice
A New Dawn for Engineering Services
PRODUCT DEVELOPMENT
Proton Persona Elegance
As the next evolution in the Persona lifecycle, the Elegance was conceived to offer ever more discerning customers an enhanced and attractive sedan, by elevating its value proposition to an even higher level. The Persona has attained the accolade of being Malaysia’s most popular mid-size sedan for over 2 years running since its launch in August 2007. It has achieved class-leading sales fi gures, proving that the unveiling of the Elegance in March 2010 came at the right time for a mid-cycle facelift.
The numerous upgrades for the Elegance are beyond skin-deep, as nothing has been spared in the pursuit of quality. Improved fi t, fi nish, specifi cation, design and Noise, Vibration & Harshness (NVH) levels are now part of every unit rolled off the production line. The Elegance also comes equipped with new upmarket features. These include an MP3 Radio with USB, LED Side Turn Signals and Rear Combination Lamps, as well as luxurious leather seats for a more sophisticated image. Occupants’ safety remains a priority as the Elegance continues to offer active and passive safety systems, such as Dual Airbags, Anti-Lock Braking System (ABS) with Elecronic Braking Distribution (EBD), Side-Impact Protection Beams, a Collapsible Steering Column, and the legendary Lotus Ride & Handling – a standard feature in every Proton.
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Operations Review
Proton Saga Special Edition (SE)
The Saga Special Edition (SE) was launched in July 2009 as a premium variant of the highly successful Saga, providing the masses with a car that is affordable yet hip and stylish. Some of the refinements come in the form of sporty alloy wheels, attractive color schemes, comfortable leather seats, purposeful body kit, and various other tasteful appointments. Continuing with the proven and reliable 1.3L Campro IAFM engine, the SE offers enough power-on-demand for a spirited drive, be it in the city or in extra-urban settings. Even with its inexpensive price tag, safety is not compromised, as the SE has a tough and rigid body construction, in addition to many other safety features.
Versatility and practicality come bundled with the 413-litre boot, cup holders, storage compartments, and door pockets. All these epitomize PROTON’s quest to offer Malaysians a car that is engineered with them in mind. It embodies all the qualities one would desire in a car – style, convenience, safety and affordability. In this regard, the SE has truly banished all conventional notions, and delivers all its promises in a neat package.
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STYLING & TECHNOLOGY DEVELOPMENT
Global Styling – EMAS Concept Car
The EMAS concept car project is a joint development initiative with ItalDesign-Giugiaro of Italy where PROTON has harnessed the wealth of experience available from the Maestro in designing & engineering cars for the masses.
The halo effect of this collaboration is immense and can best be valued over time. Such is the nature of Design where the maturity of a particular direction can only be judged when it has achieved critical mass within every product in the organisation. It is worth mentioning also that the joint development with ItalDesign-Giugiaro has yielded a fresh and far stronger corporate image for PROTON’s cars. This new image is what will propel the new Global Styling Initiative.
Hybrid Vehicle
Looking to adhere to the Malaysian Government’s low carbon and green growth agenda, PROTON has started initiatives in the development of hybrid electric vehicles. The project was initiated in September 2009 and the prototypes are being subjected to performance evaluation, testing and safety assessment.
By adjusting to the environmental standards in the global vehicle market, the Hybrid can lead the Southeast-Asian region in the rapidly emerging market for alternative green vehicles with low carbon emission and fuel consumption.
Moving forward, PROTON is forming strategic partnerships with Government agencies, engineering consultants and academic institutions to lead and manage a hybrid fleet test vehicle (FTV) programme to encourage the development of supporting infrastructure, green legislation schemes and public acceptance towards a greener future.
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Powertrain/Drivetrain and Energy Storage
Electric Vehicle (EV)
PROTON entered into the development of electric vehicles as a long-term strategy towards acquiring and commercialising the technology as indicated in the PROTON Technology Roadmap. This is also part of the initiative to support the National Green Technology Policy that was implemented to chart the nation’s development in green technology as the new driver of economic growth.
Electric vehicle is a type of alternative fuel car that utilises electric power to run motors instead of an internal combustion engine. The electric power is usually derived from battery packs which are at high rechargeable rates. The car is also built with intelligent motor controllers for optimum electric usage.
Earlier, 2 units of EV vehicles were developed with Lotus Engineering, UK. The PROTON Persona was developed as a performance EV demonstrator with longer range, faster acceleration and higher maximum speed, whilst the SAGA was developed as a basic city driving demonstrator to meet urban city driving needs.
As a benchmarking exercise, PROTON also jointly developed two additional units of Proton SAGA using a different technology provider. These 2 additional EVs are now going through the testing and evaluation phase.
Operations Review
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