listed company - ces Berhad MBM RESOURCES BERHAD · 2013. 5. 21. · Bursa Malaysia Securities Berhad Stock Code : 5983 REGISTERED OFFICE Suite C-5-4, Wisma Goshen, Plaza Pantai,

MBM Resources Berhad (284496-V)

CORPORATE OFFICE

No. 1-6, The Boulevard, Mid Valley City, Lingkaran Syed Putra

59200 Kuala Lumpur, Malaysia

t (603) 2287 6803 f (603) 2287 6805

www.mbmr.com.my

MBM RESOURCES

BERHAD

ANNUAL REP

ORT 20

11

annual repor t2011annual report 2011M

BM R

esources Berhad (284496-V

)

02

Contents

Corporate Information

Corporate Profile

Corporate Structure

5 Years Group Financial Performance

Financial Highlights

Joint Letter to Shareholders

Corporate Social Responsibility

Year at a Glance

Profile of Directors and Management Team

0405060708212224

39 Other Information Required

by the Listing Requirements of

Bursa Malaysia Securities Bhd

Statement of Internal Control

Report on Audit Committee

Statement of Directors’ Responsibilities

in Relation to the Financial Statements

List of Properties

Analysis of Shareholdings

List of Top 30 Shareholders

Financial Statements

Notice of 18th Annual General Meeting

Form of Proxy

404145

46485157

170

171

Statement of Corporate Governance

29

Cover rationale"Shapes" is a dedication to our subsidiaries and associates. These shapes and colours represent their diversity and vibrancy, coming together as the formation of MBMR as a Complete Automotive Group takes shape.

As one of the few automobile players to have grown despite a testing year for the automotive industry, the diagonal design elements used throughout the report is a testament of our growth, goals and aspirations.

02

Contents


Corporate Profile

Corporate Structure





Year at a Glance

Profile of Directors and Management Team

0405060708212224

39 Other Information Required

by the Listing Requirements of

Bursa Malaysia Securities Bhd

Statement of Internal Control

Report on Audit Committee

Statement of Directors’ Responsibilities

in Relation to the Financial Statements

List of Properties

Analysis of Shareholdings

List of Top 30 Shareholders

Financial Statements

Notice of 18th Annual General Meeting

Form of Proxy

404145

46485157

170

171

Statement of Corporate Governance

29

Cover rationale"Shapes" is a dedication to our subsidiaries and associates. These shapes and colours represent their diversity and vibrancy, coming together as the formation of MBMR as a Complete Automotive Group takes shape.

As one of the few automobile players to have grown despite a testing year for the automotive industry, the diagonal design elements used throughout the report is a testament of our growth, goals and aspirations.

MBM Resources Berhad(284496-V)

COMPANY SECRETARIES

Puan Shahrizat bt Othman(MAICSA 0764744)

Puan Zaharah bt Ibrahim(MAICSA 7012004)

PRINCIPAL BANKERS

Ambank (M) Berhad

CIMB Bank Berhad

Hong Leong Bank Berhad

Malayan Banking Berhad

Public Bank Berhad

United Overseas Bank (Malaysia) Berhad

STOCK EXCHANGE LISTING

Main Market

Bursa Malaysia Securities Berhad

Stock Code : 5983

REGISTERED OFFICE

Suite C-5-4, Wisma Goshen,

Plaza Pantai, Jalan Pantai Baharu


t (603) 2283 4007

f (603) 2287 7006

FINANCIAL CALENDAR

17TH ANNUAL GENERAL MEETING

14 June 2011

2011 RESULTS ANNOUNCEMENT

Quarter One : 24 May 2011

Quarter Two : 11 August 2011

Quarter Three : 10 November 2011

Quarter Four : 24 February 2012

DIVIDEND PAYMENTS

Second interim for 2010:

21 March 2011

First Interim for 2011:

15 September 2011

SHARE REGISTRAR

AAJ Registration Services Sdn Bhd

Suite C-5-4, Wisma Goshen



t (603) 2283 4007

f (603) 2287 7006

AUDITORS

Deloitte KassimChan (AF: 0080)

Chartered Accountants

CORPORATE OFFICE

No. 1-6, The Boulevard

Mid Valley City

Lingkaran Syed Putra

59200 Kuala Lumpur

Malaysia

t (603) 2287 6803

f (603) 2287 6805

www.mbmr.com.my

MBM ResouRces BeRHAD2


AnnuAl RepoRt 2011 3

MBM Resources Berhad(284496-V)

COMPANY SECRETARIES

Puan Shahrizat bt Othman(MAICSA 0764744)

Puan Zaharah bt Ibrahim(MAICSA 7012004)

PRINCIPAL BANKERS

Ambank (M) Berhad

CIMB Bank Berhad

Hong Leong Bank Berhad

Malayan Banking Berhad

Public Bank Berhad

United Overseas Bank (Malaysia) Berhad

STOCK EXCHANGE LISTING

Main Market

Bursa Malaysia Securities Berhad

Stock Code : 5983

REGISTERED OFFICE

Suite C-5-4, Wisma Goshen,



t (603) 2283 4007

f (603) 2287 7006

FINANCIAL CALENDAR

17TH ANNUAL GENERAL MEETING

14 June 2011

2011 RESULTS ANNOUNCEMENT

Quarter One : 24 May 2011

Quarter Two : 11 August 2011

Quarter Three : 10 November 2011

Quarter Four : 24 February 2012

DIVIDEND PAYMENTS

Second interim for 2010:

21 March 2011

First Interim for 2011:

15 September 2011

SHARE REGISTRAR

AAJ Registration Services Sdn Bhd

Suite C-5-4, Wisma Goshen



t (603) 2283 4007

f (603) 2287 7006

AUDITORS

Deloitte KassimChan (AF: 0080)

Chartered Accountants

CORPORATE OFFICE

No. 1-6, The Boulevard

Mid Valley City

Lingkaran Syed Putra

59200 Kuala Lumpur

Malaysia

t (603) 2287 6803

f (603) 2287 6805

www.mbmr.com.my

MBM RESOURCES BERHAD (MBMR)

is an automotive Group with diverse

investments in distributorship and

dealership of major international

brands of vehicles in Malaysia.

ASSOC

IATE

SUBSIDIARY

Daihatsu (Malaysia) Sdn Bhd 71.5% DMM Sales Sdn Bhd 100%

Federal Auto Holdings Berhad 100% Federal Auto Cars Sdn Bhd 100%

F.A.Wagen Sdn Bhd 100% F.A. Automobiles (Ipoh) Sdn Bhd 100%

FAST Sdn Bhd 100%

Hino Motors (Malaysia) Sdn Bhd 42%

Perusahaan Otomobil Kedua Sdn Bhd 20%

Motor

Hirotako Holdings Berhad 100%

Manufacturing

Inai Benua Sdn Bhd 70%

Property

The Group is well represented in all segments of the market from

light trucks to medium and heavy duty trucks and buses in the

commercial vehicle market and, from compact entry level

cars to luxury cars in the passenger vehicle market. Its auto

parts manufacturing division supplies to all the major

brands in Malaysia.

MBMR’s brand partners are:

Oriental Metal Industries (M) Sdn Bhd 78%

100%Summit Vehicles Body Works Sdn Bhd


Corporate Profile

MBM RESOURCES BERHAD (MBMR)

is an automotive Group with diverse

investments in distributorship and

dealership of major international

brands of vehicles in Malaysia.

ASSOC

IATE

SUBSIDIARY

Daihatsu (Malaysia) Sdn Bhd 71.5% DMM Sales Sdn Bhd 100%

Federal Auto Holdings Berhad 100% Federal Auto Cars Sdn Bhd 100%

F.A.Wagen Sdn Bhd 100% F.A. Automobiles (Ipoh) Sdn Bhd 100%

FAST Sdn Bhd 100%

Hino Motors (Malaysia) Sdn Bhd 42%

Perusahaan Otomobil Kedua Sdn Bhd 20%

Motor

Hirotako Holdings Berhad 100%

Manufacturing

Inai Benua Sdn Bhd 70%

Property

The Group is well represented in all segments of the market from

light trucks to medium and heavy duty trucks and buses in the

commercial vehicle market and, from compact entry level

cars to luxury cars in the passenger vehicle market. Its auto

parts manufacturing division supplies to all the major

brands in Malaysia.

MBMR’s brand partners are:

Oriental Metal Industries (M) Sdn Bhd 78%

100%Summit Vehicles Body Works Sdn Bhd


Corporate Structure

Note: Detailed list of the companies under the Group are shown in notes 50 and 51 of the Audited Financial Statements


Year ended December 31 2007 2008 2009 2010 2011

RESULTS (RM MILLION)

Revenue

Operating profit before interest and tax

Associates’ results

Profit before tax

Profit attributable to equity holders

Basic earnings per share (sen)

BALANCE SHEETS (RM MILLION)

Share capital

Shareholders’ equity

Total assets

Net assets per share (RM)

Operating cashflow per share (sen)

FINANCIAL RATIOS (%)

Operating profit on revenue

Return on equity

Return on total assets

SALES (UNITS)

Total Group

DMSB Daihatsu/Hino Trucks/Perodua

FAHB Volvo/ Volkswagen/ Mitsubishi

EQUITY INDICES

Closing year end share price (RM)

Price-earnings ratio (times)

1,131.0

54.8

86.8

140.5

110.5

45.9

242.0

765.9

1,001.3

3.2

29.9

4.8

14.4

11.0

18,447

17,944

503

3.20

7.0

1,203

70.1

79.4

149.9

117.1

48.4

242.1

849.1

1,077.1

3.5

15.2

5.8

13.8

10.9

18,677

18,102

575

2.28

4.7

1,101.6

30.5

54.1

85.3

66.5

27.5

242.1

894.3

1,155.5

3.7

22.6

2.8

7.4

5.8 10.6

17,816

17,174

642

2.59

9.4

1,528.5

51.5

119.0

172.4

142.1

58.6

242.7

1,018.2

1,346.7

4.2

(5.4)

3.4

13.9

22,839

20,813

2,026

3.34

5.7

1705.6

42.0

107.9

150.6

121.2

49.9

242.9

1,107.9

2,019.0

4.6

(3.9)

2.5

10.9

6.0

23,236

20,129

3,107

3.18

6.4

MBMR Share Prices from April 2007 - April 2012Group vehiclesales market share

4.00

4.50

3.50

3.00

Pe

rce

nta

ge

(%

)

2.50

2.00

1.50

1.00

0.50

0.00

2007 2008 2009 2010 2011

1,203

1,131

1,101.61,528.51,705.6

Revenue

RM1,705.6mil

MILLION

UNITSVehicle sales

Total Group

Vehicle salesDMSB Daihatsu/

Hino Trucks/Perodua

Vehicle salesFAHB Volvo/Volkswagen/

Mitsubishi

Operatingcashflowper share

-3.9sen

SEN

UNITS

18,102

17,944

17,17420,81320,129

2011

2010

2009

2008

2007

UNITS

18,677

18,477

17,81622,83923,236

2011

2010

2009

2008

2007

575

503

6422,0263,107

2011

2010

2009

2008

2007

2011

2010

2009

2008

2007

2011

2010

2009

2008

2007

149.9

140.5

85.3172.4150.6

Profitbefore tax

RM150.6mil

MILLION2011

2010

2009

2008

2007

48.4

45.9

27.558.649.9

Basic earningsper share

49.9sen

SEN2011

2010

2009

2008

2007

3.5

3.2

3.74.24.6

Net assetsper share

RM4.6

RM2011

2010

2009

2008

2007

70.1

54.8

30.551.542.0

Operating profit before interest

and taxRM42.0mil

MILLION2011

2010

2009

2008

2007

15.2

2 9 .9

22.61,528.5

-5.4-3.9

5.00

4.50

4.00

RM

3.50

3.00

2.50

2.00

1.50

1.00

0.50

0.00

30/4

/07

31/8

/07

31/1

2/07

30/4

/08

31/8

/08

31/1

2/08

30/4

/09

31/8

/09

31/1

2/09

30/4

/10

31/8

/10

31/1

2/10

30/4

/11

31/8

/11

31/1

2/11

30/4

/12



Year ended December 31 2007 2008 2009 2010 2011

RESULTS (RM MILLION)

Revenue

Operating profit before interest and tax

Associates’ results

Profit before tax

Profit attributable to equity holders

Basic earnings per share (sen)

BALANCE SHEETS (RM MILLION)

Share capital

Shareholders’ equity

Total assets

Net assets per share (RM)

Operating cashflow per share (sen)

FINANCIAL RATIOS (%)

Operating profit on revenue

Return on equity

Return on total assets

SALES (UNITS)

Total Group

DMSB Daihatsu/Hino Trucks/Perodua

FAHB Volvo/ Volkswagen/ Mitsubishi

EQUITY INDICES

Closing year end share price (RM)

Price-earnings ratio (times)

1,131.0

54.8

86.8

140.5

110.5

45.9

242.0

765.9

1,001.3

3.2

29.9

4.8

14.4

11.0

18,447

17,944

503

3.20

7.0

1,203

70.1

79.4

149.9

117.1

48.4

242.1

849.1

1,077.1

3.5

15.2

5.8

13.8

10.9

18,677

18,102

575

2.28

4.7

1,101.6

30.5

54.1

85.3

66.5

27.5

242.1

894.3

1,155.5

3.7

22.6

2.8

7.4

5.8 10.6

17,816

17,174

642

2.59

9.4

1,528.5

51.5

119.0

172.4

142.1

58.6

242.7

1,018.2

1,346.7

4.2

(5.4)

3.4

13.9

22,839

20,813

2,026

3.34

5.7

1705.6

42.0

107.9

150.6

121.2

49.9

242.9

1,107.9

2,019.0

4.6

(3.9)

2.5

10.9

6.0

23,236

20,129

3,107

3.18

6.4

MBMR Share Prices from April 2007 - April 2012Group vehiclesales market share

4.00

4.50

3.50

3.00

Pe

rce

nta

ge

(%

)

2.50

2.00

1.50

1.00

0.50

0.00

2007 2008 2009 2010 2011

1,203

1,131

1,101.61,528.51,705.6

Revenue

RM1,705.6mil

MILLION

UNITSVehicle sales

Total Group

Vehicle salesDMSB Daihatsu/

Hino Trucks/Perodua

Vehicle salesFAHB Volvo/Volkswagen/

Mitsubishi

Operatingcashflowper share

-3.9sen

SEN

UNITS

18,102

17,944

17,17420,81320,129

2011

2010

2009

2008

2007

UNITS

18,677

18,477

17,81622,83923,236

2011

2010

2009

2008

2007

575

503

6422,0263,107

2011

2010

2009

2008

2007

2011

2010

2009

2008

2007

2011

2010

2009

2008

2007

149.9

140.5

85.3172.4150.6

Profitbefore tax

RM150.6mil

MILLION2011

2010

2009

2008

2007

48.4

45.9

27.558.649.9

Basic earningsper share

49.9sen

SEN2011

2010

2009

2008

2007

3.5

3.2

3.74.24.6

Net assetsper share

RM4.6

RM2011

2010

2009

2008

2007

70.1

54.8

30.551.542.0

Operating profit before interest

and taxRM42.0mil

MILLION2011

2010

2009

2008

2007

15.2

2 9 .9

22.61,528.5

-5.4-3.9

5.00

4.50

4.00

RM

3.50

3.00

2.50

2.00

1.50

1.00

0.50

0.00

30/4

/07

31/8

/07

31/1

2/07

30/4

/08

31/8

/08

31/1

2/08

30/4

/09

31/8

/09

31/1

2/09

30/4

/10

31/8

/10

31/1

2/10

30/4

/11

31/8

/11

31/1

2/11

30/4

/12


Dear Shareholders,The year 2011 marked another year of

significant achievements. We made major progress in realising our aspiration in becoming a Complete Automotive

Group with additional investments in existing businesses and the completion of

the acquisitions of Lion Motor Sdn Bhd (LMSB), Kinabalu Motor Assembly

Sdn Bhd (KMA) and Hirotako Holdings Berhad (Hirotako). Our businesses

recorded another credible performance in the face of a challenging operating

environment, achieving a new high in revenues.

"Shapes" is a dedication to our subsidiaries and associates. These shapes and colours represent

their diversity and vibrancy, coming together as the formation of MBMR as a Complete Automotive

Group takes shape.

MAN

UFAC

TURI

NG

Parts &

Accessories



Dear Shareholders,The year 2011 marked another year of

significant achievements. We made major progress in realising our aspiration in becoming a Complete Automotive

Group with additional investments in existing businesses and the completion of

the acquisitions of Lion Motor Sdn Bhd (LMSB), Kinabalu Motor Assembly

Sdn Bhd (KMA) and Hirotako Holdings Berhad (Hirotako). Our businesses

recorded another credible performance in the face of a challenging operating

environment, achieving a new high in revenues.

"Shapes" is a dedication to our subsidiaries and associates. These shapes and colours represent

their diversity and vibrancy, coming together as the formation of MBMR as a Complete Automotive

Group takes shape.

MAN

UFAC

TURI

NG

Parts &

Accessories




Economy and the Automotive Industry

Although the Malaysian economy remained

stable in 2011, with the GDP growing by 5.2%, the

automotive industry faced some short term challenges.

The earthquake in Japan and the floods in Thailand severely

disrupted global supply chains, as the areas devastated are

home to major automotive parts manufacturers.

The new Hire Purchase Act introduced in the middle of the year resulted in

a temporary slowdown in the processing of hire-purchase loans.

Consequently, the Malaysian Total Industry Volume (TIV) for vehicle sales slipped to

599,877 units in 2011, declining 0.9% from 2010’s record high of 605,166 units.

In spite of the challenges, we are pleased to report that we have outperformed our 2010

revenues and increased total Group vehicle sales by 2%.


2011 Performance Highlights:

Revenue for 2011 increased 12% to RM1,706 million due to higher

sales from all brands under Federal Auto Holdings Berhad (FAHB)

as well as additional tyre assembly business for Oriental

Metal Industries (M) Sdn Bhd (OMI).

Profits, however, were lower due in part to the strong

Yen, disruption in parts supply caused by the

Japan earthquake and floods in Thailand,

and the one-off costs incurred for the

acquisition of Hirotako.

REVENUE: +12% to RM 1,706 million

TOTAL GROUP VEHICLE SALES: +2% to 23,236 units

PROFIT BEFORE TAX: -13% to RM151 million

NET PROFIT TO SHAREHOLDERS: -15% to RM121 million

NTA PER SHARE: +8.6% to RM4.56

DIVIDEND PER SHARE: -54% to 6 sen



We currently represent seven brands and two tuning brands. As

leaders of the brands we represent, we have continued our multi-

brand strategy to cover different segments of the market, and to

widen our coverage by increasing our nationwide presence. The

Group now has a combined total of 47 branches.

We have focused on building a strong and comprehensive business

model that caters to the customer’s needs at all levels; from

selling the vehicle to upgrading vehicles with tuning and body

kits, aftersales and body and paint services. Investments in our

distribution network focuses not only on geographical presence,

but also in the upgrading of existing facilities and aftersales

capacity, which undoubtedly strengthens our business, delivering

both growth and a sustainable revenue stream.

Our priorities in customer service are reinforced by our

commitment to consistently train our employees.

We strongly believe investing in our employees

compliments the pivotal role they play in

communicating with our customers and in

providing a high level of service. This sets

us apart from our competitors. In 2011,

FA Wagen, a subsidiary of FAHB, won

first place in the service advisor

competition in Asia Pacific region

for the Volkswagen brand, an

important recognition of

our high service quality.

Distribution


DMSB recorded lower revenues and vehicle sales in 2011 due to

the stock shortages for Hino and Perodua vehicles and the final

phase-out of the Daihatsu Delta trucks from the middle of the year.

Sales did, however, recover by year end.

Variants of pick-up, panel and semi panel vans were added to

the Gran Max series line up in 2011. This year also saw the first full

year of contribution from Gran Max with a total of 1,518 units sold

compared to 445 units in 2010.

The new Hino service centre in Shah Alam was launched in

November and officiated by Mr Yoshio Shirai, the President of

Hino Motors Ltd, Japan. The new service centre is one of the

largest in the country and is equipped with the latest facilities and

standards. This will further enhance DMSB’s presence and boost its

capacity to handle increased customer traffic.

Our Perodua dealership - DMM Sales Sdn Bhd (DMMS) - recorded

a slight decline in sales, reflecting the overall industry performance

of Perodua this year. The lower sales were due to the disruption

in supply caused by the Japan earthquake. Nevertheless, DMMS

remained the largest independent dealer for Perodua vehicles,

accounting for 9.6% of total Perodua vehicles sold in Malaysia.

Daihatsu (Malaysia) Sdn Bhd (DMSB)

REVENUE 1,020 1,066 -4

PROFIT BEFORE TAX 36 35 +3

TRUCK SALES (UNITS) 2,916 3,167 -8

PERODUA (UNITS) 17,213 17,646 -3

FY2011 RM MIL

FY2010RM MIL

%CHANGE



FAHB continued to achieve another record

breaking year in sales, posting a 53% increase

from the previous year. All three brands under the

group contributed to this stellar performance.

Profits, however, declined as a result of higher

depreciation and interest costs incurred from its

new investments. Additionally, the losses from LMSB

and KMA were also consolidated into FAHB upon

completion of the acquisition of both companies.

Volvo had several new model launches in 2011.

The S60 was introduced in April followed by the

locally assembled XC60 T5 in May. The Volvo S80 T5,

S60 local assembled T4 and T5 were added to the

line up in the second half of the year. Overall the

sale of Volvo cars under FAHB increased from 481

units in 2010 to 579 units in 2011.

Meanwhile, our sale of Volkswagen vehicles

continued to be robust with 1,702 cars sold in

2011 compared to 750 units in the previous year.

New models were introduced into the market with

the launching of the Passat, Jetta and Touran in

October. We commissioned our service centre

in Glenmarie during the year, with throughputs

exceeding our expectations. We are currently

planning the next phase of expansion of our

capacity to meet the expected growth in service

of Volkswagen vehicles to support our strong

sales over the past two years. We completed the

construction of our Johor Bahru branch at the

end of the year. Johor is a market we believe has

great potential for the Volkswagen brand, with a

vibrant local economy and being a key market

for passenger cars.

We also saw a steady increase in Mitsubishi

vehicle sales with the launch of the Pajero Sport

VGT along with a couple of limited edition

models – the Lancer Sportback RA Edition

and the ASX Special Edition. The sales,

however, were held back because of

stock supply constraints. We added

a new 3S centre in Sitiawan, Perak,

during the year, in addition to

the two existing dealerships in

Petaling Jaya and Ipoh.

Federal Auto Holdings Berhad (FAHB)

REVENUE 579 385 +50

PROFIT BEFORE TAX 10.9 11.3

TOTAL VEHICLE SALES (UNITS) 3,107 2,026 +53(Volvo, Volkswagen & Mitsubishi)

FY2011 RM MIL

FY2010RM MIL

%CHANGE

-4

Hino Motors (Malaysia) Sdn Bhd (HMMSB)

Although faced with a shortage of supplies, HMMSB

saw a big increase in sales in 2011, with total unit sales

(invoiced) reaching 6,034 units, up 18.4% compared

to 2010 sales of 5,095 units.

Hino’s wide product range and its strategy of

strengthening sales and service network support

through dealer development programmes have

paid off. This year, Hino achieved number one

in market share in all commercial vehicle

categories of light, medium and heavy duty.


Associates

Perusahaan Otomobil Kedua Sdn Bhd (Perodua)

Perodua held on to its position as the leader in the passenger vehicle market for the

sixth consecutive year. Despite a dip in sales, Perodua still managed to achieve a

market share of 33.6%. Invoiced vehicle sales dropped from 192,795 units in 2010 to

181,847 units in 2011 mainly due to the shortage of supply parts from Japan. The high

Japanese Yen also had a negative impact on margins.

Despite the challenges of the parts supply shortages, Perodua successfully

launched the new Myvi 1.3 in June and the 1.5 variant in September. The new

Myvi made up 29.2% of Perodua sales in 2011. It won the Asian Auto award

for the “Best Local Assembly Compact Car” category, 2011. Additionally,

Perodua also won two other awards for its cars at the annual Frost &

Sullivan Malaysia Excellence Award. Perodua’s compact multipurpose

vehicle, Alza, won the “Best Model of The Year” while the Viva was

awarded as the “Value-for-Money Car of the Year (1.3L and below).”



We continuously look for opportunities to expand our manufacturing

arm as part of our plans to become a Complete Automotive Group.

MBMR has positioned itself to be a competitive supplier – in terms of

product quality and cost - to the automotive industry. Strong partnerships

such as OMI with Central Motor Wheel Company Ltd (a subsidiary of Toyota

Motor Corporation) and Hirotako with Autoliv (global leader in automotive

safety products) provide the platforms for us to develop into a major automotive

parts player.

OMI recorded an increase in revenues mainly from the additional tyre assembly

business it secured from its customers. However, the delivery of its steel wheels

suffered a decline of 3% as its main customers’ production were affected by the parts

shortage problem.

We have witnessed in recent years the automotive industry’s move from use of steel wheels

to alloy wheels. During the year, OMI carried out intensive detailed studies on the alloy wheel

market, together with its partner, Central Motor Wheel Company Ltd, Japan. The demand for

alloy wheels is growing and there is a gap in supply of high quality OEM wheels in Malaysia.

In January 2012, we officially launched and announced that OMI will be investing in a RM103

million alloy wheel plant in Rawang with an annual capacity of one million wheels for both the

domestic and export markets. The plant is expected to be commissioned at the end of the year.

Oriental Metal Industries (M) Sdn Bhd (OMI)

Manufacturing

Summit Vehicles Body Works Sdn Bhd (SVBW)

SVBW recorded substantial increase in revenues. However, profitability continues to be

affected by intense competition in this sector. We remain focused on increasing our

efficiency, reducing our costs and to exploring new business opportunities that will

help improve our margins and return the Company to profitability.

REVENUE 91 67 +36

PROFIT BEFORE TAX 15 17 -12

WHEEL DELIVERIES (‘000) 959 988 -3

TYRES ASSEMBLIES (‘000) 2,118 2,335 -9

FY2011 RM MIL

FY2010RM MIL

%CHANGE


OutlookEconomic conditions remain uncertain due to several

external factors. The global economy remains weak,

in particular in the Eurozone. Bank Negara Malaysia’s

move to tighten lending guidelines has affected

vehicle loan approval rates, particularly for the lower

income segment. The automotive industry is also

awaiting the details of the revision of the National

Automotive Policy (NAP), which is expected to be

announced soon. Notwithstanding these factors,

MBMR has positioned itself with a diverse portfolio

of brand representation across all the segments of

the market. Our initiatives to expand the group’s

businesses will continue as we build on MBMR’s core

strengths of business diversity, strong financials, deep

knowledge in the industry and experience.

We envisage 2012 to be another exciting year for

MBMR. We believe the momentum we have built

with our investments and acquisitions will continue to

drive our growth.

Under DMSB, the construction of Hino 3S dealerships

will continue with four more locations which are

compliant with the latest standards of facilities to

better serve our customers. As we build our Hino

dealership network, we expect to tap on the growing

sales of the Hino brand. We are also investing in

upgrading our Perodua dealerships in phases, with

particular emphasis on aftersales. Construction of our

new Perodua 3S centre in Jalan Chan Sow Lin, Kuala

Lumpur, has commenced and is expected to be

completed in 2013.

FAHB is poised for another strong year. An additional

new Volkswagen 3S dealership in Alor Setar was

opened in January this year. We are looking at

expanding our existing Glenmarie and Petaling

Jaya Volkswagen dealerships in response to the

anticipated growth in service intakes.

The Mitsubishi dealership has also grown and we

have moved our Petaling Jaya dealership in March

this year to a new location that is larger to support

our increased service throughputs.

Construction of the new MBMR Headquarters is

progressing well according to plan. The 24-storey

tower will start to take shape in the latter part of this

year as the piling and construction of the six-storey

basement is completed.

Construction of OMI’s new alloy wheel

manufacturing plant has commenced and the

equipment is being fabricated by the machine

makers. We expect to commission the plant in

December 2012.

Hirotako will be fully consolidated into the

Group for the first time in 2012. It is expected

to capitalise on the increased local

sourcing of parts by the car manufacturers/

assemblers. Additionally, compulsory front

airbags for new cars from this year is

expected to benefit the Group.

Our investments and expansion plans

give a solid base for sustainable growth

in the future. However, there will be an

immediate cost impact on our profits

as a result of these investments before

we fully realise the potential of

what we have invested in. We will

continue to exercise prudence in

our capital management and

seek the most efficient funding

means for our investments. We

believe we are well on track

to achieving our desire to be a

Complete Automotive Group.


DividendsMBMR paid its first interim dividend of 6 sen per share on 15th

September 2011. Normally a second interim dividend would

be declared at the announcement of the Group’s full year

financial results. However, in view of the proposed capital

issues, the Board decided not to declare a second

interim dividend this time.

Corporate DevelopmentsIt was a busy year of corporate developments.

On 6th May 2011, the selective capital reduction and repayment

scheme (SCR) undertaken by FAHB was completed, thus making

FAHB a 100%-owned subsidiary of MBMR.

The acquisitions of LMSB and KMA were completed on 28th

February and 3rd June 2011 respectively. The acquisitions added

the distribution of Dong Feng light commercial vehicle range to

our portfolio of brands we represent and secured for the Group a

manufacturing licence for the assembly of motor vehicles.

MBMR proposed the sale of a 20% stake in DMSB to Mitsui & Co.,

Ltd. (Mitsui) on 21st October 2011, which is pending completion.

The sale allows MBMR to partially realise its investment in DMSB

and to have Mitsui’s greater participation in the business.

A takeover offer for Hirotako was made on 27th October 2011.

Hirotako’s subsidiaries are mainly involved in the manufacture and

sale of automotive components which includes seat belts, airbag

modules, steering wheels, noise and heat reduction materials as

well as insulator parts. The offer closed on 3rd January 2012 with

acceptances of 95.99% of ordinary shares and 53.47% of warrants.

Hirotako will be consolidated into MBMR’s income in 2012. The

compulsory acquisition of the remaining ordinary shares of

Hirotako was completed on 27th February 2012.

MBMR’s Board has also proposed capital issues of bonus,

rights and warrants on 24th February 2012 to fund the

Group’s future expansion, reward shareholders

and reduce its borrowings. Shareholders’

approval was received on 2nd

May 2012 and the capital

issues are expected to be

completed by June 2012.



Shareholder valueWe aspire to be a Complete Automotive Group. We have built

valuable franchises and assets, valuations of which, as a listed

entity, are important for both the Company and its shareholders.

Until recently, MBMR’s shares have attracted little investor interest

because of the size of its market capitalisation and liquidity of its

shares.

We, the Board and Management of the Company, should not

only grow the operations of the Group, but also consider how

best to enhance the value of MBMR. In recent months we have

witnessed a marked increase in interest in MBMR accompanied

by the appreciation of its share price and trading volume of the

shares. The market capitalisation of MBMR has now exceeded

the RM1 billion mark, the highest since its listing in 1995.

We have focused on three key areas to help enhance the value

of our shares:

1. Transformation of MBMR’s Earnings Profile i) Growing the Core Profits

The earnings profile of the Group shows a heavy

dependence on associate contributions (Perodua and

HMMSB), accounting for 72% of pre-tax profit in 2011. The

new investments and acquisitions we have made in recent

years will significantly alter this balance. We anticipate that

in 2012, core operating profit will account for 50% of total

pre-tax profit, from 28% last year. Additionally, we will see

a substantial improvement in the Group’s operating cash

flow.

ii) Superior Growth

The revenues of the Group is also more diverse today,

exposed to high growth brands, which enables us to

outperform the increasingly competitive market. As

significant players of the brands that we represent,

we have built a deep and close relationship with our

principals which have positioned us as choice partners for

expansion opportunities. Our commitment, resources and

entrepreneurial spirit have gained us the advantage as

business partners with the principals.

iii) Parts Manufacturing Advantage

In a crowded market of automotive parts manufacturers,

we have been extremely vigorous in our selection of

investments in the sector. Our parts manufacturing division

is geared towards higher valued parts, with significant

technological input and efficient manufacturing processes.

Our

technology

partners are also

shareholders in the

respective companies. This

allows for strong collaboration and

ensures that our operations are not only

competitive domestically, but benchmarked

against the highest international standards. This will

eventually open vast new export markets for our products.

2. Sharing Our Vision We have consistently adopted a transparent approach to

our investor relations efforts. We hold regular analyst briefings

which are well attended by the investing community. Our

vision has been communicated to the media via various

press interviews and press releases. The Managing Director

gives short presentations of the Group’s performance and

elaborates on our future business direction at the Annual

General Meetings (AGMs). We believe in maintaining good

communications with the investment community to ensure

better understanding of our performance and future strategy.

Our approach encourages long term investor coverage of

MBMR, building confidence and consistent following of our

progress.

3. Capital Structure In our Statement to shareholders in last year’s annual report,

we elaborated that we needed to review our capital structure

to better reflect our expansion plans and also the size the

business has grown to. We have proposed a bonus issue to

reward shareholders, and a rights issue and warrants, to help

fund our present and future expansion. The larger capital base

will help improve the liquidity of MBMR shares and also enable

greater participation of investors in our future.


AppreciationOur achievements we highlighted in this letter were contributed by all our stakeholders. We

wish to thank the employees of MBMR Group for their dedication and contribution to a

commendable performance this year and for rising to the challenges with the right spirit

and commitment. We also extend our appreciation to our customers, business partners,

bankers, auditors, lawyers and suppliers for the support extended during the year. We

look forward to a lasting relationship and growing together for our mutual benefit.

We thank the members of the Board for their guidance and to shareholders for

their confidence in us.

Dato’ Abdul Rahim Abdul Halim Looi Kok LoonChairman Managing Director

23 May 2012


Education Assistance Programme

Safety CampaignVisit to Orphanage - Rumah Limpahan Kasih

Relay for Life


Visit to Pusat Penjagaan Kanak-Kanak Cacat


We at

MBMR are

mindful of our

responsibilities to

our employees and

the communities in

which we operate.

Throughout 2011 we

continued to uphold our

responsibilities by organising and

participating in various corporate

social responsibilities programmes.

We again participated in the Relay

for Life event organised by the National

Cancer Association Malaysia which raises

funds for cancer research, creates awareness

of cancer and celebrates the lives of survivors.

This year we were one of the main sponsors for this

event.

In 2011, our employees brought cheer to the children

of ‘Pusat Penjagaan Kanak-kanak Cacat Taman Megah’

and ‘Rumah Amal Limpahan Kasih’. They spent time with

the children, organised lunch and activities and presented

donations from the Group to these homes.

The MBMR Group recognises that our employees are our most

valuable assets. We have invested in our human capital by

conducting various training programmes that empower them and remain

linked to our broader strategy for company expansion and growth. Our

employees’ safety at the workplace is also of great importance and this is

reflected by the safety campaigns we conducted throughout the year to raise

awareness of workplace safety.


Year at a Glance

New Additions to Our Product Line-up

October 2011 - Mitsubishi ASX Special Edition

September 2011– Perodua Myvi 1.5

October 2011 – Volvo S80 T5, S60 (CKD) T4 and T5

October 2011– Volkswagen Passat, Jetta and Touran

September 2011 - Mitsubishi Pajero Sport VGT

April 2011– Volvo S60

July 2011 - Mitsubishi Lancer Sportback RA Edition

May 2011 – Volvo XC60 T5 June 2011– New Perodua Myvi 1.3


Corporate Events

April 2011 – Daihatsu (Malaysia) Sdn Bhd annual dinner at Holiday Villa, Subang Jaya.

November 2011 – The launch of the new Hino/Daihatsu Service Centre in Shah Alam.

September 2011 - New Mitsubishi showroom opens in Sitiawan, Perak.

May 2011 - Federal Auto Holdings Berhad’s company trip to Pulau Pangkor.

July 2011– Ground breaking ceremony of Menara MBMR.

November 2011 – Soft launch of the new Volkswagen showroom in Skudai, Johor.


Profile Of Directors

Y. Bhg. Dato’ Abdul Rahim was MBM Resources Berhad’s

(MBMR) Managing Director until 28 February 2006. He is

currently the Chairman of MBMR. Prior to his appointment to

MBMR’s Board on 17 December 1993, he was the chairman

of Daihatsu (Malaysia) Sdn. Bhd. Dato’ Abdul Rahim has

extensive experience in the motor vehicle industry and is

presently on the Boards of Rubberex Corporation (M) Berhad

and Ewein Berhad as well as several other private companies.

He is the Chairman of the Boards of the following companies

– Oriental Metal Industries (M) Sdn. Bhd. (OMI) and Hino

Motors (Malaysia) Sdn. Bhd. (HMMSB), and a Board member

of Perusahaan Otomobil Kedua Sdn. Bhd. (Perodua). He

holds a Bachelor of Economics (Honours) degree from the

University of Malaya.

Y. Bhg. Dato’ Abdul Rahim Abdul HalimAged 63, Malaysian

Chairman

Non Independent Non-Executive Director


Mr. Looi Kok LoonAged 45, Malaysian

Managing Director

Mr. Looi Kok Loon was appointed to the Board

of MBMR on 18 May 2001 and subsequently

Managing Director since 1 March 2006. He had

previously worked for a foreign investment bank.

Mr. Looi holds a Bachelor’s degree in Government

and Economics from Brunel University and a

Master’s degree in Management from the

University of Kent, United Kingdom. He represents

MBMR on the Boards of the following companies

– Perodua, HMMSB, DMSB, Federal Auto Holdings

Berhad (FAHB), Hirotako Holdings Berhad (HHB)

and OMI.

Profile Of Directors

Y. Bhg. Tan Sri Lee Lam Thye JPAged 66, MalaysianIndependent Non-Executive Director

Y. Bhg. Tan Sri Lee Lam Thye JP was appointed

to the Board on 28 February 1994 and is a

member of the Company’s Audit, Nomination

and Remuneration Committees. Before retiring

from politics in 1990, he was the elected State

Legislative Assemblyman for Bukit Nenas,

Selangor from 1969 to 1974 and served as

a Member of Parliament for Bandar Kuala

Lumpur from 1974 to 1990.

He is presently the Chairman of the National

Institute of Occupational Safety & Health

and Vice-Chairman of the Malaysian Crime

Prevention Foundation. He is also a Member of

the Board of the Employees Provident Fund.

In the private sector, Y. Bhg Tan Sri Lee serves as

a director of several public-listed companies,

namely AMCORP Properties Berhad, Media

Prima Berhad and SP Setia Berhad.

Encik Iskander Ismail Mohamed AliAged 62, Malaysian

Independent Non-Executive Director

Encik Iskander was appointed to the Board

of MBMR on 8 May 2009 and is currently

Chairman of MBMR’s Audit Committee and a

member of the Nomination and Remuneration

Committees. A member of the Malaysian Institute

of Accountants and fellow member of the

Association of Chartered Certified Accountants,

Encik Iskander was formerly the Executive

Director and Chief Executive Officer of Kenanga

Fund Management Berhad.

Having worked in the fund management industry

since 1982, he had previously held various senior

management roles in the fund management

division/ subsidiary of Bumiputra Merchant

Bankers Berhad and MIDF Berhad, where he

was also a director of several MIDF subsidiary

companies.

He was the first (and for a few years thereafter)

chairman of the Malaysian Association of

Asset Managers, which he helped establish in

November 1996. He also served on the Capital

Market Advisory Council and was a member

of the Bursa Malaysia Berhad Listing

Committee and

of the Institutional

Shareholders’ Pro Tem

Committee under the

Minority Shareholder

Watchdog Group.

He also sits on the

Board of Trustees of

a local educational

foundation.

Encik Aqil Ahmad AzizuddinAged 53, MalaysianNon-Independent Non-Executive Director

Encik Aqil began his career with DMSB where

he held various senior management positions

prior to his appointment to the Board on

18 May 2001. He is currently a member of

MBMR’s Audit Committee and the Chairman

of DMSB and FAHB. He is also a director on

the Board of Perodua and HHB.

He holds a Bachelor of Science degree

in Business Economics and an Associate

Degree in Commercial Graphics from

Southern Illinois University, USA.


Mr. Wong Wei Khin Aged 44, Malaysian

Non-Independent Non-Executive Director

Mr. Wong Wei Khin previously served MBMR as a

corporate manager and was nominated to the

Board on 23 May 2002. He is currently a member

of the Nomination Committee. He graduated

from the University of Sydney with a Bachelor of

Economics and Bachelor of Laws degrees. He is

also a director on the Board of DMSB.

Mr. Low Hin ChoongAged 51, Malaysian

Non-Independent Non-Executive Director

Mr. Low Hin Choong joined the Board on

18 May 2001 and is currently a member of

the Remuneration Committee and heads

the Information Systems & Information

Technology Committee. He has more than

20 years experience in the IT industry, having

worked as a systems analyst and software

manager. He graduated from Queen’s

University of Belfast, United Kingdom with a

Bachelor of Science (Honours) degree in

Business Administration & Computer Science

and is currently managing his own successful

software applications business. He is also a

director on the Board of HHB.

Notes:

• NoneoftheDirectorshasanyfamilyrelationship

withanyDirectorand/ormajorshareholderofthe

Company.

•NoneoftheDirectorshasanyconflictofinterest

withtheCompany.

• NoneoftheDirectorshasbeenconvictedofany

offencesotherthantrafficoffenceswithinthe

past10years.

MANAGEMENT TEAM

MBM RESOURCES BERHADNo.1-6, The Boulevard,

Mid Valley City, Lingkaran Syed Putra,

59200 Kuala Lumpur.

Tel: (603) 2287 6803

Mr. Looi Kok LoonManaging Director

Mr. Poh Chee KwanGeneral Manager

Mr. Kong Kam SeongFinancial Controller

Mr. Cheng Seng FookDirector, Automotive Division

Mr. Tan Khay BoonGeneral Manager, Manufacturing Division

Ms. Wong Fay LeeGeneral Counsel


Documents

listed company - ces Berhad MBM RESOURCES BERHAD · 2013. 5. 21. · Bursa Malaysia Securities Berhad Stock Code : 5983 REGISTERED OFFICE Suite C-5-4, Wisma Goshen, Plaza Pantai,