R RM OUR FUTURE M FUTURE - Latest Announcement FUTURE 2 2 MBM Resources Berhad ... PERODUA's Second Manufacturing Plant ... Our vision is clear. We want to build MBMR into a Complete

OUR FUTURE

ANNUAL REPORT 2012

AN

NUA

L REPORT 2012MBM Resources Berhad (284496-V)

No. 1-6, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur. T: +603 - 2287 6803 F: +603 - 2287 6805 www.mbmr.com.my

OURFUTURETODAY

•

HIR

OTA

KO Acqu i s i t i on RM410m

• Ma

nufacturing Plant Joint Venture with HINO R

M1

40

m

• OMI A

lloy

Whe

el P

lant

RM

103m

•

Network Expansion RM75m

• PEROD

UA

's Second Manufacturing Plant RM790m

MBM

Resources Berhad

MBM Resources Berhad

MBM Resources Berhad

TODAYOMI Alloy Wheel Plant

PERODUA's SecondManufacturing Plant

RM790m

INVESTING FOR OUR FUTURE

RM140m

RM103m

NetworkExpansionRM75m

Manufacturing PlantJoint Venture with HINO

HIROTAKOAcquisition

RM410m

TODAYOMI Alloy Wheel Plant

PERODUA's SecondManufacturing Plant

RM790m

INVESTING FOR OUR FUTURE

RM140m

RM103m

NetworkExpansionRM75m

Manufacturing PlantJoint Venture with HINO

HIROTAKOAcquisition

RM410m

MBM ResouRces BeRHAD2

Contents 03 corporate Information 04 corporate Profile 05 corporate structure 06 Group Financial Performance: Five-Year summary 08 Joint Letter to shareholders 26 The Year at a Glance 28 Board of Directors’ Profiles and Management Team 33 statement on corporate Governance 40 statement on Risk Management and Internal control 42 Report on Audit committee 46 other Information Required by the Listing Requirements of Bursa Malaysia securities Berhad 47 Directors’ Responsibilities statements in Relation to the Financial statements 48 List of Properties 53 Analysis of shareholdings 57 Analysis of Warrant Holdings 61 Report of the Directors and Financial statements 178 Notice of Annual General Meeting 187 Proxy Form

annual report 2012 3

Corporate Information

CORPORATE OFFICENo 1-6, The Boulevard, Mid Valley city, Lingkaran syed Putra59200 Kuala Lumpur, MalaysiaT: (603) 2287 6803 F: (603) 2287 6805www.mbmr.com.my

COMPANY SECRETARIESWong Peir chyun(MAIcsA 7018710)

Wong Wai Foong(MAIcsA 7001358)

STOCK EXCHANGE LISTINGMain Market Bursa Malaysia securities Berhadstock code: 5983Warrant stock code: 5983WA

REGISTERED OFFICELevel 18, The Gardens North Tower, Mid Valley city, Lingkaran syed Putra,59200 Kuala LumpurT : (603) 2264 8888F : (603) 2282 2733

SHARE REGISTRARTricor Investor services sdn. Bhd.Level 17, The Gardens North Tower,Mid Valley city, Lingkaran syed Putra,59200 Kuala LumpurT: (603) 2264 3883F: (603) 2282 1886

BOARD OF DIRECTORS

Y. Bhg. Dato’ Abdul Rahim Abdul HalimChairman, Non-Independent Non-Executive Director

Mr. Looi Kok LoonGroup Managing Director

encik Iskander Ismail Mohamed AliIndependent Non-Executive Director

Y. Bhg. Tan sri Lee Lam Thye JPIndependent Non-Executive Director

encik Mustapha MohamedIndependent Non-Executive Director

encik Aqil Ahmad AzizuddinNon-Independent Non-Executive Director

Mr. Low Hin choongNon-Independent Non-Executive Director

Mr. Wong Wei KhinNon-Independent Non-Executive Director

PRINCIPAL BANKERSAmbank (M) BerhadcIMB Bank BerhadHong Leong Bank BerhadHsBc Malaysia BerhadMalayan Banking BerhadPublic Bank Berhadunited overseas Bank (Malaysia) Berhad

AUDITORSDeloitte Kassimchan (AF: 0080)chartered Accountants

FINANCIAL CALENDAR18th Annual General Meeting: 20 June 2012

2012 Results Announcement Quarter 1: 24 May 2012Quarter 2: 9 August 2012Quarter 3: 8 November 2012Quarter 4: 25 February 2013

Dividend Payments: First Interim for 2012: 10 september 2012second Interim and special for 2012: 19 April 2013

Hirotako Holdings Berhad

Manufacturing

Oriental Metal Industries (M) Sdn. Bhd.

Hino Motors Manufacturing (Malaysia) Sdn. Bhd.

100%

78%

42%

Inai Benua Sdn. Bhd.

Property70%

Corporate(as at 28 May 2013)

ASSOCIATESUBSIDIARY

100%

100% OMI Alloy (M) Sdn. Bhd.

Autoliv Hirotako Sdn. Bhd. Hirotako Acoustics Sdn. Bhd.

100%

100%51%

100%100%100%

Hino Motors Sales (Malaysia) Sdn. Bhd.

Perusahaan Otomobil Kedua Sdn. Bhd.

Distribution

100%

51.5%

42%

20%

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

Structure

THE COMPLETE AUTOMOTIVE GROUP

Daihatsu (Malaysia) Sdn. Bhd.

DMM Sales Sdn. Bhd.

Federal Auto Holdings Berhad Federal Auto Cars Sdn. Bhd. F.A.Wagen Sdn. Bhd. F.A. Automobiles (Ipoh) Sdn. Bhd. FAST Sdn. Bhd.

MBM RESOURCES BERHAD (MBMR) is an automotive group with diverse investments in distributorship and dealership of major international vehicle brands and automotive parts manufacturing in Malaysia.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 automotive parts manufacturing division, consisting of wheels, airbags, seat belts, steering wheels and noise, vibration and harshness (NVH) products, is a significant supplier to all the major car brands in Malaysia.

MBMR’s brand partners are:


Corporate Profile

Hirotako Holdings Berhad

Manufacturing

Oriental Metal Industries (M) Sdn. Bhd.

Hino Motors Manufacturing (Malaysia) Sdn. Bhd.

100%

78%

42%

Inai Benua Sdn. Bhd.

Property70%

Corporate(as at 28 May 2013)

ASSOCIATESUBSIDIARY

100%

100% OMI Alloy (M) Sdn. Bhd.

Autoliv Hirotako Sdn. Bhd. Hirotako Acoustics Sdn. Bhd.

100%

100%51%

100%100%100%

Hino Motors Sales (Malaysia) Sdn. Bhd.

Perusahaan Otomobil Kedua Sdn. Bhd.

Distribution

100%

51.5%

42%

20%

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

Structure

THE COMPLETE AUTOMOTIVE GROUP

Daihatsu (Malaysia) Sdn. Bhd.

DMM Sales Sdn. Bhd.

Federal Auto Holdings Berhad Federal Auto Cars Sdn. Bhd. F.A.Wagen Sdn. Bhd. F.A. Automobiles (Ipoh) Sdn. Bhd. FAST Sdn. Bhd.

AnnuAl RepoRt 2012 5


Year ended 31 December 2008 2009 2010 2011 2012

RESULTS (RM MILLION)

RevenueEarnings Before Interest and Tax (EBIT)Associates’ resultsProfit before taxProfit attributable to equity holdersBasic earnings per share (sen)

BALANCE SHEETS (RM MILLION)

Share capitalShareholders’ equityTotal assetsNet assets per share (RM)Earnings Before Interest, Tax, Depreciation andAmortisation (EBITDA) per share (sen)

FINANCIAL RATIOS (%)

Operating profit on revenueReturn on equityReturn on total assets

VEHICLE SALES (UNITS)

Total Group

DMSB Daihatsu/Hino/PeroduaFAHB Volvo/ Volkswagen/ Mitsubishi

EQUITY INDICES

Closing year end share price (RM)Price-earnings ratio (times)

1,203.070.179.4

149.9117.133.5

242.1849.1

1,077.12.7

22.7

5.813.810.9

18,677

18,102575

1.474.4

1,101.630.554.185.366.519.0

242.1894.3

1,155.52.8

13.5

2.87.45.8 10.6

17,816

17,174642

1.678.8

1,528.551.5

119.0172.4142.1

40.6

242.71,018.21,346.7

3.2

17.0

3.413.9

22,839

20,8132,026

2.165.3

1,705.642.0

107.9150.6121.2

34.6

242.91,107.92,019.0

3.5

14.4

2.510.9

6.0

23,236

20,1293,107

2.055.9

2,267.791.9

125.3197.3136.4

38.3

390.61,339.02,443.6

3.4

28.9

4.110.2

5.6

25,572

21,2334,339

3.218.4

Group Financial Performance:Five-Year Summary

ANNuAL RePoRT 2012 7

REVENUERM2,267.7mil

VEHICLE SALESVEHICLE SALESVEHICLE SALES

BASIC EARNINGS PER SHARE NET ASSETS PER SHARE

2011

2012

2010

2009

2008 1,203.0

1,101.6

1,528.5

1,705.6

2,267.7

RM91.9mil

2011

2012

2010

2009

2008

RM197.3mil

2011

2012

2010

2009

200870.1

30.5

51.5

42.0

91.9

EBIT

149.9

85.3

172.4

150.6

197.3

PROFIT BEFORE TAX

38.3sen

25,572 units21,233 units 4,339 units

2011

2012

2010

2009

2008

RM3.4

2011

2012

2010

2009

2008

28.9sen

2011

2012

2010

2009

200833.5

19.0

40.6

34.6

38.3

2.7

2.8

3.2

3.5

3.4

EBITDA PER SHARE

22.7

13.5

17.0

14.4

28.9

2011

2012

2010

2009

2008

2011

2012

2010

2009

2008

2011

2012

2010

2009

2008

Total GroupDMSB Daihatsu/Hino/PeroduaFAHB Volvo/

Volkswagen/Mitsubishi

18,67718,102 575

17,81617,174 642

22,83920,813 2,026

23,23620,129 3,107

25,57221,233 4,339


Joint Letter to Shareholders


There was a dichotomy in the operating environment in 2012. The automotive industry staged a recovery from the temporary supply disruption from the earthquake and tsunami in Japan and floods in Thailand in 2011. However, Bank Negara’s tightening of lending guidelines (“responsible lending”) for hire purchase loans for cars resulted in slower loan approvals which dampened car sales in the first quarter of 2012. As the market adjusted to the new conditions, total industry vehicle sales [or Total Industry Volume (TIV)] recovered to close the year at a record 627,753, a growth of 4.6% from the previous year. The automotive industry was supported by a generally conducive economic environment with the Malaysian Gross Domestic Product expanding by 5.6% in 2012. Interest rates were stable.

Dear Shareholders, We are pleased to report that MBM Resources Berhad (MBMR) recorded the highest revenues and profits in its history in 2012. Our vision is clear. We want to build MBMR into a Complete Automotive Group, with capabilities in the full spectrum of the automotive industry; covering manufacturing, assembly, distribution, retail and dealerships, parts and accessories, body and paint repair and customer services. We made major progress in moving closer towards this vision.


Revenues were robust climbing by 33.0% to RM2,267.7 million in 2012, helped by the first-time contribution of Hirotako Holdings Berhad (HHB) and the addition of two Volkswagen dealerships in Alor setar and Johor Bahru. earnings before interest and tax (eBIT) grew substantially by 118.8% to RM91.9 million. However, after deducting interest costs, the growth was slower at 68.6% to 72.0 million. The higher interest costs and depreciation are a result of our expansion plans of the past three years and the funding we undertook for the acquisition of HHB. The Group’s profit before tax, which includes contribution from associates, Perusahaan otomobil Kedua sdn. Bhd. (Perodua) and Hino Motors sales (Malaysia) sdn. Bhd. (HMsM), increased by 31.0% to RM197.3 million.


Financial Highlights


Revenues

RM2,267.7m

+33.0%

RECORD REVENUES AND PROFITS

Associates’ Contribution RM125.3m

+16.2%

EBIT RM91.9m

+118.8%

Group Profit Before Tax RM197.3m

+31.0%

Operating Profit RM72.0m

+68.6%


MBMR is in an expansion phase. Back in 2010, we put in place our three year growth plan which involved significant realignment of our businesses. As a result we have broken decisively free from the “running on the spot” syndrome. We have more than doubled our revenues in three years and consistently outperformed the market, meaning we have been gaining market share.

This growth was driven by the investments we made in increasing the branch network and improving the existing facilities to stay ahead of competition. We have also invested in growing the automotive parts manufacturing division by continuously investing in the latest operational processes and technology in our facilities. our accelerated investments in the last three years, amounting to RM229 million, is more than what we have invested in the previous ten years.

We believein investing for our future today.


2000-2004

29.6m

2005-2009

96.0m

2010-2012

157.8m

2000-2004

29.6m

2005-2009

96.0m

2010-2012

228.5m

CAPEX


Contributing to a New Growth

Phase2009 RM1,101.6 m

2008 RM1,203m

2007 RM1,131m

2006

REVENUES

RM

2009 RM1,101.6m

2008 RM1,203.0m

2007 RM1,131.0m

2006 RM1,185.5m

in vehicle salesnow consistently

outperformsthe market

Our growthGroup Vehicle Sales Growth TIV Growth

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-0.5%

-10.0%

2007 2008 2009 2010 2011 2012

2012 RM2,267.7m

2011 RM1,705.6m

2010 RM1,528.5m


our multi-brand strategy has provided us with new growth opportunities. our strategy is that for the brands we represent, we must play a significant role in the distribution of the brands’ products. our size and established track record have made us an important partner for their future expansion plans. We added additional outlets for Volkswagen in Johor Bahru and Alor setar and, more recently, included sungai Petani to our combined total of five Volkswagen outlets. We have also recently commenced operations of our fourth

Mitsubishi outlet in shah Alam. clearly our multi-brand strategy gives us leverage to expand ahead of the market. our diverse representation in the automotive market presents growth opportunities and strengthens resilience in down cycles. This was well demonstrated when many entry-level customers were hit by tighter hire-purchase financing during the year. our diverse customer base helped cushion the impact of this ruling on the group’s overall performance.

extensive branch network and growing – investing to increase capacity and geographical reach

Performance: Motor Trading

Multi-brand strategy provides diversity and growth opportunities


BRANcHes NATIoNWIDe

43


New facilities to support new income streams

We have accelerated the pace of our investments to enable us to leverage on the rapid growth in cars we have sold. The service throughputs have seen phenomenal growth as we increase our capacities to absorb the huge potential of this business. The aftersales business is defensive and will boost recurring income contribution. We have also added additional streams of revenue by investing in body and paint accident repair facilities. We completed our new facility in Glenmarie, shah Alam in December 2012. This will provide added capacity for future growth.We are also expanding the range of products we

carry aftermarket. The wider range has added growth opportunities to tap on car enthusiasts who wish to personalise their vehicles or simply for those who wish to add accessories according to their personal needs.

The market for commercial vehicles has also been strong. DMsB has committed to investing in its facilities to support the increasing vehicles on the road. unlike the passenger car market, customer retention for aftersales service for commercial vehicles is generally lower. As a corporate entity and with a wide network of branches, we have focused our attention on

Group service throughput (units)

Group service throughput (units)

corporate customers. our convenient and economical maintenance programmes for our customers have strengthened our position against the competition. It ensures steady income and focuses our efforts on customer service and away from price competition.


Performance: Automotive Parts Manufacturing

1. WheelsIncreasing adoption of alloy wheels

our new alloy wheel plant – oMI’s future growth Alloy wheels have become more popular and have been gaining share of the wheel market. As part of our strategic growth plan, oMI launched its RM103 million alloy wheel plant project in early 2012 to tap into the growing demand for alloy wheels both locally and abroad. The wheels will be manufactured to original equipment manufacturer (oeM) standards, using state-of-the-art technology, with an eventual capacity of one million wheels per annum by 2015. substantial works on the plant and installation of machineries were completed by the end of 2012 and we expect commercial production by the second quarter of 2013.

once the alloy wheel production gets into full swing, combined with the steel wheel manufacturing and tyre assembly capabilities, oMI will be the largest integrated Tier-1 wheel manufacturer in Malaysia.


Steel Wheel and Alloy Wheel Adoption in Malaysia 2002 - 2012

The Automotive Parts manufacturing division forms an integral part of our vision of being a complete Automotive Group. MBMR intends to help uplift the standards of automotive product manufacturing in Malaysia by locally manufacturing high value products using the latest processes and technology.

We have three core products under the automotive parts manufacturing division:1. Wheels;2. safety products; and3. Noise, Vibration, Harshness (NVH) products

oriental Metal Industries (M) sdn. Bhd. (oMI), a joint venture with central Motor Wheel company Limited and Toyota Tsusho corporation, of Japan, is an established manufacturer of steel wheels in Malaysia. The adoption rate of steel wheels has been declining in recent years and particularly more marked in the last two years. steel wheel deliveries in 2012 declined by 16.1% compared with 2011 as we witnessed our major customers switching from steel wheels to alloy wheels for some of the key models that we supplied to. steel Alloy


2. safety productsThe recent addition to the group is the HHB group of companies. HHB’s 51%-owned subsidiary, Autoliv Hirotako sdn. Bhd. (AHsB), a joint venture with Autoliv A.B. of sweden, is Malaysia’s leading supplier of automotive safety restraint products which include seat belts, airbag systems and steering wheels. These products are part of the restraint system of a vehicle and AHsB also provides the development work to design and optimise the system’s performance with the vehicle’s own behaviour. AHsB’s plant in Balakong, selangor, includes comprehensive test facilities to support our design and development capabilities.

our products help save lives We expect the demand for airbags and seatbelts to continue to grow with increasing vehicle sales, greater consumer awareness for safer vehicles and regulatory-driven demand with more stringent crash-test rating criteria in the future.

2011

505.62012

768.3AIR

BAG

S 2011

369.52012

386.5STEE

RIN

GW

HEE

LS

2011

2,186.02012

2,050.4SEAT

BEL

TS*

Sales Volumes (‘000): Airbags, Steering Wheels and Seat Belts

* Installation of rear seat belts became compulsory in 2008 but older cars were given three years to have them retrofitted, which expired in 2011.


The New car Assessment Program for southeast Asia (AseAN NcAP) was established in December 2011 with its secretariat based in Melaka, Malaysia. It targets to raise consumer awareness on safety and to increase vehicle safety standards in the AseAN region. In collaboration with the Malaysian Institute of Road safety Research (MIRos) and Global NcAP, AseAN NcAP published in February 2013 the result of its first phase test (frontal impact) involving seven popular models in the region’s market. The second phase of AseAN NcAP will involve side impact testing.

As governments place increasing emphasis on automotive safety and driven by the AseAN NcAP

tests, the long term prospects for AHsB is encouraging.Last year in 2012, the requirement for new passenger vehicles to be fitted with frontal airbags is only the beginning of this journey. We anticipate higher airbag fitment rates as oeMs design their vehicles to attain the highest crash test ratings. We believe the safety content per vehicle will trend upwards with vehicle manufacturers installing more airbags and other safety systems in their vehicles.

During the year, AHsB’s subsidiary, Autoliv Hirotako safety sdn. Bhd., won the Best overall Performance Award from its major customer, Proton.

The NVH division under Hirotako Acoustics sdn. Bhd. (HAsB) carries a wide range of products ranging from dampening sheets to insulators and felts. The highly competitive market has also seen erosion in margins from higher raw material costs. This year saw the commissioning of the new RM4.9 million felt line which will produce insulators for in-house use. considerable cost reduction will be achieved from this internal sourcing with growth opportunities to supply to external customers.

HAsB won various awards from its customers during the year. Amongst them were:1) Isuzu –Best overall Performance2) Perodua – excellent Quality Vendor3) Proton – Best cost Perfomance sMI, Best Quality sMI, Best overall Performance.


3. Noise, Vibration and Harshness (NVH) products

Increasing vehicle safety standards to drive our growth

Trunk Trim Lining

annual report 2012 19ANNuAL RePoRT 2012 19

costsPricing pressures on automotive parts suppliers have become more pronounced over the past year as our customers face competitive pressures on the pricing of their vehicles in the face of further liberalisation of the automotive market in Malaysia and the region.

We have been actively promoting cost reduction programmes to remain competitive, including the following measures:• Negotiating for lower prices from direct material

suppliers

• Reviewingthesupplierbase• Improving labour productivity and increasing

automation• Redesigningourproducts(e.g.reducingweight,raw

materials used and/or to use alternative materials)• Focusing on higher value-added products and

reducing the emphasis on pricing.

We believe the measures we have taken will help mitigate some of the sales price erosion that the industry is facing.

Our NVH Products

Deadeners / Dampening sheets / silencers

Dampening sheets Floor

Heat shield (Aluminum embossed – patented)

Dash Insulators (Inner & outer)

Headliners

Parcel shelf / Package Tray Trim

Trunk Trim Lining

carpet Floor

Dampening sheet door panel

Dampening sheet inner wheel house

Bonnet Liner / Insulator Hood


Financials

completed capital IssuesIn view of MBMR’s expansion plans, the Board of Directors proposed a rights issue of 73.2 million new ordinary shares at RM1.42 per share together with 73.2 million new free warrants on the basis of three rights shares with three warrants for every ten existing ordinary shares held in MBMR. The capital issues were successfully completed in June 2012, raising a total of RM103.9 million. The capital issues are to help strengthen MBMR’s balance sheet to fund future expansion and to repay bank borrowings.

Additionally, a bonus issue of 73.2 million shares was issued on the basis of three bonus shares for every ten existing shares held in MBMR. The bonus issue increased the capital base of MBMR to better reflect the size of the operations and to also reward our shareholders and improve the liquidity of MBMR shares.

There had been an increased interest in MBMR during the year which saw a re-rating of the shares. MBMR’s market capitalisation rose from RM772.6 million at the end of 2011 to RM1,253.9 million as of 31st December 2012.

comfortable Gearing LevelMBMR’s debt levels remain manageable. our net gearing as at end 2012 was at a comfortable level of 19.5%.

Despite the Group’s rapid expansion, costs remained tightly controlled. our cost ratios generally declined during the year and consequently our operating margins improved by 160 basis points.

The earnings profile of the Group has also become more balanced during the year. contributions from operations have risen significantly with the inclusion of HHB to the Group and resulting in better cash flow from operations. earnings before interest, tax, depreciation and amortisation (eBITDA) per share have risen from 12.9sen per share in 2011 to 28.9sen per share in 2012. contributions from operations (parts manufacturing and distribution) accounted for 48.5% of total profits in 2012, a considerable increase from 36.5% in 2011.


Cost Ratios and Operation Margins

Earnings Breakdown

2011 4.1%

2012 3.7%

Admin expenses/revenue

2011 15.8%

2012 19.5%

Net Gearing

2011 3.1%

2012 2.8%

S&D expenses/revenue2011 14.4 sen

2012 28.9 sen

EBITDA/Share (sen/share)

2011 2.5%

2012 4.1%

Operating Margins

PARTSMANUFACTURING

9.1%DISTRIBUTION

27.4%ASSOCIATES

63.5%

2011

DISTRIBUTION

15.6%ASSOCIATES

51.5%PARTS

MANUFACTURING

32.9%

2012

2011 4.1%

2012 3.7%

Admin expenses/revenue

2011 15.8%

2012 19.5%

Net Gearing

2011 3.1%

2012 2.8%

S&D expenses/revenue2011 14.4 sen

2012 28.9 sen

EBITDA/Share (sen/share)

2011 2.5%

2012 4.1%

Operating Margins


Associatesour associates, Perodua and HMsM, continued to maintain their leading positions in the passenger car and commercial vehicle segments respectively. Perodua recorded its highest ever sales of 189,000 cars in 2012 a growth of 5.1 % from the previous year, with a market share of 30.2%. In December, Perodua announced that it will be investing RM790 million in a new manufacturing plant adjacent to the existing facilities in Rawang. The new plant, with an annual capacity of 100,000 of vehicles on a single shift cycle, will help raise Perodua’s competitiveness. The plant is expected to be operational by mid-2014.

HMsM recorded an increase in sales registration by 10.4% to 6,400 units in 2012, also a new record high for the company.

DividendsMBMR paid its first interim dividend of 3 sen per share on 10 september 2012. A second interim dividend of 3 sen per share and special dividend of 3 sen per share were paid on 19 April 2013, bringing the total dividend paid for the financial year ended 31 December 2012 to 9 sen per share, compared with 3 sen per share for the previous corresponding year.

Corporate DevelopmentsIn september 2012, MBMR announced that it had entered into a joint venture with Hino Motors Ltd (HML), Japan to invest in a RM140 million manufacturing facility in sendayan TechValley in Negeri sembilan, to produce Hino products comprising small, medium and heavy duty trucks and buses with an annual capacity of 10,000 vehicles. MBMR holds a 42% stake in the joint venture company, Hino Motors Manufacturing (Malaysia) sdn. Bhd. (HMMM) and the balance by HML. The plant is expected to be ready by early 2014. The plant will play a significant role

in supporting the growing demand for Hino products in Malaysia.

on 27 February 2013 the Board announced that MBMR had entered into a share sale and purchase agreement with Mitsui and co. Ltd (Mitsui), Japan, for MBMR to sell 20% of the issued and paid-up capital of DMsB to Mitsui for RM83.3 million. Mitsui, an existing shareholder of DMsB, will consequently increase its stake to 30% and will enable it to have a higher input in DMsB’s operations, drawing from Mitsui’s worldwide experience in dealership operations. The transaction was completed on 4 March 2013 and DMsB will remain a subsidiary of MBMR at 51.5% shareholding.

OutlookWe believe the heavy investments we have made in recent years will provide us the sustainable growth for the future. The expansion in our sales network has given us better reach and with added new income streams, in particular from the aftersales business. oMI’s alloy wheel plant will commence production in the second quarter of 2013 but will only start to see major contribution to profits once it reaches production economies of scale later. The significant investments in new manufacturing facilities by our associate companies, Perodua and HMMM, are expected to be completed next year. After the rapid pace of recent growth, we will be focusing this year on strengthening our systems and processes so as to enable us to have the capacity to support further expansion in our operations in the future.

Although the economic conditions remain generally healthy, the operating environment is highly competitive. We are confident that we have positioned ourselves strategically to tap the continued growth in the automotive industry and to capture the changing trends in the industry that we had outlined earlier. We have laid clearly our foundations for OUR FUTURE TODAY.

Earnings Breakdown


Social Responsibility

At MBMR, we have built in a culture of a responsible

corporate in the way we conduct our business.

Workplaceour people form the foundation of the success of MBMR.

We believe in developing and retaining our employees

and keeping them engaged and motivated in helping

grow our business. We have scheduled training sessions

to empower and enhance the skills of our employees; we

have regular employee communication such as holding

staff assemblies; we organise teambuilding sessions and

business retreats to keep our staff engaged, motivated

and aligned with the group’s strategy for expansion and

growth; safety at the workplace is of great importance

and we continue to target zero injuries in our workplace;

we conduct safety awareness campaigns and training to

help our employees prevent any future risk of accidents.

MarketplaceWe continue to strive to serve our customers with the best service and produce products of highest quality. We actively participate in vendor programmes to support lean production systems in the face of pressure of lowering costs.

environmentWe are constantly creating awareness of the impact of the way we conduct our business has on the environment. We continuously assess energy saving programs to reduce energy consumption in our operations; we actively explore new methods of carrying out our processes to minimize wastes and where possible, to encourage recycling. our manufacturing facilities are environment Management system (eMs) Ms Iso 14001 and occupational Health and safety Management system (oHsAs 18001) certified.


First aid training to enhance workplace safety

scheduled training sessions for employees

spacious waiting areas at our service centres

Facilities are made available to encourage recycling


We support local charities and initiatives in the communities we operate in. As in previous years, we have continued our support for Pusat Penjagaan Kanak-kanak cacat Taman Megah, home for special needs children and Rumah Amal Limpahan Kasih orphanage in Puchong. We were sponsors of the Relay for Life event organized by the National cancer society Malaysia for the third year in a row. AHsB plays an important role in the automotive industry in making products that help save lives and reducing traffic injuries. Therefore, helping to save more lives with the installation of our products in vehicles is our core contribution to our social responsibilities. We have also initiated road safety campaigns internally as well as for the public to raise the safety awareness on the roads.

community

Relay for Life – cancer awareness campaign Visit to Pusat Penjagaan Kanak-kanak cacat Taman Megah

Visit to Rumah Limpahan Kasih orphanage in Puchong

creating public awareness on road safety


on behalf of the Board we wish to express our

appreciation to the employees of the MBMR Group for

their commitment and dedicated efforts in helping us

achieve a commendable year’s performance. We thank

our customers, business partners, bankers, auditors,

lawyers, suppliers and shareholders for their support.

We also wish to thank the Board for their guidance and

advice during the year. Y Bhg Tan sri Lee Lam Thye has

decided that he does not wish to stand for re-election

in the forthcoming Annual General Meeting. A member

of the Board since 1994, we wish to thank Tan sri Lee

for his contributions and guidance and wish him good

health and the very best for his future.


Appreciation


Dato’ Abdul Rahim Abdul Halim Chairman

Looi Kok LoonGroup Managing Director

28 May 2013

We would like to extend a warm welcome to

encik Mustapha Mohamed to the Board as an

Independent Non-executive Director. He joined the

Board on 25 February 2013 and brings with him

over 40 years of commercial experience with a

chartered accountant background.

Documents

R RM OUR FUTURE M FUTURE - Latest Announcement FUTURE 2 2 MBM Resources Berhad ... PERODUA's Second Manufacturing Plant ... Our vision is clear. We want to build MBMR into a Complete