PROTON Holdings Berhad (623177-A)
02
04
08
09
10
14
18
20
Corporate Mantra & Core Values
PROTON’s Policies
Financial Calendar
Key Financial Indicators
Summary of Financial Highlights for Five Years
Corporate Profile
Corporate Information
Group Operations

40
48
54
24
26
34
36
40
48
54
140
158
162
Board of Directors
Profile of Directors
PROTON Group Management
Committee Members
Heads of International Subsidiaries
Chairman’s Statement
Managing Director’s Review
Operations Review
Statement on Corporate Governance
Additional Compliance Information
Statement on Internal Control
166
170
180
287
290
295
296
299
Risk Management
Calendar of Events 2009 – 2010
Statutory Financial Statements
Shareholding Statistics
Properties Owned by PROTON Group
Share Price and Volume Traded
Notice of 7th Annual
General Meeting
Statement Accompanying the
Notice of 7th Annual General
Meeting
Form of Proxy

Corporate Mantra & Core Values
2

Corporate Mantra & Core Values
Driving Malaysia’s transformation into a leader in technology and quality.
We deliver innovative and superior quality products and services. Our brands inspire confidence and pride.
We are a passionate group of people working together, creating exhilarating products and services for global markets, synonymous with great styling, innovation and leading technology.
3
We make products that work the first time, every time.
Customers are the source of our income. We deliver on our promises to our customers’ satisfaction.
We challenge convention, always seeking new and better ways of doing things. We view change as opportunity.
We trust, respect and share knowledge to foster teamwork at the workplace.
We 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.
As a responsible corporate citizen, we invest in safety, health and the environment.

PROTON’s Policies
4
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 noncompliance;
• Monitor and maintain high standards in environmental protection as well as health and safety measures.

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.
5
• 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.

Financial Calendar
8
JUL
30
1 st QUARTER
Financial Results for period ended
30 June 2009
FEB
19
3 rd QUARTER
Financial Results for period ended
31 December 2009
AUG
30
Notice of 7 th Annual
General Meeting
AUG
21
6 th Annual
General Meeting
MAY
26
4 th QUARTER
Financial Results for period ended
31 March 2010
SEP
23
7 th Annual
General Meeting
NOV
23
2 nd QUARTER
Financial Results for period ended
30 September 2009
JUL
30
Audited Financial
Statement for
Financial Year ended
31 March 2010
SEP
30
Entitlement Date for
First & Final Dividend of 20 sen
(less 25% tax)
JUL
30
Declaration of proposed
First & Final Dividend of
20 sen per share
(less 25% tax) for Financial Year ended 31 March 2010
OCT
22
Payment of First &
Final Dividend of
20 sen (less 25% tax)

Key Financial Indicators
Basic Earnings/(loss) Per Share
(Sen)
8.5
(107.3) 33.6
(54.9) 39.9
06 07 08 09 10
Dividend Paid
(RM’ million)
54.9
27.5
20.6
-
Net Assets Per Share
(RM)
10.7
9.5
9.9
9.3
9.7
9
06 07 08 09 10
Retained Earnings
Carried Forward (RM’ million)
4,908.7 4,291.7 4,476.2 4,153.9 4,372.8
06 07 08 09 10 06 07 08 09 10

Summary of Financial Highlights for Five Years
10
RM’ million
NON-CURRENT ASSETS
Property, plant and equipment
Prepaid land lease payments
Goodwill
Intangibles assets
Associated companies
Jointly controlled entities
Investments
Deferred tax assets
2010 2009 2008 2007 2006
2,624.4
-
29.0
564.0
152.6
202.6
-
15.0
3,587.6
2,827.1
-
29.0
431.7
158.4
195.6
10.4
5.7
3,657.9
3,150.4
24.1
29.0
275.2
165.4
192.7
10.4
-
3,847.2
3,169.5
9.9
29.0
169.1
169.8
223.6
10.4
-
3,781.3
3,302.9
10.0
29.0
18.0
160.4
245.3
10.4
105.8
3,881.8
CURRENT ASSETS
Inventories
Receivables
Current investments
Deposits, bank and cash balances
Non-current assets held for sale
TOTAL ASSETS
1,227.2
991.6
9.7
1,652.1
3,880.6
36.9
7,505.1
1,395.1
1,080.3
15.3
913.9
3,404.6
36.4
7,098.9
1,100.3
1,099.0
20.8
1,226.0
3,446.1
-
7,293.3
1,273.6
1,192.0
73.4
626.5
3,165.5
-
6,946.8
1,389.0
1,244.0
212.0
1,586.0
4,431.0
-
8,312.8

Summary of Financial Highlights for Five Years
RM’ million
CAPITAL AND RESERVES
Share capital
Other reserves
Retained earnings
Equity attributable to equity holders of the Company
Minority interest
TOTAL EQUITY
NON-CURRENT LIABILITIES
Long term liabilities
Deferred tax liabilities
2010
549.2
411.0
4,372.8
5,333.0
-
5,333.0
2009
549.2
398.5
4,153.9
5,101.6
-
5,101.6
2008
549.2
395.8
4,476.2
5,421.2
-
5,421.2
2007
549.2
389.7
4,291.7
5,230.6
-
5,230.6
2006
549.2
412.7
4,908.7
5,870.6
5,870.6
88.6
10.8
99.4
101.5
12.2
113.7
230.5
2.4
232.9
181.6
0.8
182.4
100.3
0.8
101.1
CURRENT LIABILITIES
Payables
Taxation
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
2,060.6
12.1
2,072.7
2,172.1
7,505.1
1,877.3
6.3
1,883.6
1,997.3
7,098.9
1,637.6
1.6
1,639.2
1,872.1
7,293.3
1,531.6
2.2
1,533.8
1,716.2
6,946.8
2,324.2
16.9
2,341.1
2,442.2
8,312.8
-
11

Summary of Financial Highlights for Five Years
12
RM’ million
Revenue
Profit/(loss) before taxation
Profit/(loss) after taxation
Retained earnings attributable to shareholders
Dividend paid
Retained earnings carried forward
SHARE INFORMATION
Per share
Basic earnings/(loss) (sen)
Dividend paid (sen)
Net assets (RM)
Issued share capital (‘000)
2010
8,226.9
260.9
218.9
4,372.8
-
4,372.8
2009
6,518.7
(319.2)
(301.8)
4,174.5
(20.6)
4,153.9
2008
5,621.6
144.3
184.6
4,476.2
-
4,476.2
2007
4,687.3
(618.1)
(589.5)
4,319.2
(27.5)
4,291.7
2006
7,796.9
18.0
46.7
4,963.6
(54.9)
4,908.7
39.9
-
9.71
(54.9)
5.0
9.29
549,213 549,213
33.6
-
9.87
(107.3)
5.0
9.52
549,213 549,213
8 .5
10.0
10.69
549,213

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
15
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
• China
• Indian Sub cont inent
• Middle East – North Africa
• United Kingdom – Western Europe
• Australia
• South 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.

Corporate Profile
16
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-todrive 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.
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.

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.
17
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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Corporate Information
Dato’ Sri Mohd Nadzmi Bin Mohd Salleh – Chairman
Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir
Dato’ Michael Lim Heen Peok
Dato’ Zalekha Binti Hassan
Mr. Behara Venkata Rama Subbu
Tan Sri Rainer Althoff
Encik Abdul Rahim Bin Abdul Hamid
Tuan Haji Abdul Jabbar Bin Abdul Majid
Tuan Haji Abdul Kadir Bin Md Kassim
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)
• Ms Vimala Menon
(Resigned w.e.f. 31 August 2009)
Mr. Oh Kim Sun
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)
• Encik Md. Ali Bin Md. 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
• Tuan Haji Abdul Kadir Bin Md. Kassim
(Resigned w.e.f. 27 May 2010)
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)
• Encik Abdul Jabbar Bin Abdul Majid
(Resigned w.e.f. 21 August 2009)
• Mr. Oh Kim Sun
(Resigned w.e.f. 27 May 2010)
• Tuan Haji Abdul Kadir Bin Md. Kassim
(Resigned w.e.f. 27 May 2010)
• Mr. Behara Venkata Rama Subbu
(Resigned w.e.f. 20 July 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
• Tuan Haji Abdul Kadir Bin Md. Kassim
(Resigned w.e.f. 27 May 2010)
• Encik Md. Ali Bin Md. Dewal
(Resigned w.e.f. 27 May 2010)
1 January 2009
1 January 2006
15 September 2006
11 February 2008
1 March 2010
22 June 2010
20 July 2010
12 April 2004 (Resigned w.e.f. 21 August 2009)
10 March 2005 (Resigned w.e.f. 27 May 2010)
13 May 2009 (Resigned w.e.f. 27 May 2010)

Dato’ Sri Mohd Nadzmi Bin Mohd Salleh – Chairman
Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir
Dato’ Michael Lim Heen Peok
Dato’ Zalekha Binti Hassan
Mr. Behara Venkata Rama Subbu
Tan Sri Rainer Althoff
Encik Abdul Rahim Bin Abdul Hamid
Tuan Haji Abdul Jabbar Bin Abdul Majid
Tuan Haji Abdul Kadir Bin Md Kassim
Mr. Oh Kim Sun
Corporate Information
1 January 2009
1 January 2006
15 September 2006
11 February 2008
1 March 2010
22 June 2010
20 July 2010
12 April 2004 (Resigned w.e.f. 21 August 2009)
10 March 2005 (Resigned w.e.f. 27 May 2010)
13 May 2009 (Resigned w.e.f. 27 May 2010)
AUDITORS
PRICEWATERHOUSECOOPERS
(Chartered Accountants)
Level 10, 1 Sentral, Jalan Travers
Kuala Lumpur Sentral, PO Box 10192
50706 Kuala Lumpur, Malaysia
Tel : 03 - 2173 1188
Fax : 03 - 2173 1288
REGISTERED OFFICE
PROTON CENTRE OF EXCELLENCE
KM 33.8, Westbound Shah Alam Expressway
47600 Subang Jaya, Selangor Darul Ehsan
Tel : 03 - 8026 9741
Fax : 03 - 8026 9744
MAIN BANKERS
Malayan 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 Putra
59200 Kuala Lumpur
Tel : 03 - 2264 3883
Fax : 03 - 2282 1886
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia Securities Berhad
COMPANY SECRETARY
Encik Mohd Nizamuddin Bin Mokhtar (LS 006128)
INVESTOR RELATIONS
Encik Izwan Bin Zainuddin
Tel : 03 - 8026 9094
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Group Operations
20
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)
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)

Group Operations
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.
100% Proton Hartanah Sdn. Bhd.
100% Proton Properties Sdn. Bhd.
40% Proton City Development
Corporation Sdn. Bhd.
50% Proton Commerce Sdn. Bhd.
49.9% Lotus Finance Ltd (UK)
49.9% Proton Finance Ltd (UK)
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.
Yayasan Proton
Lotus Pension Trustees Ltd (UK)
Lotus Cars Foundation (UK)
21

24
Sitting
Dato’ Haji Syed Zainal Abidin B Syed Mohamed Tahir
Dato’ Michael Lim Heen Peok
Standing (left to right)
Dato’ Zalekha Binti Hassan

Sitting
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
25

26
Profile of Directors

Profile of Directors
Chairman | Aged 56, Malaysian
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.
27

28
Profile of Directors
Managing Director | Aged 48, Malaysian
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.

Independent Non-Executive Director | Aged 62,
Malaysian
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
29

30
Profile of Directors
Non-Independent Non-Executive Director | Aged 57,
Malaysian
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.

Independent Non-Executive Director | Aged 56,
Indian National
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.
Profile of Directors
31

32
Profile of Directors
Independent Non-Executive Director | Aged 64,
German National
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.

Independent Non-Executive Director | Aged 60,
Malaysian
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.
Profile of Directors
33

34
(left to right)
Klaus E. Liske
Director,
Group Procurement
Azmi Bin Idris
Director,
Group Quality
Muhammad
Aris Bin Anuar
Tajul Zahari
Bin Abu Bakar
General Manager,
Manufacturing
Director,
Engineering
Michele Kythe
Lim Beng Sze
Chief
Legal Counsel
Azhar Bin Othman
Chief
Financial Officer
Dato’ Haji Syed
Zainal Abidin B
Syed Mohamed Tahir
Managing Director

Dr. Wolfgang
Karl Epple
Senior Director,
Group Operations
Mohd Nizamuddin
Bin Mokhtar
Group Company
Secretary
& Compliance
Yohani Binti
Mohd Yusof
Director,
Group Marketing
& After Sales
Mohamad Shukor
Bin Ibrahim
Chief Executive Officer,
Proton Edar Sdn. Bhd.
Claudius Meynert
Director,
Export
Dr. Badrulhisham
Bin Mohd Ghazali
General Manager,
Corporate Planning
35

36
1
4
1
Brian Collier
Managing Director,
Proton Cars (UK) Ltd
4
Ricky Too Heng Keong
President Director,
PT Proton Edar
Indonesia
2
John Startari
Managing Director,
Proton Cars Australia
Pty Limited
5
Gunther Scherz
Acting Managing
Director,
Proton Singapore
Pte Ltd
3
Dany Taner Bahar
Chief Executive Officer,
Group Lotus Plc
6
Philipe Cheng
Operations Manager,
Proton Motors
(Thailand)
Co. Ltd.

2
5
3
6
Heads of International Subsidiaries
37

40

Chairman’s Statement
Dato’ Sri Mohd Nadzmi
Bin Mohd Salleh
Chairman/Non-Independent
Non-Executive Director
The 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).
41

Chairman’s Statement
42
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.

Chairman’s Statement
For 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.
On 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.
43

Chairman’s Statement
44
It 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.

Chairman’s Statement
PROTON’s Advisor, Chairman and
Managing Director at the unveiling of the EMAS at the Geneva Motorshow.
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.
45

Chairman’s Statement
46
PROTON’s 25 th Anniversary commemorative book, “A Saga - PROTON’s 25 year story”, was launched by Prime Minister
Dato’ Sri Mohd Najib Tun Razak during PROTON’s 25 th Anniversary Gala Celebration.
PROTON’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
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
47
Dato’ Sri Mohd Nadzmi Bin Mohd Salleh
Chairman

Managing Director’s Review
48
Originally conceived by Yang Amat Berbahagia
Tun 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.

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 youngat-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.
49

Managing Director’s Review
50
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.
Having 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.
PROTON’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.

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 25 th Anniversary Gala Celebration.
Our 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.
51

Managing Director’s Review
52
In 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.

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.
As 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 TAHIR
Managing Director
53

Operations Review
54
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.

Operations Review
56
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.

Operations Review
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.
57

Operations Review
58
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.
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.

Powertrain/Drivetrain and Energy Storage
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
59

60
Operations Review

Operations Review
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 being briefed on the High
Performance Engine during a visit to
Lotus in the UK.
Engine technology moves rapidly with the global demand for high performance yet lower emissions. PROTON responds with the introduction of the higher performance engine (HPE) plan for production in 2011. The program is in collaboration with Lotus Engineering, UK.
The key objectives are enhanced performance, emissions and quality standards to support
PROTON’s future product introductions.
The main program is the design and development of an engine equivalent in performances to a 2.0L naturally aspirated engine. Thirty six PROTON engineers and technicians have been integrated with the Lotus Engineering project team in Hethel, United Kingdom, working together in all areas from Project Management, Powertrain Design, Powertrain Analysis,
Engine Development and Engine Calibration. The project team also works with leading global suppliers from Europe, Japan, South Korea, China, India and ASEAN.
His Majesty Duli Yang Maha Mulia Seri Paduka Baginda Yang di-Pertuan Agong Al-Wathiqu
Billah Tuanku Mizan Zainal Abidin Ibni Al-Marhum Sultan Mahmud Al-Muktafi Billah Shah officiated the first ‘key-on’ ceremony for the HPE on 2nd October 2009 during His Royal visit to Lotus in Hethel.
61

Operations Review
62
(a) Universiti Teknologi Malaysia (UTM)
PROTON and Universiti Teknologi Malaysia (UTM) signed a Memorandum of Understanding (MOU) in
February 2009 with the objectives of promoting the exchange of technical expertise, cultivating joint research, sharing of facilities, and creating a pool of experts towards achieving excellence in R&D and consultancy.
A PROTON Professorship Program had been established with the assignment of one lecturer to PROTON for two years to carry-out the work as stated within the objectives of the MOU. The collaboration effort is expected to benefit both parties by maximising each others’ resources. This could potentially reduce financial investment and speed up R&D processes required to bring the product into the market place.
It is also part of PROTON’s corporate responsibility and continuous efforts to be proactive in making improvements to its product quality.
Some of the research areas that have been identified for further studies include noise level reduction in the cabin of a vehicle, cabin climate control design, analysis of a door side mirror using wind tunnel and vibration test, and the development of a new transmission concept.
(b) Universiti Teknologi MARA (UiTM)
PROTON and Universiti Teknologi MARA (UiTM) signed a Memorandum of Understanding (MOU), which took place on 13th January 2010. The Agreement is for a three-year collaboration involving automotive technology, styling (art & design), and human capital development.
The MOU covers the exchange of staff, sharing of facilities, acquiring intellectual property rights, journals, publications, conferences and workshops of relevant projects as part of PROTON’s Technology
Roadmap activity.
Expected outcomes from the alliance are industry-university knowledge sharing, technology development, cost savings and competent graduates in automotive industries – in terms of technical, business and relevant soft skills. Some of the areas identified for further study include photo-voltaic powered auto ventilation, thermal management of car cabin, cabin odour control and super-activated carbon for butane canister.

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(c) Taylor’s University College (TUC)
A Non-Disclosure Agreement (NDA) and Collaboration Agreement (CA) were signed between PROTON and TUC for ideas generation and development and evaluation of projects. Four project proposals have been developed by TUC namely:
Project 1 – Air cond Accelerator
Project 2 – Lock Status Indicator
Project 3 – Parking Mirror
Project 4 – Mini Head Up Display (HUD)
The project study was completed in December 2009.
Dato’ Sri Mohd Najib Tun Razak with Dr. Maximus Ongkili witnessing the exchange of the MOU between PROTON
Managing Director Dato’ Haji Syed Zainal Abidin Syed Mohamed
Tahir and CEO of MiGHT Encik Mohd. Yusoff Sulaiman at the
Putra World Trade Centre (PWTC),Kuala Lumpur.
(a) Vehicle Advanced Telematics System (VATS)
PROTON, Azanor Exim Sdn. Bhd. and the Malaysian Industry-Government Group for
High Technology (MiGHT), have signed a Memorandum of Understanding (MOU) for the implementation of the ”Vehicle Advanced Telematics System” (VATS) Program in
October 2009. This collaboration stems from TechnoMart Malaysia™, a technology trading platform under the initiative of the Ministry of Science, Technology and
Innovation Malaysia (MOSTI) and MiGHT.
VATS is a national project under the Telematics Industry Development Program that is aimed at providing a conducive infrastructure for the development of the telematics industry for the automotive sector in this country. Through this joint venture, MIGHT-
PROTON-Azanor will also expand this program to the local small and medium industries in an effort to improve the capability of local automotive telematics technology comparable to international standards. The technology will incorporate among others, the auto-electronics, GSM communications, low orbit satellite communications, GPS,
GIS and a variety of sensors.
The VATS project includes a build up of a full demo vehicle on the P.O.C (Proof Of
Concept). This is now undergoing Feasibility Study and Market Research.
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• China
The Engineering Division provides product & technical information support to our Chinese business partner especially for localisation activities, as well as to establish the engineering system and data management.
• ASEAN, Other Markets
Continuous engineering support in the areas of vehicle, powertrain and testing is being provided for these markets.
PROTON carries out a thorough study on product compliance, benchmarking against regulatory requirements of each designated market at the earliest time possible. The implementation of new legislations between year
2009 to year 2018 in PROTON existing markets, may require PROTON to revise its development strategy so as to meet those regulatory requirements. This includes the mandatory fitment of brake assist system (BAS), electronic stability control (ESC), tyre pressure monitoring system (TPMS), gear shift indicator (GSI) and daytime running lamp (DRL).
Other than that, vehicles must also be able to comply with the requirements of pedestrian protection, CO2 emission, Euro 5 and Euro 6 emission standards, mobile air-conditioning system and reusability, recyclability and recoverability depending on the specific market.

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PROTON Managing Director Dato’ Haji Syed Zainal Abidin Syed
Mohamed Tahir (second from left) exchanges documents with Hewlett-
Packard Enterprise Services Asia-Pacific & Japan Senior Vice President
Kevin Jones (second from right) while PROTON Engineering Division
Director Tajul Zahari Abu Bakar (left) and Siemens PLM software experteam Asia Pacific Vice President Gavin Spier look on.
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As PROTON grows beyond the local market, we continue to employ innovative technology which will help us to accelerate the development of our products in a more timely, and costeffective manner. Product Lifecycle Management (PLM) solution is an initiative that PROTON has adopted, to manage the entire product lifecycle processes right from conceptual design through to after sales support. The program is being carried out together with the support of
Hewlett-Packard (HP) and Siemens PLM.
The advantages of PLM solution include:
• Improvement of the end-to-end development timeline which accelerates introduction of new models to the market.
• Management of cost throughout the product lifecycle to ensure cost effectiveness with possible cost reduction.
• Collaboration and networking within internal and external engineering partners to allow seamless work integration and knowledge sharing to improve product quality.
PLM solution links not only the entire product lifecycle processes but also the whole team that is involved in it. Therefore, collaboration, integration and information sharing could easily happen.

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(from left to right)
Winner: Super carrier business concept;
Second prize winner: Sport shoe inspired convertible; and
Third prize winner: Mid-engine Saga.
The Computer Aided Engineering (CAE), Crash & Safety Group, won the 1st prize under poster category (paper without presentation) at the 5th India/ASEAN HyperWorks Technology Conference 2009 held in Bangalore,
India. The poster was entitled ‘Application of Plackett-Burman Experimental Design through Altair Hyperstudy in Frontal Crash Performance’. The conference was attended by over 800 CAE engineering professionals from all over India and South Asia. The full technical paper was also published in the journal of the 3rd
International Conference on Energy and Environment (ICEE) 2009, under the sustainable energy category.
Additionally the CAE, Durability & Reliability Group, had won an award for the best technical paper at
South East Asia ABAQUS Users’ Conference entitled ‘Analysis of Gearshift Mechanism using Flexible Body
Approach for Structural Durability Assessment’ which was held in Penang. The presented paper was not only hinged on the innovative numerical approach in integrating the physics of multi-body-dynamics with flexible
Finite Element modeling in one simulation environment, but also the intellectual property gained from the established knowhow.
In August 2009, a technical paper entitled ‘Probabilistic Analysis in Virtual Development’ was presented by the CAE Section at the Annual MSC ASEAN Users’ Conference in Sunway, Malaysia. The distinctive feature of the analysis method as contained in the technical paper is the establishment of a Reliability Engineering framework on top of the existing traditional Finite Element approach. It is an extension of the integration between statistics and numerical analysis that put extra emphasis on Quality Engineering and Design-to cost orientation. The analysis concept was quoted by MSC as the ‘New CAE Simulation Approach of the 21st
Century’. Based on those merits, the work presented by PROTON had received the Asia Pacific Innovation
Award 2009 from MSC Software Corporation, which was awarded by Tun Dr Mahathir during PROTON’s
Family Day 2010.

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A competition named
was organised for all staff of
PROTON at Shah Alam, Tanjung Malim and those of Proton Edar Sdn. Bhd.. The objectives of this competition are to generate new ideas and interest among the staff in creating next generation cars and also for employees to feel appreciated for their contributions to the
Company.
The competition was held for 3 months from June 2009 until August 2009. The winners were decided based on the cost of build, creativity, styling and originality by internal and external judges from UiTM, UTM & MOSTI. The top 20 cars were paraded around the factory vicinity during PROTON’s Family Day in January 2010 for the staff and family members to view and appreciate.
Tun Dr Mahathir awarding the Asia Pacific Innovation
Award 2009 from MSC Software
Corporation, during PROTON’s
Family Day 2010.
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After a slower phase of growth in 2008, the performance for the year under review is an indication of positive things to come in the future as we saw increased demand for Proton vehicles even amidst a generally bleak industry scenario.
The successful launch and introduction of the Exora, the first truly Malaysian MPV in 2009, helped to improve the total production volume from 157,643 units to 173,057 units. Although it is new, the
Exora alone has contributed to 20% of the total volume in its first year of production, a testament of its high demand.

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In July 2010, the new Exora Special edition was launched and continued to capture the MPV segment with its enhanced styling and product specification. The Saga will also be upgraded by having a two phase facelift, the first facelift targeted in November 2010 with minor appearance modification and a second involving an engine upgrade in 2011. This facelift is planned despite its continuing streak of high bookings. In fact in the last financial year, the Saga was a best seller several times for the Malaysian automobile market; due to its impressive selling points of consistent quality, value for money and reliability.
The launch of the Persona ‘Elegance’ in March 2010 is another example of PROTON’s commitment to continuously improve its products. The Elegance is equipped with better specifications including a 32bit
ECU which means increased functionality, better engine performance and increased diagnostic capabilities.
These combined with an enhanced stylish body kit, alloy rims and interior trim leather makes the Elegance a much sought after car in its class. We expect the Elegance to continue its reign as one of the top revenue generating models in our stable.

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Efforts to improve productivity and quality remain a core focus within the Manufacturing
Division. Quality levels improved in 2009, and with the increase in production volume, we are also taking steps to raise our productivity index. We are putting plans into place to involve the vendor community in our efforts to raise manufacturing standards in the near future. This is crucial as minor disruptions in their operations can severely affect the performance of our production lines.
Towards this end, we have set monthly benchmarks, and established new model lines so that
‘yokoten’ (a Japanese term which means copying) activities can be implemented. During the year under review the Manufacturing Division also focused on workforce training to upgrade skills and capabilities, upgraded the shopfloor working environment and sent key employees for external training in a renowned Japanese institute. We hope to reap the benefits of all these training programmes in the near future, and see our efforts come to fruition.

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The PROTON Shah Alam manufacturing complex includes the original Main Plant and the smaller Multi
Vehicle Factory (MVF). A separate Engine machining and assembly building is also contained within the complex where cylinder blocks, crankshaft and camshafts for the Campro engine are machined and subsequently assembled.
There is also a Casting plant which is situated in the nearby Glenmarie industrial area. The Casting plant is able to produce up to 180,000 cylinder blocks, crankshafts and bearing caps. There are plans to increase this capacity to 250,000 units per year. This is not only due to the increase in demand but also in order to supply to our Chinese business partner, Jinhua Youngman Automobile Group, in the intermediate term.
The Main Plant’s capacity is 150,000 units while the MVF’s capacity is 50,000 giving a total capacity of
200,000 units per year.
The Main plant currently produces the Saga, Waja and Arena models. The Saga model is the highest volume model produced, averaging about 6,600 units a month. The capacity of the Saga has also been reviewed from 72,000 units to 96,000 units to accommodate the good demand especially from the domestic market.

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For the record, up to March 2010, the Saga production reached a cumulative volume of 162,676 units since the start of production. By contrast, the production volume for the Waja and Arena are 3,352 units and 835 units respectively.
The Wira and Perdana which were produced at the Main Plant, reached the end of production for domestic market back in June 2009. The Wira production has reached a volume of more than 1.09 million units while the Perdana recorded a volume of more than 77,300 units. The Arena is anticipated to stop production as planned in August 2010. This step is necessary in view of the need for PROTON to refocus its critical resources on current core models and new model development.
The MVF plant solely produced the 1st Malaysian MPV namely, the Exora. Since its introduction in April
2009, MVF has produced 33,689 units of Exora up till March 2010. In ensuring the EXORA continues to capture the MPV segment, a cosmetic change has been planned and targeted for launch in July 2010. The stylish body kit, sporty alloy rims and the new interior look of tempest gray are designed to attract younger drivers who appreciate aesthetic detailing. This plant is also currently being modified to produce the new replacement car for the Waja which is targetted for the production line by November 2010.
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PROTON’s Tanjung Malim plant in Perak has an annual capacity of 150,000 units (involving
2 shifts) with a 60 per cent automation level, allowing man and machine to interact more efficiently, productively and safely. The plant comprises 5 main buildings namely Engine &
Transmission (ETM), Stamping, Body Assembly, Painting and Trim and Final Assembly; all equipped with an Automatic Line Control or error proof system to assist workers to enhance built up quality on line and to achieve better production efficiencies.

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To allow for greater flexibility in production, the plant is capable of producing multi-model products on a common line. Each line can assemble vehicles on three different platforms and produce up to nine different models at any one time. The Stamping shop is equipped with a 4,600 tonne transfer press, the largest stamping equipment and the biggest of its kind in the Southeast Asian region.
Certified by ISO 9001 and ISO 14001, PROTON Tanjung Malim set new standards for a more conducive, comfortable and safe working environment. Worker friendly features include a high roof concept and natural aspirated ventilations that channel a cooling effect within the complex, where good ergonomics, brightly coloured floors and well lit interiors facilitate energetic and dynamic performance.
Currently, PROTON’s Tanjung Malim plant produces the Persona, Gen.2, Savvy and Satria Neo models with
Persona being the highest model produced on a monthly basis. During the year under review, the plant produced
45,045 units of Persona; 3,431 units of Gen.2; 4,513 units of Savvy; and 4,579 units of Satria Neo.
Total production volume for FY10/11 is forecasted to increase by 20% compared to FY09/10’s actual production volume of 173,057 units. The volume for this year has been set based on the projected domestic economic recovery, TIV growth and export volume expansion.
The sudden increase in volume is forcing PROTON to rethink its strategy to optimise plant utilisation and if possible minimise additional required investment. This is to maximise the reduction of the overall manufacturing cost per unit.
For the next financial year, we plan to deliver 208,000 units, which means plant utilisation can now reach up to 60%. Further upside in the volume is also envisaged due to the positive development in the Iraq and
China markets. Furthermore, in view of the launch of cosmetic changes for the current models and the new replacement model for Waja, we are certain of an imminent increase in the production volumes, a very challenging scenario indeed.
Presently the Saga, Persona and Exora make up more than 75% of the total FY10/11 volume plan. As part of the activities to continuously refresh these models, cosmetic changes or face lifts have been planned. The
Persona Elegance, the minor Gen.2 cosmetic change, the Exora cosmetic change and the much anticipated
Saga facelift are examples of such endeavours.
Plant improvements have been planned to cater for the potential expansion of the CKD volume. Currently, our main CKD importer is Jinhua Youngman Automobile Group (Youngman) which is assembling a rebadged version of the Gen.2 and Persona. The CKD volume set for the next financial year for Youngman is 330% higher than the previous year. In addition, Youngman is also requesting PROTON to support their production of new models based on the PROTON platform. PROTON is also currently evaluating the possibilities of supplying complete engines and some anciliary loose components to enable Youngman to develop their own products.
PROTON has dispatched the first group of engineers to provide technical assistance to Youngman to improve shopfloor management in Manufacturing. We believe the technical assistance support to Youngman will be continued in the future, and we view this technical assistance as a preparation for our future prospects in overseas plants operation – namely in Iran and India.
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Lotus Evora production line.
It was an exciting yet challenging year for the Group. Though there was great demand and appeal generated for the stunning Lotus Evora, growth of the Group was restricted by the continuing weak trading environment, market conditions, fragile consumer confidence, increased competition, cost pressures that led to increased operational expenses and the volatility of the pound sterling.
Financially, the Group recorded a consolidated turnover of £139.3m for the fiscal year, an increase of 26% when compared to the consolidated turnover of £110.9m in the previous corresponding period. Lotus Cars was the main driver behind the increase with revenues increasing by 28% to £98.2m following the initial contribution from Lotus Evora sales during the year.
Meanwhile, Lotus Engineering’s third party consultancy business continued to record year-on-year growth with revenues increasing by 21% during the financial year to £44.2m. This growth results from sustained market driven policies, focusing on clear service offerings centred on its core competencies to retain and enlarge its client base.
However, despite the increase in gross profit on the back of increased turnover and improved gross profit margins, the Group registered a consolidated loss of £11.2m during the financial year. Rising operating costs exacerbated by unrealised forex losses on non-pound sterling denominated loans and asset impairment adversely contributed to the financial results of the Group. Nevertheless, the loss for the financial year was
23% lower when compared to the loss of £14.2m incurred in the preceding financial year.
On the corporate front, Dany Bahar was appointed as Chief Executive Officer of Group Lotus, succeeding
Michael Kimberley who retired during July 2009 due to ill-health. Under Dany Bahar’s leadership, a new 5-year strategic business plan has been formulated, building on the foundations he inherited. Underlying the new strategic business plan is a radical transformation to reposition both Lotus Cars and Lotus Engineering with the ultimate aim of delivering positive and sustainable financial returns to all Group Lotus’ stakeholders.

Operations Review
During the course of the fiscal year the total number of Lotus vehicles increased by 19% or 435 units to 2,715 units across 32 countries. This was mostly driven by demand for the Lotus Evora.
The stunning Lotus Evora was unveiled to the worlds press in April 2009 to great acclaim with the media continuing to praise the car throughout the year.
This has resulted in the Evora winning a number of high profile and important awards and accolades. The total number of awards so far bestowed upon the
Lotus Evora is 8 and some citations from these awards are as follows:
Car Magazine – Performance Car of the Year 2009
“There are executive saloons that don’t ride this well, super cars that don’t turn in so crisply, and surely no car on the planet steers like this. Lotus has managed to transfer everything that we love about the Elise to a bigger, more refined, more grown up platform... It couldn’t really be much better to drive – the Evora is nigh-on perfect. A winner on every conceivable level.”
Top Gear – Sports car of the Year 2009
“Its pretty, quintessentially British, fast and handles like a dream. Evora takes Lotus to a new place in terms of quality but more importantly delivers a sports car rush that puts other marques to shame.”
Evo Magazine – Car of the Year 2009
“It’s a magical thing across the ground, deft like an Elise, with exceptional poise and feel. What was telling for me was that, getting into it after any of the other finalists, it was even better than
I remembered: a bit smoother, a bit quicker and even sweeter dynamically, too. It’s a beguiling car.
… A quite brilliant car and worthy winner.”
Autocar – Britain’s best Driver’s Car 2009
“The best here. Brilliant on the track. Nimble, delicate and forgiving. Even better on the road.” iMotor – Most Rated Car of 2008
“It’s [Lotus Evora] ‘rated’ score of 95 per cent is truly impressive and enough to see it beat brilliant machines such as the Lamborghini Gallardo LP560-4 and Nissan GT-R.”
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The first customers took delivery of their new Lotus Evoras on 1st September 2009 and shortly afterwards, at the Frankfurt motorshow in mid September 2009, Lotus unveiled the Lotus Evora Cup Racecar which underwent development over the winter. Part of the development process included a demanding development testing activity at a snowy Snetterton Cricuit in Norfolk by Lotus Racing’s F1 driver Jarno Trulli.
As part of Lotus Engineering’s drive to continue to be world leaders in hybrid and electric vehicle technology, the Lotus Range Extender engine for Series Hybrids was unveiled at the Frankfurt Motorshow, to great acclaim from the rest of the motor industry. This engine has already been installed in three high profile research vehicles: the “Limo Green” project, the Proton Emas concept and the Lotus 414E Hybrid, the two latter vehicles debuting at the Geneva motorshow in March 2010.
March 2010 also saw the return of the Lotus name to F1. Group Lotus PLC entered into a licence agreement with 1Malaysia Racing Team (1MRT), to licence the use of Lotus Racing in F1. Whilst there is no financial support from Group Lotus, the company is fully supportive of 1MRT’s F1 entry. It is recognised that Group
Lotus PLC will also benefit from the association with Lotus Racing with F1 being both true to Lotus’ racing heritage and the pinnacle of motorsport competition with a global following.
At the end of the financial year, Lotus donated eight special edition ‘Naomi for Haiti’ Fashion for ReliefTM
Lotus Evoras which were auctioned to achieve in excess of 1.4m for the high profile charity.
As part of the Group’s ambition to generate worldwide brand awareness, Lotus returned to IndyCar racing with a collaboration with experienced Indy Racing League Team, KV Racing. Lotus’ return to the highest profile racing series in North America after a 40 year absence, begun with a flourish with Japan’s most successful automobile racing driver, Takuma Sato, driving the 2010 Lotus IndyCar.

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As Lotus embarks on its strategic journey to transform and reposition the Group, it readies itself for another challenging yet exciting time ahead. Substantial investment is needed to implement the strategies but once the transformation has taken shape, the Group will be on much stronger footing operationally and financially, thus creating value for all its stakeholders.
Lotus Cars transformation will be underpinned by a clear strategy to differentiate its core offerings. Over the period of the business plan, Lotus Cars will invest heavily in new products across key luxury sportscar segments. The new product positioning requires a shift in brand position, to elevate the brand to the premium segments whilst ensuring that the core brand strength and values are maintained. Achieving this requires significant investment in marketing, sales, after-sales and manufacturing capability which will be further supplemented by investment in a robust and integrated IT system to increase overall organisational efficiency and effectiveness.
At the centre of Lotus Engineering’s business plan will be the investment identified to further strengthen and build its core competencies in the areas of lightweight architectures, driving dynamics, efficient performance and electrical and electronics integration. These four core competencies represent key disciplines which have a high growth and portability potential. In parallel, Lotus Engineering will continue with its ongoing efforts to improve operational and organisational excellence.
Acknowledging that the transformation of Group Lotus will be a significant undertaking, the management team of Group Lotus has been strengthened with the recruitment of industry heavyweights from premium sportscar manufacturers and premier global engineering service providers. These individuals bring with them the necessary capabilities and skills as well as strong track records of delivering change.
Looking ahead to the new financial year, the primary focus is to ensure that the business continues to grow using the resources available while introducing additional measures to control operational cost. Equally, if not more importantly, is for the Group to ensure that the implementation of the strategies gains traction in line with the business plan as this will also provide the Group with immediate benefits.
Lotus Cars will also focus on maximising sales of its current Evora, Exige and Elise offerings which will be further enhanced by future variants to broaden and refresh the range and to meet a multitude of new legislative requirements. An example is the new model year 2010 Elise which sports a new facelift, is equipped with a new powertrain and boasts the lowest carbon emissions for a vehicle in its class at 149g/km.
Meanwhile, Lotus Engineering will continue the expansion and growth of its third party consultancy business by generating new opportunities, leveraging on its core competencies and partnering with other engineering service providers.
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During the year under review, PROTON continued its journey towards quality excellence by embracing the principles of Total Quality Management (TQM): transforming all aspects of quality in all areas of business, cultivating quality culture, embedding further quality ownership by strengthening the crossfunctional organisation, emphasising more on process quality and instilling quality core values deeper across the business value chain to deliver the intended quality results.

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As customer focus and speed are our core values, PROTON is committed to an effective quality improvement framework. In ensuring effective and timely resolutions of quality issues, the Quality Improvement Committee (QIC), comprising members of the senior management, meets on a weekly basis meant to provide direction and decision on matters pertaining to quality.

Operations Review
The next step is to systematically and effectively implement these quality initiatives throughout the organisation. To this end PROTON has established a company-wide cross-functional Quality Improvement
Team (QIT) in the last financial year to positively address product quality problems. Beyond this, a single channel for the problem solving process was also established during the year under review to streamline communication and coordinate problem-solving efforts.
The introduction of QIT has accelerated problem-solving and enhanced customer confidence. Internal quality issues and more importantly, customer complaints, now all undergo a stringent 8 stage problem solving process to ensure that the problems are resolved permanently.
As a result, warranty trends now register a 4% improvement as there is a lower percentage of warranty claims over sales revenue. Warranty defects have also shown improved trends for all models implying all quality initiatives implemented so far via the QIT have started to bear results.
A dynamic work culture is created when individuals take charge and are empowered to make a difference.
The Kaizen Suggestion Scheme, one of the many initiatives to drive quality ownership and quality culture, is a continuous incremental improvement and structured feedback system within PROTON especially in the manufacturing environment. It encourages action by empowering individuals or groups to act to improve processes and work conditions. During the year under review, the submission rate for suggestions improved by 70% for both PROTON plants and 25% of the submitted suggestions have been implemented successfully resulting in cost savings of RM12.4 million.
The development of quality ownership and quality culture in PROTON is further strengthened by the implementation of the Innovative and Creative Circle (ICC), which is a group composed of PROTON employees who are trained to identify, analyse, solve or enrich work-related concerns based on the Plan-Do-Check-
Action (PDCA) cycle. More than 250 ICC teams voluntarily registered in the last financial year to undertake various projects to improve productivity, quality and cost. 97% of the registered teams have completed their projects and these have recorded cost savings of up to RM26.2 million.
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PROTON’s Managing
Director, Dato’ Haji
Syed Zainal Abidin, and
Senior Director of Group
Operations, Dr Wolfgang
Karl Epple, attending the Company-wide quality campaign at the
Shah Alam Main Plant.

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In translating PROTON’s quality vision of “No. 1 in Functional Quality by 2012”, more concerted efforts and structured activities are being carried out to implement built-in quality upstream at the early stage of a vehicle’s design and development. Initiatives like benchmarking and simultaneous engineering, are some of the defect prevention initiatives carried out.
How this works is that all market feedback, especially customer complaints, are channeled back to the design and development team so that they can act to prevent recurrence and also leverage on these new findings to emerge improvements and countermeasures in the design of new models and facelifts.
The design and development process deliverables are also monitored to ensure strict adherence to PROTON’s
New Product Introduction requirements. All new models will be then subjected to various stages of comprehensive and systematic quality gate reviews to track compliance against the set quality targets and deliverables.
With all these pro-active initiatives done during the design and development stage, there have been noticeable and meaningful improvements in the initial quality of PROTON vehicles as evidenced by the reduction in customer complaints. The Exora, for example, has registered 68% improvement in concerns per car for the first three months from the start of production.
This achievement clearly shows that the various initiatives PROTON have put in place and our emphasis on prevention rather than detection has started to bear fruits.

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As one of our critical success factors, our suppliers are required to implement various quality initiatives in order to ensure good quality components are being produced and fitted into PROTON’s vehicles.
To ensure our supplier’s quality system and manufacturing processes are in controlled environments and in compliance with the global quality automotive standard, all PROTON suppliers are subjected to stringent year-round quality audits. All components are also rigorously inspected and tested at various points on a continuous and periodical basis during the mass production stages so as to reflect PROTON’s endless commitment towards quality.
During the year under review we established quality improvement action plans focusing on selected critical suppliers, and special quality audits were carried-out with direct involvement of PROTON’s top management.
In addition, all newly developed components had to undergo and fulfill more than 15 requirements of the production part approval process before being approved for supply to our factories and fitted into PROTON vehicles.
With all these initiatives in place, the supplier quality level registered an improvement of more than 50% during the period. Moving forward, more efforts in supplier’s capability building and enhancement of the integrated supplier quality management programme have been identified as the next key areas of improvement as we continue to adopt global best practices and put more focus in developing a quality culture throughout the supply chain.

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Manufacturing, being one of the most important elements of quality, is always the main focus of our quality improvement initiatives. With various initiatives like QIT and Zero Defect program carried-out at the production shopfloors, the quality level of vehicles have continued registering impressive improvement of more than 50% in all plants.
Towards building-in quality into the manufacturing processes, efforts are being made to change our quality approach from judgement control to source control by implementing initiative like Zero Quality Control to eliminate defects by fixing the root cause and controlling the processes at source.The year-long continuous quality campaign strategy via the implementation of the Zero Defect program has indeed helped improve the quality level tremendously. By implementing the Zero Defect program, PROTON has ingrained a mindset shift of ‘Nothing is Impossible’ and embedded a commitment towards defect prevention into our work culture. This fulfills one of PROTON’s TQM emphasis on people quality.

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PROTON’s never-ending commitment towards customer satisfaction is strongly reflected by the JD Power
Initial Quality Study 2009 (IQS) results. In the IQS 2009, PROTON recorded a 30% improvement rate in comparison to the IQS 2008 result. The achievement is indeed significant because no other OEM companies have ever achieved such results.
In addition, PROTON’s improvement rate surpassed the industry average which only registered 14% improvement. The strong results clearly imply that PROTON is listening to our customers seriously and more importantly, various actions are being implemented to relentlessly address all customers’ concerns, big and small, to keep our customers satisfied.
During the year under review, PROTON models continued to gain market recognition via various established international awards which are testament to the improved quality of PROTON models. Towards a future of unrelenting progress, PROTON remains committed to exceed expectations and continuously embark on various quality improvement initiatives so as to attain and maintain a world class standard of quality.

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To combat the adverse market situation, we put together a series of aggressive initiatives to overcome the challenges, and leveraged on opportunities provided by the Government economic stimulus package. As the market gradually recovered, buoyed by the increase in consumer confidence and positive economic health, we continued to heighten our collective efforts to drive higher sales.
The results were encouraging. With strong support from our network, PROTON not only managed to surge in performance but also proudly secured the market leader position for 2 consecutive months in June and July 2009 respectively. Group synergy and our employees passionate commitment to our goals continued to steer us towards steady growth over the following months, and to our great delight, we surpassed the target for the 2009/2010 financial year.
At the closure of the financial year under review, as at 31st March 2010, we posted a total of
157,170 unit registrations, 4% higher than the target and representing a 13% improvement over the previous year’s performance of 139,394 units. Over the calendar year performance, while TIV posted a decline of 2% (536,905 in 2009 against 548,115 in 2008), PROTON outgrew the industry’s rate by increasing 4% (148,027) compared to 2008’s volume of 142,971.

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Effectively, PROTON gained an additional 2% market share, increasing to 28% from 26% in the previous year. This marked improvement of 13% increase in overall performance was primarily driven by the popularity of four core models namely the Saga, Persona, Exora and Satria Neo. These made up 94% of the total registration.
The Saga continued to be the lead model amongst the top four PROTON models and had managed to become the best selling model in Malaysia for 3 consecutive months from January 2010 to March 2010.
With better systems and improved processes in place, the overall monthly average of unregistered stock against registered ratio remained healthy at below 1 month, resulting in better cash flow.
The PROTON XChange Program, a scrapping scheme that was introduced in 2008 with the support of the
Malaysian Government to aid the automotive industry through its economic stimulus package, came to a closure in the third quarter of the financial year under review, with more than 29,000 units scrapped, in contrast to the original target of 5,000 units.
Service business performance posted a total revenue of RM259 million, an increase of 43% over the previous year’s achievement of RM181 million. This represented a RM32 million increase above the target and, at the same time, reflected an improvement in our Customer Service Index (CSI) score from 70 points in the previous year, to 74 points during the period under review.

Operations Review
In the second quarter of the 2009/2010 financial year, Proton Edar Sdn. Bhd., a wholly-owned subsidiary, and
Edaran Otomobil Nasional Berhad (EON) jointly signed a Master Dealership Agreement in which both parties are in consensus to re-align the Sales and Service dealer networks nationwide. This network rationalisation programme sets to re-map the Dealer Networks to solidify and strengthen PROTON’s position in the market.
As at the end March 2010, the total number of outlets was reduced to 255 for sales and 339 for service respectively.
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Center for
Logistic Allocation
Storage and Services in Sijangkang.
We have also embarked on our Phase 1 Centralized Pre-Delivery and Logistics Hub Project for the Shah
Alam plant through an outsourced partner located at Sijangkang, Kelang, Selangor. This integrates vehicles storage, Pre-Delivery Inspection (PDI), minor repair works and distribution preparation at a 1-stop centre with an aim to reduce the handling points and achieve better stock management in order to improve the delivery process to the end customers.
This mega project supports both the Domestic and Export markets and Phase 2 is in the pipeline for vehicle production rolling out from the Tanjung Malim plant.
In terms of new product enhancements, the introduction of the Saga Special Edition in July 2009; with its new special features and accessories, coupled with a sporty yet elegant look; helped to further boost the popularity of the new Saga. In the MPV segment, the popular Exora received an additional new variant with
Exora Basic making its presence in November 2009 to offer customers a more affordable choice for the lower end market. To date, the Exora has garnered an excess of 43,000 in total bookings and more than 32,000 units have been sold since its introduction in April 2009.

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PROTON’s Managing Director,
Dato’ Haji Syed Zainal Abidin, and
CEO of Proton Edar Sdn. Bhd.,
Mohamad Shukor, at the launch of the Persona Elegance.
Persona meanwhile was given a refreshed styling and enhanced look with the introduction of the Persona
Elegance in March 2010. The new design has accelerated market excitement as evidenced by improved bookings with registrations averaging 4,500 units three months after its launch.
During the financial year under review, PROTON models continued to gather a number of awards, among them:
• The prestigious Best Brand in the Brand Laureate SMEs Masters Awards for the automotive category.
• The Exora, within the first 9 months of its market entry garnered 3 awards: Best Local Assembly MPV
(Asian Auto – VCA Auto Industry Awards 2009); Winner of Car of the Year 2009 Award for small/mid-size
MPV (Autocar Asean); and Car of the Year 2009 for midi MPV (NST/Maybank).
• The Persona and Savvy took 2nd Placing for the Most Fuel Efficient Car Award 2009 (Asian Auto Mudah.
com) under the category of Small Family Car and Compact City Car respectively
• The Satria Neo was voted the Best Local Assembly Sports Car by Asian Auto-VCA Auto Industry Awards
2009.
• The hot Saga meanwhile, continued its fine run with its fourth award, winning the Best Model of The Year
2009 (Frost & Sullivan Asia Pacific).
• As an overall brand, PROTON was awarded the Reader Digest “Most Trusted Brand Gold Award 2009” for the 6th consecutive time since 2003.

Operations Review
Proton Edar believes that customer satisfaction is one of the key growth drivers for Proton vehicles in terms of sales and after sales volumes. To move up our ranks in the customer satisfaction index, we have embarked on an aggressive drive throughout the entire network for both sales and service outlets to strive for speedier improvements. Proton Edar is targeting to be number 5 within the next 3 years and to be number 3 within the next 5 years in the overall customer satisfaction index.
As we move into an era where customer expectations of new vehicles are higher, Proton Edar is actively raising up our ante in order to satisfy our customers’ demands. To continue attracting interest and realise improved sales of Proton cars, we increased our segment focus to enable offers of improved packages, enhance customers experience at all touch points and strengthen our integrated marketing approach between car sales and after-sales service.
In addition, improved efforts are pursued to expand revenue growth and margin signifi cantly from the aftersales and spare parts business specifi cally while running continuous programs and scheme to increase the network overall effectiveness.
Beyond this, Proton Edar is spearheading a corporate image enhancement exercise for all the Sales and
Service Outlets to improve the display and appearance of our showrooms and facilities.
Our passion and dedication towards maintaining outstanding performance even amidst a global slowdown is fueled by our successful performance during the period under review. As we look ahead towards a new fi nancial year, Proton Edar is ready and geared up to deliver a new dawn for the domestic market. Notwithstanding the challenges ahead, we aim for improved performances in every operational and business segment as we continue to put strong emphasis on customer satisfaction as our yardstick for further growth and success.
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Operations Review
The year under review saw PROTON strengthening its export foundation, picking up the pace of sales and registering improved performance, both in terms of export volume and financials. Aligning to the Group’s strategy, our export goals were to implement country-specific business concepts, develop products based on key market requirements, strengthen the PROTON brand, position PROTON competitively and provide support to the international supply-chain establishment.
The commencement of Completely Knocked Down (CKD) Production of the Gen.2 and Persona in China is evidence of the revived implementation of PROTON exports. Through a strong collaboration with Youngman
Automobile Group, in capitalising the tax benefits of local productions, PROTON is on track in its efforts to leverage on competitive component sourcing in China. To-date, three Youngman plants are in operation whilst PROTON’s Hangzhou Representative Office has been established with operations commencing in
December 2009.
The introduction of the Exora in ASEAN, resulted in an overwhelming response, especially during the initial launch periods at the Indonesia International Motor Show 2009 and Bangkok Auto Expo 2009 respectively.
During these launch periods, PROTON recorded higher sales bookings compared to other established brands.
Down under, Proton Cars Australia had initiated the Sales Growth Program to expand network coverage and capitalise on price-sensitive markets. This programme was spearheaded with the introduction of the the
Saga 1.6 (marketed as S16), recruitment of new dealers and brand-engagement programs with the Wests
Tigers Rugby League Football team, Miss Universe Australia pageant and Safe Drive Training program for school students.
The fiscal year also saw PROTON entering the Yemen market, as well as conducting a series of one-off fleet sales to Eastern Europe and Africa. These reflect our efforts in optimising the increased sales potential in existing regions e.g. The Middle East and Gulf Countries; as well as capturing new markets for future introductions.
5-year Export Volume and 2010/11 Forecast
50000
40000
30000
20000
• The major contributors to the increased exports for FY2009/10 were China, Thailand, Indonesia,
Australia and Egypt.
• The volume growth projection in
FY2010/11 relies on incremental
CKD Operations in China.
10000
0
‘05/06 ‘06/07 ‘07/08 ‘08/09 ‘09/10 AMP10/11
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Moving forward, in order to achieve the Group’s growing focus on overseas markets, the Export Division has prioritised the following key areas.
Volume and financials: Improving the Product and Market Mix, strengthening the Completely Knocked Down
(CKD) business in China and pursuing an effective control mechanism on operating expenditure.
Markets: Stabilising Completely Built Up (CBU) sales in existing markets; meanwhile for the CKD markets,
Export Division is to support and further strengthen the CKD Operations in China, review the business model implementation in Iran and finalise the entry strategy into India.
Marketing, product and price: To initiate a strategic concept for global benchmarking and implement brand improvement initiatives.
Dealer network: Emphasise on “Delivery to Customer” through customer satisfaction improvement (CSI) and customer relationship management (CRM) programs, as well as focus on dealer management training and after-sales service operations.
Organisation: Continue to enhance our personnel skills and dealer workforce through coaching and customised training programs.
Whilst the focus on key export regions remain, Export Division will continue to pursue the Global Benchmarking exercise that will eventually enrich the PROTON brand values and improve profitability to the Group and respective stakeholders. The initial phase will focus on Product positioning realignment, after-sales service, dealer development and management, marketing and effective organisation. The success of these initiatives shall push export operations closer to the long-term Group objectives.

Operations Review
In 2009 China surpassed the United States as the world’s largest automotive market with 13.6 million vehicles sold. The growth was mainly powered by favorable government incentives and China’s stimulus package to boost the economy amidst the global financial crisis in 2009.
During the year under review, PROTON’s business arrangement with China-based Jinhua Youngman
Automobile Group (“Youngman”) has developed from CBU into CKD to capitalise on the tax savings for locally manufactured vehicles and leveraging on China lower cost base for manufacturing and components sourcing.
Youngman’s plants in Anshun, Jinan and Tai An have been operational since 2009 with Hangzhou plant scheduled for completion end 2010.
To accelerate PROTON’s strategy into China and serve the market better, PROTON has set up a Representative
Office in Hangzhou, Zhejiang Province which has been in operations since Dec 2009.
Currently, PROTON cars are being sold under the Europestar brand through 100 appointed dealers throughout
China.
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PROTON Managing Director Dato’ Haji Syed Zainal Abidin Syed Mohamed Tahir visits
Youngman’s car assembly plant in Tai-an.

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Thailand’s automotive industry in 2009 showed a significant drop of 10.7% when compared to 2008 due to the global economic crunch and domestic political instability. Thailand’s 6 months long deflationary episode ended in October 2009 and inflationary pressures are set to accelerate slightly during 2010. Politically, the ruling government made the headlines again with a court ruling to seize a sizeable part of ousted former
Prime Minister, Thaksin Shinawatra’s frozen funds which sparked off a burning trail of aggressive protests.
Despite this turbulent background, PROTON continued to make headway in the Thai market with a package of practical designs at affordable prices. The Proton Exora offered through our exclusive distributor; Phranakorn
Auto Sales (PAS), was a popular new introduction and helped boost PROTON sales for the fiscal year. Currently, through PAS, we have a dealer network of 36 3S outlets throughout Thailand that offer 6 attractive models targetting different consumers. The models comprise Savvy, Neo, Neo CPS, Gen.2, Persona and Exora.
To combat the negative climate, the Thai government has implemented 2 stimulus programmes to boost economic growth. Under this “Thai Khem Khang” or “Stronger Thai
2012” project, the government hopes to improve Thailand’s economy by 3% from 2010 onwards, which hopefully could fuel an increase in new vehicle sales, especially in the commercial segment.
For the automotive industry, the Thai government introduced a number of measures to encourage both the production and the domestic sales of more environmentally friendly vehicles, including the promotion of biofuels. The eco car project was on stream with the 1st
CKD eco car officially launched by Nissan during the March 2010 Motor Show.
The recovery in the automotive industry for 2010 was also spurred by the reduction in Common Effective Preferential Tariff (CEPT) rates from the current 5% to
0% for CBU imports from ASEAN countries, effective Jan 2010 onwards. This indicates an increase in CBU imports from ASEAN countries. With this, many non-ASEAN brands will also be considering setting up assembly outfits or partnerships in
ASEAN countries to capitalise on the 0% CEPT concessions between Malaysia-Indonesia-
Thailand. However, this positive growth projection is still being reviewed due to the domestic political crisis.
Prior to the political crisis, Thailand’s Automotive Industry was forecasted to recover in 2010 with the improvement in the economy and availability of newer models slated to be launched in 2010 by many brands. However, the Thai automotive market will also see some vibrancy and more competitive selling by various brands to capture sales as well as to defend market share, post crisis. This will likely improve the overall TIV in Thailand.

Operations Review
Launch of Proton Exora in Thailand.
Within a short span of 2 years, PROTON has established itself as one of the top 10 players in the passenger cars segment capturing the 8th and 10th position in terms of overall TIV in the Thailand automotive market for 2009.
In December 2009, PROTON introduced the Exora during the 26th Thailand International Motor Expo 2009.
During the 13 days event, PROTON surpassed the bookings record of 1,008 units achieved in 2007 when we first entered the market, with an achievement of 1,388 units and was positioned 6th in the overall Motor
Expo booking. The Exora received 825 units booking which is equivalent to almost 10% of the share of the
MPV segment, surpassing Honda Freed in bookings.
Overall, for the financial year ended 31 March 2010, PROTON achieved a remarkable result with 4,493 units exported to Thailand which exceeded the target of 3,091 units. In terms of retail sales, PROTON sold
4,108 units representing a 41% increase against the target of 2,913 units. Total sales revenue improved correspondingly with RM 208.6 million, a 68% increase against the target of RM 123.9 million.
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PT Proton Edar Indonesia (PT PEI) was established on 16 August, 2002 but commenced full operations on
16 March 2007, as part of PROTON’s Brand expansion and Asian Multi-Local OEM (AMLO) strategies to spread out its presence intensely and dynamically.
PT PEI, till the end of 2009 offered the Indonesian market 7 attractive models, to target the different segments. The models are:
• the Savvy, launched in July 2007, which received 2 Awards for Best City Car from Majalah Mobil Motor and Auto Bild Indonesia;
• the Gen.2 and Neo (also launched in 2007), with the more sporty and stylish outlook within the hatchback categories;
• the Persona, and Waja (launched in July 2007) which are highly comfortable and functional mini sedans; and
• the Saga (launched in March 2009).
The year in review saw the launch of the Gen.2 facelift and the first ever PROTON MPV; the Exora. In a country where there is a large preference for MPVs, the PROTON Exora gathered the most accolades. This model has become the biggest sales contributor to PT PEI since its launch and debut at the 17th Indonesian
International MotorShow on 24th July, 2009.
On the dealer network aspect, PT PEI had appointed 18 sales outlets and 32 after sales service centres/ authorised workshops throughout Indonesia.
PROTON has established itself as the 15th top brand in the Indonesian automotive market; just below
Mazda, Chevrolet and Hyundai.
The Association of Indonesian Automotive Industries (Gaikindo) estimated for the year 2009 that the
Indonesian automotive market would have fallen by 20% of the total industry volume (TIV). Despite that, as per fiscal year ended 31 March 2010, PROTON had managed to sell 2,557 units; a staggering increase of 134% in comparison to the previous fiscal year’s sales volume of 1,092 units. Total sales revenue also improved correspondingly from IDR104.7 Billion to IDR 281.7 Billion.
As such, PROTON has emerged as one of the automotive brands in Indonesia with the biggest positive growth rate in 2009, while most automotive brands suffered significant decrease in their sales volume in comparison to 2008. Furthermore, PROTON’s sharp increase in sales growth has increased PROTON’s market share from
0.2% to 0.4% for the same year.
The Exora and Persona turned out to be the two biggest volume contributors to the 2009 sales volumes.
With 972 units and 534 units sold respectively for the year, these two products have become PT PEI’s core products.

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Indonesia had last year sustained its economic status from the early 2009 global economic crisis and its stable economic condition is expected to continue in the new calendar year.
PT PEI is taking advantage of the situation and is embarking aggressively on expanding its network as well as prospecting intensively on corporate and fleet sales.
Growing market confidence in PROTON has enabled PT PEI to garner strong support and cooperation from several leading finance and banking institutions. This confidence has also greatly stimulated interest from the car rental and public transport sectors throughout
Indonesia which in turn assists in increasing PROTON’s resale value to the market. With the current outlook & barring any unforeseen circumstances, PT PEI is expected to perform better in the new fiscal year.

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Registration of new passenger cars in Singapore in 2009 dropped by 28,486 units or 29.6% as compared to that in 2008 which was a direct result of a reduction in supply of COEs (Certificate of Entitlement).
In this adverse condition, Proton Singapore managed to outperform the market with a reduction in sales of only 13.23% which was mainly due to the new Proton Exora.
To maximise cost effectiveness, operations such as Administration and PDI have been relocated and consolidated as part of Proton Singapore’s overall re-structuring and cost saving measures.
Further, new marketing strategies have been implemented and partnerships with reputable local companies have been developed to enhance the awareness and image of PROTON in Singapore.
Market conditions in 2010 continue to be very difficult as the COE quota is expected to be further reduced by around 39%. In response, Proton Singapore has already trimmed the size of its operations and is now focusing on the implementation of an aggressive marketing and sales plan with an eye on improving productivity at all levels to ensure Proton Singapore is primed and ready when the market improves.
As expected 2009 was a very difficult year for the UK Automotive Industry with manufacturers having to fight for every sale. This in turn led to unpredicted levels of retail incentives with manufacturer’s subsidised finance being the most effective tool as consumers found normal credit difficult to obtain.
After a very bad start to the year, total industry volume (TIV) eventually ended at 1,995,000 vehicles which was down 7% from 2008. However, had it not been for the introduction of a Government backed scrappage scheme for cars 10 years and older, which added 300,000 sales, the reduction would have been far worse.
The difficult economic situation also drove sales of smaller A and B segment cars which both gained market share while all other segments shrunk. This in turn led to increased sales of sub 1.2 petrol engines and sub
1.6 diesel engines, lowering average CO2 emissions by 5% over the previous year. The market also saw a definite trend towards smaller cars that were well equipped and economical to run, but still had larger car characteristics and comfort levels.

Operations Review
Foreseeing a difficult year in 2009, Proton Cars (UK) Ltd’s management put in place a number of initiatives including significant cost savings, reorganised resource and resource levels, the introduction of improved operational efficiencies and other effective measures. Sales volume and financial targets for 2009 were set at realistic levels to reflect the expected tough market conditions and minimise risk levels given the volatile economical scenario.
Therefore we are pleased to report that we managed to successfully achieve all our initiatives and cost saving measures, whilst maintaining high levels of support and customer satisfaction for which PROTON is known for in the UK. We surpassed our 2009 sales volume targets by about 20% and this resulted in better financial performance for Proton Cars (UK) Ltd.
Another difficult year is forecast in 2010, with the new car market expected to record only about 1,800,000 units. On a brighter note, the general economic conditions for 2010 are set to improve with strengthening currency and a much stronger new car market predicted towards the end of the year and into 2011. Proton
Cars (UK) Ltd plans to continue the strategic initiatives and measures introduced in 2009 to deliver continued improvements.
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In 2009 the Australian automotive industry, like other markets around the world, was severely affected by the global financial crisis. Total industry volume was down 7.4% compared to 2008. However this figure was mitigated by government stimulus measures introduced earlier in the year. In the early months, prior to the stimulus assistance, the rate of decline was greater than 17%.
PROTON in Australia was in the process of a dealer rationalisation program during this period and as such was adversely affected by the availability of credit facilities in the area of dealer financing. Despite this,
Proton Cars Australia was able to recruit nine new dealers across the country in preparation for the launch and expected growth associated with the launch of the Saga, known as S16 in Australia.
The introduction of Chinese and Indian manufactured vehicles had also increased competition and the drop in customs duty from 1 January 2010 has seen prices in the market fall slightly. The outlook is for prices to hold at current levels as market conditions improve; resulting in an increase in the overall industry volume.
The early part of 2009 involved the induction of new dealers as the business prepared for the launch of several new models spearheaded by the S16. Although PROTON’s volume was down 25% in the period between April to October 2009, the launch of S16 in December resulted in an increase of 118% for the November 2009 to March 2010 sales period. Overall volume was up 17% for the full 2009/10 financial year.
Proton Australia continued with its sponsorship of the Wests Tigers Rugby League Football team, with over
400,000 people attending matches live during the season and an estimated 14.2 million watching games on television.
Proton Australia also continued its association with the Miss Universe Australia pageant. The newly-crowned
Miss Universe Australia, Rachael Finch, acted as ambassador for the S16 and was featured in all its advertising and promotions.
The Safe Drive Training program also continued to enjoy our support and is responsible for the training of school students throughout New South Wales and Queensland.
Overall, our sales result improved despite lower volumes in the first two quarters. Total retail sales volume for the year was 1,954 units – an increase of 17% over the last financial year. Our constant drive towards overhead reduction, through efficiencies implemented in the supply chain process, continue to yield financial benefits as volume continues to grow.

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Ms. Universe Australia, Rachel Finch, unveiling the S16 together with PROTON Cars Australia Pty Ltd’s Managing Director,
John Startari, during the Australian National Dealer Conference in Kuala Lumpur.
Proton Australia is bullish in its outlook for the coming financial year. Volume is forecast to continue growing on the back of continued success of the S16 and the introduction of new models in the fourth quarter. Our current dealer network is expected to grow to 45 dealers nationally by the end of 2010 providing sufficient representation to service the forecast growth in unit sales.
With our dealer rationalisation programme and cost efficient initiatives in place, the platform has now been laid for future profitable growth that will ensure Proton Australia remains a viable operation in the years ahead.

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R3, PROTON’s motorsports division, pioneers the research, development and production of race cars,
PROTON’s performance parts and special edition high performance PROTON vehicles that are inspired by Motorsports participation and technology. The term R3 stands for Race, Rally, Research.
PROTON’s involvement in motorsports is largely through participation of the PROTON R3 Malaysia
Rally Team in the Asia Pacifi c Rally Championship (APRC) and Intercontinental Rally Challenge (IRC) spanning Asia Pacifi c and Europe in countries such as Malaysia, Japan, New Zealand, Australia,
Indonesia, China, Belgium, Czech Republic and Scotland. PROTON features the Satria Neo S2000 in these rallies, a car that is the result of a combination of innovative engineering designs as approved by FIA under the S2000 regulations. Its wealth of technical advances and design has resulted in a combination of performance and reliability.

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Carrying the Malaysian flag in international rallying are world renowned drivers, Alister McRae and Chris
Atkinson. Alister McRae has been involved in motorsports for the past 16 years, participating in more than
80 World Rally Championship (WRC) events while Chris Atkinson is a hugely popular rally driver with notable achievements as a World Rally Car driver.
PROTON has had a colourful journey into rally motorsports worldwide. The Satria Neo S2000 made its debut in the IRC in 2009, and enjoyed a commendable season, finishing consistently in the top 10 positions in six rounds of the championship against more established manufacturer teams the likes of Peugeot, Skoda, Fiat,
Subaru and Mitsubishi. The team’s best finish was a second placing at the Rally of Scotland and finishing fourth in the Rally of Russia. PROTON had also participated in three rounds of the coveted APRC in 2009.
The PROTON R3 Malaysia Rally Team is the only Malaysian team represented in the IRC and PROTON is also proud to represent Malaysia once again in the APRC.

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In 2010, PROTON’s Motorsports division also embarked into sponsorship with the Lotus Racing team to further expand global branding activities. PROTON currently participates in the elite single-seater motor racing, Formula One.
Participation in motorsports is beneficial to the Company in terms of research, development and technology transfer. After every race, data and experience gained from the track is analysed and implemented into the development of PROTON’s road cars and performance parts.
Not limited to the above, it has been proven that motorsports is indeed a powerful brand building platform for PROTON. The Company believes that every victory or milestone achieved on the track is the foundation of redefining the limits of true racing performance.

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Sixteen medium cost apartments and two 3-storey shop/offices in Taman Seri Proton, Klang were sold during the year under review by Proton Properties Sdn. Bhd.
PROTON’s manufacturing plants in Shah Alam and Glenmarie, in Selangor and Tanjong Malim in
Perak, make up the Group’s main manufacturing assets todate. These are built on a total area of
602.5 hectares of land. Other assets comprise the PROTON Centre of Excellence in Subang Jaya and numerous 3S centres nationwide.
During the year under review, most of the Group’s 3S Centres underwent a corporate identity improvement exercise – an investment that continues into the current financial year.
PROTON’s properties were also made available for rental and in July 2009, Universiti Pendidikan
Sultan Idris (UPSI) started utilising Level 1 of the new administrative building in Tanjong Malim as their lecture rooms and classes. As testament to the quality and good condition of the building, UPSI had in March 2010 confirmed leasing additional floor space from July 2010 onwards.
On the development front, Proton City Development Corporation Sdn. Bhd. (PCDC), a 40% owned associate company, has been involved in developing Proton City in Tanjung Malim. Planned with modern infrastructures, recreational parks and rich landscaping, these features have become key attractions to buyers of residential units in Proton City. Due to the global economic slowdown, PCDC has not launched any phase for development. However, in the last fiscal year, it took the opportunity to carry out further studies and assessment of past projects in order to enhance its current plans and prepare for future projects and launches.

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Customers not only enjoy better deals for car financing but also value-added packages that offer a combination of other financial products.
Backed by the expertise and reliability of two established parent companies, the PROTON Group is committed to delivering competitive hire purchase packages that prioritises providing fast, efficient and friendly service to our car buyers. By doing this, it is our aim to become the preferred automotive finance provider for the purchase of new PROTON vehicles, while being recognised as a competitive and capable player in the local automotive financing industry.
At the same time, PROTON also holds a 49.9% equity stake in Lotus Finance Limited, and a 49.99% stake in Proton Finance Limited, both of which are companies incorporated in the United Kingdom.
Proton Finance Limited provides a range of hire purchase and finance lease options in connection with the financing of Proton cars, whilst Lotus Finance Limited provides the same facilities for new and used
Lotus vehicles.

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In carrying out our corporate social responsibility (CSR) initiatives, the Group aims to achieve several broad objectives which will meet the expectations of good corporate governance, ethical corporate values and responsible corporate citizenry. It is also important that we advocate a corporate culture that appreciates the value of social service and understands its impact on stakeholders as a whole.
At PROTON, we divide our CSR initiatives into four main segments: marketplace, workplace, community and environment.

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Our Marketplace CSR initiative is defined as all business activities related to the commercial or business interaction between PROTON and its stakeholders, be it the shareholder, customer or supplier. It involves, among others, adherence to ethical business practices, quality management, attention to product safety, compliance to regulations and vendor development.
Maintaining customer satisfaction is at the forefront of our business management, and we are continuously improving our efforts in cultivating a good and strong relationship with our customers to improve their satisfaction levels. A major concern among PROTON stakeholders is quality, and to address this, the Group has made numerous efforts to improve the quality of our products to much success. This can be seen in our
2009 JD Power Initial Quality Study (IQS), which recorded a 30 percent improvement rate in comparison to the previous year’s results. This improvement rate surpassed the industry’s average, which only registered a
14 percent improvement.

Operations Review
To enhance our after-sales service, customer surveys specifically tailored to PROTON’s business operations are regularly conducted to monitor customer satisfaction. Information obtained from the surveys are analysed and incorporated into our product and service developments, sales, and customer care activities to ensure that the customers’ experience with PROTON is always a positive one.
We continue to elevate the standards of our customer service system, PROTON i-Care, with emphasis on the importance of creating the best value for our customers. Staff members of i-Care are trained to ensure that customers who make contact via the Call Centre experience a smooth procedure, from receiving technical advice to those requesting assistance for a car breakdown.
On an internal level, and to better understand customers’ needs, PROTON employees are also regularly encouraged to evaluate this process via surveys in an effort to improve the quality and speed of our response to customers.
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At PROTON, we align ourselves with global safety standards – most prominently the European Safety
Standard as well as the Australian Design Rule (ADR) and Saudi Arabian Standards Organisation (SASO)/
Gulf Standards – and we are committed to the continual improvement of these standards. To ensure that compliance is met across the board, all our safety requirements are 20 to 30 percent more stringent than benchmarked figures.
In the case of product malfunction, PROTON acts promptly to minimise any adverse effects to its customers, and mobilise the respective divisions to provide an immediate response. In critical cases where customer safety has been compromised, we would assess the scope of damage and conduct a thorough investigation on the cause of the incident.
Additionally, we continuously strive to build solid and productive partnerships with our suppliers through means of fair trading, in compliance with procurement-related policies, laws and regulations. As such,
PROTON constantly monitors the performance of suppliers with on-going quality audits – and if need be, suggests improvements and provides guidance.
Last but not least, we take controlled measures to ensure that goods and services procured conform to the
Group’s policies, taking into consideration the suppliers’ manufacturing sites, management systems and the state of their operations. All of our suppliers’ efficiency and productivity levels are also supported through the Improve, Control and Educate (ICE) initiative to emphasise sustainability of supply capacity and training, and this is closely monitored via extensive reviews and follow-up visits.
PROTON also provides technical support for small- and medium-sized suppliers to enable them to gain access to the Automotive Development Fund which was established by the Government. To date, approximately
RM81.6 million has been disbursed.

Operations Review
At PROTON, we recognise that a talented, productive human capital represents the backbone of our on-going development and progress.
Our Workplace CSR not only intends to provide our employees with optimum working conditions, as evidenced by the Group’s safety and health policies, training exercises and other benefits to safeguard each one’s welfare, we also ensure that their skills and talents are nurtured as this cohesively, this will further enhance
PROTON’s competitive advantage in the industry.
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While it is important to ensure that we are able to grow as one seamless entity, this must also go hand in hand with the development and retention of qualified leaders. Through the Group’s Human Capital initiatives, we developed key members of our workforce by using PROTON’s Core and Leadership Competency Model. For those who are keen to advance along the technical career track, a similar approach is applied, that is via the Technical & Functional Competency Model. By using these competency models, our Talent Management
Programme has enhanced PROTON’s ability to identify, develop, and retain critical skills and talents, especially for positions that play a critical role in delivering business and strategic growth.

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Maintaining open communications between employees and management is also vital. PROTON has implemented a range of initiatives specifically designed to encourage such communication, so that there are no communication barriers in order for employees to achieve their full potential and progress within the group. Initiatives include disclosing key performance indices, shared assessments, personnel system reforms and streamlining the scheme of service throughout the Group. For instance, we conducted several
‘teh tarik sessions’ or informal get-togethers as well as engagement sessions with representatives from various divisions/departments, including a select group of non-executives. The use of internal channels such as PROTONCOM to disseminate information updates and policies is another effort to foster constant engagement and encourage internal communication.
Apart from that, in meeting with the Government’s major push in the areas of human capital development,
PROTON has proactively embarked and expanded on its Knowledge Management activities. A full fledged
Knowledge Management portal dubbed “ASPIRE” is now available across the organisation containing a total of 100,000 knowledge assets and is growing by 500 assets a week. This is testament to the interest and widespread acceptance of PROTON staff towards the new knowledge economy. PROTON’s plans for the future is to build key communities of practices, where platforms of knowledge collaboration and sharing will be provided for the general staff to expand and build on niche knowledge areas that are key in making
PROTON a competitive player in the ever challenging global market. The involvement from the respective business units across the group, representing all divisions, is further supported by the identification of approximately 20 staff members as Knowledge Officers.

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To further strengthen PROTON’s learning capability, we implemented the PROTON Development Framework which includes the Centre of Manufacturing Excellence, Centre of Knowledge Excellence, and Centre of
Human Capital Excellence. In essence, this initiative promotes a strong knowledge culture by encouraging continuous learning through various training programmes. From April 2009 to March 2010, our Learning &
Development department has provided training to a total of 6,836 participants via 294 courses.
The Learning and Development department has also embarked on several collaborative projects with selected higher educational institutions and ministries such as the Ministry of Higher Education and Ministry of Rural and Regional Development. Initiatives and plans are also actively being carried out to realise the setting up of the PROTON Corporate University. A task force consisting of representatives from various divisions has been identified and given the responsibility to carry out the related tasks. Under the PROTON Trainers
Development Programme – in collaboration with the Malaysian Institute of Management (MIM), PROTON had identified 11 qualified staff members as MIM-Certified Professional Trainers whom had completed their Level 3 competency. The ‘SIFU’ (meaning mentor, counsellor or teacher) Programme sees 13 of our supervisors, team leaders and new executives being trained to become a ‘SIFU’ to the others. Currently, there are 197 in-house trainers who are Subject Matter Experts registered with the Learning & Development
Department. By 2012, it is our aspiration that PROTON will be self sufficient in terms of trainer resources for all the training needs of the organisation, with minimal dependency on external training providers.
To further complement this, the Group organised numerous health talks, carnivals, exhibitions and programmes throughout the year to create awareness amongst employees on adopting a safe and healthy lifestyle. Steering and working committees were established to allow for more effective monitoring of health and safety related issues throughout PROTON’s Group of companies.

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122
To strengthen the relationship between the Group Human Resources (GHR) Division and internal customers,
GHR had organised activities such the HR Week, Turun Padang Sehati Sepakat (engagement sessions between
Group Human Resource Director and selected executives from the Manufacturing Division), career planning workshops and HR Talks/Briefings. The HR Week itself attracted more than 1300 employees attending the
3-day event organised in July 2009.
Active participation in Career Days held at various universities and locations also resulted in the hiring of at least 75% of the new Executive population, whereas 25% were sourced via the Graduate Employability
Scheme (GEMS); initiated by Khazanah Nasional Berhad and also the Graduate Program 500 (GP500); initiated by Bank Negara Malaysia.
In supporting Khazanah Nasional Berhad – as part of The Orange Book initiative in Strengthening Leadership
Development – PROTON also participated in programmes such as the Cross Assignment between Government
Linked Companies (GLCs), Cross Fertilization between GLCs and Government Offices/Ministries as well as the Accelerated Development Program (ADP) which includes Mentoring
Visitors throng PROTON’s Career Day.

Operations Review
Participants of Yayasan
PROTON teambuilding event at Awana Resort,
Genting Highlands.
Community CSR is an integral part of the Group’s interaction with the general public, and focuses on philanthropic activities and donations to orphanages, the young, NGOs and various other special interest groups.
YAYASAN PROTON had carried out several educational initiatives during the year. In December 2009,
10 scholars from universities around the country received scholarships from YAYASAN PROTON at the
Scholarship Award Ceremony. At the same event, representatives from YAYASAN PROTON’s “Adopted School
Programme” were also presented with cheques for the financial assistance pledged. These ‘Adopted’ schools, located in Shah Alam and Tanjung Malim, require financial support for educational activities in the form of tuition classes and motivational seminars, among others.
YAYASAN PROTON scholars also participated in the Annual Teambuilding and get-together activity held in
April 2010 at the Awana Resort in Genting Highlands. The event was held concurrently with the 21st Board of Governors meeting, where the scholars were given the opportunity to engage in discussion with the Board of Governors, the Managing Director and several management team members.
In the same month, YAYASAN PROTON contributed RM30,000 towards the Tabung Pendidikan PROTON.
PROTON is committed to promoting the nation’s socio-economic development. A major initiative under this platform is PROTON’s involvement in the “Pintar Programme” which began in 2007, and involves other
Government-Linked Companies. The three-year programme is spearheaded by Khazanah Nasional Berhad and involves an allocation of RM250,000 from PROTON.
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Operations Review
PROTON adopted four schools – three primary schools and one secondary school with a total number of 3,200 students - under the “Pintar Programme”. The four schools are Sekolah Rendah Kebangsaan Bagan
Tuan Kechil in Butterworth, Pulau Pinang;
Sekolah Menengah Kebangsaan Paya Keladi in Kepala Batas, Pulau Pinang; Sekolah
Rendah Kebangsaan Tanjung Malim, Perak; and Sekolah Rendah Kebangsaan Pintu Gang in Paloh, Kelantan. Throughout the duration, a host of structured activities were held to assist students from these schools, many of whom were from low-income families, to improve their academic performance and develop positive characteristics.

Operations Review
In the year under review, 32 activities were held involving these schools. The activities included weekly tuition classes, motivational forums and camps, English language camps, leadership camps and coaching for students sitting for major examinations. In
February 2010, PROTON held a Creativity and Innovation competition for these Pintar students in an effort to help them enhance their creativity level, and master scientific and technological concepts through hands-on investigation and exploration as a team. Other recreational activities held for these students included football and badminton clinics held in collaboration with the Badminton Association of Malaysia (BAM), and the PROTON Football
Club. Additionally, PROTON also presented incentives to impoverished, high-achieving students in the form of cash and kind.
Flag off for the Merdeka Convoy.
During the month of Ramadhan, the PROTON Merdeka Convoy with the theme of ‘1 Journey, 1 with Malaysia’, whereby a convoy travelled in various Proton models to visit the four “Pintar” schools and six orphanages in four states (Penang, Perak, Selangor and Kelantan.) During this journey, various activities were conducted at the schools and orphanages, including essay-writing competitions, colouring competitions, gotong royong, breaking of fast and tarawih prayers. The children were also presented with duit raya in time for the Aidil
Fitri celebration.
The year also saw PROTON finalising an Advanced Diploma program in Automotive Design and Manufacturing
Engineering with the Ministry of Higher Education. This is parallel to the Group’s bid to educate students with ambitions of becoming automotive vehicle mechanics by providing deserving underprivileged candidates with scholarships and work-based learning opportunities at PROTON Service Centres.
A new project that PROTON embarked on with other GLCs is the Program Sejahtera, an “Adopt a Community” project at Kampung Teluk Melati in Maran, Pahang.
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126
Program Sejahtera was launched by the Prime Minister, Y.A.B. Dato’ Sri Mohd Najib Tun Razak on the 4th of
September 2009, and is a nationwide CSR programme championed by Khazanah with the aim of eradicating poverty in Malaysia. In this programme, PROTON has committed to contribute RM175,000 to help build five units out of 50 houses needed for the rehabilitation program for the vulnerable members of the society in Maran.
The Group has taken its own initiative to help the needy by introducing the Bridging Community Programme.
Under this programme, PROTON allocated a budget of RM30,000 to upgrade and provide basic facilities, books, computers and tuition to the children at three adopted orphanages, namely, Pertubuhan Kebajikan
Anak Yatim & Miskin Darul Aitam Temoh in Perak, the Rumah Anak Yatim Siraman Kasih Rawang and
Rumah Anak Yatim Sekendi Sabak Bernam in Selangor.
The year also saw PROTON carrying out various charity activities such as visits to old folks’ homes, orphanages and shelter homes for the handicapped and needy families, as well as visits to children suffering from terminal illnesses in local hospitals.
In addition to this, PROTON has continued to support various national bodies and organisations like MERCY
Malaysia, Yayasan Harapan Kanak-Kanak, Yayasan Orang Kurang Upaya Kelantan, the Paediatric Ward of
Hospital Tengku Ampuan Rahimah Klang, and PEMADAM with sponsorships in the form of cars.
PROTON has been the main sponsor for the Malaysian Skills Competition (the automobile sector) organised by the Ministry of Works since 2003. The annual grant includes sending Malaysian representatives to the
ASEAN and World Competitions, with the objective of nurturing young local talents, below the age of 22, in this sector and developing world-class human capital.
Additionally, the Group held an Invention and Innovation Competition for PROTON staff. The objective of the competition was to encourage PROTON staff to contribute innovative and creative ideas on how future generation Proton models should look and feel like. Each team, made up of eight members, were provided with a scrap car, and their mission was to create a new concept car based on their creativity. The competition attracted 20 groups in total.
Winner of the Malaysian
Skills Competition
(the autombile sector)

In sports, PROTON continued to support the local scene by helping to identify and build talent at the grassroots level through development programmes, particularly in badminton and football.
The year 2010 marks PROTON’s 15 years of support towards the development of badminton in Malaysia, and the Group continued its role as the major sponsor of badminton, through its partnership with the Badminton
Association of Malaysia (BAM). As the corporate custodian of badminton in the country, PROTON was the title sponsor for the PROTON Malaysia Super Series Badminton Tournament organised by BAM. On a national level, PROTON was title sponsor for the Pahang Open 2009, Malaysia GP Gold 2009, Terengganu
Open 2009, Malaysia International Challenge Finals 2009 and PROTON GP Finals 2009. For the year under review, PROTON allocated RM3.5 million (including promotional activities) for the sport.
As a result, the year saw Malaysian national players performing well in various international outings. Most notably, world number one Datuk Lee Chong Wei won his very first coveted All-England title in March
2010.
For the 2009 Singapore Open Super Series, PROTON, together with BAM, organised a convoy to Johor in conjunction with Malaysia’s participation, comprising of national players and coaches. Additionally, PROTON became the official car sponsor to selected tournaments like the Malaysia Open Grand Prix Gold 2009 and
Super Series Masters Finals 2009.
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Operations Review
128
PROTON FC emerged as the Champion in the
Selangor Super League
2010 after defeating
Permodalan Negeri
Selangor Bhd (PNSB).
In football, PROTON’s football team withdrew from the Liga Perdana to compete in the Selangor Super
League which they went on to win recently. PROTON FC’s Under-12 team is also currently competing in the
National Junior Community League.
The team had also taken the initiative to organise various invitational football tournaments like the 1PROTON
World Cup Fiesta, PROTON FC Football Community Challenge and the PROTON Soccer Cross-Straits
Invitation, as well as organising a Soccer Kids program for children of PROTON Group employees.
PROTON FC also participated in a list of other activities throughout the year, including the 1Malaysia
Football Tournament (U-15 team), Royal Selangor Club Football Tournament (U-8 team), and Arsenal Soccer
School Inter-continental Football Tournament (U-8, U-10 and U-15 teams).

Operations Review
129
In the world of motorsports, the year under review saw the PROTON R3 Malaysia Rally Team making its competition debut in the Intercontinental Rally Challenge (IRC) under the World Rally Super 2000 category with the Satria Neo S2000. The team ended the season with commendable results, consistently finishing in the top 10 positions in six rounds of the Championship, despite being in the company of more established manufacturer teams. The PROTON R3 Malaysia Rally Team also participated in three rounds of the Asia
Pacific Rally Championship (APRC) in 2009. In Formula One, PROTON became an official partner of the
Lotus Racing team and provided marshal cars for the Malaysian F1 Grand Prix race held at the Sepang
International Circuit.
PROTON also continued in its support of the prestigious Le Tour de Langkawi international cycling event – an event the Group has long been associated with. PROTON firmly believes that the event not only helped place
Malaysia on the world sporting map, but spurred the development of home-grown cycling talents to compete at the international level. As the official car provider, PROTON supplied 150 cars of varying models for the use of officials and the media.
A new addition to PROTON’s sporting line-up in the year under review was tennis, where PROTON became title sponsor for the inaugural Malaysian Open, an ATP World Tour tournament. A budget of RM3,000,000
(inclusive of promotional activities) was spent for this event.

Operations Review
130
PROTON has achieved international standards in environmental management in line with the
ISO14001 Environmental Management System. In August 2009, PROTON passed the ISO14001
Environmental Management System (ISO14001 EMS) assessment audit by the Vehicle Certification
Agency (VCA) – part of the requirements of both the UK Department for Transport and SIRIM Malaysia and accredited by the United Kingdom Accreditation Service (UKAS).

Operations Review
132
This phase was successfully accomplished following an aggressive pursuit to achieve these standards since the project was first initiated in 2007. This international recognition is an assurance that PROTON’s environmental management is systematic and benchmarked against international standards. Our vendors, suppliers and dealers are collectively encouraged to adopt the same standards. The certification will especially make a favourable impression on export markets such as the UK and Australia where environmental concerns are of paramount importance.

Operations Review
At the manufacturing site, environmentally-friendly equipment, machinery, robots and automation systems have been installed. These facilities improve the efficiency level, utilise less energy, and emit less wastes and toxic emissions into the atmosphere.
In other areas like the Paint Shop, the manual spraying process has been completely replaced with electrostatic type robots. An electrical charge is induced into the paint mixture to polarise the molecules so that they are electro statically attracted to the car body with the opposite charge. Paint and thinner consumption have been also reduced by approximately 30 percent.
PROTON has also introduced technology which has reduced the usage of paper and ink in our offices. The Group-wide practice of sound environmental management has aided in reducing operational costs, while creating a harmonious and healthier environment for all.
In the last decade, there has been a growing global awareness of environmental issues and an increased focus on sustainability. PROTON has since consciously implemented relevant sustainable practices within our operations to ensure that resources are utilised efficiently, while waste and pollution are correspondingly reduced.
As the leading automotive manufacturer in this region, PROTON stands steadfast in our commitment to design green products, to the best of our ability. This includes considering the environmental impact of the materials used. From the metal, plastic, and glass in our products to the paper and ink in our offices, our goal is to continue leading the industry in reducing or eliminating environmentally harmful substances.
One of our core focus in this area is the phasing out of ozone depleting substances within our Manufacturing process. Through the years we have consistently and systematically phased out the usage of ozone depleting substances, such as Chlorofluorocarbons
(CFC). Alternative ozone friendly substances and technologies have been adopted at
PROTON’s production operations.
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Operations Review
134
PROTON’s commitment to ensuring a safe, healthy and conducive working environment is formalised within the Group’s Environment, Health and Safety (EHS) policy. This policy guides the EHS management of every subsidiary. The management has been entrusted to provide adequate manpower, budgets and conduct regular meetings to ensure that the policy and plan are seriously implemented. PROTON actively encourages subsidiary companies to provide strong management commitment to sustain the interest of all employees with regards to Environment, Health and Safety programs, in order to reduce and eliminate occupational injuries and illnesses.
Supplementing the EHS policy, Occupational Safety and Health (OSH) programme and activities were developed throughout the course of the year. These are driven by a legal requirement under the OSH Act
1994 & Factories and Machinery Act 1967. The objective of the programme is to secure the safety, health and welfare of persons at work and to protect all visitors and employees at the workplace from safety hazards.
To this end, relevant meetings and activities have been structured into the work schedule and are rigorously carried out within the PROTON Group.
These include:
1. Quarterly OSH committee management meetings
2. Monthly Safety and Health audits in plants
3. Health risk assessments and analysis
4. Safety training
5. OSH and Road Safety campaigns
6. Fire safety evacuations
7. Contractor safety and monitoring surveys
8. Cross safety audits among the subsidiaries
Another important item on the agenda is the ergonomic improvement programme aimed at emerging peoplefriendly working conditions and reducing workload at the assembly line. Ergonomics covers all aspects of the job from the physical stresses it places on joints, muscles, nerves, tendons, bones and the like, to environmental factors which can affect hearing, vision, and general comfort and health. Physical stress may arise when workstations, equipment, or tools do not fit the worker well. These stress factors can cause long-term damage to muscles, nerves, and joints. Most illnesses due to ergonomic causes occur because of forceful or repetitive work activities, mechanical stress, temperature, lighting, or because workers are required to assume awkward postures over a period of time.

Operations Review
135
PROTON’s Emergency Centre located at the PROTON Centre of Excellence.
The following are initiatives that have been successfully implemented:
1. Elimination of heavy lifting at assembly line to reduce backaches problem and practice rotation system.
2. Abolition of carrying heavy items that are more than 10kg in weight such as the carrying of window glass, seat, instrument panel, exhaust pipe and tire.
3. Abolition of heavy physical work such as high torque wrench corresponding more than 10kg-m for the tightening of suspension, tire bolts and drive shafts.
4. Abolition of untidy work and other operating dislikes such as urethane application and fluid charging.
Small improvements in work infrastructure can also make a big difference in creating a more conducive work environment. To eliminate any unnecessary stress on our operators’ spines due to work posture, we have implemented a door-less car for easier access, and improved working height levels to reduce bending.
PROTON also seeks to make the workplace a vibrant and stimulating environment for our workers by ensuring good lighting and ventilation, implementing friendly work ethics and ensuring adequate people-friendly features such as water coolers and pantries where possible.

Operations Review
136
Commuting safety, including car driving and motorcycle riding are among PROTON’s top priorities. PROTON’s management has implemented several major programs and campaigns to instill sound commuting practices.
Among these were:
1. An annual road safety and industrial safety campaign in collaboration with Department of
Occupational Safety and Health (DOSH), Jabatan Keselamatan Jalan Raya (JKJR), Police, National
Institute of Occupational Safety & Health (NIOSH) and other agencies. This programme was successfully launched by Y.Bhg Dato’ Hj Syed Zainal Abidin B Syed Mohamed Tahir, the Managing
Director on 11 September 2009.
2. Monthly MDRT (motorcycle defensive riding) courses targetting high risk riders and youngsters’, are carried out by our internal trainers.
3. Regular motorcycle convoys among riders to foster correct techniques of motorcycle riding.
Such convoys usually travel interstate between 150km to 250km and includes motivational programmes.
4. Organising safety and defensive driving programmes for employees and selected customers to teach safe and defensive driving techniques. This is in response to the Government’s call to make the roads safer and to bring down the alarming number of road accidents and fatalities.
With stringent safety practices in place, industrial accidents recorded in 2007, 2008 and 2009 were 18,
11 and 14 respectively. PROTON is on a continuous quest to reduce these numbers.

Operations Review
There is a need for a check and balance system to ensure that our EHS vision becomes a reality. To ensure that management and employees are committed to creating safe and healthy working conditions and to protecting the quality of the environment around them, regular EHS audits are held throughout the Group.
Audit activities in the last fiscal year revealed that most of our working places were in compliance with a majority of the standards and regulations that PROTON constantly endeavours to adhere to.
Fire evacuation procedures and emergency drills are conducted on a regular basis. As a follow-up, all noted deficiencies have been addressed through the post-audit corrective action together with the local authority fire department.
The National Institute of Occupational Safety Health Malaysia (NIOSH), a unit under the Ministry of Human
Resource, and PROTON HOLDINGS BERHAD have organised a framework of Safety and Health Induction to promote the safety and health culture among contractors together with workers.
137
Together, NIOSH and PROTON are working to establish an Occupational Safety and Health – NIOSH Safety
Passport for PROTON (OSH – NSPP). This joint arrangement will include training and assessment activities which will lead to PROTON Contractor’s Workers (PCW) being awarded the NIOSH Safety Passport for
PROTON (NSPP).

Statement on Corporate Governance
140
The Board is also committed to abiding by the Guidelines to Enhance
Board Effectiveness as set by the Putrajaya Committee on GLC High
Performance (PCG), and at the same time, striving to maintain a high level of corporate governance within the PROTON Group by ensuring that the highest standards of corporate culture are practiced throughout.
Good corporate governance is the foundation of the culture and business practices of the PROTON Group.
Set out below is a statement on how the Group has applied the principles and adopted the best practices as laid down in the Code. This statement describes how the Principles of Good Governance and provisions of the
Code, are applied by the Group.
The Board is committed to establishing and enhancing shareholder value in the long-term and is pleased to report that the Group has to its best efforts and knowledge complied with the Principles and Best
Practises of the Code throughout the financial year under review. The
Board continues to enhance its role in improving governance practices effectively to safeguard the interests of the shareholders as well as stakeholders. To this end, the Board has full control of and is responsible for, the Group’s overall strategy, acquisition and divestment policies, capital expenditure, annual budget, review of financial and operational performance, and internal controls and risk management processes. The
Group’s overall strategic direction, development, implementation and control remain of primary importance to the Board.

Dato Sri’ Mohd Nadzmi Bin Mohd Salleh who was previously the Managing Director of Perusahaan
Otomobil Nasional Berhad (the then listed entity on the
Kuala Lumpur Stock Exchange) from 29 June 1993 until 1 April 1996, made a return to PROTON when he was appointed as Non-Executive Chairman of PROTON on 1 January 2009.
The roles and responsibilities of the Non-Executive
Chairman and the Managing Director are clearly defined.
The Chairman ensures the integrity and effectiveness of the Board as a whole. He conducts Board meetings and ensures that meetings proceed in an orderly manner.
The Managing Director (“MD”) on the other hand is responsible for making and ensuring the implementation of broad policies as approved by the Board and reports to and discusses material matters including regulatory developments and strategic projects with the Board.
There is therefore a natural separation of management and governance leading to a balance of responsibility and authority.
The Non-Executive Directors are independent of management and are free from any business relationship which could materially interfere with the exercise of their independent judgment.
The Board has delegated matters pertaining to the day to day management, operations and strategic development of the Group, subject to the Limits of Authority and
Group Policy and Procedures, to the Managing Director who is supported by a competent Management Team.
141

Statement on Corporate Governance
142
In the financial year ended 31 March 2010, the Board of PROTON Holdings Berhad (PHB) met ten (10) times details of which are as shown below:
Name of Director Designation
Date of
Appointment
1 January 2009
Date of
Resignation
N/A
Meeting
Attendance Percentage
10/10 100% Dato’ Sri Mohd Nadzmi
Bin Mohd Salleh
Non-Independent
Non-Executive
Chairman
Dato’ Haji Syed
Zainal Abidin B Syed
Mohamed Tahir
Managing Director
Dato’ Michael
Lim Heen Peok
Dato’ Zalekha
Binti Hassan
Mr. Behara Venkata
Rama Subbu
Independent
Non-Executive Director
Non-Independent
Non-Executive Director
Independent
Non-Executive Director
Tan Sri Rainer Althoff Independent
Non-Executive Director
Encik Abdul Rahim
Bin Abdul Hamid
Independent
Non-Executive Director
Tuan Haji Abdul Jabbar
Bin Abdul Majid
Independent
Non-Executive Director
Tuan Haji Abdul Kadir
Bin Md Kassim
Mr. Oh Kim Sun
Independent
Non-Executive Director
Independent
Non-Executive Director
1 January 2006 N/A
15 September 2006 N/A
11 February 2008 N/A
1 March 2010
22 June 2010
20 July 2010
12 April 2004
10 March 2005
13 May 2009
N/A
N/A
N/A
10/10
10/10
10/10
N/A
N/A
N/A
21 August 2009 5/5
27 May 2010
27 May 2010
9/10
9/10
100%
100%
100%
N/A
N/A
N/A
100%
90%
90%
The profiles of the directors are set out on pages 26 to 33 of the Annual Report.
Board meetings for the Company and its subsidiaries are scheduled in advance before the start of each calendar year and the meetings calendar is circulated to all Board Members at the beginning of each year. This would enable the Directors to plan ahead and ensure attendance at Board Meetings. Additional meetings or Special Board meetings are convened whenever necessary when there are urgent and important decisions to be made.

Statement on Corporate Governance
The Board currently consists of seven (7) members with the Chairman being a Non-Independent Non-
Executive Director, one (1) Non-Independent Non-Executive Director, four (4) Independent Non-Executive
Directors and one (1) Executive Director (who is the Managing Director).
Apart from the Managing Director, all the Non-Executive Directors are independent of management and free from any business or other relationships, which could materially interfere with the exercise of independent judgment.
The Directors are required to make written declarations and it is their responsibility to declare whether they have a potential or actual conflict of interest in any transaction. Where issues involve conflict of interest, the interested Directors shall abstain from discussing or voting on the matter.
The Board has full access to the Company Secretary who is available to provide the Directors with the appropriate advice and services and also to ensure that the relevant procedures are followed and rules and regulations are complied with. The Board is, from time to time, updated on changes in the law, governance and other regulatory requirements.
At the same time, the Board may from time to time request for information pertaining to the Group’s business affairs to enable the Board to discharge its responsibilities effectively.
Senior Management as well as professional and external advisors are from time to time invited to attend
Board meetings to deliberate and clarify issues on the subject matter concerned.
In general, the agenda, board papers and minutes of previous meetings of the Board and Board Committees including minutes of board meetings of subsidiary companies are circulated in advance to the Board, before meetings. The agenda for every meeting permits the Board members to review the contents of meetings and enable the Chairman to better and more efficiently conduct the proceedings at Board meetings.
The Company has drawn up a list of transactions that would require the prior approval of the Board. The same is reflected in PROTON’s Group Policy and Procedures and Limits of Authority.
The Board Nomination & Remuneration Committee reviews all new appointments by taking into consideration the skill sets required by the Company and the Group. Board Members are appointed through a formal and transparent selection process that is consistent with the Articles of Association of the Company and the
Company’s Selection Policy for Directors.
New Directors are required to undergo familiarisation programmes, plant visits and briefings to get a better understanding of the PROTON Group, its operations and the automotive industry.
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Statement on Corporate Governance
144
Apart from carrying out annual reviews on the mix of skills and experience of the Directors, the Board
Nomination & Remuneration Committee also identifies, assesses and recommends all key positions within the PROTON Group including that of all members of the senior management committee, direct reports to the Managing Director, positions having significant impact to PROTON as well as Managing Directors of subsidiary companies.
All Directors including the Executive Director are subject to retirement by rotation at least once in every three years and are eligible for re-election. In accordance with Article 104 of the Articles of Association of the
Company and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, at least 1/3 of the
Directors shall retire from office at each Annual General Meeting, PROVIDED ALWAYS that all Directors shall retire from office once at least in each three (3) years but shall be eligible for re-election.
Further, any new Director appointed to fill a casual vacancy or as an addition to the existing Directors shall only hold office until the next Annual General Meeting of the Company and shall then be eligible for re-election as stipulated under Article 111.
Directors who are over seventy (70) years of age are required to submit themselves for retirement annually at the Annual General Meeting, unless the Director is re-appointed by way of special resolution in accordance with Section 129 (6) of the Companies Act, 1965. None of the Directors of the Company are subject to retirement pursuant to Section 129 of the Companies Act, 1965 at the forthcoming Annual General
Meeting.
At the forthcoming Annual General Meeting of the Company, the following Directors will retire and are eligible for re-election:
(i) Pursuant to Article 104
• Dato’ Zalekha Binti Hassan
(ii) Pursuant to Article 111
• Mr. Behara Venkata Rama Subbu
• Tan Sri Rainer Althoff
• Encik Abdul Rahim Bin Abdul Hamid
The Board had established five Board Committees, namely the Board Audit Committee, Board Nomination
& Remuneration Committee, Board Risk Management Committee, Board Disciplinary Committee and Board
Executive Committee, the primary functions of which were to assist the Board in overseeing the affairs of the
Group and these Committees had been entrusted with specific responsibilities and authority.
The abovementioned Board Committees were authorised to examine specific issues and report to the Board with their recommendations. The responsibility of decisions on all matters ultimately lies with the Board as a whole.

Statement on Corporate Governance
However, following review of functions and for better efficiency, clarity, transparency and coordination, the
Board of PROTON has, on 27 July 2010, resolved the rationalisation of these Board Committees and with effect from 1 August 2010, PROTON has the following Board Committees:
(i) Board Audit Committee (which apart from the functions stated herein, shall also assume the role of overseeing the overall management of all risks of the Group’s businesses); and
(ii) Board Nomination and Remuneration Committee (which apart from the functions stated herein, shall also oversee the disciplinary matters affecting senior officers of the Group, complaints lodged through the Whistle Blower Policy and all matters relating to the Code of Conduct and Ethics).
The Board Audit Committee (“BAC”) met eight (8) times during the course of the financial year. The composition of the BAC and their respective attendance record at meetings for the financial year ended 31
March 2010 are as follows:
No
1
2
3
4
5
6
7
8
Name Of Director Designation
Date of
Appointment
Date of
Resignation
Meeting
Attendance
Dato’ Michael Lim
Heen Peok
Member Independent
Non-Executive Director
Dato’ Zalekha Binti
Hassan
Member Non-Independent
Non-Executive Director
Tan Sri Rainer Athoff Member Independent
Non-Executive Director
Encik Abdul Rahim
Bin Abdul Hamid
Member Independent
Non-Executive Director
29 November 2006
27 May 2010
20 July 2010
20 July 2010
N/A
N/A
N/A
N/A
10 March 2005
8/8
N/A
N/A
N/A
21 August 2009 2/2 Tuan Haji Abdul Jabbar
Bin Abdul Majid*
Member Independent
Non-Executive Director
Tuan Haji Abdul Kadir
Bin Md Kassim
Member Independent
Non-Executive Director
Mr. Oh Kim Sun*
Mr. Behara Venkata
Rama Subbu
Chairman Independent
Non-Executive Director
Member Independent
Non-Executive Director
10 March 2005
13 May 2009
27 May 2010
27 May 2010
27 May 2010
20 July 2010
7/8
6/6
N/A
Note (*): Tuan Haji Abdul Jabbar was the Chairman of the Board Audit Committee up to 13 May 2009, wherein Mr. Oh Kim Sun took over the Chairmanship till 27 May 2010. Tuan Haji Abdul Jabbar continued as a Member of the Board Audit Committee until his resignation as Director and Member of the Board Audit Committee of PROTON on 21 August 2009.
145

Statement on Corporate Governance
146
During the financial year, the BAC of PROTON Holdings Berhad undertook the following activities:
(a) Assisted the Board in discharging its statutory duties and responsibilities relating to accounting and reporting practices of the Company and the Group in accordance with Generally Accepted Accounting
Practices.
(b) Reviewed the external audit terms of engagement, the audit strategy, the proposed audit fee and the achievement of the agreed upon reporting timeframes for the audit of the financial statements.
(c) Reviewed the external audit reports and discussed any problems and reservations arising thereon.
(d) Reviewed the internal audit plan, methodology, functions and resources.
(e) Reviewed major findings on internal audit reports and management response.
The Salient Terms of Reference of the Board Audit Committee is set out below.
Compositions
The Committee shall be appointed from amongst the Board and shall:-
(i) comprise of no fewer than three members;
(ii) all the members must be non-executive directors; and
(iii at least one member must be a member of the Malaysian Institute of Accountants or if he is not, then he must be a person who complies with Para. 15.09 (1) of Bursa Malaysia Securities Berhad’s Main
Market Listing Requirements.
No alternate director may be appointed as a member of the Board Audit Committee.
The Board will review the terms of office and the performance of the Board Audit Committee and its members at least once every three years.

Statement on Corporate Governance
Functions And Duties
The functions and duties of the Board Audit Committee shall be to:-
(a) Review and report to the Board of Directors on the following:-
• with the External Auditors, the audit plan;
• with the External Auditors, the External Auditor’s evaluation of the system of internal controls;
• with the External Auditors, the External Auditor’s audit report;
• the assistance given by the Company’s employees to the External Auditors;
• the adequacy of the scope, functions and resources of the internal audit functions and that it has the necessary authority to carry out its work, and the performance of the members of the internal audit function;
• the internal audit programme, processes, the results of the internal audit programme, or investigation undertaken and whether or not appropriate action is taken by the management on the recommendations of the internal audit function;
• the quarterly results and year-end financial statements, prior to the approval by the Board of
Directors, focusing particularly on:-
(i) changes in or implementation of major accounting policy;
(ii) significant and unusual events;
(iii) compliance with accounting standards and other legal requirements; and
(iv) accuracy and adequacy of the disclosure of information essential to a fair and full presentation of the financial affairs of the Group;
• any related party and conflict of interest situation that may arise within the listed issuer or group including any transaction, procedure or course of conduct that raises questions of management integrity;
• promptly report to Bursa Malaysia Securities Berhad on any matter reported by it to the Board of the Company which has not been satisfactorily resolved resulting in a breach of the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad;
• submit to the Board a Report on the summary of activities of the Board Audit Committee in the discharge of its functions and responsibilities in respect of each financial year.
(b) Consider the appointment of the external auditor, the audit fee and any questions of resignation and dismissal.
147

Statement on Corporate Governance
148
Meetings
The Committee shall hold meetings on at least four occasions each year although additional meetings may be called as and when necessary, by the Chairman of the Committee. These meetings will usually be:-
• prior to the current year’s audit;
• upon completion of the External Auditor’s interim examination;
• prior to the meeting of the full board to approve the financial statements;
• prior to the announcement of the quarterly results;
• upon the request of any member of the Committee or the External Auditors, the Chairman of the Committee shall convene a meeting of the Committee to consider the matters brought to its attention;
• at least once a year, the Committee shall meet with the External Auditors without any Executive Directors present.
Attendance
In order to form a quorum in respect of a meeting of the Audit Committee, the majority of members must be present throughout the meeting. The Chairman may request that any Board members, and members of the management, the Internal Auditors and / or representatives of the External Auditors be present at meetings of the Committee.
Secretary & Records
The Company Secretary shall be the Secretary to the Committee and shall be present at all meetings to record minutes.
Minutes of each meeting shall be prepared and entered into the books provided for the purpose and sent to the Committee members and will be made available to all Board members. The Minutes shall be signed by the Chairman of the Committee.
Internal Audit
The Group uses the services of the Group Internal Audit Division to accomplish its internal audit requirements.
The Group Internal Audit Division reports to the Board Audit Committee on matters concerning internal audit and assists the Board of Directors in monitoring and managing risks and internal controls.
The Group Internal Audit Division reviews internal controls related to all key activities of the Group and recommends improvements in controls and procedures. The Group Internal Audit Division is independent of the activities it audits and performs with impartiality and due professional care. The findings of the Group
Internal Audit Division are reported to the Board Audit Committee.
The Board Audit Committee approves the internal audit plan of the Group Internal Audit Division each year.
The scope of the internal audit covers the audits of all units and operations, including subsidiaries.

Statement on Corporate Governance
During the year, the Group Internal Audit Division serves to ensure internal control measures are adequate and effective in mitigating key risks and that they are monitored. The monitoring process will form the basis for continually improving the risk management process in the context of the Group’s overall goals.
The objectives of the Board Nomination & Remuneration Committee (“NRC”) are in accordance with the
Terms of Reference as approved by the Board of Directors of PROTON on 26 July 2006.
The NRC reviews appointments of new directors of the Group and the balance and effectiveness of the boards of directors, taking into account the required mix of skills and experience and other qualities, before making recommendations to the Board. The Committee is empowered to conduct periodic reviews on the overall remuneration policy and package of the Executive and Non-Executive Directors and Senior Level Mission
Critical Positions of the Group, for recommendation to the Board. The authority and scope of coverage of the NRC is over the PROTON Group, which includes subsidiaries and relevant associates and other investee companies.
The NRC is made up entirely of Non-Executive Directors, with the majority consisting of Independent Non-
Executive Directors.
Appointments to the Committee shall be for a period of three (3) years, which may be extended provided that the majority of the Committee members remain independent.
The NRC met 4 times during the financial year.
The Composition of the NRC is as follows:
Name of Director Designation
Chairman
Date of
Appointment
1 January 2009
Date of
Resignation
N/A
Meeting
Attendance
4/4 Dato’ Sri Mohd Nadzmi
Bin Mohd Salleh
Encik Ahmad Tajuddin
Bin Abdul Carrim
Dato’ Michael Lim Heen Peok
Dato’ Zalekha Binti Hassan
Encik Md Ali Bin Md Dewal
Member
Independent
Member
Independent
Non-Executive Director
Member
Non-Independent
Non-Executive director
Member Independent
29 August 2005
13 November 2006 N/A
1 August 2010
29 August 2005
N/A
N/A
4/4
4/4
N/A
27 May 2010 4/4
149

Statement on Corporate Governance
150
(With effect from 1 August 2010, the Board Risk Management Committee was disbanded and the functions were assumed by the Board Audit Committee)
The Board Risk Management Committee (“BRMC”) assisted the Board to oversee the overall management of all risks faced by the Group’s business. Further details of the activities of the Board Risk Management
Committee are spelt out in the Statement of Internal Control.
The BRMC was made up entirely of Non-Executive Directors and third party members (not being directors of the Company) who were appointed by the Board from time to time as follows:
Name
Datuk Tan Kim Leong
Dato’ Zainuddin Bin Che Din
Tuan Haji Abdul Kadir
Bin Md Kassim
Designation
Member Independent
Member Independent
Chairman Independent
Non-Executive Director
Date of
Appointment
29 August 2005
1 October 2008
Date of
Resignation
N/A
N/A
Meeting
Attendance
3/4
4/4
29 September 2005 27 May 2010 4/4
The composition of the BRMC was reviewed annually by the Board of Directors based on the recommendation of the NRC.
The Group Risk Management Committee (“GRMC”) is entrusted with the responsibility for ensuring that an appropriate risk management framework exists within the Group and effectively implemented to manage the key risks of the organisation on an on-going basis.
The GRMC, which comprises of Senior Management, is responsible for overseeing risk management implementation, regular updating of the Group’s risk profiles and improving the implementation of methodology for risk management. The GRMC deliberates and determines the Group’s major risks to be escalated now to the attention of the BAC.

Statement on Corporate Governance
(With effect from 1 August 2010, the Board Disciplinary Committee was disbanded and the roles and functions were assumed by the Board Nomination & Remuneration Committee).
The BDC was a platform for the PROTON Group that primarily dealt with disciplinary issues. The BDC was part of the structural mechanism for the handling of cases that arose from the introduction of the Whistleblower
Policy and Asset Declaration Policy. The BDC had the power to initiate investigations, consider and take appropriate action on any case referred to it by any party either received orally or in writing.
The BDC comprised members all of whom are Non-Executive Directors as follows:
Name
Dato’ Sri Mohd Nadzmi
Bin Mohd Salleh
Designation
Date of
Appointment
1 January 2009
Date of
Resignation
N/A
Meeting
Attendance
N/A
Tuan Haji Yusof Bin Ahmad
Encik Ahmad Tajuddin
Bin Abdul Carrim
Tuan Haji Abdul Jabbar
Bin Abdul Majid
Tuan Haji Abdul Kadir
Bin Md Kassim
Chairman/
Non-Independent
Non-Executive Director
Member Independent
Non-Executive Director
Member Independent
Non-Executive Director
Member Independent
Non-Executive Director
Member Independent
Non-Executive Director
21 February 2008 N/A
1 March 2010
7 May 2006
7 May 2006
N/A
2/2
N/A
21 August 2009 2/2
27 May 2010 2/2
(With effect from 1 August 2010, the PROTON Board Executive Committee was disbanded)
The objective of the Board Executive Committee (“Board EXCO”) was to assist Management in addressing issues relating to implementation and monitoring of several key projects, including but not limited to PROTON
Strategic Business Plan, Annual Management Plan, PROTON Business Turnaround Plan and also to address issues relating to identifying suitable candidates to fill in several key positions for PROTON. It is to be noted that the functions of the Board EXCO did not at any time overlap that of other Board Committees, such as the Board Nomination & Remuneration Committee.
Subject to the resolutions of the Board of Directors of PROTON that was passed from time to time, the provisions contained in the Terms Of Reference and the Memorandum and Articles of Association of the
Company, the Board EXCO exercised powers, authorities and discretions vested in the Board of Directors with regard to the affairs and business of the Company.
151

Statement on Corporate Governance
152
PROTON’s Board EXCO comprised two (2) representatives from amongst the PHB Board Members and two
(2) Senior Management representatives as follows:
Name of Director
Dato’ Sri Mohd Nadzmi
Bin Mohd Salleh
Designation
Chairman/
Non-Independent
Non-Executive Director
Managing Director
Date of
Appointment
1 January 2009
Date of
Resignation
N/A
Meeting
Attendance
1/1
Dato’ Haji Syed Zainal Abidin
B Syed Mohamed Tahir
Dato’ Michael Lim Heen Peok
17 April 2007 N/A 1/1
Encik Azhar Bin Othman
Ms. Vimala Menon
Independent
Non-Executive Director
Chief Financial Officer
Director - Finance and
Corporate Affairs
17 April 2007
22 July 2009
16 June 2008
N/A 1/1
N/A 0/0
31 August 2009 1/1
All Directors have successfully completed the Mandatory Accreditation Programme (“MAP”) conducted by
Bursatra Sdn. Bhd. and as imposed by Bursa Malaysia Securities Berhad.
Notwithstanding that Bursa Malaysia Securities Berhad’s Continuing Education Programme was repealed with effect from 1 January 2005, the Company, generally, and the Directors specifically continue to identify and attend appropriate seminars and courses to keep abreast of changes in legislation and regulations affecting the Group.
The Company has arranged various in house training programmes and luncheon talks on topics relevant to the Group, which were attended by both the members of the Board and Senior Management, including briefings on new international financial reporting standards, in particular, FRS 139 (Financial Instruments:
Recognition and Measurement), regional and global markets updates (and its impact to PROTON).
Full day knowledge sharing workshops and half day sessions on the global automotive outlook for 2009 and
2010 were also conducted in the course of the year.
PROTON has engaged the services of a global growth consulting company to share global and regional automotive knowledge with the Board Members and Management through various types of workshops. The goal of this engagement is to deliver continuous learning to PROTON through interactive sessions supported by market analysis, technology trends, best practices, economic and policy impact analysis from across the region. The automotive consultant has during the course of the year conducted workshops and luncheon training programmes for both the Directors and Management of PROTON Group.

Statement on Corporate Governance
The NRC is responsible for reviewing the performance of the Executive Directors and recommending to the
Board the remuneration package and reward structure. The Board as a whole determines the remuneration of the Non-Executive Directors, Executive Directors as well as for Senior Management. Directors do not participate in any discussions or decisions concerning each individual’s remuneration.
In the case of the Executive Director, the remuneration is structured to link rewards to corporate and individual performance through key performance indicators comprising fixed and performance-based rewards.
The level of remuneration of the Non-Executive Directors reflects the experience and level of responsibilities undertaken by the Director concerned. The Non-Executive Directors are paid annual fees and attendance allowances (in accordance with the number of meetings attended). In addition, the Non-Executive Directors are also provided with Benefits-In-Kind, including provision of a fully maintained company car, petrol card and full coverage under the Directors and Officers Insurance Scheme.
Non–Executive Directors fees are paid upon shareholders approval at each Annual General Meeting.
The NRC carries out reviews when appropriate and refers to remuneration surveys and consultants to assist in determining the appropriate level of reward, which is competitive and consistent with the corporate objectives. This is necessary in order to attract and retain professionals with the qualities needed to manage the Group successfully.
Details of the total remuneration of the Directors of PROTON Holdings Berhad for the financial year ended
31 March 2010 are as follows:
Director
Executive Directors
Non-Executive Directors
TOTAL
Basic Salaries/Bonus and
Others Employee Benefits
(RM)
1,631,844
1,631,844
-
Fees and
Allowances (RM)
-
1,389,423
1,389,423
Benefits in Kind (RM)
127,607
109,064
236,671
Total (RM)
1,759,451
1,498,487
3,257,938
Range of Total Remuneration
RM1,001 – RM50,000
RM50,001 – RM100,000
RM200,001 – RM250,000
RM500,001 – RM550,000
RM550,001 – RM600,000
RM1,750,001 – RM1,800,000
TOTAL
Number of Directors
Executive Non-Executive
-
-
-
-
-
1
1
3
1
1
1
-
1 7
Total
1
3
1
1
1
1
8
153

Statement on Corporate Governance
154
The Board is committed to providing a balanced, clear and meaningful assessment of the financial performance and prospects of the Group to shareholders, the investor community and the regulatory authorities. Shareholders and other stakeholders are kept abreast of the Group’s performance through the timely announcement of the quarterly financial results and accompanying press releases.
The Board Audit Committee assists the Board to oversee the financial reporting processes and the quality of its financial reporting. Quarterly financial results and annual financial statements are reviewed by the
Board Audit Committee to ensure adequacy and completeness of information prior to the Board’s approval.
To enhance quality of the Group’s financial reporting, the external auditors conduct quarterly reviews of the
Group’s quarterly results in addition to the year-end audit
The Board is required by the Companies Act, 1965, to ensure that financial statements prepared for each financial year have been made out in accordance with the applicable approved accounting standards and give a true and fair view of the state of affairs of the Company and the Group at the end of the financial year and of the results and cash flow of the Company and the Group for the financial year.
The Board is responsible for ensuring that the Company and the Group keeps accounting records which disclose with reasonable accuracy, the financial position of the Company and the Group and that the financial statements comply with the Companies Act, 1965.
In preparing the financial statements the Board has:-
• selected suitable accounting policies and applied them consistently;
• made judgments and estimates that are reasonable and prudent;
• ensured that all applicable accounting standards have been followed; and
• prepared financial statements on the going concern basis as the Directors have a reasonable expectation, having made enquiries that the Group has adequate resources to continue in operations for the foreseeable future.

Statement on Corporate Governance
Internal Controls
The Board acknowledges its overall responsibility for maintaining a system of internal controls that provides assurance of effective and efficient operations and compliance with laws and regulations and also its internal procedures and guidelines. The size and complexity of the operations may give rise to risks of unanticipated or unavoidable losses.
The system of internal controls is designed to provide reasonable but not absolute assurance against the risk of material errors, frauds or losses occurring. The Board Audit Committee reviews the effectiveness of the system of internal controls, which covers financial, operational and compliance controls, and also risk management.
Relationship with Auditors
The Board Audit Committee maintains an appropriate transparent relationship with both the Group external auditors and internal auditors. The external auditors are invited to attend Board Audit Committee meetings and present their audit findings when the Company’s quarter and annual financial results are considered.
The Board Audit Committee meets with the external auditors at least once a year without the presence of the
Executive Director and Management.
Dialogue Between The Company And Shareholders / Investors
The Board recognises the importance of transparency and accountability to its shareholders and investors.
Different channels of communication are optimised to provide shareholders and investors with a balanced and complete view of the Group’s performance and the issues faced by its businesses in the competitive environment amidst a changing landscape.
The issue of the Annual Report is an important medium of information for the shareholders and investors whereas the Annual General Meeting of the Company is the main forum for communication and dialogue with the shareholders. Shareholders are encouraged to actively participate and interact with the Board and members of the senior management pertaining to the items on the agenda, during the general meeting.
Shareholders are also given the opportunity and time to raise questions on the future growth prospects and strategies of the PROTON Group.
In addition, the Chairman briefs the shareholders on the Group’s operations for the financial year. Senior management and the external auditors are always present to respond to questions and queries to ensure a high level of accountability and transparency of the business goals, strategy and operations.
155

Statement on Corporate Governance
156
The Board strives to maintain open and effective dialogue with shareholders and regular meetings are held with institutional shareholders throughout the year to discuss the progress of the group, future growth prospects and strategy. In the course of the year the Board and Management have engaged in dialogue sessions with the Major Shareholders of PROTON and the representatives from the Malaysian Institute of
Corporate Governance and Minority Shareholder Watchdog Group. Other channels of communication include company presentations, seminars, press releases and interim and annual reports.
Besides the Annual Report, the Board ensures timely announcements are made to Bursa Malaysia Securities
Berhad and disseminates clear, accurate, and sufficient information to enable the shareholders and investors to make informed decisions. The Investor Relations Unit also proactively disseminates appropriate and relevant information to the investor community and attends to whatever queries they may have.
There is a company website and the general public.
which provides information on the Company for all shareholders
The PROTON Group has put in place the Code of Conduct and Discipline, which every employee is required to adhere to. Such code may be modified, added to, substituted for or otherwise amended from time to time as the Board deems fit. An employee is also required to comply with the penal code of the country.
Code of Ethics
The PROTON Group has established specific rules and regulations to govern the conduct of its employees.
The Directors and employees of PROTON Group are expected to obey all laws in conducting business and to always act with honesty, integrity, loyalty, trustworthiness, fairness and responsibility.
It is PROTON’s policy and Management’s responsibility to apply these rules fairly and equitably to all employees.
Infringement of these rules may lead to disciplinary action such as verbal or written warnings, suspension without pay and separation from the Company / Group.

Statement on Corporate Governance
Purpose of Policy
This purpose of this policy is to provide a framework for the proper conduct of directors and employees while on the job. The policy gives directors and employees guidance in identifying business situations which have the potential to create legal and ethical problems and to provide directions in handling those potential and actual situations.
The respective codes are made available to the Directors and employees.
Whistleblower Policy
PROTON had on 27 July 2006 implemented a Whistleblower Policy. The objective of the policy is to provide a mechanism for preventive and corrective action within the Group without the negative effects that come with public disclosure, such as loss of Company image or reputation, financial distress and loss of investor confidence.
The policy encourages employees or representatives of PROTON to disclose genuine concerns about illegal, unethical or improper business conduct within the Group. In this manner, the employees can help the
PROTON Group to monitor and keep track of such illegal, unethical or improper business conduct within, which otherwise, may not be easily detected through normal process or transaction.
The Group is committed to the highest standards of business conduct and seeks to maintain these standards across all of its operations throughout the world. The Group has in place group finance policies and employee procedures.
The Group has an appropriate organisation structure for planning, executing, controlling and monitoring business operations in order to achieve Group objectives. Lines of responsibility and delegations of authority are documented.
157

Additional Compliance Information
158
Additional Compliance Information in accordance with Appendix 9C of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad:
There were no proceeds raised from corporate proposals during the financial year.
There was no proposal by the Company to carry out a share buy-back during the financial year.
The Company did not issue any warrants or convertible securities during the financial year.
The Company did not sponsor any ADR or GDR Programme during the financial year.
There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or
Management by relevant regulatory bodies during the financial year.
PROTON recorded an Audited Profit After Tax of RM218.9 million for the financial year ended 31 March
2010.
However, the Unaudited Financial Statement of PROTON for the same period (as announced to Bursa Malaysia
Securities Berhad on 26 May 2010), recorded and Unaudited Profit After Tax of RM239.1 million.
This represented a variation (of RM20.2 million or 8.45%) between the Audited and Unaudited Profit After Tax for the said financial year and this was due to, additional provision for bonus (RM15.5 million), impairment of plant and machinery (RM6.0 million), development cost written off (RM4.0 million), adjustment for tax credit of RM4.0 million and other favourable adjustments amounting to RM1.3 million.
The variation was announced to Bursa Malaysia Securities Berhad on 30 July 2010 together with the Audited
Financial Statement of PROTON for the financial year ended 31 March 2010.

Additional Compliance Information
There was no profit guarantee for the financial year.
There was no material contract entered into by the PROTON Group involving the interest of Directors and major shareholders, either still subsisting at the end of the financial year ended 31 March 2010 or entered into since the end of the previous financial year.
The significant accounting policies on property, plant and equipment are disclosed in Note 3(c) of the
Summary of Significant Accounting Policies.
During the financial year, the amount of non-audit fees paid and payable to the external auditors by the
Group are as follows:
External Auditors
PricewaterhouseCoopers Malaysia
Member firm of PricewaterhouseCoopers International Limited
(a separate and independent legal entity from
PricewaterhouseCoopers Malaysia)
2010
RM’000
232
592
2009
RM’000
902
959
Total 824 1,861
159

Additional Compliance Information
160
On 8 June 2007, PROTON obtained exemption from Bursa Malaysia Securities Berhad (“Bursa”) from disclosing Recurrent Related Party Transactions with Khazanah Nasional Berhad’s investee companies. As a result, PROTON is not required to seek shareholders mandate for such transactions at the forthcoming
Annual General Meeting of the Company.
Further, Bursa had on 14 December 2006 amended the Listing Requirements pertaining to related party transactions whereby the threshold for a major shareholder was increased from 5% to 10% of the aggregate nominal amount of voting shares in a company, PROVIDED that the said shareholder is not the largest shareholder of the company.
The Employees Provident Fund Board (“EPF”) which currently holds approximately 10.720% of the issued and paid up capital of PROTON is not deemed a related party by virtue of the fact that EPF and/or person(s) connected with the EPF: a. is/are not the largest shareholder of the Company b. is/are not a party to any transaction, initiator, agent or involved in any manner in any transaction with the
PROTON Group; and c. does not have any representative in an executive capacity on the Board of Directors of PROTON or any of the subsidiaries.
The other major shareholder, Petroliam Nasional Berhad holds 7.851% equity interest in PROTON.

Additional Compliance Information
Below is a list of Recurrent Related Party Transactions entered during the financial year ended 31 March
2010.
Transacting Related Party Nature of Transaction
Company within the
PROTON Group
Actual
01/04/09 -31/03/10
RM
1 Lub Dagangan Sdn. Bhd. Purchase of lubricants PONSB
2 Petronas Dagangan Sdn. Bhd. Purchase of lubricants PONSB
3 Petronas Dagangan Sdn. Bhd.
Purchase of lubricants PESB
4 EON
5 EON
Sale of goods
Sale of goods
PESB
PPCSB
6 Johnson Controls Auto Holding Purchase of goods
7 Johnson Controls Auto Seating Purchase of goods
8 Johnson Controls Auto Interior Purchase of goods
9 PPCSB
10 PPCSB
Purchase of goods
Sale of goods
PPCSB
PONSB
PONSB
PONSB
PONSB
11 PPCSB
12 PPCSB
13 PPCSB
14 PPCSB
15 PPCSB
16 PPCSB
17 Hicom Teck See
18 Hicom Teck See
19 Tenaga Nasional Berhad
20 Oriental Summit Industries
21 Oriental Summit Industries
22 PHN Industry Sdn. Bhd.
Purchase of parts
Sale of goods
Purchase of parts
Purchase of parts
Purchase of parts
Purchase of parts
Purchase of parts
Purchase of parts
Sale of goods
Purchase of parts
Purchase of parts
Purchase of goods
PESB
PCUKL
PCUKL
PCA
PSPL
PEI
PONSB
PPCSB
PESB
PONSB
PPCSB
PONSB
5,363,445
3,187,700
20,540,634
1,432,428,000
88,768,261
208,872
91,975,085
1,894,396
2,426,273
20,744,978
122,571,114
35,022
2,677,870
3,157,376
451,661
2,144,429
152,165,343
1,314,158
931,800
62,167,936
1,289,122
164,260,662
Definition:
PONSB Perusahaan Otomobil Nasional Sdn. Bhd.
PESB Proton Edar Sdn. Bhd.
PPCSB Proton Parts Centre Sdn. Bhd.
PCUKL Proton Cars (UK) Limited
PCA Proton Cars Australia Pty. Limited
PSPL Proton Singapore Pte. Limited
PEI PT Proton Edar Indonesia
161

Statement on Internal Control
162
Bursa Malaysia’s Statement on Internal Control: Guidance for Directors of
Public Listed Companies (“Guidance”) provides guidance for compliance with these requirements. The Board’s Internal Control Statement, which has been prepared in accordance with the Guidance, is set out below.
The Board of Directors (“The Board”) recognises the importance of sound internal controls and risk management practices to good corporate governance. The Board has an overall responsibility for the Group’s system of internal controls and its effectiveness, as well as reviewing its adequacy and integrity. The Group’s system of internal controls is designed to manage the principal business risks that may impede the
Group from achieving its business objectives. The system, by its nature, can only provide reasonable but not absolute assurance against any material misstatement or loss occurrence.
Risk management is regarded by the Board to be an integral part of the
Group’s operations with the objective of maintaining a sound internal control system and ensuring its continuing adequacy and integrity. A formal risk management framework and policy was approved by the Board for the Group to identify, assess, treat, report and monitor, key risks faced by the Group. The effectiveness of the risk mitigation actions are reviewed quarterly by the Group Risk Management Committee (GRMC) and Board Risk Management Committee (BRMC) respectively.
The Group Risk Management Division (GRMD) is entrusted with the responsibility of ensuring that an appropriate risk management framework exists within the Group and is effectively implemented to manage the key risks of the organisation on an on-going basis.

Statement on Internal Control
The GRMC, which comprises of Senior Management, is responsible for overseeing risk management implementation, regular updating of the Group’s risk profiles and improving the implementation methodology for risk management. The Committee deliberates and determines the Group’s major risks to be escalated to the attention of the BRMC.
The BRMC was established to deliberate major risks highlighted by the management and assist the Board in reviewing the Group’s risk policies and strategies.
For the financial year ended 31 March 2010, the GRMC and BRMC have held quarterly meetings in accordance with their respective terms of reference.
Apart from risk management activities, the Board and Management have established other processes for identifying, evaluating and managing significant risks faced by the Group. They continue to strive in enhancing and implementing the internal control system to manage those risks that could affect the Group’s growth and financial viability. These processes include updating the system of internal controls when there are changes to the business environment or regulatory guidelines. The key elements of the Group’s control environment include:
Board Committees
Board Committees were established by the Board to assist the Board in the execution of its responsibilities to provide oversight on the effectiveness of the Group’s operations. The responsibilities and authority of the
Committees are governed by specific terms of reference and these Committees are accountable to the Board.
The Board Committees are:
• Board Audit Committee
• Board Nomination and Remuneration Committee
• Board Risk Management Committee (“BRMC”)
• Board Disciplinary Committee (“BDC”)
• Board Executive Committee (“EXCO”)
The details of the abovementioned Board Committees are set out and explained in the Statement on Corporate
Governance.
163

Statement on Internal Control
164
Board Audit Committee
The Board has delegated the duty of reviewing and monitoring the effectiveness of the Group’s system of internal controls to the Board Audit Committee (BAC).
The BAC assumes the overall duties of reviewing with the external auditors their audit plan, audit report, as well as their findings and recommendations on internal controls highlighted annually in the Internal Control
Memorandum. Throughout the financial year, the BAC was updated on the developments of Malaysian
Financial Reporting Standards, as well as legal and regulatory requirements. It also reviews the effectiveness of the internal audit function with particular emphasis on the scope and quality of audits, resources as well as the independence of the Group Internal Audit Division (GIAD).
The BAC continues to meet regularly and has full and unimpeded access to the internal and external auditors and all employees of the Group.
Further information relating to the activities of the BAC is set out in the Statement on Corporate Governance.
Organisation Structure and Management Committees
An organisation structure, which is aligned to the business and operational requirements and led by Heads of Division with clearly defined lines of responsibility, accountability and levels of authority, is in place to assist in implementing the Group’s strategies and day-to-day business activities.
Various functional committees were set up at the management level to ensure the Group’s actions and operations are properly aligned towards achieving the organisation’s goals and objectives.
Group Internal Audit Division (GIAD)
GIAD continues to independently monitor compliance with internal policies and procedures, effectiveness of the internal control systems and highlights significant findings for corrective actions by line management and reports directly to the BAC.
The annual audit plan which covers PROTON and its subsidiary companies and which was established primarily on a risk-based approach, is reviewed and approved by the BAC annually. A quarterly work status update is given by the GIAD to the BAC. GIAD regularly reviews the approved annual audit plan to ensure significant risk areas are given adequate audit focus.
The interests of PROTON in associated companies and jointly controlled entities are primarily served through representation on the board of directors of the respective companies. Internal controls of associated companies and jointly controlled entities are reviewed upon any ad-hoc request by the BAC.
On a quarterly basis, GIAD updates the BAC on the status of corrective actions taken by line management arising from the audit findings highlighted by both GIAD and the external auditors.
Further information relating to the activities of GIAD is set out in the Statement on Corporate Governance.

Statement on Internal Control
The other key elements of the Group’s internal control systems are described below:-
• Defined delegation of responsibilities to committees and management of head office and operating units, including authorisation levels for various aspects of the business, which are clearly set out in the revised Limits of Authority approved by the Board on 29th May 2009;
• Documented internal policies and procedures as set out in the Group Policies and Procedures. Perusahaan
Otomobil Nasional Sdn. Bhd., a wholly owned subsidiary, and Proton Casting Plant have been officially certified and successfully upgraded to ISO 9001:2008 from ISO 9001:2000 by Vehicle Certification
Agency (VCA) and SIRIM on the Quality System Procedures for PROTON;
• Quarterly financial statements and the Group’s performance are deliberated by the BAC, which subsequently presents them to the Board for their review, consideration and approval;
• Management Committee meetings are held on a regular basis to identify, discuss and resolve operational, financial and key management issues;
• A comprehensive budgeting process where the annual budgets are approved by the Board;
• The Board receives and reviews monthly reports from Management on key strategic and operational issues and provides direction to Management;
• Regular visits to operating units by Senior Management;
• Various improvement programs were established in PROTON and its subsidiaries to enhance its business operations;
• Continuous training efforts to enhance the leadership quality and competency of the workforce;
• Regular employee perception surveys were conducted to obtain feedback from employees to promote continuous improvements; and
• Improvement to the formal employee appraisal system for effective coaching and evaluation of employee performance using established Key Performance Indicators (KPIs). The resolution rate of internal audit findings is also included in the Division KPIs to ensure gaps in the internal controls system are effectively and timely addressed.
For the financial year under review, some weaknesses in internal control were detected. However, after due and careful inquiry and based on the information and assurance provided, the Board is satisfied that there were no material losses as a result of weaknesses in the system of internal controls. Nevertheless, identified areas of concern are accorded closer attention and more regular monitoring to ensure key internal controls are adequate and effective to continually safeguard shareholders’ investment and the Group’s assets.
165

Risk Management
166
The Group recognizes the importance of an effective risk management system throughout the organisation to provide reasonable assurance to the shareholders that the risks the Group is exposed to, are properly managed, controlled and capitalised.
As part of the Group’s improvement program, Proton Risk Management
Framework, formulated in 2003 has been continuously enhanced in line with the ISO31000:2009 as the latest international risk management standard of reference.
Proton’s risk management framework is designed to provide the foundation for organisational arrangements, implementation, and monitoring, reviewing and managing key risks throughout the organisation.

Risk Management
Risk Policy and Strategy
The Group Risk Management policy revised in 2007, remains essential in integrating risk management into key activities and business processes of the Group. As recommended in Khazanah’s Green Book, factors on risk management were continuously incorporated to that of PROTON’s ERM strategy. This is essential for the
Group to respond effectively to the fast changing business environment as well as to protect and enhance stakeholders’ interest.
Understands and manages major risk exposures
Considers the risk factors in all major decisions
Sets the company risk parameters
Overall corporate risks are measured & thresholds are controlled within predetermined limits.
Provide sufficient internal controls, clear accountabilities and mitigation plans.
Culture of identifying
& managing risks exists throughout the organisation.
ENGINEERING &
MANUFACTURING
Product Planning
PROTON GROUP RISK
(CRP/ORP)
MARKETING
& SALES
Communication
Engineering
Procurement
Quality
Manufacturing
Marketing
Export
Domestic
Parts
SUPPORT
SERVICES
Strategy
Finance
Human Resource
ICT
Compliance Group
Group risk monitoring platform
(BRMC)
Group Risk
Management
Division
Divisional risk monitoring platform
(GRMC)
Functional risk monitoring platform
(Risk Champions)
167

Risk Management
168
In ensuring that the Strategic and Operational Risks were effectively communicated and monitored at all levels, the Group has developed Proton Risk Management Communication Platform to cascade down the risk management strategy into various key divisions. This includes Group Risk Monitoring platform; monitored through Board Risk Management Committee (BRMC), Divisional Risk Monitoring platform; monitored through Group Risk Management Committee (GRMC) and Functional Risk Monitoring platform monitored by
Business Units Risk Team/Risk Champion.
Group Risk Management Division (GRMD) provides specialized resources for developing risk framework, policies, methodologies, tools and appropriate training for Managers to ensure the risk management practices is effectively integrated into business initiatives.
Business Planning Risk Assessments
Group wide risk registrations were conducted in conjunction with the business planning initiatives and escalated to GRMC and BRMC respectively. All divisions within the Group, including subsidiaries have submitted their risk profiles during this exercise. The risks collated were then prioritized and categorized into
Corporate Risk Profiles (CRP), Operational Risk Profiles (ORP) and Business Units Risk Profiles (BURP).
Risk Management Brainstorming and Profiling Sessions
A series of risk awareness and profiling workshops were conducted throughout the year involving Export
Market Division, Group Information, Communication and Technology (ICT), Group Marketing and Sales,
Group Support Services, Group Engineering and Operations and also the Board and Senior Management. The objective of these sessions was to obtain risks views across the business value chain and inculcate a more positive approach to risk management practices.
Global Emerging Risk Assessments
Several risk assessments pertaining to global issues were conducted during the year in review, specifically i.e. HINI pandemic and travel to high risk countries. The taskforce comprising, Group Human Resources
Division, Group Security, Environment, Safety and Health (EHS) Department was established particularly to review and advise the Group in managing the emerging risks and related business exposures.

Risk Management
Corporate and Operational Risks
Corporate risks are primarily risks caused by external events that have potential impact on the strategic decision or activities of the Group. The Board is responsible in ensuring that the corporate risks of the Group are identified proactively. This was performed via product development, quality improvement and process improvement programs.
Operational risk is defined as the risk of loss resulting from inadequacy or failure of internal processes, people and system. As the Group progresses towards operational excellence, the Group faces a multitude risks relating to financial risks, vendor capacity and capability in achieving business objectives. Appropriate measures were undertaken to ensure that controls are in place to avoid any disruption of operations.
Export Market Risks
Proton conducts its businesses across regions. This exposed the Group to risks such as changes in market regulation, infringement of Intellectual Property Rights (IPR) and stiff market competition which may impact the Group’s ultimate objectives. As the Group’s future lies in expanding into the export markets, it is imperative that efforts are taken to ensure that a risk faced by the organisation is effectively managed.
Various risk assessments were performed in the year in review specifically for our operations in China,
Middle East and Asean. Updates on mitigation plan were reported to the GRMC and BRMC respectively on a quarterly basis.
Business Environment Risk
Business environment risk is inherent in all businesses. The strengthening global call for reduction in greenhouse gas emissions is now widely acknowledged in both developed and developing nations and is a catalyst for the “Green Vehicle” concept to be promoted. In view of this challenge, the Group has deliberated the challenges and opportunities in the green technology and ways to catapult this idea into a feasible end state.
Providing assurance that risks are effectively managed requires commitment and discipline from all divisions.
Enhancement on ERM framework and competency will remain the top priority of the Group to cultivate a more proactive risk management operation.
Managing key risks and identifying emerging risks especially in export markets will also be the Group’s focus to catapult the Company into being a major international player. Concerted efforts on all fronts are crucial to maintain the commitment of all divisions towards embedding risk management practices as an integral part of the day-to-day decision making process in the organisation.
With the support of the BRMC, the risk management function will continue to move forward in enhancing the appreciation of risk management and strive for a stronger and more resilient risk management culture within the Group.
169

170
1 2
3 4 5
1
Flag off for the PROTON Merdeka Convoy to various charity homes in Pulau Pinang,
Kelantan, Perak and Selangor.
2
PROTON holds its 2009 AGM at the
PROTON Centre of Excellence.
3
PROTON Adviser Tun Dr. Mahathir
Mohamad joins PROTON’s Buka Puasa function with staff and orphans at
PROTON’s main plant in Shah Alam,
Selangor.
4
Miss Australia unveils the Proton S16
(Saga) at the Australian National Dealers
Conference held in Kuala Lumpur.
5
DYMM Yang di-Pertuan Agong Tuanku
Mizan Zainal Abidin visits Lotus headquarters in Norwich, UK.

Calendar of Events
6 7 8
9 10 11
6
DYMM Yang di-Pertuan Agong Tuanku
Mizan Zainal Abidin unveils the new Proton
Higher Performance Engine at Lotus UK.
7
8
9
PROTON Chairman, Dato’ Sri Mohd Nadzmi handing out “Duit Raya” during the Hari Raya
Aidilfitri gathering with business associates and children from local orphanages.
Deputy Minister of Works YB Dato’ Yong
Khoon Seng launches the 18 th Malaysian
Skills Competition co-organised by PROTON.
Nikolay Davydenko in action during the inaugural PROTON Malaysian Open Kuala
Lumpur 2009 (Tennis Tournament).
10
YB Dato’ Ahmad Shabery Cheek, Minister of Youth and Sports visits Lotus UK.
11
PROTON’s entry in the Rally of China.
171

Calendar of Events
172
12 13
14 15 16
12
PROTON goes a step further in soccer by launching the PROTON FC Soccer Kids programme.
13
14
Announcement of Official Proton Car Clubs as brand ambassadors at the inaugural
PROTON and Car Clubs Collaboration
Briefing.
Proton Exora wins the 2009 Car of The
Year Award for Small/Medium MPV at the
Autocar Asean Awards 2009.
15
Proton Exora named as the Midi MPV of the Year 2009 by the New Straits Times/
Maybank Car of the Year Awards 2009.
16
PROTON signs MOU with the Manpower
Department of the Ministry of Human
Resources, pledging support to develop an
Automotive Skills Programme.

Calendar of Events
17 18 19
20 21 22
17
Tun Dr. Mahathir Mohamad with the winners of the PROTON Invention and
Innovation competition during the 2010
PROTON Family Day.
18
19
The 2010 Family Day held at the Shah
Alam plant saw the presence of more than
10,000 staff including family members from PROTON’s central region.
Jobseekers throng PROTON’s Career Day which was held at the Shah Alam office.
20
21
22
YB Dato’ Maznah Mazlan, Deputy Minister of Human Resources visits Taska PROTON
(a day care centre for children of PROTON staff).
PROTON continues its support for national badminton by sponsoring the PROTON
Malaysia Open 2010.
A friendly shooting competition with the
Selangor contingent of the Royal Malaysian
Police.
173

Calendar of Events
174
23 24 25
26 27 28
23
The Grand Prize winner of the Proton Drive for Holidays campaign wins RM7,000 in cash and a 3 days 2 nights hotel package.
24
25
PROTON continues its support for the Le
Tour de Langkawi with its convoy of cars.
PROTON supports the National Level
PINTAR Creativity and Innovation
Competition held at the Sekolah
Kebangsaan Permatang Buloh, Kepala
Batas, Penang.
26
PROTON Adviser, Tun Dr. Mahathir
Mohamad receives a full business and technology briefing from Dany Bahar,
Chief Executive Officer of Lotus Group, at the plant in Hethel, Norwich, United
Kingdom.
27
The unveiling of the EMAS concept global cars at the prestigious 80 th International
Geneva Motor Show.
28
Launch of the Persona Elegance, a better value for money mid-sized sedan.

Calendar of Events
29 30 31
32 33 34
29
The launch of the Proton Satria Neo R3
Lotus Racing Edition in conjunction with
PROTON’s involvement in Formula One.
30
The Lotus Racing team roars its engine at the Formula 1 World Championship race in
Sepang.
31
Quality remains a top priority with the launch of the annual Company-wide
Quality Campaign which was officiated by
PROTON’s Managing Director.
32
33
34
PROTON’s Adviser Tun Dr. Mahathir
Mohamad visits the R&D facilities and plant in Shah Alam.
YAB Dato’ Ahmad Shabery Cheek Minister of Youth and Sports hands the Jalur
Gemilang to the PROTON R3 Malaysia
Rally Team.
Winner of PROTON’s 25 th Anniversary logo designing competition receives her prize from the Managing Director during the launch of PROTON’s 25 th Anniversary celebration.
175

Calendar of Events
176
35 36 37
38 39 40
35
PROTON participated in the SMIDEX 2010 exhibition at the KL Convention Centre.
36
37
PROTON showcased the Exora at the
Automotive Engineering Exposition (AEE)
2010 in Yokohama, Japan’s largest automotive exhibition and technology showcase.
President Mohamed Nasheed of the
Republic of Maldives visits the PROTON booth at the 6 th World Islamic Economic
Forum held in Kuala Lumpur.
38
Grand Prize Winner at PROTON’s Media
Night in conjunction with PROTON’s
25 th Year Anniversary, receiving his gift from the Chairman of PROTON.
39
40
The launch of the much-anticipated all-new Lotus Evora sports car in Malaysia.
Proton Edar Service Conference held in Port
Dickson, Negeri Sembilan was attended by
700 participants.

41
43
41
The EMAS concept global car was unveiled in Malaysia by the Prime Minister, YAB
Dato’ Sri Mohd Najib Tun Razak during
PROTON’s 25 th Anniversarry Gala Dinner.
42
43
Prime Minister Dato’ Sri Mohd Najib Tun
Razak launched PROTON’s 25 th Anniversary commemorative book, “A Saga - PROTON’s
25 year story”.
The launch of the stunning and newly improved Proton Exora.
42
Calendar of Events
177

182 Directors’ Report
185 Income Statements
186 Balance Sheets
188 Consolidated Statement Of Changes In Equity
189 Company Statement Of Changes In Equity
190 Cash Flow Statements
193 Notes To The Financial Statements
284 Statement by Directors
284 Statutory Declaration
285 Independent Auditors Report

Directors’ Report
182
PRINCIPAL ACTIVITIES
The Company is principally involved in investment holding activities.
The principal activities of the subsidiary companies, associated companies and jointly controlled entities are set out in Notes 17 to 19 of the financial statements. There have been no significant changes in the activities of the Group and Company during the financial year.
FINANCIAL RESULTS
Group
RM’000
218,932
Company
RM’000
98,715 Net profit for the financial year
DIVIDENDS
No dividends on ordinary shares were paid or declared by the Company since 31 March 2009.
The Directors recommend the payment of a final dividend of 20 sen per ordinary share 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 members at the forthcoming Annual General Meeting.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves and provisions during the financial year except as disclosed in the financial statements.

Directors’ Report
(continued)
DIRECTORS
The Directors who have held office during the period since the date of the last report are:
Dato’ Mohd Nadzmi bin Mohd Salleh
Dato’ Syed Zainal Abidin B Syed Mohamed Tahir
Dato’ Lim Heen Peok
Dato’ Zalekha binti Hassan
Behara Venkata Rama Subbu
Tan Sri Rainer Althoff
Abdul Rahim bin Abdul Hamid
Haji Abdul Kadir bin Md Kassim
Oh Kim Sun
Haji Abdul Jabbar bin Abdul Majid
(appointed on 1.3.2010)
(appointed on 22.6.2010)
(appointed on 20.7.2010)
(resigned on 27.5.2010)
(resigned on 27.5.2010)
(retired on 21.8.2009)
In accordance with Article 104 of the Company’s Articles of Association, Dato’ Zalekha binti Hassan retires at the forthcoming Annual General Meeting and, being eligible, offers herself for re-election.
In accordance with Article 111 of the Company’s Articles of Association, Behara Venkata Rama Subbu, Tan Sri
Rainer Althoff and Abdul Rahim bin Abdul Hamid retire at the forthcoming Annual General Meeting and, being eligible, offer themselves for election.
DIRECTORS’ BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being arrangements with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.
Since the end of the previous financial year, no Director has received or become entitled to receive a benefit
(other than benefits disclosed as Directors’ remuneration in Note 8 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.
DIRECTORS’ INTEREST IN SHARES AND DEBENTURES
According to the register of Directors` shareholdings, no Director in office at the end of the financial year held any interest in shares or debentures in the Company or its related corporations.
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS
Before the income statements and balance sheets of the Group and Company were made out, the Directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and
(b) to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business their values as shown in the accounting records of the Group and Company had been written down to an amount which they might be expected so to realise.
183

Directors’ Report
(continued)
184
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (continued)
At the date of this report, the Directors are not aware of any circumstances:
(a) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the Group and Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and
Company misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the
Group and Company misleading or inappropriate.
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and Company to meet their obligations when they fall due.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group or the Company which has arisen since the end of the financial year which secures the liability of any other person; or
(b) any contingent liability of the Group or the Company which has arisen since the end of the financial year.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading.
In the opinion of the Directors:
(a) the results of the Group’s and Company’s operations during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature except as disclosed in Notes
5, 7 and 13 to the financial statements; and
(b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group or the Company for the financial year in which this report is made.
AUDITORS
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with their resolution dated 27 July 2010.
DATO’ MOHD NADZMI BIN MOHD SALLEH
CHAIRMAN
DATO’ SYED ZAINAL ABIDIN B
SYED MOHAMED TAHIR
MANAGING DIRECTOR

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (continued)
At the date of this report, the Directors are not aware of any circumstances:
(a) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the Group and Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and
Company misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the
Group and Company misleading or inappropriate.
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and Company to meet their obligations when they fall due.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group or the Company which has arisen since the end of the financial year which secures the liability of any other person; or
(b) any contingent liability of the Group or the Company which has arisen since the end of the financial year.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading.
In the opinion of the Directors:
(a) the results of the Group’s and Company’s operations during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature except as disclosed in Notes
5, 7 and 13 to the financial statements; and
(b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group or the Company for the financial year in which this report is made.
AUDITORS
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with their resolution dated 27 July 2010.
DATO’ MOHD NADZMI BIN MOHD SALLEH
CHAIRMAN
DATO’ SYED ZAINAL ABIDIN B
SYED MOHAMED TAHIR
MANAGING DIRECTOR
Income Statements
For The Financial Year Ended 31 March 2010
Note
2010
RM’000
Group
2009
RM’000
Revenue
Cost of sales
Gross profit
6 8,226,859 6,518,754
7 (7,616,732) (6,145,328)
610,127 373,426
Other operating income
- Research and development grant
- Others
Distribution costs
Administrative expenses
Other operating expenses
- Impairment of property, plant
and equipment
Profit/(loss) before taxation
Taxation
13
- Impairment of capitalised
development cost
- Write back of impairment of property,
plant and equipment
16
13(b)
- Others
Profit/(loss) before finance cost
Finance cost
Share of results of associated companies
7
9
18
Share of results of jointly controlled entities 19
10
143,688
181,232
(132,598)
(546,584)
(6,000)
53,447
254,176
5,535
13,235
260,893
-
(49,136)
(12,053)
(41,961)
80,656
165,711
(118,253)
(516,886)
(257,674)
(20,802)
1,616
(47,401)
(339,607)
(14,408)
20,220
14,594
(319,201)
17,395
Profit/(loss) for the financial year 218,932 (301,806)
Attributable to:
Equity holders of the Company
Earnings/(loss) per share (sen)
- basic
- diluted
11
11
218,932
40
40
(301,806)
(55)
(55)
Dividend per share (sen)
- interim dividend paid
- final dividend proposed
12
12 20
5
-
2010
RM’000
101,203
-
101,203
-
3,454
-
(1,004)
Company
2009
RM’000
362,357
-
362,357
7,321
-
-
(1,329)
-
-
-
(4,375)
99,278
-
-
-
99,278
(563)
98,715
98,715
-
-
368,349
-
-
-
-
-
368,349
(1,179)
367,170
367,170
185
The notes on pages 193 to 283 form part of these financial statements.

Balance Sheets
As At 31 March 2010
186
Note
2010
RM’000
Group
2009
RM’000
2010
RM’000
Company
2009
RM’000
NON-CURRENT ASSETS
Property, plant and equipment
Prepaid land lease payments
Goodwill
Intangible assets
Subsidiary companies
Associated companies
Jointly controlled entities
Amounts due from subsidiary companies
Investments
Deferred tax assets
13 2,624,418 2,827,111
18
19
20
14
15
16
17
21
22
29,008
563,963
152,640
202,545
15,033
-
-
-
-
-
29,008
431,668
-
158,367
195,622
-
10,397
5,727
1,708,651
13,600
232,946
-
-
-
-
-
-
-
1,708,651
13,600
6,475
-
-
177,870
-
-
-
-
3,587,607 3,657,900 1,955,197 1,906,596
CURRENT ASSETS
Inventories
Trade and other receivables
Amounts due from subsidiary companies
Amounts due from associated companies
Amounts due from jointly controlled entities
Tax recoverable
Current investments
Dividends receivable
Deposits, bank and cash balances
Non-current assets held for sale
TOTAL ASSETS
23 1,227,212 1,395,081
24 920,400 890,095
20
25 34,615
-
18,284
749
-
59,978
350
145
-
58,912
-
26 11,321 11,353
10
27
25,301
9,676
28 1,652,089
-
29
160,610
15,313
-
913,850
3,880,614 3,404,586
36,931 36,412
292
-
6,600
248,376
316,345
2,100
-
7,505,152 7,098,898 2,273,642 2,175,153
-
77
-
-
209,423
268,557
-

Balance Sheets
As At 31 March 2010 (continued)
Note
2010
RM’000
Group
2009
RM’000
2010
RM’000
Company
2009
RM’000
CAPITAL AND RESERVES
Share capital
Reserves
Equity attributable to equity holders of the Company
TOTAL EQUITY
NON-CURRENT LIABILITIES
Long term liabilities
Deferred tax liabilities
30
31
549,213
4,783,776
5,332,989
5,332,989
549,213
4,552,327
5,101,540
5,101,540
549,213
1,723,894
2,273,107
2,273,107
549,213
1,625,179
2,174,392
2,174,392
32
22
88,650
10,740
99,390
101,516
12,243
113,759
-
-
-
CURRENT LIABILITIES
Trade and other payables
Provisions
Amounts due to associated companies
Amounts due to jointly controlled entities
Taxation
Short term borrowings
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Net assets per share attributable to equity holders of the Company (RM)
33 1,630,364 1,277,658
34 184,404 189,779
35 79,730 88,606
36
37
535
-
-
482
23,940
12,099
142,236
15,195
6,322
306,039
2,072,773 1,883,599 535
-
-
-
279
-
-
761
2,172,163 1,997,358 535 761
7,505,152 7,098,898 2,273,642 2,175,153
-
-
9.71
9.29
-
-
-
187
The notes on pages 193 to 283 form part of these financial statements.

Consolidated Statement Of Changes In Equity
For The Financial Year Ended 31 March 2010
188
At 1 April 2009
Net income recognised directly in equity
- Foreign exchange
differences on
translation of
foreign operations
Profit for the financial year
Total recognised income and expense for the financial year
At 31 March 2010
Note
Share capital
RM’000
Capital reserve
RM’000
549,213 475,617
Attributable to equity holders of the Company
Asset revaluation
reserve
Foreign exchange
reserve
Retained
earnings Total
RM’000 RM’000 RM’000 RM’000
2,362 (79,512) 4,153,860 5,101,540
-
-
-
549,213
-
-
-
475,617
-
-
-
2,362
12,517
-
12,517
-
218,932
218,932
12,517
218,932
231,449
(66,995) 4,372,792 5,332,989
At 1 April 2008
Net income recognised directly in equity
- Foreign exchange
differences on
translation of
foreign operations
Loss for the financial year
Total recognised income and expense for the financial year
Interim dividend for the financial year ended
31 March 2009
At 31 March 2009
12
549,213 475,617
-
-
-
-
549,213
-
-
-
-
475,617
2,362 (82,197) 4,476,261 5,421,256
-
-
-
-
2,362
2,685
-
2,685
-
2,685
(301,806) (301,806)
(301,806) (299,121)
(20,595) (20,595)
(79,512) 4,153,860 5,101,540
The notes on pages 193 to 283 form part of these financial statements.

Company Statement Of Changes In Equity
For The Financial Year Ended 31 March 2010
At 1 April 2009
Profit for the financial year
At 31 March 2010
At 1 April 2008
Profit for the financial year
Interim dividend for the financial year ended 31 March 2009
At 31 March 2009
Note
12
Issued and fully paid ordinary shares Distributable
Number of shares
Nominal value of
RM1 each
Retained earnings
‘000
549,213
RM’000 RM’000
Total
RM’000
549,213 1,625,179 2,174,392
549,213
98,715 98,715
549,213 1,723,894 2,273,107
549,213
-
549,213
-
549,213
-
-
1,278,604
367,170
(20,595)
1,827,817
367,170
(20,595)
549,213 1,625,179 2,174,392
189
The notes on pages 193 to 283 form part of these financial statements.

Cash Flow Statements
For The Financial Year Ended 31 March 2010
190
CASH FLOWS FROM
OPERATING ACTIVITIES
Profit/(loss) for the financial year
Adjustments for:
Taxation
Property, plant and equipment:
- depreciation
- written off
- impairment
- reversal of impairment
- (gain)/loss on disposal
Write down of inventories
Impairment of investment in an associated company
Investment:
- reversal of impairment
- provision for diminution in value
Intangible assets:
- amortisation
- impairment
- written off
Interest expense
Interest income
Share of results of associated companies
Share of results of jointly controlled entities
Current investments:
- loss on disposal
- provision for diminution in value
Reversal of allowance for doubtful debts
Bad debts written off
Allowance for doubtful debts
Loss/(gain) on unrealised foreign exchange
Cash from operations
(carried forward)
Note
2010
RM’000
Group
2009
RM’000
2010
RM’000
Company
2009
RM’000
(301,806)
(17,395)
450,346
38,746
257,674
(1,616)
19,417
114,950
6,678
48,493
20,802
-
14,408
(42,089)
(20,220)
(14,594)
-
-
44
1,084
(63,315)
-
45,616
(8,284)
548,939
218,932
41,961
432,612
23,806
6,000
(53,447)
(2,645)
80,128
-
(2,100)
10,397
81,688
-
55,814
12,053
(28,546)
(5,535)
(13,235)
19
282
(23,534)
19,359
27,183
26,617
907,809
367,170
1,179
363,731
-
-
-
-
-
-
-
-
(4,618)
-
-
-
-
-
-
-
-
-
-
-
-
-
98,715
563
100,216
-
-
-
-
-
-
(2,100)
6,475
-
-
(3,437)
-
-
-
-
-
-
-
-
-
-
-

Cash Flow Statements
For The Financial Year Ended 31 March 2010 (continued)
CASH FLOWS FROM OPERATING
ACTIVITIES (continued)
Cash from operations
(brought forward)
Provision for warranties
Provision for onerous contract
Research and development grant
Provision/(reversal) for retirement benefits
Amortisation of capital grant
Dividend income
Cash from/(used in) operations before working capital changes
Changes in working capital:
Inventories
Receivables
- trade and other receivables
- subsidiary companies
- associated companies and
jointly controlled entities
Payables
- trade and other payables
- provisions
- subsidiary companies
- associated companies and
jointly controlled entities
Cash generated from/
(used in) operations
Tax paid
Tax refund
Interest received
Interest paid
Retirement benefits paid
Net cash flow generated from/
(used in) operating activities
Note
2010
RM’000
66,773
-
(16,928)
313,480
(49,651)
-
(170)
1,191,775
(38,389)
126,444
27,282
(8,009)
(9,013)
1,290,090
907,809
45,968
-
(143,688)
4,970
(31,255)
(915)
782,889
95,382
Group
2009
RM’000
548,939
45,149
22,139
(80,656)
(8,042)
(21,646)
(1,260)
504,623
(445,982)
161,578
-
(14,688)
139,693
(102,257)
-
6,606
249,573
(31,550)
9,717
47,047
(12,394)
(9,369)
253,024
2010
RM’000
Company
2009
RM’000
363,731
-
-
-
-
-
(362,357)
1,374
-
(131)
7,307
-
(93)
-
(7,936)
521
-
(704)
-
4,618
-
-
4,435
100,216
-
-
-
-
-
(101,203)
(987)
-
-
(62,742)
(350)
53
-
-
-
(64,026)
(1,057)
-
2,833
-
-
(62,250)
191

Cash Flow Statements
For The Financial Year Ended 31 March 2010 (continued)
192
Note
2010
RM’000
Group
2009
RM’000
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of property, plant and equipment
Proceeds from acquisition of a subsidiary company
Purchase of intangible assets
Purchase of current investments
Proceeds from disposal of current investments
Proceeds from disposal of property, plant and equipment
Dividends received
Net cash flow (used in)/generated from investing activities
17
(145,330)
(271,707)
5,336
6,469
12,959
-
-
(392,273)
(426,509)
3,998
(237,632)
(58)
4,439
29,073
20,590
(606,099)
CASH FLOWS FROM
FINANCING ACTIVITIES
Dividend paid
Proceeds from borrowings
Advances to a subsidiary company
Lease and hire purchase creditors installments paid
Repayment of borrowings
Receipt of restricted ADF
Release of restricted ADF
Net cash flows (used in)/generated from financing activities
NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIVALENTS
EFFECTS OF EXCHANGE
DIFFERENCES
CASH AND CASH EQUIVALENTS
AT THE BEGINNING OF THE
FINANCIAL YEAR
CASH AND CASH EQUIVALENTS AT
THE END OF THE FINANCIAL YEAR
12
43
211,358
-
-
(4,368)
(386,739)
60,777
(54,732)
(173,704)
724,113
(17,387)
899,383
1,606,109
(20,595)
356,506
(6,113)
(195,421)
681
(31,557)
103,501
-
(249,574)
(24,982)
1,173,939
899,383
The notes on pages 193 to 283 form part of these financial statements.
2010
RM’000
-
-
-
101,203
101,203
-
-
-
209,423
248,376
Company
2009
RM’000
38,953
-
-
-
-
-
-
-
-
-
(20,595)
-
(177,870)
-
-
-
-
(198,465)
183,127
-
377,157
-
377,157
-
-
-
-
-
26,296
209,423

Notes To The Financial Statements
31 March 2010
1 GENERAL INFORMATION
The Company is principally involved in investment holding activities.
The principal activities of the subsidiary companies, associated companies and jointly controlled entities are set out in Notes 17 to 19 to the financial statements. There have been no significant changes in the activities of the Group and Company during the financial year.
The Company is a public limited liability company incorporated, and domiciled in Malaysia, and listed on the Main Market of Bursa Malaysia Securities Berhad.
The address of the registered office and the principal place of business of the Company is:
Centre of Excellence
KM 33.8, Westbound Shah Alam Expressway
47600 Subang Jaya
Selangor Darul Ehsan
Malaysia
2 BASIS OF PREPARATION
During the financial year, the Group recorded a net profit of RM219 million (2009: net loss for the financial year of RM302 million) which was substantially due to the introduction of more saleable models with better profit margins, and to a lesser extent, write-back of impairment of property, plant and equipment no longer required. The loss in the previous financial year arose largely from the inclusion of impairment of property, plant and equipment and intangible assets amounting to RM278 million and inventories writedown of RM82 million relating to certain vehicle models which were impacted by contraction in sales volume.
Going concern assumption
The Directors are of the opinion that the use of the going concern assumption in the preparation of the financial statements is appropriate based on the approved Group business plans and available financing arrangements. This includes efforts to control cash flows and the introduction of a new model as replacement for aged models, as well as refreshers during the current financial year.
The Directors expect the Group to continue to operate as a going concern and accordingly, the assets and liabilities of the Group and Company are recorded on the basis that the Group and Company will be able to realise its assets and discharge its liabilities in the normal course of business.
193

Notes To The Financial Statements
31 March 2010 (continued)
194
2 BASIS OF PREPARATION (continued)
Estimates and judgements
The preparation of financial statements requires the Directors to make estimates and judgements that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the financial year. It also requires the Directors to exercise their judgements in the process of applying the
Group’s and the Company’s accounting policies. Although these estimates and judgements are based on the Directors’ best knowledge of current events and actions, actual results may differ.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Group’s financial statements are disclosed in Note 4 to the financial statements.
Financial Reporting Standards
The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Companies Act, 1965 and comply with the Financial Reporting Standards (‘FRSs’),
Malaysian Accounting Standard Board (‘MASB’) Approved Accounting Standards in Malaysia for Entities
Other than Private Entities.
The financial statements of the Group and Company have been prepared under the historical cost convention
(as modified by the revaluation of certain freehold land), unless otherwise indicated in the summary of significant accounting policies.
(a) Standards, amendments to published standards and Issues Committee (‘IC’) interpretations that are effective and applicable to the Group
There are no new accounting standards, amendments to published standards and interpretations to existing standards effective for the financial year beginning 1 April 2009.
(b) Standards, amendments to published standards and IC interpretations that are not yet effective and have not been early adopted
The new standards and interpretations that are applicable to the Group and the Company, but which the Group and the Company have not early adopted:
• FRS 3 “Business Combinations” (effective prospectively from 1 July 2010). The revised standard continues to apply the acquisition method to business combinations, with some significant changes. That is, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the income statement. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be expensed.
The adoption of this standard is not expected to have a material impact on the Group’s and the
Company’s financial statements since the application is prospective.

Notes To The Financial Statements
31 March 2010 (continued)
2 BASIS OF PREPARATION (continued)
(b) Standards, amendments to published standards and IC interpretations that are not yet effective and have not been early adopted (continued)
• FRS 5 “Non-current Assets Held for Sale and Discontinued Operations”
- Improvement (effective from 1 January 2010) clarifies that FRS 5 disclosures apply to non-current assets or disposal groups that are classified as held for sale and discontinued operations.
- Improvement (effective from 1 July 2010) clarifies that all of a subsidiary’s assets and liabilities are classified as held for sale if a partial disposal sale plan results in loss of control.
Relevant disclosure should be made for this subsidiary if the definition of a discontinued operation is met.
The adoption of this standard is not expected to have a material impact on the Group’s and the
Company’s financial statements.
• Amendments to FRS 7 “Financial Instruments: Disclosure” and FRS 1 “First-time adoption of financial reporting standards” (effective from 1 January 2011) requires enhanced disclosures of fair value measurement and liquidity risk. In particular, the amendment requires disclosure of fair value measurements by level of a fair value measurement hierarchy.
FRS 7 “Financial Instruments: Disclosures” (effective from 1 January 2010) provides information to users of financial statements about an entity’s exposure to risks and how the entity manages those risks.
The improvement to FRS 7 clarifies that entities must not present total interest income and expense as a net amount within finance costs on the face of the income statement. The Group and the Company have applied the transitional provision in FRS 7, Amendments and Improvement to FRS 7 which exempts entities from disclosing the possible impact arising from the initial application of this standard on the financial statements.
• FRS 8 “Operating Segments” replaces FRS 114
2004
Segment Reporting (effective from 1 July
2009). The new standard requires a ‘management approach’, under which segment information is presented on the same basis as that used for internal reporting purposes. The improvement to FRS 8 (effective from 1 January 2010) clarifies that entities that do not provide information about segment assets to the chief operating decision-maker will no longer need to report this information. Prior year comparatives must be restated. The adoption of this standard is not expected to have a material impact on the Group’s and the Company’s financial statements.
195

Notes To The Financial Statements
31 March 2010 (continued)
196
2 BASIS OF PREPARATION (continued)
(b) Standards, amendments to published standards and IC interpretations that are not yet effective and have not been early adopted (continued)
• FRS 101 “Presentation of Financial Statements” (effective from 1 January 2010) prohibits the presentation of items of income and expenses (that is, ‘non-owner changes in equity’) in the statement of changes in equity. ‘Non-owner changes in equity’ are to be presented separately from owner changes in equity. All ‘non-owner changes in equity’ will be required to be shown in a performance statement, but entities can choose whether to present one performance statement
(the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income).
Where entities restate or reclassify comparative information, they will be required to present a restated balance sheet as at the beginning comparative period in addition to the current requirement to present balance sheets at the end of the current period and comparative period.
The adoption of this standard is not expected to have a material impact on the Group’s and the
Company’s financial statements.
• FRS 107 “Statement of Cash Flows” (effective from 1 January 2010) clarifies that only expenditure resulting in a recognised asset can be categorised as a cash flow from investing activities. The adoption of this standard is not expected to have a material impact on the Group’s and the Company’s financial statements.
• FRS 108 “Accounting Policies, Changes in Accounting Estimates and Errors” (effective from
1 January 2010) clarifies the use of implementation guidance in the standard. The adoption of this standard is not expected to have a material impact on the Group’s and the Company’s financial statements.
• FRS 110 “Events after the Balance Sheet date” (effective from 1 January 2010) reinforces existing guidance that a dividend declared after the reporting date is not a liability of an entity at that date given that there is no obligation at that time. The adoption of this standard is not expected to have a material impact on the Group’s and the Company’s financial statements.
• FRS 117 “Leases” (effective from 1 January 2010) clarifies that the default classification of the land element in a land and building lease is no longer an operating lease. As a result, leases of land should be classified as either finance or operating, using the general principles of FRS 117.
The adoption of this standard is not expected to have a material impact on the Group’s and the
Company’s financial statements.
• FRS 118 “Revenue” (effective from 1 January 2010) provides more guidance when determining whether an entity is acting as a ‘principal’ or as an ‘agent’. The adoption of this standard is not expected to have a material impact on the Group’s and the Company’s financial statements.

Notes To The Financial Statements
31 March 2010 (continued)
2 BASIS OF PREPARATION (continued)
(b) Standards, amendments to published standards and IC interpretations that are not yet effective and have not been early adopted (continued)
• FRS 119 “Employee Benefits” (effective from 1 January 2010) clarifies that a plan amendment that results in a change in the extent to which benefit promises are affected by future salary increases is a curtailment, while an amendment that changes benefits attributable to past service gives rise to a negative past service cost if it results in a reduction in the present value of the defined benefit obligation. The definition of return on plan assets has been amended to state that plan administration costs are deducted in the calculation of return on plan assets only to the extent that such costs have been excluded from measurement of the defined benefit obligation.
The adoption of this standard is not expected to have a material impact on the Group’s and the
Company’s financial statements.
• FRS 120 “Accounting for Government Grants” (effective from 1 January 2010) clarifies that the benefit of a below market rate government loan is accounted for in accordance with FRS 120.
The adoption of this standard is not expected to have a material impact on the Group’s and the
Company’s financial statements.
• FRS 123 “Borrowing Costs” which replaces FRS 123
2004
(effective from 1 January 2010) requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset. The option of immediately expensing those borrowing costs is removed. The improvement to FRS 123 clarifies that the definition of borrowing costs includes interest expense calculated using the effective interest method defined in FRS 139.
The adoption of this standard is not expected to have a material impact on the Group’s and the
Company’s financial statements.
• FRS 127 “Consolidated and Separate Financial Statements”
- Amendment (effective from 1 January 2010) deals with situations where a parent reorganises its group by establishing a new entity as its parent. Under the new rules, the new parent measures the cost of its investment in the original parent at the carrying amount of its share of the equity items shown in the separate financial statements of the original parent at the reorganisation date.
- FRS 127 removes the requirement for a parent entity to recognise dividends only to the extent that it represents distributions from profits of the investee arising after acquisition, with any excess dividends recognised as a reduction of the loss of investments.
- Amendment (effective from 1 January 2010) clarifies that where an investment in a subsidiary that is accounted for under FRS 139 is classified as held for sale under FRS 5,
FRS 139 would continue to be applied.
- Amendment (effective prospectively from 1 July 2010) requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in the income statements.
The adoption of this standard is not expected to have a material impact on the Group’s and the
Company’s financial statements.
197

Notes To The Financial Statements
31 March 2010 (continued)
198
2 BASIS OF PREPARATION (continued)
(b) Standards, amendments to published standards and IC interpretations that are not yet effective and have not been early adopted (continued)
• FRS 128 “Investments in Associates”
- Amendment (effective from 1 January 2010) clarifies that an investment in an associated company is treated as a single asset for impairment testing purposes. Reversals of impairment are recorded as an adjustment to the carrying amount of the investment to the extent that the recoverable amount of the associated company increases.
- Amendment to FRS 128 “Investments in Associates” and FRS 131 “Interests in joint ventures” (consequential amendments to FRS 132 “Financial instruments: Presentation” and FRS 7 “Financial instruments: Disclosure”) (effective from 1 January 2010) clarify that where an investment in associate or joint venture is accounted for in accordance with FRS
139, only certain, rather than all disclosure requirements in FRS 128 or FRS 131 need to be made in addition to disclosures required by FRS 132 and FRS 7.
The adoption of this standard is not expected to have a material impact on the Group’s and the
Company’s financial statements.
• FRS 132 “Financial instruments: Presentation”
- Amendment (effective from 1 January 2010) removes the transitional provision that exempted entities from applying the component part classification for a compound instrument issued before 1 January 2003. Upon adoption of FRS 139, entities are required to classify the compound financial instruments into its liability and equity elements.
- Amendment (effective from 1 March 2010) on classification of rights issues addresses accounting for rights issues that are denominated in a currency other than the functional currency of the issuer. Provided certain conditions are met, such rights are now classified as equity instruments instead of as derivative liabilities, regardless of the currency in which the exercise price is denominated.
The adoption of this standard is not expected to have a material impact on the Group’s and
Company’s financial statements.
• FRS 134 “Interim Financial Reporting” (effective from 1 January 2010) clarifies that basic and diluted earnings per share (‘EPS’) must be presented in an interim report only in the case when the entity is required to disclose EPS in its annual report. The adoption of this standard is not expected to have a material impact on the Group’s and Company’s financial statements.
• FRS 136 “Impairment of Assets” (effective from 1 January 2010) clarifies that the largest cash-generating unit (or group of units) to which goodwill should be allocated for the purposes of impairment testing is an operating segment before the aggregation of segments with similar economic characteristics. The improvement also clarifies that where fair value less costs to sell is calculated on the basis of discounted cash flows, disclosures equivalent to those for value in use should be made. The adoption of this standard is not expected to have a material impact on the Group’s financial statements.

Notes To The Financial Statements
31 March 2010 (continued)
2 BASIS OF PREPARATION (continued)
(b) Standards, amendments to published standards and IC interpretations that are not yet effective and have not been early adopted (continued)
• FRS 138 “Intangible Assets”
- Improvement (effective from 1 January 2010) clarifies that a prepayment may only be recognised in the event that payment has been made in advance of obtaining right of access to goods or receipt of services. It confirms that the unit of production method of amortisation is allowed.
- Improvement (effective from 1 July 2010) clarifies that a group of complementary intangible assets acquired in a business combination is recognised as a single asset if the individual asset has similar useful lives.
The adoption of this standard is not expected to have a material impact on the Group’s and the
Company’s financial statements.
• FRS 139 “Financial Instruments: Recognition and Measurement” (effective from 1 January
2010). This new standard established principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. Hedge accounting is permitted only under strict circumstances. The amendments to FRS 139 provide further guidance on eligible hedged items. The amendment provides guidance for two situations. On the designation of a one-sided risk in a hedged item, the amendment concludes that a purchased option designated in its entirety as the hedging instrument of a one-sided risk will not be perfectly effective. The designation of inflation as a hedged risk or portion is not permitted unless in particular situations. The improvement to FRS 139 clarifies that the scope exemption in FRS
139 only applies to forward contracts but not options for business combinations that are firmly committed to being completed within a reasonable timeframe.
The Group and the Company have applied the transitional provision in FRS 139 which exempts entities from disclosing the possible impact arising from the initial application of this standard on the financial statements.
• IC Interpretation 4 “Determining whether an Arrangement contains a Lease” (effective from
1 January 2011) requires the Group to idenfity any arrangement that does not take the legal form of a lease, but conveys a right to use an asset in return for a payment or series of payments.
The interpretion provides guidance for determining whether such arrangements are, or contain, leases.
The assessment is based on the substance of the arrangement and requires assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset and the arrangement conveys a right to use the asset. If the arrangement contains a lease, the requirements of FRS 117, “Leases” should be applied to the lease element of the arrangement.
The impact of the adoption of this standard is currently being quantified by management and cannot be reasonably estimated at this point in time.
199

Notes To The Financial Statements
31 March 2010 (continued)
200
2 BASIS OF PREPARATION (continued)
(b) Standards, amendments to published standards and IC interpretations that are not yet effective and have not been early adopted (continued)
• IC Interpretation 9 “Reassessment of Embedded Derivatives” (effective from 1 January 2010) requires an entity to assess whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative when the entity first becomes a party to the contract. Subsequent reassessment is prohibited unless there is a change in the terms of the contract that significantly modifies the cash flows that otherwise would be required under the contract, in which case reassessment is required.
The improvement to IC Interpretation 9 (effective from 1 July 2010) clarifies that this interpretation does not apply to embedded derivatives in contracts acquired in a business combination, businesses under common control or the formation of a joint venture.
The Group and the Company have applied the transitional provision in IC Interpretation 9 which exempts entities from disclosing the possible impact arising from the initial application of this standard on the financial statements.
• IC Interpretation 10 “Interim Financial Reporting and Impairment” (effective from 1 January
2010) prohibits the impairment losses recognised in an interim period on goodwill and investments in equity instruments and in financial assets carried at cost to be reversed at a subsequent balance sheet date. The adoption of this standard is not expected to have a material impact on the Group’s and the Company’s financial statements.
• IC Interpretation 13, “Customer Loyalty Programmes” (effective from 1 January 2010) explains how entities that grant loyalty award points to its customers should account for their obligation to provide free or discounted goods or services if and when the customers redeem the points.
The adoption of this standard is not expected to have a material impact on the Group’s and the
Company’s financial statements.
• IC Interpretation 14, FRS 119: “The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interactions” (effective from 1 January 2010) addresses how entities should determine the limit placed on the amount of a surplus in a pension plan they can recognise as an asset. Also, it addresses how a minimum funding requirement affects that limit and when a minimum funding requirement creates an onerous obligation that should be recognised as a liability in addition to that otherwise recognised under FRS 119. The adoption of this standard is not expected to have a material impact on the Group’s and the Company’s financial statements.

Notes To The Financial Statements
31 March 2010 (continued)
2 BASIS OF PREPARATION (continued)
(c) Standards, amendments to published standards and interpretations that are not yet effective and not relevant to the Group’s operations
• The amendment to FRS 1 “First-time adoption of Financial Reporting Standards” and FRS 127
“Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly controlled entity or Associate” (effective from 1 January 2010)
• The amendment to FRS 1: “Additional Exemptions for the First time Adopters” (effective from
1 January 2011)
• FRS 2 “Share Based Payment” (Amendment) (effective from 1 January 2010) and the improvement to FRS 2 (effective from 1 July 2010)
• The amendment to FRS 2: “ Group Cash-settled Share Based Payment Transactions “ (effective from 1 January 2011)
• FRS 4 “Insurance Contracts” (effective from 1 January 2010)
• FRS 116 “Property, Plant and Equipment” (consequential amendment to FRS 107 “Statement of Cash Flows”) and a consequential amendment to FRS 107 (effective from 1 January 2010)
• FRS 129 “Financial Reporting in Hyperinflationary Economies” (effective from 1 January
2010)
• FRS 132 “Financial Instruments: Presentation” (effective from 1 March 2010) and
FRS 101 (revised) “Presentation of Financial Statements” - “Puttable Financial Instruments and
Obligations Arising on Liquidation” (effective from 1 January 2010)
• FRS 140 “Investment Property” (effective from 1 January 2010)
• IC Interpretation 11, FRS 2: “Group and Treasury Share Transactions” (effective from 1 January
2010)
• IC Interpretation 12 “Service Concession Arrangements” (effective from 1 July 2010)
• IC Interpretation 15 “Agreements for Construction of Real Estates” (effective from
1 July 2010)
• IC Interpretation 16 “Hedges of a Net Investment in a Foreign Operation” (effective from
1 July 2010)
• IC Interpretation 17 “Distribution of Non-cash Assets to Owners” (effective from 1 July 2010)
• IC Interpretation 18 “Transfers of Assets from Customers” (effective from 1 January 2011)
201

Notes To The Financial Statements
31 March 2010 (continued)
202
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial statements.
(a) Economic entities in the Group
(i) Subsidiary companies
Subsidiary companies are those corporations, partnerships or other entities in which the Group has the power to exercise control over the financial and operating policies so as to obtain benefits from their activities, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.
Investments in subsidiary companies are stated at cost less accumulated impairment losses. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. The accounting policy on Impairment of Assets is set out in Note 3(u).
Prior to 1 January 2006, the Group applied both the purchase method and the merger method to account for Business Combinations in accordance with prior financial reporting standards.
With effect from 1 January 2006, only the purchase method of accounting is used to account for
Business Combinations in accordance with FRS 3.
The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date irrespective of the interest of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. The accounting policy on goodwill is set out in Note 3(d)(i). If the cost of acquisition is less than the fair value of the net assets of the subsidiary company acquired, the difference is recognised as a gain in the Consolidated Income Statements.
Subsidiary companies are consolidated from the date on which control is transferred to the
Group. They are de-consolidated from the date that control ceases.
Uniform accounting policies for like transactions and other events in similar circumstances are used by all companies in the Group in preparing the Consolidated Financial Statements. The financial statements of all companies within the Group used in the preparation of the Consolidated
Financial Statements are prepared as of the same reporting date.
Inter-company balances, inter-company transactions and unrealised gains on transactions between Group companies are eliminated in full. Unrealised losses are also eliminated in full unless the assets transferred are impaired.

Notes To The Financial Statements
31 March 2010 (continued)
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(a) Economic entities in the Group (continued)
(i) Subsidiary companies (continued)
Minority interests represent that portion of the profit or loss and net assets of a subsidiary company attributable to equity interests that are not owned, directly or indirectly through the subsidiary companies by the parent. It is measured at the minorities’ share of the fair values of the subsidiary companies’ identifiable assets and liabilities at the acquisition date and the minorities’ share of changes in the subsidiary companies’ equity since that date.
The gain or loss on disposal of a subsidiary company is the difference between the net disposal proceeds and the Group’s share of the subsidiary company’s net assets as of the date of disposal, including the cumulative amount of any exchange differences that relate to that subsidiary company which were previously recognised in equity, and is recognised in the Consolidated
Income Statements.
(ii) Transactions with minority interests
Disposal of equity shares to minority interests for cash consideration and at fair value resulting in gain or loss for the Group is recorded in the Consolidated Income Statements. The gain or loss is the difference between the Group’s share of net assets immediately before and after the disposal and a portion of goodwill is realised.
For purchase of equity shares from minority interests for cash consideration and at fair value, the accretion of the Group’s interest in the subsidiary company is treated as purchase of equity interest under acquisition method of accounting. The identifiable assets and liabilities acquired are adjusted to their fair values and the difference is recognised as goodwill.
For purchases or disposals from or to minority interest other than for cash and not at fair value, the accretion or dilution of the Group’s interests is treated as equity transactions between the subsidiary company and its shareholders. The gain or loss is recorded in the Group’s reserves.
The gain or loss is the difference between the Group’s share of net assets immediately before and after the disposal and the purchase consideration received or paid.
(iii) Associated companies
Associated companies are those corporations, partnerships or other entities in which the Group exercises significant influence, but which it does not control. Significant influence is the power to participate in the financial and operating policy decisions of the associated companies but not the power to exercise control over those policies.
203

Notes To The Financial Statements
31 March 2010 (continued)
204
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(a) Economic entities in the Group (continued)
(iii) Associated companies (continued)
Investments in associated companies are stated at cost. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. The accounting policy on Impairment of Assets is set out in Note 3(u).
In the Consolidated Financial Statements, investments in associated companies are accounted for using the equity method. Under the equity method, the Group’s share of its associated companies’ post-acquisition results is recognised in the Consolidated Income Statements, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted to the carrying amount of the investment. When the
Group’s share of losses in an associated company equals or exceeds its cost of investment in the associated company including any other unsecured receivables, the Group discontinues its share of further losses, unless it has incurred legal or constructive obligations to make payments on behalf of the associated company.
Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the Group’s interest in the associated companies. Unrealised losses are also eliminated unless the assets transferred are impaired.
In applying the equity method, the Group has ensured that uniform accounting policies for like transactions and other events in similar circumstances of the associated companies are used.
The equity method is applied based on the latest financial statements made up to the financial year end of the Group.
(iv) Jointly controlled entities
Jointly controlled entities are corporations, partnerships or other entities over which there is contractually agreed sharing of control by the Group with one or more parties where the strategic financial and operating policy decisions relating to the entity requires unanimous consent of the parties sharing control. The Group’s interests in jointly controlled entities are accounted for in the Consolidated Financial Statements by the equity method of accounting, as disclosed in Note
3(a)(iii).
Investments in jointly controlled entities are stated at cost. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. The accounting policy on Impairment of Assets is set out in Note 3(u).
The Consolidated Income Statements include the Group’s share of results of the jointly controlled entities based on the financial statements made up to the financial year end of the Group. The cumulative post-acquisition movements are adjusted to the carrying amount of the investment.

Notes To The Financial Statements
31 March 2010 (continued)
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(a) Economic entities in the Group (continued)
(iv) Jointly controlled entities (continued)
Unrealised gains on transactions between the Group and its jointly controlled entities are eliminated to the extent of the Group’s interest in the jointly controlled entities. Unrealised losses are also eliminated unless the assets transferred are impaired.
In applying the equity method, the Group has ensured that uniform accounting policies of jointly controlled entities for like transactions and other events in similar circumstances are used. The equity method is applied based on the latest financial statements made up to the financial year end of the Group.
(b) Investments
The Group uses its judgement to determine the classification of its investments into current and non-current. An investment is classified as current if it is readily realisable and it is held for trading or intended to be realised within 12 months after the balance sheet date. All other investments are classified as non-current.
Non-current investments are shown at cost and an allowance for diminution in value is made where, in the opinion of the Directors, there is a decline other than temporary in the value of such investments.
Where there has been a decline other than temporary in the value of an investment, such a decline is recognised as an expense in the period in which the decline is identified.
Quoted and unquoted current investments are carried at the lower of cost and market value, determined on an aggregate portfolio basis by category of investments. Cost is derived at on the weighted average basis whilst market value is calculated by reference to stock exchange quoted selling prices at the close of business on the balance sheet date. Increases/decreases in the carrying amount of current investments are credited/charged to the Consolidated Income Statements.
On disposal of an investment, the difference between net disposal proceeds and its carrying amount is credited/charged to the Consolidated Income Statements.
(c) Property, plant and equipment
Property, plant and equipment are tangible items that:
I. are held for use in the production or supply of goods or services, or for administrative purposes; and
II. are expected to be used during more than one period.
205

Notes To The Financial Statements
31 March 2010 (continued)
206
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Property, plant and equipment (continued)
(i) Cost
Property, plant and equipment are initially stated at cost. Cost includes expenditure that is directly attributable to the acquisition of the items and bringing them to the location and condition so as to render them operational in the manner intended by the Group. The Group allocates the initial cost of an item of property, plant and equipment to its significant component parts.
A piece of freehold land held by the Group is stated at the Directors’ valuation based on a 1983 independent professional valuation of the open market value of the land on an existing use basis.
The surplus arising on revaluation was credited directly to capital reserves and subsequently utilised.
The Group has adopted the transitional provision of FRS 116 which allows the freehold land to be stated at the amount revalued on 5 September 1983. All other land held by the Group is stated at cost.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the
Consolidated Income Statements during the financial period in which they are incurred.
(ii) Depreciation
Freehold land is not depreciated as it has an infinite life. Depreciation of other property, plant and equipment is provided for on a straight line basis to write off the cost or valuation of each asset to its residual value over its estimated useful life. The assets’ residual values, useful lives and depreciation method are reviewed annually and revised if appropriate.
The principal estimated useful lives of depreciation used are as follows:
Buildings
Plant and machinery
Office equipment, furniture, fittings and vehicles
15-50 years
5-20 years
2-10 years
During the financial year, the depreciation method of dies and jigs, which are included under plant and machinery has been revised to the straight line basis from unit of production basis. The revision in the basis of depreciation is to better reflect the respective assets product life cycle.
As a result, an additional depreciation charge of RM15.8 million has been recognised in the
Consolidated Income Statements during the year.

Notes To The Financial Statements
31 March 2010 (continued)
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Property, plant and equipment (continued)
(ii) Depreciation (continued)
Work-in-progress is not depreciated. Upon completion, the related costs will be transferred to the respective categories of assets. Depreciation on work-in-progress commences when the assets are ready for their intended use.
(iii) Impairment
Where an indication of impairment exists, the carrying amount of the assets is assessed and written down immediately to its recoverable amount if the carrying amount exceeds the recoverable amount. The accounting policy on Impairment of Assets is set out in Note 3(u).
(iv) Gains or losses on disposals
Gains or losses on disposals are determined by comparing proceeds with their related carrying amounts and are included in profit/(loss) from operations.
(v) Repairs and maintenance
Repairs and maintenance are charged to the Consolidated Income Statements during the period in which they are incurred. The cost of major renovations are included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related assets.
(d) Intangible assets
(i) Goodwill
Goodwill is carried at cost less accumulated impairment losses. Goodwill is tested for impairment at least annually, or when events or circumstances occur indicating that an impairment may exist. Impairment of goodwill is charged to the Consolidated Income Statements as and when it arises. Impairment losses on goodwill are not reversed. Gains or losses on the disposal of an entity includes the carrying amount of goodwill relating to the entity disposed.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each cashgenerating unit or a group of cash-generating units represents the lowest level within the Group at which goodwill is monitored for internal management purposes and which are expected to benefit from the synergies of the combination. The Group allocates goodwill to each business segment in each country in which it operates.
207

Notes To The Financial Statements
31 March 2010 (continued)
208
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Intangible assets (continued)
(i) Goodwill (continued)
Goodwill on acquisition of associated companies and jointly controlled entities are included in the carrying value of the investment in associated companies and jointly controlled entities respectively. Such goodwill is tested for impairment as part of the overall balance.
(ii) Computer software
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific computer software. These costs are amortised over their estimated useful lives of 3 to 5 years.
Costs associated with developing or maintaining computer software programmes are recognised as an expense when incurred. Costs that are directly associated with identifiable and unique software products controlled by the Group, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Costs include employee costs incurred as a result of developing software and an appropriate portion of relevant overheads.
Computer software development costs recognised as assets are amortised using the straight line method over their estimated useful lives, not exceeding a period of 3 years.
(iii) Research and development cost
Expenditure in connection with research activities (research expenditure) is recognised as an expense when incurred. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when the following criteria for recognition are fulfilled:
(i) It is technically feasible to complete the intangible asset so that it will be available for use or sale;
(ii) Management’s intention to complete the intangible asset for use or sale;
(iii) There is an ability to use or sell the intangible asset;
(iv) It can be demonstrated that the intangible asset will generate probable future economic benefits;
(v) Adequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available; and
(vi) The expenditure attributable to the intangible asset during its development can be reliably measured.

Notes To The Financial Statements
31 March 2010 (continued)
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Intangible assets (continued)
(iii) Research and development cost (continued)
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Development expenses capitalised include costs incurred in the development from the date it first meets the recognition criteria and up to the completion of the development project and commencement of commercial production. Capitalised development cost is stated at cost less accumulated amortisation and accumulated impairment losses, if any. Similar to the depreciation of dies and jigs in Note 3(c)(ii), the amortisation method has been revised. During the financial year the amortisation of research and development cost has been revised to the straight line basis over its useful life, which does not exceed 7 years for vehicles and 10 years for mechanical parts. Previously, amortisation was based on the unit of production basis, arising from the change an additional amortisation charge of RM11.1 million has been recognised in the
Consolidated Income Statements during the year. The revision in the amortisation method was applied to better reflect the respective assets product life cycle.
(e) Leases
Leases of property, plant and equipment and intangible assets where the Group assumes substantially all the benefits and risks or ownership are classified as finance leases.
Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property, plant and equipment and intangible assets, and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a periodic constant rate of interest on the balance outstanding. The corresponding obligations, net of finance charges, are included in borrowings. The interest element of the finance charge is charged to the Consolidated Income Statements over the lease period.
Property, plant and equipment and intangible assets acquired under finance leases are included in tangible property, plant and equipment and intangible assets and are depreciated in accordance with
Note 3(c)(ii) and Note 3(d)(ii) above respectively.
(f) Prepaid land lease payment
Leasehold land that normally has a finite economic life and title is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted as prepaid land lease payment that is amortised over the lease term in accordance with the pattern of benefits provided.
209

Notes To The Financial Statements
31 March 2010 (continued)
210
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(g) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes the actual cost of materials and incidentals in bringing the inventories to their present location and condition, and is determined either on the first-in first-out basis and weighted average basis depending on the nature of inventory. Cost of vehicles for sales are determined on a specific identification basis. Cost of parts and accessories is determined on a weighted average basis. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution. In arriving at net realisable value, due allowance is made for obsolete, slow moving or defective inventories.
In the case of work-in-progress and finished vehicles, an appropriate proportion of production overheads is included in the costs based on normal operating capacity and is determined on a weighted average basis.
(h) Trade and other receivables
Trade and other receivables are carried at anticipated net realisable value. Allowances are made for doubtful debts based on specific reviews of outstanding balances at the balance sheet date. General allowances are made to cover possible losses, which are not specifically identified. Bad debts are written off to the Consolidated Income Statements during the financial period in which they are identified.
(i) Non-current assets classified as assets held for sale
Non-current assets are classified as assets held for sale when the carrying amount is to be recovered principally through a sale transaction. They are stated at the lower of carrying amount and fair value less costs to sell if the carrying amount is to be recovered principally through a sale transaction rather than through continuing use.
(j) Government grants
Government grants are recognised in the Consolidated Income Statements on a systematic basis over the periods in which the Group recognises as expenses the related cost for which the grants are intended to compensate.
Grants from government are recognised at their fair values where there are reasonable assurances that the grants will be received and the Group will comply with all attached conditions.
Capital grants
Government grants relating to capital expenditure are deferred and recognised in the Consolidated Income
Statements over the period necessary to match them with the costs they are intended to compensate.
Government grants relating to the purchase of plant and equipment are included in non-current liabilities as deferred income and are credited to the Consolidated Income Statements on a straight line basis over the expected lives of the related assets.
Income grants
Income grants are grants other than capital grants and recognised in the Consolidated Income Statements where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.

Notes To The Financial Statements
31 March 2010 (continued)
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(k) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. When the effect of the time value of money is material, the amount of provision is the present value of the expenditure expected to be required to settle the obligation. Provisions are not recognised for future operating losses.
(i) Warranties
Provision is recognised for the estimated liability on all products under warranty in addition to claims already received and verified. Warranties are provided for a period of between one to three years for vehicles sold. The provision is based on experienced levels of claims arising during the period of warranty. When the Group expects warranties to be reimbursed from suppliers, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.
(ii) Onerous contracts
The Group recognises a provision for onerous contracts when the expected benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract or estimated costs of exiting the contract.
(iii) Free services
Provisions for free services are recognised based on expected levels of claims arising during the period when the free services are provided.
(l) Employee benefits
(i) Short term employee benefits
Salaries, wages, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group.
(ii) Post employment benefits
The Group has various post employment benefit schemes in accordance with the local conditions and practices in the countries in which it operates. The Group has both defined contribution and defined benefit plans.
Defined contribution plans
The Group’s contributions to defined contribution plans are charged to the Consolidated Income
Statements in the period to which they relate. Once the contributions have been paid, the Group has no further payment obligations.
211

Notes To The Financial Statements
31 March 2010 (continued)
212
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l) Employee benefits (continued)
(ii) Post employment benefits (continued)
Defined benefit plan
The liability in respect of a defined benefit plan is the present value of the defined benefit obligation at the balance sheet date minus the fair value of plan assets, together with adjustments for actuarial gains/losses and past service cost. The Group determines the present value of the defined benefit obligation and the fair value of any plan assets with sufficient regularity such that the amounts recognised in the financial statements do not differ materially from the amounts that would be determined at the balance sheet date.
The defined benefit obligation, calculated using the projected unit credit method, is determined by independent actuaries on the basis of full triennial valuations and updated annually.
Assumptions were made in relation to the annual investment returns, annual salary increases and annual increases in pension payments.
Plan assets in excess of the defined benefit obligation are subject to the asset limitation test specified in FRS 119.
Actuarial gains and losses arise from experience adjustments and changes in actuarial assumptions.
The amount of net actuarial gains and losses recognised in the Consolidated Income Statements is determined by the corridor method in accordance with FRS 119 and is charged or credited to the Consolidated Income Statements over the average remaining service lives of the related employees participating in the defined benefit plan.
(iii) Termination benefits
Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminate the employment of current employees according to a detailed formal plan without possibility of withdrawal or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.

Notes To The Financial Statements
31 March 2010 (continued)
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(m) Income taxes
Current tax expense is determined according to the tax laws of each jurisdiction in which the Group operates and include all taxes based upon the taxable profits, including withholding taxes payable by a foreign subsidiary company on distributions of retained earnings.
Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amounts attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences or unused tax losses can be utilised.
Deferred tax is recognised on temporary differences arising on investments in subsidiary companies, associated companies and jointly controlled entities except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are not recognised on temporary differences arising from:
(i) goodwill; or
(ii) from the initial recognition of an asset or liability in a transaction which is not a business combination and at time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax is determined using tax rates (and tax laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
(n) Foreign currency transactions and translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using its functional currency, which is the currency of the primary economic environment in which the entity operates (‘the functional currency’). The Consolidated Financial Statements are presented in Ringgit Malaysia, which is the Group’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated
Income Statements.
213

Notes To The Financial Statements
31 March 2010 (continued)
214
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n) Foreign currency transactions and translation (continued)
(iii) Group companies
The results and financial position of all the Group companies (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
- income and expenses for each income statement are translated at average exchange rates
(unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
- all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to shareholders’ equity. Net investment in foreign operations is defined as the amount of the reporting entity’s interest in the net assets of that operation, which includes advances that are assessed as long term in nature. When a foreign operation is disposed of or sold, such exchange differences that were recorded in equity are recognised in the
Consolidated Income Statements as part of the gain or loss on disposal.
(iv) Closing rates
The principal closing rates (units of Malaysian Ringgit per foreign currency) used in translating significant balances at financial year end are as follows:
Foreign currency 31 March 2010 31 March 2009
US Dollar
Sterling Pound
Indonesian Rupiah (100)
Singapore Dollar
Thai Baht
Australian Dollar
Euro
(o) Cash and cash equivalents
3.2725
4.9415
0.0358
2.3388
0.1012
3.0120
4.3940
3.6595
5.2225
0.0313
2.4048
0.1029
2.4935
4.8270
For the purpose of the cash flow statement, cash and cash equivalents comprise cash and bank balances, deposits held at call with banks, other short term, highly liquid investments with original maturities of not more than twelve months, bank overdrafts and pledged deposits. Bank overdrafts are included within borrowings in current liabilities on the Balance Sheet.

Notes To The Financial Statements
31 March 2010 (continued)
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(p) Income recognition
Revenue from sales of vehicles, spare parts and accessories are recognised when significant risks and rewards have been transferred to buyers. Significant risks and benefits are generally deemed to have been transferred upon delivery or acceptance of the goods.
Revenue from rendering of engineering services on long term engineering contracts is recognised on the basis of the stage of completion of such contracts at the financial year end, where the contractual outcome can be assessed with reasonable certainty. Full provision is made for all foreseeable losses on contracts entered into or commenced prior to the financial year end. Amounts are included within receivables and payables to recognise timing differences arising between amounts invoiced and amounts recognised in the Consolidated Income Statements on individual engineering contracts.
Revenue from sale of completed apartments is recognised when the Sale and Purchase Agreements are signed, significant risks and rewards of ownership have been transferred to the buyer and the recovery of the consideration is probable.
Other revenue comprises mainly revenue from rental and royalties, which are recognised on an accrual basis. Interest income is recognised on proportionate basis that reflects the effective yield on the asset. Scrap sales and gains on disposal of investments are recognised on an accrual basis.
Sale of rights for the use of intellectual property rights are recognised on an accrual basis in accordance with the substance of the relevant agreements.
Dividends are recognised when the Company’s right to receive payment is established.
(q) Financial instruments
(i) Description
A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.
A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from another enterprise, a contractual right to exchange financial instruments with another enterprise under conditions that are potentially favourable, or an equity instrument of another enterprise.
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or to exchange financial instruments with another enterprise under conditions that are potentially unfavourable.
(ii) Financial instruments not recognised on the balance sheet
The Group enters into foreign currency forward contracts to protect the Group from movements in exchange rates by establishing the rate at which a foreign currency asset or liability will be settled.
Exchange gains and losses arising on contracts entered into as hedges of anticipated future transactions are deferred until the settlement of the related forward contracts.
215

Notes To The Financial Statements
31 March 2010 (continued)
216
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q) Financial instruments (continued)
(iii) Fair value estimation for disclosure purposes
The fair value of publicly traded derivatives and securities is based on quoted market prices at the balance sheet date.
The fair value of forward foreign exchange contracts is determined using forward foreign exchange market rates at the balance sheet date.
In assessing the fair value of non-traded derivatives and financial instruments, the Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Unquoted investments are valued based on quoted investments with similar features.
The fair value of financial liabilities with a maturity of more than one year is estimated by discounting the future contractual cash flows at the current market interest rate available to the
Group for similar financial instruments.
The face values, less any estimated credit adjustments, for financial assets and liabilities classified as current are assumed to approximate their fair values.
(r) Borrowings
Borrowings are initially recognised based on the proceeds received, net of transaction costs incurred.
Subsequently, borrowings are stated at amortised cost using the effective yield method; any difference between proceeds (net of transaction costs) and the redemption value is recognised in the Consolidated
Income Statements over the period of the borrowings.
Borrowing costs are charged to the Consolidated Income Statements as an expense in the period in which they have accrued.
Borrowings are classified as current liabilities unless the Group has the unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
(s) Share capital
Ordinary shares are classified as equity. External costs directly attributable to the issue of new shares are expensed off in the Consolidated Income Statements.
Dividends on ordinary shares are recognised as liabilities when proposed or declared before the balance sheet date. A dividend proposed or declared after the balance sheet date, but before the financial statements are authorised for issue, is not recognised as a liability at the balance sheet date.
Upon the dividend becoming payable, it will be accounted for as liability.

Notes To The Financial Statements
31 March 2010 (continued)
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(t) Contingent liabilities and contingent assets
The Group and Company do not recognise a contingent liability but disclose its existence in the financial statements. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare circumstance where there is a liability that cannot be recognised because it cannot be measured reliably.
A contingent asset is a possible asset that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.
In the acquisition of subsidiary companies by the Group under a business combination, the contingent liabilities assumed are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interests.
The Group recognises separately the contingent liabilities of the acquirees as part of allocating the cost of a business combination where their fair values can be measured reliably. Where the fair values cannot be measured reliably, the resulting effect will be reflected in the goodwill arising from the acquisition.
Subsequent to the initial recognition, the Group measures the contingent liabilities that are recognised separately at the date of acquisition at the higher of the amount that would be recognised in accordance with the provisions of FRS 137 and the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with FRS 118.
(u) Impairment of assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or whenever events or circumstances occur indicating that an impairment may exist.
Property, plant and equipment and other non-current assets, including intangible assets, are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is measured at the higher of the fair value less cost to sell of an asset and its value-in-use. The value-in-use is the net present value of the projected future cash flows derived from that asset discounted at the appropriate discount rate.
Assets other than goodwill that suffered an impairment are reviewed for possible reversal at each reporting date.
The projected cash flows are based on the Group’s estimates calculated based on historical, industry trend, general market, economic conditions and other available information. For the purposes of assessing impairment, assets are grouped at the lowest level for which there is separately identifiable cash flows.
217

Notes To The Financial Statements
31 March 2010 (continued)
218
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(u) Impairment of assets (continued)
The impairment loss is charged to the Consolidated Income Statements. Any subsequent increase in recoverable amount is recognised in the Consolidated Income Statements.
Irrespective of whether there is any indication of impairment, the Group shall test an intangible asset with an indefinite useful life or an intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test may be performed at any time during an annual period; it is performed at the same time every year. Different intangible assets may be tested for impairment at different times. However, if such an intangible asset was initially recognised during the current annual period, that intangible asset shall be tested for impairment before the end of the current annual period.
4 KEY ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that are anticipated to have a material impact on the Group’s results and financial position are tested for sensitivity to changes in the underlying parameters. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are mentioned below.
(i) Carrying value of property, plant and equipment and capitalised development cost
The Group assesses the carrying amount of property, plant and equipment and capitalised development cost whenever the events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable i.e. the carrying amount of the asset is more than the recoverable amount.
Recoverable amount is measured at the higher of the fair value less cost to sell for that asset and its value-in-use. The value-in-use is the net present value of the projected future cash flows derived from the asset discounted at an appropriate discount rate.
Projected future cash flows are based on the Group’s estimates calculated based on the cash generating unit’s operating results, approved business plans, expected market growth and industry growth as well as future economic conditions and other data. The assumptions used, results and conclusion of the impairment assessment are stated in Note 13 to the financial statements.

Notes To The Financial Statements
31 March 2010 (continued)
4 KEY ESTIMATES AND JUDGEMENTS (continued)
(ii) Estimated useful lives of dies and jigs and capitalised development cost
The Group reviews annually the estimated useful lives of dies and jigs and capitalised development cost based on product life cycle. The product life cycle is assessed based on business plans and strategies such as, the expected product life cycle as well as technological developments.
Future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned. A reduction in the estimated useful lives used for assessing the carrying values of dies and jigs and capitalised development cost would increase the recorded depreciation and amortisation respectively.
(iii) Deferred tax assets
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. This involves significant judgements regarding the future financial performance of the Group, the likely timing and level of future taxable profits together with future tax planning strategies to support the basis of recognition of deferred tax assets. An analysis of the deferred tax balance is set out in Note 22 to the financial statements.
The Directors have considered the ability of the Group to generate sufficient taxable income to utilise the deferred tax assets and have concluded that no deferred tax asset should be recognised for certain subsidiary companies as at 31 March 2010 (Note 22).
(iv) Estimation of income taxes payable and recoverable
Income taxes are estimated based on the rules governed under the Income Tax Acts of the respective countries. Significant judgement is required in determining the capital allowances and deductibility of certain expenses during the estimation of the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.
Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax provisions in the period in which such determination is made. The status of the income tax position of the Group is stated in Note 10 to the financial statements.
219

Notes To The Financial Statements
31 March 2010 (continued)
220
4 KEY ESTIMATES AND JUDGEMENTS (continued)
(v) Provisions for warranty
Provision is made for the estimated liability on all products under warranty in addition to claims already received. The accrual recorded is based on the actual claims experienced by the Group arising during the period of warranty over a number of years which provides a basis for calculating expected warranty claims. In addition, the Group records an asset for the amount expected to be recoverable from its vendors based on similar actual reimbursement experienced by the Group.
An analysis of the utilisation of the provision is stated in Note 34 to the financial statements.
(vi) Allowance for inventory write down
Allowance for inventory write down is made based on an analysis of the ageing profile and expected sales patterns of individual items held in inventory. This requires an analysis of inventory usage based on expected future sales transactions taking into account current market prices, useful lives of vehicle models and expected cost to sell. Changes in the inventory ageing and expected usage profiles can have an impact on the allowance recorded.
(vii) Allowance for receivables
The allowance is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. This is determined based on the ageing profile, expected collection patterns of individual receivable balances, credit quality and credit losses incurred. Management carefully monitors the credit quality of receivable balances and makes estimates about the amount of credit losses that have been incurred at each financial statements reporting date. Any changes to the ageing profile, collection patterns, credit quality and credit losses can have an impact on the allowance recorded.
(viii) Impairment of goodwill
The Group tests goodwill for impairment at least annually in accordance with its accounting policy or whenever events or changes in circumstances indicate that this is necessary. The assumptions used, results and conclusion of the impairment assessment are stated in Note 15 to the financial statements.

Notes To The Financial Statements
31 March 2010 (continued)
5 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
During the financial year and as reported in the prior financial year,
(a) The Members’ Voluntary Liquidation of Proton Cars Benelux Limited (‘Benelux’), a 99% owned subsidiary company of Proton Marketing Sdn. Bhd. (‘PMSB’) on 2 February 2009 has not been completed. Benelux had not commenced operations since its incorporation.
(b) Proton Edar Ventures Sdn. Bhd. and Proton Edar Resources Sdn. Bhd., wholly owned subsidiary companies of Proton Edar Sdn. Bhd. which in turn a wholly owned subsidiary of PMSB were liquidated during the financial year.
(c) Proton Capital Sdn. Bhd., a wholly owned subsidiary company of the Company was liquidated during the financial year.
6 REVENUE
Revenue at the Group represents the invoiced value of goods sold and engineering services provided and is presented net of taxes, discounts and commission paid to dealers.
Revenue at the Company represents income from shares held in subsidiary companies and associated companies.
Revenue comprises:
2010
RM’000
Group
2009
RM’000
2010
RM’000
Company
2009
RM’000
Sale of vehicles, spare parts and accessories 7,993,619 6,220,872
Rendering of engineering services
Gross dividend income
Others
195,057
-
38,183
235,667
62,215
-
8,226,859 6,518,754
-
-
101,203
-
101,203
362,357
-
362,357
-
-
Included in others is sale of rights for the use of intellectual property rights to an export market amounting to RM1,742,000 (2009: RM19,612,000).
221

Notes To The Financial Statements
31 March 2010 (continued)
222
7 PROFIT/(LOSS) BEFORE FINANCE COST
2010
RM’000
Group
2009
RM’000
2010
RM’000
Company
2009
RM’000
The following items have been charged/(credited) in arriving at profit /(loss) before finance cost:
Gross dividends received/receivable from:
- subsidiary company, unquoted
- associated companies, unquoted
- others, quoted
Research and development grant*
Property, plant and equipment:
- depreciation
- written off
- (gain)/loss on disposal
Impairment of investment in an associated company
Investment:
- reversal of impairment
- provision for diminution in value
Intangible assets:
- amortisation
- written off
- impairment
Write down of inventories**
Current investments:
- loss on disposal
- provision for diminution in value
Research and development expenditure***
Provision for warranties (net of expected reimbursement) (Note 34)
Reversal of allowance for doubtful debts
Allowance for doubtful debts
Bad debts written off
Statutory audit fees to
PricewaterhouseCoopers Malaysia:
- current year
- (over)/under provision in prior year
(96,600) (359,000)
-
(915)
-
(1,260)
(143,688) (80,656)
(4,603)
-
-
(3,357)
-
-
432,612 450,346
23,806 38,746
(2,645) 19,417
6,678
-
-
-
-
-
-
-
-
(2,100)
10,397
81,688
55,814
48,493
-
20,802
80,128 114,950
-
-
19
282
68,618
44
1,084
45,127
45,968 45,149
(23,534) (63,315)
27,183 45,616
19,359 -
(2,100)
6,475
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
620
(67)
599
114
88
27
88
60

Notes To The Financial Statements
31 March 2010 (continued)
7 PROFIT/(LOSS) BEFORE FINANCE COST (continued)
2010
RM’000
Group
2009
RM’000
2010
RM’000
Company
2009
RM’000
Other member firms of PricewaterhouseCoopers
International Limited:****
- current year
- under provision in prior year
Audit related fees to PricewaterhouseCoopers:
- Malaysia
Non-audit fees to PricewaterhouseCoopers:
- Malaysia
- Other member firms of PricewaterhouseCoopers
International Limited****
Provision for onerous contract
Rental:
- plant, machinery and equipment
- land and buildings
Foreign exchange loss/(gain):
- transactions
- translation
Rental income on land and buildings
Interest income
Automotive Development Fund
- amortisation of capital grant
1,502
24
486
232
592
2,536
12,228
7,989
26,617
-
(514)
(28,546)
1,380
206
505
902
959
22,139
1,765
16,725
(7,481)
(8,284)
(1,925)
(42,089)
(31,255) (21,646)
48
-
-
-
-
-
-
-
-
-
-
(3,437)
-
-
-
-
-
-
-
-
-
-
-
-
(4,618)
-
* The Government of Malaysia, as part of the Second Stimulus Package under the Ninth Malaysia Plan had within the ambit of the National Automotive Policy (‘NAP’) granted in 2009 a Research and Development (‘R&D’) grant to Perusahaan Otomobil Nasional Sdn. Bhd. (‘PONSB’), a wholly owned subsidiary company. One of the objectives of the NAP is to provide support and incentives to enhance competitiveness and capability of the automotive industry through the development of the latest and more sophisticated technology. PONSB, being a full fledged automotive manufacturer has complied with the requirements and had been allocated funds in the form of a R&D grant.
During the financial year, PONSB has recognised R&D grant income amounting to RM143,688,000 (2009:
RM80,656,000) based on R&D expenditure that did not meet the capitalisation criteria, as set out in the Group’s accounting policy (Note 3(d)(iii)).
** Cost of sales includes write-down of inventories amounting to RM80,128,000 (2009: RM114,950,000 of which RM81,841,000 relates to certain vehicle models which were impacted by contraction in sales volume as disclosed in Note 13(a) to the financial statements).
*** R&D expenditure including general R&D expenditure of a subsidiary company amounting to RM32,492,000
(2009: RM30,585,000) had been charged to cost of sales, and matched against R&D grant.
**** PricewaterhouseCoopers Malaysia and other member firms of PricewaterhouseCoopers International Limited are separate and independent legal entities.
223

Notes To The Financial Statements
31 March 2010 (continued)
224
8 STAFF COST
2010
RM’000
644,297
Group
2009
RM’000
598,390 Wages, salaries and bonuses
Pension cost
- defined contribution plan
- defined benefit plan (Note 32(e))
Other employee benefits
50,436
4,970
53,293
752,996
55,228
(8,042)
62,842
708,418
Directors’ remuneration
The aggregate amount of emoluments received/receivable by the Directors of the Group and Company during the financial year was as follows:
2010
RM’000
Group
2009
RM’000
2010
RM’000
Company
2009
RM’000
Non-executive Directors:
- allowances
- fees
- estimated monetary value
of benefits-in-kind
Executive Director:*
- salaries and bonuses
- defined contribution plan
- estimated monetary value
of benefits-in-kind
- fees
- allowances
695
695
109
1,384
248
128
-
-
3,259
584
939
59
705
109
81
-
-
2,477
524
223
109
1,384
248
128
42
11
2,669
424
217
59
705
109
81
42
16
1,653
* The Executive Director’s remuneration in the Company is fully recharged to a subsidiary company.

Notes To The Financial Statements
31 March 2010 (continued)
9 FINANCE COST
Interest expense on:
Long term loans
Short term borrowings
Others
10 TAXATION
Taxation in Malaysia
Current taxation:
- charge for the financial year
- write back of accrual in
respect of disputes
- over accrual in respect of
prior financial years
Taxation outside Malaysia
Current taxation:
- charge for the financial year
- under/(over) accrual in respect of
prior financial years
Deferred taxation (Note 22)
Origination and reversal of temporary differences
Tax benefits arising from previously unrecognised tax losses
Tax expense/(credit)
2010
RM’000
5,892
4,069
2,092
12,053
Group
2009
RM’000
6,957
6,110
1,341
14,408
225
2010
RM’000
Group
2009
RM’000
2010
RM’000
Company
2009
RM’000
41,197
-
(3,144)
38,053
28,027
(18,240)
(31,216)
(21,429)
607
-
(44)
563
1,179
-
1,179
-
14,448
269
14,717
801
(844)
(43) -
-
-
(1,821)
(8,988)
(10,809)
41,961
15,344
(11,267)
4,077
(17,395) 563
-
-
-
1,179
-
-
-
-
-
-

Notes To The Financial Statements
31 March 2010 (continued)
226
10 TAXATION (continued)
A numerical reconciliation between the average effective tax rate and the statutory tax rate effect is as follows:
2010
%
25
Group
2009
%
(25)
2010
%
25
Company
2009
%
25 Malaysian statutory tax rate
Tax effects of:
- double deduction and incentive
on qualifying expenditure
- expenses not deductible for tax purposes
- income not subject to tax
- current year tax losses not recognised
- current year deductible temporary
differences not recognised
- over accrual in respect of prior years
- recognition of previously unrecognised
deductible temporary differences
- recognition of previously
unrecognised tax losses
- different tax rates in subsidiary
companies outside Malaysia
Average effective tax rate
(17)
3
(18)
4
26
(1)
(2)
(3)
(1)
16
(3)
1
(11)
6
50
(16)
(2)
(4)
(1)
(5)
1
-
(25)
-
1
-
-
-
-
-
-
-
(25)
-
-
-
-
-
-
-
2010
RM’000
2009
RM’000
2010
RM’000
2009
RM’000
Previously unrecognised temporary differences utilised during the financial year
Tax savings arising from temporary differences
Previously unrecognised tax losses utilised during the financial year
Tax savings arising from such tax losses
Unabsorbed capital allowances carried forward
Unutilised tax losses carried forward
Unutilised reinvestment allowances
16,181
4,045
35,953
8,988
19,640
5,486
45,068
11,267
1,879,043 1,964,254
666,390 566,932
2,060,732 1,993,363
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Notes To The Financial Statements
31 March 2010 (continued)
10 TAXATION (continued)
The effective tax rate is lower than the statutory tax rate due to double deduction for R&D expenditure, recognition of non-taxable income and recognition of previously unrecognised tax losses and capital allowances.
The tax write back in the previous financial year arose following an agreement with the Inland Revenue
Board (‘IRB’) to settle tax disputes in respect of a subsidiary company’s treatment of certain items in the tax submissions for Years of Assessment (‘YA’)1989 to 1998. The basis of agreed claims was subsequently applied for YA 1999 to 2002.
The tax recoverable amount of RM18,240,000 (2009: RM140,960,000) relates to settlement of tax disputes for YA 1999 to 2002 (2009: YA 1989 to 2002) whilst the balance of RM7,061,000
(2009: RM19,650,000) relates to overpayment of tax liabilities.
11 EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share is calculated by dividing the net profit/(loss) attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year.
Net profit/(loss) attributable to equity holders of the Company (RM’000)
Weighted average number of ordinary shares in issue (‘000)
Basic earnings/(loss) per share (sen)
Diluted earnings/(loss) per share equals to basic earnings/(loss) per share.
2010
Group
2009
218,932 (301,806)
549,213 549,213
40 (55)
12 DIVIDENDS
Dividends declared in respect of the financial year ended 31 March 2010 are as follows:
2010
RM’000
-
Group
2009
RM’000
20,595 Interim dividend of 5 sen per ordinary share less tax at 25%
The Directors recommend the payment of a final dividend of 20 sen per ordinary share 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 members at the forthcoming Annual General Meeting.
227

Notes To The Financial Statements
31 March 2010 (continued)
228
13 PROPERTY, PLANT AND EQUIPMENT
Freehold
land
RM’000
Buildings
RM’000
Plant and machinery
RM’000
Office equipment, furniture, fittings and vehicles
RM’000
Note
Group
2010
Cost/valuation
At 1 April 2009
Currency translation differences
Additions
Disposals
Written off
Reclassification of completed work-in-progress
Reclassification
Reclassification to intangible assets 16
At 31 March 2010
Accumulated depreciation
At 1 April 2009
Currency translation differences
Charge for the financial year
Disposals
Written off
Adjustment in respect of reversal of impairment loss
At 31 March 2010
226,872 1,352,482 4,579,828 1,137,416
(639) (6,952) (10,438) (9,546)
-
-
-
209
-
(253)
38,015
(10,726)
(66,916)
56,143
(19,064)
(6,614)
-
407
(9,313)
57,521
9,313
12,435
-
(6)
226,233 1,336,580 4,596,597 1,170,764
-
-
-
-
-
-
477,676 2,793,840
(1,092) (6,370)
52,343
-
(160)
292,714
(10,710)
(43,662)
28,252 52,757
557,019 3,078,569
735,725
(2,811)
87,555
(15,256)
(6,155)
34,025
833,083
Accumulated impairment losses
At 1 April 2009
Currency translation differences
Charge for the financial year
Reclassification
Reversal of impairment loss
At 31 March 2010
Net book value
At 31 March 2010
-
-
-
-
-
-
226,233
112,829
(15,455)
-
(1,232)
(80,834)
15,308
317,761
(3,757)
6,000
(1,357)
(53,503)
265,144
764,253 1,252,884
37,020
(5,027)
-
2,589
(34,144)
438
337,243
Work-inprogress
RM’000
Total
RM’000
5,364 7,301,962
(27,575)
108,804
-
-
203,171
(29,790)
(73,783)
(70,363)
-
-
(6)
43,805 7,373,979
-
-
-
-
- 4,007,241
(10,273)
432,612
(25,966)
(49,977)
115,034
- 4,468,671
-
-
-
-
467,610
(24,239)
6,000
-
(168,481)
280,890
43,805 2,624,418

Notes To The Financial Statements
31 March 2010 (continued)
13 PROPERTY, PLANT AND EQUIPMENT (continued)
Group
Note
Freehold
land
RM’000
Buildings
RM’000
Plant and machinery
RM’000
Office equipment, furniture, fittings and vehicles
RM’000
2009
Cost/valuation
At 1 April 2008
Currency translation differences
Additions
Disposals
236,362 1,396,863 4,375,404 1,074,479
(2,611)
759
(7,638)
(35,192)
2,457
-
(45,094)
22,629
(43,136)
(30,946)
85,685
(20,848)
-
-
-
2,794
(3,778)
1,256
-
420
(38,668)
312,680
-
Work-inprogress
RM’000
Total
RM’000
27,858 7,110,966
(88) (113,931)
351,251 462,781
(10,560) (82,182)
26
(10,053)
-
(19,212)
39,073 (353,009)
9,124
3,240
(71,711)
-
9,124
(16,325)
5,364 7,301,962 At 31 March 2009
Accumulated depreciation
At 1 April 2008
Currency translation differences
Charge for the financial year
Disposals
Acquisition through business combination
Written off
Reclassification to non-current assets held for sale
At 31 March 2009
17
29
(11,918) (4,407) -
226,872 1,352,482 4,579,828 1,137,416
-
-
-
-
-
-
-
-
434,149 2,558,858
(7,849)
52,647
-
1,298
-
(2,569)
(28,592)
306,075
(19,571)
102
(23,004)
(28)
477,676 2,793,840
682,161
(14,004)
91,624
(14,121)
26
(9,961)
-
735,725
-
-
-
-
-
- 3,675,168
(50,445)
450,346
(33,692)
1,426
(32,965)
(2,597)
- 4,007,241
229

Notes To The Financial Statements
31 March 2010 (continued)
230
13 PROPERTY, PLANT AND EQUIPMENT (continued)
Group
Note
Freehold land
RM’000
Buildings
RM’000
Plant and machinery
RM’000
Office equipment, furniture, fitting and vehicles
RM’000
Accumulated impairment losses
At 1 April 2008
Currency translation differences
Charge for the financial year
Reversal of impairment loss
At 31 March 2009
13,536
(13,536)
-
-
-
137,365
(24,034)
-
(502)
112,829
79,632
(18,759)
257,674
(786)
317,761
54,819
(17,471)
-
(328)
37,020
Work-inprogress
RM’000
-
-
-
-
-
Total
RM’000
285,352
(73,800)
257,674
(1,616)
467,610
Net book value
At 31 March 2009 226,872 761,977 1,468,227 364,671 5,364 2,827,111
A piece of a subsidiary company’s freehold land was revalued on 5 September 1983 based on an independent professional valuation. The surplus of RM36,882,000 arising from the revaluation was credited to the capital reserves and subsequently utilised. Had this freehold land been carried at historical cost, the net book value of freehold land that would have been included in the financial statements at the end of the financial year would be RM22,448,000 (2009: RM22,448,000).
Property, plant and equipment of a wholly owned subsidiary company with a net book value of
RM169,229,000 (2009: RM111,777,000) was charged to a licensed bank as security for borrowings as disclosed in Note 32(b) to the financial statements.
The net book value of the office equipment acquired under finance lease at the balance sheet date was
RM10,416,000 (2009: RM3,959,000).
The net cash outflow for the acquisition of property, plant and equipment during the financial year is:
2010
RM’000
Group
2009
RM’000
Total acquisition of property, plant and equipment
Less: Amount financed by hire purchase arrangements
Less: Amount acquired via ADF (Note 32(d)(ii))
Net cash outflow on acquisition of property, plant and equipment
203,171
(7,253)
(50,588)
145,330
462,781
(5,223)
(31,049)
426,509

Notes To The Financial Statements
31 March 2010 (continued)
13 PROPERTY, PLANT AND EQUIPMENT (continued)
Impairment test for property, plant and equipment and capitalised development cost, included within intangible assets
Assumptions and approach used – Group
The fair value of a cash generating unit or an asset group is measured based on market prices when available. Where market prices are not available, the recoverable amounts are determined based on value-in-use calculations. Embedded in the development of the cash flow projections are assumptions and estimates derived from a review of the cash generating unit’s operating results, approved business plans, expected market and industry growth rates, as well as, future economic conditions and other data.
Most of these factors used in assessing the fair values are outside the control of management, hence these assumptions and estimates may change in future periods.
(a) Malaysian operations
The carrying values of property, plant and equipment and capitalised development cost, included within intangible assets of a subsidiary company totalling RM2,575,757,000 were tested for impairment in the current financial year.
The impairment assessment performed in the current financial year resulted in an impairment loss of
RM6,000,000 in respect of plant and machinery for a slow moving model.
In the previous financial year, the softening of the automotive industry in the second half of the financial year had resulted in a contraction in sales volume. Arising from this, a subsidiary company undertook a test for impairment of its property, plant and equipment and capitalised development cost relating to certain vehicles models impacted by volume contraction. As a result, an amount of RM270,000,000 recognised as an impairment loss under other operating expenses, comprised
RM249,198,000 in respect of plant and machinery, while the balance of RM20,802,000 was related to capitalised development cost, included within intangible assets.
The property, plant and equipment were allocated to the cash generating units which are identified according to production plants and vehicle models.
(i) Assumptions and approach used
The value-in-use calculations apply a discounted cash flow model using cash flow projections covering a five year period, and assuming a zero growth rate for subsequent periods up to fourteen years. The projections over these periods were based on an approved business plan.
The business plan reflects the cash generating unit’s expectation of capacity utilisation, revenue growth, operating costs and margins based on past experience, current assessment of market share, expectations of market growth and industry growth.
The following are the key assumptions used in the cash flow projections:
• Business projections – The cash generating unit makes assumptions about the demand for its products in the market place. These assumptions are used to drive the planning assumptions for sales volume and mix. The cash generating unit also makes assumptions about cost levels.
231

Notes To The Financial Statements
31 March 2010 (continued)
232
13 PROPERTY, PLANT AND EQUIPMENT (continued)
Impairment test for property, plant and equipment and capitalised development cost, included within intangible assets (continued)
(a) Malaysian operations (continued)
(i) Assumptions and approach used (continued)
The following are the key assumptions used in the cash flow projections (continued):
• Business analysis – In line with the improved global economy, the overall sales volume used in the projections indicates an increase from current levels due to the expected growth in sales of completely-knocked-down (CKD) packs to the export markets and planned introduction of new models for which the product development capital expenditure has been approved.
Separate assessment is made for the Malaysian and the export markets. The Malaysian market, being the major contributor to the Group’s margins indicates an increase in sales volume from current levels for the first two years through planned introduction of new models for which capital expenditure on project development has been approved. Thereafter, the projected sales volume did not include future models for which capital expenditure on project development has not been approved, hence, the projections for the remaining three years indicate a reduction.
• Long-term growth rate – From the sixth year and onwards, a zero growth rate is assumed.
• Terminal values of production plants – Terminal values of the production plants in year fourteen are assumed to be derived from the fair market values by an internal registered valuer arising from the disposal of the land and buildings on which the three specific plants are located. A discount factor of 6.8% was used to discount the terminal value which reflects the prevailing term loan borrowing cost.
• Discount rates – In measuring the recoverable amounts based on the value-in-use calculation, discount rates of 13.39% and 21.39% have been applied to domestic and export sales respectively. The discount rate reflects the prevailing independent market rate applicable to the Group.
• Economic projections – Assumptions regarding the general economic conditions are applied in arriving at the industry sales volume. Other macro-economic assumptions, such as, commodities prices, inflation rates, interest rates and foreign currency exchange rates have also been considered.
(ii) Impact of possible changes in key assumptions
The sensitivity tests indicated that no further impairment loss is required where other realistic variations are applied to key assumptions.

Notes To The Financial Statements
31 March 2010 (continued)
13 PROPERTY, PLANT AND EQUIPMENT (continued)
Impairment test for property, plant and equipment and capitalised development cost, included within intangible assets (continued)
(b) Overseas operations
The carrying values of property, plant and equipment and capitalised development cost, included within intangible assets totalling RM344,588,000 were tested for impairment in the current financial year. The review indicated that no impairment losses were required for the current financial year ended 31 March 2010 (2009: RM8,476,000 in relation to plant and machinery) as their recoverable amounts were in excess of their carrying values. This is largely attributable to a change in management whereby, fresh funds would be invested to develop new and better products to penetrate into the premium sports car segment.
The review also indicated that the impairment of property, plant and equipment previously provided at the Group level is no longer required as the balance of impairment related mainly to buildings.
The balance of impairment provision amounting to RM53,447,000 (being accumulated impairment of RM168,481,000 less depreciation of RM115,034,000 in Note 13) has been reversed to the
Consolidated Income Statements.
The property, plant and equipment and capitalised development cost, included within intangible assets were allocated to the cash generating units which are identified according to production facilities relating to cars and engineering businesses of the overseas subsidiary.
(i) Assumptions and approach used
The recoverable amounts are determined based on value-in-use calculations. The value-in-use calculations apply a discounted cash flow model using cash flow projections covering a five-year period. The projections over these periods were based on an approved business plan and reflect the subsidiary group’s expectation of plant utilisation, revenue growth, operating costs and margins based on past experience and current assessment of market demand.
The following are the key assumptions used in the cash flow projections:
• Business analysis – For cars, the sales volumes used in the value-in-use calculation is based on sales projections of existing models taking into consideration the projected lifecycle of the models in line with the short range and long range product plans.
For engineering services, the third party sales projections are based on existing projects-inhand and include a forecast of new work to be won with emphasis on the 4-core competencies and key service offerings.
• Terminal values – An estimated residual value based on the carrying values of the land and buildings is used.
233

Notes To The Financial Statements
31 March 2010 (continued)
234
13 PROPERTY, PLANT AND EQUIPMENT (continued)
Impairment test for property, plant and equipment and capitalised development cost, included within intangible assets (continued)
(b) Overseas operations (continued)
(i) Assumptions and approach used (continued)
The following are the key assumptions used in the cash flow projections (continued):
• Discount rates – For purposes of the value-in-use calculation, a discount rate of 10% has been applied. This is based on the subsidiary group’s weighted average cost of capital and is reflective of the prevailing market rate applicable to the subsidiary group and segment in which the Group operates in.
• Economic projections – In arriving at the industry sales volume, assumptions are made regarding the general economic conditions in its key markets, as well as other macro-economic assumptions relating to the automotive industry.
(ii) Impact of possible changes in key assumptions
The sensitivity test indicated that no further impairment loss is required where other realistic variations are applied to key assumptions.
14 PREPAID LAND LEASE PAYMENTS
2010
RM’000
Group
2009
RM’000
Cost/Net book value:
At 1 April
Currency translation differences
Reclassification to non-current assets held for sale (Note 29)
At 31 March
-
-
-
-
24,031
(1,347)
(22,684)
-

Notes To The Financial Statements
31 March 2010 (continued)
15 GOODWILL
At 1 April
Less: Accumulated impairment loss
At 31 March
2010
RM’000
35,749
(6,741)
29,008
Group
2009
RM’000
35,749
(6,741)
29,008
Impairment test for goodwill
The Group undertook an annual test for impairment of goodwill. The carrying amount of goodwill is allocated to the cash generating unit that the goodwill relates to, which is the distribution business in Malaysia.
(i) Assumptions and approach used
The recoverable amount of the cash generating unit including goodwill in this test is determined based on the value-in-use calculation. This value-in-use calculation applies a discounted cash flow model using cash flow projections covering a five-year period for the distribution business in Malaysia. The projections reflect the Group’s expectations of revenue growth, operating costs and margins based on past experience and current assessment of market share, expectations of market growth and industry growth.
The following are the key assumptions used in the cash flow projections:
• Business projections – The cash generating unit makes assumptions about the demand for its products in the market place and are used to project the sales volume and mix.
• Business analysis – The sales volume used in the projections indicates an increase from current levels for the first two years through planned introduction of new models for which capital expenditure on project development has been approved. Thereafter, the projected sales volume did not include future models for which capital expenditure on project development has not been approved, hence, the projections for the remaining three years indicate a reduction.
• Discount rates – For purposes of the value-in-use calculation, a discount rate of 13.39% has been applied. The discount rate reflects the prevailing independent market rate applicable to the
Group in Malaysia.
• Economic projections – Assumptions regarding the general economic conditions are considered in arriving at the estimated sales volume and prices for the vehicles.
(ii) Sensitivity impact of possible changes in key assumptions
Sensitivity analysis shows that no impairment loss is required for the carrying amount of goodwill, including where realistic variations are applied to key assumptions.
235

Notes To The Financial Statements
31 March 2010 (continued)
236
16 INTANGIBLE ASSETS
Group
2010
Cost
At 1 April 2009
Currency translation differences
Additions
Written off
Reclassification from property, plant equipment (Note 13)
At 31 March 2010
Amortisation
At 1 April 2009
Currency translation differences
Charge for the financial year
At 31 March 2010
Accumulated impairment loss
At 1 April 2009/31 March 2010
Net book value
At 31 March 2010
Capitalised development cost
RM’000
Computer software
RM’000
493,128
(7,595)
268,237
(55,814)
-
697,956
59,401
(2,762)
67,327
123,966
20,802
553,188
71,265
6,387
-
6
-
77,658
52,522
14,361
66,883
10,775
-
-
Total
RM’000
564,393
(7,595)
274,624
(55,814)
6
775,614
111,923
(2,762)
81,688
190,849
20,802
563,963

Notes To The Financial Statements
31 March 2010 (continued)
16 INTANGIBLE ASSETS (continued)
Capitalised development cost
RM’000
Computer software
RM’000
Total
RM’000
Group
2009
Cost
At 1 April 2008
Currency translation differences
Additions
Written off
Disposal
At 31 March 2009
275,804
(14,144)
231,468
-
-
493,128
65,133
-
6,164
(16)
(16)
71,265
340,937
(14,144)
237,632
(16)
(16)
564,393
Amortisation
At 1 April 2008
Currency translation differences
Charge for the financial year
Written off
Disposal
At 31 March 2009
Accumulated impairment loss
At 1 April 2008
Charge for the financial year (Note 13)
At 31 March 2009
27,739
(2,283)
33,945
59,401
-
-
38,006
-
14,548
(16)
(16)
52,522
65,745
(2,283)
48,493
(16)
(16)
111,923
20,802
-
20,802
-
-
-
20,802
-
20,802
Net book value
At 31 March 2009 412,925 18,743 431,668
The amortisation period for intangible assets ranges from 3 to 10 years (2009: 3 to 10 years).
During the financial year, a subsidiary company acquired computer software with an aggregate cost of
RM6,387,000 (2009: RM6,164,000) of which RM2,917,000 (2009: Nil) was acquired by means of finance lease (Note 32(c)). The net book value of the computer software acquired under finance lease at the balance sheet date was RM2,880,000 (2009: Nil).
Impairment test for capitalised development cost has been performed together with the related property, plant and equipment as explained in Note 13 to the Financial Statements.
237

Notes To The Financial Statements
31 March 2010 (continued)
238
17 SUBSIDIARY COMPANIES
Unquoted shares at cost:
At 1 April
Less: Impairment loss
At 31 March
The details of the subsidiary companies are as follows:
Name Principal activities
Country of incorporation
2010
RM’000
Company
2009
RM’000
2,036,303 2,036,303
(327,652) (327,652)
1,708,651 1,708,651
Group’s effective interest
2010
%
100
2009
%
100 Perusahaan Otomobil
Nasional Sdn. Bhd.^
Proton Tanjung Malim
Sdn. Bhd.^
Proton Marketing
Sdn. Bhd.
Lotus Advance
Technologies Sdn. Bhd.
Manufacture, assembly and sales of motor vehicles and related products
Assembly of motor vehicles and related products
Investment holding
Investment holding
Proton Hartanah Sdn. Bhd. Investment holding
Proton Capital Sdn. Bhd.
Liquidated during the financial year
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Subsidiary companies of
Perusahaan Otomobil
Nasional Sdn. Bhd.
PT Proton Cikarang
Indonesia
Proton Automobiles
(China) Limited^
Ceased operations
Dormant
Indonesia
British Virgin
Islands
100
100
100
100
-
100
100
100
100
100
100
100
100
100

Notes To The Financial Statements
31 March 2010 (continued)
17 SUBSIDIARY COMPANIES (continued)
Name Principal activities
Country of incorporation
Subsidiary companies of
Proton Marketing
Sdn. Bhd.
Proton Cars (UK)
Limited*^
Proton Cars Australia
Pty. Limited*^
Proton Edar Sdn. Bhd.^
Proton Motors (Thailand)
Co. Limited*
Proton Cars Benelux
NV. SA*^
Importation and distribution of motor vehicles and related products
Importation and distribution of motor vehicles and related products
England
Australia
Sales of motor vehicles, related spare parts and accessories
Malaysia
Importation and wholesale of motor vehicles and related products
Thailand
In Members’ Voluntary
Liquidation
Belgium
Subsidiary companies of Lotus Advance
Technologies Sdn. Bhd.
Proton Engineering
Research Technology
Sdn. Bhd.^
Lotus Group
International Limited*^
Dormant
Investment holding
Malaysia
England
Subsidiary company of
Proton Hartanah
Sdn. Bhd.
Proton Properties
Sdn. Bhd.^
Property development and management
Malaysia
Group’s effective interest
2010 2009
% %
100 100
100 100
100
100
100
100
100
100
100
100
100
100
100 100
239

Notes To The Financial Statements
31 March 2010 (continued)
240
17 SUBSIDIARY COMPANIES (continued)
Name Principal activities
Country of incorporation
Subsidiary company of
Proton Cars Australia Pty.
Limited
Lotus Cars Australia
Pty. Limited*^
Importation and distribution of motor vehicles and related products
Subsidiary companies of
Proton Edar Sdn. Bhd.
Proton Singapore
Pte. Limited*^
PT Proton Edar
Indonesia*
Proton Edar Resources
Sdn. Bhd.^
Proton Edar Ventures
Sdn. Bhd.^
Australia
Importation and distribution of motor vehicles and related products
Importation and wholesale of motor vehicles and related products
Singapore
Indonesia
Liquidated during the financial year
Liquidated during the financial year
Malaysia
Malaysia
Subsidiary company of
Lotus Group International
Limited
Group Lotus Plc*^ Investment holding England
Group’s effective interest
2010 2009
% %
100 100
100 100
95
-
-
95
100
100
100 100

Notes To The Financial Statements
31 March 2010 (continued)
17 SUBSIDIARY COMPANIES (continued)
Name Principal activities
Country of incorporation
Group’s effective interest
2010 2009
% %
Subsidiary companies of
Group Lotus Plc
Lotus Cars Limited*^ Manufacture of motor vehicles and engineering consultancy services
England
Investment holding England Lotus Body
Engineering Limited*^
Lotus Motorsports
Limited*^
Lotus Holdings Inc.*^
Dormant
Investment holding
England
United States of
America
Subsidiary companies of
Lotus Cars Limited
Lotus Engineering
Limited*^
Lotus Engineering
Company Limited
(Shanghai)*
Engineering consultancy services
Engineering consultancy services
Subsidiary company of
Lotus Body Engineering
Limited
Lotus Lightweight
Structures Holdings
Limited*
Investment holding
England
People’s Republic of China
England
100
100
100
100
100
100
100
100
100
100
100
100
100
100
241

Notes To The Financial Statements
31 March 2010 (continued)
242
17 SUBSIDIARY COMPANIES (continued)
Name Principal activities
Country of incorporation
Group’s effective interest
2010 2009
% %
Subsidiary company of
Lotus Lightweight
Structures Holdings
Limited
Lotus Lightweight
Structures Limited*
Subsidiary company of
Lotus Engineering
Limited
Lotus Engineering
(Malaysia) Sdn. Bhd.^
Manufacture of automotive components
England 100 100
Engineering consultancy services
Malaysia 100 100
Subsidiary companies of
Lotus Holdings Inc.
Lotus Engineering Inc.*^ Engineering consultancy services
United States of
America
100 100
Lotus Cars USA Inc.*^ Sales of motor vehicles and related spare parts and accessories
United States of
America
100 100
* Audited by a member firm of PricewaterhouseCoopers International Limited which is a separate and independent legal entity from PricewaterhouseCoopers, Malaysia.
^ Consolidated by merger method of accounting prior to 1 April 2006.

Notes To The Financial Statements
31 March 2010 (continued)
17 SUBSIDIARY COMPANIES (continued)
In the prior year, Lotus Body Engineering Limited, a wholly owned subsidiary company of Lotus Group
International Limited, which in turn is a wholly owned subsidiary company of the Company acquired the entire issued and paid up share capital of Lotus Lightweight Structures Holdings Limited.
The effects of the acquisition on the financial results of the Group during the last financial year are as follows:
Revenue
Operating costs
Loss before tax
Tax expense
Loss for the financial year
2009
RM’000
46,204
(57,957)
(11,753)
-
(11,753)
The details of net assets acquired and cash flows arising from the acquisition of the subsidiary company during the last financial year are as follows:
Property, plant and equipment (Note 13)
Inventories
Receivables, deposits and prepayments
Deposits, bank and cash balances
Payables and other liabilities
Net assets/Fair value of net assets acquired
Acquiree’s carrying value
RM’000
4,995
5,173
7,512
4,520
(14,355)
7,845
Fair value
RM’000
1,814
5,173
7,512
4,520
(18,497)
522
Details of cash flow arising from the acquisition are as follows:
Purchase consideration settled in cash
Less: Cash and cash equivalents of subsidiary company acquired
Cash inflow to the Group on acquisition of subsidiary company
522
(4,520)
3,998
Had the acquisition taken effect at the beginning of the previous financial year, the contributed revenue and loss to the Group would have been RM55,193,000 and RM13,160,000 respectively.
243

Notes To The Financial Statements
31 March 2010 (continued)
244
18 ASSOCIATED COMPANIES
Unquoted shares at cost
Share of post-acquisition reserves
Less: Impairment loss
2010
RM’000
59,252
126,266
185,518
(32,878)
152,640
Group
2009
RM’000
59,252
131,993
191,245
(32,878)
158,367
2010
RM’000
13,600
-
13,600
-
13,600
Company
2009
RM’000
13,600
-
13,600
-
13,600
The Group’s share of the assets, liabilities, revenue and expenses of the associated companies are as follows:
2010
RM’000
Group
2009
RM’000
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
107,560 112,703
145,422 161,000
(91,365) (105,804)
(8,977) (9,532)
152,640 158,367
Revenue
Expenses (excluding tax)
Profit before taxation
Taxation
Profit for the financial year
The details of the associated companies are as follows:
227,976 236,058
(222,019) (222,351)
5,957
(422)
13,707
6,513
5,535 20,220
Name
PHN Industry Sdn. Bhd.
Principal activities
Country of incorporation
Malaysia
Group’s effective interest
2010
%
2009
%
35 35 Manufacture and sales of stamped parts and sub-assembly of automotive metal components

Notes To The Financial Statements
31 March 2010 (continued)
18 ASSOCIATED COMPANIES (continued)
Name Principal activities
Country of incorporation
Group’s effective interest
2010 2009
% %
25 25 Marutech Elastomer
Industries Sdn. Bhd.
Manufacture and production of moulded products, extruded and rubber hoses for motor vehicles, motorcycle and other related products
Malaysia
Exedy (Malaysia) Sdn. Bhd. Manufacture and assembly of manual clutch and automatic transmission parts
Malaysia
Associated company of
Perusahaan Otomobil
Nasional Sdn. Bhd.
Vina Star Motors
Corporation
Import, assembly and distribution of motor vehicles
Associated company of
Proton Hartanah Sdn. Bhd.
Proton City Development
Corporation Sdn. Bhd.
Property developer and project management
Socialist Republic of Vietnam
Malaysia
Associated company of
Proton Cars (UK) Limited
Proton Finance Limited Provision of dealer and customer financing
Associated company of
Proton Edar Sdn. Bhd.
Netstar Advance Systems
Sdn. Bhd.
Manufacture, assembly and sales of vehicle tracking devices
England
Malaysia
45
25
40
49.99
40
45
25
40
49.99
40
245

Notes To The Financial Statements
31 March 2010 (continued)
246
18 ASSOCIATED COMPANIES (continued)
Name Principal activities
Country of incorporation
Group’s effective interest
2010 2009
% %
Associated company of
Proton Automobile
(China) Limited
Goldstar Proton
Automobiles Co. Limited*
Dormant People’s Republic of China
49 49
Associated company of
Lotus Advance
Technologies Sdn. Bhd.
Miyazu (Malaysia)
Sdn. Bhd.**
Development, marketing and sale of products and provision of services relating to dies, moulds and jigs
Malaysia 51 51
* The Group has resolved to dissolve the associated company via an arbitration process (Note 42(c)).
** Company in which the Group owns more than 50%. However, although the Group exercises significant influence, it does not have control over its financial and operating policies.
The share of capital commitments relating to the associated companies is as follows:
2010
RM’000
Group
2009
RM’000
Capital commitments
Capital expenditure for property, plant and equipment approved but not provided for in the financial statements:
Contracted for
Not contracted for
468
5,159
233
1,736

Notes To The Financial Statements
31 March 2010 (continued)
19 JOINTLY CONTROLLED ENTITIES
2010
RM’000
Group
2009
RM’000
Unquoted shares at cost
At 1 April 2009
Liquidated
At 31 March 2010
Accumulated impairment loss
At 1 April 2009
Liquidated
At 31 March 2010
Share of post-acquisition reserves
135,534
-
135,534
-
-
-
67,011
202,545
136,648
(1,114)
135,534
1,114
(1,114)
-
60,088
195,622
The Group’s share of the assets, liabilities, revenue and expenses of the jointly controlled entities are as follows:
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
2010
RM’000
Group
2009
RM’000
236,858
199,151
290,168
151,926
(93,566) (82,559)
(139,898) (163,913)
202,545 195,622
Revenue
Expenses (excluding tax)
Profit before taxation
Taxation
Profit for the financial year
190,574 175,673
(170,480) (156,000)
20,094
(6,859)
19,673
(5,079)
13,235 14,594
247

Notes To The Financial Statements
31 March 2010 (continued)
248
19 JOINTLY CONTROLLED ENTITIES (continued)
The details of the jointly controlled entities are as follows:
Name Principal activities
Country of incorporation
Group’s effective interest
2010 2009
% %
Jointly controlled entity of
Proton Marketing
Sdn. Bhd.
Proton Parts Centre
Sdn. Bhd.*
Trading in motor vehicle components, spare parts and accessories
Malaysia 55 55
Jointly controlled entity of Group Lotus Plc
Lotus Finance Limited Provision of motor vehicles financing
England 49.9
49.9
Jointly controlled entity of Proton Edar Sdn. Bhd.
Proton Commerce
Sdn. Bhd.
Provision of motor vehicles financing
Malaysia 50 50
* Company in which the Group owns more than half of the voting powers. However, as the Group only has joint control over its financial and operating policies, this investment is treated as a jointly controlled entity.
The share of capital commitments relating to the jointly controlled entities is as follows:
2010
RM’000
Group
2009
RM’000
Capital commitments
Capital expenditure for property, plant and equipment approved but not provided for in the financial statements:
Not contracted for 1,438 1,062

Notes To The Financial Statements
31 March 2010 (continued)
20 AMOUNTS DUE FROM SUBSIDIARY COMPANIES
Less than
1 year
RM’000
More than
1 year
RM’000
2010
Total
RM’000
Less than
1 year
RM’000
More than
1 year
RM’000
Company
2009
Total
RM’000
Amounts due from subsidiary companies
Advances to a subsidiary company
59,978 59,978
232,946 232,946
59,978 232,946 292,924
58,912 58,912
177,870 177,870
58,912 177,870 236,782
The amounts due from subsidiary companies are denominated in Ringgit Malaysia, interest free and repayable on demand.
Advances to a subsidiary company are denominated in Ringgit Malaysia, repayable after 6 years and bears interest at 3.5% per annum.
21 INVESTMENTS
2010
RM’000
Group
2009
RM’000
2010
RM’000
Company
2009
RM’000
Unquoted investments in Malaysia:
At cost
Allowance for diminution in value
Reclassification to non-current assets held for sale (Note 29)
13,347
(11,247)
2,100
(2,100)
-
13,347
(2,950)
10,397
10,397
-
8,575
(6,475)
2,100
(2,100)
-
8,575
(2,100)
6,475
6,475
-
249

Notes To The Financial Statements
31 March 2010 (continued)
250
22 DEFERRED TAXATION
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same tax authority.
The following amounts, determined after appropriate offsetting, are shown in the Consolidated Balance
Sheets:
2010
RM’000
Group
2009
RM’000
Subject to income tax:
Deferred tax assets
Deferred tax liabilities
15,033
(10,740)
4,293
5,727
(12,243)
(6,516)
Movement of deferred tax
At start of financial year
Credited/(charged) to income statement (Note 10)
- property, plant and equipment
- capitalised development cost
- allowances and provisions
- others
(6,516)
1,720
(968)
8,136
1,921
10,809
4,293
(2,439)
(8,841)
(43,436)
49,624
(1,424)
(4,077)
(6,516) At end of financial year
Deferred tax assets (before offsetting)
- property, plant and equipment
- allowances and provisions
- others
Offset of deferred tax liabilities
Deferred tax assets (after offsetting)
94,210
-
497
94,707
(79,674)
15,033
17
86,074
561
86,652
(80,925)
5,727
Deferred tax liabilities (before offsetting)
- capitalised development cost
- property, plant and equipment
- others
Offset against deferred tax assets
Deferred tax liabilities (after offsetting)
(79,332)
(11,082)
-
(90,414)
79,674
(10,740)
(78,364)
(12,819)
(1,985)
(93,168)
80,925
(12,243)

Notes To The Financial Statements
31 March 2010 (continued)
22 DEFERRED TAXATION (continued)
The tax effect of temporary differences (which have no expiry dates) for which no deferred tax assets are recognised in the balance sheet of certain subsidiary companies of the Group as at 31 March 2010, are as analysed below:
2010
RM’000
Group
2009
RM’000
Temporary differences of which no deferred tax assets are recognised
Unrecognised tax losses
Unabsorbed capital allowances
Unrecognised reinvestment allowances
Other temporary differences
183,250
476,475
515,183
84,639
158,263
497,646
498,341
79,082
As at 31 March 2010, there are no temporary differences associated with unremitted earnings of subsidiary companies, associated companies and joint controlled entities for the recognition of deferred tax liabilities
(2009: Nil).
23 INVENTORIES
2010
RM’000
Group
2009
RM’000
Raw materials:
- completely knocked-down packs of vehicles
- others
Parts, accessories and general stores
Work-in-progress
Finished vehicles
Goods-in-transit
Land held for development
Properties for sale
112,449
125,883
66,910
274,458
581,569
47,221
10,049
8,673
244,888
164,115
68,862
219,188
640,945
35,723
10,049
11,311
1,227,212 1,395,081
251

Notes To The Financial Statements
31 March 2010 (continued)
252
24 TRADE AND OTHER RECEIVABLES
Trade receivables
Allowance for doubtful debts
Other receivables
Allowance for doubtful debts
2010
RM’000
621,177
(54,429)
566,748
149,397
(25,891)
123,506
Group
2009
RM’000
611,944
(51,583)
560,361
125,820
(22,954)
102,866
2010
RM’000
749
749
-
-
-
-
Government grant receivable
Warranty claims reimbursable (Note 34)
Prepayments
Deposits
99,344
95,758
20,957
14,087
920,400
80,656
111,451
20,368
14,393
890,095
The currency exposure profile of trade and other receivables is as follows:
Ringgit
Malaysia
RM’000
Thai
Baht
RM’000
749
-
-
-
-
Currency exposure profile as at 31.3.2010
US
Dollar
RM’000
Euro
RM’000
Others
RM’000
Total
RM’000
145
-
-
-
-
Group
Functional currency
Ringgit Malaysia
Pound Sterling
Thai Baht
Indonesian Rupiah
Others
581,911
-
-
-
-
581,911
40,657
103,023
84,700 -
-
-
84,700
-
-
143,680
21,716
11,295
-
177
-
33,188
3,874
38,329
4,509
76,921
648,158
30,209 144,527
84,700
38,329
4,686
920,400
Company
2009
RM’000
-
-
-
145
-
145
Company
Functional currency
Ringgit Malaysia 749 749

Notes To The Financial Statements
31 March 2010 (continued)
24 TRADE AND OTHER RECEIVABLES (continued)
The currency exposure profile of trade and other receivables is as follows (continued):
Ringgit
Malaysia
RM’000
Pound
Sterling
RM’000
Currency exposure profile as at 31.3.2009
US
Dollar
RM’000
Euro
RM’000
Others
RM’000
Total
RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
Indonesian Rupiah
Others
530,497
-
-
-
530,497
31,764
37,178
-
-
78,307
82,823
68,942 161,130
-
-
21,985
15,503
198
-
37,686
51,611 714,164
2,410 137,914
31,044
6,775
31,044
6,973
91,840 890,095
Company
Functional currency
Ringgit Malaysia 145 145
Credit terms of trade receivables for the Group range from 14 to 180 days (2009: 14 to 360 days).
However, the majority of the Group’s trade receivables have a credit term between 14 to 90 days (2009:
14 to 90 days).
Group sales are concentrated in Malaysia with one major third party customer in Malaysia making up 17.4%
(2009: 27.5%) of total Group revenue.
The Group has no significant concentration of credit risk except for an amount of RM73,520,000
(2009: RM81,138,000) due from a single customer. The Directors are of the view that the credit risk is minimal in view of the stability and historical settlement of the receivables from this customer.
253

Notes To The Financial Statements
31 March 2010 (continued)
254
25 AMOUNTS DUE FROM ASSOCIATED COMPANIES
The amounts due from associated companies arose from normal trade transactions. These amounts have credit terms ranging from 30 to 60 days (2009: 30 to 60 days).
The functional currency of the Company is Ringgit Malaysia and the amounts due from associated companies as at 31 March 2010 are denominated in Ringgit Malaysia.
The currency exposure profile of amounts due from associated companies is as follows:
Currency exposure profile as at 31.3.2010
Ringgit
Malaysia
RM’000
Pound
Sterling
RM’000
Total
RM’000
Group
Functional currency
Ringgit Malaysia 34,599 16 34,615
Currency exposure profile as at 31.3.2009
Ringgit
Malaysia
Pound
Sterling Total
RM’000 RM’000 RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
18,219
-
18,219
16
49
65
18,235
49
18,284

Notes To The Financial Statements
31 March 2010 (continued)
26 AMOUNTS DUE FROM JOINTLY CONTROLLED ENTITIES
The amounts due from jointly controlled entities arose from normal trade transactions. These amounts have credit terms ranging from 30 to 45 days (2009: 30 to 45 days).
The currency exposure profile of amounts due from jointly controlled entities is as follows:
Currency exposure profile as at 31.3.2010
Ringgit Pound
Malaysia
RM’000
Sterling
RM’000
Total
RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
8,611
-
8,611
15
2,695
2,710
8,626
2,695
11,321
Currency exposure profile as at 31.3.2009
Ringgit Pound
Malaysia
RM’000
Sterling
RM’000
Total
RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
8,894
-
8,894
16
2,443
2,459
8,910
2,443
11,353
255

Notes To The Financial Statements
31 March 2010 (continued)
256
27 CURRENT INVESTMENTS
2010
RM’000
Group
2009
RM’000
Lower of cost and market value:
Commercial papers and corporate debt
- quoted investments in Malaysia
- unquoted investments in Malaysia
Provision for diminution in value
Market value of quoted investments:
Commercial papers and corporate debt
584
10,458
11,042
(1,366)
9,676
654
584
15,813
16,397
(1,084)
15,313
724
28 DEPOSITS, BANK AND CASH BALANCES
2010
RM’000
Short term funds deposited with licensed banks
Bank and cash balances
1,385,703
266,386
1,652,089
The maturity profile of short term funds is as follows:
0 - 1 month
2 - 3 months
4 - 6 months
6 - 12 months
More than 1 year
845,272
388,206
68,052
59,173
25,000
1,385,703
Bank balances are deposits held at call with banks.
Group
2009
RM’000
717,221
196,629
913,850
2010
RM’000
248,119
257
248,376
486,044
224,784
-
6,393
-
717,221
83,088
106,102
10,252
48,677
-
248,119
Company
2009
RM’000
208,955
468
209,423
51,159
157,796
-
-
-
208,955

Notes To The Financial Statements
31 March 2010 (continued)
28 DEPOSITS, BANK AND CASH BALANCES (continued)
The currency exposure profile of deposits, bank and cash balances is as follows:
Ringgit
Malaysia
RM’000
Pound
Sterling
RM’000
Currency exposure profile as at 31.3.2010
US
Dollar
Australian
Dollar Others Total
RM’000 RM’000 RM’000 RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
Australian Dollar
Others
1,440,330
-
-
-
1,440,330
10,015
14,194
-
-
24,209
50,662
27,254
72
-
77,988
33,014
-
21,629
-
54,643
9,727 1,543,748
12,053 53,501
33,139
21,629
33,211
54,919 1,652,089
Ringgit
Malaysia
RM’000
Pound
Sterling
RM’000
Currency exposure profile as at 31.3.2009
US
Dollar Euro Others Total
RM’000 RM’000 RM’000 RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
Australian Dollar
Others
717,899
-
-
-
717,899
4,978
67,549
-
-
72,527
23,536
16,305
-
-
39,841
5,194
10,165
-
1,086
16,445
21,079 772,686
5,554
15,012
25,493
99,573
15,012
26,579
67,138 913,850
Deposits, bank and cash balances of the Company as at 31 March 2010 and 31 March 2009 are denominated in Ringgit Malaysia.
The weighted average effective interest rates of deposits at the balance sheet date were 2.34%
(2009: 2.59%) per annum for the Group and 2.24% (2009: 1.90%) per annum for the Company.
The Group has unutilised banking facilities amounting to RM777.3 million (2009: RM623.7 million) as at
31 March 2010.
257

Notes To The Financial Statements
31 March 2010 (continued)
258
29 NON-CURRENT ASSETS HELD FOR SALE
2010
RM’000
Group
2009
RM’000
2010
RM’000
Company
2009
RM’000
Non-current assets classified as held for sale:
- property, plant and equipment
(Note 13)
- prepaid land lease payments (Note 14)
- investments (Note 21)
11,599
23,232
2,100
36,931
13,728
22,684
-
36,412
2,100
-
-
2,100
30 SHARE CAPITAL
Group and Company
2010 2009
RM’000 RM’000
Authorised :
Ordinary shares of RM1.00 each
At start/end of financial year
Issued and fully paid:
Ordinary shares of RM1.00 each
At start/end of financial year
1,000,000 1,000,000
549,213 549,213
31 RESERVES
(a) Retained earnings
Under the single-tier tax system which came into effect from the year of assessment 2008, companies are not required to have tax credits under Section 108 of the Income Tax Act, 1967 for dividend payment purposes. Dividends paid under this system are tax exempt in the hands of shareholders.
Companies with Section 108 credits as at 31 December 2007 may continue to pay franked dividends until the Section 108 credits are exhausted or 31 December 2013 whichever is earlier unless they opt to disregard the Section 108 credits to pay single-tier dividends under the special transitional provisions of the Finance Act, 2007.
As at 31 March 2010, the Company has sufficient Section 108 tax credits to frank approximately
RM1,377.0 million (2009: RM1,377.0 million) of its retained earnings if paid out as dividends.
In addition, the Company has tax exempt income as at 31 March 2010 amounting to approximately
RM331.1 million (2009: RM326.5 million) available for distribution of tax exempt dividends to its shareholders.
-
-
-
-

Notes To The Financial Statements
31 March 2010 (continued)
31 RESERVES (continued)
(b) Capital reserve
The capital reserve arose as a result of a Group reorganisation exercise whereby all existing shareholders of Perusahaan Otomobil Nasional Sdn. Bhd. (‘PONSB’) exchanged all their ordinary shares of RM1.00 each comprising 549,213,000 ordinary shares in PONSB for 549,213,000 new ordinary shares of
RM1.00 each in the Company in a one-for-one share exchange on 5 April 2004. Following the share for share exchange, the Company has no share premium. Accordingly, the amount of share premium previously recognised on consolidation has been re-designated as capital reserve.
(c) Asset revaluation reserve
The asset revaluation reserve arose as a result of a fair value adjustment of the 51% equity interest previously held in PT Proton Cikarang Indonesia as a jointly controlled entity upon the acquisition of the remaining 49% equity interest on 10 August 2007.
32 LONG TERM LIABILITIES
2010
RM’000
Group
2009
RM’000
Unsecured:
Long term loan (Note 32(a))
Portion repayable within twelve months (Note 37) -
-
-
47,879
(47,879)
-
Secured:
Long term loan (Note 32(b))
Portion repayable within twelve months (Note 37)
Lease and hire purchase creditors (Note 32(c))
Less: Portion repayable within twelve months (Note 33)
Automotive Development Fund (Note 32(d))
Employee retirement benefits (Note 32(e))
49,415
(19,766)
29,649
9,111
(6,546)
2,565
37,288
19,148
88,650
67,893
(15,668)
52,225
3,395
(858)
2,537
21,686
25,068
101,516
259

Notes To The Financial Statements
31 March 2010 (continued)
260
32 LONG TERM LIABILITIES (continued)
The currency exposure profile of the long term liabilities is as follows:
Currency exposure profile as at 31.3.2010
Ringgit
Malaysia
Pound
Sterling Total
RM’000 RM’000 RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
38,327
-
38,327
50,323
-
50,323
38,327
50,323
88,650
Currency exposure profile as at 31.3.2009
Ringgit
Malaysia
Pound
Sterling Total
RM’000 RM’000 RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
21,686
-
21,686
79,830
-
79,830
21,686
79,830
101,516
(a) Long term loan – unsecured
The long term loan balance of RM47.9 million, which was interest free had been reclassified to short term loan and subsequently repaid during the financial year.

Notes To The Financial Statements
31 March 2010 (continued)
32 LONG TERM LIABILITIES (continued)
(b) Long term loan – secured
2010
RM’000
Group
2009
RM’000
The long term loan is repayable as follows:
Within one year
Between one and two years
More than two years
19,766
19,766
9,883
49,415
15,668
20,890
31,335
67,893
The long term loan is secured over a subsidiary company’s fixed and floating assets as disclosed in
Note 13 and bears interest rates of 3.5% - 4.5% (2009: 7.32%) per annum.
(c) Lease and hire purchase creditors – secured
The lease and hire purchase arrangements obtained by subsidiary companies are secured against the related assets of the respective subsidiary companies.
2010
RM’000
Group
2009
RM’000
The lease and hire purchase creditors are repayable as follows:
Within one year
Between one and two years
Between two and five years
Less: Future finance charges
Current (Note 33)
Non-current
7,075
1,814
927
9,816
(705)
9,111
6,546
2,565
9,111
The lease and hire purchase creditors bear an interest rate of 7.5% (2009: 7.5%) per annum.
1,084
1,084
1,714
3,882
(487)
3,395
858
2,537
3,395
261

Notes To The Financial Statements
31 March 2010 (continued)
262
32 LONG TERM LIABILITIES (continued)
(d) Automotive Development Fund
The Government of Malaysia approved the setting up of an Automotive Development Fund (‘ADF’) under the Ninth Malaysia Plan with the objective of modernising and automating the manufacturing processes, improving efficiency, productivity, quality and the application of automation for the
Malaysian automotive industry.
As at 31 March 2010, the Government of Malaysia had disbursed a total of RM110 million to the
Group to be utilised for payments to external parties for the purpose of developing and promoting a competitive and viable domestic automotive sector as a means to achieve the objective of the ADF.
2010
RM’000
Group
2009
RM’000
The ADF comprises:
(i) ADF liabilities
(ii) Capital grant
Less: Current portion of capital grant
Non-current
20,512
28,736
49,248
(11,960)
37,288
14,467
9,403
23,870
(2,184)
21,686
(i) ADF liabilities
At 1 April
Add: Additional ADF grant received during
the financial year
Interest earned during the financial year
14,467
60,000
777
75,244
(54,732)
20,512
45,343
681
-
46,024
(31,557)
14,467
Less: Utilised during the financial year
At 31 March (Note 43)
(ii) Capital grant
At 1 April
Add: Received during the financial year (Note 13)
Less: Amortisation
31 March
Current
Non-current
9,403
50,588
(31,255)
28,736
11,960
16,776
28,736
31,049
-
(21,646)
9,403
2,184
7,219
9,403
The current portion of the capital grant is presented within other payables (Note 33).

Notes To The Financial Statements
31 March 2010 (continued)
32 LONG TERM LIABILITIES (continued)
(e) Employee retirement benefits
The employee retirement benefits represents the scheme operated by a subsidiary company.
(i) Defined contribution plans
The Group pays contributions to publicly or privately administered pension plans on either a mandatory, contractual or voluntary basis depending on the nature of the defined contribution plans. The Group has no further payment obligations once the contributions have been paid.
The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or reduction in the future payments is available.
(ii) Defined benefit plan
Lotus Group Scheme – defined benefit scheme
Lotus Group International Limited and its subsidiary companies (‘Lotus Group’), operate a defined benefit scheme, the Lotus Pension Plan. The assets are held in separate trustee administered funds. In addition, it provides life assurance cover for all employees.
Contributions to the scheme are charged to the income statement so as to spread the cost of pensions over employees’ working lives with the Lotus Group. The contributions are determined by a qualified actuary. An actuarial valuation of the plan was carried out for the period from
1 April 2009 to 31 March 2010.
The movements during the financial year in the Consolidated Balance Sheets are as follows:
At 1 April
Currency translation differences
Charged/(credited) to income statement (Note 8)
Contributions paid
At 31 March
2010
RM’000
25,068
(1,877)
4,970
(9,013)
19,148
Group
2009
RM’000
50,095
(7,616)
(8,042)
(9,369)
25,068
263

Notes To The Financial Statements
31 March 2010 (continued)
264
32 LONG TERM LIABILITIES (continued)
(e) Employee retirement benefits (continued)
(ii) Defined benefit plan (continued)
The amounts recognised in the Consolidated Balance Sheets are analysed as follows:
Present value of obligation
Fair value of plan assets
Shortfall of funded plan
Unrecognised actuarial (loss)/gain
Liability on balance sheet
2010
RM’000
Group
2009
RM’000
358,343 234,156
(313,138) (224,494)
45,205
(26,057)
9,662
15,406
19,148 25,068
The movements in the defined benefit obligation during the financial year are as follows:
2010
RM’000
Group
2009
RM’000
At 1 April
Currency translation differences
Interest cost
Current service cost
Employee contributions
Benefits paid
Actuarial loss/(gain) on obligation
Effect of changes in assumptions
At 31 March
234,156
(15,603)
17,022
2,952
3,662
(8,410)
8,331
116,233
358,343
316,128
(55,588)
18,926
4,266
3,817
(11,495)
(41,898)
-
234,156

Notes To The Financial Statements
31 March 2010 (continued)
32 LONG TERM LIABILITIES (continued)
(e) Employee retirement benefits (continued)
(ii) Defined benefit plan (continued)
The movements in the fair value of plan assets during the financial year are as follows:
At 1 April
Currency translation differences
Expected return on plan assets
Employer contributions
Employee contributions
Benefits paid
Actuarial gain/(loss) on plan assets
At 31 March
2010
RM’000
224,494
(23,534)
15,004
9,013
3,662
(8,410)
92,909
313,138
Group
2009
RM’000
341,917
(55,571)
21,162
9,369
3,817
(11,495)
(84,705)
224,494
The mortality assumptions used were as follows:
2010
Age
Group
2009
Age
Longevity at age 65 for current pensioners:
- Male
- Female
Longevity at age 65 for future pensioners:
- Male
- Female
85.9
88.3
87.0
89.3
84.9
87.9
86.1
89.1
265

Notes To The Financial Statements
31 March 2010 (continued)
266
32 LONG TERM LIABILITIES (continued)
(e) Employee retirement benefits (continued)
(ii) Defined benefit plan (continued)
The expenses recognised in the Consolidated Income Statements are analysed as follows:
2010
RM’000
Group
2009
RM’000
Current service cost
Interest cost
Expected return on plan assets
Net actuarial gain recognised in financial year
Total, included in staff costs within administrative expenses (Note 8)
Actual return/(loss) on plan assets
2,952
17,022
(15,004)
-
4,970
107,913
4,266
18,926
(21,162)
(10,072)
(8,042)
(63,543)
The principal actuarial assumptions used in respect of the Group’s defined benefit plan were as follows:
2010
%
Group
2009
%
Discount rates
Expected return on plan assets:
- equity
- bonds
- others
Expected rate of salary increase
Expected rate of pension payment increase
Inflation
5.60
6.75
4.00
4.00
4.70
3.50
3.70
6.90
7.25
4.50
4.50
4.00
3.00
3.00
The expected return on the average value of the assets over the period is calculated using the long-term average rate of return expected over the remaining term of the Lotus Pension Plan’s liabilities.

Notes To The Financial Statements
31 March 2010 (continued)
33 TRADE AND OTHER PAYABLES
Trade payables
Other payables
Accruals
Payments received in advance for engineering contracts
Lease and hire purchase creditors
- current portion (Note 32(c))
2010
RM’000
853,843
80,904
611,292
77,779
Group
2009
RM’000
617,725
95,597
487,229
76,249
6,546 858
1,630,364 1,277,658
The currency exposure profile of trade and other payables is as follows:
Ringgit
Malaysia
RM’000
Pound
Sterling
RM’000
2010
RM’000
535
-
-
535
-
-
Company
2009
RM’000
482
-
-
482
-
Currency exposure profile as at 31.3.2010
US
Dollar
RM’000
Euro
RM’000
Others
RM’000
Total
RM’000
-
Group
Functional currency
Ringgit Malaysia
Pound Sterling
Others
1,240,224 3,930
147,164
-
1,240,224 151,094
86,997
10,372
-
97,369
29,743
20,142
184
50,069
39,893 1,400,787
23,334 201,012
28,381 28,565
91,608 1,630,364
Company
Functional currency
Ringgit Malaysia 535 535
267

Notes To The Financial Statements
31 March 2010 (continued)
268
33 TRADE AND OTHER PAYABLES (continued)
The currency exposure profile of trade and other payables is as follows (continued):
Currency exposure as at 31.3.2009
Ringgit
Malaysia
RM’000
Pound
Sterling
RM’000
US
Dollar
RM’000
Euro
RM’000
Others
RM’000
Total
RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
Others
959,908 523 115,677
127,742 3,779
-
959,908 128,265 119,456
7,080
22,584
203
29,867
30,821 1,114,009
1,599 155,704
7,742 7,945
40,162 1,277,658
Company
Functional currency
Ringgit Malaysia 482 482
Terms of trade payables granted to the Group and Company vary up to 60 days (2009: up to 60 days) credit.
34 PROVISIONS
Provision for warranty
RM’000
Onerous contract
RM’000
Group
Total
RM’000
2010
At 1 April
Currency translation differences
Charge to income statement (Note 7)
Warranties reimbursable
Provision for the financial year
Utilised during the financial year
At 31 March
2009
At 1 April
Currency translation differences
Charge to income statement (Note 7)
Warranties reimbursable
Provision for the financial year
Utilised during the financial year
At 31 March
167,640
(1,769)
45,968
24,320
70,288
(61,815)
174,344
186,556
(4,862)
45,149
43,054
88,203
(102,257)
167,640
22,139
-
-
-
-
(12,079)
10,060
189,779
(1,769)
45,968
24,320
70,288
(73,894)
184,404
22,139
-
186,556
(4,862)
67,288
22,139
43,054
110,342
(102,257)
22,139 189,779

Notes To The Financial Statements
31 March 2010 (continued)
34 PROVISIONS (continued)
The Group expects to be reimbursed by suppliers in respect of warranties amounting to RM95,758,000
(2009: RM111,451,000) as disclosed in Note 24 to the financial statements.
35 AMOUNTS DUE TO ASSOCIATED COMPANIES
Amounts due to associated companies arose from normal trade transactions, are denominated in Ringgit
Malaysia, unsecured, interest free and payable within 30 to 60 days (2009: 30 to 60 days).
36 AMOUNTS DUE TO JOINTLY CONTROLLED ENTITIES
Amounts due to jointly controlled entities arose from normal trade transactions and are due between 30 to
60 days (2009: 30 to 60 days).
The currency exposure profile of the amounts due to jointly controlled entities is as follows:
Pound
Sterling
RM’000
Currency exposure profile as at 31.3.2010
US
Dollar
RM’000
Ringgit
Malaysia
RM’000
Total
RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
Australian Dollar
Indonesia Rupiah
323
-
-
-
323
127
556
-
-
683
22,934
-
-
-
22,934
22,934
323
127
556
23,940
Pound
Sterling
RM’000
Currency exposure profile as at 31.3.2009
US
Dollar
RM’000
Ringgit
Malaysia
RM’000
Total
RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
Australian Dollar
307
-
-
307
266
-
-
266
14,622
-
-
14,622
14,622
307
266
15,195
269

Notes To The Financial Statements
31 March 2010 (continued)
270
37 SHORT TERM BORROWINGS
Effective interest rate during the financial year
2010
%
Per annum
2009
%
Per annum
2010
RM’000
Unsecured:
Long term loan
- current portion (Note 32(a))
Bridging loan
Bankers’ acceptance/Bills of exchange
Revolving credit
5.00 – 6.00
-
3.50
2.84
5.00 – 6.00
2.88 – 4.82
3.50 – 6.00
-
32,724
-
2,690
25,696
61,110
Secured:
Long term loan
- current portion (Note 32(b))
Revolving credit
3.50 – 4.50
1.80 – 4.50
7.32
4.00 – 10.00
19,766
61,360
81,126
142,236
The revolving credit is secured over a subsidiary company’s fixed and floating assets.
Group
2009
RM’000
47,879
36,595
141,317
30,813
256,604
15,668
33,767
49,435
306,039

Notes To The Financial Statements
31 March 2010 (continued)
37 SHORT TERM BORROWINGS (continued)
The currency exposure profile of the short term borrowings is as follows:
Currency exposure profile as at 31.3.2010
Ringgit Pound
Malaysia
RM’000
Sterling
RM’000
Total
RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
2,690
-
2,690
-
139,546
139,546
2,690
139,546
142,236
Currency exposure profile as at 31.3.2009
Ringgit
Malaysia
RM’000
Pound
Sterling
RM’000
Total
RM’000
Group
Functional currency
Ringgit Malaysia
Pound Sterling
189,196
-
189,196
-
116,843
116,843
189,196
116,843
306,039
271

Notes To The Financial Statements
31 March 2010 (continued)
272
38 SEGMENTAL INFORMATION
The Group is principally engaged in the automobile industry namely, manufacturing, assembling, trading and provision of engineering and other services in respect of motor vehicles and related products.
Accordingly, no segmental information is considered necessary for analysis by industry segment.
Inter-segment sales comprise sales of motor vehicles, parts and engineering services to Group companies in different geographical locations.
Analyses of the Group’s revenue, results and other information by geographical locations are as follows:
Malaysia Other countries Elimination Total
2010 2009 2010 2009 2010 2009 2010 2009
RM’million RM’million RM’million RM’million RM’million RM’million RM’million RM’million
Revenue
External sales
Inter-segment sales
Total revenue
7,020.2
261.6
7,281.8
5,721.8
121.6
5,843.4
1,206.7
46.0
1,252.7
797.0
47.2
844.2
-
(307.6)
(307.6)
-
(168.8)
8,226.9
(168.8) 8,226.9
-
6,518.8
-
6,518.8
Results
Segment operating profit/(loss)
Unallocated (expense)/income
Interest expense
Interest income
Share of net results of associated companies and jointly controlled entities
Taxation
Profit/(loss) after taxation
142.4
10.9
(273.0)
20.3
90.3
5.9
(106.5)
5.3
0.7
2.0
(3.4)
9.2
233.4
(7.7)
(12.1)
28.5
18.8
(42.0)
218.9
(382.9)
1.3
(14.4)
42.0
34.8
17.4
(301.8)
Other information
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
Capital expenditure
Depreciation and amortisation
Assets written off
Impairment:
- property, plant and equipment
- capitalised development cost
Research and development grant
Allowance for doubtful debts
Write down of inventories
Reversal of impairment of investment
Provision for diminution in value of investment
Reversal of impairment of property, plant and equipment
5,992.8
1,054.5
365.1
462.5
66.7
6.0
-
(143.7)
14.0
80.1
(2.1)
10.4
(53.4)
5,703.4
1,287.0
562.4
473.4
34.2
249.2
20.8
(80.7)
45.6
108.9
-
-
-
1,078.2
866.5
112.7
51.8
12.9
13.2
-
-
-
-
-
-
-
820.5
286.8
138.0
25.4
4.6
8.5
-
6.1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,071.0
434.2
7,505.2
1,921.0
251.2
2,172.2
477.8
514.3
79.6
6.0
-
(143.7)
27.2
80.1
(2.1)
10.4
(53.4)
257.7
20.8
(80.7)
45.6
115.0
-
-
-
6,523.9
575.0
7,098.9
1,573.8
423.6
1,997.4
700.4
498.8
38.8

Notes To The Financial Statements
31 March 2010 (continued)
38 SEGMENTAL INFORMATION (continued)
Unallocated income includes dividend from other investments, gain/(loss) on disposal of current investments and write down/(write back) of provision for diminution in value of current investments. Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and operating cash, and excludes investments in associated companies, jointly controlled entities, investments, current investments, goodwill and taxation. Segment liabilities comprise operating liabilities and exclude items such as taxation, borrowings and employee retirement benefits.
Capital expenditure mainly comprises additions to property, plant and equipment and intangible assets
(Notes 13 and 16 to the financial statements).
Secondary reporting format
The primary reporting format is based on geographical locations of the assets. Industry segmentation is considered unnecessary as the Group is principally engaged in the automobile industry. Therefore, only sales to external customers based on the location of the customer are presented below:
2010
Malaysia
2009
Other countries
2010 2009 2010
Elimination
2009 2010
Total
2009
RM’million RM’million RM’million RM’million RM’million RM’million RM’million RM’million
Revenue
External sales
Inter-segment sales
Total revenue
6,703.6
5,404.5
1,523.3
1,114.3
261.6
121.6
46.0
47.2
6,965.2
5,526.1
1,569.3
1,161.5
-
(307.6)
(307.6)
8,226.9
6,518.8
(168.8) -
(168.8) 8,226.9
6,518.8
39 CAPITAL AND OTHER COMMITMENTS
2010
RM’000
Group
2009
RM’000
Capital commitments
Capital expenditure for property, plant and equipment and intangible assets approved by the Board but not provided for in the financial statements:
Contracted for
Not contracted for
345,546 184,745
2,883,331 2,421,085
273

Notes To The Financial Statements
31 March 2010 (continued)
274
40 OPERATING LEASES
As at 31 March 2010, the Group was committed to making the following payments in respect of operating leases expiring:
Group
Land and buildings
RM’000
Plant and machinery
RM’000
Office equipment and vehicles
RM’000
Total
RM’000
2010
Within one year
Between one and five years
After five years
23,302
49,055
1,280
73,637
956
1,280
12
2,248
1,213
1,598
-
2,811
25,471
51,933
1,292
78,696
Group
Land and buildings
RM’000
Plant and machinery
RM’000
Office equipment and vehicles
RM’000
Total
RM’000
2009
Within one year
Between one and five years
After five years
11,414
13,896
1,353
26,663
965
2,261
52
3,278
1,254
1,231
-
2,485
13,633
17,388
1,405
32,426

Notes To The Financial Statements
31 March 2010 (continued)
41 SIGNIFICANT RELATED PARTY TRANSACTIONS DISCLOSURES
In the normal course of business, the Group and Company undertake a variety of transactions at mutually agreed terms with subsidiary companies, associated companies, jointly controlled entities and other related parties. The related parties with whom the Group and Company transact with, include the following companies:
Related parties
Lotus Group International Limited
Miyazu (Malaysia) Sdn. Bhd.
PHN Industry Sdn. Bhd.
Marutech Elastomer Industries Sdn. Bhd.
Exedy (Malaysia) Sdn. Bhd.
Netstar Advance Systems Sdn. Bhd.
Proton Finance Limited
Lotus Finance Limited
Proton Parts Centre Sdn. Bhd.
PEPS-JV (M) Sdn. Bhd.
Technomeiji Rubber Industries Sdn. Bhd.
Aluminium Alloy Industries Sdn. Bhd.
Ara Borgstena Sdn. Bhd.
Relationship
Subsidiary company
Associated company
Associated company
Associated company
Associated company
Associated company
Associated company
Jointly controlled entity
Jointly controlled entity
Equity investment
Equity investment
Equity investment
Equity investment
In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party transactions. The related party transactions described below were carried out on terms and conditions obtainable in transactions with unrelated parties unless otherwise stated.
(a) Interest income from advances to a subsidiary company
2010
RM’000
Company
2009
RM’000
Subsidiary company
- Lotus Group International Limited 5,680
275

Notes To The Financial Statements
31 March 2010 (continued)
276
41 SIGNIFICANT RELATED PARTY TRANSACTIONS DISCLOSURES (continued)
(b) Sales of goods and services
2010
RM’000
Group
2009
RM’000
Jointly controlled entities
- Proton Parts Centre Sdn. Bhd.
- Lotus Finance Limited*
20,780
74,641
25,566
45,988
Associated company
- Proton Finance Limited* 29,100 30,787
* Under the terms of financing agreements, Lotus Finance Limited and Proton Finance Limited provide financing services to dealers and customers of the Group to acquire vehicles. Vehicles under financing arrangements are sold through Lotus Finance Limited and Proton Finance
Limited.
(c) Purchases of goods and services from:
2010
RM’000
Group
2009
RM’000
Associated companies
- PHN Industry Sdn. Bhd.
- Marutech Elastomer Industries Sdn. Bhd.
- Exedy (Malaysia) Sdn. Bhd.
- Netstar Advance Systems Sdn. Bhd.
- Miyazu (Malaysia) Sdn. Bhd.
Jointly controlled entity
- Proton Parts Centre Sdn. Bhd.
Equity investment companies
- PEPS-JV (M) Sdn. Bhd.
- Technomeiji Rubber Industries Sdn. Bhd.
- Aluminium Alloy Industries Sdn. Bhd.
- Ara Borgstena Sdn. Bhd.
164,261
1,365
8,186
5,489
44,057
133,429
188,697
3,063
38,706
566
123,623
1,048
8,619
6,487
136,524
98,179
191,301
3,589
44,712
30

Notes To The Financial Statements
31 March 2010 (continued)
41 SIGNIFICANT RELATED PARTY TRANSACTIONS DISCLOSURES (continued)
(d) Interest expense
2010
RM’000
Group
2009
RM’000
Associated company
- Proton Finance Limited 371 694
(e) Key management personnel compensation
Key management is defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including Executive and
Non-executive Directors. The key management compensation disclosed below excludes the Executive and Non-executive Directors’ compensation as disclosed in Note 8 to the financial statements:
Group
2010
RM’000
2009
RM’000
Salaries and other short-term employee benefits
Defined contribution retirement plan
15,067
1,184
10,822
1,243
42 CONTINGENT LIABILITIES
2010
RM’000
27,503
Group
2009
RM’000
14,531 Disputed claims
(a) In a prior financial year, a supplier had obtained a judgment in default against a subsidiary company for RM12.5 million after failing to reach a formal agreement. The subsidiary company had obtained legal opinion that the claims are without basis and action has been taken to set aside the judgment.
The Directors are of the opinion, based on legal advice, that the claims have no merits and are unlikely to succeed.
277

Notes To The Financial Statements
31 March 2010 (continued)
278
42 CONTINGENT LIABILITIES (continued)
(b) A distributor instituted arbitration proceedings against a subsidiary company as a result of the termination of its distributorship, for which the distributor had claimed USD9.9 million
(RM32.4 million) plus general damages and interest. The arbitration award was handed down on 30
October 2006 wherein the distributor’s claim against the subsidiary company was dismissed. The distributor has filed an action in court to set aside the arbitration award. The subsidiary company has obtained legal advice that it is probable that such an action will not be successful.
(c) A subsidiary company had issued a notice of termination of an associated company on
11 July 2006 to the subsidiary company’s joint venture partner (‘Respondent’). The subsidiary company’s joint venture partner is disputing the termination. The amount claimed cannot be quantified due to the nature of damages being claimed which can only be ascertained from evidence produced during the arbitration process. According to the Joint Venture Contract (‘JV Contract’), disputes must be referred to arbitration. The subsidiary company filed the Statement of Case with the Singapore International Arbitration Centre on 31 January 2008. The Respondent subsequently produced a Memorandum allegedly signed by the subsidiary company and the Respondent dated the same date as the JV Contract which allegedly states that the forum for settling of disputes should be the Chinese courts and not arbitration. The subsidiary company maintains that the Memorandum is a forgery. The arbitration tribunal stated that it has jurisdiction to hear the matter challenging its jurisdiction and this will be by way of a full hearing involving witnesses and evidence.
The Respondent had on 11 June 2008 filed an action in China seeking damages for the unlawful termination of the JV Contract by the subsidiary company. The subsidiary company has accordingly filed its objection to the action in China on the basis that the Chinese court has no jurisdiction to hear any matters in relation to the JV. This is supported by the tribunal awards on jurisdiction and on the valid termination of the JV. The objection is pending examination by the Chinese court.
On 2 February 2010, the arbitration tribunal issued a final award stating that the JV Contract was validly terminated.
On 24 May 2010, the arbitration tribunal ordered the Respondent to pay the subsidiary company all its legal and arbitration costs totalling Singapore Dollar 655,056 (RM1,532,045). The subsidiary company is currently in the midst of enforcing the arbitral award and initiating the winding-up process in China.
(d) A vendor has commenced arbitration proceedings against two subsidiary companies. The claim against one subsidiary company amounts to RM19.3 million and against the other subsidiary company is for RM8.2 million. Both parties are in the midst of exchanging points of claims and defences which will be followed by the exchange of documents in support of such claims and defences. The parties are also appointing a new arbitrator in light of the previous arbitrator being appointed as Judicial Commissioner to the High Court. The Directors are of the opinion, based on legal advice, that the claims have no merits and are unlikely to succeed.

Notes To The Financial Statements
31 March 2010 (continued)
43 CASH AND CASH EQUIVALENTS
2010
RM’000
Group
2009
RM’000
2010
RM’000
Company
2009
RM’000
Short term funds deposited with licensed banks
Bank and cash balances
Deposits, bank and cash balances
Deposit pledge with financial institution as security for banking facilities
Bank balance in respect of
ADF liabilities (Note 32(d))
1,385,703
266,386
1,652,089
(25,468)
(20,512)
1,606,109
717,221
196,629
913,850
-
(14,467)
899,383
248,119
257
248,376
-
-
248,376
208,955
468
209,423
-
209,423
-
44 FINANCIAL INSTRUMENTS
(a) Financial risk management objectives and policies
The Group’s activities are exposed to a variety of financial risks, including foreign currency exchange risk, interest rate risk, market risk, credit risk, liquidity and cash flow risk. The Group focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. Financial risk management is carried out through risks reviews, internal control systems, a comprehensive insurance programme and adherence to Group financial risk management policies. The Board regularly reviews these risks and approves the treasury policies, which cover the management of these risks.
The Group uses derivative financial instruments such as foreign exchange contracts and interest rate instruments to hedge certain exposures. It does not trade in financial instruments.
(i) Foreign currency exchange risk
The Group is exposed to currency risk as a result of the foreign currency transactions entered into by the Company and subsidiary companies in currencies other than their functional currencies.
The Group enters into forward foreign currency exchange contracts to limit the exposure on foreign currency receivables and payables, and on cash flows arising from anticipated transactions denominated in foreign currencies.
(ii) Interest rate risk
The Group’s income and operating cash flows are not substantially affected by changes in market interest rates except for interest from bank deposits. Derivative financial instruments are used, where appropriate, to generate the desired interest rate profile.
279

Notes To The Financial Statements
31 March 2010 (continued)
280
44 FINANCIAL INSTRUMENTS (continued)
(a) Financial risk management objectives and policies (continued)
(iii) Market risk
The Group does not face significant exposure from the risk from changes in debt and equity prices.
(iv) Credit risk
The Group seeks to invest cash assets safely and profitably. The Group considers the risk of material loss in the event of non-performance by a financial institution to be unlikely in view of the financial strength of those counter-parties.
The Group seeks to control customers credit risk by ensuring that significant sales of vehicles and provision of services are made to customers with an appropriate credit history.
(v) Liquidity and cash flow risk
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions.
(b) Forward foreign exchange contracts
Forward foreign exchange contracts are entered into by the Group in currencies other than the functional currency to manage exposure to fluctuations in foreign currency exchange rates on specific transactions.
As at 31 March 2010, there are no outstanding forward foreign exchange contracts. As at 31 March
2009, the outstanding notional principal amounts of the Group foreign exchange contracts are as follows:
2010
RM’000
Group
2009
RM’000
Maturity
Less than 6 months 38,343

Notes To The Financial Statements
31 March 2010 (continued)
44 FINANCIAL INSTRUMENTS (continued)
(b) Forward foreign exchange contracts (continued)
The foreign currency amounts to be received and the contractual exchange rates of the Group‘s outstanding contracts are as follows:
Hedged item
Currency to be received
Currency to be paid
RM’000 equivalent
Average contracted rate
2009
Group
Forecasted receivables
- the following 6 months JPY
GBP
GBP
RM
USD
EURO
1,907
21,956
14,480
38,343
1 RM
1 USD
= JPY 26.705
= GBP 1.6567
1 EURO = GBP 1.1746
The net position based on fair values of the outstanding forward foreign exchange contracts was NIL
(2009: unfavorable by RM125,000).
281

Notes To The Financial Statements
31 March 2010 (continued)
282
44 FINANCIAL INSTRUMENTS (continued)
(c) Fair values
The carrying amounts of financial assets and liabilities of the Group and Company at the balance sheet date approximated their fair values except as set out below:
Group Company
Note
Carrying amount
RM’000
Fair value
RM’000
Carrying amount
RM’000
Fair value
RM’000
2010
Recognised on the balance sheet
Amounts due from subsidiary companies
Current investments:
- quoted
- unquoted
Non-current assets held for sale:
- investments
Long term loan
Lease and hire purchase creditor
- long term portion
ADF liabilities
20
27
27
29
32(b)
32(c)
32(d)
584
9,092
-
2,100
(29,649)
(2,565)
(37,288)
654
9,092
-
13,825
(28,646)
(2,478)
(36,027)
232,946
2,100
-
-
-
-
-
205,420
13,825
-
-
-
-
-
2009
Recognised on the balance sheet
Amounts due from subsidiary companies
Investments - unquoted
Current investments:
- quoted
- unquoted
Long term loan
Lease and hire purchase creditor
- long term portion
ADF liabilities
20
21
27
27
32(b)
32(c)
32(d)
10,397
-
584
14,729
(52,225)
(2,537)
(21,686)
17,618
-
724
14,729
(46,053)
(2,256)
(21,422)
177,870
6,475
-
-
-
-
-
138,284
17,618
-
-
-
-
-

Notes To The Financial Statements
31 March 2010 (continued)
45 COMPARATIVES
The following comparative figures have been reclassified to conform with the current year’s presentation:
Revenue
Cost of sales
Other operating income
Distribution costs
Group
As previously reported Reclassification
RM’000 RM’000
6,486,570
(6,075,913)
197,895
(187,668)
32,184
(69,415)
(32,184)
69,415
Restated
RM’000
6,518,754
(6,145,328)
165,711
(118,253)
46 APPROVAL OF FINANCIAL STATEMENTS
The financial statements have been approved for issue in accordance with a resolution of the Board of
Directors on 27 July 2010.
283

284
Statement By Directors Pursuant To
Section 169(15) Of The Companies Act, 1965
We, Dato’ Mohd Nadzmi bin Mohd Salleh and Dato’ Syed Zainal Abidin B Syed Mohamed Tahir, two of the
Directors of Proton Holdings Berhad, state that, in the opinion of the Directors, the financial statements set out on pages 185 to 283 are drawn up so as to give a true and fair view of the state of affairs of the Group and
Company as at 31 March 2010 and of the results and cash flows of the Group and Company for the financial year ended on that date in accordance with the provisions of the Companies Act, 1965 and MASB Approved
Accounting Standards in Malaysia for Entities Other than Private Entities.
Signed on behalf of the Board of Directors in accordance with their resolution dated 27 July 2010.
DATO’ MOHD NADZMI BIN MOHD SALLEH
CHAIRMAN
Statutory Declaration Pursuant To
Section 169(16) Of The Companies Act, 1965
DATO’ SYED ZAINAL ABIDIN B SYED
MOHAMED TAHIR
MANAGING DIRECTOR
I, Azhar bin Othman, the officer primarily responsible for the financial management of Proton Holdings Berhad, do solemnly and sincerely declare that the financial statements set out on pages 185 to 283 are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
AZHAR BIN OTHMAN
Subscribed and solemnly declared by the abovenamed Azhar bin Othman at Shah Alam in Malaysia on 27 July
2010, before me.
COMMISSIONER FOR OATHS

Independent Auditors’ Report To The Members Of
Proton Holdings Berhad
(Incorporated in Malaysia) (Company No. 623177-A)
We have audited the financial statements of Proton Holdings Berhad, which comprise the balance sheets as at 31 March 2010 of the Group and Company, and the income statements, statements of changes in equity and cash flow statements of the Group and Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 185 to 283.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with MASB Approved Accounting Standards in Malaysia for Entities Other than
Private Entities and the Companies Act, 1965. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with MASB Approved
Accounting Standards in Malaysia for Entities Other than Private Entities and the Companies Act, 1965 so as to give a true and fair view of the financial position of the Group and Company as of 31 March 2010 and of their financial performance and cash flows for the year then ended.
285

286
Independent Auditors’ Report To The Members Of
Proton Holdings Berhad
(continued)
(Incorporated in Malaysia) (Company No. 623177-A)
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the
Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 17 to the financial statements.
(c) We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.
(d) The audit reports on the financial statements of the subsidiary companies did not contain any qualification or any adverse comment made under Section 174(3) of the Act.
OTHER MATTERS
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the
Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
PRICEWATERHOUSECOOPERS
(No. AF: 1146)
Chartered Accountants
Kuala Lumpur
27 July 2010
THAYAPARAN A/L S. SANGARAPILLAI
(No. 2085/09/10 (J))
Chartered Accountant

Shareholding Statistics as at 30 July 2010
ANALYSIS OF SHAREHOLDINGS
Share Capital
Authorised Share Capital Issued and Fully Paid Up Capital RM1,000,000,000/-
Issued and Fully Paid Up Capital
Class of Shares
Voting Rights
RM549,213,002/-
Ordinary Shares of RM1/- each
One (1) Voting Right for
One (1) Ordinary Share
ANALYSIS OF SHAREHOLDINGS BY RANGE GROUPS
Size Of Holdings
1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - 27,460,649 (*)
27,460,650 and above (**)
Total
No. of
Shareholders/
Depositors
% of Shareholders/
Depositors No. of Shares
105
3,710
2,699
443
160
3
7,120
1.475
52.107
37.907
6.222
1,483
3,447,441
10,307,866
14,242,938
2.247 184,480,801
0.042 336,732,473
100.000 549,213,002
%
of Shares held
0.000
0.628
1.877
2.593
33.590
61.312
100.000
DISTRIBUTIONS OF SHAREHOLDINGS
Size of shareholdings
1 to 99
100 to 1,000
1,001 to 10,000
10,001 to 100,000
100,001 to 27,460,649
27,460,650 and above
Total
No. of
Shareholders/
Depositors
% of
Shareholders/
Depositors
Malaysian Foreign Malaysian Foreign
103
3,659
2,610
364
68
3
6,807
2 1.447
0.028
51 51.390
0.716
0
313
0.042
Malaysian
1,439
3,398,741
0.000 336,732,473
No. of shares % of Shares Held
Foreign Malaysian Foreign
44
48,700
89 36.658
1.250
79 5.112
1.110
9,903,066
11,178,300
404,800
3,064,638
92 0.955
1.292 133,036,227 51,444,574 24.223
9.367
95.604
4.396 494,250,246
0.000
0.619
1.804
2.035
0.000
0.009
0.073
0.558
0 61.312
0.000
54,962,756 89.993 10.007
287

Shareholding Statistics as at 30 July 2010 (continued)
288
SUBSTANTIAL SHAREHOLDERS
No. Name
1 Khazanah Nasional Berhad
2 Employees Provident Fund Board
3 Cartaban Nominees (Tempatan) Sdn. Bhd.
Petroliam Nasional Berhad (Strategic Inv)
Shareholdings
234,734,693
58,877,100
43,120,680
THIRTY LARGEST SHAREHOLDERS
No. Name No. of Shares
1 KHAZANAH NASIONAL BERHAD
2 EMPLOYEES PROVIDENT FUND BOARD
3 CARTABAN NOMINEES (TEMPATAN) SDN. BHD.
PETROLIAM NASIONAL BERHAD (STRATEGIC INV)
4 MAYBAN NOMINEES (TEMPATAN) SDN. BHD.
MAYBAN TRUSTEES BERHAD FOR PUBLIC REGULAR SAVINGS FUND
(N14011940100)
5 LEMBAGA TABUNG HAJI
6 KUMPULAN WANG PERSARAAN (DIPERBADANKAN)
7 HSBC NOMINEES (TEMPATAN) SDN. BHD.
NOMURA ASSET MGMT MALAYSIA FOR EMPLOYEES PROVIDENT FUND
8 HSBC NOMINEES (ASING) SDN. BHD.
EXEMPT AN FOR THE BANK OF NEW YORK MELLON (MELLON ACCT)
9 AMANAHRAYA TRUSTEES BERHAD
PUBLIC GROWTH FUND
10 VALUECAP SDN. BHD.
11 AMANAHRAYA TRUSTEES BERHAD
PUBLIC EQUITY FUND
12 AMANAHRAYA TRUSTEES BERHAD
AS 1MALAYSIA
13 AMANAHRAYA TRUSTEES BERHAD
SKIM AMANAH SAHAM BUMIPUTERA
14 PERMODALAN NASIONAL BERHAD
15 AMANAHRAYA TRUSTEES BERHAD
PUBLIC SECTOR SELECT FUND
16 CITIGROUP NOMINEES (ASING) SDN. BHD.
CBNY FOR DIMENSIONAL EMERGING MARKETS VALUE FUND
17 MAYBAN NOMINEES (TEMPATAN) SDN. BHD.
MAYBAN TRUSTEES BERHAD FOR PUBLIC AGGRESSIVE GROWTH
FUND (N14011940110)
234,734,693
58,877,100
43,120,680
20,493,600
16,820,427
13,926,800
10,797,700
8,540,210
6,766,500
6,035,000
5,226,600
5,165,900
4,793,300
4,599,900
4,295,400
3,786,000
3,453,000
%
42.740
10.720
7.851
%
42.740
10.720
7.851
3.731
3.063
2.536
1.966
1.554
1.232
1.098
0.951
0.940
0.872
0.837
0.782
0.689
0.628

Shareholding Statistics as at 30 July 2010 (continued)
THIRTY LARGEST SHAREHOLDERS (continued)
No. Name
18 AMANAHRAYA TRUSTEES BERHAD
PUBLIC INDEX FUND
19 HSBC NOMINEES (ASING) SDN. BHD.
EXEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
(U.S.A.)
20 MAYBAN NOMINEES (TEMPATAN) SDN. BHD.
MAYBAN TRUSTEES BERHAD FOR PUBLIC BALANCED FUND
(N14011950210)
21 HSBC NOMINEES (ASING) SDN. BHD.
TNTC FOR BRANDES INSTITUTIONAL EQUITY TRUST
22 CIMSEC NOMINEES (TEMPATAN) SDN. BHD.
CIMB BANK BERHAD (ETP)
23 CARTABAN NOMINEES (ASING) SDN. BHD.
GOVERNMENT OF SINGAPORE INVESTMENT CORPORATION PTE LTD
FOR GOVERNMENT OF SINGAPORE (C)
24 CARTABAN NOMINEES (ASING) SDN. BHD.
SSBT FUND ITTE FOR COMMONFUND EMERGING MARKETS
INVESTORS COMPANY
25 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN. BHD.
ALLIANCE INVESTMENT MANAGEMENT BERHAD FOR EMPLOYEES
PROVIDENT FUND
26 AMANAHRAYA TRUSTEES BERHAD
AMANAH SAHAM MALAYSIA
27 EMPLOYEES PROVIDENT FUND BOARD
28 CITIGROUP NOMINEES (ASING) SDN. BHD.
CBNY FOR DFA EMERGING MARKETS SMALL CAP SERIES
29 PERTUBUHAN KESELAMATAN SOSIAL
30 SBB NOMINEES (TEMPATAN) SDN. BHD.
KUMPULAN WANG PERSARAAN (DIPERBADANKAN)
TOTAL
No. of Shares
2,761,200
2,678,900
2,489,000
2,376,000
2,358,500
2,302,600
2,020,800
1,488,600
1,485,600
1,470,000
1,404,700
1,385,900
1,226,800
476,881,410
DIRECTORS SHAREHOLDINGS
None of the Directors hold any shares in the Company.
%
0.502
0.487
0.453
0.432
0.429
0.419
0.367
0.271
0.270
0.267
0.255
0.252
0.223
86.829
289

Properties Owned by Proton Group as at 31 March 2010
290
PROPERTIES OWNED BY PERUSAHAAN OTOMOBIL SDN. BHD. (PONSB)
Location Description Tenure
Date of
Acquisition/
Revaluation
Age of
Building
2009
Age of
Building
2010
24
Years
25
Years
Net Book Value (RM 'Mil)
2009 2010
Land
Buildings
68.40
113.00
68.40
100.40
No. H.S. (D)71311,
No. P.T 82
Mukim of Damansara,
District of Petaling,
Selangor Darul Ehsan.
Land with an area of
6,231,080 sq. ft. with main office, main factory, engine factory, medium volume factory, canteen buildings, sports facilities, car park for production cars and additional R&D laboratories building.
Total built -up area is 2,594,603 sq
Freehold 05.09.1983
HICOM Industrial
Estate encompassing
Lot 572,
Mukim of Damansara,
District of Petaling,
Selangor Darul Ehsan.
3 units of flats currently rented out.
No. H.S.(D) 71309,
No. P.T. 80,
Mukim of Damansara,
District of Petaling,
Selangor Darul Ehsan.
Land having an area of
158,107 sq. ft. used as the car park for staff.
Geran 215214,
Lot 61812 Bandar
Glenmarie, District of Petaling, Selangor
Darul Ehsan
Land with an area of
1,027,339 sq. ft. with office, factory and canteen buildings and sports facilities used for the Casting Plant.
Freehold 09.04.1986
Freehold 19.11.1993
Freehold 30.12.1992
HSD 86554, PT 257,
Mukim of Damansara,
District of Petaling,
Selangor Darul Ehsan.
Land with an area of 2,396,727 sq. ft. adjoining the Company's northern boundary housing the semi-high speed test track and control building.
Size of Test Track is 2,102,731 sq. ft.
Freehold 18.04.1994
No. H.S. (D) B.P.5653 and 5654 Bil P.T.
16162 and 10163,
District of Batang
Padang, Mukim of
Ulu Bernam Timur,
Perak Darul Riduan.
Land with an area of
55,444,116 sq. ft, for the construction of a second automobile plant,administrative building ans sports complex facilities.
Total built-up area is 3,374,577 sq.ft.
Freehold 03.02.1999
24
Years
-
15
Years
15
Years
6
Years
25
Years
-
16
Years
16
Years
7
Years
Flats
Land
Land
Buildings
Land
Track &
Buildings
Land
Building
0.041
2.50
21.20
36.80
54.90
13.00
1.00
436.10
0.041
2.50
21.20
33.70
54.90
6.90
1.00
417.90

Properties Owned by Proton Group as at 31 March 2010 (continued)
PROPERTIES OWNED BY PROTON EDAR SDN. BHD. (PESB)
Location Description Tenure
Date of
Acquisition/
Revaluation
Age of
Building
2009
Age of
Building
2010
Vehicel Preparation
Centre (VPC)
No H.S. (D) 86555,
PT No. 258 and
H.S. (D) 86557,
PT No.260, TP 5
Road, Sime UEP
Industrial Park,
47600 Subang Jaya,
Selangor Darul Ehsan.
Vehicle Preparation
Centre and stock control building with a land area of 315,553 sq. ft.
(total built-up area is 101,956 sq. ft.)
Centre of Excellence
(COE) & Pre-Delivery and Inspection
Centre (PDI)
No H.S. (D) 86596,
PT No. 299 and
H.S. (D) 86597,
PT No. 300, TP 5
Road, Sime UEP
Industrial Park,
47600 Subang Jaya
Administration &
Operation Office and
Pre-Delivery & Inspection
Centre with total land area of 465,184 sq. ft.
No. 2, Lrg. Samarinda
6A Off Jalan Kebun
H.S (D) 60042,
P.T.No. 64566
Mukim Klang Selangor
Three (3) storey corner terraced shopoffice unit with a land area of approximately
2,476 sq. ft.
Lot 859, Block 16
Kuching Central
Land District,
Stampin 41/2 Mile,
Penrissen Road
Kuching, Sarawak
Land with an area of
50,570 sq. ft. used for sales outlet and service centre with a built-up area of approximately
37,049 sq. ft.
No. 218089.
Mukim Plentong,
Daerah Johor Bahru,
Johor
Land with an area of
87,120 sq. ft. to be used for sales outlet and service centre
Freehold 01.12.2000
7 Years 8 Years Building
Freehold 01.03.2001
8 Years 9 Years
Freehold 10.05.2002
6 Years 7 Years Building
Freehold 12.07.2002
27.11.2007
7 Years
1 Year
8 Years
2 Years
Freehold 29.04.2002
7 Years 8 Years
Land
Building
Land
Building
Land
Building
Net Book Value (RM 'Mil)
2009 2010
4.20 3.90
35.70
120.60
0.58
2.80
6.90
8.10
6.10
35.70
113.90
0.55
2.80
6.70
8.10
5.80
291

Properties Owned by Proton Group as at 31 March 2010 (continued)
292
PROPERTIES OWNED BY PROTON EDAR SDN. BHD. (PESB)
Location Description Tenure
Date of
Acquisition/
Revaluation
Age of
Building
2009
Age of
Building
2010
H.S(D) 63313,
P.T.No. 9671 Mukim of Ampangan District of Seremban, Negeri
Sembilan
HSD 318392,
PTD 81816, Mukim of Pulai, District of
Johor Bahru,
Johor Darul Takzim
Lot PT 4352,
Mukim Kuah District of Langkawi Kedah
Land with an area of
79,949 sq.ft. used for sales outlet and service centre is 7,175 sq.ft.
Land with an area of
57,267 sq.ft. to be used for sales outlet and service centre
Land with an area of
51,979 sq. ft. to be used for sales outlet and service centre
Geran 111857,
Lot 67320,
Mukim of Sungai
Buloh, District of
Petaling, Selangor
Darul Ehsan.
No H.S. (D) 86596,
PT No. 302,
TP 5 Road, Sime
UEP Industrial Park,
47600 Subang Jaya,
Selangor Darul Ehsan
Land with an area of
61,524 sq. ft. to be used for sales outlet and service centre
Land with an area of
123,853 sq. ft. to be used for stockyard area
L&D Tanjung Malim,
Proton Edar Sdn. Bhd., c/o Proton Tanjung
Malim Sdn. Bhd.,
Proton City, 35900,
Tanjung Malim, Perak.
Administration &
Operation Office
Freehold 19.07.2002
29.09.2003
6½ Years
4 Years
7½ Years
5 Years
Freehold 06.08.2002 6½ Years 7½ Years
Freehold 13.09.2002 6½ Years 7½ Years
Freehold 02.09.2002
01.03.2004
6½ Years
4 Years
7½ Years
5 Years
Land
Building
Land
Building
Freehold 05.12.2005 3¼ Years 4¼ Years Land
Freehold 31.07.2007
1 Year 2 Years
Land
Land
Building
Net Book Value (RM 'Mil)
2009 2010
3.10
2.50
3.10
2.40
5.10
1.40
9.60
5.90
5.80
4.70
5.10
1.40
9.60
5.50
5.80
4.40

Properties Owned by Proton Group as at 31 March 2010 (continued)
PROPERTY OWNED BY PROTON CARS (UK) LTD (PCUK)
Location
Ref. AV 915, Units
1-3, Crowley Way,
Avonmouth,
Bristol Avon BS11
9YR, England
Description
Land with an area of
162,479 sq. ft. with a parts warehouse building
Tenure
Date of
Acquisition/
Revaluation
Age of
Building
2009
Age of
Building
2010
Freehold 31.03.1994 32 Years 33 Years Land
Net Book Value (RM 'Mil)
2009 2010
Building
5.30
1.61
5.01
1.49
PROPERTIES OWNED BY LOTUS CARS LTD.
Location Description Tenure
Date of
Acquisition/
Revaluation
Age of
Building
2009
Age of
Building
2010
Net Book Value (RM 'Mil)
2009 2010
Land adjacent to
Potash Lane, Hethel,
Norwich, Norfolk NR
14 8EZ, England and
Land north of Browic
Two parcels of land with a total area of 6,286,550 sq. ft. with the factory, engineering facilities, offices and test track of
Lotus Group International
Ltd. Total built up area is 515,500 sq. ft.
Potash Lane, Hethel,
Norwich, Norfolk
NR14 8EZ, England.
R&D building rented to group companies.
Total built up area is
86,600 sq.ft.
Freehold 26.09.1968 41 Years 42 Years Land
Building
Freehold 01.03.2000
9 Years 10 Years Building
5.15
58.96
9.73
4.87
52.07
8.89
PROPERTY OWNED BY LOTUS HOLDINGS INC
Location
1254 North Main
St, Ann Arbor,
Michigan USA
Description
Land with an area of approximately 165,528 sq. ft. with office and workshop. Total built up area is 73,000 sq. ft.
Tenure
Date of
Acquisition/
Revaluation
Age of
Building
2009
Age of
Building
2010
Freehold 24.02.2000
Office:
89 Years
Workshop:
43 Years
Office:
90 Years
Workshop:
44 Years
Land
Building
Net Book Value (RM 'Mil)
2009 2010
0.66
6.72
0.82
5.84
293

Properties Owned by Proton Group as at 31 March 2010 (continued)
294
PROPERTIES OWNED BY PT PROTON CIKARANG INDONESIA (PCI)
Location Description Tenure
Date of
Acquisition/
Revaluation
Age of
Building
2009
Age of
Building
2010
Hak Guna Bangunan
No. 353,
Desa Sukaresmi,
Kecamatan
Lemahabang,
Kabupaten Bekasi,
West Java, Indonesia
Hak Guna Bangunan
No. 596,
Desa Sukaresmi,
Kecamatan
Lemahabang,
Kabupaten Bekasi,
West Java, Indonesia
Hak Guna Bangunan
No. 597,
Desa Sukaresmi,
Kecamatan
Lemahabang,
Kabupaten Bekasi,
West Java, Indonesia
Combined land area of 136,610 sq. meters were erected with factories, office, canteen, warehouse, utility & security facilities
Leasehold
(Expiry:
24/09/
2025)
21/09/2004 13 Years 14 Years
Leasehold
(Expiry:
24/09/
2021)
Leasehold
(Expiry:
19/06/
2023)
Net Book Value (RM 'Mil)
2009 2010
Lands
Building
22.7
9.9
23.2
11.6
6
5
4
3
2
1
0
Share
Price (RM)
Apr 09 May Jun
Share Price
Jul Aug Sep Oct Nov Dec Jan 10 Feb Mar
Volume
Volume
50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0

Share Price and Volume Traded
6
5
4
3
2
1
0
Share
Price (RM)
Apr 09 May Jun
Share Price
Jul Aug Sep Oct Nov Dec Jan 10 Feb Mar
Volume
Volume
50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
295

Notice of Annual General Meeting
296
TH
1. To lay the Reports of the Directors and Auditors and the
Audited Statement of Accounts for the year ended
31 March 2010;
2. To elect the following Directors who retire in accordance with the Company’s Articles of Association:-
Ordinary Resolution 1
To re-elect Dato’ Zalekha Binti Hassan who shall retire in accordance with Article 104 of the Company’s Articles of Association and being eligible, offers herself for re-election.
Ordinary Resolution 2
To re-elect Mr Behara Venkata Rama Subbu who shall retire in accordance with Article 111 of the Company’s
Articles of Association and being eligible, offers himself for re-election.
Ordinary Resolution 3
To re-elect Tan Sri Rainer Althoff who shall retire in accordance with Article 111 of the Company’s Articles of Association and being eligible, offers himself for re-election.
Ordinary Resolution 4
To re-elect Encik Abdul Rahim Bin Abdul Hamid who shall retire in accordance with Article 111 of the Company’s
Articles of Association and being eligible, offers himself for re-election.
3.
Ordinary Resolution 5
To approve the payment of Directors’ Fees for the financial year ended 31 March 2010.
Explanatory Note:
Article 104 states that in every Annual General
Meeting, at least one third of the Directors for the time being shall retire from office. The retiring Directors shall be eligible to seek re-election.
Explanatory Note for Resolutions 2 to 4:
Article 111 states that any Director(s) appointed, either to fill a casual vacancy or as an addition to the existing
Directors shall hold office only until the following
Annual General Meeting. The retiring Directors shall be eligible to seek re-election.
Explanatory Note:
In accordance with Article 112 of the Company’s
Articles of Association, the Board is recommending that the shareholders approve the payment of Directors fees for the financial year ended 31 March 2010 as disclosed in Page 153 of the Annual Report 2010

Notice of Annual General Meeting
(continued)
Ordinary Resolution 6
To declare and approve the payment of a first and final dividend of 20 sen per share less 25% income tax in respect of the financial year ended 31 March 2010 as recommended by the Directors.
4.
Ordinary Resolution 7
To re-appoint Messrs PricewaterhouseCoopers as Auditors of the Company for the ensuing year and to authorise the
Directors to fix their remuneration.
5. To transact any other ordinary business for which due notice has been given in accordance with Section 151 of the Companies Act, 1965.
Explanatory Note:
In accordance with Article 157 of the Company’s
Articles of Association, the Board is recommending that the shareholders approve the payment of a first and final dividend of 20 sen per share less 25% income tax.
Explanatory Note:
Pursuant to Section 172 (2) of the Companies Act,
1965, shareholders shall approve the re-appointment of Auditors who shall hold office until the conclusion of the next Annual General Meeting, and further, authorise the Directors to determine their remuneration thereof.
The present Auditors, Messrs PricewaterhouseCoopers have indicated their willingness to continue to hold office for the ensuing year.
Explanatory Note:
In accordance with Section 151 of the Companies Act,
1965, a company shall on the requisition in writing of such number of members and at the expense of the requisitionists give to the members of the company entitled to receive notice of the next Annual General
Meeting, notice of any resolution which may be properly moved and is intended to be moved at that meeting.
NOTICE OF BOOKS CLOSURE AND DIVIDEND PAYMENT
NOTICE IS HEREBY GIVEN THAT the first and final dividend of 20 sen per share less 25% income tax in respect of the financial year ended 31 March 2010, if approved at the Seventh (7 th ) Annual General Meeting will be paid on 22 October 2010 to shareholders whose names appear in the Register of Members and/or the
Record of Depositors on 30 September 2010 .
A Depositor shall qualify for entitlement to the first and final dividend only in respect of:-
(a) Shares transferred into the Depositors’ Securities Account before 4.00p.m. on 30 September 2010 in respect of transfer;
(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of
Bursa Malaysia Securities Berhad.
By Order of the Board
297
MOHD NIZAMUDDIN BIN MOKHTAR (LS NO. 006128)
Company Secretary
Shah Alam
30 August 2010

Notice of Annual General Meeting
(continued)
298
NOTES:
1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provision of Section
149(1)(b) of the Companies Act, 1965 shall not apply.
2. The instrument appointing a proxy must be in writing under the hands of the appointer or his attorney duly authorised in writing or, if such appointer is a corporation, under its common seal or that of an officer or attorney duly authorised.
If the Form of Proxy is signed under the hand of an officer duly authorised, it should be accompanied by a statement reading “signed as authorised officer under Authorisation Document which is still in force, no notice of revocation having been received”. If the Form of Proxy is signed under the attorney duly authorised, it should be accompanied by a statement reading “signed under Power of Attorney which is still in force, no notice of revocation having been received”. A copy of the Authorisation Document or the Power of Attorney, which should be valid in accordance with the laws of the jurisdiction in which it was created and is exercised, should be enclosed.
3. The maximum number of proxies that may be appointed is two. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.
4. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central
Depositories) Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.
Every appointment submitted by an authorised nominee as defined under the Securities Industry (Central Depositories)
Act, 1991, must specify the CDS Account Number.
5. The instrument appointing the proxy must be deposited at the office of the Registrar, Tricor Investor Services Sdn.
Bhd. (formerly known as Tenaga Koperat Sdn. Bhd.), Level 17, The Gardens North Tower, Mid Valley City, Lingkaran
Syed Putra, 59200 Kuala Lumpur not less than forty eight (48) hours before the time appointed for the meeting.
6. For the purpose of determining a member who shall be entitled to attend the Meeting, the Company shall be requesting
Bursa Malaysia Depository Sdn. Bhd., in accordance with Article 67(b) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a General Meeting Record of Depositors as at 15 September 2010. Only a depositor whose name appears on the General Meeting Record of
Depositors as at 15 September 2010 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote in his stead.

Statement Accompanying
The Notice of Seventh (7 th ) Annual General Meeting
DIRECTORS STANDING FOR RE-ELECTION
Directors who are standing for re-election at the Seventh (7th.) Annual General Meeting of the Company which will be held at The Auditorium, PROTON Centre of Excellence, KM33.8, Westbound Shah Alam Expressway,
47600 Subang Jaya,Selangor Darul Ehsan, Malaysia, on Thursday, 23 September 2010 at 10.00 a.m. pursuant to the Company’s Articles of association are:
Article 4 i. Dato’ Zalekha Binti Hassan
Article 111 i. Mr. Behara Venkata Rama Subbu ii. Tan Sri Rainer Althoff iii. Encik Abdul Rahim Bin Abdul Hamid
Refer to page 30 of the Annual Report
Refer to page 31 of the Annual Report
Refer to page 32 of the Annual Report
Refer to page 33 of the Annual Report
299

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PROTON Holdings Berhad (623177-A)
No. of Shares Held
CDS Account No. of
Authorised Nominee
I/We (name of shareholder, in capital letters)
NRIC No. (new) (old) ID No./Company No.
of (full address) being a member of PROTON Holdings Berhad, hereby appoint
(name of proxy as per NRIC, in capital letters) NRIC No. (new) (old) or failing him/her,
(name of proxy as per NRIC, in capital letters) NRIC No. (new) (old) or failing him/her, the CHAIRMAN OF THE MEETING as my/our proxy to vote for me/our behalf at the Seventh (7th) Annual
General Meeting of the Company to be held at The Auditorium, Level 1 PROTON Centre of Excellence, KM33.8, Westbound
Shah Alam Expressway, 47600 Subang Jaya, Selangor Darul Ehsan, Malaysia at 10.00 a.m. on Thursday, 23 September
2010 or at any adjournement thereof.
My/Our proxy/proxies is/are to vote as indicated below:
ORDINARY RESOLUTIONS FOR AGAINST
Re-election of Dato’ Zalekha Binti Hassan pursuant to Article 104
Re-election of Mr Behara Venata Rama Subbu Pursuant to Article 111
Re-election of Tan Sri Rainer Althoff Pursuant to Article 111
Re-election of Encik Abdul Rahim Bin Abdul Hamid Pursuant to Article 111
To approve the payment of Directors’ Fees for the financial Year ended 31 March 2010
To declare and approve the payment of a First and Final Dividend of 20 sen per share less 25% income tax for the Financial Year ended 31 March 2010
To re-appoint Messrs PricewaterhouseCoopers as Auditors Of the
Company and to authorise the Directors to fix their Remuneration
To transact any other ordinary business for which due notice has been given.
Ordinary Resolution 1
Ordinary Resolution 2
Ordinary Resolution 3
Ordinary Resolution 4
Ordinary Resolution 5
Ordinary Resolution 6
Ordinary Resolution 7
(Please indicate with an “X” in the appropriate box against each resolution, how you wish your proxy to vote. If no instruction is given, this form will be taken to authorise the proxy to vote at his / her discretion)
Dated this day of 2010.
Signature/Common Seal of Appointer
(If the appointor is an attorney or a corporation please see Note 2 below)
Contact No:
For appointment of more than one proxy, state number of shares and percentage of shareholdings to be represented by the proxies:-
No. of Shares
Proxy 1
Proxy 2
Percentage
%
%

NOTES:
1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply.
2. The instrument appointing a proxy must be in writing under the hands of the appointer or his attorney duly authorised in writing or, if such appointer is a corporation, under its common seal or that of an officer or attorney duly authorised. If the Form of Proxy is signed under the hand of an officer duly authorised, it should be accompanied by a statement reading “signed as authorised officer under
Authorisation Document which is still in force, no notice of revocation having been received”. If the Form of Proxy is signed under the attorney duly authorised, it should be accompanied by a statement reading “signed under Power of Attorney which is still in force, no notice of revocation having been received”. A copy of the Authorisation Document or the Power of Attorney, which should be valid in accordance with the laws of the jurisdiction in which it was created and is exercised, should be enclosed.
3. The maximum number of proxies that may be appointed is two. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.
4. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.
Every appointment submitted by an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, must specify the CDS Account Number.
5. The instrument appointing the proxy must be deposited at the office of the Registrar, Tricor Investor Services Sdn. Bhd. (formerly known as Tenaga Koperat Sdn. Bhd.), Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty eight (48) hours before the time appointed for the meeting.
6. For the purpose of determining a member who shall be entitled to attend the Meeting, the Company shall be requesting Bursa Malaysia
Depository Sdn. Bhd., in accordance with Article 67(b) of the Company’s Articles of Association and Section 34(1) of the Securities
Industry (Central Depositories) Act, 1991 to issue a General Meeting Record of Depositors as at 15 September 2010. Only a depositor whose name appears on the General Meeting Record of Depositors as at 15 September 2010 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote in his stead.
Fold Here
Fold Here
Fold Here
THE SHARE REGISTRAR OF
PROTON HOLDINGS BERHAD (Company No.623177-A)
Tricor Investor Services Sdn. Bhd.
(formerly known as Tenaga Koperat Sdn. Bhd.)
Level 17, The Gardens, North Tower,
Mid Valley City, Lingkaran Syed Putra,
59200 Kuala Lumpur, Malaysia
AFFIX
STAMP