DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
Interim Financial Report for the Financial Year
Ended 31 March 2008
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
INTERIM FINANCIAL REPORT ON UNAUDITED CONSOLIDATED RESULTS FOR THE
FINANCIAL YEAR ENDED 31 MARCH 2008
The Board of Directors is pleased to announce the unaudited financial results of the Group for the
financial year ended 31 March 2008.
CONDENSED CONSOLIDATED INCOME STATEMENTS
Current Quarter
3 Months Ended
Note
31.03.2008
RM’000
Revenue
Cost of sales and operating expenses
Other income
Other expenses
Profit from operations
Finance cost
Share of results of jointly controlled entities (net of
tax)
Year to date
12 Months Ended
31.03.2007
RM’000
31.03.2008
RM’000
31.03.2007
RM’000
1,366,065
681,592
4,012,379
2,905,421
(1,355,606)
(629,951)
(3,931,057)
(2,819,139)
81,533
223,466
363,338
346,451
(46,484)
(80,459)
(104,604)
(90,222)
45,508
194,648
340,056
342,511
(28,909)
(33,682)
(119,976)
(143,688)
18,607
16,458
43,481
27,844
14,663
112,512
Associated companies
23,988
- Share of results (net of tax)
-
- Impairment loss
PROFIT BEFORE TAXATION
(131,000)
-
91,464
(131,000)
59,194
61,087
376,073
187,131
(1,728)
(11,891)
(25,728)
(30,600)
57,466
49,196
350,345
156,531
Equity holders of the Company
38,285
17,072
291,786
95,073
Minority interest
19,181
32,124
58,559
61,458
57,466
49,196
350,345
156,531
- Basic
3.80
1.69
28.96
9.47
- Fully diluted
3.80
1.69
28.96
9.47
Taxation
14
NET PROFIT FOR THE FINANCIAL PERIOD /
YEAR
Attributable to:
Earnings per share (sen):
26
The Condensed Consolidated Income Statement should be read in conjunction with the Annual Financial Report for the financial
year ended 31 March 2007 and the explanatory notes attached to the interim financial report.
1
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
CONDENSED CONSOLIDATED BALANCE SHEETS
Note
Unaudited
As at
31.03.2008
RM’000
Audited
As at
31.03.2007
RM’000
(Restated)
ASSETS
NON CURRENT ASSETS
Property, plant and equipment
Prepaid lease properties
Biological assets
Investment properties
Land held for property development
Jointly controlled entities
Associated companies
Other investments
Intangible assets
Deferred tax assets
1,713,953
77,025
19,743
609,286
329,304
350,695
390,967
790,802
23,036
56,418
1,709,084
68,086
19,616
466,827
311,933
228,100
1,339,434
722,331
9,715
71,662
4,361,229
4,946,788
803,393
742,351
200,439
1,223,626
384,197
1,570,714
6,044
619,669
110,037
995,483
245,534
1,308,663
4,924,720
3,285,430
9,285,949
8,232,218
1,007,607
1,878,470
1,007,607
1,593,789
Equity attributable to equity holders of the Company
Minority interests
2,886,077
941,976
2,601,396
737,678
TOTAL EQUITY
3,828,053
3,339,074
1,247,903
74,310
1,087,947
69,478
1,488,042
1,299
61,866
1,595,962
947
69,032
1,551,207
1,665,941
2,873,420
2,823,366
CURRENT ASSETS
Assets held for sale
Inventories
Property development costs
Trade and other receivables
Marketable securities
Bank balances and cash deposits
TOTAL ASSETS
EQUITY AND LIABILITIES
Share Capital
Reserves
NON CURRENT LIABILITIES
Life assurance fund
Deferred income
Long term and deferred liabilities
- Borrowings
- Sinking fund
- Deferred tax liabilities
18(c)
2
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
Note
CURRENT LIABILITIES
Liabilities attributable to assets held for sale
General and life insurance funds
Trade and other payables
Provision for liabilities and charges
Bank borrowings
- Bank overdrafts
- Others
Dividend payable
Unaudited
As at
31.03.2008
RM’000
Audited
As at
31.03.2007
RM’000
(Restated)
18,418
350,435
1,421,859
14,170
330,938
1,021,244
24,625
25,010
754,584
-
27,079
658,536
7,356
2,584,476
2,069,778
TOTAL LIABILITIES
5,457,896
4,893,144
TOTAL EQUITY AND LIABILITIES
9,285,949
8,232,218
2.86
2.58
18(a)
18(b)
NET ASSETS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY
HOLDERS OF THE COMPANY (RM)
The Condensed Consolidated Balance Sheet should be read in conjunction with the Annual Financial Report for the financial year
ended 31 March 2007 and the explanatory notes attached to the interim financial report.
3
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Issued and
fully paid
ordinary
shares of
RM1.00
each
Equity
attributable
to equity
holders of
the
Company
RM’000
Distributable
Non-distributable
Share
Premium
RM’000
Merger
Reserve
RM’000
Currency
Translation
Differences
RM’000
Other
Reserves
RM’000
1,007,607
20,701
911,016
4,516
119,936
537,620
2,601,396
Currency translation differences of subsidiary
companies
-
-
-
634
-
3,604
4,238
Share of associated companies’ reserves
-
-
-
-
12,048
(7,518)
4,530
Acquisition of additional shares in a subsidiary
company
-
-
-
-
-
-
-
Acquisition of a subsidiary company
-
-
-
-
13,700
-
13,700
151,257
164,957
Disposal of subsidiary companies
-
-
-
-
-
-
-
34,469
34,469
Dividend paid to minority interests
-
-
-
-
-
-
-
(28,816)
(28,816)
Net gain/(loss) not recognised in the income statement
-
-
-
634
25,748
(3,914)
22,468
145,739
168,207
Transfer of reserves
-
-
-
-
7,658
(7,658)
-
-
-
Net profit for the financial year
-
-
-
-
-
291,786
291,786
58,559
350,345
Dividend in respect of financial year ended 31 March
2007
-
-
-
-
-
(18,389)
(18,389)
-
(18,389)
Interim dividend in respect of financial year ended 31
March 2008
-
-
-
-
-
(11,184)
(11,184)
-
(11,184)
1,007,607
20,701
911,016
5,150
153,342
Nominal
Value
RM’000
Balance at beginning of the financial year 1.4.2007
Balance as at 31.03.2008
4
Retained
Earnings
RM’000
788,261
2,886,077
Minority
Interests
RM’000
737,678
(1,723)
(9,448)
941,976
Total
RM’000
3,339,074
2,515
4,530
(9,448)
3,828,053
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
Issued and
fully paid
ordinary
shares of
RM1.00
each
Share
Premium
RM’000
Merger
Reserve
RM’000
Currency
Translation
Differences
RM’000
Other
Reserves
RM’000
Retained
Earnings
RM’000
Equity
attributable
to equity
holders of
the parent
RM’000
999,772
16,699
911,016
2,929
103,641
409,626
2,443,683
664,780
3,108,463
-
-
-
6,146
(6,428)
18,789
18,507
-
18,507
999,772
16,699
911,016
9,075
97,213
428,415
2,462,190
664,780
3,126,970
Fair value adjustments on investment properties
-
-
-
-
-
41,602
41,602
5,984
47,586
Deferred tax in relation to fair value adjustments
-
-
-
-
-
1,311
1,311
-
1,311
Share of an associated company’s reserves
-
-
-
(716)
-
-
Currency translation differences of subsidiary companies
-
-
-
(3,843)
-
4,745
902
278
1,180
Share of subsidiary companies’ reserves
-
-
-
-
10,998
-
10,998
93
11,091
Acquisition of additional shares in a subsidiary company
-
-
-
-
-
-
-
(9,330)
(9,330)
Acquisition of a subsidiary company
-
-
-
-
-
-
-
53,469
53,469
Disposal of a subsidiary company
-
-
-
-
-
-
-
(315)
(315)
Dividend paid to minority interests
-
-
-
-
-
-
-
(38,739)
(38,739)
Net (losses)/gain not recognised in the income statement
-
-
-
10,998
4,745
11,184
5,456
16,640
Transfer of reserves
-
-
-
-
11,725
(11,725)
-
-
-
Net profit for the financial year
-
-
-
-
-
95,073
95,073
61,458
156,531
Interim dividend for financial year ended 31 March 2007
-
-
-
-
-
(7,356)
(7,356)
-
(7,356)
Final dividend in respect of financial year ended 31 March 2006
-
-
-
-
-
(14,445)
(14,445)
-
(14,445)
7,835
4,002
-
-
-
-
11,837
-
11,837
1,007,607
20,701
911,016
4,516
119,936
537,620
2,601,396
737,678
3,339,074
Nominal
Value
RM’000
Balance at beginning of the financial year 1.4.2006
Prior year adjustments
As restated
Issue of ordinary shares pursuant to ESOS/conversion of REULS
Balance as at 31.03.2007
Non-distributable
(4,559)
(716)
Minority
Interests
RM’000
Total
RM’000
-
(716)
The Condensed Consolidated Statement of Changes in Equity should be read in conjunction with the Annual Financial Report for the financial year ended 31 March 2007 and the
explanatory notes attached to the interim financial report.
5
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Net profit for the financial year
Adjustments:
- Depreciation and amortisation of property, plant and equipment / prepaid lease properties /
biological assets
- Finance cost
- Impairment losses of investments and property, plant and equipment
- Taxation
- Share of results of jointly controlled entities (net of tax)
- Share of results of associated companies (net of tax)
- Excess of fair value of net assets acquired over purchase consideration (negative goodwill)
- Others
12 months ended
31.03.2008
RM’000
12 months ended
31.03.2007
RM’000
350,345
156,531
136,252
119,976
37,782
25,728
(43,481)
(112,512)
(173,178)
(57,139)
133,544
143,688
169,493
30,600
(27,844)
(91,464)
(146,021)
Operating profit before working capital changes
Changes in working capital:
Net (increase) / decrease in current assets
Net increase / (decrease) in current liabilities
283,773
368,527
(105,431)
419,687
456,171
(109,038)
Net cash generated from operations
Interest received
Dividends received from jointly controlled entities
Dividends received from associated companies
Dividends received from investments
Tax paid, net
Finance cost paid
598,029
78,247
22,470
118,704
7,757
(5,622)
(121,789)
715,660
38,028
37,462
50,862
6,811
(31,906)
(123,219)
697,796
693,698
Net cash inflow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of property, plant and equipment / assets held for sale
Proceeds from disposal / maturity of investments
Proceeds from disposal of a jointly controlled entity and associated companies
Net cash (outflow) / inflow from disposal of subsidiary companies
Purchase of property, plant and equipment / prepaid lease properties / investment properties
/ biological assets
Net cash inflow / (outflow) from acquisition of a subsidiary company
Acquisitions of investments / land held for property development
Additional investment in an associated company
Acquisition of additional investment in a subsidiary company
Capital redemption of an associated company
15,735
667,013
14,083
(2,388)
9,069
557,420
23,733
3,697
(127,240)
75,450
(956,159)
(653)
(26,096)
-
(101,151)
(934)
(720,933)
(7,790)
Net cash outflow from investing activities
(340,255)
(233,889)
1,165,231
(1,191,288)
114,607
(36,929)
(28,816)
3,544
360,013
(596,942)
(61,175)
(14,445)
(38,739)
3,000
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of ordinary shares
Proceeds from bank borrowings
Repayment of bank borrowings / hire purchase and finance leases
Maturity of Fixed deposits / (Fixed deposits held as security and maintained as sinking fund)
Dividend paid to shareholders
Dividend paid to minority interests
22,805
Net cash inflow / (outflow) from financing activities
6
(347,744)
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (Continued)
12 months ended
31.03.2008
RM’000
12 months ended
31.03.2007
RM’000
380,346
112,065
228
3
CASH AND CASH EQUIVALENTS AS AT BEGINNING OF THE FINANCIAL YEAR
1,162,222
1,050,154
CASH AND CASH EQUIVALENTS AS AT END OF THE FINANCIAL YEAR
1,542,796
1,162,222
1,570,714
(25,010)
1,545,704
(4,755)
1,847
1,542,796
1,308,663
(27,079)
1,281,584
(119,362)
1,162,222
NET INCREASE IN CASH AND CASH EQUIVALENTS
Effects of foreign currency translation
Cash and cash equivalent as at end of the financial year comprise the followings:
Bank balances and cash deposits
Bank overdrafts
Less: Fixed deposits held as security / sinking fund
Add: Cash and cash equivalents attributable to an investment held for sale
The Condensed Consolidated Cashflow Statement should be read in conjunction with the Annual Financial Report for the financial year
ended 31 March 2007 and the explanatory notes attached to the interim financial report.
7
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
EXPLANATORY NOTES TO THE INTERIM FINANCIAL REPORT
1.
BASIS OF PREPARATION
The interim financial report is prepared in accordance with Financial Reporting
Standard (“FRS”) 134 on “Interim Financial Reporting” and paragraph 9.22 of the
Listing Requirements of Bursa Malaysia Securities Berhad and should be read in
conjunction with the Group’s financial statements for the financial year ended 31
March 2007.
2.
CHANGES IN ACCOUNTING POLICIES
The accounting policies and methods of computation adopted for the interim
financial statements are consistent with those adopted for the annual audited
financial statements for the financial year ended 31 March 2007 as well as the
adoption of the following revised Financial Reporting Standards (“FRSs”) issued by
the MASB that are effective and applicable to the Group in the current financial
year beginning 1 April 2007.
FRS 117
FRS 124
Leases
Related Party Disclosures
The adoption of the revised FRSs did not result in substantial changes to the
Group’s accounting policies other than the effect of the FRS 117 described below:
FRS 117: Leases
The adoption of the revised FRS 117 has resulted in a retrospective change in the
accounting policy relating to the classification of leasehold land. The up-front
payments made for the leasehold land represents prepaid lease payments and are
amortised on straight-line basis over their lease terms. Prior to 1 April 2007,
leasehold land were classified as property, plant and equipment and were stated at
cost less accumulated depreciation and impairment losses.
Upon the adoption of the revised FRS 117 from 1 April 2007, the unamortised
amounts of leasehold properties are retained as the surrogate carrying amounts of
prepaid lease payments as allowed by the transitional provisions of FRS 117. The
reclassification of leasehold properties as prepaid lease properties has been
accounted for retrospectively and the comparative amounts as at 31 March 2007
have been restated as follows:
As
previously
stated
RM’000
Effect on
adoption
of
FRS 117
RM’000
As
restated
RM’000
1,777,170
-
(68,086)
68,086
1,709,084
68,086
Balance sheet
As at 31 March 2007
Property, plant and equipment
Prepaid lease properties
8
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
Income Statement
for the financial year ended
31 March 2007
Depreciation of property, plant and
equipment
Amortisation of prepaid lease
properties
3.
As
previously
stated
RM’000
Effect on
adoption
of
FRS 117
RM’000
As
restated
RM’000
133,544
(1,201)
132,343
-
1,201
1,201
AUDIT REPORT OF THE PRECEDING ANNUAL FINANCIAL STATEMENTS
The audit report of the Group’s preceding audited annual financial statements was
not subject to any qualification.
4.
SEASONALITY OR CYCLICALITY OF OPERATIONS
The businesses of the Group were not materially affected by any seasonal or
cyclical fluctuations during the financial year ended 31 March 2008.
5.
ITEMS OF UNUSUAL NATURE, SIZE OR INCIDENCE
Save as disclosed below, there were no items of an unusual nature, size or
incidence affecting the assets, liabilities, equity, net income or cash flows.
Following the acquisition of additional shares in EON Berhad, which thus became
a subsidiary company of DRB-HICOM Group [refer Note 17(c)], the initial
accounting for EON’s business combination involves identifying and determining
the fair values to be assigned to EON’s identifiable assets, liabilities and contingent
liabilities and the cost of the combination. As the initial accounting for this business
combination can be determined only provisionally as at the end of this current
financial year as the fair values to be assigned to EON’s identifiable assets,
liabilities and contingent liabilities can be determined only provisionally, the EON
business combination has been accounted for using these provisional values. The
Group shall recognise any adjustments to these provisional values upon
completing the initial accounting within twelve months of the acquisition date. The
initial accounting has resulted in an excess (negative goodwill) of the Group’s
interest in the net fair value of EON’s identifiable assets, liabilities and contingent
liabilities over cost amounting to approximately RM173.18 million which has been
recognised as other income in the consolidated income statement.
6.
CHANGES IN ESTIMATES
There were no changes in estimates of amounts reported in prior financial years
that have a material effect in the interim financial report.
9
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
7.
ISSUANCE OR REPAYMENT OF DEBT AND EQUITY SECURITIES
Save as disclosed below, there were no issuance and repayment of debt
securities, shares buy backs, share cancellations, shares held as treasury shares
and resale of treasury shares for the financial year ended 31 March 2008.
On 19 November 2007, Gadek (Malaysia) Berhad, a wholly-owned subsidiary of
the Company made a partial cash redemption of RM42.71 million nominal value of
Redeemable Exchangeable Unsecured Loan Stock (“REULS”). The remaining
outstanding nominal value of REULS 2002/2008 after the above redemption is
RM76.476 million.
8.
9.
DIVIDENDS PAID
(i)
An interim dividend of 1.0 sen gross per share, less taxation of 27%
amounting to RM7,355,531 for the financial year ended 31 March 2007,
was paid on 13 April 2007.
(ii)
A final dividend of 2.5 sen gross per share, less taxation of 27% amounting
to RM18,388,828 in respect of the financial year ended 31 March 2007 was
paid on 18 October 2007.
(iii)
An interim dividend of 1.5 sen gross per share less taxation of 26%
amounting to RM11,184,438 for the financial year ended 31 March 2008,
was paid on 8 January 2008.
SEGMENTAL INFORMATION
The information of each of the Group’s business segments for the financial year
ended 31 March 2008 is as follows:
Property &
Construction
RM’000
Automotive
RM’000
Investment
Holding
RM’000
Services *
RM’000
Group
RM’000
Revenue
Total revenue
Inter-segment revenue
2,316,980
(14,306)
302,374
(11,386)
1,435,293
(16,576)
External revenue
2,302,674
290,988
1,418,717
-
4,012,379
33,247
98,321
237,228
338,539
Results
Segment profit
(30,257)
17,240
(17,240)
Unallocated expenses
(41,768)
Interest income
43,285
Finance cost
Share of results of
jointly controlled
entities (net of tax)
4,071,887
(59,508)
(119,976)
24,465
19,016
10
-
-
43,481
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
9.
SEGMENTAL INFORMATION (Continued)
Property &
Construction
RM’000
Automotive
RM’000
Share of results of
associated companies
(net of tax)
66,505
998
Services *
RM’000
45,009
Investment
Holding
RM’000
Group
RM’000
-
112,512
Profit before taxation
376,073
Taxation
(25,728)
Net profit for the
financial year
350,345
Attributable to:
Equity holders of the
Company
291,786
Minority Interest
58,559
* includes concession and financial services.
10.
PROPERTY, PLANT AND EQUIPMENT
There is no revaluation of property, plant and equipment brought forward from the
previous audited annual financial statements as the Group does not adopt a
revaluation policy on its property, plant and equipment.
11.
SUBSEQUENT EVENT
Save as disclosed in Note 17, there has not arisen in the interval between the end
of this reporting period and the date of this announcement, any item, transaction or
event of a material and unusual nature likely to affect substantially the results of
the operations of the Group.
12.
CHANGES IN THE COMPOSITION OF THE GROUP
(a)
On 11 April 2007, Comtrac Businessworld Sdn. Bhd. (in members voluntary
winding up), effectively a 35% indirect dormant associated company of
DRB-HICOM Berhad was placed under voluntary winding-up.
(b)
On 19 April 2007, Comtrac-Concrete Constructions Sdn. Bhd. (in members
voluntary winding up), effectively a 34.30% indirect dormant associated
company of DRB-HICOM Berhad was placed under voluntary winding-up.
(c)
On 26 June 2007, DRB-HICOM Berhad completed the disposal of its entire
20% equity stake in Gerbang Perdana Sdn. Bhd. (“GPSB”) to Merong
Mahawangsa Sdn. Bhd. for a cash consideration of RM14 million. As a
result, GPSB ceased to be an associated company of the Group.
11
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
12.
CHANGES IN THE COMPOSITION OF THE GROUP (Continued)
(d)
On 1 July 2007, HICOM Holdings Berhad completed the disposal of its
entire 33.33% equity stake in Model Building Maintenance Dallah Alam
Flora Waste Management Services L.L.C. (“MBMD”) for a cash
consideration of RM83,000. As a result, MBMD ceased to be a jointly
controlled entity of the Group.
(e)
On 28 August 2007, HICOM Holdings Berhad, completed the acquisition of
the remaining 40% equity stake in KL Airport Services Sdn. Bhd. (“KLAS”)
from Mofaz Aerospace Holdings Sdn. Bhd. for a cash consideration of
RM26 million. As a result, KLAS became a wholly-owned subsidiary of the
Group.
(f)
On 17 October 2007, the Company completed the disposal of 31% equity
stake in ISUZU HICOM Malaysia Sdn. Bhd. (“IHMSB”) (formerly known as
Malaysian Truck & Bus Sdn. Bhd.) to Isuzu Motors Asia Limited, Singapore
for a cash consideration of RM23,748,239. As a result, IHMSB ceased to
be a subsidiary and became a 49% associated company of the Group.
(g)
As mentioned in Note 17(c), the Group had acquired an additional
123,877,330 EON shares of RM1.00 each during the period from
November 2007 to January 2008 under various corporate exercises. As a
result, the Group owns a total of 196,845,330 EON shares, which thereby
increased its equity stake from 29.31% to 79.05%. Consequently, EON
ceased to be an associated company and became a subsidiary company of
the Group.
(h)
On 26 March 2008, Suzuki Motor Corporation (“SMC”) and Itochu
Corporation (“Itochu”) subscribed for a total of 14,000,000 and 7,000,000
new ordinary shares of RM1.00 each respectively in Suzuki Malaysia
Automobile Sdn. Bhd. (“SMA”), representing 40% and 20% equity stake in
SMA, pursuant to the Joint Venture and Share Subscription Agreement
between DRB-HICOM Berhad, SMC, Itochu and SMA dated 12 February
2008. As a result, SMA ceased to be a wholly owned subsidiary and
became a 40% associated company of the Group.
(i)
On 28 March 2008, HICOM-Chevrolet Sdn. Bhd. (“HICOM-Chevrolet”)
allotted and issued 5,199,999 new ordinary shares of RM1.00 each to
General Motors Asia Pacific Holdings L.L.C. (“GMA”), a wholly-owned
subsidiary of General Motors Corporation and 4,999,999 new ordinary
shares of RM1.00 each to DRB-HICOM Berhad pursuant to the Joint
Venture and Shareholders Agreement dated 28 August 2007. GMA and
DRB-HICOM Berhad continue to hold 51% and 49% equity in HICOM
Chevrolet respectively.
(j)
On 31 March 2008, the Company and HICOM Holdings Berhad, effectively
a wholly-owned subsidiary of the Group, had disposed of DRB-HICOM
Information Technologies Sdn. Bhd., HICOM Communications Sdn. Bhd.
and HICOM Network Services Sdn. Bhd. to Synergycentric Sdn. Bhd. for a
total cash consideration of RM500,000. As a result, the above disposed
companies ceased to be wholly-owned subsidiaries of the Group.
12
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
12.
CHANGES IN THE COMPOSITION OF THE GROUP (Continued)
(k)
13.
On 31 March 2008, HICOM Holdings Berhad disposed of its 20% equity
stake in Navi & Map Sdn. Bhd. (“Navi & Map”) to Weststar Motorsport Sdn.
Bhd. for a cash consideration of RM1.00. As a result, Navi & Map ceased
to be an associated company of the Group.
CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There have been no material changes in contingent liabilities or contingent assets
since the last annual financial statements.
14.
TAXATION
Taxation comprises the following:
3 months ended
12 months ended
31.03.2008
RM’000
31.03.2007
RM’000
31.03.2008
RM’000
31.03.2007
RM’000
Current taxation
(1,217)
11,867
20,794
31,499
Deferred taxation
2,945
24
4,934
(899)
Total
1,728
11,891
25,728
30,600
The Group’s effective tax rate for the financial year ended 31 March 2008 is lower
than the statutory tax rate mainly due to gains on disposal of investments and
recognition of negative goodwill which are capital in nature and not subject to tax,
offset by certain expenses not deductible for income tax purposes.
15.
SALE OF UNQUOTED INVESTMENTS AND/OR PROPERTIES
Save as disclosed in Note 12 (c), (d), (f), (j), (k) and below, there were no sale of
unquoted investments or properties during the financial year ended 31 March
2008.
Sales proceeds from disposal of properties
13
3 months ended
31.03.2008
RM’000
12 months
ended
31.03.2008
RM’000
-
12,800
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
16.
PURCHASE OR DISPOSAL OF QUOTED SECURITIES
The following particulars on quoted securities do not include transactions in any
quoted investments undertaken by the insurance subsidiary companies of the
Group:
(a)
(b)
17.
Total purchase consideration and disposal proceeds of quoted securities
are as follows:
3 months ended
31.03.2008
RM’000
12 months
ended
31.03.2008
RM’000
-
-
(i)
Purchases
(ii)
Disposals
- sales proceeds
80
11,818
- profit on disposal
53
9,191
Investments in quoted securities other than investments in subsidiaries and
associated companies as at 31 March 2008 are as follows:
In Malaysia
RM’000
Outside
Malaysia
RM’000
At cost
1,889
38,781
At carrying value
1,304
38,781
At market value
1,304
48,074
STATUS OF CORPORATE PROPOSALS
(a)
The Board of Directors of the Company had on 13 July 2007, received an
offer from Motivasi Asia Sdn. Bhd. (“Motivasi Asia”) to sell its entire
shareholding in Rangkai Positif Sdn. Bhd. (“Rangkai Positif”) to the
Company for RM720 million to be satisfied by the issuance of new DRBHICOM’s ordinary shares of RM1.00 each (“DRB-HICOM Shares”) (“Offer”).
The DRB-HICOM Shares are to be issued based on the indicative issue
price of RM1.91 per DRB-HICOM Share and is subject to the terms and
conditions of the Offer.
The principal activity of Rangkai Positif is to provide operation and
maintenance services to the Tanjung Bin Power Plant (“Plant”) located in
the state of Johor based on a concession period of 25 years from 28
September 2006. The Plant comprises three coal-fired generating units with
a total capacity of 2,100 megawatts and sells electricity to Tenaga Nasional
Berhad.
14
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
17.
STATUS OF CORPORATE PROPOSALS (Continued)
(a)
(Continued)
Subsequent thereto, the Company was informed by Motivasi Asia that as at
20 September 2007, the ownership of Rangkai Positif shares has been
transferred to Tan Sri Syed Mokhtar Shah bin Syed Nor (“TSSM”). Motivasi
Asia further confirmed that TSSM has agreed to be bound by the Offer.
Hence, TSSM replaces Motivasi Asia as the party making the Offer. On 11
October 2007, the Company entered into a Sale and Purchase of Shares
Agreement with TSSM for the proposed acquisition of Rangkai Positif. The
proposed acquisition of Rangkai Positif is subject to approvals from the
relevant authorities and shareholders of the Company.
(b)
On 28 August 2007, the Company entered into a Joint Venture and
Shareholders Agreement (“JVSA”) with General Motors Asia Pacific
Holding Co. LLC (“GMAP”), a wholly-owned subsidiary of General Motors
Corporation (“GMC”), to establish a “NEWCO” to market, distribute and
manufacture GMC’s and its affiliates’ automobiles, parts and accessories in
Malaysia as well as to export to other countries. NEWCO was incorporated
on 19 October 2007 under the name of HICOM-Chevrolet Sdn. Bhd.
(“HICOM-Chevrolet”) and the Company and GMAP shall hold a 49% and
51% equity interest in HICOM-Chevrolet respectively. The approval from
Foreign Investment Committee was obtained on 26 November 2007.
On 28 March 2008, HICOM-Chevrolet has allotted and issued 5,199,999
and 4,999,999 new ordinary shares of RM1.00 each to GMAP and DRBHICOM respectively, pursuant to a condition precedent of the JVSA. In
addition, the parties have also agreed to extend the completion date for the
fulfillment of the conditions precedent of the JVSA to 31 May 2008.
(c)
As mentioned in the previous Quarterly Report, HICOM Holdings Berhad
(“HICOM”), effectively a wholly-owned subsidiary of the Group had
acquired a total of 123,877,330 ordinary shares in Edaran Otomobil
Nasional Berhad (“EON”) from Jardine Strategic Malaysia Investment Pte
Limited (“Jardine”), open market and pursuant to the EON mandatory offer.
As a result of the above transactions, the Group has increased its equity
from 29.31% to 79.05% in EON. As announced to Bursa Malaysia on 21
January 2008, HICOM, as a 79.05% shareholder in EON, does not intend
for EON to comply with the 25% shareholding spread requirements under
the Listing Requirements of Bursa Securities and would take the relevant
steps to request for the withdrawal of EON’s listing status.
15
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
17.
STATUS OF CORPORATE PROPOSALS (Continued)
(c)
(Continued)
On 24 March 2008, HICOM had served a proposal to the EON Board
where HICOM has proposed that EON undertakes a voluntary withdrawal
of its listing status from the Official List of Bursa Securities pursuant to
Paragraph 16.04 of the Listing Requirements. As required under Paragraph
16.05 of the Listing Requirements and to facilitate the Proposed De-Listing,
HICOM will thereafter extend a voluntary general offer to acquire all the
remaining 52,147,493 EON Shares, representing approximately 20.95% of
EON’s issued and paid-up capital not held by HICOM at an offer price of
RM2.10 per EON Share (“Proposed Exit Offer”).
The Proposed De-Listing and Proposed Exit Offer are subject to the
following approvals being obtained:
(d)
(a)
shareholders of EON in accordance with the requirements of
Paragraph 16.05 of the Listing Requirements at an
Extraordinary General Meeting to be convened for the
Proposed De-Listing;
(b)
Bursa Securities for the withdrawal of the listing of EON from
the Official List of Bursa Securities; and
(c)
any other relevant authority; where applicable.
On 10 October 2007, the Company received an offer from Bukhary Capital
Sdn. Bhd. (“Bukhary Capital”) to sell its entire 70% equity interest in Bank
Muamalat Malaysia Berhad (“Bank Muamalat”) to DRB-HICOM for
RM1,069.90 million (“Offer”) to be satisfied by the issuance of new ordinary
shares of RM1.00 each in DRB-HICOM (“DRB-HICOM Shares”) to be
issued based on the indicative issue price of RM1.95 per share, subject to
the terms and conditions of the Offer.
Bank Muamalat group is involved in the provision of Islamic banking
business and related financial services.
On 4 February 2008, the Company accepted the Offer and the Minister of
Finance vide Bank Negara Malaysia’s letter dated 21 April 2008 had
granted its conditional approval under Section 22 of the Islamic Banking
Act, 1983.
On 24 April 2008, the Company entered into a Sale and Purchase
Agreement with Bukhary Capital for the proposed acquisition. The
proposed acquisition is subject to approvals from the relevant authorities
and shareholders.
16
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
17.
STATUS OF CORPORATE PROPOSALS (Continued)
(e)
On 29 October 2007, HICOM Communications Sdn. Bhd., effectively a
wholly-owned subsidiary of the Company, entered into an agreement to
dispose of its entire 70% equity interest in PT HICOM BMS, a dormant
company, to Mr. Hong Kah Ing for the cash consideration of RM1.00. On 31
March 2008, the proposed disposal is deemed completed subsequent to
completion of the disposal as mentioned in item 17 (h).
(f)
On 4 February 2008, HICOM Holdings Berhad entered into a Share Sale
and Purchase Agreement with Primus Pacific Partners 1 L.P. (“Primus”) to
dispose off its entire stake of 20.2% in EON Capital Berhad for a cash
consideration of RM1,337,100,523. Further, an amount equal to ten-twelfth
(10/12) of the declared dividend amount or the sum of RM16,353,229,
whichever is greater will be paid by Primus upon completion of the
proposed disposal. Primus has obtained the approval of the Foreign
Investment Committee on 12 March 2008 for the acquisition of the
140,010,526 EONCAP shares. On 17 March 2008, the shareholders of
DRB-HICOM have approved the disposal. The proposed disposal became
unconditional as at 31 March 2008 and is expected to be completed by
June 2008.
(g)
On 12 February 2008, the Company and Suzuki Malaysia Automobile Sdn.
Bhd. (“SMA”), a wholly owned subsidiary company of the Group, had
entered into a Joint Venture and Share Subscription Agreement (“JVSSA”)
with Suzuki Motor Corporation (“Suzuki”) and Itochu Corporation (“Itochu”)
to regulate their relationship as shareholders of SMA with the desire to
develop and promote the sale of SUZUKI brand motor vehicles in Malaysia.
Currently, the Company holds 100% equity interest in SMA. Upon
restructuring of the equity holdings, HICOM, Suzuki and Itochu will hold
40%, 40% and 20% equity interest in SMA respectively. The approval from
the Foreign Investment Committee was obtained on 19 March 2008. The
proposed joint venture was completed on 26 March 2008, resulting in SMA
ceasing to be a subsidiary company and becoming a 40% associated
company of the Group (refer item 12(h)).
(h)
On 22 February 2008, the Company and HICOM Holdings Berhad entered
into a Sale and Purchase Agreement with Synergycentric Sdn. Bhd. to
dispose off their entire equity interests in DRB-HICOM Information
Technologies Sdn. Bhd., HICOM Network Services Sdn. Bhd. and HICOM
Communications Sdn. Bhd. for a total sale consideration of RM0.5 million.
The disposals were completed on 31 March 2008 (refer item 12(j)).
17
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
17.
STATUS OF CORPORATE PROPOSALS (Continued)
(i)
On 14 March 2008, Scott & English Electronics Holdings Sdn. Bhd.
(“SEEH”), effectively 70% indirect subsidiary company of the Group, had
entered into the following agreements to dispose its entire 100% equity
interest in Scott & English Electronics Sdn. Bhd. (“SEE”) for a total cash
consideration of RM6.58 million to facilitate the following parties’ equity
participation in SEE:
-
Share Sale Agreement (“SSA”) between SEEH and Midea
Refrigeration (Hong Kong) Ltd (“Midea”);
-
SSA between SEEH and HICOM Holdings Berhad (“HICOM”),
effectively a 100% owned subsidiary of the Group; and
-
SSA between SEEH and Eastern Trinity Sdn Bhd (“ETSB”).
(collectively the “Proposed Disposal”)
On completion of the above disposal, the Group will retain 40% equity
interest in SEE.
Midea, HICOM, ETSB and SEE have also entered into a Shareholders
Agreement on the same day to regulate their relationship in the conduct
and affairs of SEE.
The Proposed Disposal is subject to the approval of the Foreign Investment
Committee and relevant authorities.
(j)
18.
On 1 April 2008, HICOM Environmental Sdn. Bhd., a 51% indirect dormant
subsidiary of the Group, commenced a members’ voluntary winding up
pursuant to Section 254(1)(b) of the Companies Act, 1965.
BORROWINGS AND DEFERRED LIABILITIES
Total Group borrowings are as follows:
As at
31.03.2008
RM’000
(a)
Short Term Borrowings
Bank overdrafts
- Secured
- Unsecured
Total
13,802
11,208
25,010
18
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
18.
BORROWINGS AND DEFERRED LIABILITIES (Continued)
As at
31.03.2008
RM’000
(b)
(c)
Others
Secured
Bankers acceptances
Revolving credit
Short term loans
Hire purchase and finance lease liabilities payable within
12 months
Long term loans – portion repayable within 12 months
Long term loans under Islamic financing – portion repayable within
12 months
Sub-total
27,978
4,000
151,395
10,526
79,933
18,699
292,531
Unsecured
Bankers acceptances
Revolving credit
Short term loans
Long term loans – portion repayable within 12 months
Loan Stocks 2002/2008 – portion repayable within 12 months
194,337
157,022
7,693
1,923
101,078
Sub total
462,053
Total
754,584
Long Term Borrowings
Secured
Hire purchase and finance lease liabilities
- portion repayable within 12 months
36,544
(10,526)
26,018
Long term loans
- portion repayable within 12 months
588,624
(79,933)
508,691
Long term loans under Islamic financing
- portion repayable within 12 months
873,888
(18,699)
855,189
Unsecured
Long term loans
- portion repayable within 12 months
61,923
(1,923)
60,000
19
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
18.
BORROWINGS AND DEFERRED LIABILITIES (Continued)
As at
31.03.2008
RM’000
Loan Stocks 2002/2008
- portion repayable within 12 months
101,078
(101,078)
-
Deferred liability
38,144
Total
1,488,042
Grand Total
2,267,636
Note:
Apart from the following Ringgit equivalent of foreign currency borrowings, the rest of
the total borrowings and deferred liabilities are denominated in Ringgit Malaysia.
As at
31.03.2008
19.
Amount
RM218.61 million (SGD 93.5 million)
RM9.62 million (Thai Baht 87.5 million)
OFF BALANCE SHEET FINANCIAL INSTRUMENTS
Foreign Currency Contracts
As at 22 May 2008, the Group had the following outstanding foreign currency
contracts to hedge its committed purchases:
Foreign Currency
Japanese Yen
Contract
Amounts
(‘000)
1,349,804
Equivalent
Amount In
Ringgit Malaysia
(‘000)
41,415
23/5/2008 – 22/9/2008
1,104
3,582
11/8/2008
USD
20.
Expiry Dates
MATERIAL LITIGATION
There are no material litigation pending as at the date of this report.
20
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
21.
REVIEW OF PERFORMANCE
For the financial year ended 31 March 2008, Group revenue increased by
approximately 38% to RM4.0 billion from RM2.9 billion in the previous financial
year, driven primarily by higher sales of companies in the automotive and services
businesses and also the inclusion of four month’s of EON sales.
The Group’s profit before tax surged more than 100% to RM376.1 million for the
financial year under review compared to RM187.1 million registered in the previous
financial year. The favourable results were achieved on the back of better financial
performance of the operating companies in the various sectors of the Group, gains
on disposal of investments and recognition of negative goodwill as mentioned in
Note 5.
22.
COMPARISON WITH PRECEDING QUARTER’S RESULTS
The Group recorded a profit before taxation of RM59.2 million in the current
quarter ended 31 March 2008 as compared to RM187.2 million in the preceding
quarter ended 31 December 2007. Included in the preceding quarter results is
negative goodwill on acquisition of additional shares in EON. Excluding the above
item, the results for the fourth quarter is higher than the third quarter.
23.
PROSPECTS FOR THE FINANCIAL YEAR ENDING 31 MARCH 2009
The Malaysian economy is expected to grow moderately in the fiscal year 2008
due to the slowdown in the global economy and inflationary pressures arising
mainly from higher commodity prices.
The local operating landscape remains very competitive and challenging and
hence cost management and improving operating efficiencies will remain as the
main priorities to the Group’s various business units.
The proposed acquisitions of Rangkai Positif Sdn. Bhd. and Bank Muamalat
Malaysia Berhad and the disposal of EON Capital Berhad which are expected to
be completed during the coming financial year will also enhance the Group’s
earnings.
Barring any unforeseen circumstances, the Board expects the Group’s
performance for the financial year ending 31 March 2009 to be satisfactory.
24.
VARIANCE OF FORECAST PROFIT OR PROFIT GUARANTEE
The above is not applicable.
21
DRB-HICOM BERHAD
(203430-W)
(Incorporated in Malaysia)
25.
26.
DIVIDENDS
(a)
The Board of Directors recommend for approval at the Annual General
Meeting the payment of a final dividend of 3.5 sen (2007: 2.5 sen) gross
per share less taxation of 26% (2007: 27%) in respect of the financial year
ended 31 March 2008. The book closure and dividend payment dates will
be announced latter.
(b)
An interim dividend of 1.5 sen (2007: 1 sen) less tax of 26% (2007: 27%)
was declared for the financial year ended 31 March 2008 and paid on 8
January 2008.
EARNINGS PER SHARE
Basic/Fully diluted
The basic/fully diluted earnings per share is calculated by dividing the Group’s net
profit attributable to equity holders of the Company by the weighted average
number of ordinary shares in issue during the financial year.
3 months ended
31.03.2008
31.03.2007
Net profit attributable to equity
holders of the Company (RM’000)
Weighted average number of shares
in issue (‘000)
12 months ended
31.03.2008
31.03.2007
38,285
17,072
291,786
95,073
1,007,607
1,007,607
1,007,607
1,003,949
3.80
1.69
28.96
9.47
Basic earnings per share (sen)
BY ORDER OF THE BOARD
CHAN CHOY LIN, CAROL
Secretary
Shah Alam
29 May 2008
22