DRBHICOM Sustainability Report

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The financial year ended 31 March 2019

(“FY2018/19”) was challenging on several fronts,
yet DRB-HICOM Berhad (“DRB-HICOM” or
“the Group”) made significant progress as the
Company continued to streamline its operations,
focusing on core competencies and monetising
certain assets. The Group was validated in their
long gestation period for PROTON’s turnaround
when the national carmaker exceeded all
expectations with the launch of the X70 SUV.
Almost every other key company within the stable
also performed well, enabling DRB-HICOM as a
whole to emerge from the year fundamentally
“
stronger and better prepared for the future.
STRATEGY OF RATIONALISATION Since then, a number of the Group’s automotive companies

have diversified into new businesses, some even into non-
In response to the multifaceted challenges that faced by automotive sectors. Under-performing companies, were
DRB-HICOM’s three key businesses – namely Automotive, reviewed and some others consolidated. A milestone was
Services and Properties – the Company outlined a five-year achieved in 2017 when PROTON entered into a strategic
plan in FY2016/17 to tighten its operations and refocus on partnership with Zhejiang Geely Holding Group Co.,
core competencies. The plan also required the exit from Ltd. (“Geely”). In FY2018/19 the first golden fruit of this
unprofitable businesses while right-sizing resources; partnership made its debut, in the form of the Proton X70
venture into emerging growth sectors; rationalise/ sports utility vehicle (“SUV”). Launched on 12 December
consolidate organisational structures for effective cost 2018, PROTON’s SUV has become a star within its segment,
management; pursue strategic partnerships; and ensure creating record sales which have helped turn around not
consistently high quality as well as quick delivery. only PROTON but the entire Automotive Sector.
ALIGNED FOR THE FUTURE 110

MANAGEMENT DISCUSSION AND ANALYSIS
Within the Services Sector, DRB-HICOM began a massive Automotive recorded a 6.7% increase in revenue from
transformation of its Postal & Logistics business by RM6.9 billion to RM7.4 billion mainly as a result of
acquiring new assets and consolidating them under Pos PROTON’s contribution, underscored by strong sales of
Malaysia Berhad (“Pos Malaysia”) as it builds the group the X70 SUV with more than 14,000 units delivered from
into a leading logistics player. Separately, in FY2018/19, the its launch till end of March 2019. Services recorded a 2%
Company entered into an agreement to divest Alam Flora increase in revenue from RM4.49 billion to RM4.58 billion
Sdn. Bhd. (“Alam Flora”), its waste management services due to better performance by Bank Muamalat Malaysia
provider, to Malakoff Corporation Berhad (“Malakoff”). Berhad (“Bank Muamalat”), Alam Flora and PUSPAKOM
The sale will enable DRB-HICOM to unlock value of the Sdn. Bhd. (“PUSPAKOM”), their vehicle inspection
concessionaire and use the proceeds to reduce gearing concessionaire.
and to part-finance PROTON’S 10-year business plan. The
deal should be finalised by end of 2019. Properties, however, saw a 37.3% dip in revenue from
RM862.6 million to RM540.9 million, primarily due to
Meanwhile, to streamline their Properties Sector, towards progressive completion of two construction projects being
the tail end of FY2017/18, DRB-HICOM entered into undertaken, namely Media City in Kuala Lumpur and the
transactions to divest of their retail and leisure assets in Immigration, Customs, Quarantine and Security (“ICQS”)
order to leverage on more than 30 years of experience in Complex at the Thai border. The nature of construction
developing and selling industrial land. These transactions, projects sees revenue varying throughout the various
too, are expected to be completed within 2019. stages of completion, with payment percentages tied to
the progress.
FINANCIAL REVIEW Profit before tax (“PBT”) decreased by a marginal 0.7%

from RM283.8 million to RM281.9 million. According to
Despite a tough operating landscape, DRB-HICOM’s sector, Properties saw a more than doubling in profit from
revenue increased by 1.9% year-on-year to RM12.48 RM104.6 million to RM259.7 million. Automotive’s profit
billion from RM12.25 billion, with the Group’s Automotive dropped 45.8% from RM92.9 million to RM50.4 million
Sector contributing 59% of the total, Services of 37% and while Services declined 30.2% from RM295.9 million to
Properties of 4%. RM206.4 million.
With the exception of Pos Malaysia, all key operating

companies achieved strong results for the financial year.
111 DRB-HICOM ANNUAL REPORT 2019

OPERATIONAL REVIEW
AUTOMOTIVE SECTOR
Key Highlights
A definite highlight of the year was the launch of the Proton

X70 SUV (“X70”) which, given its tremendous reception,
has become the carmaker’s flagship product. It was not,
however, the only model introduced to become a market
darling. Soon after the financial year ended, PROTON also
rolled out the facelifted Persona compact sedan and Iriz
hatchback in April 2019, followed by the upgraded Exora
multi-purpose vehicle (“MPV”) in May 2019, all featuring
entertainment systems connected to the internet. These
models, along with the X70, have become Malaysia’s
only connected cars and are leading in their respective
segments.
Other Significant Achievements
As part of the PROTON turnaround, the carmaker has

invested in a new RM1.2 billion plant within the existing
Tanjung Malim facility. As announced previously, the entire
operations of PROTON will eventually move to Tanjung
Other than PROTON, the Automotive Sector in general has
Malim and this new plant marks a beginning to that move.
seen an overall improvement in performance. India’s TATA
Construction of the plant has been completed and trial
Motors Limited (“TML”) will begin completely knocked-
runs for production of the X70 have begun in preparation
down (“CKD”) assembly of the new Super Ace pick-up and
for commissioning by the second half of 2019.
Ultra trucks that have been proven popular in the markets
where they have already been launched. In March 2019,
PROTON also made headway in plans to build its
Audi broke a two-year dry spell by introducing the latest Q
international sales. In August 2018, a deal was signed
series models, followed by the Audi A3, A4 Quattro, A5, A6
with Geely for the export of PROTON to China, while
and A7 with two more new models to follow later in 2019.
another agreement was penned with ALHAJ Automotive,
appointing it to establish a PROTON assembly plant
Composites Technology Research Malaysia Sdn. Bhd.
in Karachi, Pakistan to tap the currently underserved
(“CTRM”), which has a strong focus on the aerospace
Pakistani car market.
sector, maintained steady growth riding on the upswing
in the aviation industry. It earned an extra stripe by being
The strategic partnership with Geely is also creating spin-
named by global aircraft giant Airbus SE as their Best
off benefits in terms of knowledge transfer and capability-
Performer in 2018, essentially recognising CTRM as one
building. To date, no less than 200 PROTON engineers have
of their best suppliers globally. In the defence segment,
spent time at Geely’s research and development (“R&D”)
we continued to exceed delivery targets.
centres for technical upskilling. In addition, Geely’s
vendors have been invited to form partnerships with
While car rental represents a smaller part of the Group’s
PROTON’s local vendors. In January 2019, HICOM-Teck
automotive business, Avis Malaysia did the Group proud
See Manufacturing Malaysia Sdn. Bhd., one of PROTON’s
by winning the Licensee of the Year Award 2018 from Avis
main suppliers, signed a joint venture (“JV”) agreement
Budget Group Inc. for excellent performance all round,
with Jiangsu Xinquan Automotive Trim Co. Ltd. to establish
beating over 100 other franchisees from Europe, the
XINQUAN HICOM Malaysia Sdn. Bhd. These collaborations
Middle East, Asia Pacific and Africa.
will further enhance the influx of foreign direct investment
into the country.

Work in Progress
National motorcycle company Motosikal Dan Enjin Nasional Sdn. Bhd. (“MODENAS”) is now on the cusp of a new era.
Similar to PROTON, a path is being outlined for Malaysia’s national motorcycle manufacturer in terms of partnering with
foreign Original Equipment Manufacturer (“OEM”) to enhance its product line-up. From its existing partnership with
India’s Bajaj, the fourth largest motorcycle manufacturer in the world, it launched the popular Dominar 500 street bike in
April 2018 which contributed to an increased share of this particular segment from 21% to 36%. In April 2019, Kawasaki
Heavy Industries, Ltd. (“KHI”) increased its stake in MODENAS from 11% to 30%, heralding a new beginning for the
company. KHI is a founding shareholder of MODENAS and the increased role of this world-renowned marque will augur
well for the company and for the market it serves.
Key Risks & Mitigating Actions
Segment Key Risks Mitigating Actions

Vehicle Distribution Competition from other • Increase sales volume to gain market share by offering
brands leading to thinner various incentives to dealers
profit margins • Increase new product launches to excite the market
and increase sales
Government policies that • Constant engagement with the relevant authorities for
are becoming outdated, e.g. greater flexibility and possible change in policies
on pricing
Components Requirement by OEMs for • All Group manufacturing companies engage in
Manufacturing lower prices in order to continuous improvement programmes for enhanced
reduce their costs efficiencies to reduce cost
• Manufacturing and Engineering (“M&E”) companies
serving the same clients are collaborating to create
synergies and cost efficiencies
• Increase in volume of manufacturing (e.g. for PROTON)
reduces price per unit
What We Can Look Forward To
PROTON has regained the market’s confidence with the X70, Iriz, Persona and Exora, and has promised to keep fans
enthralled with the launch of at least one new model a year. Already in the pipeline are the locally-assembled version of
X70 and an improved Saga. Meanwhile, PROTON’s ongoing retail outlet revamp will ensure greater customer satisfaction
and a better brand experience.
In order to meet their clients’ requirements, our manufacturing companies will continue to manage their costs under
proven programmes such as Lean Six Sigma and Kaizen. Cost reduction initiatives will also feature prominently among
our distribution companies as they maintain their focus on introducing new and/or updated exciting models. There will
also be a greater push towards local assembly to leverage the tax structure which is more favourable to CKD as opposed
to completely built-up (“CBU”) models.

SERVICES SECTOR
while the ability to see progress on their vehicle’s

inspection takes away the discomfort of not knowing
how long more they will have to wait. In preparation for
increased inspections when this becomes mandatory for
e-hailing drivers, PUSPAKOM extended its service hours
on weekdays at selected outlets and opened some of its
high-volume centres throughout the weekend. Meanwhile,
its contract for the provision of hire-purchase inspection
service was extended by the Government for another three
years.
The company has also been strengthening its governance

and transparency, and gained further ground in this regard
by becoming one of the first organisation in Malaysia to
be MS ISO 37001:2016: Anti-Bribery Management System
(“ABMS”) certified.
Within the Services Sector, DRB-HICOM involved in postal Bank Muamalat made significant strides in terms of its
& logistics services provided by the Pos Malaysia group; customer delivery. In August 2018, it became the first
waste management and vehicle inspection offered by domestic full-fledged Islamic financial institution to
Alam Flora and PUSPAKOM respectively; Islamic banking provide premier banking facilities via Muamalat Beyond
by Bank Muamalat; and tertiary education focused on Premier Banking. To better understand its customers, it
the automotive industry at DRB-HICOM University of launched its Customer Relationship Management (“CRM”)
Automotive Malaysia (“DRB-HICOM U”). platform. It also enhanced its mobile banking platform
with biometric authentication enabling customers to view
Key Highlight their balance without having to log in.
A significant corporate decision was made to divest of DRB-HICOM U continued to focus on increasing its student
Alam Flora in order to realise its value and use the funds intake by introducing more programmes and catering
to support PROTON’s turnaround. Hence, on 1 August to distance learners by identifying seven programmes
2018, HICOM Holdings Berhad (“HHB”) entered into a to be conducted online. Further integrating itself with
conditional share sale agreement with Tunas Pancar Sdn. the industry, six programmes are to be offered under
Bhd. (“TPSB”), a wholly-owned subsidiary of Malakoff, for the Work-Based Learning and 2-Year University, 2-Year
the proposed disposal of HHB’s entire equity interest of Industry (“WBL” and “2U2I”) platforms combining practical
97.4% in Alam Flora. This transaction is now awaiting the experience with theoretical learning. Another feather in
necessary regulatory approvals for completion. its cap was gaining ISO 9001:2015 certification, reflecting
high levels of quality and safety.
Other Significant Achievements
PUSPAKOM has been working assiduously to enhance

its customer delivery and made progress during the year
by rolling out the myPUSPAKOM app nationwide while
introducing an e-wallet option for payment and installing
live feed display units at all inspection centres. The digital
innovations enable customers to better manage their time
as online booking means they only need to arrive at the
inspection centre 20 minutes prior to their appointment,

Work in Progress
A 13% decline in mail volume together with high costs to deliver to a growing number of addresses (which has increased
17% to 8.9 million over the last five years) exerted a financial toll on Pos Malaysia. However, the management is working
closely with the regulators to review and revise the current tariff, and is hopeful of a resolution in the near future.
Meanwhile, various transformation initiatives are in place to capitalise on growing e-commerce; consolidate its transport
logistics; enhance cost efficiencies and build new revenue streams. In addition, Pos Malaysia is placing greater emphasis
on rebuilding its relationship with customers through trust in the quality of its service.
Company Key Risks Mitigating Actions

Pos Malaysia Competition from other • Proposal to revise tariffs for domestic and international products
brands leading to thinner as well as to deregulate certain product
profit margins • Focus on courier business to serve growing demand for
e-commerce
Loss-making retail • Relocate or convert non-profitable post offices (“POs”) to Pusat
network, as it is expensive Pos Laju while closing loss-making POs
to maintain a presence in • Outsource certain retail businesses to third parties under an
low-density areas agency model to optimise operations and cost
Alam Flora Escalating cost of doing • Achieve operational excellence through innovation and digital
business systems while re-aligning productivity through mechanisation
and automation
• Manage fleet maintenance cost such as old ageing machineries,
vehicles and bins; optimise field operations costs; carry out
manpower rationalisation programme; and manage operating
expenditure prudently
PUSPAKOM Possible discontinuation • PUSPAKOM will continue to deliver the highest level of service
of inspection service as its while maintaining transparency and cost efficiency
concession expires in 2024
Bank Muamalat A tougher banking • Expand revenue growth opportunities
landscape • Effective management of balance sheet
• Improve cost efficiency and productivity
• Drive innovation and process transformation through digital
technologies
DRB-HICOM Competition from other • Collaborate with regional agencies such as Southeast Asian
University institutions preventing it Ministers of Education Organisation (“SEAMEO”) and ASEAN
from becoming an ASEAN Universities Network
automotive university • Collaborate with Geely University and other foreign institutions on
student exchange and other programmes
• Promote programmes geared towards the ASEAN automotive
market
• Recruitment exercise in Thailand, China, Indonesia and other
targeted countries
While the companies within this sector represent a range of activities, they have one underlying commonality: the fact
that they are service providers. In this respect, all the companies share a need to please the customer. They have all
embarked on digital and other initiatives towards this end as they continue to drive greater cost efficiencies and further
develop their people. Ultimately, their goal is to offer the best service at the most competitive and profitable price.

PROPERTIES SECTOR
Key Highlights Other Significant Achievements
During the year, DRB-HICOM achieved significant On 8 March and 11 July 2018, DRB-HICOM entered into
milestones in the Media City development. It completed various agreements to dispose of certain property assets
the first parcel of the RM860 million project to redevelop and investments to Prisma Dimensi Sdn. Bhd. and Kelana
Angkasapuri’s broadcast studios and complex, while the Ventures Sdn. Bhd. The disposals will relieve the Group of
second parcel will be completed by end of 2019 and the landbank earmarked for residential development as well
entire development will be handed over by the middle as their leisure and hospitality assets which are capital
of 2020. Some of Radio Televisyen Malaysia (“RTM”) intensive as they require periodic refreshes to keep up
programmes are now produced and broadcast from their with market trends.
new facilities.
DRB-HICOM’s shareholders agreed to these disposals
Full completion and handover of the ICQS facility in Bukit at an Extraordinary General Meeting (“EGM”) held on 15
Kayu Hitam will see the 28-year leasing concession of the October 2018, and the Group expects to fulfil the conditions
facilities kick in. Northern Gateway Infrastructure Sdn. within 2019.
Bhd., a subsidiary of the Group was awarded the concession
for the rights to design, finance, develop, construct,
complete and lease the facilities and infrastructure and
to carry out the asset management services for the ICQS
Complex.
Key Risks Mitigating Actions

Overhang in the residential sector due • DRB-HICOM has exited the residential property market
to supply-demand mismatch and tighter • The Group is also more focused on the industrial sector and is targeting
financing requirements is expected to community-centred developments that support Fourth Industrial
persist for another two years Revolution (“IR4.0”)
The Group is now managing the completed ICQS, which is operated 24 hours a day for commercial vehicles transporting
goods across the Malaysian/Thai border under a three-month pilot programme. If successful, the round-the-clock
operations will continue as it would enhance bilateral trade. At the same time, the Company aims to progressively handing
over the final phases of Media City and then managing the complex as specified under the concession.
In the longer term, DRB-HICOM are looking at developing integrated industrial parks – offering better shared facilities –
for the high-tech sector in support of Industry 4.0.

BUSINESS REVIEW
Automotive Sector
DRB-HICOM Group has more

than 40 subsidiaries involved
in automotive manufacturing/
assembly, distribution, import
and export, sales and after-
sales as well as rental/leasing.
This encompasses passenger
and commercial vehicles,
defence vehicles, specialty
vehicles and motorcycles.
The Group’s comprehensive
automotive ecosystem includes
the manufacture of composites
and other components for the
aerospace industry.
PROTON Holdings Berhad (“PROTON”)
PROTON, established in 1983 as Malaysia’s national The brand’s stellar performance can be distilled to a
car company, is involved in key automotive value chain 10-year business plan established immediately upon
activities covering research and development (“R&D”), completion of the partnership deal in September 2017,
product and powertrain engineering, vendor development, outlining seven strategic thrusts, namely:
vehicle and key component manufacturing, as well
as marketing, sales and after-sale services. In 2017, 1) Develop attractive, technologically-advanced
DRB-HICOM entered into a strategic partnership with Geely products
to reinvigorate the PROTON brand, regain its domestic 2) Expand its plant capacity and upgrade its
leadership while achieving greater success abroad. manufacturing processes by adopting advanced
equipment and automation systems
Key accomplishments in FY2018/19 demonstrate PROTON 3) Implement progressive localisation of components,
is on the right track. Progress in the domestic front has especially systems and sub-systems of advanced
led to the brand regaining second spot in terms of market technologies
share, after a three-year hiatus. This serves as huge 4) Adopt group practices on quality management
motivation for PROTON’s employees to continue to work throughout the value chain
hard to deliver better results consistently.

5) Attain globally-competitive cost in line with group and Iriz were officially rolled out on 23 April 2019, while
practices the Exora was launched on 28 May. These models offer a
6) Upgrade dealer outlets to offer integrated services new design appeal and at the same time boast enhanced
of sales, after-sale services, spare parts (“3S”) driving performance incorporating intelligent connectivity
and spray booth body repair (“4S”), as well review features, famously known as the talking-car, “Hi Proton”.
business policy between PROTON and its dealers
7) Develop in-house talent and concurrently attract In terms of capacity, expansion of the Tanjung Malim plant
global talents to join the interesting journey in reviving has been progressing well and operations are expected to
PROTON commence in the second half of 2019. The localised Proton
X70 will be manufactured in this new plant, followed by
During the year, PROTON delivered positive outcomes in other new PROTON models. The plan is for all PROTON
each strategic area. Most prominently, on 12 December production to take place in Tanjung Malim by 2023.
2018, PROTON launched its first and much awaited SUV, Aligned to the IR4.0, the new plant will feature the latest
the X70. As at 30 June 2019, the model has recorded technologies in producing cutting-edge models, including
sales of 16,418 units making it the most popular SUV in energy-efficient vehicles and autonomous features.
2019. At the same time, PROTON expanded much effort
to upgrade its existing model range. The uplifted Persona

BUSINESS REVIEW
Automotive Sector
Local vendor development is ongoing to progressively DISTRIBUTION COMPANIES

increase local content value and develop the capability of
local vendors, especially in the areas of new technology Honda Malaysia Sdn. Bhd. (“Honda Malaysia”)
investment, advanced manufacturing processes, quality
assurance and globally-competitive costs. Honda Malaysia assembles and markets Honda cars in
Malaysia. It has the capacity to produce 100,000 cars per
With quality and competitiveness being driven to enhance annum at its plant in Pegoh, Melaka. Sales and after-sales
the customer experience, PROTON is upgrading its dealer services are provided by a network of 88 outlets nationwide.
network to one-stop 3S and 4S centres providing sales and
after-sales services, spare parts, as well as body and paint In FY2018/19, Honda Malaysia sold 101,101 cars, a marginal
services. There are now 84 upgraded outlets reflecting drop from 106,341 cars in the previous financial year due
the ‘new PROTON’, embodying a refreshed, efficient and to delays in the HR-V model and Civic model facelifts
customer-centric feel. launches. Yet, the company maintained its top position in
the non-national car segment for the fourth consecutive
In addition, much emphasis is being placed on developing year in 2018; and number 2 position for overall car sales
PROTON’s human resources, with employees and key for the third consecutive year.
talent being provided opportunities to escalate their
capabilities towards career growth with PROTON. All seven CKD models, namely the Jazz, City, BR-V,
HR-V, Civic, Accord and CR-V, continued to be segment
PROTON has also been working to build its export leaders. The City contributed to 34% of total volume of
business. On 18 August 2018, it signed an agreement with sales revenue, followed by CR-V and Civic at 14% and 13%
Geely to conduct feasibility studies for the development respectively.
and distribution of PROTON cars in China. While the
overall export strategy is being reviewed holistically, Forever upgrading its capabilities, in FY2018/19 Honda
PROTON signed a Distributorship Agreement as well as Malaysia invested RM101 million on its plant and
a Licensing and Technical Assistance Agreement with machinery. Its investments in technology means Honda is
ALHAJ Automobile for the latter to assemble and market able to introduce to Malaysia new models being developed
PROTON vehicles in Pakistan. using its Next Generation Advanced Technology. These
include the new Odyssey, launched in February 2018, the
For the financial year, PROTON recorded sales of 67,928 third model after the CR-V and new Accord to be equipped
passenger vehicles in Malaysia and 1,544 units in the with Honda SENSING; and the new HR-V Hybrid equipped
international market, mainly Egypt, Jordan, the United with advanced Sport Hybrid i-Dual-Clutch Drive. Malaysia
Arab Emirates and Brunei, achieving RM3.94 billion in was the first country outside Japan to introduce the HR-V
revenue. hybrid, in the last quarter of FY2018/19.
The management will continue to pursue the company’s
transformation programme in realising shareholders’
aspirations of returning to a healthy financial position and
regaining market confidence.

Honda Malaysia continued to receive a string of awards Complementing its quality products MMM is also known
reflecting the quality of its cars. Among the highlights for for excellent service. It ranked highest among eight
the financial year were being named as the Top Selling selected brands in the J.D. Power Malaysia Customer
Hybrid Brand by Malaysia Automotive Institute (“MAI”)/ Service Index Mass Market Study 2018. The company
Malaysia Car of The Year 2018 Awards; winning seven has consistently ranked among the top three in the study
awards from Carlist.my – People’s Choice Awards 2018; a since 2015, reflecting a firm commitment to provide a
Gold for the People’s Choice 2018 Automotive at the Putra rewarding and positive customer experience. To inspire its
Brand Awards; the Car Sifu Editors’ Choice Awards 2018 people to offer the best service, MMM is an advocate of the
for the Best Large-Size MPV; Vehicle of The Year 2018: Omotenashi philosophy that extols the virtues of SHARP,
Hybrid Of The Year by DSF.my Allianz; and eight awards at namely ‘Smile, Heartfelt, Attentive, Ready and Polite’.
the 2018 Cars of Malaysia.
Isuzu Malaysia Sdn. Bhd. (“Isuzu Malaysia”)
To maintain its market leadership, Honda Malaysia will
seek continuously to improve its product quality and after- Isuzu Malaysia markets and distributes Isuzu commercial
sales service while launching great-value-for-money vehicles, namely the light-duty ELF, medium-duty
models which exceed market expectations. FORWARD, heavy-duty GIGA and GIGA Prime Movers,
D-Max pick-up trucks; as well as the MU-X sports utility
Mitsubishi Motors Malaysia Sdn. Bhd. (“MMM”) vehicle.
MMM is the official distributor of Mitsubishi Motors Isuzu’s commercial vehicles continued to dominate the
vehicles in Malaysia. The company is represented by 54 local market in 2018, achieving the number 1 position
showrooms of which 48 are 3S Centres; and 55 service in the truck segment for the fifth consecutive year, and
outlets throughout Malaysia. It has 15 showrooms in East number 1 position in the light-duty truck segment for the
Malaysia – eight in Sabah, seven in Sarawak. seventh consecutive year. Overall, Isuzu is ranked ninth as
a brand.
During the financial year 2018, MMM launched an
enhanced Outlander SUV and a new Mitsubishi Triton. In 2018, a total of 6,036 units commercial vehicle trucks
The Outlander was introduced in May 2018, boasting an were sold, achieving 35% market share and 5,067 units
all-round monitor and premium leatherette seats. The of Isuzu D-Max were sold which made up 12% of the total
Triton followed in January 2019, carrying the concept of pick-up segment.
‘Engineered Beyond Tough’ and offering four pillars under
the 4Sure Handling USPs: 4Sure Power, 4Sure Control, Isuzu Malaysia was number 1 in J.D Power’s Initial Quality
4Sure Agility and 4Sure Safety. Study in the pick-up segment for year 2018. The Isuzu Pick-
up was also the Car Sifu Editor’s Choice in the Star Car
MMM enabled Malaysians to experience the thrill of high- Sifu awards, and won for the category of Proven Durability
speed rides and off-road driving, as well as the proven Vehicle in the carlist.my’s Editors’ Choice Award 2018.
capabilities of the new Triton, by hosting the Mitsubishi
4Sure Thrill Event in March 2019. The event, featuring In July 2018, the company launched a limited edition
two-time Dakar Rally Champion, Hiroshi Masuoka, and Isuzu D-Max X-Series boasting a sporty urban look and
Malaysia Motorsports Athlete, Leona Chin, was a hit. enhanced accessories.
The two new models picked up a total of four awards

between them during the year. The Outlander won the
Family SUV of Malaysia by Cars of Malaysia 2018, Best
Family Ride by The Star- Carsifu, and Midsize SUV of the
Year by MAI, while the Triton was named the best Pick Up
Truck in Malaysia by Cars of Malaysia 2018.

BUSINESS REVIEW
Automotive Sector
MOTORCYCLES
Motosikal Dan Enjin Nasional Sdn. Bhd. (“MODENAS”)
MODENAS is Malaysia’s homegrown motorcycle

manufacturer. In its 100 acres land size factory located
in Gurun, Kedah, the plant is readily equipped for
welding, electro-disposition plating, painting and coating,
conveyorised assembly lines, vehicle final testing, tools
calibration lab, design centre including motorcycle and
components testing, engine casting, assembly and test
bench.
DRB-HICOM Commercial Vehicles Sdn. Bhd. (“DHCV”)
DHCV is the exclusive assembler and distributor of TATA

commercial vehicles in Malaysia, with nine sales and 34
service centres nationwide.
The year saw Indian OEM, TML launch three models in

April 2018 – the TATA Super Ace (small pick-up), Ultra
814 (7,500kg) and 1014 (10,400kg). Boasting competitive
performance, durability, safety and low maintenance, all
have been well received. TML is working with DHCV to
fast-track the local assembly of these models, which to be
rolled out in FY2019/20.
DHCV also collaborated with TML to develop specialised

body applications for TATA Super Ace and Ultra to cater
for local business needs. It also strengthened its dealer
network via training, and continued to build strong
relationships with banks and financiers so as to ensure
adequate financing support for the purchase of TATA
commercial vehicles.
Looking beyond, TML and DHCV will continue to assess

the market and select the most suitable products from the
TATA portfolio that are able to meet customers’ increasing
demand for wider transportation needs. New segments to
be explored include Heavy duty trucks, buses and military
vehicles. DHCV also plans to expand their dealers network
to cater for the business expansion.

The motorcycle market has grown in a positive index EON also has 48% equity in Mitsubishi Motors Malaysia
for the second consecutive year by achieving 8.5% in Sdn.Bhd. (“MMM”), the distributor of Mitsubishi vehicles
the calendar year of 2018 with sales of 552,514 units, as in the country. Meanwhile, the company’s Jeep business
opposed to 509,425 units in 2017. Propelled by new models has ceased with the appointment of third party authorised
introduction and robust promotions, MODENAS itself had service dealer to continue servicing Jeep vehicles.
leaped its share in the Street Bikes segment via Pulsar
and exciting new model of Dominar 400. Since 2016, EON has been consolidating the Finance,
Human Capital, IT and Procurement functions across its
Moving forward in strengthening its position in the group of companies as part of efforts to contain costs and
Malaysian market and Asean region, MODENAS has create efficiencies. It will continue with this process by
embarked a strategic partnership collaboration with further extending its shared services to other automotive
Kawasaki Heavy Industries, Ltd., Japan (“KHI”). With distribution companies within the group. At the same
KHI’s strategic partnership via expansion of shareholding time, it aims to increase its income by attracting tenants
position in MODENAS, more new models and technology to occupy currently vacant land and premises belonging to
transfer will be anticipated which shall generates better the company.
efficiency, leaner cost, faster to market products and
wider market reach. The MODENAS’s annual production EON Auto Mart Sdn. Bhd.
capacity of 130,000 units is anticipated to be maximised in
next five years aligning to reaching economies of scale for EAM being the largest MMM dealer with 8 outlets
the Gurun plant. nationwide accounting for 17% of Mitsubishi market share
in the country, providing sales and after-sales services to
all Mitsubishi customers.
RETAIL COMPANIES
During the year, EAM embarked into network rationalisation
Edaran Otomobil Nasional Berhad (“EON”) exercise and focus on after-sales service efficiencies
throughout the outlets. This includes implementation
EON is the holding company for Euromobil Sdn. Bhd. of new Mitsubishi visual identity. At the same time,
(“ESB”), EON Auto Mart Sdn. Bhd. (“EAM”), HICOM Auto the company will build on its strategy of driving fleet
Sdn. Bhd. (“HASB”), DRB-HICOM Leasing Sdn. Bhd. sales while looking to grow it’s after-sales revenue and
(“DLSB”) and DRB-HICOM EZ-Drive Sdn. Bhd. (“EZ-Drive”). profitability through greater expansion of the body and
It is involved in the retail sales of Audi, Mitsubishi and paint services.
Volkswagen (“VW”) vehicles, spare parts and accessories
via ESB, EAM and HASB, respectively; as well as vehicle
rental and leasing services via EZ-Drive and DLSB.

BUSINESS REVIEW
Automotive Sector
Euromobil Sdn. Bhd. HICOM Auto Sdn. Bhd.
Euromobil is the largest Audi dealer in Malaysia with HASB is an authorised dealer for Volkswagen (“VW”) with
centres in Damansara, Chan Sow Lin, Glenmarie and two sales and service outlets contributing 7% to VW volume.
Johor Bahru. It accounts for 75% of Audi’s total sales in
the country. HASB’s outlook is bright, with sales to corporate fleets
expected to contribute significantly to its performance in
After two years of not introducing any new models, in FY2019/20. The company is also confident of a 25% growth
March 2019 Audi launched the latest Q series range – in vehicle throughput given VW’s launch of Volkswagen
Audi Q2, Q5, Q7, and all-new Q8 – once again giving fans Care Plus (“VCP”), a customer care programme to keep
something to look forward to. This was followed by the customers returning even after their five-year warranty
arrival of the Audi A3, A4 Quattro and A5 in April 2019. The expires.
premium Audi A8L and all-new Audi Q3 will debut later in
2019. With the introduction of new models line-up will definitely
benefit HASB. In the interim, it will concentrate on
In FY2018/19, without any new models, a total of 294 enhancing its sales volume via more targeted marketing
Audi cars were sold in Malaysia of which 225 units were efforts complemented by extensive roadshows.
accounted for by Euromobil. Euromobil maintained its
lead as Audi’s dealer by purchasing all 78 units of unsold Automotive Corporation (Malaysia) Sdn. Bhd. (“ACM”)
Audi cars manufactured in 2015/2016 from Audi Malaysia
in March 2018, thus boosting its own sales. Meanwhile, as ACM is the largest dealer of Isuzu trucks, pick-ups and
part of ongoing efforts to reduce costs, it invested in digital SUVs in Malaysia. The company’s sales centre in Shah
marketing through which it has been able to target specific Alam, Selangor, is supported by a network of Sales, Service
audiences. and Spare Parts (“3S”) centres in Batu Caves, Selangor;
Kuantan, Pahang; Juru, Penang; Ipoh, Perak; and Johor
Re-strategising its after-sales operations, in July 2018 Bahru in Johor.
the Chan Sow Lin Service Centre was transformed into a
Running Gear Competence Centre – a first-in-Malaysia ACM specialises in supply of Isuzu truck with customised
dedicated facility equipped with the latest technology body application to suit specific business needs. This is
to ensure Audi cars continue to deliver the best ride made possible through experience of more than 30 years
possible. Further, to reduce the workshop overload at the in commercial vehicle industry and strong relationships
Damansara Service Centre, all major jobs such as engine with numerous prestigious body builders. With strong
overhaul have been diverted to Chan Sow Lin. This led to financial position, ACM is capable of fulfilling the needs
the Damansara outlet being recognised with the honorary of fleet customers which usually involve massive number
Customer Experience Management (“CEM”) Improvement of units.
Award from Audi.
ACM aims to further enhance its customer service through
2019 looks set to be an exciting year given the new product offering more comprehensive and competitively priced
launches. service maintenance packages with lower total cost of
ownership for the fleet and government agency business.

In response to an industry that looks set to remain
SERVICES COMPANIES
challenging, DHAS has outlined various initiatives
to maintain its business momentum. These include
DRB-HICOM Auto Solutions Sdn. Bhd. (“DHAS”)
extending its contracts with existing customers that are
introducing new CBU and CKD models. A bright spot
DHAS provides end-to-end logistics solutions for the
is the PROTON-Geely collaboration which will see the
automotive industry, from the import of CBU vehicles and
introduction of many new CKD models in Malaysia from
completely knocked-down (“CKD”) kits, to forwarding
end of 2019 onwards. DHAS also intends to play a key role
and clearance, vehicle yard management, pre-delivery
in the import and export of new CKD motorcycle models
inspection and final delivery to dealer networks. Its
to ASEAN.
broad customer base includes major marques such as
PROTON, Audi, VW, Honda, Mitsubishi, Isuzu, TATA, Suzuki
At the same time, the company seeks to strengthen its
Motorcycle and MODENAS.
yard management services by attracting customers from
outside of the DRB-HICOM Group such as Mercedes-Benz
In 2018, DHAS recorded an increase in the number of
and Hap Seng Trucks. It also intends to grow its trading
imported CBU kits with the inclusion of a new Triton
activities, especially in components manufacturing, while
model. However, its import volume of CKD kits decreased
exploring opportunities in DRB-HICOM’s non-automotive
following the cessation of Proton Ertiga production in
sectors such as aerospace and property.
September 2018. This offset the increase in motorcycle
CKD kits brought in for MODENAS as well as the slight
As it continues to strengthen its operational excellence,
increase in volume of incoming VW CKD kits during the
DHAS is also rightsizing its Vehicle Preparation Centre
GST tax holiday.
operations to bring about even greater cost savings,
setting it up for better performance in the coming years.
Although the discontinuation of Proton Ertiga together
with cost reduction initiatives by customers resulted in a
23% dent in DHAS’ revenue, its Profit Before Zakat and
Tax (“PBZT”) stood at RM7.7 million, relatively unchanged
from the previous financial year.

BUSINESS REVIEW
Automotive Sector
DRB-HICOM EZ-Drive Sdn. Bhd. The company’s prospects look good as demand for leased
vehicles is set to increase, driven by cash-strapped
DRB-HICOM EZ-Drive, which owns DRB-HICOM Leasing organisations, the establishment of more multinational
Sdn. Bhd., represents Avis Malaysia. It is the leasing arm of corporations (“MNCs”) and foreign operations in the
the DRB-HICOM Group, offering short-term vehicle rental country, and ongoing mega projects.
and long-term leasing of passenger and commercial
vehicles as well as agricultural equipments.
MANUFACTURING AND ENGINEERING
The year was positive overall as EZ-Drive continued
to grow its fleet by 26% to more than 4,000 units while ISUZU HICOM Malaysia Sdn. Bhd. (“IHM”)
expanding its network of stations to 14 from 12 at the end of
FY2018/19, and further building its agricultural equipment IHM manufactures ISUZU commercial vehicles such as the
business. Operationally, it was able to maintain a high N-Series light-duty trucks, F-Series medium and heavy-
vehicle utilisation rate, 10% higher than AVIS Asia Pacific duty trucks and D-Max pick-up trucks.
standard rate. It also established a Kaizen department to
drive a continuous improvement programme. For year 2018, ISUZU sales for light, medium and heavy-
duty trucks totalled 5,975 units, capturing 39% of the
Its business expansion and diversification enabled the market, further entrenching the brand as a firm leader
company to overcome competition from ride hailing set- in its segment. At the same time, sales of pick-up trucks
ups to achieve 23.1% growth in revenue year-on-year to stood at 5,067 units, making up 11.4% of the market. With
more than RM100 million, with 4.1% growth in PBT, mainly this performance, ISUZU retained its pole position for all
supported by the introduction of agricultural equipment trucks for the fifth consecutive year. It is also the number 1
leasing business. light-duty truck brand for the ninth consecutive year.
EZ-Drive’s operational and financial successes were In quality, the ISUZU D-Max was presented the IQS Award
duly recognised when Avis Malaysia won the Avis by J.D Power for the second consecutive year. In addition
Budget Group 2018 Licensee of the Year Award at the to that, IHM as a company received the High Productivity
International Licensee Conference 2018, held in Prague, Enterprise Using Local Talent Award from Malaysia
Czech Republic. The award recognise licensee partners Productivity Corporation. The company has also achieved
that have demonstrated growth in annual financial the highest score for Chemical and Ergonomic safety under
performance, measured against their respective country’s a voluntary Systematic Occupational Health Enhancement
economic conditions, excellence in customer service and Level Programme (“SoHELP”) run by the Department of
alignment with the brand’s initiatives. Avis Malaysia has Occupational Safety and Health. IHM was subsequently
been independently owned and operated since 1973, was invited to share its best practices at the National SoHELP
also recognized for its long, successful tenure with an Convention 2018.
additional “45-year award” at the event. During this time,
Avis Malaysia has been offering customers and businesses To further strengthen its market position, IHM plans
alike a wide selection of well-maintained vehicles, as well to upgrade ISUZU N-Series, ISUZU F-Series as well as
as ancillary services and coverages to enhance the overall ISUZU D-Max. Following approval from the Road Transport
driving experience. Department in April 2018, it has also embarked on a
frame extension project under which it performs frame
Going forward, the company will continue to tap into the modifications for trucks at a new workshop.
potential of commercial vehicle leasing and market its
services more aggressively with state governments. It also IHM is confident of maintaining its leadership in the
seeks to leverage potential synergies within Albukhary commercial vehicles segment as it continues to introduce
Group of companies; and capitalise on its International the latest ISUZU models while complying with all local and
Licensee of the Year win. To further meet increase in international regulatory requirements.
demand, it will further strengthen its fleet size and add
another two outlets to its network in FY2019/20.

HICOM Automotive Manufacturers (Malaysia) Sdn. Bhd. HICOM-YAMAHA Manufacturing Malaysia Sdn. Bhd.
(“HA”) (“HYMM”)
HA assembles the Mercedes-Benz C, E and S Class, GLC, HYMM manufactures and assembles Yamaha motorcycle
GLC Coupe as well as Actros and Mitsubishi Fuso Light engines and parts, with current production catering for
and Medium-Duty trucks, in addition to the VW Passat, three moped and two scooter models.
Tiguan, Vento and Polo Hatchback at its plants in Peramu
Industrial Estate, Pekan. During the financial year, three of the models – namely
the B17, 55D and 2WB – were upgraded, contributing to a
During FY2017/18, HA achieved a significant milestone surge in demand which exceeded HYMM’s manufacturing
with the commercial launch of a new high-tech paint capacity. This led to production line balancing and cycle
shop which doubles HA’s capacity to 50,000 units a year. time improvement to cater for higher volumes. Excitingly,
HA leveraged its additional capacity by signing a five-year the ramp-up in production also saw HYMM achieving a
contract with Mercedes Benz Malaysia and a three-year milestone when the 3,000,000th engine rolled out from its
contract with Hap Seng Truck Distribution for commercial plant on 25 February 2019.
vehicle assembly.
In its effort to boost productivity, HYMM continued to
Assembly of the Mercedes-Benz GLC Coupe and S Class focus on its Total Productive Maintenance programme,
560e plug-in hybrid commenced in February and March which contributed to an Assembly Overall Equipment
2019 respectively. Another feather in their cap was when Effectiveness (“OEE”) of more than 97% and a Machining
HA scored 10/10 points in the Daimler Surveillance Audit OEE of more than 91%. HYMM has also achieved its fourth
during the financial year. consecutive gold in the annual Yamaha Motor Company
Limited (Japan) audit in 2018 for the implementation of
Capitalising on its high-end painting capabilities and Shikkari Kihon manufacturing principles. It also won three
infrastructure as well as skilled employees, HA is looking Global Benchmarking Awards at the Yamaha Japan Annual
at further volume expansion in the years to come. The Monozukuri 2018 – for Best Performance Assembly, Best
focus for FY2019/20 will be new Mercedes-Benz and VW Improvement Machining Crankcase and Best Improvement
models, as well as a project it has embarked on with a new Crankshaft lines.
customer.
Yamaha’s market share has inched up from 44% in 2017
to 47% in 2018, reinforcing the brand’s leadership. This is
also reflected in the overall HYMM financial performance
which sees HYMM revenue and PBT exceeding the Annual
Management Plan by 22.1% and 40.5% respectively.
For FY2019/20, there are plans for B17, 55D and 2WB
models facelift, as well as B92 in order to excite the
market. This excitement is expected to further increase
Yamaha’s market share. In order to cater for the increase
in demand, HYMM is upgrading its production capabilities
with the installation of three new machining lines which
is for crankcase and head cylinder in FY2019/20, followed
by crankshafts machining lines in FY2020/21. It is also
improving its assembly cycle time from 0.60 minutes to
0.55 minutes in its effort to increase productivity as to
meet the increase in demand.

BUSINESS REVIEW
Automotive Sector
HICOM-Teck See Manufacturing Malaysia Sdn. Bhd. HICOM HBPO Sdn. Bhd. (“HHBPO”)
(“HTS”)
HHBPO designs, develops and supplies front end modules
HTS provides precision plastic injection moulding, blow (“FEMs”) for PROTON, VW and BMW at its plants in Tanjung
moulding, laser cutting, vacuum foaming, assembly, Malim, Perak; Pekan, Pahang; and Kulim, Kedah respectively.
painting and electroplating services. From manufacturing
of cockpits, bumpers, door modules and chrome parts This financial year saw HHBPO recording a steady growth
for the automotive industry, it has diversified into the with increase in sales, contributed primarily by BMW
non-automotive sector with the supply of road furnitures, and PROTON. Demand from the former increased with
mobile garbage bins and sound barriers. It is also gearing the launch of the second project namely, MINI (F60), X3
up to supply for the aerospace industry. (G01) and X4 (G02); while that from PROTON was driven
by higher than expected sales of Prevé. Together with VW
Moving up the value chain, HTS is now currently upgrading sales, HHBPO’s revenue for the year exceeded its target
its technology while focusing on people development to by 30%.
deliver excellence in manufacturing and service while
maintaining a competitive cost structure. Taking its Its quality and efficiency were recognised in December
technological transformation a step higher, it has formed 2018, when PROTON bestowed HHBPO the Excellent
a joint venture company with Jiangsu Xinquan Automotive Contribution Award for outstanding performance in
Trim Co. Ltd. (“XINQUAN”) in January 2019 to design, Quality, Delivery & Cost Reduction.
develop and manufacture instrument panels using a new
slush moulding technology, which is currently not available Moving forward, HHBPO has been nominated to supply
or used in Malaysia. the FEM for the Proton X70 and X50 once local production
commences. Concurrently, HHBPO is engaging with the
XINQUAN was incorporated in Jiangsu, China in 1982 and local OEMs and collaborating with the Malaysian External
was listed in the Shanghai stock exchange on 17 March Trade Development Corporation to explore opportunities
2017. It currently has 10 production plants in various for export within ASEAN.
parts of China supplying instrument panels, floor console
and door trims to Geely, SAIC Motor, Chery, Volkswagen, Launches from BMW, PROTON and VW, as well as other
Nissan, FOTON and Fiat Chrysler Automobiles (“FCA”). brands should boost HHBPO further.
Results of HTS’ process and people development have

been evident in recognition gained. In December 2018, it
received the Technical Development Award from PROTON.
This was followed by a gold award from Perodua for the
implementation of Karakuri Kaizen in January 2019.
The company recorded a total revenue of RM329.8 million

for FY2018/19, where PROTON contributed 38%, Perodua
22% and HA 14%.

PHN Industry Sdn. Bhd. (“PHN”) In anticipation of increase in customer demand, PHN
has embarked on additional production capacity project.
PHN is a Tier-1 manufacturer of automotive components, Collaborating with PROTON, it has established a new sub-
specialising in metal stamping, roll forming, welding and assembly plant within Proton Tanjung Malim complex. A
modular assembly, dies design and manufacturing, as newly completed second plant in Pegoh will be ready to
well as electrical and electronic device assembly. It fully supply to Honda by August 2019. The Bukit Beruntung
owns Oriental Summit Industries Sdn. Bhd. (“OSI”), one plant is now expanded to cater for additional volume from
of the largest chassis manufacturers in the country; and Perodua.
DRB-HICOM Mechatronics Sdn. Bhd. (“DHMSB”), a
supplier of automotive batteries and electrical/electronic For business diversification, PHN is currently developing
devices. In recent years, PHN has diversified into the premium fan blades for BAFCO and supplying agricultural
non-automotive sector via the production of premium vehicles to Tradewinds Plantation via AVIS. PHN also
fan blades, industrial air filters and the assembly of aims to enhance its export business especially in non-
agricultural vehicles. automotive products such as industrial air filters.
In FY2018/19, PHN entered into technical partnerships PHN continues to service and quality recognition. It received
with TOPRE and ATSUMITEC Japan, to enhance the Perodua’s “Excellent Delivery Award” and “Excellent
development of components for three new Honda vehicles. Quality Vendor Award”, PROTON’s “Best Cooperation and
In addition to that, it acquired the rights to supply 24 parts Technology Award” and HONDA’s “Delivery Appreciation
for the Perodua Aruz; and 22 parts for PROTON’s upgraded Award” as well as “Environment Appreciation Award”.
Persona and Iriz.
HICOM Diecastings Sdn. Bhd. (“HDSB”)
HDSB manufactures aluminium parts and components for

the automotive and non-automotive sectors. It specialises
in engine components such as cover cylinder heads, cover
timing chains, oil pumps, water pump covers, fuel pipe
delivery, steering housing and engine brackets, supplying
to OEMs such as PROTON, Perodua, Mazda, Honda and
Bosch, amongst others.
During the financial year, HDSB achieved a revenue

of RM67.3 million, of which 93% was from automotive
products and 67% export.
In FY2018/19, the company secured a total of seven new

projects from Mazda Corporation Japan, PROTON and
Perodua. This is the third consecutive year it has secured
new businesses from Mazda. HDSB was also nominated
by PROTON to supply parts for the X70. For Perodua, HDSB
was awarded a contract to supply parts for new turbo
engine.
The company will continue to grow its export market,

especially with the existing customers such as Mazda,
Magna Powertrain and Bosch Group. Strengthening its
core technology of high-pressure diecasting, it is also
expanding its customer base and new business segment
such as electric vehicles and other green technology
products.

BUSINESS REVIEW
Automotive Sector
DEFENCE DIVISION Adhering to this strategy, the Group is confident of

continuing to secure more government contracts in the
DRB-HICOM Defence Technologies Sdn. Bhd. new architecture of open tenders and competitive bidding.
(“DEFTECH”) DEFTECH firmly believes it stands in good stead to be a
significant force of growth in the defence and security
DEFTECH is a key player in the local defence and security industry in the coming years, and is actively pursuing
industry community, with an entrenched position in several programmes under the Army Mobility Phase 2
land-based mobility platforms, and increasing presence (2021-2025) and Royal Malaysian Air Force (“RMAF”) CAP
in selected aerospace domains. It comprises four 55. Briefly:
main subsidiaries, namely Defence Services Sdn. Bhd.
(“DSSB”), an automotive engineering, maintenance, repair a) Following the near completion of the AV-8 GEMPITA
and overhaul (“MRO”) powerhouse; DEFTECH Aviation programme, DEFTECH is embarking on the armoured
Sdn. Bhd. (“DAV”) which provides aviation MRO; DEFTECH 6x6 combat vehicles bid for the Malaysian Army
Systems Integration Sdn. Bhd. (“DSI”) which provides b) In partnership with Turkish Aerospace, DEFTECH is
avionic, optronic and systems integration services; and in the running to supply the Medium Altitude Long
DEFTECH Unmanned Systems Sdn. Bhd. (“DUS”), which Endurance UAV under RMAF’s CAP 55 plan for which
specialises in unmanned aerial vehicles (“UAVs”) and the Request for Inquiry was called in January 2019
unmanned ground vehicles. The entire group caters to, c) DEFTECH is in the final stages of commercial
and serves, both the military and non-military segments. negotiations and has submitted its proposal to the
Ministry of Defence for the maintenance contract of
Despite a slight reduction in the government’s budget for the AV-8 GEMPITA, which will be in service for at least
defence and security, and a temporary hold on various the next 20 years
MRO contracts, DEFTECH recorded a comfortable d) It is eyeing the supply of soft-skinned vehicles and
revenue of RM908.3 million and PBT of RM229.9 million trucks for various security agencies within the
for FY2018/19. The ongoing AV-8 GEMPITA Project, for the Ministry of Home Affairs
supply of 255 units of the armoured vehicles and four units e) DEFTECH is participating in tenders for non-military
of Commercial off the Shelf vehicles for the Malaysian trucks, UAVs, weapons and specialised vehicles for
Army, continues to be the main revenue contributor, at governmental agencies such as the Fire Department,
RM905 million, while the spare parts businesses and the Agensi Penguatkuasaan Maritim Malaysia, Customs
delivery of Explosive Ordnance Disposal vans to the Royal and Jabatan Kemajuan Orang Asli
Malaysian Police Force contributed to the remainder.
In FY2019/20 itself, DEFTECH will continue to deliver the
DEFTECH’s strategy continues to focus on ensuring AV-8 to the Army; fulfil its MRO and spare parts contracts
delivery excellence for current contracts while securing and bid for the tender to deliver 25 units of HANDALAN
new defence, security and commercial projects. It also trucks. In the mid and longer term, collaboration with
aims to excel in the MRO sphere while pushing for growth leading international players such as Turkish Aerospace
in aerospace and unmanned technologies-based services Industries, FNSS, Aselsan, Rheinmetall, Berretta and Kia
and product and system integration. Military Vehicle, places DEFTECH on a formidable footing
to continue its march towards continuous business growth
and sustainability.

AEROSPACE DIVISION CTRM recognises the importance of offering its capacity
and capability at competitive cost. This is being driven
Composites Technology Research Malaysia Sdn. Bhd. by operational excellence and the introduction of digital
(“CTRM”) management tools such as ERP/MRP, APQP, eSalary,
eAttendance and LCD monitoring systems which help to
CTRM is a leading composites aero-structure reduce process time, optimise product quality and manage
manufacturer in Asia Pacific, and the first Asian composites its people. Research and Technology (“R&T”) also features
manufacturer with a Nadcap AC7122-accredited test lab. prominently in CTRM’s business strategy. It is rolling out
It also manufactures composite non-aero structures. a five-year R&T road map established in 2017 focused
on processes including Out of Autoclave materials, Resin
Continued growth of the aviation industry meant increased Transfer Molding, Hot Press and AFP layup.
demand for aircraft, which contributed to CTRM group
increasing its revenue by 3.3% to RM953.2 million. CTRM’s All these initiatives are supported by strategic human
Aero Structure business was the main revenue earner, capital development. CTRM has adopted a holistic approach
with 55% of the total contributed by wing components encompassing skills and leadership development,
while Nacelles and others (aircraft tail, main landing knowledge and career management to enhance its human
gear door and EC130 Fenestron) accounted for 42% and capital.
3% respectively. The increase in revenue, together with
cost optimisation from reduced material consumption As a result of its wide-ranging efforts to enhance
and purchase prices, competitive bidding and commercial efficiencies and quality, in 2018 CTRM was awarded the
negotiations with suppliers, led to a 26.9% increase in PBT Best Performer award (Tier 2) from Airbus under its Supply
to RM60.3 million. Chain & Quality Improvement Programme (“SQIP”), based
on delivery and quality performance.
In the Non-Aero Structure business, CTRM Composites
Engineering Sdn. Bhd. (“CTRMCE”) participated in several Moving forward, CTRM seeks to secure new contracts with
bidding exercises related to aircraft cabin interiors and existing and new customers in the aerostructure and non-
satellite communication. Meanwhile, CTRM Testing aerostructure industries. With the completion of a new
Laboratory Sdn. Bhd. (“CTRMTL”) is gaining greater facility, Building 6 at its Composites Technology City in
recognition due to investment in product development. It Melaka, it has the capacity to take on new work packages
expects to grow its calibration capabilities, and is exploring without any further significant capex.
the possibility of collaborating with Pos Malaysia, SIRIM
and Vas Aero in both calibration as well as testing activities.
Two prominent French companies have been identified for
knowledge sharing and technology transfer. Along with
other activities, CTRMTL will continue in its pursuit to gain
Airbus Independent Laboratory status.

BUSINESS REVIEW
Services Sector

DRB-HICOM offers a range of
services, from postal & logistics to
waste management, environmental
services, vehicle inspection, banking
and education. Its logistics network
is the most comprehensive in the
country, while the Group’s university
distinguishes itself through its unique
curriculum based on the concept of
being ‘by the industry, for the industry’.
POSTAL & LOGISTICS
Pos Malaysia Berhad (“Pos Malaysia”)
Pos Malaysia, the nation’s postal service provider for over 200 years, has evolved
beyond traditional mail and parcel delivery. Leveraging its extensive network of
more than 3,700 touch points across the country, it offers end-to-end logistics
capability with an asset fleet that includes three freighter aircraft, two bulk
carrier vessels, 374 prime movers, 2,369 trailers and 377 lorries in addition to
3,020 delivery vehicles and 6,599 motorcycles.
As a result of a series of acquisitions in recent years, Pos Malaysia owns Pos

Aviation Sdn. Bhd. (“Pos Aviation”), Pos Logistics Berhad (“Pos Logistics”) and
Pos Asia Cargo Express Sdn. Bhd. (“Pos ACE”). Together with its subsidiaries, it
is principally involved in five core businesses, namely Postal Services; Courier,
Express and Parcel (“CEP”); Aviation; Logistics and International Business.
In FY2018/19, revenue from Postal Services decreased by RM36.9 million from

FY2017/18 due to a continuing structural decline in mail volume (13% year-on-
year). Coupled with the high costs of fulfilling its Universal Service Obligation
(“USO”), Postal Services continued to incur a loss. In the last five years itself, the
number of new addresses has increased by 17% to 8.9 million. In mitigation, the
management is working closely with the regulator to review and rebalance the
tariff – which was last changed in 2010 – and is hopeful of a positive outcome.

BUSINESS REVIEW
Services Sector
Riding on Malaysia’s e-commerce wave, revenue from the Profit before tax (“PBT”) plunged from RM117.3 million to
CEP business increased by RM50 million. Supporting this a loss before tax of RM158.4 million, mainly as a result
growth, the aggregated total capacity of Pos Malaysia’s of widening losses from mail and impairment charges of
automated processing has been increased to 530,000 RM39.6 million from the impairment loss of goodwill in Pos
items a day from 300,000 items a day with the completion Logistics. Postal Services’ losses stem from continuing
of the second integrated processing centre (“IPC”) in KLIA. double-digit contraction in mail volume and bill payments
The first IPC is in Shah Alam. as these are replaced by electronic communication. The
impairment of goodwill in Pos Logistics was due to lower-
The Aviation business, which provides a range of ground than-expected performance resulting from competition.
handling services at airports including cargo handling,
saw a 4.8% increase in revenue year-on-year. This was Moving forward, Pos Malaysia is embarking on a Digital
due to higher cargo tonnage at the Sabah and Sarawak Transformation journey and expanding its capabilities
stations as well as enhanced cargo volume. Revenue to serve growing e-commerce demand. Overarching its
from the Logistics business dropped by 29%, mainly digital strategy are comprehensive efforts to become
as a result of completion of the RAPID project in Johor. more customer centric. Pos Malaysia seeks to elevate
The International Business, comprising the cross-border the customer experience and build trust through greater
delivery of e-commerce items (either via transshipment or transparency and visibility of service.
direct entry), recorded RM147.2 million in revenue.
Along with e-commerce growth, the long-term outlook
Overall, Pos Malaysia saw a 4.8% year-on-year drop in for Pos Malaysia is bright as more and more people
revenue to RM2.36 billion compared to RM2.47 billion in shop online. In the shorter term, it is hopeful of the
the previous financial year. tariff negotiations coming to fruition. This, together with
strategies for revenue growth and cost containment, places
Pos Malaysia on a surer footing to expand its business with
the best infrastructure and solutions to serve the market.

CONCESSIONAIRES The company’s vision for expansion is reflected in
a strategic plan that had been mapped in 2018. For
Alam Flora Sdn. Bhd. (“Alam Flora”) FY2019/20 – FY2020/21 the goal is to venture into
integrated waste and facilities management, the waste
Alam Flora is responsible for solid waste management processes business and recovery and recycling business.
(“SWM”) and public cleansing services in Kuala Lumpur, The ultimate objective is to become a holistic waste
Putrajaya and Pahang under a concession from the management solutions provider and a smart waste
government which extends up to year 2033. Through its management partner to the government. Alam Flora is
subsidiary, DRB-HICOM Environmental Services Sdn. Bhd. technically equipped to be a partner to the government
(“DHES”), it is also involved in non-concession business to achieve its goals of increasing the nation’s recyclable
activities such as building cleaning, landscaping, landfill rate to 30% and reducing the solid waste management
management, waste management, integrated facility industry’s carbon footprint by 40% by 2020.
management, recycling and the collection of industrial
scrap material. The Group’s conscientious efforts to carry out its functions
efficiently led to another year of positive results, with
FY2018/19 marked the seventh year of Alam Flora’s revenue increasing 8.3% year-on-year to RM880.1 million,
privatisation, during which it remained steadfast in its and Profit Before Zakat and Taxation (“PBZT”) remaining
pursuit of providing excellent service to the public. The at RM98.6 million.
company continued to invest in the best equipment to
mechanise and automate its operations. It also reinforced In FY2019/20, Alam Flora plans to extend its SWM services
its lobby for an expansion of its concession services to to Tioman Island thus cover the entire state of Pahang.
Kelantan and Terengganu, following which it would be Meanwhile, DHES’ refurbishment and full operation
the biggest private solid waste management company in of mini incinerators in Cameron Highlands and Pulau
Malaysia. At the same time, it made greater inroads into Pangkor will enhance the company’s earnings.
the non-concession business, including waste treatment,
through negotiations with the DRB-HICOM and Albukhary
Groups.

BUSINESS REVIEW
Services Sector
PUSPAKOM Sdn. Bhd. (“PUSPAKOM”) Yet another digital innovation has been to install live feed
display units at all inspection centres allowing customers
PUSPAKOM celebrates its silver jubilee this year. In that to monitor their vehicle inspection status while waiting.
time, it has played a significant role in motorists’ safety
as the only authorised vehicle inspection body in Malaysia. On the ground, PUSPAKOM has continued to grow its
In addition to this mandatory function, it offers a suite of mobile inspection network, extending the number of
services for private vehicles that includes inspection for operation days and hours of operation at major branches
hire-purchase financing, ownership transfer, registration while relocating and upgrading branches for greater
of imported vehicles and voluntary vehicle inspection. customer convenience and experience. It has also been
engaging more diligently with the public to enhance
awareness of the importance of inspection.
Its Hire-Purchase Inspection service was extended for Higher demand for inspection services along with an
another three years in December 2018 when PUSPAKOM overall increase in TIV during the year led to a 3.8%
won a tender issued by the Ministry of Domestic Trade and growth in net revenue year-on-year to RM145.5 million,
Consumer Affairs. while PBZT rose to RM9.9 million from RM8.1 million.
PUSPAKOM conducted a total of 3.35 million inspections
Since being awarded its concession in 1994, PUSPAKOM in FY2018/19, compared to 3.31 million in FY2017/18.
has been conscientious about fulfilling its service mandate
by continuously enhancing the customer experience. A key Meanwhile, its commitment to excellence was reflected
focus area currently is to harness digital technology for in more accolades and accreditation. PUSPAKOM was
more holistic, hassle-free solutions. This saw the launch of awarded the Malaysia Best Employer Brand Award 2018 by
online reservation and payment system, MyPUSPAKOM, in World HRD Congress, and received the MS ISO 37001:2016:
FY2017/18. In FY2018/19, PUSPAKOM rolled out the digital Anti-Bribery Management System (“ABMS”) accreditation,
service to all inspection centres in Peninsular Malaysia, becoming among the first organisations in Malaysia to
Kuching and Kota Kinabalu while also extending it for its do so.
mobile truck services. In addition, PUSPAKOM introduced
its own e-wallet as a new payment option besides credit Going forward, to meet increasing demand for mobile
and debit cards as well as financial process exchange. inspections PUSPAKOM seeks to grow its mobile service
fleet. With strengthened resources, it will also take its
services to as yet untapped markets.

OTHER SERVICES
Bank Muamalat Malaysia Berhad (“Bank Muamalat”)
Bank Muamalat is one of only three full-fledged Islamic

banking institutions in Malaysia. It has 63 branches across
the country and RM22.9 billion in assets. It is the first and
the only Islamic bank in the world to become a member of
the Global Alliance for Banking Values (“GABV”).
It recorded a total revenue of RM1.33 billion in FY2018/19

and a PBZT of RM241.2 million, marking 4.6% growth
from the previous financial year. This was driven by a 3.5%
increase in total net income to RM712 million underpinned
by higher financing and investment securities income as
well as higher gain in foreign exchange transactions.
During the financial year, the Bank’s gross financing

base expanded by 3.9% to RM15.47 billion. Deposits from
customers closed at RM19.14 billion, with current account
and savings account (“CASA”) contributing 27.9% of this
total. The Bank’s gross non-performing financing (“NPF”)
ratio has also improved to 1.43% as at end of March 2019
from the 1.92% recorded in March 2018. Meanwhile, its
capital position remained healthy with the Tier I capital
ratio and total capital ratio at 15.8% and 18.6%, respectively.
In November 2018, the Bank was awarded the Best

Alternative Investment Asset for Wealth and Society in
Malaysia (Shariah Compliant Gold Investment) Award
at the Global Wealth and Society Awards 2018 held in
London. It also received various awards from Amanah
Saham Nasional Berhad (“ASNB”) at the ASNB Starz
Awards Night 2018, for outstanding performance as an
ASNB agent. Bank Muamalat seeks to tap into new markets for existing
products while growing its Small Medium Enterprise
Moving forward, Bank Muamalat will continue to focus on business in collaboration with guaranteed providers and
five strategic thrusts that have been outlined in its five- other financial institutions. It will also optimise its returns
year business plan, namely to: while managing risks through prudent provisioning for
financing; offering more floating rates; and attracting
1) harness digital technologies; more CASA deposits. In terms of cost efficiency and
2) become the preferred investment solutions provider; productivity, it will press ahead with process automation,
3) be the banker of choice for each localised community; centralised documentation and shift routine transactional
4) be recognised as a socially responsible bank; and banking tasks into less-cost banking channels.
5) further excel in the area of customer service.
Bank Muamalat’s ultimate goal is to ethically deliver best
This five-pronged transformation is being strengthened value to its stakeholders, society and the environment.
by initiatives to expand its revenue, better manage its
balance sheet, and improve cost efficiency and productivity.
Further underlining its commitment to be a values-based
bank, a number of plans have also been put in place to
ensure a continuous positive impact on society and the
environment.

BUSINESS REVIEW
Services Sector
DRB-HICOM University of Automotive Malaysia face the challenges of the 21st century. Currently, 2-Year
(“DRB-HICOM U”) University, 2-Year Industry (“2U2I”) programmes have
obtained provisional accreditation from the Ministry of
DRB-HICOM U is a full-fledged university offering Education: the Diploma of Engineering Technology in
foundation, diploma, degree and post-graduate Aerospace Composites Manufacturing; and Bachelor
programmes in engineering, technology, business and of Engineering Technology in Aerospace Composites
management to Malaysian and international students. Manufacturing.
Located within DRB-HICOM’s Automotive Complex in
Pekan, Pahang, it is the only university in Malaysia that Meanwhile, the Faculty of Business and Management’s
focuses on producing graduates who are automotive newly approved Bachelor Business Administration
industry-ready. (“BBA”) in Entrepreneurship and Innovation saw its first
intake in February 2019; and plans to offer programmes
Enrolment in FY2018/19 stood at 377, a number that is in flipped classroom mode under the School of Advanced
targeted to increase to 700 in FY2019/20 as a result of and Distance Learning (“SADLe”) are progressing. Out of
more aggressive marketing as well as new scholarship seven undergraduate programmes to be offered through
packages. In the next five years, DRB-HICOM U aims to the virtual campus, the SADLe is starting with two
have a total student population of 3,000. programmes for the June 2019 intake.
As part of efforts to increase its student intake, the The quality of DRB-HICOM U programmes is assured
Engineering Faculty is streamlining its resources to focus through relevant accreditation. To date, a total of 14 out of
on the most sought-after programmes. It has also identified 55 programmes have been accredited. Another seven were
six work-based learning (“WBL”) programmes that would audited in the first half of 2019 and have been provisionally
combine on-the-job experience with theoretical lessons. accredited. The remaining programmes will be audited for
This is in line with the Malaysian Education Development full accreditation in the coming years. To ensure relevancy
Plan 2015-2025 (Higher Education) to produce graduates and continuous enhancement of the programmes,
who are talented, skilled, knowledgeable and ready to industrial advisors and subject matter experts have been
appointed to appraise the curriculum contents.

Making its presence felt within ASEAN and beyond, the
university’s newly set up Centre of Academic Collaboration
and Transformation is engaging with both foreign and
local institutions of higher learning. In FY2018/19, no
less than 13 Memorandums of Understanding were
signed to promote staff exchange, academic programme
development, student mobility and student exchange.
In anticipation of a significant number of Chinese students

from Beijing-Geely University starting at DRB-HICOM U
in September 2019, the University has been training its
administrative staff to speak Mandarin. Staff training is
integral to overall quality enhancement which includes
coaching for academic staff by visiting and adjunct
professors; and a series of competency programmes by
professional trainers.
The University received the ISO 9001:2015 certification in

2018, reflecting its commitment to maintaining quality and
safety in an environment of continual improvement.
The University has also started to offer scholarships as

a means of broadening its pool of incoming students. A
total of 76 students have been awarded scholarships for
the Foundation programmes; 50 have been awarded the
DRB-HICOM Apprentice Scholarship; three international
students have received scholarships; and 237 students
have received partial non-Foundation programme
scholarships.
Research continues to be emphasised, and 21 indexed

publications were produced in 2018. The University
received a total of RM279,160 in external grants for
research purposes from the Public Private Research
Network and Knowledge Transfer Programme Fund which
was used to fund 10 projects.
In 2018, the University won three awards each at the

Malaysia Technology Expo and International Invention,
Innovation & Technology Exhibition, and a gold at the
Hackathon PSAS 2018 - Smart Car System. In addition, 46
teams won awards at the Ideas in Business & Engineering
Exhibition hosted by the university. The University also
won the Worldskill Malaysia Competition in 2018 and was
awarded the Prime Minister’s Golden Hand Award.

BUSINESS REVIEW
Properties Sector
DRB-HICOM is involved in property development and management

as well as construction. It is currently developing Proton City
in Perak, residential properties in Johor, Media City in Kuala
Lumpur and an Immigration, Customs, Quarantine and Security
(“ICQS”) Complex at the Malaysia-Thai border – the latter two
under concessions with the government. Although it also owns and
manages hotels and a golf club, these are being phased out under
an agreement to dispose of land parcels and leisure assets. The
objective is to focus on industrial properties.

Phase 1A of Glenmarie Johor, made up 189 units of link
houses was completed in February 2018. Phase 1B,
comprising 102 units of link houses, was completed
during the financial year under review and handed
over Phase 1C, comprising of 56 units of semi-detailed
houses and cluster homes, was launched in April 2018.
The semi-detached units have an approximately built-
up area of 3,000 sq.ft. While the cluster homes measure
2,600 sq.ft.
Occupying land areas of 40’ x 80’ and 34’ x 80’ respectively,

prices range from RM1,098,000 to RM1,398,000 for
standard units. To date, 30% of the units have been sold.
• HICOM Pegoh Industrial Park is designed to be a premier

integrated industrial estate spanning 729 acres, one of
the largest freehold industrial parks in Melaka. Located
strategically along the North South Expressway, it will
be easily accessible via the Alor Gajah/Simpang Empat
Interchange in Alor Gajah, Melaka.
To date, approximately 326 acres of the industrial estate

have been developed, and approximately 93% of the
land has been sold. In FY2019/20, GPSB targets to sell
approximately 22 acres of industrial land in Phase 2A while
developing 69 acres in Phase 3 in the first half of 2020.
Proton City Development Corporation Sdn. Bhd. (“PCDC”)
PCDC is the developer of Proton City, a 4,000-acres

township in Tanjung Malim, Perak. The development
PROPERTY DEVELOPMENT comprises residential, commercial, institutional as well
as industrial parcels surrounded by lakes. Proton City
Glenmarie Properties Sdn. Bhd. (“GPSB”) also houses Universiti Pendidikan Sultan Idris, a premier
university in the country.
GPSB is the primary property development arm of DRB-
HICOM. It is currently involved in the development of In July 2018, PCDC launched a total of 169 single storey
the residential Glenmarie Johor and the HICOM Pegoh and 1½-storey link houses on standard lot sizes of 22’ x 70’.
Industrial Park. The single storey units have built-up areas of 1,000 sq.ft.
while the 1½-storey link houses measure 1,586 sq.ft. in
•
Glenmarie Johor is a 69-acres freehold mixed size. Priced from RM279,000 and RM390,000 respectively,
residential project that will feature a total of 477 units about 30% of the units have been sold.
once completed. The development is located at the
epicentre of Johor’s bustling and mature Tebrau region,
highly sought-after due to its proximity to Johor Bahru’s
central business district as well as the Malaysia-
Singapore Causeway.

BUSINESS REVIEW
Properties Sector
CONCESSION DEVELOPMENT AND

CONSTRUCTION
Media City Ventures Sdn. Bhd. (“MCVSB”)
MCVSB, 51%-owned by DRB-HICOM, is the parent

company of Media City Development Sdn. Bhd. (“MCDSB”),
which is developing Media City, an upgraded and expanded
Angkasapuri, the national TV and radio complex. MCDSB
has a 23-year concession that includes the design,
construction and upgrade of the buildings and media
facilities, and subsequent management of Media City
Complex. It has delivered the first parcel of Media City,
which entailed installing the latest broadcast equipment
required for high definition digital TV programmes. The
second parcel, comprising new TV studios and radio
contis, will be delivered by end of 2019.
Northern Gateway Infrastructure Sdn. Bhd. (“NGISB”)
NGISB was set up to develop and manage a new ICQS

complex in Bukit Kayu Hitam, Kedah under a 28-year
concession with the government beginning in June
2014. Phase 1 of the complex was officially opened on 1
November 2017, and has been operating flawlessly by
14 government agencies helmed by Jabatan Imigresen
Malaysia. Construction of Phase 2 commenced in January
2018 and was completed as per schedule. It is now being
commissioned for opening to the public by end of June
2019.

ASSET AND FACILITY MANAGEMENT
Glenmarie Golf & Country Club (“GGCC”)
GGCC is one of the most prestigious golf courses and club

houses in the country, attracting high-profile tournaments
such as the Bridgestone ASEAN Amateur Open 2018
– Grand Finals. Other tournaments hosted during the
year included the Professional Golf of Malaysia (“PGM”)
Northport Championship, PGM Ladies Championship,
13th Ambank Group-SportExcel International Junior Golf
Championship and the Senior Golfers’ Society of Malaysia
Interstate Team Championship 2019. Total revenue from
membership and events for the financial year amounted
to RM22.0 million.
Holiday Inn Kuala Lumpur Glenmarie (“HIKLG”)
HIKLG is a business and leisure resort-styled hotel in Shah

Alam, Selangor. As a result of the slowdown in tourism,
it recorded a lower number of guest arrivals than in the
previous year, achieving an average occupancy rate of
45.2%, with revenue totalling RM19.4 million.
Vivanta by TAJ - Rebak Island, Langkawi
Vivanta by TAJ - Rebak Island, Langkawi is a luxury resort

under the globally renowned TAJ brand. Offering the lure
of staying on a private island, the five-star resort continues
to attract an ever-increasing number of guests, achieving
an occupancy rate of 65% for the year and revenue of
RM24.3 million.

KEY INITIATIVES
145 Sustainability Report

SUSTAINABILITY REPORT
For Financial Year 2018/19
This picture of our headquarters, Wisma DRB-HICOM, was hand-drawn by Kennard Lee Kean Aun (“Ken”), one of six differently-abled individuals
employed by the Company under our People with Disabilities (“PWD”) Programme. Ken is a staff of the Creative Services Department at Group
Strategic Communications Division.

Dear shareholders,
Following our Sustainability Report last year, we

continue our efforts as a Group to improve the impact
of our businesses towards the surrounding and the
public. We realise that our stakeholders want all the
elements related to sustainability – climate change,
human rights, integrity, diversity and safety – be
addressed while at the same time deliver quality
products and credible financial performance that
brings about long-term business value.
As I stated last year, DRB-HICOM’s sustainability initiatives focus on five

themes: Safety and Health; Energy Management; Waste Management; Human
Capital, and Corporate Responsibility. This sustainability journey is a demanding
one, what more for an organisation such as DRB-HICOM. With some 55,000
people in our ranks, this alone poses so many challenges.
Our wide geographic reach also means that our carbon footprint is larger than
most. Our postal services, for example, cover the far reaches of our nation, and
thus we endeavour to be responsible in the way we impact the environment
within which we operate.
Our size means we consume more energy when compared to the smaller
organisations. But we are cognisant to take proactive steps to ensure wherever
we can, we manage energy consumption while not impacting the output of work.
The satisfaction is in the results we have achieved. This year, we are proud
that the efforts across the Group have borne fruit. These are detailed in this
report and I hope you will celebrate with us the small successes that will lead
to greater ones.
On behalf of the Board, I extend my gratitude to our employees for embracing

sustainability as they have done. This report details their success, and also
the route charted towards building a more sustainable DRB-HICOM. In the
end, their role in this journey with DRB-HICOM is one that will benefit future
generations, and that must be a prime motivating factor for each and every one
of us.
Thank you.
Syed Faisal Albar

ABOUT THIS REPORT
Reporting Approach Scope and Boundaries
This report focuses on the sustainability strategy and The scope of the report is confined to subsidiaries in which
practices of DRB-HICOM and its subsidiaries, namely the DRB-HICOM has more than 50% equity, unless indicated
material Economic, Environmental and Social aspects of otherwise.
our business operations.
Memberships and Associations
This report has been prepared in reference to the reporting
framework stipulated by the Global Reporting Initiative DRB-HICOM is actively involved in nationally recognised
(“GRI”) Standards and meets the statutory requirement memberships and associations in Malaysia. Examples of
prescribed by Bursa Malaysia Securities Berhad (“Bursa include, but are not limited to, the list below:
Malaysia”). The reporting principles covered in this report • MIGHT – Malaysian Industry-Government Group for
includes: High Technology
• FMM – Federation of Malaysian Manufacturers
• Stakeholder : capturing our stakeholders’
• MIER – Malaysian Institute of Economic Research
Inclusiveness expectations and concerns
• MIM – Malaysian Institute of Management
• MEF – Malaysian Employers Federation
• Sustainability : p
resenting our performance in the • MICG – Malaysian Institute of Corporate Governance
Context wider context of sustainability • MAA – Malaysian Automotive Association
• IIAM – The Institute of Internal Auditors Malaysia
• Materiality : identifying and prioritising the • FPLC – Federation of Public Listed Companies
key sustainability issues that our
Group encounters References
• Completeness : reporting all sustainability topics References to “DRB-HICOM”, “the Company”, “the
that are relevant to our Group, Organisation”, “the Group” and “we” refer to DRB-HICOM
and those that influences our and its subsidiaries.
stakeholders.
Feedback
The Materials established as the reporting perimeters in For further details, you may contact:
this report are as stated below: Name : Mahmood Abdul Razak
• GRI 203 Indirect Economic Impacts 2016 Designation :
Head, Group Strategic Communications
• GRI 302 Energy 2016 Division
• GRI 306 Effluents and Waste 2016 Email : info@drb-hicom.com
• GRI 403 Occupational Health and Safety 2016
• GRI 404 Training and Education 2016
• GRI 407 Freedom of Association and Collective
Bargaining 2016
• GRI 413 Local Communities 2016
Reporting Period
This report refers to the financial year period from 1 April

2018 to 31 March 2019, unless indicated otherwise.

AWARDS AND RECOGNITION
A B
C D
A. Asia Sustainability Reporting Awards 2018 F. HR Excellence Awards 2018

• Finalist • Gold Winner
– Asia’s Best Sustainability Report within Annual – Excellence in HR Team Collaboration
Report • Bronze Winner
• Finalist – Excellence in Graduate Recruitment &
– Asia’s Best SDG Reporting Development
B. TalentCorp Life at Work Awards 2018 – Outstanding G. Malaysia HR Awards 2018

Practice (Workforce) Employer of Choice Award (Private Sector)
C. Excellent Technology Development Award H. Human Resources Asia Recruitment Awards 2018
Geely Auto 2019 Annual Supplier Conference awarded In-House Recruitment Professional of The Year
to PHN Industry Sdn. Bhd. (Silver) awarded to Vilashini Ananda Rajah, Head of
Group Talent Acquisition
D. Best Performer 2018 Award
Airbus Supply Chain & Quality Improvement I. Rentalcars.com Customer Favourite Award 2018
Programme (“SQIP”) awarded to Composites Avis Malaysia’s Kuching and Kota Kinabalu branch
Technology Research Malaysia Sdn. Bhd. (“CTRM”)
E. HR Asia Awards

Best Companies to Work For in Asia 2018

THIS IS DRB-HICOM SUSTAINABILITY
Today, with over 100 years of experience and growth, DRB-HICOM strives to lead by example in driving our Group’s
sustainability agenda. The group is among the region’s leading conglomerates with over 70 subsidiaries covering three
main sectors (across Automotive, Services and Properties) nationwide, employing more than 55,000 strong employees
base. Working with different sectors, people and needs, we have always aspired to reform the sustainability-sphere to
achieve noteworthy and continuing improvement in economic, environmental and social outcomes. This is a commitment
for all our business sectors, and Group as a whole, as we work together to incorporate sustainability into all our daily
operations.
Building on a strong foundation of corporate governance, sustainability principles permeate decisions and actions we
undertake to ensure responsible business practices, manage the environmental impact of our operational activities,
provide an inclusive workplace for our employees and meet the needs of wider society. We recognise the responsibility
we owe to our various stakeholders in delivering not only quality but ethical and responsible services and products. We
continue to strive towards inculcating sound corporate governance practices that is in line with the Malaysian Code on
Corporate Governance (“MCCG”) and adhere to related industrial best practices (see page 63 to 74 for details).
Our Commitment Our Ecosystem Our Themes
Being one of the largest We have formed specific themes

conglomerates in Malaysia and assigned teams to take
with a market capitalisation of responsibility in managing these
RM3.7 billion, DRB-HICOM has themes and their impacts. The
experienced extensive growth teams have developed specific
since the millennial merger to goals, targets (e.g. 2% reduction
become the only corporation in per year for safety and health &
Sustainability Vision the country involved in the entire energy) and initiatives to ensure
To be a frontrunner in meeting the automotive value ecosystem, there is continuous progress
sustainable standards set by the as well as the only organisation within the Group in managing
nation. nationwide that provides end-to- all the material concerns. We
end logistics services, Islamic are certain this will ensure a
banking, vehicle inspection, waste sustainable business model for
management and automotive the Group.
industry-related tertiary education
including vocational training. In
the property market, we have
built a strong reputation for
quality developments under the
Glenmarie brand, and are now Safety and
Sustainability Mission
focused on the development of Health
To ensure that business activities
industrial parks.
of our core sectors align with the
expectations of our stakeholders Energy
while also enhancing the long- Management
term value of the Company through
sustainable initiatives.
Waste
Management
Automotive
Human
Services Capital
Corporate
Responsibility
Properties

Our value chain strategy
Given the diverse nature of our business operations, sustainable practices and responsible business strategy form the
basis of our ability to create long-term value for our stakeholders. We allocate and channel our capital in the form
of financial, manufactured, intellectual, human, social and relationship as well as natural capital into all our business
operations with the objective to minimise our negative impact and generate sustainable value to our diverse stakeholders.
As we believe that our global presence needs us to be forward looking and be supportive on both global and national
agendas, we therefore incorporate Sustainable Development Goals (“SDGs” or “Goals”) introduced by the United Nations
into the Group’s sustainable strategy. These set of 17 Goals include calls of action to end poverty, protect the environment
and help people lead a peaceful and prosperous life. Malaysia is committed to support and implement the 2030 Agenda for
Sustainable Development and its 17 Goals. We at DRB-HICOM reaffirm our support, aligning to the national aspirations
towards achieving the Goals.
Our Capital Our Input Our Output Our Impact
• Capital expenditure • Profit

Financial • Creditworthiness • Government tax
• Equity • Dividend
• Grant • Employee benefits
• Presence in three • Top class quality

key countries on products and
Manufactured across three services • Economical,
diverse industries in ecological and
Malaysia, Indonesia societal value to the
and Thailand people and nation
• Future-proof
Intellectual • Research and • Patents on product workforce
Development and process • Local community
well-being
• More than 55,000 • Skilled employees • Sustainable growth
employees under the • Safe and healthy across the Group
Human
Group workplace • Brand value and
• Training and safety reputation
programmes
• Stakeholder • Stakeholders’
Social and engagement survey concerns are
Relationship • Community addressed
engagement
• Natural resources • Waste

such as energy, water • Wastewater
Natural
and raw materials • Emissions

Managing Our Supply Chain
We have strengthened the relationships we have with our DRB-HICOM Green Procurement Policy
vendors and suppliers through years of mutual trust and
respect via transparent business transactions. Given the The Group established the DRB-HICOM Green
multi-faceted nature of our services, we believe this is Procurement Policy to require all employees to
essential for the success of our business. conduct purchasing and contracting activities in
a resource efficient manner. It recommends each
At DRB-HICOM, we are committed to providing equal and necessary purchase to consider the below:
fair business opportunities through our tendering and
Request for Quotation (“RFQ”) processes. Our process 1. Fit for purpose, provide value for money
ensures all the participants are evaluated in a transparent 2. Energy and resource efficient
manner by the appointed committee members. We screen 3. Minimum use of virgin materials
all potential suppliers through our pre-qualification 4. Non-polluting
(“pre-Q”) evaluation before the tender or RFQ invitation 5. Durable, easily upgraded and repairable
is issued. Suppliers who pass the pre-Q are qualified 6. Minimum packaging
to move forward their participation of the tender/RFQ. 7. Reusable and recyclable
To encourage local supplier participation, we award
additional points to them in our tender/RFQ evaluations
where applicable.
We are dedicated to conducting our business in an

ethical manner and ensuring transparency across all our Engaging PROTON’s Supply Chain on Energy
business functions. The Ethics and Procurement clause in Management
our Group Procurement Policy (“GPP”) details the ethical
requirement for procurement personnel. We manage PROTON has expanded its aspiration to reduce
conflicts of interest, procurement relationships and energy consumption to its supply chain. As part
ethical conduct of suppliers through our Invitation To Bid of the PROTON Green Initiatives, PROTON actively
(“ITB”) documents. These documents are issued during engages and provides technical assistance to
the tender exercises to all participating suppliers. The ITB its vendors as well as PROTON showrooms to
documents provide the requirements suppliers have to facilitate the implementation of energy reduction
strictly adhere to. The following are the relevant clauses: initiatives in their operations.
1. Clause 2.7 : Confidentiality To learn more on how PROTON engages its supply
2. Clause 2.8 : Bidder’s Undertaking chain on energy management, please refer to
3. Clause 2.16 : Bribery and Solicitation page 162 to 163.
4. Clause 2.17 :
Compliance to Safety, Health and
Environment Regulations and Guidelines
5. Clause 2.18 : Immigration Regulations
We encourage all our stakeholders to report any unethical

behaviour and have provided a safe platform to do so.
They may access this platform easily through our Group’s
toll-free Whistleblower hotline at 1-800-88-2005, which is
mentioned both in GPP and ITB.


Sustainability Governance
Recognising sustainability as a key business differentiator

and a driver of our business, the spirit of sustainability
is embedded in every level of operation in DRB-HICOM.
Starting at the Board of Directors level, the governance DRB-HICOM
of sustainability in the Group encompasses our three Board of
business sectors (Automotive, Services, and Properties) Directors
and Group Corporate Support Services.
The Board Risk and Sustainability Committee (“BRSC”)

has general oversight of our sustainability strategy and
performance. The BRSC reviews our sustainability-related
progress on a quarterly basis.
Board Risk and
Chaired by Group Director for Financial Services Division,
Sustainability
our Sustainability Steering Committee (“SSC”) comprises Committee
of the Head of Group Risk Management Department; Head
of Group Strategic Communications Division; Head of
Group Human Capital Division and Head of Group Safety,
Health and Environment Department. The committee is
responsible to drive and ensure our sustainability strategy
is effectively incorporated into all areas of our business.
The Sustainability Working Committee (“SWC”) is our Sustainability

cross-functional ‘activation arm’ that effectively drives Steering
focus on the execution of strategic plans for our priority Committee
material topics. This diverse working committee reviews
the status of strategic plans for our priority material topics
and emerging material topics. The SWC is also accountable
for analysing which stakeholders and programmes have
the most impact on DRB-HICOM’s reputation as well as
working proactively across the organisation to foster
engagements around the progress of our goals and Sustainability
sustainability commitments. Working
Committee
Kindly refer to Risk Management statement in the Annual
Report on the pages 75 to 80 and 95 to 102 for more details
on sustainability governance in DRB-HICOM.
Automotive Properties
Group Corporate
Services Support Services
DRB-HICOM
Sustainability Governance Structure

Sustainability Risk Management
At DRB-HICOM, risks related to climate change, market and industries, reputation, and organisation are perceived as
the overarching foundation for sustainability risk management. These risks are managed by the Group’s three lines of
defense, namely Sector and Business Units, Group Risk Management Department and Group Internal Audit Division,
alongside initiatives conducted to measure and mitigate risks across all sectors, units and divisions on a consistent basis.
Risks Description Actions Taken
Climate-Related According to the Task Force on Climate-related At DRB-HICOM, we undertake a similar approach to
Risk Financial Disclosures (“TCFD”), climate-related risks understand our climate-related risks. We align our
can be divided into two categories, 1) risks related to commitment to Malaysia’s aspiration on carbon reduction
the transition to a lower-carbon economy and 2) risks in order to safeguard our business as well as the
related to physical impacts of climate change. community we serve from climate-related risks. This
means we constantly explore innovative ways and cutting
edge technology to reduce our energy consumption as well
as carbon footprint not only within the Group but also in our
supply chain.
Legal & Compliance The newly restructured Ministry of Energy, Science, With this in mind, the Group frequently engage with the
Risk Technology, Environment and Climate Change government as well as industry experts to ensure we are
(“MESTECC”) has emphasised on the participation of well prepared for regulatory transitions.
private sector in addressing climate change and other
environmental issues in Malaysia. The government is
currently looking into establishing policies on climate
change and energy efficiency. This may result in
increased compliance costs for businesses especially
those which are involved in high energy intensity
industries.
Health & Safety The health and safety of our employees as well as all Guided by the Group Safety, Health and Environment
Risk our stakeholders is an integral part of DRB-HICOM’s (“SHE”) Policy, we conduct stringent checks and employee
operational excellence that we will not compromise. trainings as well as implement control systems and
standard operational procedures to ensure disruptions
from health and safety related incidents at our workplace
are effectively mitigated.
Opportunities Description Actions Taken
Circular Economy Over 70 subsidiaries spanning across three diverse The Group is currently exploring methods to adopt the
within DRB-HICOM sectors - Automotive, Services and Properties, circular economy approach and gradually move away from
Ecosystem DRB-HICOM has built an economic ecosystem that the traditional linear “take, make, dispose” industrial
possesses sizable potential in minimising waste processes. We believe this will enable the Group to
and making the most out of resources within our minimise risks associated with raw material and natural
subsidiaries. For example, waste generated by one of resources in the long term.
our subsidiaries can be a source of raw material for
other subsidiaries.
Decarbonise Our In supporting Malaysia’s commitment towards We align our energy management strategy with Malaysia’s
Environmental achieving a 45% nationwide carbon reduction by year committment to carbon reduction. Since FY2016/17, the
Footprint 2030 compared to base year 2005, the Group has been Group has recorded a reduction of over 42 million kWh in
actively reducing its carbon footprint through energy energy consumption, which is equivalent to a reduction
reduction initiatives as well as adoption of renewable of more than 28,000 tonnes of carbon emissions. While
energy sources. the Group continues to yield energy savings from energy
reduction initiatives, our main subsidiaries PROTON and
CTRM have plans to adopt and instal solar panels at their
premises in the upcoming years.
These Economic, Environmental and Social (“EES”) risks and opportunities also complement the Group’s Enterprise Risk
Management (“ERM”) framework. More information can be found in the Risk Management Statement on the pages 75 to
80 and 95 to 102 of the Annual Report.

ENGAGING OUR STAKEHOLDERS
Our stakeholders are an integral part of our business, thus understanding and addressing their expectations and
concerns is key towards ensuring continuity in the DRB-HICOM sustainability journey. We are grateful and humbled by
the involvement of our stakeholders in this journey, particularly in identifying areas for improvements and defining the
expectations on our sustainability areas.
Over the years, we have nurtured our relationship with our stakeholders by placing an emphasis in prioritising our people,
the quality of our products, the personalised services we provide, the social impact we create, the economic performance
we achieve and our diligence in complying with relevant laws and regulations.
This year, DRB-HICOM has taken a digital approach by reaching out to our stakeholders via an online survey to understand
their expectations and concerns about our businesses.
The table showcased below has been revised as per data we have collated from our engagement with stakeholders
throughout FY2018/19.
Frequency of
Stakeholders Mode of Engagement Scope of Interest
Engagement
Customers Website / Social media platforms Continuous • Direct economic value generated and distributed
Media conferences As needed • Materials (recycled materials and reclaimed
products)
• Employment (turnover rate and benefits)
Employees DRB-HICOM Talent Development Programme Continuous

Excellence award and scholarship programmes Annually • Training and education
Code of Ethics and Business Practice (“COEBP”) Continuous • Materials (recycled materials and reclaimed
products)
Whistleblower Policy Continuous • Employment (turnover rate and benefits)
Dialogue with national and in-house unions As needed
DRB-HICOM Safety, Health and Environment Quarterly
Council
Suppliers and Business negotiation As needed • Occupational health and safety
Contractors DRB-HICOM Group Procurement Policy ("GPP") Continuous • Anti-corruption
• Effluents and waste
Vendor development programme Annually
Local Community Participation in and sponsorship of community As needed • Materials (recycled materials and reclaimed
service events / NGO events products)
Social and environmental contribution As needed • Human rights assessment
programme • Indirect economic impacts
Safety, health and environment campaigns Quarterly
Investors In-house, one-to-one and small group meetings Continuous • Direct economic value generated and distributed
Community with stakeholders • Environmental compliance
Annual General Meeting (“AGM”) Annually • Employment (turnover rate and benefits)
Extraordinary General Meeting (“EGM”) of As needed
shareholders
Financial results announcements Quarterly
Dialogue / Teleconference between the Group and Continuous
investors
Non-deal roadshows As needed
Planned visits / Business showcase Annually
Regulators Attend workshops and seminars organised Continuous • Anti-corruption
by regulatory agencies to stay abreast of any • Energy
regulatory requirement • Training and education
Pro-active engagement / consultation with Continuous
the relevant regulatory bodies on corporate
compliance matters

MATERIALITY ASSESSMENT
Our closed loop materiality assessment is a key component of our sustainability reporting journey, primarily in defining
the reporting expectations and boundaries. Following the Materiality Matrix that was established in FY2017/18,
DRB-HICOM has reviewed and revised the existing matrix by incorporating local and global sustainability trends as well
as perspectives from our internal and external stakeholders via various engagements. The survey undertaken to engage
our stakeholders was managed and verified by an independent third party consultant. The results were compiled and
mapped according to the influence of sustainability issues emphasised by stakeholders and the significance of economic,
environmental and social impacts to the business. Further to the establishment of the Materiality Matrix, it was discussed
and approved by the BRSC. The Group strives to review the Materiality Matrix on an annual basis.
1 2
Current State Identify Local and
Assessment Global Trends
• Analyse previous year • Utilise media search and
reports to identify subject matter experts’
improvements to be inputs to identify local and
incorporated into this year’s global sustainability trends
report. that are relevant to
DRB-HICOM and its subsidiaries.
6 3
Validation
• Align the Materiality Matrix DRB-HICOM Climate Check
with DRB-HICOM Sustainability Materiality • Align report to Bursa Malaysia
Themes. requirement, GRI Standards
• BRSC discusses and approves Assessment and United Nations Sustainable
the finalised Materiality Matrix. Approach Development Goals (“UNSDGs”).
• Conduct comparative analysis
on peers and best-in-class.
Stakeholder
5 4
Management
Discussion Engagement
• Conduct a series of management • Bottom-up approach to identify
meetings and focus group internal and external stakeholders'
discussions to incorporate concerns on sustainability issues
stakeholders' concern into the via periodical engagements and
Group’s Materiality Matrix. online surveys.
High
Occupational
Anti-corruption Health and Safety
INFLUENCE OF STAKEHOLDER ASSESSMENT & DECISION
Training and
Education
Energy
Indirect Economic
Impacts
Local Communities
Respective
indicators can
Effluents and
Waste be found in
Freedom of Association
and Collective Bargaining GRI Standards
Water
Content Index on
the pages 193
Supplier Environmental and 194
Assessment Emissions
Diversity and Equal
Opportunity
Human Rights
Assessment
SIGNIFICANCE OF ECONOMIC, ENVIRONMENTAL & SOCIAL IMPACTS High

Low
DRB-HICOM Materiality Matrix

Safety & Health
Key Highlights In
FY2018/19
13% 5 Subsidiaries
reduction in total number of incidents
as compared to FY2017/18 were awarded SoHELP Level 5
Achievement of Excellence
81%
reduction in total Lost Time Injuries as
compared to FY2017/18 Open Dialogue
with the Group SHE practitioner to
191 share successful SHE initiatives
Safety, Health & Environment (“SHE”)

practitioners throughout the Group as of
31 March 2019
1 2 3 4
NO ZERO GOOD HEALTH QUALITY
POVERTY HUNGER AND WELL-BEING EDUCATION
6 7 8 9 1
CLEAN WATER AFFORDABLE DECENT WORK INDUSTRY RED
AND SANITATION AND CLEAN AND ECONOMIC INNOVATION AND INEQU
ENERGY GROWTH INFRASTRUCTURE
11 12 13 14
SUSTAINABLE RESPONSIBLE CLIMATE LIFE BELOW
CITIES AND CONSUMPTION AND ACTION WATER
COMMUNITIES PRODUCTION
Cardiopulmonary Resuscitation (“CPR”) training

1 2 153 164 175
during Safety, Health & Environment Dialogue
NO ZERO LIFEHEALTH
GOOD ON PEACE JUSTICE
QUALITY PARTNERSHIPS
ZERO
and Awareness Training. POVERTY HUNGER AND LAND
WELL-BEING AND STRONG
EDUCATION FOR THE GOALS
HUNGER
INSTITUTION
6 7 8 9 10
CLEAN WATER AFFORDABLE DECENT WORK INDUSTRY REDUCED
Why It Matters How We Approach It
Our people matters. It is our primary aim to provide a safe Safety, health and environment (“SHE”) matters at
and healthy working environment for our employees. It DRB-HICOM are guided by the Group’s SHE policy. The
is important to the Group that we ensure the safety of all policy focuses on four major objectives that include
our stakeholders that do businesses at our premises are Compliance, Prevention of Pollution, Communication and
prioritised. With a business influence sphere that spans Continual Improvement. These broad scopes underpin
throughout Malaysia, it is our duty to be compliant with all our overarching commitment towards protecting the
relevant safety and health requirements. environment where we operate while emphasising our
employees’ safety and health. The policy is applicable to
We have put in place stringent checks, systems and all our business activities and premises.
processes to ensure that safety and health is never
compromised, as we see these as not just a priority, but The Group formed a SHE Council, headed by the Group
a necessity. We have also invested heavily in training and Managing Director with the Group SHE Department acting
re-training courses, as well as run safety awareness as secretariat to monitor and advise on all SHE matters
and training programmes to instil a safety and health at Group level. The Council, with active participation
conscious culture in employees at all levels. This focus from Senior Management of the Group, has a role in
continues to be strongly reflected in the Group’s policies, determining the overall safety and health strategies and
procedures and plans. initiatives, as well as to drive effective implementation.
They meet quarterly to review the Group’s SHE strategies,
examine the progress on the Group’s SHE performances,
and evaluate audit results.
A strong safety culture relies on effective communication

in the workplace. Today, there are more than 190 SHE
practitioners across the Group who ensure and drive
compliance monitoring with regard to managing SHE risks.
Key Objectives of
DRB-HICOM’s
Group SHE Policy
Compliance
To comply with all legislative and
regulatory requirements related
to SHE, as well as code of
conduct, best practices and
behaviour.
Prevention of
Pollution Communication
To identify and implement Best To engage and educate SHE
Green Practices for the Policy to all employees, partners,
workplace and to minimise and contractors and stakeholders
prevent at source where working within our premises.
possible. Continuous
Improvement
To identify and reduce the
potential hazards, risks and
impact to safety, health and
environment in order to
achieve continuous
improvements in all
activities and working
condition.

Integrated Reporting Occupational Safety, Man
Health & Environment (“IROSHE”) Days
15,000
In 2015, Group SHE introduced IROSHE, a web-based data
14,333
management system that enables us to monitor our SHE 12,000
performance not only at Group level but also at subsidiary
level. It is compulsory for all subsidiaries to report their 9,000
SHE performance (e.g. energy, waste and safety & health)
via IROSHE on a monthly basis.
8,212
6,000
IROSHE helps in generating effective reports and analysis
1,598
from the data collected. All results will be subsequently 3,000
reported to the SHE Council on a periodic basis. Financial
0 Year
FY FY FY
Our Performance 2016/17 2017/18 2018/19
We continue to monitor our Group’s safety and health Total Lost Time Injuries in DRB-HICOM
performance by tracking both total Lost Time Injuries1 (Man Days)
(“LTI”) and total number of incident cases2. Based on the
results3, we are progressing positively based on a year-to-
year comparison. Incident
Cases
For FY2018/19, we managed to reduce the total number 800
of incident cases by approximately 13% compared to the 700 760
previous year. The number of cases decreased from 760
to 676 and 591 for FY2016/17, FY2017/18 and FY2018/19 600
676
respectively. This is a significant progress as the Group
591
500
aspires to have a consistent year-to-year reduction of 2%
400
in the total number of cases.
300
Based on the year-to-year comparison, the Group
200
has recorded a significant drop in the total LTI for
FY2018/19. We have recorded zero fatality cases, thus 100
Financial
the aforementioned results. It is our utmost priority to 0 Year
ensure our people are safe and healthy while conducting FY FY FY
their responsibilities to the company. We will continue to 2016/17 2017/18 2018/19
evaluate our current processes, monitor and find better
ways to improvise our safety and health matters. Total Number of Incident Cases in DRB-HICOM
Near-Miss Reporting
1
Total Lost Time Injuries is the total lost workdays - the number
We encourage our employees to report near-miss of workdays on which the employee would have worked but could
incidents across all operations as part of the measures not because of occupational injury or occupational poisoning or
occupational disease.
to prevent any such recurrence. Our near-miss reporting
system is designed to ensure that all near-miss incidents 2
Total number of incident cases - the total number of employees who
(including minor incidents) are reported, recorded and change in status from one state of health to another (such as non-
disease to disease) over a specific period of time.
investigated in a consistent and effective manner.
3
This includes data from ISUZU HICOM Malaysia Sdn. Bhd. and
HICOM-YAMAHA Manufacturing Malaysia Sdn. Bhd.

Systematic Occupational Health Enhancement Level Programme (“SoHELP”)
The SoHELP programme is a systematic intervention programme aimed to help companies enhance hygiene standards
in the workplace while meeting relevant regulatory requirements. The programme focuses on three main aspects:
1 2 3 4 5
chemical management, ergonomic issues and hearing conservation. The Group has NO
identified
ZERO
champions among the
GOOD HEALTH QUALITY ZER
SHE practitioners as SoHELP Enablers to assist the companies to self-regulate and monitor. Department of Occupational
POVERTY HUNGER AND WELL-BEING EDUCATION HUNG
Safety and Health (“DOSH”) acts as the SoHELP Verifier to evaluate and certify the level of achievement from Level 1
to 5. For FY2018/19, five companies have achieved Level 5 – Excellent, i.e. Perusahaan Otomobil Nasional Sdn. Bhd.
(“PROTON”), ISUZU HICOM Malaysia Sdn. Bhd., Bank Muamalat Malaysia Berhad, CTRM Aero Composites Sdn. Bhd. and
Motosikal Dan Enjin Nasional Sdn. Bhd. (“MODENAS”). 6 7 8 9 10
CLEAN WATER AFFORDABLE DECENT WORK INDUSTRY REDUCED
AND SANITATION AND CLEAN AND ECONOMIC INNOVATION AND INEQUALITIES
LEVEL ENERGY GROWTH INFRASTRUCTURE
EXCELLENT
ADVANCED Element 1 Element 2 Element 3
INTERMEDIATE Chemical Noise Ergonomic
Management Management Management
BASIC 11
SUSTAINABLE
12
RESPONSIBLE
13
CLIMATE
14
LIFE BELOW
ENTRY
1 2 153 164 175

NO ZERO LIFEHEALTH
GOOD ON PEACE JUSTICE
QUALITY PARTNERSHIPS
ZERO
Key Initiative 1: DRB-HICOM Emergency Assistance Team (“D-HEAT”)

POVERTY HUNGER AND LAND
WELL-BEING AND STRONG
EDUCATION FOR THE GOALS
HUNGER
INSTITUTION
Established in the wake of floods in Pahang back in

6 7 8 9 10
December 2014 to January 2015, D-HEAT is a trained teamCLEAN WATER AFFORDABLE DECENT WORK INDUSTRY REDUCED
that responds to any disaster or crisis as and when theAND SANITATION

AND CLEAN AND ECONOMIC INNOVATION AND INEQUALITIES
Management of DRB-HICOM deems fit for it to be deployed.
D-HEAT members are selected according to the criteria

issued by Fire and Rescue Department of Malaysia
(“BOMBA”). The members have undergone various training 11
SUSTAINABLE
12
RESPONSIBLE
13
CLIMATE
14
LIFE BELOW
courses under the guidance of Balai Bomba Seksyen 15, CITIES AND
COMMUNITIES
CONSUMPTION AND
PRODUCTION
ACTION WATER
Shah Alam. Some of the trainings comprised Light Search

and Rescue (Land and Water), Self-Contained Breathing
Apparatus (“SCBA”), first aid, firefighting and rappelling.
D-HEAT Training Preparation for Flood Relief 15

LIFE ON
16
PEACE JUSTICE
17
PARTNERSHIPS
LAND AND STRONG FOR THE GOALS
INSTITUTION
D-HEAT Team participated in one-day flood relief

preparation training which include water pump testing,
chainsaw testing, rigging testing and equipment handling.
Our D-HEAT members attended High Angle Rescue

Training and Water Rescue Training provided by BOMBA
Bukit Jelutong in 2019.

1 2 3 4 5
NO ZERO GOOD HEALTH QUALITY ZERO
Key Initiative 2: Safety, Health & Environment Dialogue and Awareness Training
POVERTY HUNGER AND WELL-BEING EDUCATION HUNGER
From 26 to 28 September 2018, Group SHE organised a dialogue session with more than 190 SHE practitioners
8
across DRB-HICOM’s Group of Companies. Through the dialogue, weCLEAN conducted
6
WATER
open 7
AFFORDABLE
discussions to get feedback
DECENT WORK
9
INDUSTRY
andREDUCED
10
opinions on SHE matters, including inviting our subsidiary, PHN Industry Sdn. Bhd.
AND SANITATION
to demonstrate
AND CLEAN
ENERGY
AND ECONOMIC
GROWTH their ‘Safety Dojo’
INNOVATION AND
INFRASTRUCTURE
INEQUALITIES
amongst SHE practitioners, ensuring continued improvements to make DRB-HICOM a safe place to work. The dialogue
included presentation on corrective / preventive SHE-related action plans, SHE awareness training as well as providing
cardiopulmonary resuscitation (“CPR”) training to other employees in Wisma DRB-HICOM.
11 12 13 14
15 16 17
LIFE ON PEACE JUSTICE PARTNERSHIPS
INSTITUTION
1 2 3 4
NO ZERO GOOD HEALTH QUALITY
POVERTY HUNGER AND WELL-BEING EDUCATIO
Key Initiative 3: Safety, Health and Environment Campaign
The SHE team organised a safety, health and environment campaign on 24 and 25 October 2018 in Wisma DRB-HICOM.
6 7 8 9
About 10 external exhibitors participated in this two-day event providing healthcare advice, free
CLEAN WATER optometry
AFFORDABLE DECENT check-ups
WORK INDUSTRY
and fire safety awareness. One of the key events for the campaign was a blood donation drive ENERGY in collaboration
GROWTH with the
AND SANITATION AND CLEAN AND ECONOMIC INNOVATION AND
INFRASTRUCTURE
National Blood Bank or Pusat Darah Negara where more than 80 DRB-HICOM employees donated their blood.
11 12 13 14
SUSTAINABLE RESPONSIBLE CLIMATE LIFE BEL
15 16 17
LIFE ON PEACE JUSTICE PARTNERSHIPS
INSTITUTION

Energy Management
Key Highlights in
FY2018/19
3.0% Certified Green

reduction in Group’s total energy Building
consumption as compared to FY2017/18
for CTRM new manufacturing plant –
Building 6
PROTON Green Initiatives reduced Expanded

> 2.2 million kWh Energy Audits
energy consumption across all to PROTON showrooms as an extension of
operations PROTON Green Initiatives
11 22 33 44
NO
NO ZERO
ZERO GOOD
GOODHEALTH
HEALTH QUALITY
QUALITY
POVERTY
POVERTY HUNGER
HUNGER AND
ANDWELL-BEING
WELL-BEING EDUCATION
EDUCATION
66 77 88 99
1 2 3 4
AFFORDABLE
AFFORDABLE DECENT
5
DECENTWORK
WORK INDUSTRY
INDUSTRY
CLEAN
CLEANWATER
WATER
NO ZERO GOOD
AND
AND HEALTH
SANITATION
SANITATION QUALITY
AND
ANDCLEAN
CLEAN AND ZERO
ANDECONOMIC
ECONOMIC INNOVATION
INNOVATIONAND
AND
POVERTY HUNGER AND WELL-BEING EDUCATION
ENERGY
ENERGY HUNGER
GROWTH
GROWTH INFRASTRUCTURE
INFRASTRUCTURE
Dunham-Bush Green Chiller verified by AHRI*

6
installed in Wisma DRB-HICOM. 7 8 119
11 1210
12 13
13 14
14
CLEAN WATER AFFORDABLE DECENT WORK INDUSTRY
SUSTAINABLE
SUSTAINABLE REDUCED
RESPONSIBLE
RESPONSIBLE CLIMATE
CLIMATE LIFE
LIFEBELOW
BELO
AND SANITATION AND CLEAN AND ECONOMIC INNOVATION
CITIES AND AND
CITIESAND INEQUALITIES
CONSUMPTION
CONSUMPTION AND
AND ACTION
ACTION WATER
WATER
*AHRI- Air Conditioning, Heating & Refrigeration Institute ENERGY GROWTH INFRASTRUCTURE
COMMUNITIES
PRODUCTION
based in United States.
11 12 13 15
1514 16
16 17
17
Why It Matters
ISO 14001:2015 Certification
According to the World Resources Institute, more than
70% of global Greenhouse Gas (“GHG”) emissions are 12 DRB-HICOM subsidiaries received ISO 14001: 2015
contributed by energy sectors. It suggests that many global certification:
challenges associated with climate change we currently
face are mainly due to a rapid increase in human activities • HICOM Automotive Manufactures (Malaysia) Sdn. Bhd.
and energy consumption in our economy since the mid- • HICOM-YAMAHA Manufacturing Malaysia Sdn. Bhd.
20th century. While we acknowledge that climate change is • HICOM-Teck See Manufacturing Malaysia Sdn. Bhd.
expected to impact not only the communities we serve but • HICOM Diecastings Sdn. Bhd.
also our businesses in the long run, especially industries • PHN Industry Sdn. Bhd.
that are inherently energy-intensive, we strongly believe it • Oriental Summit Industries Sdn. Bhd.
is our responsibility to take an active role towards finding • DRB-HICOM Environmental Services Sdn. Bhd.
a sound solution towards embracing a low carbon society • Glenmarie Properties Sdn. Bhd.
for our future generation. • Composites Technology Research Malaysia Sdn. Bhd.
• HICOM HBPO Sdn. Bhd.
How We Approach It • PROTON Tanjung Malim Sdn. Bhd.
• Alam Flora Sdn. Bhd.
At DRB-HICOM, we are pleased to be entrusted with
an imperative role in contributing to the betterment
of the nation due to the Group’s strong presence with To date, PROTON has successfully implemented PROTON
more than 70 subsidiaries across various sectors in Green Initiatives Phase 1 (Energy Management System),
Malaysia. We align our energy management strategy Phase 2 (Energy Efficiency) and Phase 3 (Waste and Water
with Malaysia’s commitment to carbon reduction as Management). Notably, PROTON has commissioned
well as United Nations Sustainable Development Goals Energy Performance Contracting (“EPC”) in PROTON
(“UNSDGs”) to demonstrate our commitment towards Tanjong Malim Plant and PROTON Centre of Excellence in
energy management. This means the Group constantly January 2019.
engages with our subsidiaries to not only reduce energy
consumption through adopting industry best practices and Based on the United Nations Industrial Development
international standards but also to drive them to explore Organisation (“UNIDO”) Energy Management System Tool
new and innovative ways such as opting for renewable adopted by PROTON to monitor and evaluate its energy
energy to transform the way we manage our energy performance on monthly basis, initiatives implemented
consumption. under Phase 1 and Phase 2 have yielded up to 34% total
energy consumption reduction against the base year,
Energy Management at PROTON which is equivalent to more than RM18 million cost
savings across PROTON. Phase 3 is currently underway
PROTON has further escalated energy-related matters in PROTON Tanjung Malim Plant via the Recycled Water
as one of the material sustainability topics via its Green Initiative. Kindly refer to page 168 for more details on
Initiatives in September 2015. This has subsequently PROTON’s Phase 3 – Waste & Water Management.
fostered the launch of PROTON Green Initiatives that
drives PROTON towards reducing 40% of total energy In FY2019/20, PROTON is ready to step into the PROTON
consumption by 2020 in comparison with the base year Green Initiatives Phase 4 (Renewable Energy) with new
2015. and exciting initiatives in the pipeline. While PROTON
continuously adopts best practices in optimising energy
In January 2019, PROTON streamlined their energy performance in its manufacturing process, it plans to
reduction efforts by introducing the New Energy install a 9.75 Mega-Watt peak (“MWp”) Solar Photovoltaic
Management (“NEM”) department to spearhead and (“PV”) system as well as implement the conversion of
oversee energy reduction initiatives across all PROTON energy source from Liquefied Petroleum Gas (“LPG”) to
operations. Their Registered Electrical Energy Managers Compressed Natural Gas (“CNG”) in the PROTON Tanjong
(“REEMs”) are certified under the Energy Commission Malim Plant. It is estimated that both measures will
to achieve PROTON’s energy reduction target, in tandem generate more than RM 5.5 million energy savings once it
with PROTON’s aspiration towards becoming the leading is completed in FY2019/20.
ASEAN automotive company.

PROTON Green Initiatives Strategy
Phase 1: (2014-2015) Phase 2: (2016-2018) Phase 3: (2019-2020) Phase 4: (2018-2020) Phase 5: (2021)
Energy Management Energy Efficiency Waste & Water Management Renewable Energy Energy Digitalisation
System (AI)
Energy Management at CTRM
Reducing Energy in PROTON’s Supply Chain As a prominent player in the Aerospace and Composites
industry in Malaysia, CTRM actively supports government
After its success in reducing energy consumption initiatives in climate change as the industry is considered
within PROTON’s operations in the past three years, inherently energy-intensive among other industries.
PROTON believes it is time to expand its aspiration to
reduce energy consumption through its upstream and CTRM’s commitment to energy management not only
downstream supply chain by assisting them towards reflects CTRM’s corporate responsibility towards the
adopting energy efficiency initiatives. environment but also subsequently reduces its overall
product costing that is highly associated with energy cost.
This year, PROTON has embarked on an energy audit
programme across its branches in Malaysia with To advocate the efficient usage of energy, CTRM established
11
the objective
NO
NO
22
to achieve
ZERO
ZERO
energy
GOOD
33
GOODHEALTH
reduction
HEALTH
44
by 5% perZERO
QUALITY
QUALITY
55
ZERO
the Energy Management Policy back in 2014. It lays the
branch. To date, we have completed energy audits in
POVERTY
POVERTY HUNGER
HUNGER AND
ANDWELL-BEING
EDUCATION HUNGER
HUNGER
foundation for all CTRM employees to continuously
seven branches located in Northern and Southern improve the use of energy efficiency with minimum waste
region of Peninsular Malaysia. We plan to complete and without compromising on regulatory compliance
energy audit in all branches, including branches as well as product quality for customer satisfaction. To
in East Malaysia,
66 77
by end 88 of FY2019/20. 99
Apart 1010from further demonstrate its determination in optimising its
CLEANour
CLEAN
AND
WATER PROTON
WATER
ANDSANITATION
SANITATION AND
branches,
AFFORDABLE
AFFORDABLE
ANDCLEAN
CLEAN
DECENTwe
DECENT
AND
WORK are also
WORK
ANDECONOMIC
ECONOMIC INNOVATION
in
INDUSTRY
INDUSTRY
INNOVATIONAND
AND
the midst
REDUCED of
REDUCED
INEQUALITIES
INEQUALITIES
energy management practices, CTRM has set an annual
engaging with ENERGY
ENERGY
our vendors GROWTH
GROWTH
as well as our subsidiaries
INFRASTRUCTURE
INFRASTRUCTURE
2% electricity consumption reduction target across its
to implement effective energy reduction initiatives. operations.
This year, CTRM sets its focus on improving energy efficiency

11
11 12
12 13
13 14
14
while preparing itself towards embracing the usage of
SUSTAINABLE
SUSTAINABLE
CITIES
CITIESAND
AND
RESPONSIBLE
RESPONSIBLE
CONSUMPTION
CONSUMPTIONAND
AND
CLIMATE
CLIMATE
ACTION
ACTION
LIFE
LIFEBELOW
BELOW
WATER
WATER
renewable energy within its manufacturing plants. Several
COMMUNITIES
PRODUCTION replacements and upgrades were conducted to further
improve its energy performance (see details in page 166).
CTRM also introduced the Building Management System
(“BMS”) to monitor its energy consumption in its newly
15
15 16
16 17
17
built manufacturing plant Building 6. As for the adoption of
LIFE
LIFEON
LAND
LAND
ON PEACE
PEACEJUSTICE
AND
JUSTICE
ANDSTRONG
STRONG
PARTNERSHIPS
PARTNERSHIPS
FOR
FORTHE
THEGOALS
GOALS
renewable energy, CTRM has initiated an in- house 10kWp
INSTITUTION
INSTITUTION Solar PV system that will be installed on top of the main
guard house at Building 3.

Our Performance
Certified Green Building for the new CTRM Plant
The Group has experienced a downward trend in its total
electricity consumption with a reduction rate of 11.8%
Occupying a floor size of more than 21,000 square
since FY2016/174. This has been contributed by the
meters, the new CTRM manufacturing plant in Melaka
increasing number of subsidiaries that have aligned their
– Building 6 or B6 - is completed and will be fully
energy management strategy with the Group’s aspiration
operational in FY2019/20. The plant serves as CTRM’s
in transforming the way we consume energy. This year, we
additional capacity to deliver its upcoming new orders.
saved a total of 9.6 million kWh in electricity, or a 3.0%
reduction as compared to last year, which is equivalent to
From design to construction, B6 took into account
a reduction of more than 6,400 tonnes of CO2 emissions5.
various environmental considerations. Apart from
incorporating natural lighting as well as adopting
As PROTON and CTRM constitute a large portion of the
LED lighting into the plant, B6 is equipped with other
Group’s total energy consumption, both subsidiaries
environmental-friendly features such as rainwater
have been active in reducing their energy consumption.
harvesting, water leak detection and air handling unit
Total energy usage in PROTON reduced 3.4% this year,
(“AHU”) condensate water recycling system.
augmenting the 15.6% reduction in the previous year.
Meanwhile, CTRM experienced an increase of 2.5% in
B6 was certified Platinum under the GreenRE’s non-
total electricity consumption as compared to FY2017/18 as
residential green building certification. It is also the
the aforementioned completed Building 6 comes online.
first manufacturing building equipped with Buidling
However, this is mitigated by several energy reduction
Management System within the Group.
initiatives that has resulted in improved energy efficiency
in CTRM’s production process.
1 2 3 4 5
NO ZERO GOOD HEALTH QUALITY ZERO
POVERTY HUNGER AND WELL-BEING EDUCATION HUNGER
400
350
Kilowatt-hour (million)
356.9
6 7 8 9 10 300
324.3
AFFORDABLE DECENT WORK INDUSTRY REDUCED
314.6
CLEAN WATER
AND SANITATION AND CLEAN AND ECONOMIC INNOVATION AND INEQUALITIES
250
200
150
11 12 13 14
100
50
0
FY FY FY
2016/17 2017/18 2018/19
Moving forward,
15
CTRM 16
will consistently
17
uphold its
LIFE ON
commitment to reduce
LAND
PEACE JUSTICE
its
AND STRONG
PARTNERSHIPS
environmental
FOR THE GOALS
impact by Total Electricity Consumption in DRB-HICOM
Group of Companies4
INSTITUTION
adopting best practices in energy management into its

operations. This will be complemented by the installation
of two MWp Rooftop Solar PV system alongside with the
implementation of conversion from LPG to CNG that are 4
his includes data from Isuzu HICOM Malaysia Sdn. Bhd. and HICOM-YAMAHA
T
Manufacturing Malaysia Sdn. Bhd. The data does not include branches from Pos
both planned for full operation by end of FY2019/20. Malaysia Berhad and Bank Muamalat Malaysia Berhad.
5
This is calculated via World Resources Institute GHG Protocol tool for purchased
electricity, Version 4.8.

150 50
141.2
45.9
45.9
120 40
44.8
119.2
115.2
90 30
60 20
11 22 33 44
NO
NO ZERO
ZERO GOOD
GOODHEALTH
HEALTH QUALITY
QUALITY
POVERTY
POVERTY HUNGER
HUNGER AND
ANDWELL-BEING
EDUCATION
30 10
0 0
FY FY FY FY FY FY 88
66 77 99 10
1
2016/17 2017/18 2018/19 2016/17 2017/18
CLEAN
CLEANWATER
WATER
2018/19
AFFORDABLE
AFFORDABLE DECENT
DECENTWORK
WORK INDUSTRY
INDUSTRY REDU
RED
AND
ANDSANITATION
SANITATION AND
ANDCLEAN
CLEAN AND
ANDECONOMIC
ECONOMIC INNOVATION
INNOVATIONAND
AND INEQUA
INEQU
ENERGY
ENERGY GROWTH
INFRASTRUCTURE
Total Electricity Consumption in PROTON Total Electricity Consumption in CTRM
11
11 12
12 13
13 14
14
SUSTAINABLE
SUSTAINABLE RESPONSIBLE
RESPONSIBLE CLIMATE
CLIMATE LIFE
LIFEBELOW
BELOW
Key Initiative 1: PROTON Green Initiatives in FY2018/19

CITIES
CITIESAND
AND CONSUMPTION
CONSUMPTIONAND
AND ACTION
ACTION WATER
WATER
COMMUNITIES
PRODUCTION
PROTON Green Initiatives has been an integral part of the journey towards transforming PROTON into a leading Malaysia
automotive company in energy efficient production. Since 2015, PROTON has continuously invested1515its efforts and 16 resources 17
16 17
into optimising energy performance across its operations. This year, PROTON has conducted several
LIFE
LIFEON
LAND
LAND
ON
initiatives
PEACE
AND
ANDSTRONGunder the
PEACEJUSTICE
JUSTICE
STRONG
PARTNERSHIPS
PARTNERSHIPS
FOR
FORTHE
THEGOALS
GOALS
INSTITUTION
INSTITUTION
PROTON Green Initiatives which have resulted in more than 2.22 million kWh of energy reduction. Approximately 40% of
the energy reduction is contributed by PROTON Casting Plant through maximum demand management of its induction
furnace.
Initiatives Facility Location Reduced Energy (kWh)

Maximum demand management 913,920
Dust collector operation controlling and monitoring 481,920
Installation of LED lightings 438,608
Air compressor operation controlling and monitoring 376,433
Optimisation of fan system 18,636
PROTON Shah Alam Plant PROTON Tanjung Malim Plant PROTON Casting Plant PROTON Centre of Excellence
PROTON Green Initiatives activities in FY2018/19

Waste in Alam Flora
Alam Flora is one of the leading environmental management companies in Malaysia. They are dedicated to help the
environment by providing innovative solutions for waste minimisation and management in the community.
Through Alam Flora together with its fully-owned subsidiary, DHES, DRB-HICOM is contributing towards shaping
consumer behaviour to adopt and move towards advanced waste management practices in their day-to-day habits. The
following five key initiatives demonstrate our efforts and progress in the area for the current financial year.
1 11 2 22 3 33 4 44
NONO
NO ZERO
ZERO
ZERO GOOD
GOOD
GOOD
HEALTH
HEALTH
HEALTH QUALITY
QUALITY
QUALITY
POVERTY
POVERTY
POVERTY HUNGER
HUNGER
HUNGER AND
AND
AND
WELL-BEING
WELL-BEING
EDUCATION
EDUCATION
6 66 7 77 8 88 9 99 10
CLEAN
CLEAN
CLEAN
WATER
WATER
WATER AFFORDABLE
AFFORDABLE
AFFORDABLE DECENT
DECENT
DECENT
WORK
WORK
WORK INDUSTRY
INDUSTRY
INDUSTRY REDU
RED
RE
AND
AND
AND
SANITATION
SANITATION
SANITATION AND
AND
AND
CLEAN
CLEAN
CLEAN AND
AND
AND
ECONOMIC
ECONOMIC
ECONOMIC INNOVATION
INNOVATION
INNOVATION
AND
AND
AND INEQUA
INEQU
INEQ
ENERGY
ENERGY
ENERGY GROWTH
GROWTH
INFRASTRUCTURE
INFRASTRUCTURE
1111
11 1212
12 1313
13 1414
14
SUSTAINABLE
SUSTAINABLE
RESPONSIBLE
RESPONSIBLE CLIMATE
CLIMATE
CLIMATE LIFE
LIFE
LIFE
BELOW
BELOW
BELOW
Key Initiative 1: Separation @ Source (S@S) Programme

CITIES
CITIES
CITIES
AND
AND
AND CONSUMPTION
CONSUMPTION
CONSUMPTION
AND
AND
AND ACTION
ACTION
ACTION WATER
WATER
WATER
COMMUNITIES
COMMUNITIES
PRODUCTION
PRODUCTION
We aim to support national initiatives to improve waste

management in Malaysia and have launched the S@S 1515
15 1616
16 1717
17
LIFE
LIFE
LIFE
ONON
ON PEACE
PEACE
PEACE
JUSTICE
JUSTICE
JUSTICE PARTNERSHIPS
PARTNERSHIPS
PARTNERSHIPS
programme to support the enactment of Solid Waste and LAND
LAND
LAND AND
AND
AND
STRONG
STRONG
STRONG
INSTITUTION
INSTITUTION
INSTITUTION
FOR
FOR
FOR
THE
THE
THE
GOALS
GOALS
GOALS
Public Cleaning Management Act 2007. The programme

was launched with the aim to encourage households in
separating recyclable and non-recyclable wastes. The
recyclables waste which are collected through the S@S
programme are sold to recycling vendors appointed
by Ministry of Urban Wellbeing, Housing and Local
Government.
Since April 2016, we have collected a total of 2,426 tonnes

of recyclables. The items include paper, plastic, metal,
aluminium, glass and other recyclable materials.

6 66 7 77 8 88 9 99
CLEAN
CLEAN
CLEAN
WATER
WATER
WATER AFFORDABLE
AFFORDABLE
AFFORDABLE DECENT
DECENT
DECENT
WORK
WORK
WORK INDUSTRY
INDUSTRY
INDUSTRY
AND
AND
AND
SANITATION
SANITATION
SANITATION AND
AND
AND
CLEAN
CLEAN
CLEAN AND
AND
AND
ECONOMIC
ECONOMIC
ECONOMIC INNOVATION
INNOVATION
INNOVATION
AND
AND
AND
ENERGY
ENERGY
ENERGY GROWTH
GROWTH
INFRASTRUCTURE
INFRASTRUCTURE
1111
11 1212
12 1313
13 1414
14
SUSTAINABLE
SUSTAINABLE
RESPONSIBLE
RESPONSIBLE CLIMATE
CLIMATE
CLIMATE LIFE
LIFE
LIFE
BELO
BEL
B
Key Initiative 2: Buy Back Centre and 3R on Wheels

CITIES
CITIES
CITIES
AND
AND
AND CONSUMPTION
CONSUMPTION
CONSUMPTION
AND
AND
AND ACTION
ACTION
ACTION WATER
WATE
WAT
COMMUNITIES
COMMUNITIES
PRODUCTION
PRODUCTION
Since 2004, Alam Flora has built eight Buy Back Centres
(“BBCs”) located around Kuala Lumpur, Putrajaya and 1515
15 1616
16 1717
17
LIFE
LIFE
LIFE
ONON
ON PEACE
PEACE
PEACE
JUSTICE
JUSTICE
PARTNERSHIPS
PARTNERSHIPS
Cyberjaya, which functions as a one-stop platform for LAND
LAND
LAND AND
AND
AND
STRONG
STRONG
STRONG
INSTITUTION
INSTITUTION
INSTITUTION
FOR
FOR
FOR
THE
THE
THE
GOALS
GOALS
GOALS
the public to sell used items such as paper, iron scrap,

aluminium cans and used cooking oil, at market price.
As an extension of BBCs, 3R on Wheels (“3RoW”) was

officially launched on 1 December 2018 by the Minister of
Housing and Local Government, in conjunction with the
National Recycling Day.
With its main aim of providing easy access to members

of the public to recycling activities, 3RoW has managed
to bring about greater awareness on waste segregation
at home and at same time, seeing waste as an additional
source of income. The locally-fabricated 3RoW is a six
wheeler, seven-tonne truck which had been fitted with a
giant LED screen on its side together with a retractable
stage for organising awareness talks and demonstrations
on S@S.

Why It Matters As this is the first year of reporting our head office’s
waste production, we will consider this year’s (FY2018/19)
DRB-HICOM, through its subsidiary Alam Flora Sdn. disclosed data as the baseline for our future reports and
Bhd. (“Alam Flora”), has established itself as one of the will subsequently include waste production data of other
key players in the waste management sector in Malaysia. subsidiaries in the future.
Proper waste management is essential to develop
a nationwide long-term strategy for environmental Type of waste Amount of waste (kilogram)
protection. We believe it is our responsibility to contribute
to this agenda and help promote initiatives in line with the Paper 3,142
national target of ‘22% recycling rate in 2020’ as embodied Cardboard 128
in Malaysia’s Green Technology Master Plan.
Plastic 33
This target has been actively promoted and implemented by
the Ministry of Energy, Science, Technology, Environment Waste Production in Wisma DRB-HICOM in FY2018/19
and Climate Change (“MESTECC”). We have started
promoting the use of state-of-the-art waste management It is our commitment to continually improve our waste
practices within the Group, and hope to eventually bring management performance through initiatives such as
these efforts to the public by collaborating with the local PROTON Recycled Water Initiative at its Tanjong Malim
communities. Plant. As part of PROTON Green Initiatives, PROTON
recycles wastewater from the plant back into its
manufacturing process, resulting in significant reduction
How We Approach It in water consumption. We are always looking for ways1
to adopt best practices and make progress in our waste
NO
POVERTY
We are determined to conduct our business in a responsible management practices.

manner and aim to reduce the waste generated by the
Group as a whole. Our SHE Policy provides guidance to
ensure adherence to all applicable environmental laws
and regulations across all our operations. We engage with 6 7
AFFORDABL
CLEAN WATER
responsible and ethical waste management contractors AND SANITATION AND CLEAN
to ensure proper collection and disposal of the waste Recycled Water Initiative in ENERGY
generated by the Group. PROTON Tanjong Malim Plant
At DRB-HICOM, we have established a Green Procurement Apart from significant water savings generated by
Policy and encourage all our subsidiaries to conduct the adoption of dry scrubber tools in its paint shop,11
procurement in a resource-efficient manner. The Policy the PROTON Tanjong Malim Plant has implemented SUSTAINABLE
CITIES AND CO
provides guidance to conduct purchasing and contracting recycled water initiative since 2017 to channel COMMUNITIES
activities by preferably selecting and purchasing goods, wastewater discharge from the plant back to its
services and processes, which utilise reusable, recyclable manufacturing process.
materials with minimal packaging.
Over the past two years, PROTON Tanjong Malim plant 15
has reused over 153,000 m3 recycled water, averaging LIFE ON
LAND
Our Performance 58% in wastewater recycling7. This has resulted in

approximately RM214,000 cost savings after taking
At Wisma DRB-HICOM, our waste is segregated in into account of the operating cost of the water
different bins and collected by DRB-HICOM Environmental recycling system. Moving forward, PROTON Tanjong
Services Sdn. Bhd. (“DHES”) on every Thursday. This year, Malim Plant will continue to explore best practices
we generated a total of 3.3 tonnes of waste in the form in water management such as rainwater harvesting
of paper, cardboard and plastic. While we acknowledge as part of PROTON’s commitment in embracing
that more than 95% of waste generated in our head office sustainable practices across its business to reduce
is paper, we strive to reduce our paper consumption by their environmental impact.
promoting digital reporting of documents and reports.
7
This is dated from January 2017 to December 2018.

Waste in Alam Flora
Alam Flora is one of the leading environmental management companies in Malaysia. They are dedicated to help the
environment by providing innovative solutions for waste minimisation and management in the community.
Through Alam Flora together with its fully-owned subsidiary, DHES, DRB-HICOM is contributing towards shaping
consumer behaviour to adopt and move towards advanced waste management practices in their day-to-day habits. The
following five key initiatives demonstrate our efforts and progress in the area for the current financial year.
1 11 2 22 3 33 4 44
NONO
NO ZERO
ZERO
ZERO GOOD
GOOD
GOOD
HEALTH
HEALTH
HEALTH QUALITY
QUALITY
QUALITY
POVERTY
POVERTY
POVERTY HUNGER
HUNGER
HUNGER AND
AND
AND
WELL-BEING
WELL-BEING
EDUCATION
EDUCATION
6 66 7 77 8 88 9 99 10
CLEAN
CLEAN
CLEAN
WATER
WATER
WATER AFFORDABLE
AFFORDABLE
AFFORDABLE DECENT
DECENT
DECENT
WORK
WORK
WORK INDUSTRY
INDUSTRY
INDUSTRY REDU
RED
RE
AND
AND
AND
SANITATION
SANITATION
SANITATION AND
AND
AND
CLEAN
CLEAN
CLEAN AND
AND
AND
ECONOMIC
ECONOMIC
ECONOMIC INNOVATION
INNOVATION
INNOVATION
AND
AND
AND INEQUA
INEQU
INEQ
ENERGY
ENERGY
ENERGY GROWTH
GROWTH
INFRASTRUCTURE
INFRASTRUCTURE
1111
11 1212
12 1313
13 1414
14
SUSTAINABLE
SUSTAINABLE
RESPONSIBLE
RESPONSIBLE CLIMATE
CLIMATE
CLIMATE LIFE
LIFE
LIFE
BELOW
BELOW
BELOW
Key Initiative 1: Separation @ Source (S@S) Programme

CITIES
CITIES
CITIES
AND
AND
AND CONSUMPTION
CONSUMPTION
CONSUMPTION
AND
AND
AND ACTION
ACTION
ACTION WATER
WATER
WATER
COMMUNITIES
COMMUNITIES
PRODUCTION
PRODUCTION
We aim to support national initiatives to improve waste

management in Malaysia and have launched the S@S 1515
15 1616
16 1717
17
LIFE
LIFE
LIFE
ONON
ON PEACE
PEACE
PEACE
JUSTICE
JUSTICE
PARTNERSHIPS
PARTNERSHIPS
programme to support the enactment of Solid Waste and LAND
LAND
LAND AND
AND
AND
STRONG
STRONG
STRONG
INSTITUTION
INSTITUTION
INSTITUTION
FOR
FOR
FOR
THE
THE
THE
GOALS
GOALS
GOALS
Public Cleaning Management Act 2007. The programme

was launched with the aim to encourage households in
separating recyclable and non-recyclable wastes. The
recyclables waste which are collected through the S@S
programme are sold to recycling vendors appointed
by Ministry of Urban Wellbeing, Housing and Local
Government.
Since April 2016, we have collected a total of 2,426 tonnes

of recyclables. The items include paper, plastic, metal,
aluminium, glass and other recyclable materials.

6 66 7 77 8 88 9 99
CLEAN
CLEAN
CLEAN
WATER
WATER
WATER AFFORDABLE
AFFORDABLE
AFFORDABLE DECENT
DECENT
DECENT
WORK
WORK
WORK INDUSTRY
INDUSTRY
INDUSTRY
AND
AND
AND
SANITATION
SANITATION
SANITATION AND
AND
AND
CLEAN
CLEAN
CLEAN AND
AND
AND
ECONOMIC
ECONOMIC
ECONOMIC INNOVATION
INNOVATION
INNOVATION
AND
AND
AND
ENERGY
ENERGY
ENERGY GROWTH
GROWTH
INFRASTRUCTURE
INFRASTRUCTURE
1111
11 1212
12 1313
13 1414
14
SUSTAINABLE
SUSTAINABLE
RESPONSIBLE
RESPONSIBLE CLIMATE
CLIMATE
CLIMATE LIFE
LIFE
LIFE
BELO
BEL
B
Key Initiative 2: Buy Back Centre and 3R on Wheels

CITIES
CITIES
CITIES
AND
AND
AND CONSUMPTION
CONSUMPTION
CONSUMPTION
AND
AND
AND ACTION
ACTION
ACTION WATER
WATE
WAT
COMMUNITIES
COMMUNITIES
PRODUCTION
PRODUCTION
Since 2004, Alam Flora has built eight Buy Back Centres
(“BBCs”) located around Kuala Lumpur, Putrajaya and 1515
15 1616
16 1717
17
LIFE
LIFE
LIFE
ONON
ON PEACE
PEACE
PEACE
JUSTICE
JUSTICE
PARTNERSHIPS
PARTNERSHIPS
Cyberjaya, which functions as a one-stop platform for LAND
LAND
LAND AND
AND
AND
STRONG
STRONG
STRONG
INSTITUTION
INSTITUTION
INSTITUTION
FOR
FOR
FOR
THE
THE
THE
GOALS
GOALS
GOALS
the public to sell used items such as paper, iron scrap,

aluminium cans and used cooking oil, at market price.
As an extension of BBCs, 3R on Wheels (“3RoW”) was

officially launched on 1 December 2018 by the Minister of
Housing and Local Government, in conjunction with the
National Recycling Day.
With its main aim of providing easy access to members

of the public to recycling activities, 3RoW has managed
to bring about greater awareness on waste segregation
at home and at same time, seeing waste as an additional
source of income. The locally-fabricated 3RoW is a six
wheeler, seven-tonne truck which had been fitted with a
giant LED screen on its side together with a retractable
stage for organising awareness talks and demonstrations
on S@S.

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“

The financial year ended 31 March 2019

STRATEGY OF RATIONALISATION Since then, a number of the Group’s automotive companies

ALIGNED FOR THE FUTURE 110

FINANCIAL REVIEW Profit before tax (“PBT”) decreased by a marginal 0.7%

With the exception of Pos Malaysia, all key operating

111 DRB-HICOM ANNUAL REPORT 2019

A definite highlight of the year was the launch of the Proton

Other Significant Achievements

As part of the PROTON turnaround, the carmaker has

ALIGNED FOR THE FUTURE 112

Key Risks & Mitigating Actions

Segment Key Risks Mitigating Actions

What We Can Look Forward To

113 DRB-HICOM ANNUAL REPORT 2019

while the ability to see progress on their vehicle’s

The company has also been strengthening its governance

PUSPAKOM has been working assiduously to enhance

ALIGNED FOR THE FUTURE 114

Key Risks & Mitigating Actions

Company Key Risks Mitigating Actions

What We Can Look Forward To

115 DRB-HICOM ANNUAL REPORT 2019

Key Highlights Other Significant Achievements

Key Risks & Mitigating Actions

Key Risks Mitigating Actions

What We Can Look Forward To

ALIGNED FOR THE FUTURE 116

DRB-HICOM Group has more

PROTON Holdings Berhad (“PROTON”)

117 DRB-HICOM ANNUAL REPORT 2019

ALIGNED FOR THE FUTURE 118

Local vendor development is ongoing to progressively DISTRIBUTION COMPANIES

119 DRB-HICOM ANNUAL REPORT 2019

The two new models picked up a total of four awards

ALIGNED FOR THE FUTURE 120

Motosikal Dan Enjin Nasional Sdn. Bhd. (“MODENAS”)

MODENAS is Malaysia’s homegrown motorcycle

DRB-HICOM Commercial Vehicles Sdn. Bhd. (“DHCV”)

DHCV is the exclusive assembler and distributor of TATA

The year saw Indian OEM, TML launch three models in

DHCV also collaborated with TML to develop specialised

Looking beyond, TML and DHCV will continue to assess

121 DRB-HICOM ANNUAL REPORT 2019

ALIGNED FOR THE FUTURE 122

Euromobil Sdn. Bhd. HICOM Auto Sdn. Bhd.

123 DRB-HICOM ANNUAL REPORT 2019

ALIGNED FOR THE FUTURE 124

125 DRB-HICOM ANNUAL REPORT 2019

ALIGNED FOR THE FUTURE 126

Results of HTS’ process and people development have

The company recorded a total revenue of RM329.8 million

127 DRB-HICOM ANNUAL REPORT 2019

HDSB manufactures aluminium parts and components for

During the financial year, HDSB achieved a revenue

In FY2018/19, the company secured a total of seven new

The company will continue to grow its export market,

ALIGNED FOR THE FUTURE 128

DEFENCE DIVISION Adhering to this strategy, the Group is confident of

129 DRB-HICOM ANNUAL REPORT 2019

ALIGNED FOR THE FUTURE 130

131 DRB-HICOM ANNUAL REPORT 2019

POSTAL & LOGISTICS

Pos Malaysia Berhad (“Pos Malaysia”)

Occupying land areas of 40’ x 80’ and 34’ x 80’ respectively,

• HICOM Pegoh Industrial Park is designed to be a premier

B. TalentCorp Life at Work Awards 2018 – Outstanding G. Malaysia HR Awards 2018

E. HR Asia Awards

• Presence in three • Top class quality

• Natural resources • Waste