CONTENTS - listed...

CONTENTS

APM Automotive Holdings B erhad (424838-D)Laporan Tahunan 2002 Annual Report

Corporate Information 2

Business Divisions 3

Chairman’s Statement 4Penyata Pengerusi

Corporate Calendar 14

Share Price and Volume Traded 16

Profile of the Board of Direc tors 17

Statement on Corporate Governance 19

Statement on Internal Control 23

Audit Committee Report 24

Financial Statements 26

Group Properties 59

Shareholders’ Statistics 60

Notice of Annual General Meeting 62

Statement Accompanying 66Notice of Annual General Meeting

Proxy Form

Corporate Information

02

DIRECTORS

Dato’ Tan Heng Chew DJMK,JP

Chairman

Azman bin BadrillahExecutive Director

Koo Sian ChuExecutive Director

Dr. Fun Woh PengExecutive Director

Dato’ N. Sadasivan DPMP, JSM,KMN

Dato’ Haji Kamaruddin @ Abas bin Nordin DSSA,KMN

Tan Eng Soon

Tan Eng Hwa

Ahmad bin Abdullah

Mohd. Sharif bin Haji Yusof

AUDIT COMMITTEE MEMBERS

Dato’ N. Sadasivan DPMP, JSM,KMN

Chairman (Independent Non-Executive Director)

Dato’ Haji Kamaruddin @ Abas bin Nordin DSSA,KMN

Independent Non-Executive Director

Mohd. Sharif bin Haji YusofIndependent Non-Executive Director

Koo Sian ChuExecutive Director

COMPANY SECRETARIES

Lee Kwee Cheng

Chan Yoke-Lin

REGISTERED OFFICE

62 – 68 Jalan Ipoh,51200 Kuala Lumpur, MalaysiaTelephone : (603) 4041 1044Fax : (603) 4042 7198E-mail : [email protected] : www.apm-automotive.com

REGISTRARS

Tenaga Koperat Sdn. Bhd.20th Floor Plaza PermataJalan Kampar, Off Jalan Tun Razak50400 Kuala LumpurTelephone : (603) 4041 2188

AUDITORS

KPMGWisma KPMG, Jalan DungunDamansara Heights 50490 Kuala Lumpur

STOCK EXCHANGE LISTING

Kuala Lumpur Stock Exchange Main Board


SUSPENSION DIVISION- Leaf Springs- Shock Absorbers- Coil Springs- Metal Parts

INTERIOR/PLASTIC DIVISION- Automotive Seats- Plastic Parts- Body Side Mouldings- Interior Trim

ELECTRICAL AND HEATEXCHANGE DIVISION- Starter Motors- Alternators- Wiper Motors- Distributors- Engine Management Systems- Air Conditioners- Radiators

MARKETING DIVISION- Local Replacement Market- Export Market

OVERSEAS OPERATIONS- Australia- Canada/USA- Indonesia- China

03Business Divisions

04

On behalf of the Board of Directors, it gives me great

p l e a s u re to pre s e nt the Annual Re po rt and Au d i te d

Financial St ate m e nts for the financial year ended 31

December 2002.The Group enjoyed another good year with

Group revenue increasing 5.5% to RM696.0 million from

RM659.6 million in 2001 and consolidated profit before tax

increasing 15.0% from RM79.6 million in 2001 to RM91.6

million. The revenue and profit achieved in 2002 is the

highest ever for the Group since its public listing in

December 1999.

Saya, bagi pihak Lembaga Pengarah, dengan sukacitanya

membentangkan Laporan Tahunan dan Penyata Kewangan

yang diaudit bagi tahun kewangan berakhir 31Disember

2 0 0 2 . Kumpulan mencapai prestasi yang baik dengan

jumlah jualan Kumpulan bertambah sebanyak 5.5% kepada

RM696.0 juta dari RM659.6 juta pada tahun 2001.

Ke u ntungan sebelum cukai yang disat u kan meningkat

sebanyak 15.0%,dari RM79.6 juta pada 2001 kepada RM91.6

j u t a . Jualan dan ke u ntungan yang dicapai pada 2002

m e ru p a kan yang paling tinggi bagi Kumpulan sejak

penyenaraian dibursa saham pada Disember 1999.

Chairman’s StatementPENYATA PENGERUSI


ORIGINAL EQUIPMENT (OE) MARKET

The Group’s sales of OE parts to domesticvehicle manufact u rers/assemblers grew by5.7% in 2002. The increase would have beenlarger if not for the phasing out of the supplyof Engine Management System (EMS) to amajor national car model since July 2001.Excluding EMS sales, the Gro u p’s OE saleswould have increased by 14.9% co m p a re dwith 2001.

The increase in OE sales is mainly attributed tothe strong growth in new motor vehicle salesin 2002, which grew by 9.7% from 396,381units in 2001 to 434,954 units in 2002. Thea g g re s s i ve promotional activities org a n i s e dby the motor distri b u to r s, the favo u ra b l efinancing packages offered and new modellaunches contributed to the growth.

The Group maintained its position as one of the leading supplier to pra ct i cally all them o tor manufact u rers/assemblers in thecountry. The entry of certain Korean makesinto the local market has also benefited theGroup. The Group currently supplies seats, air-co n d i t i o n e r s, ra d i ato r s, e l e ct ri cal part s, co i lsprings, shock absorbers and plastic parts tothese Korean makes.

PASARAN PERALATAN TULEN (OE)

Jualan pe ra l atan tulen Kumpulan ke p a d apemasang/ pe m b u at ke n d e raan domestikm e n i n g kat sebanyak 5.7% pada tahun 2002.Peningkatan ini seharusnya lebih tinggi lagi jikatidak ke rana pe m be rh e ntian be kalan Si s te mPengurusan Enjin (EMS) kepada sebuah modelke reta nasional sejak Julai 2001. Ji ka tidakdiambil kira jualan EMS, jualan OE Kumpulans e h a ru s nya meningkat sebanyak 14.9%berbanding tahun 2001.

Pe n i n g katan jualan OE ini sebahagian be s a radalah disebabkan oleh pertumbuhan kukuhdalam jualan kenderaan bermotor baru pada2002, yang meningkat 9.7% dari 396,381 unitpada 2001 kepada 434,954 unit pada 2002.Aktiviti promosi yang agresif oleh pengedar-pengedar ke n d e ra a n , p a kej pe m b i aya a nkewangan yang menarik serta pe l a n ca ra nmodel-model baru telah menyumbang kepadapeningkatan ini.

Kumpulan mengekalkan kedudukannya sebagaisebuah pe m be kal te rulung kepada hampirsemua pe m a s a n g / pe m b u at ke n d e ra a nbermotor di negara ini. Kemasukan beberapakenderaan buatan Korea ke pasaran tempatanjuga memberi manfaat kepada Kumpulan. Padamasa ini, Kumpulan membe ka l kan te m p atd u d u k , pe n g h awa dingin, ra d i ato r, b a ra n g a nelektrik, spring gegelung, penyerap hentak danbarangan plastik kepada kenderaan-kenderaanbuatan Korea ini.

05

An aerial shot of APM’s factory complex in Pandamaran, Port Klang

Pandangan dari udara kawasan kilang APM di Pandamaran, Pelabuhan Kelang

06

PASARAN GANTIAN (RE)

Jualan RE Kumpulan menurun sedikit pada 2002 berbanding 2001, hasil daripada sainganh a rga yang hebat di pasaran gantian te m p at a n . Kemunculan pe s a i n g - pesaing barudan peningk atan saingan dari barangan impot d a ri negara - n e g a ra jiran telah menye b a b ka npe n u runan harga jualan seca ra umum dipasaran RE.

Di sebalik penurunan nilai purata jualan,sukacitakami melapurkan bahawa Kumpulan te l a hberjaya mengekalkan bahagian pasaran kamimenerusi kempen-kempen jualan yang intensif,skim insentif pengedar yang menarik dan usaha-usaha meningkat kan jualan oleh bahagianpe m a s a ran ka m i . Dalam pasaran pe nye ra phentak prestasi tinggi,APM Motorsport Sdn Bhdtelah memperkenalkan penyerap hentak R-Techlebih rendah, yang telah mendapat sambutanbaik dari pengguna kenderaan.

Dalam tahun 2002, Kumpulan melanca rka ns i s tem pe m e riksaan stok SMS yang membo l e h ka npe n g e d a r - pengedar mempe rolehi data inve nto rikami. Kumpulan juga telah melancarkan kataloge l e k t ronik yang membo l e h kan pe n g e d a r -pengedar te m p atan dan asing mendapatm at l u m at te rte ntu mengenai barangan ka m is e pe rti bara n g a n - b a rangan yang te rkini danspesifikasi teknikalnya.

REPLACEMENT (RE) MARKET

The Group’s RE sales declined marginally in2002 co m p a red with 2001, due mainly toi ntense pri ce co m petition in the loca lreplacement market. The emergence of newcompetitors and increased competition fromparts imported from neighbouring countrieshave resulted in a decline in general pricing inthe RE market.

Despite the decline in the average sales value,we are glad to report that the Group has beenable to maintain its market share thro u g hi nte n s i ve sales ca m p a i g n s, at t ra ct i ve dealeri n ce nt i ves schemes and increased sales efforts by our marketing department. In theh i g h - pe rfo rm a n ce shock absorber marke t,APM Motorsport Sdn Bhd also introduced itsnew R-Tech range of lowered shock absorbers,which was well received by motorists.

During the year, the Group launched its SMSstock checking system,which enables dealersto instantly access our inve nto ry dat a .The Group also int rod u ced its elect ro n i ccatalogue, which enables our domestic andoverseas dealers to access certain essentiald ata on our parts such as new ite m sintroduced and their technical specifications.


PASARAN EKSPOT DAN LUARNEGARA

Jualan luar negara dan ekspotKumpulan meningkat sebanyak23.0% pada 2002 be r b a n d i n gtahun 2001 disebabka nte ru t a m a nya oleh usaha-usahape m a s a ran luar negera ya n ggiat.

Ek s pot spring dedaun, s p ring gegelung danb a rangan plastik mencat at kan pe n i n g kat a nke t a ra sepanjang tahun. Kumpulan jugamemulakan ekspot barangan penghawa dinginke Itali, Arab Saudi dan Ecuador serta springdedaun ke China dan Panama.

Jualan ekspot spring gegelung ke Korea, Kanadadan Jerman serta spring dedaun ke Australia,Itali dan Amerika Syarikat telah menunjukkanpe n i n g kat a n , m a n a kala jualan ke be be ra p anegara Amerika Selatan seperti Ecuador danParaguay merosot disebabkan oleh kelembapane konomi dan pe nyusutan nilai m at awang n e g a ra - n e g a ra be rke n a a n . Ek s pot barangan plastik ke be be rapa negara Asia unt u kpemasangan OE oleh sebuah pe m b u atke n d e raan be rm o tor utama te rus meningkatdan telah berkembang ke rantau lain termasukAmerika Selatan dan India.

Anak syarikat baru kami APM Components (USA)Inc., yang ditubuhkan di Amerika Syarikat telahmemulakan operasinya pada tahun ini. Syarikatini telah mencapai ke j ayaan awal dalampemasaran dan pengedaran tempat duduk dankomponen automotif lain di pasaran AmerikaUtara, menerusi servis yang lebih baik kepadapelanggan.


EXPORT AND OVERSEAS MARKET

The Gro u p’s ex po rt and overseas salesincreased by 23.0% in 2002 compared with2001, attributed mainly to our strong overseasmarketing efforts.

Export of leaf springs, coil springs and plasticp a rts re co rded significa nt improve m e nt sduring the year. The Group also commencedexports of air-conditioning parts to Italy, SaudiArabia and Ecuador as well as leaf springs toChina and Panama.

Export sales of coil springs to Korea, Canadaand Ge rm a ny as well as leaf springs toAustralia, Italy and USA improved whilst salesto certain South American countries such asEcuador and Paraguay suffered declines dueto the economic dow nt u rn and curre n cydepreciation in these countries. Our export ofplastic parts to seve ral Asian co u nt ries fo ri n s t a l l ation as OE by a major moto rmanufacturer continues to increase and hasexpanded to other regions, including SouthAmerica and India.

Our new subsidiary APM Components (USA)I n c. , i n co rpo rated in the Un i ted St ates ofAmerica, commenced operations during theyear.This company has achieved initial successin the marketing and distribution ofa u to m o t i ve seats and co m po n e nts in theNorth American market through better serviceto customers.

07

APM’s exhibition booth at the AE AsiaExhibition 2002 in March 2002

Dewan pameran APM di AE AsiaExhibition 2002 pada bulan Mac 2002

PERKEMBANGAN TERKINI

Pada bulan Ap ril 2002, Kumpulan te l a hmemasuki satu usahasama dengan Fuji SeatsJapan untuk membuat te m p at duduk ke n d e ra a ndi Ma l ays i a . Fuji Se ats (Ma l aysia) Sdn. Bh d. ,sebuah sya ri kat usahasama baru te l a hditubuhkan, dan APM memegang kepentingansebanyak 70% dalam syarikat ini.

Kerjasama dengan Fuji Se ats Japan aka nm e m bo l e h kan Kumpulan te rus mengembangka nkemampuan teknologinya dalam rekaan sistemte m p at duduk ke n d e ra a n , kh u s u s nya unt u kbeberapa model kenderaan nasional yang baru.Syarikat baru ini akan beroperasi dari kilang barukami yang terletak di Bukit Beruntung. Kilangberkenaan yang dibina dengan kos RM5.3 jutaa kan membe ka l kan te m p at duduk ke p a d apelanggan utama kami di Serendah.

Pada April 2002, Kumpulan juga telah menyertaiusahasama dengan syarikat Hefei WinKing AssetCo. L td. u ntuk membuat te m p at dudukke n d e raan di He fe i , w i l ayah Anhui di Ch i n a .Syarikat usahasama berkenaan, Anhui WinKingAu to Pa rts Ma n u f a ct u ring Co. L td, ya n gKumpulan m e m p u nyai ke pe ntingan 60%, te l a hdi tubuhka n pada setengah tahun kedua dan be r j aya meny i a p kan sampel te m p at duduk untuk dibekalkan kepada JAC, sebuahs ya ri kat be r s e kutu ra kan kongsi sya ri katberkenaan. Syarikat usahasama ini dijangka akanmencatatkan jualan yang memberangsangkanpada tahun 2003.

APM Plastics Sdn Bhd juga telah melengkapkanpembinaan sebuah kilang baru di Bu ki tBeruntung dengan kos RM4.4 juta. Kilang baruini akan membekalkan barangan plastik kepadapelanggan utama kami di Serendah. Kumpulanjuga telah membeli tanah tambahan di BukitBeruntung sebagai persiapan membekalkan alatganti ke kilang kereta nasional yang baru diTanjung Malim.

NEW DEVELOPMENTS

In April 2002, the Group entered into a jointventure with Fuji Seats Japan to manufacturemotor vehicles seating in Malaysia.A new jointventure company, Fuji Seats (Malaysia) Sdn.Bhd was incorporated, with APM having a 70%interest.

The tie up with Fuji Seats Japan will enable theGroup to further enhance our technologicalcapabilities in seating and sys tems designparticularly for certain national car models.The new company will operate from our newlyco m p l e ted premises located in Bu ki tBeruntung. This factory, constructed at a costof RM5.3 million,will supply seats to our majorcustomer in Serendah.

In April 2002, the Group also entered into ajoint venture with Hefei WinKing Asset Co. Ltd.to manufact u re car seats in He fe i , An h u iprovince in China. The joint venture company,Anhui Winking Auto Parts Manufacturing Co.Ltd, in which the Group has 60% interest, wasestablished in the second half of the year andhas successfully completed sample seats forsupply to an associated company of its jointventure partner, JAC.The company is expectedto record reasonable sales in the current year.

APM Plastics Sdn Bhd also co m p l e te dconstruction of a new factory building in BukitBeruntung at a cost of RM4.4 million. This newfactory will supply plastic parts to our majorcustomer in Serendah. The Group has alsoacquired additional land in Bukit Beruntung toprepare for supply of parts to the new TanjungMalim plant of the national car.

08Chairman’s Statement

PENYATA PENGERUSI

Sya ri kat usahasamakami di Indonesia,P. T. APM Arm a d aAu to p a rt s, di manaKumpulan mempunya i

kepentingan sebanyak 5 0 % , telah meny i a p ka npembinaan kilang pe rt a m a nya di Ma g e l a n g,Java Te n g a h . Sya ri kat be rkenaan telah mulam e n g h a ntar be kalan kecil kepada sat upelanggan OE yang utama dan sampe lpembangunan untuk pelanggan utama yangkedua. Syarikat berkenaan dijangka mencatatjualan munasabah pada tahun ini. Usahasamabe rkenaan juga mera n cang membina ki l a n gkedua di Jakarta, dimana beberapa pelangganberpotensi ditempatkan.

Pada bulan Ogos 2002, APM Springs Sdn Bhdtelah melanca rkan mesin baru pe n g e l u a ra nspring parabolik automatik berharga RM8 jutayang mengabungkan teknologi canggih sertakeberkesanan dan kualiti tinggi. Kami berharapakan meningkatkan kemampuan pengeluaranspring parabolik kami sebanyak 200 tan sebulansetiap syif untuk mencapai pe n g e l u a ra ns e b a nyak 1,600 tan setiap bulan setiap syif.Dengan pe n i n g katan ini, APM seharu s nyamampu menampung permintaan lebih tinggiuntuk spring parabolik terutamanya dari pasaranEropah.

Tambahan lagi, APM Air-Conditioners Sdn Bhdjuga telah menyiapkan pembinaan relau paterib a ru yang akan menambahkan pe n g e l u a ra nkondenser dan pe nye j at hawa dingin sert ara d i ator aluminium sebanyak 30%. Ini aka nm e m bo l e h kan Kumpulan memenuhi pe rm i nt a a ndari kedua-dua pasaran ekspot tempatan danluar negara.

APM Automotive Holdings Berhad (424838-D)Laporan Tahunan 2002 Annual Report

Our Indonesian joint ve nt u re, P. T. APM Armada Autoparts in which the Group has50% inte re s t, co m p l e ted the co n s t ru ction of its first plant in Ma g e l a n g, Ce nt ral Java . It has co m m e n ced small volume supply to one majorOE customers andsample developmentfor a second major custo m e r. Th ecompany is expectedto record reasonablesales in the curre ntyear.The joint venturealso plans to establisha second facto ry in Ja ka rt a , w h e resome po te ntial newc u s tomers are locate d.

In August 2002,APM Springs Sdn Bhd officiallylaunched its auto m ated para bolic spri n g sproduction line. This new line, costing RM8million,incorporates the latest state-of-the-artte c h n o l ogy, q u a l i ty and efficiency, and willi n c rease our para bolic springs prod u ct i o ncapacity by another 200 tons per month pershift to 1,600 tons per month per shift. Withthis increased capacity, APM should be able tocater for the greater demand for parabolics p ri n g s, p a rt i c u l a rly from the Eu ro pe a nmarket.

In addition, APM Ai r - Conditioners Sdn Bhd has also co m p l e ted the installation of its n ew brazing furn a ce. This new facility willi n c rease the prod u ction of air-co n d i t i o n i n geva po rators and condensers as well asaluminium ra d i ators by 30%, enabling theGroup to meet the increasing demand fromboth the local and export markets.

09

Various itemsmanufactured by APMexhibited at our Ser iKembangan office

Belbagai barangan buatanAPM di pamerkan di pejabatkami di Seri Kembangan

AWARDS AND CERTIFICATIONS

Fo l l owing on from the outstanding awa rdfrom Ford Motor Co. USA in 2001, the Groupco ntinues to stri ve for improve m e nts inquality and international recognition. Duringthe ye a r, another three subsidiaries we reawa rded the QS-9000 ce rt i f i cat i o n . These we re APM Sp rings Sdn Bh d, APM Ai r - Conditioners Sdn Bhd and APM Sh oc kAb s o r bers Sdn Bh d. This ce rt i f i cation

of quality managementexcellence is a prerequisitefor the supply of parts tothe top three moto rmanufacturers in the USAand is also recognised bymany European and Asianmanufacturers.

On the env i ro n m e nt a lfront, several companies inthe Group we re awa rd e dthe ISO14001 certification.These companies we reAPM Au to El e ct rics SdnBhd, APM Plastics Sdn Bhdand APM Coil Springs Sdn

Bhd. ISO14001 requires the implementation ofan Env i ro n m e ntal Ma n a g e m e nt Sys tem ina c co rd a n ce with defined inte rn at i o n a l l ystandards. As a responsible corporate citizen,the Group has implemented the necessarye nv i ro n m e ntal standards for all ouroperations. Other companies in the Group arescheduled for certification in 2003.

In addition to the above, APM Plastics Sdn Bhdalso re ce i ved the Best Cost Pe rfo rm a n ceAward from ASSB Top Supplier Year 2001 atthe 7th Toyota Supplier’s Conference in May2002.

ANUGERAH DAN PENSIJILAN

Menyusuli kejayaan anugerah kecemerlangand a ri Fo rd Mo tor Co. USA pada tahun 2 0 0 1 , Kumpulan telah mengorak langka hm e n i n g kat kan kualiti serta mendapatpengiktirafan antarabangsa. Sepanjang tahun,tiga lagi anak syarikat telah menerima anugerahpensijilan QS-9000. Syarikat berkenaan adalahAPM Sp rings Sdn Bh d, APM Ai r - Conditioners Sdn Bhd dan APM Sh ock Ab s o r bers Sdn Bh d. Pensijilan bagi ke ce m e rlangan ku a l i t ipe n g u rusan ini adalah sya rat pe nting unt u km e m bo l e h kan sya ri kat kami membe ka lb a rangan kepada tiga pe m b u at ke n d e ra a nbermotor utama di Amerika Syarikat. Ia jugad i i k t i raf oleh banyak pe m b u at ke n d e ra a nEropah dan Asia.

Dalam aspek alam seki t a r, be be rapa sya ri katdalam Kumpulan telah dianugerahi pensijilanISO14001. Syarikat-syarikat berkenaan ialah APMAuto Electrics Sdn Bhd, APM Plastics Sdn Bhddan APM Coil Sp rings Sdn Bh d. I S O 1 4 0 0 1memerlukan perlaksanaan Sistem PengurusanAlam Sekitar mengikut piawaian antarabangsayang telah ditetapkan. Sebagai warga korporatyang pri h at i n , Kumpulan telah melaksanaka np i awaian alam sekitar dalam semua ope ra s ikami. Syarikat lain dalam Kumpulan berusahauntuk mendapatkan pensijilan pada 2003.

Selain itu, APM Plastics Sdn Bhd juga te l a hmenerima Anugerah “Best Cost Performance”d a ri ASSB Top Supplier Year 2001 padaPersidangan Pe m be ka l - Pe m be kal Toyota ke - 7dalam bulan Mei 2002.

10

The Best CostPerformance Award

from ASSB/Toyotawon by APM

Plastics Sdn Bhd

Anugerah Best CostPerformance dari

ASSB/Toyota yangdimenangi oleh

APM Plastics Sdn Bhd


DIVIDEN

Lembaga Pe n g a rah menca d a n g kan baya ra ndividen akhir 7% tolak 28% cukai (2001- 3%tolak cukai pendapatan dan 3% dikecualikancukai). Bayaran dividen akhir ini tertakluk kepadakelulusan pe m e g a n g - pemegang saham padaMe s y u a rat Agung Tahunan akan dat a n g.Pengagihan bersih dividen akhir akan berjumlahRM10.2 juta, menjadikan jumlah pembayarandividen bagi tahun 2002 sebanyak RM21.5 juta(2001 – RM19.4 juta).

PROSPEK MASA DEPAN

Jualan kukuh kenderaan bermotor yang dicatatsejak Ja n u a ri 2002 memuncak dalam bulanOgos 2002. Sejak September, jualan kenderaanmengalami pe n u runan mendadak danpe rm i ntaan ke kal lembapsehingga suku tahun pertama2 0 0 3 . Ha s i l nya , p ro s pek bagitahun 2003 masih tidakmenentu. Jikalau tidak berlakupe rubahan ke t a ra dalamke ce n d e rungan ini padapenghujung tahun, j u a l a nbagi 2003 dijangka te ru slemah.

Pa s a ran RE pula akan te ru smenghadapi saingan sengitd a ri ke l u a ran te m p at a nmahupun barangan impo t,terutamanya untuk baranganpe n g h awa dingin, pe nye ra phentak dan spring gegelung.Walau bagaimana pun,Kumpulan yakin dapat mengekalkan bahagianp a s a ran be rd a s a rkan ra n g kaian pe n g e d a ra nkami yang ku kuh dan jenama kami ya n gdikenali.

Jualan ekspot dan luar negara Ku m p u l a ndijangka bertambah lagi pada 2003 dan tahunseterusnya. Dengan penubuhan pejabat kami diLos Angeles, Kumpulan mensasar untuk terusmeningkatkan jualan di Amerika Utara. Operasiusahasama kami di Indonesia dan China jugad i j a n g ka menyumbang kepada pe n d a p atan dankeuntungan tahun semasa Kumpulan.

DIVIDENDS

The Directors recommend the payment of afinal dividend of 7% less 28% income tax(2001- 3% less income tax and 3% tax exempt).The payment of final dividend is subject to thea p p roval by the shareholders at theforthcoming Annual General Meeting. The netfinal dividend distribution will be RM10.2million, bringing the total dividend payout inrespect of the year 2002 to RM21.5 million (2001– RM19.4 million)

FUTURE PROSPECTS

The strong motor vehicle sales recorded sinceJanuary 2002 peaked in August 2002. SinceSe p te m be r, vehicle sales ex pe ri e n ced asudden decline, and demand has remainedweak right up to the first quarter of 2003.As a result, the prospects for 2003 remainuncertain; unless there is a strong reversal ofthis trend in the later part of 2003, we expectour 2003 sales to be weak.

The RE market will continue to face intenseco m petition both from local as well asimported products, especially air-conditioningp a rt s, s h ock absorbers and coil spri n g s.Nevertheless, the Group is confident that wewill be able to maintain our market share onthe basis of our strong distribution networkand established brand name.

The Group’s exports and overseas sales shouldcontinue to improve in 2003 and beyond.Withthe establishment of our office in Los Angeles,the Group aims to further expand our sales inNorth America. Meanwhile, our joint ventureoperations in Indonesia and China should alsocontribute to the Group’s revenue and profit inthe current year.

APM Automotive Holdings B erhad (424838-D)Laporan Tahunan 2002 Annual Report 11

ISO 14001certification for APM Auto ElectricsSdn Bhd, APM PlasticsSdn Bhd and APMCoil Springs Sdn Bhd

Pensijilan ISO14001untuk APM AutoElectrics Sdn Bhd,APM Plastics Sdn Bhddan APM Coil SpringsSdn Bhd

In summar y, 2003 shall be a challenging yearfor both our OE and RE sectors. If the currentweak market conditions continue, our Group’srevenue and profitability will be affected andwe may not be able to achieve another year ofgrowth.The growth in our export and overseassales will be too small to offset any decline inthe domestic sector. On the longer term, thematurity of our China and Indonesia projects,coupled with the new parts to be supplied tothe new national car models, should see theGroup re t u rning to our traditional grow t hp ath in 2004. Neve rt h e l e s s, the eco n o m i cperformance of the country will still play anoveriding role in determining the growth ofthe domestic motor industry in general andthe Group in particular.

The Group is optimistic that in 2004, t h eindustry will return to strong growth. Bothnational car manufacturers are planning newmodel launches in 2004 and this will generatemore sales in the industry. The Group has

managed to secure the supply of anumber of high value componentsfor these new mod e l s, w h i c h

traditionally were not suppliedby us, and this will add

substantially to our Group’sreve n u e, although pro f i tmargins are expected to be

reduced with them o re inte n s eco m pe t i t i o nunder AFTA.

Sebagai kesimpulan, tahun 2003 bakal menjaditahun amat mencabar bagi kedua-dua sektor OEdan RE ka m i . Se ki ra nya kelembapan pasara nberterusan, jualan dan keuntungan Kumpulanakan terjejas dan kemungkinan kami tidak akanmencapai pertumbuhan untuk satu tahun lagi.Peningkatan jualan luar negara dan ekspot tidaka kan dapat mengimbangi pe n u runan dalams e k tor te m p at a n . Dalam jangka masa lebihpanjang, dengan kematangan projek kami diChina dan Indonesia dan juga bara n g a ntambahan yang akan dibe ka l kan kepada model-model baru kereta nasional pada t a h u n2 0 0 4 , Kumpulan seharu s nya dapat ke m b a l ibe rkembang sepe rti sebelum ini. Wa l a u p u nbe g i t u, pe rt u m b u h a n i n d u s t ri pe rm o to ra ntempatan secara umum dan Kumpulan secarakh u s u s nya be rg a ntung besar atas pre s t a s iekonomi negara.

Kumpulan optimis bahawa industri kenderaanbermotor akan kembali kukuh pada tahun 2004.Kedua-dua pe m b u at ke n d e raan nasionalmerancang pelancaran model-model baru pada2004 dan ini pasti akan mendorong jualan lebihtinggi dalam industri be rke n a a n . Ku m p u l a nberjaya mendapatkan hak membekal beberapakomponen bernilai tinggi untuk model-modelbaru ini yang sebelum tidak dibekalkan olehka m i . Ini pasti membe ri sumbangan be s a rkepada tahap jualan Kumpulan wa l a u p u nm a rgin ke u ntungan dijangka menurun hasilsaingan lebih hebat di bawah AFTA.

12

APM’s Futuristic seat design

Rekaan tempat duduk terkini APM


PENGHARGAAN

Lembaga mengalu-alukan perlantikan Dr. FunWoh Peng sebagai Pe n g a rah Ek s e kutif baru.Dr. Fun mula menyertai kumpulan APM padatahun 1997 dan telah be rkh i d m at sebagaiPe n g u rus Besar dalam pe m b a n g u n a nperniagaan dan juga perniagaan tempat duduk.Kami yakin Dr. Fun akan terus menyumbangkepada pembangunan perniagaan Kumpulan,terutamanya dalam sector ekspot.

Saya juga ingin mera ka m kan pe n g h a rg a a nLembaga kepada Pe n g u rusan dan semuakakitangan di atas dedikasi dan usaha gigihmereka pada tahun lepas.Tidak ketinggalan jugasemua pelanggan, pembekal, bank, rakan niagadan para pemegang saham di atas sokonganberterusan mereka terhadap Kumpulan.

ACKNOWLEDGEMENTS

The Board would like to welcome Dr. Fun WohPeng as an Executive Director to the Board. Dr.Fun joined the APM Group in 1997 and hass e rved as Ge n e ral Manager for businessdevelopment as well as of the seats and trimparts business. We are confident that Dr. Funwill co ntinue to co nt ri b u te to the futurebusiness development of the Group,especiallythe export sector.

I would also like to ex p ress the Bo a rd’sappreciation to the Management and staff fortheir hard work and dedication during thepast ye a r, as well as to all our custo m e r s,s u p p l i e r s, b a n ke r s, business assoc i ates andshareholders for their continued support forthe Group.

DATO’ TAN HENG CHEW DJMK,JP

Chairman/Pengerusi25 April 2003

APM Automotive Holdings B erhad (424838-D)Laporan Tahunan 2002 Annual Report 13

Artist impression of our new factory for Electrical Division to be built in Seri Kembangan

Lakaran kilang baru untuk Bahagian Elektrik kami yang akan dibina di Seri Kembangan

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