Financial Performance 2011

For FY 10/11, PROTON Holdings Berhad posted a consolidated PBT of RM214 million, which is a
slight decrease compared to the PBT of RM261 million in the last financial year. This is largely
attributed to higher branding costs and restructuring expenses incurred by Lotus Group International
Limited, which is currently undergoing a business transformation exercise. Nevertheless, these
efforts are showing positive early signs with the successful global unveiling of five new Lotus sports
cars that are due to go on sale as early as 2013. Revenue for the year ended 31 March 2011 grew by
10% to RM9 billion compared to RM8.2 billion posted in the last financial year. This performance
was the result of encouraging sales recorded by the three core models – the Saga, Persona and
Exora.

Additionally, PROTON’s cash and cash equivalents are maintained above the RM1 billion mark and
this augurs well for the Group as cash resources are required for continued investments in the
development of more exciting and better offerings. Despite a shrinking of the PBT, what is important
to note is that PROTON is on a positive trajectory as we re-establish our revenue growth and
profitability. From 2007 to 2011, PROTON recorded a revenue growth of 91% and a PBT growth of
133%. Operationally, we have also registered an improving trend from 1.0 to 0.6 defects per unit. In
terms of market share, we have also arrested the decline at 24% and gradually increased the same
to just below 30%. Essentially, as we rise to reclaim the number one position in Malaysia and strive
to achieve greater acceptance internationally, it is imperative for our esteemed shareholders and
key stakeholders to appreciate that we have gone through a laborious phase where legacy issues
have been properly addressed and, of equal importance, improved on key processes to ensure
greater efficiency.

Financial statement year 2011

RM'000
2011

Revenue 8,969,882
cost of sale -7980743
grossprofit 989,139

Research and development

expenditure -20673
other operating income 158,269
distribution costs -153772
administrative expenses -745,463
other operating expenses -22337
profit before finance cost 205,163
other losses-net -3549
finance cost -13,661
share of resultsof associated
companies 2918
share of resultsof jointly
controlled entities 23,536
 profit before taxation and zakat 214,407
zakat 3,394
taxation 55,401
profit for the financial year
attributeable to equity holders of
the company 155,612

Financial Forecast in 5 Years

PROTON surpassed the RM8 billion revenue and RM200 million profitbefore tax (PBT)
milestones for both Financial Year (FY) 09/10 and 10/11, numbers which were last achieved
a handful of years ago. Based on that performance we assume proton financial forecast. The 5
years forecast we focus on research and development expenditure. As a global automotive
challenger, the Group conducts research in its centres throughout the world, on new
technologies to create cars that are unique in both design and driving performance..To boost
the quality of its products, PROTON performs a continuous Company-wide quality
improvement programme and quality-conscious work culture that assures:

• Quality in everything (products and individuals);

• Quality in the way things are done (doing it right the first time);
• Quality in spending, including reducing materials costs;
• High-quality products (end products must be of the right technology and designed to meet
Market expectations); and
• Quality services to customers, including after-sales support.

With staff strength close to 12,000 employees worldwide, we ensure that each individual is
aligned to our core values, thereby ensuring strong customer orientation in order to produce
competitive products that drive our business forward.
.
Financial Forecast For 5 years
2012 2013 2014 2015 2016

Revenue 9,418,376 9,889,295 10,383,760 10,902,948 11,448,095

cost of sale (7,980,743) (7,980,743) (7,980,743) (7,980,743) (7,980,743)

grossprofit 1,437,633 1,908,552 2,403,017 2,922,205 3,467,352

Research and development

expenditure (22,740) (26,151) (31,382) (39,227) (49,034)
other operating income 158,269 158,269 158,269 158,269 158,269

distribution costs (161,461) (169,534) (178,010) (186,911) (196,256)

administrative expenses (782,736) (821,873) (821,873) (862,967) (862,967)

other operating expenses (23,454) (24,627) (24,627) (25,858) (25,858)

profit before finance cost 605,511 1,024,636 1,505,394 1,965,511 2,491,506

other losses-net -3549 -3549 -3549 -3549 -3549
finance cost -13,661 -13,661 -13,661 -13,661 -13,661
share of results of associated
companies 2918 2918 2918 2918 2918

share of results of jointly

controlled entities 23,536 23,536 23,536 23,536 23,536
profit before taxation and
zakat 614,755 1,033,880 1,514,638 1,974,755 2,500,750
zakat 3,394 3,394 3,394 3,394 3,394
taxation 55,401 55,401 55,401 55,401 55,401
profit for the financial year
attributeable to equity holders
of the company 555,960 975,085 1,455,843 1,915,960 2,441,955
Revenue

Revenue is the amount of money that is brought into a company by its

business activities. The 5 years revenue forecast is calculated base on the previous year
2011 and 2010. Year 2010 revenue increase about 5% and financial statement 2011
show that revenue increased about 9%. Forecast for 5 years the revenue in first year
we assume that it’s increase about 10% and 5% every year till 2016. The figure as show
in graf below:

Revenue
13,000,000
11,000,000
9,000,000
7,000,000
RM'Million

5,000,000
3,000,000
1,000,000
2012 2013 2014 2015 2016
Rev- 9418376.1 9889294.905 10383759.65 10902947.63 11448095.01
enue 025 27625 44006

Research and development expenditure

Research and development expenditure

60,000

50,000

40,000
Research and development
expenditure
30,000

20,000

10,000

-
2012 2013 2014 2015 2016
The research and development expenditure increase year by year. Proton have to put such an
amount to make sure proton turn into global car manufacturer in 5 years.

PROTON is committed to the development of its green technology in line with the government’s
initiative to make Malaysia a regional hub for hybrid, electric and environment-friendly vehicles.We
will be conducting a Fleet Test Vehicle Program for our Range Extender Electric Vehicle (REEV) in
collaboration with the Malaysian Government in the the second half of 2011.

PROTON’s decision to be involved in the hybrid and Electric Vehicle (EV) powertrains is strategic in
nature. Indeed, in comparison to global OEMs, PROTON is a relatively smaller company which has
not committed as much investments into internal combustion engine (ICE) powertrain technologies,
thus allowing us to quickly and efficiently switch to alternative powertrain technologies such as
battery storage powertrain (used in hybrids and EVs). We believe that with the new PROTON
hybrids, we will be able to compete with global OEMs who have already launched their hybrid cars in
the market. The EMAS project was the trigger for PROTON’s efforts to meet global trends and to
deliver a new family of world-class and eco-friendly vehicles, and a message to the public that
PROTON will not compromise on space, quality and performance through the electrification process.

With the appointment of the PROTON Technology Advisory Council (PTAC), PROTON will enhance its
current strategy for timely preparation and risk mitigation of technology acquisition based on the
information given by the panels. The purpose of PTAC is to advise and provide recommendation to
PROTON on current, future technologies and global automotive directions. PRoTon Technology
RoadmapThe PROTON Technology roadmap (PTR) serves as a blueprint for the Company in shaping
PROTON’s car of the future. It forms an integral part of the decision making process of the
technologies that should be acquired so as to remain competitive and profitable in the domestic and
global market within a ten year time frame. The PTR enables this by aligning business objectives with
in-house capabilities and resources. Our pillar of PTR is largely based on Body, Chassis, Safety,
Electrical, Electronic, Powertrain and Alternative Powertrain. The foundation of six technology
clusters contributes to realising the ‘Ride and Handling’ differentiator. To ensure that technology
visions are constantly met, if not exceeded, PROTON is relentless in its lookout for cutting edge
technology which will catapult the PROTON brand into the forefront of automotive
excellence.Technology Transfer The Government of Saudi Arabia recently initiated a cluster
programme to develop and provide support to a range of new industries whereby the mission is to
grow and diversify the Saudi Arabian economy by developing targeted industrial clusters that
leverage the Kingdom’s resources. PROTON has worked on a feasibility study programme with King
Abdulaziz City for Science and Technology (KACST), an independent scientific organisation in Saudi
Arabia, to develop the plan to achieve full automotive development and manufacturing capability in
the Kingdom ofSaudi Arabia

Today, PROTON’s operations reach across SouthEast Asia, the Middle East, China, Australia and the
United Kingdom. With a workforce exceeding 12,000 to date, the PROTON family works across the
whole spectrum of the automotive industry including vehicle design, R&D, manufacturing,
marketing, sales & distribution and corporate services.
Research Collaboration with Universities & Research Institutes

The PROTON Critical Mass Scheme serves asa platform to establish the critical mass within
PROTON employees as a whole and the EngineeringDivision particularly by increasing the
ratio of PhDand Master Holders. This programme is one of theMOU components under the
PROTON-UniversityTechnology Malaysia (UTM) collaboration initiative. Todate, 36
PROTON staff have successfully registeredunder PCMS at UTM International Campus –24
under the Industrial PhD Programme and12 for the Master’s Programme. About 70% of these
employees are from the Engineering Division.

Skills Development and Training

The focus on staff development within the EngineeringDivision is to enhance skills and
capability. FromOctober till December 2010 over 47 new engineershave successfully
equipped themselves with basicskills and knowledge which have enabled them tocarry out
their responsibilities in their current tasks,while 26 engineers were deployed overseas for on
the job training to upgrade their skills and capabilityin engine development at Lotus in UK,
Germany,and automotive development skills in Italy, Spainand Japan.The exposure has
enhanced their skills in their areasof specialisation which gives PROTON an edge in
the product development process for the Inspira,Saga Facelift and also in engine
development.