Annual Report 2016
6
Reliance Pacific Berhad • 244521 A
On behalf of the Board of Directors (Board), it is my pleasure to present the Annual Report and
Audited Financial Statements for the financial year ended 31 March 2016.
Overview of the Industries
The Group continued to operate under difficult and challenging environment for the period under
review.
The Hotel Industry experienced a slow down in demand which was further dampened by four
months of haze which was beyond our control. This has a direct impact on our Hotel Division’s
performance.
The Tourism Division in general recorded a drop in both tourist and visitor arrivals, reduced length
of stays and tourism receipts. The harsh environment has severely affected the performance of the
Tourism Division.
The general property market has been weak and lackluster at the back of weak economic growth,
declining disposable incomes and subdued financing policies. In this context, the Group like other
property developers also faced declining margins on certain categories of housing especially
affordable housing.
Financial Review
The Group registered a turnover of RM194 million for the Financial Year 2015/2016 as compared
to RM188 million for the financial year 2014/2015. Nonetheless, as mentioned above due to the
challenging and difficult operating conditions, the Group posted a loss of RM10.6 million before
impairment loss on goodwill and taxation. The Board, taking cognizance of the difficult and
challenging operating environment of some of its subsidiary companies agreed to impair loss of
goodwill amounting to RM12.3 million during the period under review.
The Hotel Division posted a lower revenue of RM40.6 million and a profit of RM2.0 million for
the year under review due to the general slowdown resulting from substantial drop in corporate
spending which commands high yields and margins. Our strong branding has resulted in the
entering of a new hotel management contract which will contribute positively to the Division when
it is opened.
The Tourism Division posted a higher revenue of RM126.7 million due to depreciation of Ringgit
against foreign currencies in the countries in which we operate. The loss of RM4.8 million is mainly
due to a substantial drop in high yielding customers which has severely impacted the industry.
The Property Division also saw a marginal increase in revenue from RM17.5 million in the
preceeding Financial Year to RM24.6 million for the current Financial Year. Not unlike other
property developers, the Division suffered a loss of RM2 million mainly due to lower margins as the
bulk of the revenue was from affordable housing in Desa Impian, Bandar Tenggara.
CHAIRMAN’S STATEMENT