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2 Cover Rationale RPB has 3 business divisions. This year s montage illustrates the vision of its travel online distribution pyotravel.com which is fast tracking its growth into the Asian Region in particular China, Hong Kong, Taiwan, Australia, Indonesia, Singapore, Thailand and Malaysia.

3 Contents Notice of Annual General Meeting Statement Accompanying the Notice 03 Board of Directors 04 Corporate Information 05 Director s Profile Group Structure 08 Corporate Governance Statement Corporate Social Responsibility Statement on Internal Control 16 Audit Committee Report 17 Chairman s Statement Director s Report Statutory Declaration 32 Independent Auditors Reports Balance Sheet Income Statement 37 Statement of Changes in Equity Cash Flow Statement Notes to the Financial Statements List of Properties 103 Analysis of Shareholders 104 Proxy Form 105

4 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN that the 18th Annual General Meeting of Reliance Pacific Berhad will be held at the Perdana Ballroom, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, Kuala Lumpur on Thursday, 23 September 2010 at 3.00 p.m. to transact the following business:- AGENDA 1. To receive and adopt the Audited Financial Statements together with the Reports of the Directors and the Auditors for the financial year ended 31 March (Ordinary Resolution 1) 2. To re-elect Datin Irene Tan who is retiring in accordance with Article 128 of the Company s Articles of Association. (Ordinary Resolution 2) 3. To re-appoint Mr Lim Guan Chin, a Director who retires under Section 129(6) of the Companies Act, 1965 to hold office until the conclusion of the next Annual General Meeting. (Ordinary Resolution 3) 4. To approve directors fees for the financial year ended 31 March (Ordinary Resolution 4) 5. To re-appoint Messrs AljeffriDean as Auditors and that authority be and is hereby given for the Directors to determine their remuneration. (Ordinary Resolution 5) 6. AS SPECIAL BUSINESS To consider and, if thought fit, pass the following Ordinary Resolutions respectively:- 6.1 Section 132D of the Companies Act 1965 THAT subject to the Companies Act, 1965 ( the Act ) and the Articles of Association of the Company, the Directors be and are hereby empowered pursuant to Section 132D of the Act, to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed ten percent (10%) of the issued share capital of the Company for the time being and that the Directors are empowered to obtain the approval for the listing and the quotation of the additional shares so issued on Bursa Malaysia Securities Berhad ( Bursa Securities ) AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company. (Ordinary Resolution 6) 6.2 Proposed Authority for the Company to purchase its own shares of up to ten percent (10%) of its issued and paid up share capital THAT subject to the provisions of the Companies Act, 1965 ( the Act ), the Memorandum and Articles of Association of the Company and the Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ), all other applicable laws, rules, regulations, and orders and the approvals of all relevant regulatory authorities, the Company is hereby authorised to purchase and/or hold such amount of ordinary shares of RM0.20 each ( Shares ) in the Company as may be determined by the Directors from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company, provided that the aggregate number of Shares to be purchased and/or held pursuant to this resolution shall not exceed ten percent (10%) of the total issued and paid up share capital of the Company and that an amount of the funds not exceeding the retained profits of the Company, be utilized for Share buy-back ( Proposed Share Buy-Back Authority ); AND THAT such Shares purchased may be retained as treasury shares and/or distributed as dividends and/or resold on the market of Bursa Securities and/or be cancelled, as the Directors may deem fit and expedient in the interest of the Company; AND THAT the Proposed Share Buy-Back Authority hereby given shall take effect immediately and shall continue to be in force until: a) the conclusion of the next Annual General Meeting ( AGM ) of the Company at which time it shall lapse, unless by an ordinary resolution passed at the meeting, the Proposed Share Buy- Back Authority is renewed; b) the expiration of the period within which the next AGM of the Company after that date is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or c) revoked or varied by an ordinary resolution passed by the shareholders in general meeting, whichever is the earlier. AND THAT the Directors be and are hereby authorized to complete and do all such acts and things as may be required by the relevant authorities (including executing any relevant documents) as may be considered expedient or necessary to complete and give effect to the aforesaid authorisation. (Ordinary Resolution 7) 6.3 Proposed Renewal of Shareholders Mandate on Recurrent Related Party Transactions of a Revenue or Trading Nature ( The Mandate ) THAT subject to the Companies Act, 1965 ( the Act ), the Memorandum and Articles of Association of the Company, the requirements of the Bursa Malaysia Securities Berhad and all relevant authorities, approval be and is hereby given to the Company and its subsidiaries, to enter and give effect to specified recurrent related party transactions of a revenue or trading nature and with specified classes of the related parties as stated Reliance Pacific Berhad Company No A 2 Annual Report 2010

5 in Section 3.2 of the Circular to shareholders dated 1 September 2010 which are necessary for the Group s day-to-day operations subject further to the following:- i) the transactions are in the ordinary course of business and are on terms not more favourable to the related parties other than those generally available to the public and are not to the detriment of the minority shareholders; and ii) the Mandate is subject to annual renewal which shall only continue to be in force until:- (a) (b) (c) the conclusion of the next Annual General Meeting ( AGM ) of the Company following the general meeting at which such Mandate was passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed; the expiration of the period within which the next AGM is required to be held pursuant to section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or revoked or varied by resolution passed by the shareholders in general meeting, whichever is the earlier. AND THAT the Directors be and are hereby empowered to do all acts and things as they may be considered expedient or necessary to give full effect to the Mandate on recurrent related party transactions with full powers to assent to any conditions, modifications, revaluations, variations and/or amendments (if any) as may be imposed by the relevant authorities. (Ordinary Resolution 8) 7. To transact any other business of which due notice shall have been given in accordance with the Companies Act, By Order of the Board Tan Bee Leng (MAICSA No ) Secretary NOTE 2 The proposed Ordinary Resolution 6 in relation to authority to allot shares pursuant to Section 132D of the Companies Act, 1965, if passed will empower the Directors to issue shares up to an aggregate amount not exceeding 10% of the issued share capital of the Company for the time being, for such purposes as the Directors consider would be in the interests of the Company. This would avoid any delay and cost involved in convening a general meeting to approve such issue of shares. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company. NOTE 3 The proposed Ordinary Resolution 7, if passed, shall empower the Directors of the Company to buy back the shares of the Company not exceeding ten percent (10%) of its issued and paid up share capital from time to time being quoted on Bursa Malaysia Securities Berhad as may be determined by the Directors of the Company from time to time through Bursa Malaysia Securities Berhad upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company. Please refer to the Circular to Shareholders dated 1 September 2010 with regard to the Ordinary Resolution 7. NOTE 4 The proposed Ordinary Resolution 8, if passed, will empower the Directors from the date of the 18th Annual General Meeting ( AGM ), to deal with the related party transactions involving recurrent transactions of a revenue or trading nature which are necessary for its day-to-day operations. These Recurrent Related Party Transactions are in the ordinary course of business and are on terms not more favourable to the related parties other than those generally available to the public. This authority, unless revoked or varied at a general meeting, will expire at the next AGM of the Company. Please refer to the Circular to Shareholders dated 1 September 2010 with regard to the Ordinary Resolution 8. Statement accompanying Notice of Annual General Meeting There are two directors who are retiring and standing for re-election at the 18th Annual General Meeting of the Company: Kuala Lumpur Date: 1 September 2010 (a) Retiring pursuant to Article 128 of the Company s Articles of Association. NOTE 1 Every member is entitled to appoint a proxy or in the case of a corporation, to appoint a representative to attend and vote in his stead. A proxy need not be a member of the Company. The Form of Proxy must be signed by the appointer or by his attorney duly authorised in writing or if the appointer is a corporation, either under seal or under hand of an officer or attorney duly authorised. If no name is inserted in the space for the name of your proxy, the Chairman of the Annual General Meeting will act as your proxy. The Proxy Form must be deposited at the Registered Office of the Company at Block A, Unit A-5-3, Megan Avenue II, 12 Jalan Yap Kwan Seng, Kuala Lumpur, Malaysia, not less than forty-eight (48) hours before the time set for holding the Meeting or any adjournment thereof. (b) Datin Irene Tan Retiring pursuant to Section 129 (6) of the Companies Act, Lim Guan Chin Details of the above directors who are standing for re-election are provided for in the respective Directors Profile on pages 6 and 7 of this Annual Report. Details of their interest in the securities of the Company can be found on page 104 of this Annual Report Reliance Pacific Berhad Company No A 3 Annual Report 2010

6 Board of Directors Reliance Pacific Berhad Company No A 4 Annual Report 2010

7 Corporate Information BOARD OF DIRECTORS Dato Gan Eng Kwong (Chairman) Datin Irene Tan (Chief Executive Officer) Dato Abdul Rahim Bin Osman Lim Guan Chin Johan Arifin Sopiee Bin Mohamed Noordin REGISTERED OFFICE Block A, Unit A-5-3, Megan Avenue II 12 Jalan Yap Kwan Seng Kuala Lumpur Tel: Fax : PRINCIPAL AUDITORS AljeffriDean (AF1366) Chartered Accountants (Malaysia) MEMBERS OF AUDIT COMMITTEE Dato Abdul Rahim Bin Osman (Chairman, Independent Non-Executive Director) Lim Guan Chin (Independent Non-Executive Director) Johan Arifin Sopiee Bin Mohamed Noordin (Independent Non-Executive Director) COMPANY SECRETARY Tan Bee Leng (MAICSA No ) STOCK EXCHANGE LISTING Main Market, Bursa Malaysia Securities Berhad SHARE REGISTRARS Symphony Share Registrars Sdn Bhd ( D) Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/ Petaling Jaya, Selangor, Malaysia Tel: Fax: / 52 PRINCIPAL BANKERS OCBC Bank (Malaysia) Berhad Malayan Banking Berhad CIMB Bank Berhad Hong Leong Bank Berhad Reliance Pacific Berhad Company No A 5 Annual Report 2010

8 Directors Profile DATO GAN ENG KWONG Dato Gan Eng Kwong aged 60, a Malaysian holds the position of Chairman. He has been actively involved in managing RPB s Travel Division since Dato Gan is a non-independent executive director and was appointed to the RPB Board on 13 May He has over 30 years of experience in the tourism industry locally and abroad. He currently leads the development of information technology in the Group s global travel business and network. Dato Gan is also a life member of the Institute of Directors. DATIN IRENE TAN Datin Irene Tan aged 55, a Malaysian is the Chief Executive Officer. Datin Irene was appointed as a nonindependent executive director to the RPB Board on 13 May Datin Irene s experience spans a wide ambit of the travel, tourism, hotel and resort development industries. She was responsible for the development of Malaysia s first homegrown Travel Franchise under the Reliance brand name. Datin Irene also led a team of hotel professionals in developing Malaysia s first homegrown Hotel Management Franchise System for the Seri Malaysia chain of hotels. She spearheaded and developed the Avillion Hotel Sydney, Avillion Hotel Port Dickson, Admiral Cove Development and Admiral Marina & Leisure Club in Port Dickson Datin Irene is an Associate Member of the Harvard Business School Alumni, a life member of Institute of Directors and the Malaysian Institute of Personnel Management. Reliance Pacific Berhad Company No A 6 Annual Report 2010

9 DATO ABDUL RAHIM BIN OSMAN Dato Abdul Rahim Bin Osman aged 63, a Malaysian is an independent non-executive director. He was appointed to the Board of RPB on 10 December 1997 and is the Chairman of the RPB s Audit Committee. He graduated with Bachelor of Science and Master of Business Administration degrees from Northern Illinois University, USA. He also completed the Advanced Management Programme at Harvard Business School, USA. He was the managing director of Keretapi Tanah Melayu Berhad (KTMB) where he worked for many years until he left for private business in During his tenure with KTMB, he acquired vast experience in the management of a service industry especially the travel and transportation business. Currently, he is involved in a number of private limited companies where he is a shareholder and director. JOHAN ARIFIN SOPIEE BIN MOHAMED NOORDIN Johan Arifin Sopiee Bin Mohamed Noordin aged 40, a Malaysian is an independent non-executive director. He was appointed to the RPB Board on 2 January 2009 and is a member of RPB s Audit Committee. He graduated with BA (Hons) in Accounting and Financial Management from University of Essex, England and is also an Association of Chartered Certified Accountants (ACCA) graduate from Emile Woolf College, London. Johan s working experience includes audit with Arthur Andersen KL, stock market research with RHB Research Institute Sdn Bhd and business development and marketing with an IT company known as Hitechniaga Sdn Bhd (also known as MyBiz.net. my). Currently he is the vice president and director of Noordin Sopiee & Associates Sdn Bhd and also a director of Third Side of the Coin Sdn Bhd. LIM GUAN CHIN Lim Guan Chin aged 72, a Malaysian is an independent non-executive director. He was appointed to the Board of RPB on 22 June 1994 and is a member of RPB s Audit Committee. He graduated with a Bachelor of Science degree from the University of Malaya in 1962 and upon his graduation he worked in various organisations in the public and private sectors. He retired in Other Information on Directors Conflict of Interest None of the above directors has any conflict of interest with the Company. Convictions for offences None of the above directors has been convicted for offences within the past 10 years other than traffic offences, if any. Family Relationship None of the above directors has any family relationship except Datin Irene Tan who is the spouse of Dato Gan Eng Kwong. Reliance Pacific Berhad Company No A 7 Annual Report 2010

10 Group Structure as of 31 March 2010 Reliance Sightseeing Sdn Bhd Travel Division Reliance Shipping & Travel Agencies Sdn Bhd Reliance E-Com Sdn Bhd Traveleasi Sdn Bhd Xplonet Capital Sdn Bhd RPB Travel Holdings Sdn Bhd Hotemart Travel Services Sdn Bhd Hotemart International (Labuan) Ltd Australian Vacations Pty Ltd Reliance Travel Pty Ltd RPB Holdings (Overseas) Ltd Reliance Travel (Hong Kong) Ltd Vacation Asia (HK) Ltd Vacationland Tours (HK) Ltd Avillion Hotels International Sdn Bhd Avi Spa Sdn Bhd Hotel Division Avillion Hotel Group Sdn Bhd Fortune Valley Sdn Bhd RPB Hotel & Resort Management Sdn Bhd Avillion Suite Hotel (PD) Sdn Bhd Avillion Vista Hotel Sdn Bhd Layang Layang Island Resort Sdn Bhd Gateway Inn Management Sdn Bhd Admiral Cove Development Sdn Bhd Admiral Marina Berhad Property Division RPB Development Sdn Bhd Admiral Hill Hotel Sdn Bhd ACD Project Management Services Sdn Bhd Nesline Sdn Bhd Genius Field Sdn Bhd Festive Place Sdn Bhd Vast Access Sdn Bhd Support Companies RPB Capital Holdings Sdn Bhd OS Resources Sdn Bhd Read Advertising Sdn Bhd Reliance Pacific Berhad Company No A 8 Annual Report 2010

11 Corporate Governance Statement The Board of Directors of Reliance Pacific Berhad (RPB) will endeavour to adopt the principles and best practices of corporate governance in conducting all the business and affairs of the Company and Group. Pursuant to Paragraph of the Bursa Malaysia Securities Berhad s ( Bursa Securities ) Main Market Listing Requirements ( Listing Requirement ), the Board is pleased to report to shareholders in the manner in which RPB has applied the Principles of the Malaysian Code on Corporate Governance ( the Code ) and complied with the Best Practices as set out in the Code throughout the financial year ended 31 March Board of Directors Composition & Board Balance The Board consists of five members of which three are independent non-executive directors and two non-independent executive directors. The profile of each director is presented on page 6 and page 7 in the Annual Report. The concept of independence adopted by the Board is in line with the definition of an independent director in paragraph 1.01 of the Listing Requirements. The Board complies with paragraph of the Listing Requirements which requires that at least two directors or one third of the Board of the Company, whichever is higher are independent directors. The composition of the Board represents a good mix of knowledge, skills and experience to ensure that the Group is competitive within its industry. The directors will take a review on the size of the Board as and when necessary. Duties and Responsibilities The Board adheres to the Code of Conduct/Ethics for Directors. The Code of Conduct/Ethics for Directors highlights the criterias that directors should observe in the performance of their duties. The Board leads, controls, provides strategic direction and has the overall responsibilities for the corporate governance, formulation of key policies, overseeing investments and businesses for the Group, risk management, investor relations programmes, internal controls and management information systems. The management is accountable for the execution of the corporate objectives and policies set by the Board. The duties and responsibilities of the Chairman and Chief Executive Officer ( CEO ) are distinct and separate with clear division of responsibilities. The Chairman is responsible for managing the conduct of the Board and ensuring its effectiveness including ensuring all directors receive sufficient relevant information on all financial, business, operational and corporate matters to enable each of them to participate actively and effectively in Board decisions. The CEO is responsible for the efficient and effective management of the business operations and strategic direction of the Group. Reliance Pacific Berhad Company No A 9 Annual Report 2010

12 Board Meetings The Board normally has four scheduled meetings annually with additional meetings convened as and when necessary. At such scheduled meetings the Board deliberates and gives approval to quarterly financial reports, audited accounts, recurrent related party transactions and other material agreements prior to announcement to Bursa Securities. During meetings the Board is also briefed on business performance and financial aspects of the Group. During the financial year ended 31 March 2010, four Board meetings were held. Details of the attendance of the Directors at Board meetings held during the financial year ended 31 March 2010 are detailed below. Director Attendance Dato Gan Eng Kwong 4/4 Datin Irene Tan 4/4 Dato Abdul Rahim Bin Osman 4/4 Lim Guan Chin 4/4 Johan Arifin Sopiee Bin Mohamed Noordin 4/4 Supply of information The Board is provided in advance with a yearly scheduled timetable which includes all board meetings, audit committee meetings and other relevant meetings. This is to ensure timely and adequate information are circulated prior to the meetings. Each Board member is supplied in advance with an agenda, written reports which include minutes of previous meetings, financial reports and other reports relevant to the meeting, to allow the directors sufficient time to review and to deliberate at the board meetings and to facilitate informed decision making by the directors. Management representatives are also present to provide additional insight on matters to be discussed during the Board meetings. The Board members are also provided with the relevant facts, analysis and recommendations on any new corporate proposals. Advisers and professionals such as merchant bankers and solicitors may be invited to attend the Board meetings at which such proposals are deliberated to provide the Board with their explanations and advice and to clarify any issues raised. All directors have access to the Group s information through the management team and the services of the Company Secretary, who provide the Board with any updates to the statutory and regulatory requirements and any other matters related to the affairs of the Group. Appointment to the Board and Re-election The appointment of any additional directors is made as and when it is deemed necessary by the Board of Directors with due consideration given to a good mix of knowledge, skills and experience required for the Board to discharge its duties effectively. Any proposal to appoint new directors will be discussed among the Board members and appointment to the Board will be documented in the Board resolutions. Reliance Pacific Berhad Company No A 10 Annual Report 2010

13 The Articles of Association of the Company provides that one third of the Board shall retire from office and be eligible for re-election at every Annual General Meeting. Directors over seventy years of age are required to submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, Directors Training All the Board members have attended and successfully completed the Directors Mandatory Accreditation Programme ( MAP ) prescribed by Bursa Securities for Directors of public listed companies. The Board acknowledges the fact that continuous education is vital for the Board members to keep abreast with the developments of the economy and further enhance their knowledge to discharge their duties and responsibilities more effectively. During the financial year directors training programmes includes the following: Induction programme organised by the Company and also MAP organised by Bursatra Sdn Bhd for the newly appointed director; Briefings by the Company Secretary, Internal Auditors and External Auditors on the relevant updates on statutory and regulatory requirements; Forum on The Challenges of Implementing FRS139; Talk on Team Cohesion by the Corporate Coach; Workshop on individual Company Strategies, Resources and Action Plans. Our Directors will also continue to attend further training from time to time, particularly on relevant new laws and regulations. Remuneration The remuneration packages of executive and non-executive directors are approved by the Board. The directors annual fees are recommended by the Board and tabled for shareholders approval at the Annual General Meeting. The aggregate remuneration of directors who served during the financial year ended 31 March 2010 are categorised into appropriate components. Category Fees Salaries & other Benefits (RM) Emoluments (RM) In Kind (RM) Executive Directors 76,000 1,667,800 5,100 Non-Executive Directors 105,000 7,500 - The executive directors agreed to a voluntary reduction in basic salary and bonuses for the two financial years beginning 2008/2009 and coming up financial year till 31 March The number of Directors whose total remuneration during the financial year fall within the respective bands are as follows:- Number Executive Directors RM850,000 to RM900,000 2 Non-Executive Directors Less than RM50,000 3 Reliance Pacific Berhad Company No A 11 Annual Report 2010

14 Committee Established by the Board Audit Committee The Audit Committee was established on 5 July 1994 and currently comprises of three fully Independent Non- Executive Directors. The terms of reference and goals of the Audit Committee are set out in the Audit Committee Report. Remuneration Committee and Nomination Committee The Board of Directors nominates and approves the appointment of new directors. The Board also approves the remuneration packages of the executive directors and non-executive directors and recommends the directors fees which is then tabled for shareholders approval at the Annual General Meeting. Investor Relations and Shareholders Communication The Board values regular communication with shareholders and investors. This includes various medium of communication such as annual general meetings, announcements on quarterly financial results and material agreements made throughout the year, audited financial results and annual reports. The information provide shareholders and investing public with an overview of the Group s performance and business operations. The Board recognizing the importance of investors relations has established close contact with analysts and institutional shareholders by providing regular update on the Group s business developments. The Group has established a comprehensive and current website at to further enhance investor relations and communication with shareholders, investors and general public to access information such as group s profile, services, financial performance and corporate information. Accountability and Audit Financial Reporting The Directors aim to present a balanced and understandable assessment of the Group s position and prospects when presenting the financial statements, quarterly announcements and submission of reports to regulators. The annual and quarterly financial reports are prepared in accordance with the provision of the Companies Act, 1965 and approved accounting standards. The annual and quarterly financial reports are reviewed by the Audit Committee and approved by the Board. Reliance Pacific Berhad Company No A 12 Annual Report 2010

15 Directors Responsibility Statement The Directors are required under the provisions of the Companies Act, 1965 to prepare financial statement for each financial year, which gives a true and fair view of the Company. Following discussions with the auditors, the Directors consider that the Company uses appropriate accounting policies and such policies are supported by reasonable and prudent judgement and estimates. The Directors also ensure that the Company keeps the accounting records and are disclosed with reasonable accuracy which enable them to ensure that the financial statements comply with the Companies Act, 1965 and the relevant accounting standards. The Directors also took the necessary steps to safeguard the assets of the Company. Having prepared the financial statements, the Directors have requested the Auditors to take whatever steps and undertake whatever inspections they consider appropriate for the purpose of preparing their audit reports. The Board has given their approval for the Corporate Governance Statement and are satisfied that as far as possible the Group has complied with the best practices of the Code. Internal Control The Group s Internal Control Statement is set out on page 16 of the Annual Report. Relationship with External Auditors The role of the Audit Committee in relation to the external auditors is set out on page 17 of the Annual Report. The Company has always maintained a cordial and transparent relationship with its external auditors in seeking professional advice and ensuring compliance with the relevant accounting standards. The External Auditors are independent. Related Party Transactions All related party transactions for the financial year ended 31 March 2010 are set out in Note 36 of the Annual Report. This note also sets out the recurrent transactions conducted during the period in accordance with the general mandate obtained from shareholders at the Annual General Meeting held on 24 September OTHER DISCLOSURE REQUIREMENTS Variation in Results From Unaudited Results The Company has on 12 August 2010 announced that there is a deviation between the audited and the unaudited financial statements for the financial year ended 31 March The Board of Directors has clarified that the audited loss after tax and minority interest for the financial year was RM408,000, which is a positive variance of 17% ie RM85,000, as compared to the unaudited loss after tax and minority interest of RM493,000 as announced to the Bursa Securities on 27 May The main reason for the deviation was mainly due to the net over provision of expenses especially deferred taxation during the financial year under review. Reliance Pacific Berhad Company No A 13 Annual Report 2010

16 Corporate Social Responsibility RPB will observe and carry out its corporate social responsibility (CSR) to promote humantarian works to the deserving and underprivileged and to alleviate the social well being of the community as well as to ensure the sustainability of the environment both locally and abroad. Our daily business is conducted through integration of business practices based on ethical values and respect for the environment, the work place, the community and the market place. The Environment RPB Group manages its operations by placing special emphasis on conservation and environment protection. Some of our efforts include:- To raise awareness on the importance of a clean sea shore, Avillion Port Dickson and Avillion Admiral Cove participated in a beach cleaning programme called Take A Stand in the Sand on 10 November The staff and management of both resorts, orphans from Rhema Foster Home Seremban and New Life Care Centre PD and volunteers managed to gather three tons of litter collected from along the 10 km stretch of beach at Avillion Port Dickson and Avillion Admiral Cove. The participation by Avillion Port Dickson in a state sponsored programme namely the Raptor s Watch whereby migratory birds are observed when they rest over at Tanjung Tuan to raise awareness on the importance of retaining natural forest reserve and protection of wildlife, flora and fauna. Strict rules and regulations are imposed on all boaters berthed at the marina basin. The pumping of oil, diesel, fuel waste and waste tanks are strictly prohibited within the marina basin. Works such as deck sanding, spray painting and other polluting works are only allowed at the repair yard pontoon. Strict conservation policy is practised for divers at Avillion Layang Layang and include no touching of marine life and no gloves policy. All employees of the RPB Group are encouraged to reduce paper usage and recycle used paper where possible. Quarterly and annual spring cleaning events were organised by the Group at which unwanted papers, brochures, packing materials, empty printer cartridges and other recyclable items are sent for recycling. The Work Place RPB Group values its human capital and has placed high emphasis on the development of human capital resources. Over the past years, the employees of the Group has expanded to comprise a global team of dedicated professional managers and staff who have blended modern technology with traditional values of hard work, perseverance and integrity. As part of the human capital development, the Group also conducts various in-house training programmes focusing on quality leadership, building effective performance and job skills related training to equip employees with improved skills and knowledge. Reliance Pacific Berhad Company No A 14 Annual Report 2010

17 To strike a balance between work life and personal strives, the employees are encouraged to participate in social, sports and welfare activities organised by the Social Club. Communication and camaraderie among staff is fostered through social gatherings such as annual dinners, festive parties and quarterly birthday celebrations. Hotel employees are encouraged to participate in inter-hotel sports activities and tournaments organised by Malaysia Association of Hotels. The Group acknowledges and commits to create a safe and conducive working environment for all Its employees. Employees must work together in effecting health and safety in the work place. The Community RPB has always been supportive of employees involvement in community issues. RPB s hotel division s yearly charity event called Time for Giving, Time for Sharing, grew into its 3rd year and is now jointly hosted by Avillion Port Dickson and Avillion Admiral Cove one month before Christmas whereby our employees, hotel guests and public make cash contributions to the orphanages or purchase gifts for the orphans. In conjunction with this drive, a pre-christmas luncheon was held on 11 December 2009 whereby orphans from Rhema Foster Home, Seremban and New Life Care Centre PD were invited to the hotel for lunch, entertainment and presentation of gifts by Santa Claus. Avillion Port Dickson and Avillion Admiral Cove jointly organises annual blood donation drive called A Life in Dire Need, A Drop Of Blood Indeed. In the year 2009, the event was held on 12th August. A charity event called Majlis Berbuka Puasa Bersama Anak-Anak Yatim was jointly organised by Avillion Port Dickson and Avillion Admiral Cove on 11 September 2009 whereby orphans from Yayasan Anak Yatim Dewan Perniagaan Melayu Malaysia and Yayasan Anak-Anak Islam Daerah Port Dickson were treated to a sumptuous buka puasa and fun activities at the Children s Playroom. RPB s travel division s annual Reliance Charity Drive in conjunction with the Chinese New Year celebrations initiated by tour managers in 1994 where money contributed by employees, their family members and friends were used for distribution of red packets, foodstuff and beverage for old folks homes and orphanages. The Market Place RPB Group places great importance in its stakeholders such as investors and institutional shareholders in the market place. This is achieved by establishing close contact with analysts and institutional shareholders by providing regular update on the Group s business developments. The Group has established a comprehensive and current website at to further enhance investor relations and communication with shareholders, investors and general public to access information such as group s profile, products, financial performance and corporate information. Reliance Pacific Berhad Company No A 15 Annual Report 2010

18 Statement on Internal Control 1.0 Introduction Pursuant to the Malaysian Code on Corporate Governance, listed companies are required to maintain a sound and robust system of internal controls with corporate governance embodied in its framework to safeguard shareholders investments and the Group s assets. Bursa Malaysia Securities Berhad ( Bursa Securities ) Listing Requirements require directors of listed companies to include statements in the annual reports on the state of their internal controls and application of the principles and compliance with Best Practices in Corporate Governance. Bursa Securities Statement on Internal Control: Guidance for Directors of Public Companies ( Guidance ) sets out guidelines on compliance with these requirements. Set out below is the Board s Internal Control and Corporate Governance Statement, which has been prepared in accordance with the Guidance. 2.0 Responsibility The Board of Directors acknowledges that sound internal controls, risk management and corporate governance are essential to creating, generating and maximising sustainable value for shareholders. The Board affirms its overriding responsibility for the Group s risk oversight, risk management and internal controls, and for reviewing the adequacy and integrity of these systems including compliance with applicable laws and regulations. However, such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives. Any system can only provide reasonable but not absolute assurance against the risk of material misstatement, loss or fraud. 3.0 Risk management process The Group has in place, an ongoing process of identifying, evaluating, managing and monitoring significant risks which affect achievement of business objectives. Cost versus benefit of major risks, materiality and the likelihood of these risks crystallising are regularly evaluated by the Management and deliberated at the Group s Audit Committee and Board of Directors meetings. These activities provide the Board with assurance on adequacy and integrity of the Group s internal control system. The internal control framework used to identify, manage and effectively mitigate key risks within defined parameters is assessed periodically by the Group s Audit Committee based on audit reports presented by the Internal Audit Department and the external auditors. 4.0 Other key elements of internal control The other key elements of the Group s internal control system are summarised as follows :- 4.1 Processes governing appraisal, approval of capital / investment expenditure, asset disposal, monitoring and evaluation of the performance of investments are in place. 4.2 Budgets with financial and operating targets, capital expenditure proposals and performance indicators are reviewed and approved by the Executive Director and managers of the respective subsidiary companies. 4.3 Financial performance reports benchmarked against budgets and objectives are regularly provided to the Group s Senior Management for monitoring and improving financial results. 4.4 The Group s operations are reviewed by the Group s Internal Audit Department based on the annual Audit Plan. 5.0 Corporate governance The Board of Directors is responsible for setting out the Group s strategic directions, establishing and monitoring achievement of the goals. The Board is also accountable for corporate governance of the Group through its undertaking and commitment on active monitoring of the Group s systems and procedures to ensure objectivity and integrity prevails. In determining what is best practice governance, the Group has taken into account, the principles, practices and recommendations that are in the best interests of the shareholders and wider stakeholders to achieve established goals and objectives. The Group has adopted a range of comprehensive systems, procedures and practices which it considers will enable it to operate in a manner consistent with prudent corporate governance principles. Steps have been progressively undertaken to ensure that the Best Practices have been complied and are adequately addressed. Consistent with Bursa Securities guidelines, the Group s corporate governance practices will be regularly reassessed in the light of experience (within the Group and in other organisations), contemporary views and best practices. Reliance Pacific Berhad Company No A 16 Annual Report 2010

19 Audit Committee Report 1.0 Composition Chairman : Members : 2.0 Terms of Reference 2.1 Authority Chairman : Dato Abdul Rahim Bin Osman Independent Non-Executive Director Lim Guan Chin Independent Non-Executive Director Johan Arifin Sopiee Bin Mohamed Noordin Independent Non-Executive Director The Audit Committee is authorised by the Board to : possess adequate resources required to perform its duties have full and unrestricted access to any information and document relevant to the Company have direct communication channels with the external and internal auditors convene meetings with the external and / or internal auditors, excluding the attendance of the executive members of the Committee, if deemed necessary obtain external legal or independent professional advice, if it considers necessary investigate any activities within its Terms of Reference. 2.2 Frequency of Meetings The Audit Committee shall meet not less than four times a year with additional meetings convened as and when required with the presence of the Committee members. The presence of the external auditors will be requested, if required. 2.3 Duties and Responsibilities The duties and responsibilities of the Audit Committee are to : Review the annual report, financial statements of the Company and consolidated financial statements of the Group prior to the directors approvals Review adequacy of the functions, resources and scope of the internal audit function and ascertain it has the necessary authority and employees cooperation to carry out its work independently and effectively Evaluate adequacy of the system of internal controls and accounting control procedures with the external auditors Review the audit plans and audit reports with the external auditors Review the internal audit programme, results of the internal audits or investigations undertaken to ensure appropriate and timely actions have been taken on the audit recommendations expeditiously Review any related party transactions that may arise within the Company or the Group Review and recommend the appointment of the external auditors and any questions of resignation or dismissal. 3.0 Summary of Activities of the Audit Committee The Audit Committee held six meetings during the financial year ended 31 March The attendance of each member of the Committee is as follows :- Director Attendance Dato Abdul Rahim Bin Osman 5/5 Lim Guan Chin 5/5 Johan Arifin Sopiee Bin Mohamed Noordin 5/5 The main activities carried out by the Audit Committee during the financial year ended 31 March 2010 is summarized as follows:- Reviewed the quarterly and year end financial statements for the Board s approval before announcement to Bursa Securities Reviewed the audit plan of external and internal auditors Assessed the adequacy and effectiveness of the internal control system Reviewed the recurrent related party transactions 4.0 Summary of activities of Internal Audit Function The Group s internal audit function is carried out by the Group s Internal Audit Department ( the Department ) which reports to the Audit Committee on its activities based on the annual Audit Plan. The primary function of the Department is to undertake regular and systematic review of internal controls to provide the Audit Committee and the Board with sufficient assurance that the internal control system is adequate and effective in addressing the risks identified. The Department submits audit reports which identify risk exposure in key business processes, control lapses and non-compliances with the Group s Policies and Procedures and recommendations for improvements to the Audit Committee regularly. The Department also follows up with the Management on the implementation status of the agreed audit recommendations and reports to the Audit Committee accordingly. Reliance Pacific Berhad Company No A 17 Annual Report 2010

20 1 The Top 3 ASEAN Franchise Brand Award by the Indonesian Franchise Association & the Indonesian Franchise Magazine in recognition of Reliance as a leading regional travel brand. 2 Reliance s contribution & leadership in the development of the franchise industry in Malaysia received official endorsement. 3-4 In recognition of Malaysia s top franchise brand for travel

21 Travel Division The only Malaysian Travel Company to have been awarded the Best Travel Brand by the Asia Pacific Brand Laureate Foundation for 4 consecutive years, 2006/07, 2007/08, 2008/09 & 2009/10

22 Chairman s Statement On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statements of Reliance Pacific Berhad (RPB) and its group of companies (Group), for the financial year ended 31 March INTRODUCTION The past year was extremely challenging for the global and regional tourism, travel and hotel industries. The International Air Transport Association (IATA) declared 2009 as the toughest year in the history of aviation, worse than post 9/11 and SARS resulting in total industry loss of US$9.9 billion in As a whole, the World Travel & Tourism Council (WTTC) reported a decline of 4.8% in the 2009 Global Travel & Tourism Economy GDP. Needless to say, RPB was adversely affected by the decline. However, the regional economic recovery in the last months of 2009, led by the rebound of emerging Asian markets, drove stronger growth in travel for the industry as a whole and RPB in particular. By December of 2009, we saw an improvement in our business. Yields, however, were slower to recover as demand remained fragile. Nevertheless, it signaled that the worst may be over. GROUP PERFORMANCE For the financial year ended 31 March 2010, RPB recorded a Group Turnover of RM457 million down 17% from the previous year. In spite of the challenging operating environment, the Group recorded a Pretax Profit of RM2.9 million, down 80% from the previous financial year. Despite the harsh operating conditions, I am pleased to note that our delivery and service standards remained strong. We are proud to mention that Reliance had for 4 consecutive years been awarded The Best Travel Brand by the Asia Pacific Brand Laureate for 2006/07, 2007/08, 2008/09 and 2009/10. We are the one and only Malaysian Travel Brand to have been continuously recognized by the Asia Pacific Brand Laureate for consistently delivering great value to customers throughout the Asian region. This award together with many other accolades that we received over the years is testaments to the quality and consistent levels of services that we provide to our customers. DIVISIONAL PERFORMANCE Travel Division In the financial year under review, we continued to invest in areas that are critical to achieving our Vision, namely, human talents, technology & systems, branding, service innovation and establishing new markets in Asia. Online B2C & B2B distribution channels are the key drivers for our regional growth plans. Our ability to fast track the transition to a direct online distribution model is underpinned by the strength of our established infrastructure of value chain in the region, primarily in leading Asia s leading tourist destinations of Malaysia, Singapore, Hong Kong, Thailand, Indonesia, Taiwan & China. Across the Travel Division we have a unique breadth and depth of experienced talents from Malaysia as well as the region. Our human talents are ideally positioned to meet the challenges and the changing dynamics of the market place in the pursuit of capturing growth opportunities in the region. The motivation and development of our people is fundamental to the success of our business, vision and to the delivery of our goal to create shareholders value. Hotel Division The Hotel Division s goal is to achieve an efficient operating system that is scalable and multipliable in view of its plans to grow the number of hotels in the years ahead. Its other values are consistently delivering innovative products and excellent customer service. Our customers want to feel that they are gaining real value that extends beyond personalized, thoughtful delivery of services and world class experiences. These are the fundamental philosophies of our business. Growth in third party management contracts will continue to be our primary focus in 2010/11. This segment of our business will optimize our manpower resources. In 2009/10, we added another third party management contract, the Marina Vista Hotel, under the Avillion brand name. Moving forward, these initiatives are expected to be positive for the Hotel Division to maximize profits and strongly positioning us to expand the Avillion brand in the region. Reliance Pacific Berhad Company No A 20 Annual Report 2010

23 Property Division The Property Division embarked on its 8th project, the 160 room Marina Vista on Admiral Cove in the financial year 2008/09. The construction has been fast-tracked and was completed ahead of schedule in March The remaining land banks will be developed when demand improves. PROSPECTS In January 2010, IATA forecast that the airline industry would collectively lose an approximate US$5.6 billion for the full year. In February 2010, IATA halved its earlier forecast to a loss of about US$2.8 billion following encouraging signs of solid recovery in travel. In February, global passenger demand was up by 9.5% year-on-year. In Asia Pacific alone, air travel grew by 13.5%. This relatively stronger recovery indicates that the worst may be over, and the tourism, travel and hotel industries can look forward to a brighter future save for unanticipated natural disasters. APPRECIATION On behalf of the Board, I would like to extend my heartfelt gratitude to each and every one of our employees who has remained loyal and dedicated to the company and continue to persevere with the company throughout the years. To them, I would sincerely like to say thank you. Our utmost appreciation must also go to our business partners for their continued support. My deepest appreciation also goes to my fellow board members who have been instrumental in providing guidance and valuable insights to the management throughout the year. To our shareholders and customers, we thank you for your confidence and support. We have built our business with you in mind and will continue building value for shareholders and customers moving forward. Nevertheless, the otherwise positive developments augur well for RPB. We are cautiously optimistic. Oil prices continue to be volatile, and the uncertainty of the global economic outlook adds to the challenge. While the Asia Pacific region is playing a key role in leading the world out of the debilitating aftermath of the 2008 Global Financial Crisis, the economic outlook particularly in Europe remains uncertain for now. It is important to note that though challenges have grown in complexity, they are certainly not new to our industry or RPB. We have dealt with all these challenges in the past and have remained resilient throughout the years. We will continue to confront these challenges and remain committed to our vision of becoming Dominant Regional Player. Dato Gan Eng Kwong Chairman DIVIDENDS For the financial year ended 31 March 2010, the Board of Directors is not recommending any declaration of dividend. Reliance Pacific Berhad Company No A 21 Annual Report 2010

24 The breathtaking and calming presence at the Avillion Admiral Cove lobby. 2 The contemporary design of the spacious Vista Suites at Avillion Admiral Cove with a view of the sea. 3 Avillion Port Dickson s Meeting & Convention Centre. 4 Avillion Legacy Melaka, a timeless classic design in the UNESCO Heritage City of Malacca. 4 5 Avillion Layang Layang, Sabah, rated among the world s top 5 dive destinations.

25 Hotel Division Avi Spa, winner of numerous awards & recognition including Best New Spa and Best Traditional Treatment by Malaysia Spa and Wellness Awards 2009, the Silver Award by Asia Pacific Interior Design Awards (APIDA) Also named the Most Unique Spa Destination by Harper s Bazaar Spa Awards 2009 and the Best Spa-With-A-View by the Malaysian Women s Weekly 2009.

26 Marina Vista, the 8th project within Admiral Cove that was completed ahead of schedule in March The award winning Avi Spa at Avillion Port Dickson that was developed by our Property Division. 3 The awesome view from Marina Crescent, Admiral Cove. 3 4 A serene enclave well known among yachtsmen worldwide as a safe haven for their yachts.

27 Property Division Magnificent view of Admiral Cove, our award winning development conceptualised out of a dream to create a world class integrated international marina resort for those who wants to live beyond the dreams of others.

28 Financial Statement

29 DIRECTORS REPORT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2010 The directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 March PRINCIPAL ACTIVITIES The Company is principally engaged in investment holding and provision of management services. The principal activities of the subsidiary companies are set out in Note 11 to the financial statements. There have been no significant changes in the nature of these principal activities of the Group and of the Company during the current financial year. RESULTS Group RM 000 Company RM 000 Net (loss)/profit for the year attributable to: Equity holders of the parent (408) 74 Minority interest DIVIDENDS No dividend has been paid, declared or proposed by the Company since the end of the previous financial year. The directors do not recommend any final dividend in respect of the financial year ended 31 March RESERVES AND PROVISIONS Material transfers to or from reserves and provisions during the current financial year are shown in the financial statements. 27

30 Directors report cont d. VALUATION OF ASSETS AND LIABILITIES At the date of this report, the directors are not aware of any circumstances that have arisen which render adherence to the existing methods of valuation of assets and liabilities of the Group and of the Company misleading or inappropriate. BAD AND DOUBTFUL DEBTS Before the income statements and the balance sheets of the Group and of the Company were made out, the directors took reasonable steps to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and adequate provision had been made for doubtful debts. At the date of this report, the directors are not aware of any circumstances that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the Group and in the Company, inadequate to any substantial extent. ITEMS OF A MATERIAL AND UNUSUAL NATURE The results of the operations of the Group and of the Company for the financial year ended 31 March 2010 were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature. There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the current financial year. CURRENT ASSETS Before the income statements and the balance sheets of the Group and of the Company were made out, the directors have taken reasonable steps to ensure that any current assets which were unlikely to be realised in the ordinary course of business, including their values as shown in the accounting records, have been written down to an amount which they might be expected to realise. At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current assets in the respective financial statements of the Group and of the Company misleading. 28

31 Directors report cont d. CONTINGENT AND OTHER LIABILITIES At the date of this report, there does not exist: i) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or ii) any contingent liability in respect of the Group and of the Company which has arisen since the end of the financial year other than those disclosed in Note 35 to the financial statements. No contingent or other liability has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due. DIRECTORS AND THEIR SHAREHOLDINGS The directors in office since the date of the last report and at the date of this report are as follows: Dato Gan Eng Kwong Datin Irene Tan Dato Abdul Rahim Bin Osman Lim Guan Chin Johan Arifin Sopiee Bin Mohamed Noordin In accordance with the registers required to be kept under Section 134 of the Companies Act, 1965, the directors interest in shares in the Company in respect of directors who were in office at the end of the financial year are as follows: 29

32 Directors report cont d. DIRECTORS AND THEIR SHAREHOLDINGS (Cont d) Number of Ordinary Shares of RM0.20 each Direct Holding: Balance as at Acquired Sold Balance as at Dato Gan Eng Kwong 42,750 10,936,400 9,500,000 1,479,150 Dato Abdul Rahim Bin Osman 252, ,500 Indirect Holding: Dato Gan Eng Kwong 488,078,195 46,998,375 37,498, ,578,195 Datin Irene Tan 488,120,945 57,934,775 46,998, ,057,345 Lim Guan Chin 903, ,750 By virtue of their substantial interest in the Company, Dato Gan Eng Kwong and Datin Irene Tan are deemed to have an interest in the shares in the subsidiary companies to the extent the Company has an interest. Other than as disclosed above, none of the other directors held any interest in shares in the Company or in shares in its related companies. 30

33 Directors report cont d. DIRECTORS BENEFITS Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors shown in the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest. During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. SUBSEQUENT EVENTS The subsequent events during the current financial year are disclosed in Note 39 to the financial statements. CHANGE OF CIRCUMSTANCES At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the financial statements of the Group and of the Company, which would render any amount stated in the respective financial statements misleading. AUDITORS The auditors, AljeffriDean, have expressed their willingness to continue in office. Signed on behalf of the Board of Directors in accordance with a resolution of the directors, Datin Irene Tan Director Dato Abdul Rahim Bin Osman Director Kuala Lumpur, Date: 28 July

34 STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965 We, Datin Irene Tan and Dato Abdul Rahim Bin Osman, being the directors of Reliance Pacific Berhad, do hereby state on behalf of the directors that in our opinion, the financial statements set out on pages 35 to 100 are properly drawn up in accordance with the applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2010 and of the results and the cash flows for the financial year ended on that date. Signed on behalf of the Board of Directors in accordance with a resolution of the directors, Datin Irene Tan Director Kuala Lumpur, Date: 28 July 2010 Dato Abdul Rahim Bin Osman Director STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965 I, Chong Set Fui, being the officer primarily responsible for the financial management of Reliance Pacific Berhad, do solemnly and sincerely declare that the financial statements set out on pages 35 to 100 are to the best of my knowledge and belief correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, Subscribed and solemnly declared ) by Chong Set Fui ) at Wilayah Persekutuan Kuala Lumpur ) on this day of 28 July 2010 ) Chong Set Fui Before me, Commissioner for Oaths 32

35 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF RELIANCE PACIFIC BERHAD ( A) Report on the Financial Statements We have audited the financial statements of Reliance Pacific Berhad, which comprise the balance sheets as at 31 March 2010 of the Group and of the Company, and the income statements, statement of changes in equity and cash flow statements of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 35 to 100. Directors Responsibility for the Financial Statements The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with the applicable approved accounting standards for entities other than private entities and the provisions of the Companies Act, 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 33

36 Independent auditors report...cont d. Opinion In our opinion, the financial statements have been properly drawn up in accordance with the applicable approved accounting standards for entities other than private entities and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 March 2010 and of its financial performance and cash flows for the year then ended. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. b) We have considered the financial statements and the auditors reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 11 to the financial statements. c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. AljeffriDean AF 1366 Chartered Accountants (Malaysia) Mohd Neezal Noordin No.: 2162/06/11 (J) Kuala Lumpur, Date: 28 July

37 BALANCE SHEETS AS AT 31 MARCH 2010 GROUP COMPANY NOTE RM 000 RM 000 RM 000 RM 000 NON-CURRENT ASSETS Property, plant and equipment 5 215, , Prepaid land lease payments 6 30,821 31, Land held for development 7 30,070 27, Investment properties 8 15,755 15, Goodwill arising on consolidation 9 41,959 41, Investment in associates Subsidiary companies ,689 59,689 Investments 12 6,105 6, Deferred and development expenditure , Deferred tax assets , TOTAL NON-CURRENT ASSETS 341, ,450 59,797 59,846 CURRENT ASSETS Development properties 7-7, Inventories 15 22,957 22, Trade and other receivables , ,381 5,336 5,744 Amount due from subsidiaries , ,438 Fixed and call deposits 22,037 17,119 11,155 11,155 Cash and bank balances 11,028 20, ,876 TOTAL CURRENT ASSETS 277, , , ,213 TOTAL ASSETS 619, , , ,059 CURRENT LIABILITIES Trade and other payables 18 34,500 44,974 1,703 1,660 Short term borrowings 19 91,978 75,945 27,984 25,884 Collaterised loan obligation (CLO) 26 45,000-45,000 - Hire purchase and finance lease payables Provison for taxation 1,899 2, TOTAL CURRENT LIABILITIES 173, ,281 75,291 28,094 NET CURRENT ASSETS 104, , , , , , , ,965 The notes set out on pages 43 to 100 form an integral part of, and should be read in conjunction with these financial statements. 35

38 Balance Sheets cont d. GROUP COMPANY NOTE RM 000 RM 000 RM 000 RM 000 EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT Share capital , , , ,710 Reserves , ,969 29,309 29,235 Equity attributable to equity holders of the parent 340, , , ,945 Minority interest 23 (650) (1,526) - - TOTAL EQUITY 339, , , ,945 LONG TERM AND DEFERRED LIABILITIES Advance from joint venture shareholder 24 8,686 7, Term loans 25 57,958 53,300 43,750 45,000 Collaterised loan obligation (CLO) 26 40,000 85,000 40,000 85,000 Hire purchase and finance lease payables Deferred tax liabilities TOTAL LONG TERM AND DEFERRED LIABILITIES 106, ,864 83, , , , , ,965 The notes set out on pages 43 to 100 form an integral part of, and should be read in conjunction with these financial statements. 36

39 INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2010 GROUP COMPANY NOTE RM 000 RM 000 RM 000 RM 000 Continuing Operations Revenue , ,618 13,249 21,743 Cost of sales 27 (382,472) (462,631) - - Gross profit 74,807 90,987 13,249 21,743 Other operating income 1,502 3, Provision for dimunition in value of investment (608) (4,146) - - Administrative expenses (58,447) (61,383) (2,629) (3,339) Profit from operations 28 17,254 28,542 10,772 18,432 Finance costs 29 (14,215) (13,615) (10,647) (10,007) Share of results of associates (107) (103) - - Profit from continuing operations before taxation 2,932 14, ,425 Taxation 30 (2,236) (4,664) (51) (607) Net profit from continuing operations , ,818 DISCONTINUED OPERATION Net loss from discontinued operation, net of tax (228) (132) - - Net profit for the year , ,818 Attributable to: Equity holders of the parent (408) 9, ,818 Minority interest , ,818 Basic (losses)/earnings per share (sen) 31 From continuing operations (0.03) 1.10 From discontinued operation (0.01) (0.01) (0.04) 1.09 Dividends per share (sen) The notes set out on pages 43 to 100 form an integral part of, and should be read in conjunction with these financial statements. 37

40 STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2010 GROUP Equity Attributable to Equity Holders of the Parent Non-Distributable Distributable Foreign Share Share Currency Share Premium Buy-Back Translation Revaluation Accumulated Minority Total NOTE Capital Reserve Reserve Reserve Reserve Profit Total Interest Equity RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Balance as at ,710 19,911 8,930 (4,131) - 62, ,831 (2,156) 256,675 Net profit for the year ,398 9, ,028 Currency translation differences , ,006-4,006 Revaluation surplus ,171-79,171-79,171 Interim dividend (7,727) (7,727) - (7,727) Balance as at ,710 19,911 8,930 (125) 79,171 64, ,679 (1,526) 342,153 Net profit/(loss) for the year (408) (408) Currency translation differences (3,025) - - (3,025) - (3,025) Balance as at ,710 19,911 8,930 (3,150) 79,171 63, ,246 (650) 339,596 The notes set out on pages 43 to 100 form an integral part of, and should be read in conjunction with these financial statements. 38

41 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2010 COMPANY. Non-Distributable Distributable Share Share Share Premium Buy-Back Accumulated NOTE Capital Reserve Reserve Profit Total RM 000 RM 000 RM 000 RM 000 RM 000 Balance as at ,710 19,911 8, ,854 Net profit for the year ,818 7,818 Final and interim dividend (7,727) (7,727) Balance as at ,710 19,911 8, ,945 Net profit for the year Balance as at ,710 19,911 8, ,019 The notes set out on pages 43 to 100 form an integral part of, and should be read in conjunction with these financial statements. 39

42 Cash Flow From Operating Activities CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2010 GROUP COMPANY NOTE RM 000 RM 000 RM 000 RM 000 Profit/(Loss) before taxation - continuing operations 2,932 14, ,425 - discontinued operations (228) (132) - - Total profit before taxation 2,704 14, ,425 Adjustments for : Depreciation of property, plant and equipment 3,574 3, Depreciation of investment properties Negative goodwill written off - (636) - - Loss on disposal of property, plant and equipment Gain on disposal of property, plant and equipment - (14) - - Loss on disposal of investment properties Property, plant and equipment written off Share of result of associates Provision for dimunition in value of investment 608 4, Deferred expenditure written off Interest income (136) (91) - - Interest expenses 14,215 13,615 10,647 10,007 Realised gain on foreign exchange (184) (28) (152) (28) Gross dividend income - - (7,241) (15,100) Provision for doubtful debts Amortisation of prepaid land lease payments Operating profit before working capital changes 21,731 36,560 3,434 3,579 The notes set out on pages 43 to 100 form an integral part of, and should be read in conjunction with these financial statements. 40

43 Cash Flow Statements cont d. GROUP COMPANY NOTE RM 000 RM 000 RM 000 RM 000 Increase in inventories (197) (14,336) - - Decrease/(Increase) in receivables (24,841) 14,354 (5,757) (21,902) (Decrease)/Increase in payables (10,670) (44,116) Decrease in development properties 7,833 8, Increase in deferred expenditure (132) (565) - - Cash generated from/(used in) operating activities (6,276) 657 (2,129) (18,168) Tax paid (1,390) (2,152) (74) (68) Interest paid (14,215) (13,615) (10,647) (10,007) Net cash used in operating activities (21,881) (15,110) (12,850) (28,243) CASH FLOW FROM INVESTING ACTIVITIES Proceeds from disposal of property, plant and equipment Proceeds from disposal of investment properties - 3, Purchase of property, plant and equipment 33 (4,458) (10,009) (6) (23) Purchase of investment properties (20) (1,969) - - Decrease/(Increase) of land held for development 768 (139) - - Acquisition of subsidiary companies - (12,092) - - Acquisition of associate companies - (322) - - Net dividend income - - 7,241 14,133 Dividend paid - (7,727) - (7,727) Interest income Net cash (used in)/generated from investing activities (3,477) (28,687) 7,235 6,383 The notes set out on pages 43 to 100 form an integral part of, and should be read in conjunction with these financial statements. 41

44 Cash Flow Statements cont d. GROUP COMPANY NOTE RM 000 RM 000 RM 000 RM 000 CASH FLOW FROM FINANCING ACTIVITIES Proceeds from term loan 32,482 5,000-5,000 Repayment of term loan (9,469) (1,941) - - Repayment of hire purchase and finance lease payables (169) (216) - - Net cash generated from financing activities 22,844 2,843-5,000 Net decrease in cash and cash equivalents (2,514) (40,954) (5,615) (16,860) Cash and cash equivalents at beginning of the year (12,004) 29,073 (4,853) 12,007 Effects of exchange rate changes on cash and cash equivalents 20 (123) - - Cash and cash equivalents at end of the year 34 (14,498) (12,004) (10,468) (4,853) The notes set out on pages 43 to 100 form an integral part of, and should be read in conjunction with these financial statements. 42

45 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH PRINCIPAL ACTIVITIES AND GENERAL INFORMATION The Company is principally engaged in investment holding and provision of management services. The principal activities of the subsidiary companies are set out in Note 11 to the financial statements. There have been no significant changes in the nature of these principal activities of the Group and of the Company during the current financial year. The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad. The Board of Directors authorised these financial statements for issue on 28 July BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements of the Group and of the Company have been prepared on a historical cost convention and modified to include other bases of valuation as indicated in the summary of significant accounting policies, and are drawn up in accordance with the applicable Malaysian Accounting Standards Board ( MASB ) approved accounting standards for entities other than private entities in Malaysia and the provisions of the Companies Act, The accounting policies have been consistently applied by the Group and by the Company and are consistent with those used in the previous financial year. The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM 000) except when otherwise indicated. 43

46 3. SIGNIFICANT ACCOUNTING POLICIES a) New / Revised FRSs and Interpretation Not Yet Effective The Group and the Company has not applied the following new/revised FRSs and Interpretation that are relevant to its operations which have been issued but are not effective: FRSs/ Interpretation Title Effective Date FRS 101 Presentation of Financial Statements (revised) 1 January 2010 Amendments to FRS 1 and FRS 127 First-time Adoption of Financial Reporting Standards and Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate 1 January 2010 Amendments to FRS 107 Cash Flow Statements 1 January 2010 Amendments to FRS 108 Accounting Policies, Changes in Accounting 1 January 2010 Estimates and Errors Amendments to FRS 110 Events After the Balance Sheet Date 1 January 2010 Amendments to FRS 116 Property, Plant and Equipment 1 January 2010 Amendments to FRS 117 Leases 1 January 2010 Amendments to FRS 118 Revenue 1 January 2010 Amendments to FRS 127 Consolidated and Separate Financial Statements 1 January 2010 Amendments to FRS 128 Investments in Associates 1 January 2010 Amendments to FRS 132 Financial Instruments: Presentation 1 January 2010 Amendments to FRS 134 Interim Financial Reporting 1 January 2010 Amendments to FRS 136 Impairment of Assets 1 January 2010 Amendments to FRS 140 Investment Property 1 January 2010 FRS 7 Financial Instruments: Disclosures 1 January 2010 FRS 8 Operating Segments 1 July 2009 FRS 1 First-time Adoption of Financial Reporting Standards 1 July 2010 (revised) FRS 127 Consolidated and Separate Financial Statements 1 July 2010 (revised) FRS 139 Financial Instruments: Recognition and Measurement 1 January 2010 Amendments to FRS 8 Operating Segments 1 July 2010 Amendments to FRS 1 First-time Adoption of Financial Reporting Standard 1 January 2011 Limited Exemption from Disclosures for First-time Adopters 1 January 2011 Comparative FRS 7 Amendments to FRS 7 Financial Instruments: Disclosures Improving Disclosures about Financial Instruments 1 January

47 The Group and the Company plan to adopt the above pronouncements when they become effective in the respective financial period. Unless otherwise described below, these pronouncements are expected to have no significant impact to the financial statements of the Group and the Company upon their initial application: FRS 101: Presentation of Financial Statements The revised FRS 101 separates owner and non-owner changes in equity. Therefore, the consolidated statement of changes in equity will now include only details of transactions with owners. All nonowner changes in equity are presented as a single line labelled as total comprehensive income. The Standard also introduces the statement of comprehensive income: presenting all items of income and expense recognised in the income statement, together with all other items of recognised income and expense, either in one single statement, or in two linked statements. In addition, a statement of financial position is required at the beginning of the earliest comparative period following a change in the accounting policy, the correction of an error or the reclassification of items in the financial statements. This revised FRS does not have any impact on the financial position and results of the Group and the Company. FRS 7: Financial Instruments: Disclosures and FRS 139: Financial Instruments Recognition and Measurement The possible impacts of the above mentioned FRSs on the financial statements upon their initial applications are not disclosed by virtue of the exemptions given in these standards. b) Functional and Presentation Currency The financial statements of the Group and of the Company are presented in Ringgit Malaysia, which is the functional and presentation currency of the Group and of the Company. c) Basis of Consolidation The consolidated financial statements include the financial statements of the subsidiary companies made up to the end of the financial year. The total profit and losses of subsidiary companies are included in the Group s income statements. The proportion of the profit or loss applicable to minority interests is deducted in activity at the profit or losses attributable to the shareholders of the Company. 45

48 All the subsidiary companies are consolidated on the acquisition method of accounting where the results of the subsidiary companies acquired or disposed of during the current financial year are included from the date on which control is transferred to the Group and are no longer consolidated from the date on which the control ceases. At the date of acquisition, the fair values of the subsidiary companies net assets are determined and these values are reflected in the consolidated financial statements. The profit or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group s share of its net assets. The total assets and liabilities of subsidiary companies are included in the Group s balance sheets and the interests of minority shareholders are stated separately. All significant inter-company transactions and balances are eliminated on consolidation. Where necessary, adjustments are made to the financial statements of subsidiary companies to ensure consistency of accounting policies with those of the Group. Goodwill on acquisition, being the difference between the cost of acquisition and the underlying net asset value of the subsidiary companies at the date of acquisition. Goodwill is carried at cost less impairment and is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. The impairment loss of goodwill is recognised immediately in the income statements and is not reversed in a subsequent period. Negative goodwill represents the excess of the Group s interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition over the cost of acquisition. Negative goodwill is recognised immediately in the income statements. d) Subsidiary Companies Subsidiary companies are the companies in which the Group has long term equity interest of more than 50% or has power to exercise control over the financial and operating policies as to obtain benefits from their activities. Investments in subsidiary companies, which are eliminated on consolidation, are stated in the Company s financial statements at cost, less impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 3(i) to the financial statements. 46

49 e) Associate Companies An associate company is defined as an investment where the Group holds for long-term purposes between 20% to 50% of the issued equity share capital of the investee s company, and exercises significant influence but not control, over the investee s company management. Investment in associate companies are accounted for in the consolidated financial statements using the equity method of accounting based on the management financial statements of the investee s company made up to the end of the financial year. f) Property, Plant and Equipment Property, plant and equipment are stated at cost or valuation less accumulated depreciation and any impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 3(i) to the financial statements. The revaluations are made at least once in every five years based on a valuation by an independent valuer. Any revaluation increase is credited to equity as revaluation surplus, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case the increase is recognised in the income statements to the extent of the decrease previously recognised. A revaluation decrease is first offset against unutilised previously recognised revaluation surplus in respect of the same asset and the balance thereafter recognised as an expense. Freehold land is not depreciated. Depreciation also is not provided for freehold office lots, certain buildings and those properties with an unexpired lease period of 50 years or more as the Group s practice is to maintain the properties in a great condition and non-compliance will have no material effect on the financial statements. The related maintenance expenditure is charged to the income statements. 47

50 Depreciation of other property, plant and equipment is computed on a straight line method at rates calculated to write off the cost of assets over their estimated useful lives. The principal annual rates used are as follows: % Motor vehicles Furniture and fittings 10 Office equipment 10 Data processing equipment 20 Electrical installation 10 Motor vehicles workshop 10 Renovations 10 Boats 15 Computer integrated systems 10 The residual values, useful live and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in the income statements and the unutilised portion of the revaluation surplus on that item is take directly to accumulated profit. g) Prepaid Land Lease Payments Leasehold land that normally has indefinitely economic life and title is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted for as prepaid land lease payments and is amortised over the lease term period. h) Investment Property Investment property is property which are held either to earn rental income or for capital appreciation or both. The Group measured its investment at cost less accumulated depreciation and any impairment losses. However, no depreciation is provided for freehold office lots as the directors are of the opinion that its market value is far greater than the carrying amount and that the non-compliance will have no material effect on the financial statements. Freehold land is not depreciated as it has an infinite live. 48

51 i) Impairment of Assets At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication of impairment. If any such indication exists, impairment is measured by comparing the carrying amounts of the assets with their recoverable amounts. Recoverable amounts are the higher of net selling price and value in use, which is measured by reference to discounted future cash flows. An impairment loss is recognised as an expense in the income statements immediately, unless the assets are carried at a revalued amount. Any impairment losses of revalued assets are treated as a revaluation decrease to the extent of any unutilised previously recognised revaluation surplus for the same assets. Reversal of impairment losses recognised in previous years for assets other than goodwill are recorded when the impairment losses recognised for the assets are no longer exist or have decreased. j) Land Held for Development and Development Properties Land held for development representing lands held for future development are stated at cost of acquisition including all related costs incurred subsequent to the acquisition on activities necessary to prepare the land for its intended use. Such assets are transferred to development properties when significant development work is to be undertaken and is expected to complete within the normal operating cycle. k) Investments Investments in quoted and unquoted shares held on a long-term basis are stated at cost unless, in the opinion of the directors, a permanent diminution in value of investment has arisen in which event provision is made for the diminution in value. 49

52 l) Inventories Inventories are valued at the lower of cost and net realisable value. Cost of trading merchandise and consumables comprise of the original cost of purchase plus the cost of bringing the inventories to location. Cost is determined on the First-In-First-Out basis. Cost of unsold completed properties comprises proportionate cost of land and development expenditure. Net realisable value represents the estimated selling price less all estimated costs to be incurred in marketing and selling. m) Deferred and Development Expenditure Cost incurred by subsidiary companies engaged in hotel and resort management are deferred to the extent that the directors opinion such expenditure is expected to generate future economic benefits. n) Taxation Income tax on the profit or loss comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the enacted tax rates relevant to the financial years. Deferred tax is provided for, using the liability method, on temporary differences at the balance sheets date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. o) Discontinued Operation A discontinued operation is a component of the Group s business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. 50

53 Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. A disposal group that is to be abandoned may also qualify. p) Cash Flow Statements The Group and the Company adopt the indirect method in the preparation of the cash flow statements. Cash and cash equivalents are defined as cash on hand, demand deposits and deposits with licensed bank net off bank overdrafts which are readily convertible to known amounts of cash and subject to insignificant risk of change in value. Cash and bank balances and short-term deposits which are held to maturity are carried at cost. q) Currency Translation The financial statements are stated in Ringgit Malaysia ( RM ). i) Foreign currency transactions Transactions in foreign currencies are translated into Ringgit Malaysia at rates ruling at transaction dates. At balance sheets date, monetary assets and liabilities resulting from foreign currency transactions are translated into Ringgit Malaysia at rate of exchange ruling at that date. Exchange differences are dealt with through the income statements. ii) Financial statements of foreign operations In the Group s financial statements, assets and liabilities of foreign subsidiary companies are translated into Ringgit Malaysia at rates of exchange ruling at the balance sheets date. Revenue and expenses are translated monthly at the average exchange rates. Exchange differences arising from the translation of the assets and liabilities and results of operation, and the restatement at year end rates of the opening net investments in foreign subsidiary companies are taken to foreign currency translation reserve as a component of shareholders equity. 51

54 The principal closing rates used in the translation of foreign currency amounts are as follows: RM RM 1 Singapore Dollar (S$) Australia Dollar (AUD) United States Dollar (USD) Hong Kong Dollar (HKD) Thai Baht (THB) r) Provision for Liabilities Provisions are recognised when the Group and the Company have a present legal or constructive obligation as a result of past events, it is probable that the Group and the Company will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are measured at the directors best estimate of the expenditure required to settle the obligation at the balance sheet date. s) Revenue Recognition i) Travel services and tours Revenue is recognised upon gross invoiced value on sales of group travel services and tours, hotel arrangements and air ticketing. ii) iii) iv) Hotel and resort Revenue from the provision of room, food and beverage sales from hotel operations are recognised based on the value invoiced to customer during the year. Income from design, artwork and other services Revenue from the design, artwork and other services are recognised upon performance of services and customer acceptance, net of sales tax, discounts and allowances. Management fee Management fee is recognised on an accrual basis. 52

55 v) Dividend income Dividend income is accounted for in the income statements when the rights to receive have been established. t) Employee Benefits i) Short term benefits Salaries, bonuses, allowances and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group. ii) Defined contribution plans The Group and the Company make contributions to the Employee Provident Fund ( EPF ) as required by law in Malaysia. Obligations for contributions to defined contribution plans are recognised as an expense in the income statements as incurred. u) Plant and Equipment Acquired Under Hire Purchase Arrangements Plant and equipment acquired under hire purchase arrangements are being capitalised and the corresponding obligations treated as liabilities in the financial statements. Finance costs are allocated to the income statements to give a constant periodic rate of interest on the remaining hire purchase payables. Plant and equipment acquired under hire purchase arrangements are depreciated over their expected useful lives on the same basis as owned assets. 53

56 v) Leased Assets Leased of assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to the Group are classified as finance leases. Finance leases are capitalised, recording an asset and liability equal to the present value of the minimum lease payments, including any guaranteed residual values. Leased of assets are depreciated on straight-line basis over the term of the lease estimated useful lives where it is likely that the Group will obtain ownership of the asset. Lease payment is allocated between the reduction of the lease liability and the lease interest expense for the year. Leased payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as an expense in the year in which they are incurred. w) Financial Instruments i) Financial instruments recognised on the balance sheets The particular recognition method adopt for financial instruments recognised on the balance sheets is disclosed in the individual policy statements associated with each item. ii) iii) iv) Financial instruments not recognised on the balance sheets The Group, in managing its currency exposures, enters into forward exchange currency contracts to hedge its committed purchases in foreign currencies. This instrument is not recognised in the financial statements on inception. Fair value estimation for disclosure purposes The fair value of publicly traded securities is based on quoted market prices at the balance sheets date. For non-traded financial instruments, the Group uses various methods and makes assumptions that are based on market conditions. Receivables Receivables are carried at anticipated realisable value. Debts considered to be uncollectible are written off while provision is made for debts considered to be doubtful of collection. v) Payables Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received. vi) Equity Instruments Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. 54

57 x) Interest-Bearing Borrowings Interest-bearing borrowings are recognised at the fair value of the consideration received less direct attributable transaction costs. Borrowing cost directly attributable to the construction of development properties are capitalised as part of the cost. After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective interest method. y) Significant Accounting Estimates and Judgements The significant accounting estimates and judgements at the balance sheets date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Useful lives and residual value of property, plant and equipment Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives after deducting its residual value. The management exercises their judgement in estimating the useful lives and the residual value of the depreciable assets. The Group assesses annually the residual value and the useful lives of the property, plant and equipment and if the expectation differs from the original estimate, such difference will impact the depreciation in the period in which such estimate has been charged. Provision for doubtful debts The Group makes provision for doubtful debts based on an assessment of the recoverability of receivables. Provisions are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. In assessing the extent of irrecoverable debts, the management has given due consideration to all pertinent information relating to the ability of the debtors to settle the debts. Where the expectation is different from the original estimate, such difference will impact the carrying amounts of the receivables. Deferred tax assets Deferred tax assets are recognised for all unutilised business losses, unabsorbed capital allowances and unutilised investment tax allowances to the extent that it is probable that future taxable profits will be available against which the business losses, capital allowances and investment tax allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying amounts of unabsorbed capital allowances, unutilised business losses and unutilised investment tax allowances are disclosed in Note 30 to the financial statements. 55

58 Impairment of goodwill The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the cash-generating units ( CGU ) to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimate of the expected future revenue from the CGU. The carrying amounts of goodwill as at 31 March 2010 were RM million (2009: RM million). Further details on goodwill are disclosed in Note 9 to the financial statements. Development properties and construction contracts The Group recognises development properties and construction contracts in the income statements using the stage of completion method. The stage of completion is determined by reference to the proportion of costs incurred for the work performed to date to the estimated total costs where the outcome of the projects can be reliably estimated. Significant judgement is required in determining the stage of completion, the extent of costs incurred and the estimated total revenue and costs, as well as recoverability of the development properties and construction contracts. In making the judgement, the Group evaluates based on past experience, external economic factors and if possible relying on the work of specialists. 4. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES The operation of the Group is subject to a variety of financial risks. The Group s overall financial risk management objective is to ensure that the Group creates value for its shareholders. The main areas of financial risk faced by the Group are as follows: i) Credit risk Credit risk is the risk of financial loss attributable to default on obligations by parties contracting with the Group. The Group s main exposure to credit risk is in respect of its trade and other receivables. The Group manages the exposures to credit risk by performing credit evaluation on the major customers and outstanding debts are being monitored and pursued for full recovery. ii) Liquidity and cash flow risk The Group actively manages its debt maturity profile, operating cash flows and availability of funding so as to ensure that all repayment and funding needs are met. 56

59 iii) iv) Interest rate risk Any increase in interest rates will increase the burden of the Group with respect to interest payments of its borrowings. There can be no assurance that the performance of the Group would remain favourable in the event of adverse changes in the interest rate. To mitigate the interest rate risk, the management of the Group constantly monitors the interest rate exposure. Foreign currency exchange rate risk Foreign currency exchange rate risk arises as the Group engages in transactions that are denominated in foreign currencies. Exchange rate risk arises due to translation of financial statements of foreign subsidiary companies in the course of consolidation of financial statements of the Group. These exchange differences are taken to foreign currency translation reserve instead of to the income statements. Material transactions foreign exchange exposures are hedged, mainly with derivative financial instruments such as forward exchange currency contracts. As at 31 March 2010, the Group had entered into the following forward exchange currency contracts to hedge its committed purchases in foreign currencies ( FC ): Contract Outstanding Contract Expiry Currency Amounts Amounts Date FC 000 FC 000 RM 000 JPY 5, April 2010 JPY 5,000 5, May 2010 JPY 5,000 5, May 2010 USD May 2010 v) Market price risk Market price risk is the risk that the fair value of a financial instrument will fluctuate as a result of changes in the market prices. The risk of fluctuation in market prices is minimised via adherence of qualifying criteria before making the investments and by continuous monitoring of the performance and medium term price risk of the investment. 57

60 5. PROPERTY, PLANT AND EQUIPMENT Valuation/Cost GROUP As at Forex As at /04/2009 Additions fluctuation Disposals Reclassification Transfer 31/03/2010 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 At Valuation Freehold office lots 7, ,940 Building 73, ,111 At Cost Building 105, ,780 Freehold land 10, (3,725) 6,742 Motor vehicles 4, (36) (641) 1-4,156 Furniture and fittings 12, (4) (237) ,007 Office equipment 13, (19) (222) 1,228-14,533 Data processing equipment 15, (26) (447) (193) - 14,823 Electrical installation 2, (1,254) - 1,551 Motor vehicles workshop Renovations 15, (122) ,741 Boat 1, (104) - 1,798 Computer integrated systems 6,584 2, (6) - 9, ,553 4,458 (85) (1,669) - (3,725) 268,532 58

61 5. PROPERTY, PLANT AND EQUIPMENT Cont d. Accumulated Depreciation Net Book GROUP As at Forex As at Value /04/2009 Additions fluctuation Disposals Reclassification 31/03/ /03/2010 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 At Valuation Freehold office lots ,940 Building ,111 - At Cost - Building 3, , ,397 Freehold land ,742 Motor vehicles 3, (38) (579) 1 3, Furniture and fittings 10, (17) (226) 7 11,086 1,921 Office equipment 8, (17) (134) 1 9,281 5,252 Data processing equipment 13, (25) (447) (10) 13,699 1,124 Electrical installation 1, (1) 1, Motor vehicles workshop Renovations 5,536 1,396 - (73) (1) 6,858 8,883 Boat 1, , Computer integrated systems 1, ,166 7,071 50,912 3,574 (97) (1,459) - 52, ,602 59

62 5. PROPERTY, PLANT AND EQUIPMENT Cont d. Valuation/Cost GROUP As at Acquisition of Forex As at /04/2008 Additions Revaluation subsidiary fluctuation Write off Disposal Transfer 31/03/2009 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 At Valuation Freehold office lots 1,880-6, ,940 Building , ,111 At Cost Building 105, ,583 Freehold land 10, ,467 Motor vehicles 5, (1,114) - 4,681 Furniture and fittings 11,794 1, (38) (194) - 12,822 Office equipment 12,201 1, (161) (8) (11) - 13,301 Data processing equipment 13, , (160) (3) (100) 15,239 Electrical installation 1, , (5) - 2,755 Motor vehicles workshop Renovations 9,758 5, ,055 Boat 1, (34) - - 1,902 Computer integrated systems 3,320 1,523-1, , ,214 10,070 79,171 4,776 (11) (240) (1,327) (100) 269,553 60

63 5. PROPERTY, PLANT AND EQUIPMENT Cont d. Accumulated Depreciation Net Book GROUP Acquisition of Forex Value Value /04/2008 Additions subsidiary fluctuation Write off Disposals 31/03/ /03/2009 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 At Valuation Freehold office lots ,940 Building ,111 At Cost Building 3, , ,202 Freehold land ,467 Motor vehicles 4, (1,114) 3, Furniture and fittings 10, (35) (170) 10,945 1,877 Office equipment 7, ,077 (74) (8) (5) 8,916 4,385 Data processing equipment 12, (160) (1) 13,730 1,509 Electrical installation 1, ,200 1,555 Motor vehicles workshop Renovations 4,310 1, ,536 9,519 Boat 1, (33) - 1, Computer integrated systems , ,833 4,751 44,915 3,871 3, (236) (1,290) 50, ,641 61

64 5. PROPERTY, PLANT AND EQUIPMENT Cont d. Cost Accumulated Depreciation Net Book COMPANY As at As at As at As at Value /04/2009 Additions 31/03/ /04/2009 Additions 31/03/ /03/2010 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Renovation Electrical fittings Data processing equipment Furniture and fittings Office equipment Motor vehicles , ,525 2, , Cost Accumulated Depreciation Net Book COMPANY As at As at As at As at Value /04/2008 Additions Disposals 31/03/ /04/2008 Additions Disposals 31/03/ /03/2009 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Renovation Electrical fittings Data processing equipment (160) (160) Furniture and fittings (30) (30) Office equipment (4) (4) Motor vehicles , (194) 2,519 2, (194) 2,

65 a) Had the revalued freehold office lots and buildings been stated in the financial statements at cost less accumulated depreciation, the net book value would have been as follows: GROUP RM 000 RM 000 Freehold office lots 1,880 1,880 Buildings 56,132 60,096 The details of independent professional valuation of the buildings are as follows: Year of Valuation Description of Property Basis of Valuation 2007 Freehold office lots Open Market Value 2007 Buildings Open Market Value b) Had the freehold office lots and buildings been stated in the financial statements at valuation less accumulated depreciation, the net book value would have been as follows: GROUP RM 000 RM 000 Freehold office lots 7,940 7,940 Buildings 126, ,160 c) Included in the Group s property, plant and equipments is a plant and equipment which has been acquired by hire purchase and finance lease arrangements amounting to RM0.194 million (2009 : RM0.316 million) and RM0.156 million (2009 : RM0.333 million) respectively. 63

66 6. PREPAID LAND LEASE PAYMENTS GROUP RM 000 RM 000 At cost Beginning/End of the year 31,903 31,903 Accumulated amortisation Beginning of the year Current year Under provision in previous year 5 - End of the year 1, Unamortised prepaid land lease payments 30,821 31, LAND HELD FOR DEVELOPMENT AND DEVELOPMENT PROPERTIES GROUP RM'000 RM'000 Leasehold land 16,496 19,338 Freehold land 2,300 - Development cost 11,274 15,608 30,070 34,946 Less: Non-current portion, classified as land held for development (30,070) (27,113) Current portion, classified as development properties - 7,833 Included in the above are leasehold land held for development and development properties with carrying amount of RM4.546 million (2009: RM4.527 million) pledged as security for bank borrowings granted to the Group. 64

67 8. INVESTMENT PROPERTIES GROUP RM'000 RM'000 Freehold land and office lots Cost Beginning of the year 15,799 13,830 Additions 20 1,969 End of the year 15,819 15,799 Accumulated depreciation Beginning of the year 24 - Additions End of the year Net carrying amount 15,755 15,775 Included in the above is investment property with a carrying amount of RM million (2009: RM million) which is secured for the banking facilities as stated in Note 25 to the financial statements. As at 31 March 2010, the fair value of the investment properties were estimated at RM million (2009 : RM million) based on the directors estimation. The rental income earned by the Group from its investment properties amounted to RM0.696 million (2009: RM0.693 million). Direct operating expenses pertaining to the investment properties of the Group that generated rental income during the year amounted to RM0.574 million (2009: RM0.688 million). 65

68 9. GOODWILL ARISING ON CONSOLIDATION GROUP RM'000 RM'000 Beginning of the year 41,959 6,796 Acquisition of subsidiary companies - 35,163 End of the year 41,959 41,959 Goodwill is allocated to the Group s cash-generating units ( CGU ) identified according to business segment. The recoverable amount of a CGU is determined based on value in use and was determined by discounting the future cash flows generated from the continuing use of the unit and was based on the following key assumptions: i) The cash flow projections was approved by the management covering a seven year period and incorporating a terminal value after the seventh year. ii) iii) vi) The subsidiary will continue its operation indefinitely. The gross profit margin was based on past performance and its expectations of market development. The growth rate used is based on expected growth rates for sales. v) The discount rate used is pretax and reflect specific risks relating to the relevant segments. There is no impairment loss for the financial year recognised because the value in use exceeded the carrying amount (including the goodwill allocated) of each CGU at balance sheets date. 66

69 10. INVESTMENT IN ASSOCIATES GROUP RM'000 RM'000 Unquoted shares, at cost Share of attributable post acquisition, net loss for the period (210) (103) Represented by: Share of net tangible assets The details of the associated companies are as follows: Associate Companies Group Effective Interest % % Country of Incorporation Principal Activities Held by RPB Holdings (Overseas) Limited * Vacation Asia (Thailand) Co. Limited Thailand Travel services and tours * ^Reliance Holidays (Thailand) Ltd Thailand Travel services and tours * Companies not audited by AljeffriDean ^ Company s financial year end is 31 December 67

70 The Group s share of revenue and loss of associates is as follows: RM 000 RM 000 Revenue 9,870 10,472 Net loss for the year (107) (103) The Group s share of assets and liabilities of associates is as follows: RM 000 RM 000 Non-current assets Current assets Current liabilities (2,031) (1,669) Non-current liabilities - (234) Currency translation differences Net tangible assets SUBSIDIARY COMPANIES COMPANY RM'000 RM'000 Unquoted shares, at cost 59,689 59,689 68

71 The details of subsidiary companies are as follows: Equity Interest Name of Companies % % Principal Activities Travel Division a) Incorporated in Malaysia Reliance Shipping & Travel Agencies Sdn. Berhad Reliance Shipping & Travel Agencies (Penang) Sdn. Bhd. Reliance Shipping & Travel Agencies (Johore) Sdn. Bhd. Reliance Shipping & Travel Agencies (Malacca) Sdn. Bhd. Reliance Shipping & Travel Agencies (Damansara) Sdn. Bhd Reliance Shipping & Travel Agencies (Kuching) Sdn. Bhd. Reliance Shipping & Travel Agencies (BKI) Sdn. Bhd Travel services, outbound tours and other related services Travel services, outbound tours and other related services Travel services, outbound tours and other related services Travel services, outbound tours and other related services Travel services, outbound tours and other related services Travel services, outbound tours and other related services Travel services, outbound tours and other related services PYO Travel (MY) Sdn. Bhd Travel services, outbound tours and other related services Ideal Malaysian Support Sdn. Bhd Travel franchise business Reliance Sightseeing Sdn. Bhd Inbound travel services and tours, coach hire and other related services RPB Travel Holdings Sdn. Bhd Investment holding Vacation Asia International Sdn. Bhd (formerly known as Hotemart Travel Services Sdn. Bhd.) Sale and marketing of hotel accommodations and representation of hotel chains Reliance E-Com Sdn. Bhd Investment company in relation to electronic commerce 69

72 Equity Interest Name of Companies % % Principal Activities Traveleasi Sdn. Bhd Electronic commerce in relation to reservation services for airline tickets and tour packages via the internet and the development of related systems and products Reliance Travel.Com Services Sdn. Bhd Airline representative, travel services, tours and other related services Xplonet Capital Sdn. Bhd Investment company in relation to electronic commerce Relianceworld International Sdn. Bhd Dormant M.I.C.E World Sdn. Bhd Dormant Maricuti.Com Sdn. Bhd Dormant Cuticuti.Com Sdn. Bhd Dormant Reliance Malaysiaworld Sdn. Bhd Dormant Ticketworld Sdn. Bhd Dormant Reliance Tourworld Sdn. Bhd Dormant Reliance Cruiseworld Sdn. Bhd Dormant Reliance Hotelworld Sdn. Bhd Dormant Reliance Shipping & Travel Agencies (Perak) Sdn. Bhd. Reliance Shipping & Travel Agencies (Kuantan) Sdn. Bhd Dormant Dormant 70

73 Equity Interest Name of Companies % % Principal Activities Reliance Shipping & Travel Agencies (Kedah) Sdn. Bhd Dormant Reliance Shipping & Travel Agencies (N.S) Sdn. Bhd. Reliance Shipping & Travel Agencies (Miri) Sdn. Bhd Dormant Dormant Heritage Destination Holdings Sdn. Bhd Dormant Mirage Travel Holdings Sdn. Bhd Dormant *Streamline Express Sdn. Bhd Dormant Relzone Online Sdn. Bhd Dormant Hotemart On-Line Sdn. Bhd Dormant b) Incorporated in Labuan *Reliance Sightseeing (Labuan) Limited Travel services and tours, coach hire and other related services *Hotemart International (Labuan) Limited c) Incorporated in Singapore Travel services and tours, coach hire and other related services *Reliance Travel Agencies (S) Pte. Ltd Travel services, outbound tours and other related services *Vacation Singapore DMC Pte. Ltd Travel services, rental of vehicles and other related services 71

74 Equity Interest Name of Companies % % Principal Activities Hotel Division a) Incorporated in Malaysia Fortune Valley Sdn. Bhd Development and management of hotels RPB Hotel & Resort Management Sdn. Bhd Hotel and resort management Gateway Inn Management Sdn. Bhd Hotel and resort management Avillion Hotel Group Sdn. Bhd Hotel and resort management Avillion Hotels International Sdn. Bhd Hotel and resort management Avi Spa Sdn. Bhd Operate and manage spa and health centre Avillion Vista Hotel Sdn. Bhd Provision of management services for hotel suites and service apartments Avillion Suite Hotel (PD) Sdn. Bhd Provision of management services for hotel suites and service apartments Layang-Layang Island Resort Sdn. Bhd. # Diving and resort operation RPB Management Services (Overseas) Sdn. Bhd Hotel and resort management Avillion Hotel (KL) Sdn. Bhd Dormant Avillion Hotel (Malacca) Sdn. Bhd Dormant 72

75 Equity Interest Name of Companies % % Principal Activities b) Incorporated in British Virgin Islands RPB Holdings (Overseas) Limited Investment holding RPB Development (BVI) Limited Investment holding Xplonet Investments Limited Investment company in relation to electronic commerce c) Incorporated in Australia *Australian Vacations Pty Ltd Travel services and tours *Reliance Travel Pty Ltd Travel services and tours *Avillion Hotels International (Sydney) Pty Ltd Dormant *Reliance - OSW (Nominees) Pty Ltd Dormant *Reliance - OSW Investment Trust Dormant *RPB Hotels International Services Pty Ltd *Avillion Hotels International (Aust) Pty Ltd Dormant Dormant d) Incorporated in Hong Kong *Reliance Travel (Hong Kong) Limited Travel services and tours *Vacation Asia (HK) Limited Travel services and tours *Vacationland Tours (HK) Limited Travel services and tours 73

76 Equity Interest Name of Companies % % Principal Activities Property Division Incorporated in Malaysia RPB Development Sdn. Bhd Hotel and resort development Nesline Sdn. Bhd Investment holding Unique Gardens Sdn. Bhd Investment holding Admiral Cove Development Sdn. Bhd Property and resort development Admiral Marina Berhad Operation of a marina club including berthing facilities ACD Project Management Services Sdn. Bhd Provision of project management services Genius Field Sdn. Bhd Investment holding Admiral Hill Hotel Sdn. Bhd Property and resort development Festive Place Sdn. Bhd Development and management of tourism related projects Vast Access Sdn. Bhd Investment and property holding Support Companies Incorporated in Malaysia *RPB Capital Holdings Sdn. Bhd Investment holding *READ Advertising Sdn. Bhd Advertising and media services *OS Resources Sdn. Bhd Office services and administration *ANV Production Services Sdn. Bhd Dormant * Companies not audited by AljeffriDean # Deemed to be a subsidiary by virtue of Section 5(1)(a)(i) of the Companies Act,

77 12. INVESTMENTS GROUP COMPANY RM'000 RM'000 RM'000 RM'000 Unquoted shares, at cost Quoted in Malaysia: Shares 2,366 2, Quoted in Australia: Shares 8,364 8, ,859 10, Less: Provision for diminution in value of investment (4,754) (4,146) - - 6,105 6, Market value of quoted shares 6,772 5, DEFERRED AND DEVELOPMENT EXPENDITURE GROUP RM'000 RM 000 Beginning of the year 1, Acquisition of subsidiary company - 11 Addition Currency translation 2-1,247 1,428 Less: Amount written off (304) (315) End of the year 943 1,113 75

78 14. DEFERRED TAXATION Analysis for financial reporting purposes GROUP COMPANY RM'000 RM'000 RM'000 RM'000 Deferred tax assets 564 1, Deferred tax liabilities (241) (234) (16) (20) Net position 323 1,498 (16) (20) Deferred tax assets GROUP COMPANY RM'000 RM'000 RM'000 RM'000 Beginning of the year 1,732 3, Acquisition of subsidiary company Recognised in income statements (Note 30) (1,168) (1,731) - - End of the year 564 1, Deferred tax liabilities GROUP COMPANY RM'000 RM'000 RM'000 RM'000 Beginning of the year (234) (161) (20) (68) Acquisition of subsidiary company - (32) - - Recognised in income statements (Note 30) (9) (39) 4 48 Exchange differences 2 (2) - - End of the year (241) (234) (16) (20) 76

79 The components and movements of deferred tax assets and liabilities during the year are as follows: Deferred Tax Assets Unutilised Accelerated - GROUP investment capital tax allowances allowances Total RM 000 RM 000 RM 000 Beginning of the year 6,403 (4,671) 1,732 Recognised in income statements (Note 30) (1,258) 90 (1,168) End of the year 5,145 (4,581) 564 Deferred Tax Liabilities Accelerated - GROUP capital allowances RM 000 Total RM 000 Beginning of the year (234) (234) Recognised in income statements (Note 30) (9) (9) Exchange differences 2 2 End of the year (241) (241) Deferred Tax Liabilities Accelerated - COMPANY capital allowances RM 000 Total RM 000 Beginning of the year (20) (20) Recognised in income statements (Note 30) 4 4 End of the year (16) (16) 77

80 15. INVENTORIES GROUP RM 000 RM 000 At cost: Promotional items Trading merchandise Unsold completed properties 21,762 21,310 22,957 22,752 Included in unsold completed properties are 108 units (2009: 35 units) of properties which have been pledged to secure against the banking facilities. 16. TRADE AND OTHER RECEIVABLES GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Trade receivables 181, , Provision for doubtful debts (517) (495) , , Other receivables 41,654 36,658 5,263 5,673 Provision for doubtful debts (583) (583) ,071 36,075 5,263 5,673 Deposits , ,381 5,336 5,744 The normal trade credit term of trade receivables range from 30 to 90 days (2009 : 30 to 90 days). 78

81 17. AMOUNT DUE FROM SUBSIDIARIES The amount due from subsidiaries is unsecured and has no fixed terms of repayment. Interest rate is at the ranged between 1.50% to 5.55% (2009: 1.50% to 6.75%) per annum is charged on amount owing of RM million (2009: RM million) by certain subsidiaries. All other amounts are interest free. 18. TRADE AND OTHER PAYABLES GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Trade payables 25,398 26, Other payables 6,100 13,035 1,703 1,660 Tour deposit received 3,002 5, ,500 44,974 1,703 1,660 The normal trade credit term granted to the Group range from 30 to 90 days (2009: 30 to 90 days). 79

82 19. SHORT TERM BORROWINGS GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Bank Overdraft - Secured 23,591 19,506 15,916 15,951 - Unsecured 23,972 30,380 5,818 4,933 47,563 49,886 21,734 20,884 Revolving Credit - Secured 16,159 16,159 5,000 5,000 - Unsecured 9,500 9, ,659 25,659 5,000 5,000 Term Loan (secured) * - Current portion (Note 25) 18, ,250-91,978 75,945 27,984 25,884 Secured by : GROUP COMPANY RM 000 RM 000 RM 000 RM 000 i) A third party first legal charge over the certain property, plant and equipment of subsidiary companies 44,189 48, ii) Corporate guarantee by the Company 88,371 69, iii) Joint and several guarantee by the subsidiary companies 10,000 11,000 10,000 11,000 *Details of securities of term loans are disclosed in Note 25 to the financial statements. The effective interest rate during the financial year ranged between 4.72% to 7.55% (2009: 5.06% to 8.50%) per annum. 80

83 20. HIRE PURCHASE AND FINANCE LEASE PAYABLES GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Minimum payments - not later than 1 year later than 1 year and not later than 5 years Future finance charges on hire purchase and finance lease payables (6) (32) - - Present value of hire purchase and finance lease payables Present value of hire purchase and finance lease payables - not later than 1 year later than 1 year and not later than 5 years SHARE CAPITAL GROUP AND COMPANY RM 000 RM 000 Ordinary shares of RM0.20 each Authorised 500, ,000 Issued and fully paid-up 171, ,710 81

84 22. RESERVES GROUP COMPANY Non-distributable RM 000 RM 000 RM 000 RM 000 Share Premium Reserve 19,911 19,911 19,911 19,911 Share Buy-Back Reserve 8,930 8,930 8,930 8,930 Foreign Currency Translation Reserve (3,150) (125) - - Revaluation Reserve 79,171 79, Distributable 104, ,887 28,841 28,841 Accumulated profit 63,674 64, , ,969 29,309 29,235 a) The Share Buy-Back reserve arose pursuant to the Company s purchase of its own shares. b) The revaluation reserve relates to the revaluation on the Group s freehold office lots and buildings. 23. MINORITY INTEREST The minority interest reflects a net debit balance due to losses borne by a minority corporate shareholder. 24. ADVANCE FROM JOINT VENTURE SHAREHOLDER The advance is in the nature of a long term advance of that minority shareholder s proportionate contribution pertaining to a subsidiary s hotel development project in Australia and it is unsecured and bears no interest. 82

85 25. TERM LOANS GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Total term loans 76,714 53,700 45,000 45,000 Less: Payable within 12 months (short term borrowings - Note 19) (18,756) (400) (1,250) - Payable after 12 months 57,958 53,300 43,750 45,000 The Company has been granted with term loans as follows: i) Fixed rate term loan of RM40 million from financial institutions for a period of 5 years on an unsecured basis. The purpose of the term loan was for the refinancing of the CLO and for general working capital of RPB Group. The repayment is in one lump sum after 5 years of the first drawn down. The interest rate charged is fixed at 5.70% per annum. The term loan is secured by joint and several guarantee by subsidiary companies. ii) Term loan of RM5 million from financial institutions for a period of 5 years. The purpose of the term loan as an advances to the existing subsidiary company to part finance the purchase of the issued and fully paid up ordinary shares of the new subsidiary companies. The repayment is by 8 equal semiannual installments of RM0.625 million each. The first installment will be commenced 18 months from the date of first drawdown. The interest rate charged is at 1.15% per annum above the Bank s Cost of Funds. The term loan is secured by joint and several guarantee by subsidiary companies and third party first legal charge over a vacant land. 83

86 The subsidiary companies have been granted with term loans as follows: i) The term loan of RM10 million is obtained from a financial institution for redemption of existing term loan outstanding for the discharge of the proposed collateral and working capital. The term loan is repayable by 120 months commencing from the date of the first drawdown. The effective interest rate is ranging from 5.55% to 5.80% per annum. The term loan is secured by first party first legal charge over a double storey detached office building and corporate guarantee by the Company. ii) The term loan of RM18 million from a financial institution for a period of 18 months. The purpose of the term loan is to part finance the interior works of Marina Vista Suite Hotel at Port Dickson. The effective interest rate is ranging from 5.50% to 5.80% per annum. The term loan is secured by 73 unsold units of Marina View Waterfront Suite Hotel. iii) The term loan of RM20 million from a financial institution for a period of 7 years. The purpose of the term loan is to finance construction/upgrading works at Avillion Port Dickson Resort. The repayment is by 26 equal quarterly installments of RM0.769 million each commencing in the 7th month from the date of first drawdown. The effective interest rate is ranging from 6.80% to 7.05% per annum. The term loan is secured by third party, first legal charge over a double storey clubhouse and Marina basin and corporate guarantee by the Company. 84

87 26. COLLATERISED LOAN OBLIGATION (CLO) GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Payable within 12 months 45,000-45,000 - Payable after 12 months 40,000 85,000 40,000 85,000 85,000 85,000 85,000 85,000 The Company has been granted a Collaterised Loan Obligation ( CLO ) from financial institutions for Unsecured Fixed Rate Term Loan facility of up to RM85 million. The purposes of the loan are to raise funds to primarily refinance the bank borrowings as well as for working capital requirements. The repayment is in one lump sum after 5 years of the first drawn down. The effective interest rate is ranging from 7.13% to 7.60% per annum. 85

88 27. ANALYSIS OF GROUP S REVENUE, COST OF SALES AND RESULT Revenue of the Company represents gross dividend income, management fees and investment income. Revenue of the Group represents the gross invoiced value of tour operations, less discounts and returns and agency commission; income from other travel related services; proportionate sale value of development properties completed during the year; progress billings from design and artwork services rendered; fees from business computing solutions rendered and income from the operation of a marina club. The revenue and cost of sales incurred in relation to revenue are as follows: i) Revenue and cost of sales Type of activity Revenue Cost of sales Composition of cost of sales RM 000 RM 000 GROUP 2010 Continuing operations: Tours operations and other travel related services 363, ,520 Purchases of tours, tickets, hire of coach, fuel, maintenance and upkeep of vehicles, and other related expenses Properties 51,070 45,451 Development cost of properties and discount given to club members Hotel and resort management 42,655 6,501 Cost of material purchased and related overheads Total from continuing operations 457, ,472 86

89 Type of activity Revenue Cost of sales Composition of cost of sales RM 000 RM 000 GROUP 2009 Continuing operations: Tours operations and other travel related services 493, ,616 Purchases of tours, tickets, hire of coach, fuel, maintenance and upkeep of vehicles, and other related expenses Properties 16,586 8,881 Development cost of properties and discount given to club members Hotel and resort management 43,476 7,134 Cost of material purchased and related overheads Total from continuing operations 553, ,631 87

90 ii) Summary of Group s results Discontinued Continuing operation 2010 operations (Note 40) Total RM 000 RM 000 RM 000 Revenue 457, ,279 Segment result 3,647 (228) 3,419 Provision for diminution in value of investment (608) - (608) Share of results of associates (107) - (107) Profit/(Loss) before taxation 2,932 (228) 2,704 Taxation (2,236) - (2,236) Net profit/(loss) for the year 696 (228) Revenue 553, ,618 Segment result 19,073 (132) 18,941 Provision for dimunition in value of investment (4,146) - (4,146) Shares of results of associates (103) - (103) Profit/(Loss) before taxation 14,824 (132) 14,692 Taxation (4,664) - (4,664) Net profit/(loss) for the year 10,160 (132) 10,028 88

91 28. PROFIT FROM OPERATIONS Profit from operations is arrived at: GROUP COMPANY RM 000 RM 000 RM 000 RM 000 After charging: Directors remuneration: - short term benefits 3,595 3, EPF contributions Audit fees - current year under provision in previous year Depreciation of property, plant and equipment 3,574 3, Depreciation of investment properties Rental of office premises 3,766 3, Provision for doubtful debts Deferred expenditure written off Loss on disposal of property, plant and equipment Loss on disposal of investment properties Property, plant and equipment written off Operating lease rental Realised loss on foreign exchange Amortisation of prepaid land lease payments Staff costs - Short term benefits 18,635 20,824 1,200 1,333 - EPF contributions 1,796 1, And crediting: Gross dividend from subsidiary companies - - 7,241 15,100 Realised gain on foreign exchange Interest income Management fees from subsidiary companies - - 1,980 2,760 Rental income Gain on disposal of property, plant and equipment Negative goodwill written off

92 29. FINANCE COSTS GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Term loan interest 3,192 2,982 2,480 2,294 Overdraft interest 2,797 2,062 1, Revolving credit interest 1,574 1, Collaterised Loan Obligation ("CLO") interest 6,229 6,229 6,229 6,229 Amortisation - CLO upfront fee Hire purchase interest ,215 13,615 10,647 10, TAXATION GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Tax expense for the year : Malaysian income tax 705 1, Foreign tax , Under provision in previous years : Malaysian income tax Deferred tax relating to the origination and reversal of temporary differences (Note 14) 1,177 1,770 (4) (48) Total tax expense 2,236 4,

93 Malaysian income tax is calculated at the Malaysian statutory rate of 25% (2009: 25%) on the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. A reconciliation of income tax expense applicable to profit/(loss) before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follow: GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Profit from continuing operation 2,932 14, ,425 Loss from discontinued operation (228) (132) - - Taxation at Malaysian statutory rate - at 25% (2009: 25%) 676 3, ,106 Tax effect on different tax rate in another country (131) (427) - - Tax effect for subsidiary companies with lower tax rate - (55) - - Tax effect on expenses that are not deductible for tax purposes 3,141 2,204 1,775 1,204 Income not subject to tax (863) (86) (1,810) (2,808) Utilisation of previously unabsorbed capital allowances and unutilised business losses and investment tax allowances (1,891) (3,076) - - Deferred tax assets not recognised during the year 1,146 1, Under provision in prior year Tax expenses for the year 2,236 4,

94 Deferred tax assets have not been recognised in respect of the following items: GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Unabsorbed capital allowances Unutilised business losses 174, , , , Deferred tax assets have not been recognised in respect of these items due to uncertainty of its recoverability. As at 31 March 2010, the Group has unutilised investment tax allowances amounting to RM million (2009: RM million). The above unabsorbed capital allowances, unutilised business losses and investment tax allowances are available indefinitely for offset against future taxable profits, subject to the approval of the Inland Revenue Board. 31. (LOSSES)/EARNINGS PER SHARE The basic (losses)/earnings per share has been calculated based on the loss after tax and minority interest of RM0.408 million (2009: profit after tax and minority interest of RM9.398 million) divided by the weighted average number of million (2009: million) ordinary shares of RM0.20 each. The (losses)/earnings per share for the continuing and discontinued operation have been calculated based on the loss from continuing operations attributable to shareholders of RM0.292 million (2009: profit of RM9.465 million) and the loss from discontinued operation attributable to shareholders of RM0.116 million (2009: loss of RM0.067 million) respectively. 92

95 32. DIVIDENDS PER SHARE GROUP AND COMPANY Gross dividend Tax exempt Gross dividend Tax exempt per share dividend per share dividend SEN RM'000 SEN RM'000 Final and interim dividend ,727 The directors do not recommend any final dividend in respect of the financial year ended 31 March Purchase of Property, Plant and Equipment During the financial year, the Group and the Company made the following payment to purchase property, plant and equipment: GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Purchase of property, plant and equipment 4,458 10, Financed by finance lease arrangements - (61) - - Payment to purchase property, plant and equipment 4,458 10,

96 34. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise of the following: GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Fixed and call deposits 22,037 17,119 11,155 11,155 Cash and bank balances 11,028 20, ,876 Bank overdrafts (47,563) (49,886) (21,734) (20,884) (14,498) (12,004) (10,468) (4,853) Included in the amount is an Authorised Depository with the financial institution pledged as security amounting to RM million (2009: RM million). 35. CONTINGENT LIABILITIES As at 31 March 2010, the Group and the Company have contingent liabilities as follows: GROUP COMPANY RM 000 RM 000 RM 000 RM 000 a) Corporate guarantees given by the Company to banks and suppliers for credit facilities granted to subsidiary companies ,999 83,602 b) Corporate guarantees given by subsidiary companies to bank ,000 61,000 c) Secured bank guarantees issued to third parties in the ordinary course of business 12,891 16, ,891 16, , ,682 94

97 36. SIGNIFICANT RELATED PARTY TRANSACTIONS GROUP RM 000 RM 000 a) Services rendered to the companies controlled by certain directors World Net Services Sdn Bhd Reliance Computer Centre Sdn Bhd Relvest Management Services Sdn Bhd b) Services rendered by the companies controlled by certain directors Relvest Management Services Sdn Bhd World Net Services Sdn Bhd c) Purchases from the company controlled by certain directors Japan Insight Travel Inc. (Incorporated in Japan) 2,427 1,687 Reliance Computer Centre Sdn Bhd 742 1,245 Reliance College Sdn Bhd Travel Save and Tours Sdn Bhd - 50,847 Vacation Europa Ltd (Incorporated in UK) 1,835 1,458 Reliance Travel (Thailand) Ltd (Incorporated in Thailand) d) Sales to the company controlled by certain directors Reliance Tours (UK) Limited (Incorporated in UK) Reliance Computer Centre Sdn Bhd World Net Services Sdn Bhd 5 29 Reliance College Sdn Bhd 32 5 The transactions have been entered into the normal course of business at terms mutually agreed between the parties. 95

98 e) Compensation of Key Management Personnel GROUP COMPANY RM 000 RM 000 RM 000 RM 000 Short term benefits 2,639 2, EPF contributions ,932 2, Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group and the Company either directly or indirectly. 96

99 37. SEGMENT INFORMATION 31 March 2010 Travel Hotel Development Group Management Malaysia Overseas Property Malaysia Overseas and Others Consolidated RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Revenue 219, ,799 51,070 42, ,279 Result Segment result (845) 1,406 2,724 7,493 (21) (7,110) 3,647 Provision for dimunition in value of investment (608) Share of results of associates (107) Profit from continuing operations before taxation 2,932 Taxation (2,236) Net profit from continuing operations 696 Net loss from discontinued operation (Note 40) (228) Net profit for the year 468 Minority interest (876) Loss attributable to equity holder of the parent (408) Assets employed - Continuing operations 157,484 35, , ,940 4,557 59, ,348 - Discontinued operation ,484 35, , ,940 4,860 59, ,651 97

100 37. SEGMENT INFORMATION...Cont d 31 March 2009 Travel Hotel Development Group Management Malaysia Overseas Property Malaysia Overseas and Others Consolidated RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Revenue 319, ,501 16,586 43, ,618 Result Segment result 12,580 2,738 1,070 8,894 (62) (6,147) 19,073 Provision for dimunition in value of investment (4,146) Share of results of associates (103) Profit from continuing operations before taxation 14,824 Taxation (4,664) Net profit from continuing operations 10,160 Net loss from discontinued operation (Note 40) (132) Net profit for the year 10,028 Minority interest (630) Profit attributable to equity holder of the parent 9,398 Assets employed - Continuing operations 168,468 39, , ,367 4,390 66, ,176 - Discontinued operation ,468 39, , ,367 4,746 66, ,532 98

101 38. FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES The carrying amounts of cash and cash equivalents, receivables, payables and short term borrowings including hire purchase payables approximate their fair values due to the relatively short term nature of these financial instruments. In respect of amount due by subsidiaries, it is not practical to determine the fair values due to uncertainties of timing and repayment term without incurring excessive costs. However, the directors do not anticipate the carrying amounts recorded at the balance sheet date to be significantly different from the value that would eventually be received or settled. The fair values of investment properties and other investments in quoted shares are disclosed in Note 8 and 12 to the financial statements. The fair values of all other financial assets and liabilities of the Group and of the Company as at 31 March 2010 are not materially different from their carrying amounts. 39. SUBSEQUENT EVENTS AFTER BALANCE SHEET DATE On 10 June 2010, Nesline Sdn. Bhd., a wholly owned subsidiary of the Company has entered into Sale and Purchase Agreement with Andaman Land Sdn. Bhd., to sell 2 pieces of land together with double storey office building which is erected thereon for a total consideration of RM26 Million. 99

102 41. DISCONTINUED OPERATION The effects on the financial results of the Group for the financial year ended 31 March 2010 are as follows: RM 000 RM 000 Other operating income - - Administrative expenses (228) (132) Loss from operations (228) (132) Finance cost - - Loss from discontinued operation before taxation (228) (132) Taxation - - Net loss from discontinued operation (228) (132) The cash flow attributable to the discontinued operation is as follows: RM'000 RM'000 Net cash used in operating activities (1) (1) Net cash used in discontinued operation (1) (1) 100

103 List of Properties as at 31 March 2010 No Location Description/ Existing Use Tenure Age of Building Net Built-up Area (sq.ft) Land Area (sq.ft) Net Book Value (RM 000) Revaluation Date/ Date of Acquisition 1 H.S.(D) 13641, and 19662, 5th Mile, Mukim Si Rusa, Daerah Port Dickson, Negeri Sembilan. Admiral Cove Premier Integrated Marina Resort Leasehold (99 years expiry ) 12 years - 1,076,064 70, C.T. 5972, Lot 1273, 3rd Mile Mukim Si Rusa, Daerah Port Dickson, Negeri Sembilan. 3 H.S. (D) 12303, and 18191, 3rd Mile, Mukim Si Rusa, Daerah Port Dickson, Negeri Sembilan. Avillion Resort Port Dickson consists of villas, water chalets, meeting rooms, spa, F&B outlets and other facilities Freehold 13 years - 15,507 Leasehold (99 years expiry ) 12 years - 480, ,774 (Note 1) (Date of Revaluation) 4 Geran 10923, Lot 254 and 256, Seksyen 89A and H.S.(D) , PT 20, Seksyen 89A, Bandar Kuala Lumpur, Daerah Kuala Lumpur. Two pieces of commercial land along Jalan Tun Razak with a two storey building for development Freehold 12 years - 21,614 13, H.S.(D) PT 3413, Mukim Si Rusa, Daerah Port Dickson, Negeri Sembilan. Vacant land for development Leasehold (99 years expiry ) - - 1,077,272 9, C.T.2977, Lot 312, 3rd Mile, Mukim Si Rusa, Daerah Port Dickson, Negeri Sembilan. Avillion Resort Port Dickson Car Parks Freehold ,431 5, H.S.(D) PT 215, 5th Mile, Mukim Pekan, Teluk Kemang, Daerah Port Dickson, Negeri Sembilan. Vacant land for development Leasehold (99 years expiry ) ,349 4, H.S.(D) PT 3412, Mukim Si Rusa, Daerah Port Dickson, Negeri Sembilan. Vacant land for development Leasehold (99 years expiry 2096) ,442 4, C.T 4723 & C.T 4718, Lot 1185 & 1179, 9th Mile, Port Dickson, Negeri Sembilan 10 Lots Nos. T079 to T083, 3rd Floor, Sungei Wang Plaza, Jalan Sultan Ismail, Kuala Lumpur. Sea front land for development Travel Retail shop in commercial complex Freehold ,926 2, Freehold 34 years 3,175-7, (Date of Revaluation) Date of Purchase Note 1 : C.T.5972 Lot 1273, 3rd Mile, Mukim Si Rusa, Daerah Port Dickson, Negeri Sembilan H.S.(D) 12303, 3rd Mile, Mukim Si Rusa, Daerah Port Dickson, Negeri Sembilan H.S.(D) 15353, 3rd Mile, Mukim Si Rusa, Daerah Port Dickson, Negeri Sembilan H.S.(D) 18191, 3rd Mile, Mukim Si Rusa, Daerah Port Dickson, Negeri Sembilan Reliance Pacific Berhad Company No A 103 Annual Report 2010

104 Analysis of Shareholdings as at 5 August 2010 Authorised Share Capital : RM500,000,000 Issued & Paid-up Capital : RM171,710,350 Class of Shares : Ordinary Shares of RM0.20 each Voting Rights On show of hands : 1 vote On a poll : 1 vote for each share held DISTRIBUTION OF SHAREHOLDINGS ANALYSIS OF SHAREHOLDINGS Range of Shareholdings Number of Shareholders Number of Shares Percentage of Issued Capital Less than , to 1, , ,001 to 10, ,472, ,001 to 100,000 1,047 29,193, ,001 to less than 5% of issued shares ,814, % and above of issued shares 4 328,936, , ,551, REGISTER OF SUBSTANTIAL SHAREHOLDERS (Excluding Bare Trustees) Number of Shares Number of Shares Direct Percentage of Issued Capital Indirect Percentage of Issued Capital 1. Reliance Holdings Sdn Bhd 94,525, ,909,020 (Note (a)) Dato Gan Eng Kwong 1,394, ,663,195 (Note (b)) Datin Irene Tan ,057,345 (Note (c)) Thong Swe Cheong 16,581, ,404,575 (Note (d)) Dato Mukhriz Mahathir 6,250, ,917,485 (Note (e)) 4.53 DIRECTORS SHAREHOLDINGS Number of Shares Number of Shares Direct Percentage of Issued Capital Indirect Percentage of Issued Capital 1. Dato Gan Eng Kwong 1,394, ,663,195 (Note (b)) Datin Irene Tan ,057,345 (Note (c)) Dato Abdul Rahim Bin Osman 252, Lim Guan Chin 903,750 (Note (f)) 0.11 Notes:- (a) (b) (c) (d) (e) (f) Reliance Holdings Sdn Bhd is deemed to have an indirect interest held through nominees. Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 held through Reliance Holdings Sdn Bhd and nominees. Deemed interested by virtue of Section 122(A) of the Companies Act, 1965 being the spouse of Dato Gan Eng Kwong and by virtue of Section 6A(4) of the Companies Act, 1965 held through Reliance Holdings Sdn Bhd and nominees. Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 held through nominees and Section 122(A) of the Companies Act 1965 held through spouse. Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 held through Prestige Avenue (M) Sdn Bhd, nominees and M-Ocean Holdings Sdn Bhd and nominees. Deemed interested by virtue of Section 122(A) of the Companies Act, 1965 held through spouse. THIRTY LARGEST SHAREHOLDERS No of Shares Percentage of Issued Capital 1. Reliance Holdings Sdn Bhd 94,525, AMSEC Nominees (Tempatan) Sdn Bhd - Pledged securities account - AmBank (M) Berhad for Reliance Holdings Sdn Bhd 91,289, Mayban Nominees (Tempatan) Sdn Bhd - Pledged securities account for Reliance Holdings Sdn Bhd 75,688, HLB Nominees (Tempatan) Sdn Bhd - Pledged securities account for Reliance Holdings Sdn Bhd 67,433, CIMB Group Nominees (Tempatan) Sdn Bhd - Dato Gan Eng Kwong for Reliance Holdings Sdn Bhd 35,150, Prestige Avenue (M) Sdn Bhd 29,121, CIMSEC Nominees (Tempatan) Sdn Bhd - CIMB Bank for Dato Gan Eng Kwong 25,650, M.I.T. Nominees (Tempatan) Sdn Bhd - Pledged securities account for Dato Gan Eng Kwong 19,283, Jane Wong Choong Julia Binti Abdullah 18,211, CIMSEC Nominees (Tempatan) Sdn Bhd - CIMB Bank for Reliance Holdings Sdn Bhd. 16,800, Lee Pok Mun 16,585, Thong Swe Cheong 16,244, Jane Wong Choong Julia Binti Abdullah 15,674, AMSEC Nominees (Tempatan) Sdn Bhd - Pledged securities account - AmBank (M) Berhad For Reliance Holdings Sdn Bhd 14,748, CIMSEC Nominees (Tempatan) Sdn Bhd - CIMB Bank for Thong Swe Cheong 12,750, Chong Yen Yin 12,728, M.I.T. Nominees (Tempatan) Sdn Bhd - Pledged securities account for Thong Swe Cheong 12,238, AmBank (M) Berhad - Pledged securities account for Thong Swe Cheong 11,856, Chong Yen Yin 11,489, AMSEC Nominees (Tempatan) Sdn Bhd - Pledged securities account - AmBank (M) Berhad for Chong Yen Yin 11,105, ABB Nominee (Tempatan) Sdn Bhd - Pledged securities account for Reliance Holdings Sdn Bhd 11,000, EB Nominees (Tempatan) Sendirian Berhad - Pledged securities account for Reliance Holdings Sdn Bhd 10,800, Chan Chong Chan Chong Kiat 9,799, M-Ocean Holdings Sdn Bhd 9,795, EB Nominees (Tempatan) Sendirian Berhad - Pledged securities account for Dato Gan Eng Kwong 9,500, Lok Wen Huei 9,377, Chan Choy Har 8,626, RHB Nominees (Tempatan) Sdn Bhd - Pledged securities account for Chan Chong Chan Chong Kiat 8,358, Alliancegroup Nominees (Tempatan) Sdn Bhd - Pledged securities account for Dato Gan Eng Kwong 7,645, OSK Nominees (Tempatan) Sdn Berhad - Pledged securities account for Chan Chong Chan Chong Kiat 6,579, ,054, Reliance Pacific Berhad Company No A 104 Annual Report 2010

105 Proxy Form 18th Annual General Meeting No. of Ordinary Shares Held RELIANCE PACIFIC BERHAD A I/We Name in Block Letters of Full Address being (a) member (s) of RELIANCE PACIFIC BERHAD, HEREBY APPOINT Mr/Mrs/Mdm/Miss of or failing him/her, the Chairman of the Meeting as my/our proxy to attend and vote for me/us on my/our behalf at the 18th Annual General Meeting of the Company to be held at the Perdana Ballroom, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, Kuala Lumpur on Thursday, 23 September 2010 at 3.00 p.m. and at any adjournment thereof, in the manner indicated below: RESOLUTION NO. ORDINARY RESOLUTIONS FOR AGAINST Adoption of Audited Financial Statements and Reports of Directors and Auditors for the financial year ended 31 March Re-election of Datin Irene Tan who is retiring by rotation pursuant to the Company s Articles of Association. Re-appointment of Lim Guan Chin retiring under Section 129(6) of the Companies Act, Approval of Directors fees for the financial year ended 31 March Re-appointment of Messrs AljeffriDean as the Company s Auditors and to authorise the Directors to fix their remuneration. Approval of allotment and issue of shares pursuant to Section 132D of the Companies Act, Authority for the Company to purchase its own shares. Proposed renewal of Shareholders Mandate on Recurrent Related Party Transactions of a revenue or trading nature. Please indicate with an X in the spaces provided how you wish your vote to be cast. In the absence of specific instructions, your Proxy will vote or abstain from voting as he/she thinks fit. Signature : Dated this day of 2010 NOTES: 1) Every member of the Company is entitled to appoint a proxy or in the case of a corporation, to appoint a representative to attend and vote in his stead. A proxy need not be a member of the Company. 2) The Proxy Form must be signed by the appointer or by his attorney duly authorised in writing or if the appointer is a corporation, either under seal or under the hand of an officer or attorney duly authorised. 3) If no name is inserted in the space for the name of your proxy, the Chairman of the Meeting will act as your proxy. 4) The Proxy Form must be deposited at the Registered Office of the Company at Block A, Unit A-5-3, Megan Avenue II, 12 Jalan Yap Kwan Seng, Kuala Lumpur, Malaysia, not less than forty-eight (48) hours before the time set for holding the Meeting or any adjournment thereof. Reliance Pacific Berhad Company No A 105 Annual Report 2010

106 1st fold here Then fold here AFFIX STAMP HERE Reliance Pacific Berhad Company No A Block A, Unit A-5-3, Megan Avenue II 12 Jalan Yap Kwan Seng Kuala Lumpur, Malaysia Fold this flap for sealing

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