FINANCIAL REVIEW

The Company crossed the Ringgit 1 Billion sales mark for the first time in history, recording revenue of RM1.086 billion and it was the highest revenue in its 50 years of existence. This constitutes an increase of RM 155 million or 17% against the registered revenue of RM931 million in the previous year.

The overall improvement in sales performance in the current year was mainly attributed to a favorable exchange condition, better performance from higher sales in the domestic market after the implementation of Goods and Service Tax and the transfer of manufacturing and sales of certain rice cooker models from Thailand.

With the improvement in revenue, the Company achieved a remarkable combined profit before taxation of RM185 million for the year ended 31 March 2016, which was higher by 42% or RM55 million against the previous year’s combined profit before tax of RM130 million.

ASSOCIATED COMPANY

The associated company, Panasonic Malaysia Sdn. Bhd., registered consolidated revenue of RM1.39 billion for the financial year ended 31 March 2016; an increase of 4.5% or RM 60 million over the previous year’s consolidated revenue was RM1.33 billion.

Pre-tax and post-tax profits from its group operations, were RM38.0 million (2015: RM31.4 million) and RM23.4 million (2015: RM23.3 million) respectively.

DIVIDENDS

The Company has consistently paid dividends while allocating funds for business growth and investment. For the financial year ended 31 March 2016, a final dividend of 124 sen (2015: RM127 sen) per ordinary share of RM1.00 was recommended and it will be proposed for approval at the forthcoming Annual General Meeting.

OPERATIONS REVIEW

While offering and pursuing a “better life” for an even wider range of customers, the Company will also work to sustainably grow its corporate value to satisfy shareholders, investors, customers, business partners, employees and all other stakeholders.

For fan products business development, the Company is continuing to expand its product line up for strategic markets with direct current (DC) motor based features which promote energy saving and high functioning features such as Light Emitting Diode (LED) and sensory capabilities. The new improvement features low level motor noise and energy-efficient products which are in harmony with the environment and customer’s needs.

Apart from the new model development and upgrading of previous models, the Company has also undertaken measures to expand on its manufacturing capacity and capability. We invested in technologically advanced facilities to cater for manufacture of new product range with enhanced features.

In 2015, we have launched two new models for vacuum cleaner with user friendly design, flexible nozzle for bag-less model and cord rewind function for tank model. This is in line with the current generation preferences.

During the financial year under review, a wide range of rice cookers was transferred from a Thailand factory to the Company. Previously, rice cookers manufactured by the Company catered for the domestic market. With the transfer, the Company is now expanding sales to other Asian markets such as Vietnam, Hong Kong and Thailand.

With effect from 1st April 2016, the Company was placed under the purview of Appliance Company following the change in regional reporting structure which aligned manufacturing companies to its respective product segment.

We continue to receive good endorsement for our community works and CSR practices. I am proud to inform that many of our employees volunteer in community-based projects, despite their busy schedule. The Company’s CSR efforts will be shown in the following pages.

INDUSTRY OUTLOOK AND PROSPECTS FOR 2016

The Company remains steadfast on its vision to be the market leader for electrical consumer products by strengthening product line-up and will continue to engage with all relevant stakeholders.

The international economic and financial landscape is likely to remain challenging for 2016 and will likely influence the prospects of the Malaysian economy. GDP is expected to grow at a slower pace of 4 to 4.5%. In addition, a stronger Ringgit will have an impact on the Company’s export revenue which is mainly denominated in US Dollars.

Looking ahead, the Company is cautiously optimistic, in line with gradual recovery of global economies although the outlook for certain markets remains challenging. The tight labour market, inflationary cost pressures and volatile foreign currency exchange continue to be key areas that we will actively monitor to mitigate any adverse impact on our global businesses.

Nevertheless, The Company will continue to focus on developing new products for its strategic products whilst leveraging on its operational efficiency to reduce and minimize overall costs of production. With these measures in place, the Company is committed to deliver satisfactory results for the next financial year.

DIRECTORATE

The Board bade farewell to Mr. Toshiro Okamoto and Mr. Takemoto Yoichi who resigned from the Board on 31 December 2015 and 1 April 2016 respectively.

The Board is pleased to welcome Mr. Toru Okano who was appointed as an Executive Director to the Company on 1 January 2016 and Mr. Koji Takatori as the Non-Independent Non-Executive Director on 1 April 2016.

ACKNOWLEDGEMENT

On behalf of the Board of Directors, I would like express my utmost and sincere appreciation and gratitude to our shareholders for your loyal support and confidence in the Company. My warmest gratitude is also extended to the management and employees, for their dedicated work and commitment to delivering results and to ensure the success of the Company.

May we continue to work together and forge ahead to achieve greater growth and success for the betterment of the Company.

Tan Sri Datuk Asmat bin Kamaludin
Chairman