PRG Holdings Berhad Annual Report 2017

G r o u p M a n a g i n g D i r e c t o r ’ s M a n a g e m e n t D i s c u s s i o n a n d A n a l y s i s ( C O N T ’ D ) • Annual Report 2017 19 RISK MANAGEMENT & APPROACHES The Group remains confident with the long-term prospects of property market in Malaysia and manufacturing business but is also cognizant of the short-term challenges that these markets pose. The Group constantly reassesses its risk exposure and seeks to optimise the balance between opportunities and risks both in operations and strategic direction. The level of unsold inventory is another key item that the Group closely monitors. The Group is confident with the Picasso Residence’s sales via the arrangement of PUA, which enabled us to gain accelerated, wider and more extensive access in our target markets. Moving for the Property Development & Construction Division, our Group will continue to focus on promoting “Picasso Residence”, launching of new projects, tendering for new construction works and maintaining cost consciousness throughout all divisions. The Group is exposed to risk of fluctuation in foreign exchange rates especially in Manufacturing Division. Manufacturing Division derives a significant portion of its revenue in USD from the business with its international counterparts. The Group had a net USD exposure arising from the income after settling the purchases. While the Group adopted RM as the reporting currency, some of the assets and liabilities such as trade receivables and payables were denominated in other currencies, such as USD. These foreign currency balances are revalued at each accounting year or period end with the then prevailing exchange rate and may give rise to gain or loss in foreign currency translation. Although the Group does not have a currency hedging policy, a significant part of the currency risk is naturally hedged. OUTLOOK It is expected the market conditions in Malaysia and regionally will remain challenging, but we believe we are well positioned to overcome these challenges. We ended 2017 in good shape with a strong platform for growth and we are confident of achieving further progress in 2018 and beyond for all our businesses. ACKNOWLEDGEMENT Our remarkable performance is a tremendous credit to the commitment and passion of everyone at PRG. I would like to thanks the Board of Directors and the management team for their contribution and expertise in driving PRG forward. While we look to the future with confidence and are excited about the opportunities that lie ahead, I would like to take this opportunity to acknowledge the skills and dedication of employees throughout PRG, who have worked hard to deliver further progress for the Group. Their combined efforts have sustained the Group’s vision of progress through performance. I would also like to express my sincere appreciation to our business associates and financiers for their continuous support to PRG. I also wish to express our appreciation to the Management, all members of the Group and professional parties involved for their dedication, hard work and contribution to the successful listing of Furniweb Holdings Limited. On behalf of the Management, I would like to thanks to all the stakeholders who have supported us in making PRG a better and stronger organisation. I hope we will continue to receive your support as we continue to growth our company moving forward. Dato’ Lua Choon Hann Group Managing Director