(ASSIGNMENT TEMPLATE – ENGLISH VERSION) (COVER PAGE)

< FACULTY: OUM BUSINESS SCHOOL>

< SEMESTER / YEAR: MAY/2015

< COURSE CODE: BMNV5103>

< COURSE TITLE:NEW VENTURE DEVELOPMENT>

COURSE> CODE>Table of Contents

Page Number

Question 1(a) Company Profile1 2 – 4

Company Profile 2 5 – 7

Question 1 (b) Question 1 (b) 8 - 18

Conclusion 18 - 19

List of Abbreviations 20

Attachment 1 to 8 21-29

References 30

1 | P a g e

COURSE> CODE>Question 1(a)

Company Profile 1

The Malaysian company chosen for this assignment is Asia Knight Berhad, formerly known as

Pahanco Corporation Berhad (Co No: 71024-T). This company was incorporated in 1981 and it

changed name to Asia Knight Berhad (AKB) in October, 2012.

AKB is a public limited liability company, incorporated and domiciled in Malaysia and is listed

on the Main Market of Bursa Malaysia Securities Berhad. Please refer to Attachment 1 for

AKB’s corporate information.

During the financial period, the Company changed its financial year end from 31 December to 30

June. Consequently, the current financial period is made up for 18 months from 1 January 2013

to 30 June 2014. This assignment will be based on information extracted from the audited

financial report for the period ending 30 June 2014 and 31 December 2013.

The principal activities of the Company are investment holding and sales and marketing of

particleboards. The Company has suspended its operations pending restructuring of its operations

and proposed acquisitions of businesses and joint ventures.

In the audited financial report for the 18 months ending 30 June 2014 the auditors of AKB in the

“Independent Auditors’ Report to the members of AKB” have included a “Disclaimer of

Opinion” statement. The auditors were unable to express an opinion on AKB’s financial

statement after conducting the audit in accordance with approved standards on auditing in

Malaysia due to several matters described in the “Basis for Disclaimer of Opinion paragraph”.

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COURSE> CODE>The auditors express: “During the financial period, the Group and the Company had incurred a

net loss of RM9.8million and RM12.6million respectively and as of that date the Group’s current

liabilities exceeded its current assets by RM12.7million. The continuation of the Group as a

going concern is dependent on the successful restructuring of the Group’s operations and

continued availability of adequate financial support from its shareholders, creditors and

bankers.”

AKB is classified by Bursa Saham Malaysia as a PN17 company. PN17 stands for Practice Note

17/2005 and is issued by Bursa Malaysia, relating to companies that are in financial distress.

AKB has a timeframe of 12 months from the date of the First Announcement (31 October 2014)

to submit its plan to regularize its financial condition.

Attachment 2 shows, total revenue of AKB rose 83% during the 18 months financial period

ended 30 June 2014, as compared to the 12 months financial year ended 31 December 2012.

However during the same period AKB’s net loss before taxation increased by 21.0%. No

dividend was declared, in view of the loss.

It appears that while the Group was able to restructure its manufacturing and overall business

operations however it failed to control manufacturing and operational cost which increased, by

50% during the financial year ended 2014 as compared to 2012.

The revenue of the Group for the current financial year ending 30 June 2014 was partly

contributed by manufacturing of plastic parts division. This business was acquired in April 2014

through the purchase of the entire equity interest in T-Venture Industries (M) Sdn Bhd at an

acquisition cost of RM4.8million.

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COURSE> CODE>The Directors report the manufacturing of particleboards, which was one of the principal

activities of the Group has been stopped due to strong competition from low cost producing

countries and the increasing operating costs. The manufacturing division and the hotel operations

division remains the core businesses of the Group during the financial year. A breakdown of the

contribution from each division towards Group revenue is provided in Attachment 2.

There were 2 (two) issues of shares during the financial year ending 30 June 2014 which

increased AKB’s issued and paid-up ordinary share capital. The net issuance raised RM16.5

million which was used for working capital and partial settlement of debts owing to related

parties.

Attachment 3 shows the ratio analysis for AKB. The liquidity ratios reveals the company

is not in a position to meet its short term debts or convert its assets into cash. The asset turnover

ratio shows very poor management of assets in generating revenue. However the average

collection period of its accounts receivable has been reduced to 3 months. Gearing ratio

measures the degree to which the Group’s activities are funded by owner’s fund as compared to

creditor’s funds. AKB’s gearing ratio for the current financial period is lower as compared to the

two previous financial periods. This could be due to the Group’s exercise to issue shares and

partly repay creditors. The Group’s basic loss per share has increased to 20.8 sen as compared to

the previous two financial periods.

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COURSE> CODE>Company Profile 2:

The second Malaysian company chosen for this assignment is Nationwide Express Courier

Services Berhad (NWE) (Co No: 133096-M). NWE was founded in 1985, it is one of the first

few locally established companies in Malaysia with its principal activities being that of a courier

service provider. .

NWE is a public limited liability company, incorporated and domiciled in Malaysia, and is listed

on the Main Market of Bursa Malaysia Securities Berhad. The Group’s corporate information is

provided in Attachment 4. Attachment 5 shows the vision and mission statement and core value

of NWE.

NWE’s financial year end is on 31 March. This assignment will be based on information

extracted from the audited financial report for the period ending 31 March 2014 and 31 March

2013.

The principal activities of the Group consist of providing express courier services, trucking

services, freight forwarding services, customized logistic services, mailroom management

services, retail and warehousing.The Group has developed a range of dedicated products and

solutions tailored to meet the demands of their discerning customers.

Attachment 6 is a line chart presentation of the financial performance of NWE over a five (5)

year period spanning from 2010 to 2014. NWEs revenue has shown a steady rise from 2010 to

2013 before decreasing in 2014 by 1.31% as compared to revenue recorded in 2013. However

the net profit after tax of NWE has shown steady decline from 2010 to record its highest net loss

after taxation of RM2.9 million in 2013. Surprisingly in 2013, NWE recorded its highest revenue

of RM99 million. Similarly the shareholders fund has been also decreasing steadily over the five

5 | P a g e

COURSE> CODE>years.Shareholders fund represents the amount by which a company is financed through its

common stocks plus retained earnings.

NWE did not declare any divided in the financial year ending 2014 due to the loss recorded.

The lower revenue recorded in 2014was attributed to expiry of long term contracts and generally

lower sales during the year. The courier service industry is a highly competitive industry and

NWE faces competition from both local and overseas courier service providers. One of its

strongest competitors is Pos Malaysia Berhad. A comparison of the breakdown of NWE and

PMB revenue by segments is provided in Attachment 7. PMB has recorded progressively higher

revenue over the three year period and it has shifted from the courier services to mail

management segment, as its biggest contributor of revenue. This is unlike NWE which has

maintained its revenue contribution by segments throughout the three years period studied in the

assignment.

NWE’s brand name is “Nationwide Express” which the company has capitalized upon as a brand

that can be easily associated with courier and express delivery services in the Malaysian logistics

scene. However looking at NWE’s financial performance the company has to look into creating a

brand experience for its consumers in order for NWE to sustain and continue remaining

competitive in this business.

NWE’s operations have an indirect negative impact on the environment through its heavy

reliance on motor vehicles and usage of paper. Among the proposed initiative to protecting the

environment include regular servicing of its existing vehicles and recycling of paper. NWE has

also used information technology systems to better manage routes run by its vehicles and on-line

6 | P a g e

COURSE> CODE>services for its customers to place delivery bookings and to view statements of account. This

helps to reduce emission of carbon to the environment and reduces paper usage.

Attachment 8 is a ratio analysis of NWEs performance over a three year period. The liquidity

ratio in the current financial year of 4.15:1 suggests NWE has a large margin of safety to cover

its short-term debts. The asset turnover ratio is an indication of the efficiency with which a

company is deploying its assets. The ratio analysis for NWE indicates the company has a poor

asset utilizations which has dropped over the three year period. The higher gearing ratio in the

current financial year is because the company has purchased motor vehicles using Islamic

finance leasing. The company is committed to repay the borrowings over a five year period.

NWE’s gross profit ratio in the current year is 24.2%. NWE was able to record a higher gross

profit margin due to reduction in the cost of services through restructuring and better costs

management. A ratio analysis of its expenses indicates it has remained the same as previous year

except for the selling and marketing expenses and finance costs. The selling and marketing costs

has seen a reduction over the years and the finance costs has increased substantially in the

current year. This increase could be attributed to financing costs for the purchase of motor

vehicles.

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COURSE> CODE>

Question 1 (b)

Following is a discussion of the major causes of a business venture failure.

A companies’ failure to understand the market and its customers could possibly be one of the

causes of failure of the business venture. Any venture should be able to identify its competitive

market space and customers buying habits in order to continue generating its sales and to have

healthy cash flow.

AKB’s original business venture into selling particle boards was not profitable for the group. It

was not able to anticipate and understand the changes in the market. On one hand customers

were looking for variety in the quality of particleboard manufactured and at lower prices.

Particleboards are used especially in the manufacture of furniture and fittings for household and

office. Customers were also becoming environmentally conscious and were cautious using

wood-based products as it involved cutting down of trees.

However AKB’s competitors like Heveaboard Berhad has been successful in the manufacture, of

particleboards and particleboards related furniture. Heveaboard through its subsidiary engaged in

partnership with rubber tree producers and was able to obtain continuous supply of trees which

were cut down during replanting. Heveaboard too ventured into production of furniture and

fittings. Its production of various quality of particleboards and at lower prices appealed to

customers. Its furniture production too was successful among customers as the designs were

modern and appealed to customers taste.

AKB was not able to compete with the local manufactures nor could it anticipate the global

competition. Countries like the Philippines and China were also producing particleboards of

8 | P a g e

COURSE> CODE>various quality to meet various uses for its customers and at lower production costs. AKB had

invested heavily in plants and machinery for the production of particleboards and their

production method did not facilitate any changes in the production methodology. New

production methods were evolving which resulted in a better quality particleboards which can be

applied for different usage purposes. AKB was not able to compete effectively against its

competitors and lost its market share.

Lessons to be learnt here are a new venture should be aware of the changes occurring in the

market and in its competitors. It is also important to know customers’ expectations. Any heavy

investment in plant and equipment should be done only after a careful study of the market and

analysis of potential costs and revenue is performed. If this is not performed the investment only

weighs heavily upon the performance of the company, affecting its future growth.

Secondly, a business venture may fail when it is unable to understand and communicate what it

is selling to its customers. Thus it becomes important for companies to clearly define their value

proposition and effectively communicate it to their customers.The company in their value

proposition statement should be able to explain how they would provide for their customers and

how the product would help to solve the customers’ needs, well.

In its financial report for the year ending 31 March 2014 NWE states among the customized

products and solutions its offers to its customers are the Mail Room Management Services

(MMS) and Pharmaceutical Dedicated Services (PDS) NWE’s strongest competitor PMB has

successfully positioned itself among B2B customers as the solutions provider for all their mail

room management needs. The PDS services was to provide logistics services for the pharmacies

to ensure safe storage and distribution of the pharmaceutical products. However it is questionable

9 | P a g e

COURSE> CODE>if NWE succeeded in promoting this services among its medical and pharmacy relating business

customers.

Please refer to Attachment 7 which compares the volume of revenue by product segment of

NWE against PMB. PMB has shown growth in revenue over the three year period by product

segment. NWE shows reduced growth in sales volume and its revenue by product segment has

not changed much over the three year period.

It is possible NWE’s marketing strategy is not effective to promote its range of new products to

its potential customers. The ratio analysis for NWE’s selling costs shows a reducing trend from

2012 to 2014. For effective sales and marketing promotion activities to proceed, it is important

sufficient allocation is made in the budget so that the marketing team can produce results through

higher sales.

Lessons to be learnt here would be that having a great product alone is not sufficient for a new

venture to succeed, it is important sales and marketing efforts also go together in order to get the

products to the customer’s attention. Promotional activities should go with creating a customer

value proposition in order to be effective in getting sales revenue.

The third possible reason for a business venture failure is its inadequate cash flow position. The

short term financial health of a company is reflected by its working capital. Generally a ratio of

between 1.2 to 2.0 against current liabilities is preferred however this would depend on the

industry.

The working capital ratio for AKB has been below 1 over the three years. In the financial year

ending 30 June 2014, the working capital ratio is 0.31:1. This can be interpreted to mean for

every RM1 of short term lability the company has only RM0.31 worth of current assets to meet

10 | P a g e

COURSE> CODE>the debt. The low working capital also supports the high leverage of the Group as it is heavily

relying on debt or borrowings to service its daily operations. On the other hand it also indicates

the Group is struggling to maintain and finding new sources of revenue.

A look at AKB’s current assets, indicates it consists of mainly of trade receivables and inventory.

The auditors have also stated the trade receivables of the Group comprise balances past due of

RM2.1million which the directors however believe is recoverable. Other than debtors the current

assets comprise over RM1million of inventories. Inventories usually take time to liquidate and if

sold immediately it is likely the selling price may have to be reduced to find a potential buyer.

The low liquidity ratio is also indicative of the general poor management of the company as it is

reflective of the ineffectiveness of the sales and marketing teams to generate revenues, the

overall debt management by the company and management of finances.

This unhealthy cash flow position has also resulted in AKB not being able to service repayment

of its banking facilities with its banker. This poor state of affairs of the Group is pointed out by

the auditors of AKB in their disclaimer of opinion statement.

The lesson to be learnt here for new ventures is while making profits is important the company

should also look at maintaining a healthy working capital. Availability of liquid cash is important

for the company, for purposes of running its day-to-day operations and to take advantage of any

new opportunities that may arise. Banks would also be more likely to advance to a company with

healthy financial position as it reflects good management practices.

The fourth possible reason for the business venture failure is it’s over dependence on a single or

group of customers, so that when the contract or agreement expires and is not renewed it affects

the revenue of the business concerned.

11 | P a g e

COURSE> CODE>This could possibly be the case with NWE which had a drop in revenue of 1.3% in the financial

year ending 31 March 2014 as compared to the previous financial year. Though this may be a

small number, from the financial report it can be understood NWE did know the contracts were

expiring in 2013/2014. NWE should have taken two possible actions: firstly look into renewing

the contract and secondly look for potential new sales contracts.

Thus it becomes important especially for a services based firm to have effective marketing team

in order to put forward its services to potential customers. There is a huge potential in sourcing

B2B customers as was done by, NWE’s competitors, PMB. NWE needs to seriously increase its

marketing allocation as there is a possibility of it losing its potential customers to its competitors.

Also in NWE’s effort to maintain its customers it is important the company be sensitive to the

needs of its customers. Staff training is essential to interact effectively with customers and be a

solution provider to their needs. Competition is high in this business and NWE has to embark on

every possible effort to retain and generate new customers.

The lesson to be learnt here is, it is not advisable for a venture to be over dependent on a single

customer. When the contract expires or the customer sources a different supplier the company

suffers from reduced sales. Marketing efforts should be continuous in order to gain new

customers as well as to keep existing customers. Any customer retention exercise involves total

management and staff commitment.

Fifth reason for a business venture failure is the reactive attitude of management towards

competition, technology or marketplace changes. Any failure to be innovative and not being

generally aware of the goings on in the market will affect the competitiveness of the firm.

12 | P a g e

COURSE> CODE>AKB’s management was not reactive towards competition both internally and globally. New

players had entered the market who not only manufactured varying quality of particleboards but

at lower manufacturing cost. The competitors had also successfully ventured into the end-user

products example furniture and fittings using the particleboards.

For example. AKB’s competitor HB had successfully applied the changing technology in their

production methods to come up with quality products which also met with consumer’s needs.

HB were able to produce at lower production cost which resulted in them being able to sell at

reduced prices. The market for particleboards was changing, new technology created new

products which appealed to the changing tastes of the consumers.

AKB’s management could not react positively and in a timely manner to changes that were

occurring in the manufacture of particleboards. AKB had invested heavily in machinery and

equipment for purposes of production of particleboards however the equipment could not

facilitate any modifications to its internal structure for innovation in production.

The management team of AKB continued to struggle to remain in the industry and decided in

2014 to stop the manufacture of particleboards and to venture in to the area of plastic parts

manufacture and sales.

Lessons to be learnt here for future ventures is, it is important for the management team to be

fully aware of their market and changes that are occurring in that market in terms of technology

and consumer tastes. Any failure to address such changes in a timely manner would result in the

company not being able to meet sales targets and losing its customers to the competitors. This

would be costly on any venture as it impacts on the company’s future growth.

13 | P a g e

COURSE> CODE>The sixth reason for a business failure is when there is no customer strategy in place. Customers

represent revenue to a business, it is important for the business to put in place effective strategy

to retain and grow its market share. Thus understanding the customers’ needs and wants become

crucial for the development of a strategy.

NWE has ventured in to various new products for example MRM and PDS. Both are customer-

driven solution provider services, however the question is how far has NWE brought forward

these services to its customers. A customer strategy is essential for NWE if it wants to gain a

competitive edge in the marketplace by building a large and loyal customer base. The only way

for NWE to grow its sales would be building a customer-centric strategy that works on building

loyalty and word-of-mouth advertising among the company’s client base. NWE’s customer

strategy should meet and exceed potential customer’s expectations. A customer service culture

within NWE is also essential towards customer retention.

It is not clear if NWE has undertaken any market research to identify its customers’ needs and

requirement before introducing the various products. Though it is important to diversify products

range however it should be reflected in revenue through increased revenue. However this does

not appear to be the case for NWE.

The lessons to be learnt here would be customer strategy is essential for any new venture in order

to retain and build new sales. A customer driven strategy encompassing management and staff in

the firm becomes essential in order to be seen as meeting the needs of its customers. Thus an

exercise encompassing the whole firm becomes important in its efforts to retain and build its

customer base.

14 | P a g e

COURSE> CODE> The seventh reason for a venture failure is poor management. Management of a business

encompasses a number of activities: planning, organizing, controlling, directing and

communicating. It is important for a business to know where it stands at all times as compared to

competitors, technological changes and its consumer needs. A common problem faced by

successful companies is growing beyond management resources or skills.

For AKB the loss situation the company is in and its generally poor state of affairs is reflective

on its directorship and management. The ratio analysis over a three year period on AKB shows

the company’s unhealthy working capital, asset generation ratio and gearing ratio. However the

management team appears to have shifted their concentration on marketing from particleboards

to their hotel operations and in 2012 trading in apparel wear which was discontinued in 2014. In

2014 directors decided to discontinue manufacture of particleboards and to shift to manufacture

of plastic parts.

This move has resulted in the plant and machinery used for manufacture of particleboards being

classified as assets held for sale totaling RM7.9million. As at the audited financial report date,

the Directors appear to be sourcing for buyers and the resale value is as yet undetermined.

Also the directors of AKB are also the majority shareholders of the Group. The directors may

have had managerial qualities and resources to run the company earlier but as the various

companies consolidated and a Group was established, it is possible the directors did not possess

the acumen to run such a large Group. Either a managerial team consisting of experts in their

respective fields or a specialized consulting firm could have been hired by the directors in order

to move AKB forward. The current poor state of affairs of AKB certainly reflects on the

management team.

15 | P a g e

COURSE> CODE>Lessons to be learnt for future venture entrepreneurs is it is essential they be able to read and

understand financial reports. Financial reports reflect the financial position and the state of

affairs of a company. If the entrepreneur lacks this skill he should hire or seek exert help from

companies which provide such services. Being able to interpret financial figures is important as

it should save the entrepreneur much headache before the venture turns into a loss running

business.

The eighth reason being when legal proceedings are initiated against the company for possible

wrong doings by the company concerned.

AKB has three legal proceedings initiated against it, with total claims amounting to

approximately RM2.2 million. The first claim involves AKB being sued for a sum of

RM610,000 being the initial due diligence review costs for aborting the proposed acquisition of a

company. The second claim is for RM1.6million by Tenaga Nasional Berhad against AKB for

alleged malfunction of the electricity meter which caused the meter readings be inconsistent with

the electricity supplied to AKB. The third proceeding involves AKB’s subsidiary for

infringement of copyright.

All three proceedings were mentioned by the auditors as significant events which would have

major impact on AKB’s financial performance and statement of affairs. Legal proceedings

against a company gives it a negative impact in the public eye as it implies the company has

done something against the law of the country.

The lesson to be learnt here would be to avoid any wrongdoing especially those that involves

fraudulent activity. It is always better for a new venture to stay within the law and ensure it gets

the advice of a professional lawyer where legal matters are involved, to avoid any possible

16 | P a g e

COURSE> CODE>claims. Litigation involves heavy cost to the company and also gives the unwanted negative

publicity from the media.

The ninth reason being poor management of its assets. The asset turnover ratio analyses how

effectively and efficiently a company manages its assets in order to generate sales.

During the current financial year NWE’s asset turnover ratio is 1.25X, (Attachment 8) which is

interpreted as for every RM1 of assets the Group is generating RM1.25 worth of sales. Over the

three year period analyzed it appears this ratio has been decreasing. NWE has made purchase of

motor vehicle in 2013 and 2014. The purpose of the purchase was in order to replace the old

vehicles and to upgrade its services to cater for the new services in PSB that NWE expected to

venture. However the above ratio analysis indicates the company has very poor asset

management which means it is underutilizing its assets in order to generate revenue. This could

also means the company has over-capitalized by buying assets it does mot actually require and

tying itself up in debts. Also the gearing ratio is high reflecting the loans NWE has acquired in

order to purchase the fixed assets.

The lessons leant here is that asset management is very important. Assets are purchased in order

for a company to generate revenue and if the asset does not do so then the acquisition cost of that

asset only weighs heavily upon the company. Thus it becomes important, a cost study is

performed to see whether a capital acquisition would be profitable for the company.

The tenth reason for the failure of a business venture would be when its management team have

a poor knowledge of the business ventured. Knowledge here encompasses product knowledge,

market knowledge, consumer demand, competitors, capital requirement and future prospects of

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COURSE> CODE>the business. This list does not cover all the knowledge required but it does give a fair idea as to

their importance in a new venture prospect. A failure to address this issues could possibly result

in the venture going broke.

This was what had occurred to AKB. The directors had decided to venture into production of

particleboards and had as a result purchased the machinery required in the production of

pasteboards. However it appears the directors did not obtain any expert advice as to the viability

of this venture. AKB has invested heavily into machinery which only ended up being

underutilized as production had to be cut down due to low demand.

AKB’s competitors were able to fulfill customers demand in terms of quality, quantity and price.

AKB was not able to predict the changes that were occurring in customers demand. The

competitors had also diversified their venture to manufacture of furniture and fittings using

particleboards as their main material. This innovative ideas was well received by the consumers

as the material used had modern designs and was economical.

Thus the lesson learnt here is any new entrepreneur should cultivate the habit of acquiring

knowledge of his venture. This would enable him to remain competitive and to sustain demand

for its products. This habit of knowledge acquisition should be continuous as changes occur

constantly and knowledge would enable the entrepreneur to say ahead of competition and make

wise decisions.

Conclusion

The two Malaysian copies selected for this assignment were Asia Knight Berhad and Nationwide

Express Courier Services Berhad. Both are public listed companies, While NWE continues to be

listed in Bursa Saham Malaysia, AKB’s status is that of a PN17 company. Both companies are

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COURSE> CODE>suffering losses and their continued presence in the market place depends on their respective

management to steer the companies to profitable grounds.

Ten reasons were put forward for possible causes of their failure. The reasons encompassed areas

of

Generally poor management of all areas of business

Inability to understand and lack of knowledge of market conditions

No knowledge and failure to comprehend competitors move

Inability to address changes in customers’ needs and wants towards building stable

customer relations

It was the failure to address all of the above issues by both the companies that had resulted in

both of them being in the present state of affairs.

There were indeed many lessons to be learnt by any future venture entrepreneurs towards making

their business profitable. Managerial ability covers business management, finance, accounting,

production, selling and marketing, distribution and finally human capital management. A new

venture who can cover all of the above areas, either on his own or gaining expert help, would

certainly make his venture a successful one.

(Number of Words:

19 | P a g e

COURSE> CODE>List of Abbreviations

AKB Asia Knight Berhad

NWE Nationwide Express Courier Services Berhad

PMB Pos Malaysia Berhad

B2B Business to Business

HB Heveaboard Berhad

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COURSE> CODE>Attachment 1:

Asia Knight Berhad (Co No: 71024-T)

Registered Office:

No. 9, Jalan Bayu Tinggi, 2A/KS6, Taipan 2, Batu Unjur, 41200 Klang, Selangor Darul Ehsan

Principal Place of Business:

No. 33 & 35, Jalan Batu Tiga,41300 Klang, Selangor Darul Ehsan

and

Kawasan Perindustrian Batu Tiga, Jalan Kuantan Gambang, 25150 Kuantan, Pahang Darul Makmur.

Auditors:

Nexia SSY, SSY Building @ Sentral, Level 1, 2A Jalan USJ Sentral 3, USJ Sentral, Persiaran Subang 1, 47620 Subang Jaya, Selangor Darul Ehsan

Principal Bankers:

HSBC Bank Malaysia Berhad, 1 Jalan Mahkota, 25000 Kuantan, Pahang Darul Makmur

CIMB Bank Berhad, No A1, Lorong Tun Ismail, Sri Dagangan 2, 25000 Kuantan, Pahang Darul Makmur

Share Registrars :

Symphony Share Registrars Sdn Bhd (Co No: 378993-D), Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan

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Attachment 2:

Breakdown of sources of Income and Expenditure of Asia Knight Berhad

For the 18 monthsFinancial year ending30 June 2014 (millions) RM

For the 12 monthsFinancial year ending31 December 2012(millions) RM

For the 12 monthsFinancial year ending31 December 2011(millions) RM

Manufacturing 2.1 1.0 2.2Hotel Operations 4.2 2.7 2.7Trading 4.3 2.6 -Total Revenue 11.6 6.3 4.9Less Expenses (20.2) (13.4) (1.9)Net Loss/Profit Before Tax

(8.6) (7.1) 3.0

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COURSE> CODE>Attachment 3: Asia Knight Berhad – Ratio Analysis

For the 18 monthsFinancial year ending30 June 2014 (millions) RM

For the 12 monthsFinancial year ending31 December 2012(millions) RM

For the 12 monthsFinancial year ending31 December 2011(millions) RM

Liquidity Ratio

1. Current Ratio Total Current AssetsTotal Current Liabilities

5,55918,217= 0.31

4,44727,092= 0.16

2,79522,657= 0.12

2. Quick Ratio Total Current Assets – Inventory / Total Current Liabilities

5,559 -1,097 18,217= 0.24

4,447 – 1,091 27,092= 0.12

2,795 – 1,458 22,657= 0.06

Activity ratios

1. Asset Turnover Ratio

Turnover Total Assets

11,51851,733= 0.22

6,33952,078= 0.12

4,87554,719= 0.09

2. Receivables Turnover

3. Average Collection Period

TurnoverAccounts Receivables

365Receivables Turnover

11,5182,892= 3.98

3653.98= 91.7 Days

6,3391,992= 3.18

3653.18= 114.8 Days

4,875 523= 9.3

3659.3 = 39.2 Days

Financial Ratios

1. Gearing Ratio

Total Borrowings Total Equity

6,06231,317= 19.4%

6,88524,570= 28.0%

7,87531,646= 24.9%

2. Basic Loss Per Share

Net Loss after TaxWeighted AverageNumber of Ordinary Shares

9,76746,953=20.8 sen

7,16044,083= 16.2 sen

6,78844,083= 15.40 sen

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COURSE> CODE>Attachment 4:

Nationwide Express Courier Services Berhad (Co No: 133096-M)

Registered Office and Principal Place of Business:

Lot 11A, Persiaran Selangor, Section 15, Selangor Darul Ehsan

Auditors:

Messrs. Hanafiah Raslan & Mohamad (AF:0002) Chartered Accountants, Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur

Principal Bankers:

Malayan Banking Berhad and HSBC Bank Malaysia Berhad

Registrar:

Symphony Share Registrars Sdn Bhd (Co No: 378993-D)Level 6, Symphony House, Pusat Dagangan Dana 1,Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan

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COURSE> CODE>Attachment 5:

Nationwide Express Courier Services Berhad (Co No: 133096-M)

Vision Statement:

To be the Premier Total Logistics Provider Globally Providing Innovation in Services

with State of the Art Technology

Mission Statement:

Nationwide Express D.E.L.I.V.E.R.S

• Dedicated Workforce

• Efficient and Excellent Services

• Learning Organization

• Intimacy with Business Partners

• Value Stakeholders

• Exceed Customers’ Expectations

• Respect for Individual Dignity

• Socially Responsible

Core Values:

Trustworthiness & Excellence Driven

Our Core Values denote and represent the deeply held beliefs within Nationwide Express. These

timeless principles are intrinsic values, which are seen in all our employees through our day-to-

day behavior and attitude. We hold these values close to our hearts as these are the very values,

which makes us Nationwide Express!

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COURSE> CODE>Attachment 6:

Nationwide Express Courier Services Berhad – Financial Performance over a 5 year period

(all figures are in millions)

2010 2011 2012 2013 2014

-20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

Nationwide Express Courier Services Berhad - Financial Per-formance over 5 years

Turnover Profit or Loss After Taxation Shareholders Fund

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COURSE> CODE>Attachment 7:

Nationwide Express Courier Services Berhad – Breakdown of Sales over three year period

according to product segments

Pos Malaysia Berhad – Breakdown of Sales over three year period according to product

segments

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Courier Freight Retail & Others0

20000400006000080000

100000

Nationwide Express Courier Services Berhad

2014 2013 2012

Product Segments

Rev

enue

in R

M'0

00

COURSE> CODE>

Mail Courier Retail Others0

100000200000300000400000500000600000700000800000900000

1000000

Pos Malaysia Berhad

2014 2013 2012

Product Segments

Reve

nue

(in R

M'0

00)

Attachment 8: Nationwide Express Courier Services Berhad – Ratio Analysis: A comparison over 3 years.

Ratio Computation Financial Year Ended 31.3.2014

Financial Year Ended 31.3.2013

Financial Year Ended 31.3.2012

Liquidity Ratio1. Current Ratio Total Current Assets

Total Current Liabilities

43,71010,540= 4.15

41,549 9,910= 4.19

2,79522,657= 0.12

Activity ratios

4. Asset Turnover Ratio

Turnover Total Assets

97,74278,317= 1.25

99,03673,060= 1.36

96,17854,719= 1.76

Financial Ratios

5. Gearing Ratio

Total Borrowings Total Equity

7,71362,145= 12.4%

2663,021= 0.04%

18167,279= 0.27%

6. Basic (Loss)/Profit Per Share

Net Loss/Profit after TaxWeighted AverageNumber of Ordinary

(892)60,116=(1.5sen)

(2,922)60,116= (4.9sen)

1,20560,116= 2.0sen

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COURSE> CODE> Shares

Profitability Ratios

7. Gross Profit RatioGross ProfitRevenue

23,68997,742= 24.2%

21,19999,03621.4%

25,37096,178= 26.4%

8. Staff Salary & Related Expenses to Revenue Ratio

Staff Salary Revenue

36,84997,74237.7%

37,31299,03637.7%

37,26996,178= 38.8%

9. Directors Remuneration To Revenue Ratio

Directors RemunerationRevenue

41097,742= 0.42%

47099,036= 0.47%

56896,178=0.59%

10. Administrative Expenses/Revenue Ratio

AdministrativeExpenses Revenue

2196997742= 22.5%

2134499036= 21.6%

20,59996,178= 21.4%

11. Selling & Marketing Expenses To Revenue Ratio

Selling & Marketing Expenses Revenue

228797742= 2.3%

250299036= 2.5%

257896,178= 2.7%

12. Other Expenses to Revenue Ratio

Other Expenses Revenue

30497742= 0.3%

28399036= 0.3%

18096,178= 0.2%

13. Finance Costs to Revenue Ratio

Finance CostsRevenue

7097742= 0.07%

1399036= 0.01%

14196,178= 0.2%

14. Total Expenses to Revenue Ratio

Total Expenses Revenue

2463097742= 25.2%

2414299036= 24.4%

23,49896,178= 24.4%

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COURSE> CODE>

1.

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