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< FACULTY: OUM BUSINESS SCHOOL>

< SEMESTER / YEAR: MAY/2015

< COURSE CODE: BMNV5103>

< COURSE TITLE:NEW VENTURE DEVELOPMENT>

(ASSIGNMENT TEMPLATE ENGLISH VERSION)(COVER PAGE) COURSE> CODE>19 | Page

Table of ContentsPage Number

Question 1(a)Company Profile12 4

Company Profile 25 7

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

Conclusion18 - 19

List of Abbreviations20

Attachment 1 to 821-29

References30

Question 1(a)Company Profile 1The 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 AKBs 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 AKBs 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.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 Groups 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 Groups 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 AKBs 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.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 operationsdivision remains the core businesses of the Group during the financial year. A breakdown of thecontribution 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 whichincreased AKBs issued and paid-up ordinary share capital. The net issuance raised RM16.5million which was used for working capital and partial settlement of debts owing to relatedparties.Attachment 3 shows the ratio analysis for AKB. The liquidity ratios reveals the companyis not in a position to meet its short term debts or convert its assets into cash. The asset turnoverratio shows very poor management of assets in generating revenue. However the averagecollection period of its accounts receivable has been reduced to 3 months. Gearing ratiomeasures the degree to which the Groups activities are funded by owners fund as compared tocreditors funds. AKBs gearing ratio for the current financial period is lower as compared to thetwo previous financial periods. This could be due to the Groups exercise to issue shares andpartly repay creditors. The Groups basic loss per share has increased to 20.8 sen as compared tothe previous two financial periods.

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 Groups corporate information is provided in Attachment 4. Attachment 5 shows the vision and mission statement and core value of NWE.NWEs 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 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.NWEs 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 NWEs 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.NWEs 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 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.NWEs 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.

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.AKBs 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 AKBs 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 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) NWEs 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 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 NWEs marketing strategy is not effective to promote its range of new products to its potential customers. The ratio analysis for NWEs 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 customers 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 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 AKBs 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 its 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.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, NWEs 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 NWEs 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.AKBs 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. AKBs competitor HB had successfully applied the changing technology in their production methods to come up with quality products which also met with consumers 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. AKBs 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 companys future growth.

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 companys client base. NWEs customer strategy should meet and exceed potential customers 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. 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 companys 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. 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 AKBs subsidiary for infringement of copyright. All three proceedings were mentioned by the auditors as significant events which would have major impact on AKBs 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 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 NWEs 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 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.AKBs 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, AKBs status is that of a PN17 company. Both companies are 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 relationsIt 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:

List of Abbreviations

AKB Asia Knight BerhadNWE Nationwide Express Courier Services BerhadPMB Pos Malaysia Berhad

B2B Business to Business

HB Heveaboard Berhad

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 EhsanandKawasan 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

Attachment 2:

Breakdown of sources of Income and Expenditure of Asia Knight Berhad

For the 18 monthsFinancial year ending30 June 2014 (millions) RMFor the 12 monthsFinancial year ending31 December 2012(millions) RMFor the 12 monthsFinancial year ending31 December 2011(millions) RM

Manufacturing2.11.02.2

Hotel Operations4.22.72.7

Trading4.32.6-

Total Revenue11.66.34.9

Less Expenses(20.2)(13.4)(1.9)

Net Loss/Profit Before Tax(8.6)(7.1)3.0

Attachment 3: Asia Knight Berhad Ratio Analysis

For the 18 monthsFinancial year ending30 June 2014 (millions) RMFor the 12 monthsFinancial year ending31 December 2012(millions) RMFor the 12 monthsFinancial year ending31 December 2011(millions) RM

Liquidity Ratio1. Current RatioTotal Current AssetsTotal Current Liabilities5,55918,217= 0.314,44727,092= 0.16 2,79522,657= 0.12

2. Quick RatioTotal Current Assets Inventory / Total Current Liabilities5,559 -1,097 18,217= 0.244,447 1,091 27,092= 0.122,795 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 PeriodTurnoverAccounts Receivables

365Receivables Turnover11,5182,892= 3.98

3653.98= 91.7 Days

6,3391,992= 3.18

3653.18= 114.8 Days4,875 523= 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 ShareNet Loss after TaxWeighted AverageNumber of Ordinary Shares

9,76746,953=20.8 sen7,16044,083= 16.2 sen6,78844,083= 15.40 sen

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

Attachment 5:Nationwide Express Courier Services Berhad (Co No: 133096-M)Vision Statement:To be the Premier Total Logistics Provider Globally Providing Innovation in Serviceswith 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 DrivenOur 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!Attachment 6:Nationwide Express Courier Services Berhad Financial Performance over a 5 year period(all figures are in millions)

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

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

RatioComputationFinancial Year Ended 31.3.2014 Financial Year Ended 31.3.2013Financial Year Ended 31.3.2012

Liquidity Ratio1. Current RatioTotal Current AssetsTotal 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 ShareNet Loss/Profit after TaxWeighted AverageNumber of Ordinary Shares

(892)60,116=(1.5sen)(2,922)60,116= (4.9sen)1,20560,116= 2.0sen

Profitability Ratios

7. Gross Profit RatioGross ProfitRevenue23,68997,742= 24.2%21,19999,03621.4%25,37096,178= 26.4%

8. Staff Salary & Related Expenses to Revenue RatioStaff Salary Revenue36,84997,74237.7%37,31299,03637.7%37,26996,178= 38.8%

9. Directors Remuneration To Revenue RatioDirectors RemunerationRevenue41097,742= 0.42%47099,036= 0.47%56896,178=0.59%

10. Administrative Expenses/Revenue RatioAdministrativeExpenses Revenue 2196997742= 22.5%2134499036= 21.6%20,59996,178= 21.4%

11. Selling & Marketing Expenses To Revenue RatioSelling & Marketing Expenses Revenue

228797742= 2.3%250299036= 2.5%257896,178= 2.7%

12. Other Expenses to Revenue RatioOther Expenses Revenue30497742= 0.3%28399036= 0.3%18096,178= 0.2%

13. Finance Costs to Revenue RatioFinance CostsRevenue7097742= 0.07%

1399036= 0.01%14196,178= 0.2%

14. Total Expenses to Revenue RatioTotal Expenses Revenue2463097742= 25.2%2414299036= 24.4%23,49896,178= 24.4%

1.

References

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