1.

0 INTRODUCTION TO AN ORGANIZATION
1.0.1

Uzma Group

Uzma Group is an international Oil and Gas service company providing an array of services
to the upstream sector across the exploration, development and production phases and to the
downstream sector for facilities and plant construction, operations and maintenance.
Since the year 2000, Uzma has worked with over 50 clients worldwide helping them realize
the value of their assets. Registered office at 802, 8th floor, block c, kelana square, 17 jalan
ss7/26, 47301 Petaling jaya Selangor Darul Ehsan.

Uzma mission is to compete with the Oil and Gas power houses which provide support
services to the oil majors is shaping up on the right track. Based on their significantly smaller
market capitalization, there tend to be some non-believers who may doubt that we possess the
technology sitting at the same level with the likes of multinational service providers.
Their philosophy exemplifies the commitment to sustainable development and zero harm to
the people and environment in all their business undertakings areas in which they operate.
Our Core values, Health Safety and Environment (HSE) Policy and various procedures on
safety and business ethics serve as our guides in all our operations.
With over 100 staff and 300 active consultants across Uzma area of operations in Africa,
Middle East, the Indian Sub-continental, South East Asia and Australia, Uzma provides
Geosciences and Petroleum Engineering Services, Drilling and Well Services, Laboratory
Services, Project Oilfield and Operation Services, Oilfield Manpower Services and Oilfield
Chemical and Services.

1.0.2 Padiberas Nasional Berhad (BERNAS)

Padiberas Nasional Berhad (BERNAS) is a company listed on the Main Market of Bursa
Malaysia. As the nation's partner in the domestic paddy and rice industry, BERNAS and its
group of companies are involved in the procurement and processing of paddy; as well as the
importation, warehousing, distribution and marketing of rice in Malaysia.
Vision; Our food products are consumed in every household in Malaysia. We are a company
deeply committed to nourish the nation better. We do this by providing quality food products
that create value for our company, our partners and our consumers.
Mission; Value creation by increasing market share, introducing new products and acquiring
complementary products. It is our goal to be a market leader in Malaysia.
BERNAS purchases paddy from farmers at 32 Kilang Beras BERNAS nationwide and 50
purchasing centres (Skim Pusat Belian) located at the premises of participating Bumiputra
rice mills nationwide. The wide distribution of these procurement centres provide better
services to farmers enabling them to sell their paddy without having to travel far.
Together with the millers under the Bumiputra Rice Millers Scheme, the groups purchase
about 800,000 tonnes paddy annually from local farmers.
To increase BERNAS presence along the entire industry supply chain, the BERNAS Group
of companies is now involved in seed and farming activities, international rice joint venture,
as well as rice complementary businesses.
With staff strength of 1,700 people, BERNAS continues to fulfil its obligations under a
Privatisation Agreement signed with the Government in 1996. These obligations include
maintenance of the nation's rice stockpile, acting as the buyer of last resort for paddy farmers,
managing the Bumiputera Rice Millers Scheme and the distribution of Paddy Price Subsidies
to farmers on behalf of the Government.
BERNAS will continue to strive towards fulfilling our responsibilities to the shareholders,
the industry, consumers and the nation as a whole. Based on this, we can say that this
organization is stable.

2.0 PRIMARY QUALITATIVE CHARACTERISTICS

The primary decision-specific qualities that make accounting information useful are
relevance and reliability. Both are critical. No matter how reliable, if information is not
relevant to the decision at hand, it is useless. Conversely, relevant information is of little
value if it cannot be relied on.
2.1 Relevance
To make a difference in the decision process, information must possess predictive value
and/or feedback value. Generally, useful information will possess both qualities. For
example, if net income and its components confirm investor expectations about future cashgenerating ability, then net income has feedback value for investors. This confirmation can
also be useful in predicting future cash-generating ability as expectations are revised.
2.1.1 Uzma Groups assessment on Relevance (Refer appendix 2)
The basic earnings per share is arrived at by dividing the Groups profit after taxation
attributable to the owners of the Company of approximately RM12,062,000 (2010: Loss after
taxation attributable to the owners of approximately RM2,049,000) by the number of
ordinary shares in issue during the financial year of 80,000,000 (2010: 80,000,000) ordinary
shares.
The fully diluted earnings per share for the Group is not presented as there were no potential
dilutive ordinary shares outstanding at the end of the reporting period.
2.1.2 Bernas assessment on Relevance (Refer appendix 5 and 7)
For the information to have feedback value, it must support or prove our early expectation.
Referring to the financial statement, the revenue for the year 2010 is RM3,172,973 and for
the year 2010 is RM3,530,731. The total asset in 2010 is RM 2,402,133 and RM 2,832,245 in
year 2011. It is safe to predict that the organization will continue to get income and based on
the future plans of the organization, their profit from outside Malaysia will make the
company grow even bigger and garnering more profit. The expectation that the company has
a very high annual earning is proven to be right.

2.2 Reliability
Reliability is the extent to which information is verifiable, representationally faithful, and
neutral. Verifiability implies a consensus among different measurers. For example, the
historical cost of a piece of land to be reported in the balance sheet of a company is usually
highly verifiable. The cost can be traced to an exchange transaction, the purchase of the land.
However, the market value of that land is much more difficult to verify. Appraisers could
differ in their assessment of market value. The term objectivity often is linked to verifiability.
The historical cost of the land is objective but the lands market value is subjective,
influenced by the measurers past experience and prejudices. A measurement that is
subjective is difficult to verify, which makes it more difficult for users to rely on.
2.2.1 Uzma Groups assessment on Reliability (Refer appendix 2)
On efficiency in execution, Uzma achieved a solid financial performance when they exit
Financial Year 2011. This was demonstrated by their revenue and earnings per share which
both outperformed Uzma historical performance.
A significant increase in secured projects demonstrated growing demand for their services.
Uzma cash flow was improved and stabilized, exceeding our expectation. On building
momentum, they reached growth at a faster rate than the overall oil and gas industry. At a
growth rate of 66% year-on-year, Uzma reaffirmed customers preference for value
proposition of providing reliable services with good technical know-how and focused
customer service.
Uzma further strengthened their balance sheet and continued to make critical investments in
technologies and infrastructure to support their vision to gain industry leadership position.
They had successfully driven market expansion in existing businesses as well as in our newer
market entries. These include subsurface, production optimization and well intervention
services.
UZMA exited the Financial Year with revenue of RM192.2 million.

2.2.2 Bernas assessment on Reliability (Refer appendix 5 and 6)

Verifiable means that the information can be validated by someone else. From the 2010
annual income to the 2011 net profit, it can be checked by everyone else. It is important to get
someone who knows what to look for to validate the information for you. Without their
validation, decision making can be hard to do. BERNAS closed the financial year ended 31
December 2011 with revenue of RM3.53 billion, 11% higher than the RM3.17 billion
achieved in the preceding financial year. The rice segment of the Groups business accounted
for 84% of the revenue, while the non-rice segment made up the remaining 16% which is
34.4% higher than that recorded last year. However, profit before tax for FYE 2011
decreased by 2.9% to RM238.73 million from RM245.78 million in the previous year. This
was attributed mainly to the higher cost of raw materials, closure of the Groups Save More
retail operations and increase in finance costs and operating expenditure. As a consequence,
earnings per share declined to 35.0 sen from 37.7 sen recorded a year ago.

3.0 SECONDARY QUALITATIVE CHARACTERISTICS

3.1 Comparability

This characteristic means that the information given should be able to be compared whether
among companies, industries or different periods. This will allow the users to contrast the
information, identify the similarities or differences that might be present. It is important to
compare the information to make the better decision.
For example, if a companys annual report contains the companys accounting information
for the past five years, users can compare the information and decide whether the company is
stable or the other way around. The information that can be compared is the annual profit,
shares and much more.

3.1.1 Uzma Groups assessment on Comparability (Refer appendix 1 and 2)

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In Financial Year 2011 the group executed well while continuing to invest for the future.
Uzma focus on delivering value to the clients enabled them to increase the momentum in
their business and generate significant value for the shareholders.
As a result, Uzma grew another RM76.4 millions, garnering total revenue of RM192.5
million in Financial Year 2011 compared to RM116.1 million in Financial Year 2010. This is
a solid growth of 66% year-on-year, contributed mostly by our production optimization and
consultancy services whose presence on the offshore scene has created strong interests in the
local and global oil and gas industry.
Arising from the 66% growth year-on-year, the group posted an after-tax profit of RM12.8
million compared with a net loss of RM1.2 million the year before.

3.1.2 Bernas assessment on Comparability (Refer appendix 4)

Besides providing relevant information to the investors, the data that is available in the
statement of comprehensive income can also be used as comparison from previous years in
the company for example the Year 2011 the revenue was RM3,530,732,000 as compared
with the year 2010 which was only RM3,172,973,000. With this comparison the investors
can see that there was an increase of RM357,759,000 in revenue. However, the net profit for
the company after tax has decreased tremendously from 2010 to 2011. The total decrease was
RM14,805,000 or 0.9% from 2010. This is important data for the investors to compare on the
strength of the company from this information.

3.2 Consistency
Consistency is very important because if the companys annual report shows different types
of data every year, it can be difficult to compare the information. The purpose of the annual
report is to enable users to compare the data so when the annual report itself is not consistent
in its data report, decision cannot be made and the user will have negative connotation for the
company. When changes are made in the annual report, they should also change the past year
data too to make sure comparison can still be made.

3.2.1 Uzma Groups assessment on Consistency (Refer appendix 2)

In the Uzma financial statements in Appendix 2, notice that disclosure at the bottom of the
note includes a summary of significant accounting policies. A change in one of these policies
would require disclosure in the financial statements and notes to restore comparability
between periods.

3.2.2 Bernas assessment on Consistency

A Share Sale Agreement for the acquisition by the Company of 409,165 ordinary shares of
RM1.00 each in BHBH from Jelapang Jati for a cash consideration of RM15.0 million.A
Subscription Agreement for the subscription by the Company of 1,627,483 new ordinary
shares of RM1.00 each in BHBH for a cash consideration of RM59.7 million. The Proposed
Equity Restructuring has been completed on 9 December 2011 and BERNAS now holds 49%
equity interest in BHBH.

4.0 EVALUATION ON THE QUALITATIVE CHARACTERISTICS OF

ACCOUNTING INFORMATION FOR INVESTMENT DECISION MAKING

Fundamental analysis is a complex and thorough analysis of the financial statements of the
company, which is supplemented by analysis of the sector in which the company operates,
and its macroeconomic environment. The goal of fundamental analysis is to assess the
financial position of companies, especially in terms of determining the fundamental value of
its shares.

4.0.1 Uzma Group

According to Managing Director / Chief Executive Officer Dato Kamarul Redzuan bin
Muhamed 2012 will clearly be a more exciting year for Uzma. They started off with a
strategic acquisition of 30.02% equity interest in Setegap Ventures Petroleum Sdn. Bhd. This
acquisition would enable them to offer fully integrated well services to the oil majors. The
acquisition is a way to expand their business and prepare them to take up bigger jobs in the
future.
In February, Uzma were awarded a RM350 million contract for the provision of oil welltesting equipment and services to PETRONAS Drilling Programmes in Peninsular Malaysia
for five years beginning in April 2012. This is a testament to Uzmas technological capability
in the upstream support services. I am extremely excited about this, as we believe I will truly
contribute to our 2012 income. Said Dato Kamarul Redzuan.
On 29 March 2012, the Company announced the completion of a private placement of
8,000,000 new ordinary shares of RM0.50 each in the Company following the listing of and
quotation for the said new shares on the Main Market of Bursa Malaysia Securities Berhad
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(Bursa Securities) which were issued and allotted on 29 March 2012 at an issue price of
RM2.00 per share

4.0.2 Bernas
According to the Organisation for Economic Cooperation and Development (OECD) and the
Food and Agriculture Organisation of the United Nations (FAO) in their OEC D-FAO
Agricultural Outlook 2011-2020, rice trade is expected to grow at 2.2% per annum for the
next decade. By 2020, it is projected at 41 million MT, up from 31 million MT in 2010.
Trade expansion will likely be fuelled by rising demand from African countries. The
Company had on 11 November 2011 entered into a Master Agreement with Jelapang Jati Sdn
Bhd (Jelapang Jati) and Ban Heng Bee Holdings Sdn Bhd (BHBH) for the proposed
increase of the Companys equity holding from 20% to 49% in BHBH for a total
consideration of RM110.66 million which comprise of the following documents and
simultaneously executed.
For the year 2011, the ongoing transformation of Padiberas Nasional Berhad (BERNAS) into
a nimble and commercial-oriented entity continued to progress at a deliberate and measured
pace. Whilst exploring paths to new growth and profitability, BERNAS remains committed to
fulfilling its mandated role as custodian of the nations paddy and rice industry.

5.0 SUMMARY

In accounting, the information can be divided into two that are primary and secondary
qualitative accounting information. The primary characteristics consist of relevance and
reliability. Relevance require the matters of feedback value, forecast value and timelines.
Reliability need the matters of verifiable, objectivity and trustworthy. The secondary
characteristics consist of comparability and consistency.
The assessment done with Genting Malaysia about their relevance was deemed satisfactory.
While looking at their 2009 and 2010 financial statements, their feedback value, forecast
value Sample of Good Assignment 9
and timelines were all good and it makes it easier for the users to make their decision
regarding this organization.
The assessment on reliability was found good for Bernas. The three characteristics, which
are, verification, objectivity and trustworthiness were done extensively. With a reputation like
Bernas, they cannot afford to fabricate their information because it can be spotted by
accounting society and bring them bad press in return. By looking at their profit, they do not
have the need to fabricate anything. So, it is safe to say that Bernas is a very reliable
organization.
In conclusion, all valuable information is important in the Financial Statement otherwise it
would be just like another figures or numbers in a statement. All the four essential Financial
Statements provide different information for investors to make sound decision.
As we have understood that the Statement of Financial Position provides information about
the financial position of the business as it bears the important totals of assets, liabilities and
the interest of owners in the business in the form of capital. By understanding the status of
business assets and burden of liabilities and the ability to pay them back on time, investors
can learn much about the company.

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6.0 APPENDIX
APPENDIX 1

11

APPENDIX 2

12

APPENDIX 3

APPENDIX 4

13

APPENDIX 5

14

APPENDIX 6

APPENDIX 7

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7.0 REFERENCES

http://www.bernas.com.my/index.php?option=com_content&view=article&id=74:backgroun
d&catid=34&Itemid=58 [2012 November 3]
http://www.uzmagroup.com/V5/home.html [2012 November 4]
http://smallbusiness.chron.com/qualitative-characteristics-accounting-information-3952.html
[2012 November 4]
http://www.bursamalaysia.com/market/listed-companies/company-announcements/967161
[2012 November 4]
http://highered.mcgrawhill.com/sites/0072994029/student_view0/ebook/chapter1/chbody1/qualitative_characteristic
s_of_accounting_information.html [2012 November 4]
http://uzmagroup.listedcompany.com/misc/ar2011.pdf [2012 November 4]
http://www.theedgemalaysia.com/in-the-financial-daily/182771-petronas-contract-a-boost-touzma.html [2012 November 5]
http://lms.oum.edu.my/myvle/modules/ccontent/c_content.php?cid=BBAW2103&cmid=5036&tocid=454966 Accessed on 5th
November 2012

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