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BBAW2103 / 2013

TABLE OF CONTENT
1.0

INTROUCTION...................................................................................................... 2
1.1 Missions.......2
1.2 Visions..3
1.3 Financial Highlights3
1.3.1 Revenue4
1.3.2 Profit before tax...5
1.3.3 Profit after tax..6
1.3.4 Profit before tax margin..7
1.3.5 Profit after tax margin.8

2.0
ACCOUNTING INFORMATION USERS OF BONIA CORPORATION
BERHAD...................... 9
2.1 Auditor.9
2.2 Employee....10
2.3 Government10
3.0
RELIABILITY CHARACTERISTIC OF ACCOUNTING INFORMATION FOR
INTERNAL USERS ...11
4.0
RELEVANCE CHARACTERISTIC OF ACCOUNTING INFROMATION FOR
EXTERNAL USERS..13
5.0

SUMMARY.14

REFERENCES

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1.0

INTRODUCTION
Bonia Corporation Berhad is a public listed company in Malaysia which is listed in the

Main Market of Bursa Malaysia and it is categorized under the consumer product. Bonia
Corporation Berhad is a Malaysia-based investment holding and management company. Being a
leader in the Asian leather fashion industry, Bonia provides a wide variety of high quality leather
and fashion products through innovative merchandising and creative marketing activities.
Bonia Group has a network of over 700 sales and outlets and 70 boutiques throughout the
world including countries like Singapore, Malaysia, Japan, Taiwan, Hong Kong, China,
Thailand, Vietnam, Indonesia, Brunei, Kingdom of Saudi Arabia, Oman, and Syria. Its
subsidiaries include CB Marketing Sdn. Bhd., CB Holdings (Malaysia) Sdn. Bhd., Ataly
Industries Sdn. Bhd., Luxury Parade Sdn. Bhd., Eclat World Sdn. Bhd., CB Franchising Sdn.
Bhd., BCB Properties Sdn. Bhd., Long Bow Manufacturing Sdn. Bhd. and De Marts Marketing
Sdn. Bhd. The Company operates mainly in Malaysia and Singapore. In August 2011, the
Company acquired Vista Assets Sdn Bhd.
Bonia Corporation Berhad which is listed on the Main Market of Bursa Malaysia is involved
in retailing, manufacturing and investment and property development. The three segments are:

Retailing which is engaged in designing, promoting and marketing of fashionable

apparels, footwear, accessories and leather goods.


Manufacturing which is engaged in manufacturing and marketing of fashionable leather

goods,
Investment and property development which is engaged in investment holding and rental
and development of commercial properties.

1.1 MISSIONS
In Bonia, it holds three different categories of Missions statement whereby it all started with
the letter R and it can be told by the 3R Missions of Bonia. The Missions are:

Recognition to be recognized as an international luxury brand with excellent customer


satisfaction.

Resources to build, recognize and reward our valued human capital.

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Responsibilities to provide sound return to stakeholders and fulfilling community


social responsibilities.

1.2 VISIONS
The Visions of Bonia contains five categories and it all stated will the letter B. The
companys vision can be recognized by the 5B Visions of Bonia.

Brand Value Bonia group will have the most desirable brands in the fashion industry
which will be relevant to all generations.

Brand Visibility Bonia will be well-established in 5 key countries and have brand
visibility in 30 other countries.

Billion Dollar Company Bonia shall contribute to an annual group turnover of RM1
Billion with atleast 12% profit before tax.

Business Listing Bonia shall have two more public listed companies in the region.

Best Employer Bonia Group will be recognized in the regions as the preferred
employer and shall create a workforce of passion and accountability.

1.3 FINANCIAL HIGHLIGHTS


Meanwhile, the financial highlights of the Bonia Corporation Berhad will be explained
for five years of accounting years of assessment which is from year ended june 2008 until june
2012, whereby, I will explain the financial highlights between five types of financial categories.
They are the revenue, profit before tax, profit after tax, profit before tax margin in percentage,
and profit after tax margin in percentage.

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1.3.1 REVENUE
Year

of

Assessment

30 June 2008
30 June 2009
30 June 2010
30 June 2011
30 June 2012
300,189,000.
314,891,000.
360,099,000.
461,381,000.0
579,812,000.

Revenue (RM)

00

00

00

00

As we can see from the above table, it shows Bonias revenue between five years of
assessment. In the year of assessment 2008, Bonia had collected their revenue of RM 300.19
million which had been increased in year of assessment 2009 to RM 314.29 million. Meanwhile,
Bonia had increased their revenue from year of assessment 2010 and 2011 which is RM 360.10
million and RM 461.38 million respectively. Last but not least, in the year of assessment 2012,
Bonia had once again gained an increased revenue collection from RM 461.38 million in 2011 to
RM 579.81 million in the year of assessment 2012. I can say that Bonia Corporation had done its
homework and job well as they had succeed in increasing their revenue from year to year in that
five particular year of assessment.

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1.3.2 PROFIT BEFORE TAX


Year of Assessment
30 June 2008
30 June 2009
30 June 2010
30 June 2011
30 June 2012
Profit before Tax
38,334,000.
29,515,000.
45,455,000.
56,546,000.
66,882,000.
(RM)

00

00

00

00

00

In the accounting year of assesment 30 June 2008, Bonia Corporation Berhad had gained
the profit before tax of RM38,334,000.00 while in the year of assesment 30 june 2009, the
company had decreased its number of profit before tax which was RM29,515,000.00.
Meanwhile, Bonia Corporation Berhad managed to earn back its value by increasing its profit
before tax in the year of assesment 30 June 2010 for RM45,455,000.00 and it keep on increasing
in the next year of assement which is in 2011 for RM56,546,000.00. As for the latest accounting
year of assesment, which is 30 June 2012, the company also managed to increased its profit
before tax value for RM66,882,000.00.

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1.3.3 PROFIT AFTER TAX


Year of Assessment
30 June 2008
30 June 2009
30 June 2010
30 June 2011
30 June 2012
Profit after Tax
28,223,000.
21,062,000.
33,203,000.
42,604,000.
45,557,000.
(RM)

00

00

00

00

00

As for the profit after tax, in the accounting year of assesment 30 June 2008, the
company had managed to earn the profit after taxation for RM28,223,000.00 meanwhile in the
year assesment 30 June 2009, Bonia Corporation Berhad had earned an increased amount of
profit after tax which was RM21,062,000.00. For the accounting year assesment 30 June 2010,
the company had regained its value in profit after taxation amounted RM33,203,000.00 and keep
on increasing in the year 2011 which was RM42,604,000.00. As for the last year accounting year
of assesment, which is 30 June 2012, Bonia Corporation Berhad had constantly increased its
profit after taxation for RM45,557,000.00.

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1.3.4 PROFIT BEFORE TAX MARGIN


Year of Assessment
30 June 2008
Profit before Tax Margin

30 June 2009

30 June 2010

30 June 2011

30 June 2012

(%)

9.37

12.62

12.26

11.54

12.77

In the year of assesment 30 June 2008, Bonia Corporation Berhad had the profit before
tax margin for 12.77% while in the accounting year of assesment 30 June 2009, the company
had scored the profit before tax margin for 9.37% which shows a decrease from the previous
year. Moreover, in the accounting year of assesment 30 June 2010, Bonia Corporation Berhad
had captured a good increment of profit before tax margin which was 12.62% meanwhile, there
was a slightly declination in the accounting year of assesment 30 June 2011 which was 12.26%.
Bonia Corporation Berhad had once again decrease its value of profit before tax margin in the
accounting year of assesment 30 June 2012 which amounted to 11.54%.

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1.3.5 PROFIT BEFORE TAX MARGIN


Year of Assessment
Profit after Tax Margin

30 June 2008

30 June 2009

30 June 2010

30 June 2011

30 June 2012

(%)

9.40

6.69

9.22

9.23

7.86

As for the profit after tax margin, Bonia Corporation Berhad had gained 9.40 % in the
accounting year of assessment 30 June 2008 meanwhile 6.69 % in the accounting year of
assessment 2009. Moreover, the company had gained an increment of profit after tax margin in
the year of assessment 30 June 2010 which was 9.22 % and had a slightly increased in 2011
which was 9.23 %. As for the last year which was in the accounting year of assessment 30 June
2012, the company had decreased its percentage of profit after tax margin to 7.86 %.

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2.0 ACCOUNTING INFORMATION USERS OF BONIA CORPORATION BERHAD


2.1 Auditor
The auditor of Bonia Corporation Berhad is BDO Chartered Accountants which is one of
the well known medium audit firm in Malaysia. BDO Chartered Accountants had been appointed
by Bonia Corporation Berhad as its auditor and BDO Chartered Accountants had been provided
useful and trusted audited accounting information towards Bonia Corporation Berhad with true
and fair view.
The first purpose is fraud investigation. Fraud investigations are a special interest for
auditors. Companies that engage in suspicious, illegal or fraudulent activity may come under
investigation by regulatory authorities. If Bonia Corporation engages in some suspicious
fraudulent activities, BDO Chartered Accountants has to put itself as an uninfluenced observer to
clarify or bare witness towards the fraudulent activities that occurred.
The second purpose in obtaining accounting information from the auditor is for the
public interests. BDO Chartered Accountants has to provide opinions for quarterly or annual
reports regarding a company's financial accounting process. Private investors, investment firms
and other individuals have an interest in this information. BDO Chartered Accountants serve to
certify that the general public has a precise understanding of the accounting information. While
the general public cannot request an audit of a public or private company, shareholders can elect
a board of directors for this purpose. The board often hires a public accounting firm to conduct
audits for the general public's interest.
The third category of users who would like to obtain from the auditors intention from
Bonia Corporations Berhads accounting information is for the third party review. BDO
Chartered Accountants are interested in Bonia Corporation Berhads accounting information on
behalf of a third party organization. These organizations include banks, lenders, government
agencies and other businesses. BDO Chartered Accountants typically release official reports that
state their opinion of the Bonia's accounting information. This opinion can be favourable,
unfavourable or adverse, if BDO Chartered Accountants has serious concerns about the Bonia
Corporation Berhad.

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2.2 Employees
Employees are the individuals who transform economic resources into valuable
consumer goods or services. Employees are interested in the companys profitability and
stability. They are after the ability of the company to pay salaries and provide employee benefits.
They may also be interested in the companys financial position and performance to assess the
possibility of company expansion and career opportunities.
In Bonia, employees can be interested in companys financial information for several
reasons. Bonia Corporation Berhad may offer contributions to employees by providing ESOS
(Employee Share Option Scheme), or might be the retirement account plan. The income
statement usually lists the amount of these contributions in expense accounts.
Employees may also receive commissions or bonuses based on the amount of sales a
company has generated during a certain time period. Business owners can also treat employees
like partners. Employees in a partnership-style organization often receive a portion of net income
as their pay.
2.3 Government
Governing bodies of the country, especially the tax authorities, are interested in an
entity's financial information for taxation and regulatory purposes. Taxes are computed based on
the results of operations and other tax foundations.
In Bonia, the company will have to provide their accounting information to the tax
regulatory in order to determine their taxable income which has to be paid to the Malaysia Inland
Revenue Board. In order to determine the tax, Bonia has firstly to prepare their computation on
financial statement which has to be prepared by BDO Chartered Accountants as their auditor.

3.0 RELIABILITY CHARACTERISTIC OF ACCOUNTING INFORMATION FOR


INTERNAL USERS
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Each organization has implied and clear goals and objectives. Many organizations have a
mission statement that particularly describes their goals. These goals can vary widely among
organizations ranging from non-profit organizations, where goals are aimed at serving specified
elements, meanwhile, for profit organizations where goals are directed toward maximizing the
owners objectives.
Business owners often require financial information when making business decisions.
Incorrect or inappropriate information can hamper decision-making or cause business owners to
make incorrect assessments about their companies.
Accounting information must be reliable. This is because business owners can be assured
that accounting information presents a good quality of the companys financial presentation.
Business owners of Bonia Corporation Berhad need accounting information that is applicable to
the business decision at hand. They can request financial statements and all the working papers
throughout the accounting process. As for the example, the cost distribution reports might not
provide sufficient information for business owners who must make a decision on hiring
employees. Business owners should particullarly request and review accounting information.
This is because, is to ensure it provides the most valuable information for the decision making
process.
Let us look at the 2011 annual report of Bonia Corporation Berhad in the statement of
comprehensive income, under the general and administrative expenses. As we said earlier, if the
business owners have the intention to hire new employess, they will need to have the
quantitative information of how much their expense on general and administrative.
As in 2011, the company had spent RM16,746,000.00 of expenses on general and
administrative. This means that if the owner would like to hire some more employees for the
next particular year, they will need to analyse on the expenses that will incurred whether they
wanted to hire some more employees to increase efficiency or to maintain the current situation.
It is all up to them based on the accounting information provided by the BDO Chartered
Accountants. Therefore, all of this information has to be useful in order to make them happy
when looking at it.
Accounting information must be understandable. This is an important qualitative
characteristic for business owners like Bonia Corporation Berhad. Many business owners do not
have a strong accounting background. Business owners should choose an accountant who can
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prepare information in an easily understandable manner, which in this case, BDO Chartered
Accountants happened to be the professional accountant for Bonia Corporation Berhad in order
to provide understandable accounting information for them.
In Bonia Corporation Berhad, besides the cost allocation reports requested by the owner,
they can request the information of its Investment Properties in 2011 annual report in order for
them to analysis on how much the companies own the investment properties before they make
any decisions to acquire new properties or not to buy any new properties. For example, in 2011,
the annual report of Bonia Corporation Berhad, in the statement of financial position stated
under non-current assets to be precise, shows that the company own the investment properties
valued at RM16,403,000.00 compared to the year 2010 which was RM17,274,000.00. It shows
that the company had sold some of it properties in 2011 which the number shows a decline.
Therefore, the owner of the Bonia Corporation Berhad will need to analyse using the
provided accounting information in order for them to buy new investment properties to increase
their non-current assets or to sell their properties. All the decision that will be made by the
owners of Bonia Corporation Berhad will be based on the accounting information provided in
the annual report and information provided by the chartered accountants.

4.0 RELEVANCE CHARACTERISTIC OF ACCOUNTING INFROMATION FOR


EXTERNAL USERS

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Accounting information should be related between each other at a specific time period or
contain information regarding individual business functions. Business owners often conduct a
trend analysis when reviewing financial information. The analysis should compare the trend of
historical financial information to the companys current accounting period information. Any
unrelated historical information can misrepresent the trend analysis process.
Let us see at Bonia Corporation Berhads disclosure on an increase in Earnings Per Share
(EPS) from RM0.166 to RM0.194 in 2010 and 2011 respectively. The information is relevant to
investors as it may assist them in confirming their past predictions regarding the profitability of
the company and will also help them in forecasting future trend in the earnings of the company.
Relevance is affected by the materiality of information contained in the financial statements
because only material information influences the economic decisions of the investors of Bonia
Corporation Berhad.
Besides that, let see in Bonia Corporation Berhads group cost of sales in the 2011 annual
report, the amount shows that the group have to spend RM194,232,000.00 of costs in order to
make the sales of RM461,381,000.00. This information should be relevant parallel to the
operations of the company in order to ensure that the company had spent its money to cover cost
of sales which are on the right path without any misuse of money.
Therefore, it is important for BDO Chartered Accountants to ensure that any relevant
information on the cost of sales should be taken into account in order to ensure that there will no
missing items of the money which were spent on the costs of sales. The creditors should use this
information to analyse whether it is relevant for them to provide goods and raw materials on
credits to Bonia Corporation Berhad in order to produce their end products.

5.0 SUMMARY

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Relevance and reliability are two of the four key qualitative characteristics of financial
accounting information. Relevance requires that the financial accounting information should be
such that the users need it and it is expected to affect their decisions.
Reliability requires that the information should be accurate and true and fair. Relevance
and reliability are both critical for the quality of the financial information, but both are related
such that an emphasis on one will hurt the other and vice versa.
After the balance sheet date during the time when audit is carried out, it becomes clear
which debts were realized and where were not hence it improves the reliability of allowance for
bad debts estimate but the information loses its relevance due to too much time being taken.
Timeliness is the key to relevance.
Accounting information is relevant when it is provided in time, but at early stages
information is undefined and later less reliable. Therefore reliability and relevance are two main
important factors for the users to take into account when they are considering their knowledge in
Bonia Corporation Berhads accounting information.

(2903 Words)
References
Frank Wood and Alan Sangster. (1999). Business Accounting 1. Pitman Publisher. United
Kingdom: London.
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S. Susela Devi, Howard Davey, Keith Hooper. (2004). Accounting Theory and Practice: A
Malaysian Perspective. Prentice Hall. Malaysia: Kuala Lumpur.
Assoc. Prof. Dr. Shahul Hameed Hj Mohamed Ibrahim. (2009). Accounting and Auditing for
Islamic Financial Institutions. Kuala Lumpur: INCEIF
M W E Glautier and B Underdown. (2001). Accounting Theory and Practice. England:
Edinburgh.
http://www.bonia.com/
http://bonia.listedcompany.com/misc/ar2011.pdf
http://www.securities.com/
http://bonia.listedcompany.com/
Lynette Teal, http://www.wisc-online.com/

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