Table of Content

INTRODUCTION

BACKGROUND
o Public Listed Company
o Shared Ownership
o Single Ownership

ANALYSIS
o Public Listed Company
o Shared Ownership
o Single Ownership

DISCUSSION

SUMMARY

REFERENCE

INTRODUCTION
Financial management is a process to maximise the overall of an organisation by
applying general management principles to financial resources of the organisation. It
involved planning, organising, directing and controlling the financial activities such as
obtain and consumption of funding and also procurement.
In this report, three different companies including YTL Corporation, Sin Hup Seng
Trading and Natural Beauty Alteration Centre are compared in term of their financial
structure and their financial year end report. These companies are significantly
different where YTL Corporation is a public listed company; Sin Hup Seng Trading is
shared ownership company whereas Natural Beauty Alteration Centre is single
ownership company. Their main income or funding, and liabilities are identified and
analysed in term of how they manage the fund and balance out the liabilities.
Single ownership is a business which has no separate existence from its owner and
is responsible for the companys debt and losses personally. This form of ownership
is the simplest business form which one can run a business. All his/her personal
asset will be subjected to the debts or claims of all creditors. All the income and
losses of the business are also taxed on the owners individual personal income tax
return. Although this form of ownership has very adverse consequences, it is still a
popular business form due to its low cost, simplicity and ease to setup. Often,
owners personal and business property and funds are mixed, which differentiate it
from shared ownership and corporations.
Shared ownership is a business form in which two or more persons run and manage
the business and all owners are equally responsible for the businesss debts and
losses. In most cases, an agreement which is signed by all partners will outline the
allocation of profits and losses, as well as the management and operation of the
business. Both of the single and shared ownership are simple and can be entered
into and dissolved easily, even without a written contract.
Meanwhile, a corporation is more complex in which a company or group of people
are authorized legally to act as a single entity. A corporation is owned by
shareholders and the liability is limited to their investment. Unlike single and shared
ownership, this legal entity do not terminate upon the owners death, and can enter

into and dissolve contracts, sue or to be sues, incur debts and buy or sell property as
a normal individual can do.
The related information for this assignment is obtained through the financial year end
report of these companies which generally consists of the companys balance sheet,
cash flow statement and income statement. This financial year end report is
important for every organisation to provide important financial information for their
stakeholders. Balance sheet is a useful tool in financial management as a summary
of the financial balances of an organisation, either of sole ownership, shared
ownership or public listed corporation. It described the assets, liabilities and owners
equity and can used to represent the companys financial position as of a specific
date.
Income statement or profit and loss account provides the summary of the revenues
and expenses of an organisation through both operating and non-operating activities
and shows the net profit and loss incurred over a specific accounting period.
Meanwhile, cash flow statement is a summary showing the cash obtained and used
during the time interval as specified in its heading. It shows both the operating results
and the associated changes in the balance sheet.

BACKGROUND
1. Public Listed Company YTL Corporation Berhad
YTL Corporation Berhad is one of the largest public companies listed on the Bursa
Malaysia with the stock code 4677 and company number 92647-H. This company is
founded by Tan Sri Dato Seri Yeoh Tiong Lay in 1955 with his eldest son, Tan Sri
Dato Seri (Dr) Francis Yeoh Sock Ping as the Managing Director in 1988. In 1985, it
has grown from a single listed company to a group of 5 listed companies which have
a combined Market Capitalisation of approximate RM30.3 billion and total assets of
over RM53.6 billion as at 30 November 2014.
YTL is now an international utilities company where more than 70 percent of its
revenues are come from outside Malaysia. It was also the first Asian non-Japanese
company to be listed on Tokyo Stock Exchange since 1996.
The core businesses of YTL Corporation are ownership and management of
regulated utilities and other infrastructural assets. The major contributor for this
company, which is its utilities division made up of power generation and merchant
multi-utilities businesses in Singapore; water and sewerage operations in UK; and

also power generation, power transmission and communications businesses in

Malaysia, Australia and Indonesia.
The other YTL Corporations portfolio of business includes:
1
2

Cement Manufacturing
Construction Contracting

YTL Cement
Syarikat Pembinaan Yeoh Tiong Lay Sdn

Operational and Maintenance

Bhd (SPYTL)
YTL Power International Berhad

(O&M) Activities
Property Development &

YTL Land & Development Berhad

5
6

Investment
Hotel Development & Investment
Information Technology Initiatives

YTL Hotels
YTL e- Solutions Bhd (YTLE)

This companys strategy to offer World Class Products and Services at Competitive
Prices extends across its great range of business activities and had achieved a large
growth rate of 55% over the 15 years to 2010.
2. Sin Hup Seng Trading
Sin Hup Seng Trading is a tyre trading house established in year 1999. It is a
shared ownership company founded by Mr. Tan and Madam Nim, with both holding
the share equally, i.e. 50 % each. The company which is located at Simpang
Rengaam, Johor has more than 10 years business experiences in the related field.
The long business period has successfully expanded its customer sources across
several regions in Kluang.
The business scope of Sin Hup Seng Trading not only includes providing wide variety
of tyre products, as well as delivering tyre installation services. A vast selection of
tyre brands, ranging from local to imported ones, such as Bridegestone, Dunlop,
Continetal and others is made available to meet the needs and wants of clients.
Meanwhile, the large stock capacity of tyres allows services to be provided for normal
passenger cars, light truck, bus, lorry etc. To name, there are car tyres, 4x4 tyres,
light truck tyres, truck & bus tyres, off-the-road tyres and forklift tyres.
3. Natural Beauty Alteration Centre
Natural Beauty Alteration Centre was established on year 2013. It is a tailor shop
located at Kluang, Johor. Natural Beauty Alteration Centre is a single ownership
company and it is still consider a new establish company since the tailor shop is
established on March of year 2013 and business is start on May of year 2013.

Natural Beauty Alteration Centre is a small business that establish by a

women and the main product sell by the company are school uniform, fashion clothes
and cloth. The business is only run by the owner herself and sometime by her
daughter. The owner of the business is a professional tailor that undergo training at
Astitchworks Concepts Institution of Singapore. She is knowledgeable regarding to
different type of clothes such as Malay costume, Chinese costume and Indian
costume.

ANALYSIS
Introduction
As the business activities and the method of ownership involved companies are
different, there is no way to compare their financial performance only on numerical
view. Hence, we analysed and compared their financial performance by comparing
their main incomes and liabilities and the way they manage the income and liabilities.
The financial structure of these three companies and their process to produce the
financial year end report are also analysed and compared.
Core Business and Contribution of Main Income
1. YTL Corporation
As stated in the companys 2013 annual report, the revenue had been increased
from RM8,892,125,000 at 2009 to RM19,972,948,000 at 2013. Their main income
and increase in profit are from their businesses of property development, hotel and
power station O&M operations. Recently, the drastic increase in profit are due to
better margins on electricity sales and tank leasing, better pricing from their water
and sewerage operations and lower operating expenses in the multi-utilities division.
75.3% of the corporations revenue and 72.4% of non-current assets are from the
corporations overseas operations, especially the corporations power generation,
merchant multi-utilities and power transmission businesses. YTL Powers has several
wholly-owned subsidiaries company in Malaysia and Singapore, namely YTL Power
Generation Sdn Bhd and YTL PowerSeraya Pte Ltd respectively, as well as has
associated companies in Indonesia and Australia, including PT Jawa Power and
ElectraNet Pte Ltd respectively. This also can see in term of their hotel development
and management in which their Starhill REIT comprises assets in Japan and
Australia

According to the revenue statement in the annual report, the main revenue in 2013 is
their sales of electricity which account for RM11,006,805,000, followed by sales of
water, treatment and disposal of waste water; sales of goods; and sales of fuel oil
which account for RM2,507,191,000; RM2,545,660,000; and RM1,525,348,000
respectively.
By studying their cash flow statement, their main income in term of cash can be
divided into cash from operating activities, cash from investment activities and cash
financing activities. This indicate that the main income for this corporate not only from
their operating activities, but also investment including investment in subsidiaries, in
associated company and in jointly controlled entity, as well as from financing activities
such purchase and selling of share, bonds and borrowing. Based on the cash flow
statement also, the main cash or cash equivalent expenses are depreciation noncurrent assets and interest expenses which accounted for RM1,441,564,000 and
RM1,001,293 respective.

Total Asset = RM53,619,494,000

Total Liabilities = RM38,061,749,000
Equity = RM15,557,745,0

Current Asset = RM32,900,115,000

Current Liabilities = RM38,061,749,000
Non-current asset = RM20,719,379,000
Non-current Liabilities = RM29,952,043,000

In the balance sheet of YTL Corporation, the total assets are balance with
corporations equity combine with total liabilities as the shown in the formula below:
Current Asset + Non-current Asset = Equity + Current Liabilities + Non-current
Liabilities
As in 2013, the total asset is RM53,619,494,000 which balances with the
combination of total liabilities of RM38,061,749,000 and equity of RM15,557,745,000
2. Sin Hup Seng Trading
The company, which acts as middle supplier, generates revenue through regional
tyre supply to car services center, transport agency, deliverys company, tyre trading
and so on. Basically, non-current asset used for revenue generation in this company

is lorry. There are six capital assets (lorries-MW 8114, JEH 8010, JER 8010, JEQ
1431, JKM 5292, JPC 7793) being employed, and yet, one of those (lorry JER 8010)
has been disposed in year 2013 due to termination of life. Not forgetting the fixed
assets that are depreciated by the company for more than a year in earning profit for
their business, namely, office renovation, furniture & fittings, office equipment, mobile
phone, computer and fax machine. Hence, net book value for all the fixed assets are
RM 163,149.23, according to the following formula.
Net Book Value = Cost of Asset Accumulated Depreciation (disposal value is
applicable in Sin Hup Seng Trading)
While current assets for revenue generation here is referred to accounts receivable,
sundry deposit and cash either in hand or in bank. To explain, trade debtors (sheet 4)
from who cash amounts are collected has contributed RM 135,551.45 for the year
whereas total of cash and sundry deposit (refers to deposit in which no interest is
paid) are RM 30,761.71 and RM 11,500.00 respectively. The amounts might not only
be come from tyre supply, but also from the available tyre installation services.
In Sin Hup Seng Trading, only current liabilities which are expected to be liquidated
within the year have been obliged. As shown in balance sheet, current liabilities for
year 2013 comprised of hire purchase of a lorry (Lorry Hino- JPC 7793) and trade
creditors. There are no non-current liabilities as the portion of bank loan which is
divided into 36 installments (3 years) is due within year 2013 on the balance sheet
date.
Hence, it can be found out that the equity of the company is RM 288,191.59 by
following the below formula.
Equity = Fixed Assets + (Current Asset Current Liabilities)
= RM 163,149.23 + (RM 177,813.16- RM 52,770.80)
= RM 288,191.59
The half bottom of balance sheet has shown the balanced amount of equity. From
the partners current account, it demonstrated that the total sum of retained earnings
brought forward and yearly net profit is RM 194,191.59. The reason of not having
capital in the account might owe to . After partners drawings have been deducted,
the equitys amount shown is RM 288,191.59, same as the value calculated before.

The partners drawings for this incorporated company are RM 47,000 each for two
individuals, which have shown in sheet 3.
To make matter clear on net profit in the year 2013, a total amount of RM
1,012,094.80 is obtained through revenue and gain on disposal of fixed asset (lorryJER 8010). The net profit can be calculated after deducting the expenses at RM
932,140.94, on items like accommodation, clerk wage, lorry expenses (sheet 5),EPF
contribution etc. which is shown in sheet 2.

3. Natural Beauty Alteration Centre

Natural Beauty Alteration Centre generates income through sales of their handmade
products and also partly from the suppliers. Their handmade products include school
uniform and other fashion products. Their business generates highest profit during
festival seasons such as Chinese New Year in February, Hari Raya in July and so on
as they sell custom made fashion clothes to the customers. Not only that, they also
provide services which helps to alter the clothes of the customers.
The main liability of the company is accrued expenses. The accrued expenses is the
operating cost or expense which use to run the business but the money is not yet
paid for. The is only 1 accrued expenses for the Natural Beauty Alteration Centre
which is the book keeping fee (including 6% printing & stationary) and the cost of
accrued expenses is RM 420. Since the company is only begin their business on
May of 2013 the total income for the year 2013 is only cover 8 months and the total
income value is RM 17,486.00. While for the net profit of the company for year 2013
is RM 2,672.63. The net profit of the company is then become part of the equity of
company. The net profit of the company can calculate by using the formula below:
Net Profit = Revenue or Total Income (Total Cost of Goods Sold + Total
Expenses)

Hence, net profit for year 2013 = RM 17,486.00 (RM 11,124.17 + Rm3689.20)
= RM 2,672.63
The equity of Natural Beauty Alteration Centre is RM 27,872.63 and it does not has
non-current liability. The fixed asset of the company consist of renovation (Rm5,
490.00), electrical installation (RM 2,025.00), shop equipment (RM 1, 746.00) and

tool & utensils (RM 243.00). The current assets of the company consist of two
components which are stock (RM12, 774.48) and cash in hand (RM6, 018.15). While
for the current liability, it only has accruals and it cost RM 424.00. The value of equity
can calculate based on the formula below:
Equity = Fixed Asset + (Current Assets - Current Liability)
Hence,
The equity of the company = RM 9, 504.00 + (RM 18, 792.63 RM424.00)
for year 2013

= RM 27872.63

Financial Structure of Company

1. YTL Corporate
YTL Corporation obtains funds from several sources including through profitable
operations internally and also externally from bond markets, equity market, issue of
share capital and irredeemable convertible unsecured loan stock. The average
revenue of YTL corporate is high enough to fund the future operations of the
corporates. For example, the revenue in 2013 is RM19,972,948,000. The corporates
businesses are also financed by bonding and borrowing in which a bond is a promise
to pay in the future in exchange for receiving something today. In 2013, YTL Corp.
has the net cash flow from bonding and borrowing of RM519,122,000 and
RM1,465,920,000. In 2013, YTL also undergo change in composition as a respond to
changing economic and financial market conditions, and had result in RM80,000
extra reserves for the corporation.
Besides, YTL Corporation also issue share capital and issue shares by subsidiaries
to non-controlling interest which contribute total equity of RM1,381,400,000 and
RM181,551,000. YTL Corporation also issue Irredeemable convertible unsecured
loan stock (ICULS) which is a security that can be used to buy underlying common
shares. In YTL Corporation, ICULS is issued by YTL Land & Development Berhad
and YTL Cement Berhad. ICULS can be converted to equity or shares during its
maturity date based on the step-up coupon rate and the interest is payable semiannually.
For an insight for the financial organization structure, all the profitability and
development of YTL Corporate Group are fall on the responsible of The Board of
Directors which consists of 9 Executive Directors and 4 non-executive Directors.

Executive Directors are directly responsible for the business operations while the
non-executive directors are independent directors who ensure an independent
judgment on the issues of strategy, performance and resources. The Board and the
13 directors need to make decision on the matters of business expansion and
restricting plans, material acquisitions and disposals, limit of expenditure and capital
alterations plans.
YTL Corporation has also an external Audit Committee to assist the Board of
Directors in the matter of the corporate accounting and practices, as well as
improving the corporates business efficiency, the quality of the accounting and audit
function to strengthen the confidence of the public in the corporate and their reported
results. They are required to produce annual financial report. The Audit Committee is
also responsible to review the scope, results, and cost effectiveness of the audit and
also the independence and objectivity of the external auditors, preventing the
external auditors do not give substantial volume of non-audit services to the
Corporate.
Since there is numerous shareholders interest needed to be considered,
management of fund is especially important in this corporate. The funds need to be
managed properly to maximise the return for all the contributors of the fund. In this
large company, the management of fund is mainly managed by the Board of
Directors and 13 Directors, and needs to include in the annual report for the
knowledge and reference of all stakeholders, shareholders and whoever interested in
investing in YTL Corporate.
In YTL Corporate, almost two-thirds of the funds are used for investment. Their
investment activities can be further divided into investment in subsidiaries,
investment in associated companies and investment in a jointly controlled entity. In
2013, the net cash flows used in investing activities are RM3,268,342,000. Besides,
the fund is also used for acquisition of property, plant and equipment which can help
in their ongoing operations or increase their productivity capacity. This had cost the
corporate a total of MR1,695,167,000 for property development. Some of the
properties acquired such as hotel properties are also used for lease with a step-up
rate of 5% every five years. According to the annual report, the future minimum lease
payment receivables from leasing hotel properties are around RM573million.
2. Sin Hup Seng Trading

Financial structure is concerned with long-term debt and equity that a company uses
to finance its operation. In the shared ownership company, they raise finance from
bank loans for hire purchase of lorry to support their core business. For example, one
unit of secondhand lorry Hino (JEQ 1431) and one unit of firsthand lorry Hino (JPC
7793) are financed from Public Finance Berhad and RHB Bank respectively. A total
loan of RM 57,500 inclusive interest, payable through 30 installments was taken in
year 2004 for the former while a 36-term interest bank loans at RM 76,930.00 has
been taken in year 2013. Beside of obtaining their funds via bank loan, the company
also operates their business through self-financing.
Basically, Sin Hup Seng Trading employed clerk holding diploma in accounting to
manage its money. Financial statements are produced in planning and organizing the
companys finances. Yet, no financial department is specially formed as the company
is not incorporated and auditing function is not necessary.
The management of fund is initially started up through issue of sales invoice by
business owner to record the trading parties and lists as well as to describe and
quantify the items sold, with the statement of shipments date, prices, delivery and
payment terms. After that, all the source documents are recorded in chronological
order into journal, for posting to general ledger in the end of every month. The
purpose of journal is used to keep track on daily business transaction, and thus,
summarizes the accounting information of the company as central repository. To
check if the general ledger is in balance, trial balance is made for adjustment before
making closing entries. Lastly, financial statement is produced with income statement
and balance sheet as summary report.
3. Natural Beauty Alteration Centre
According to the business owner, their business is solely self-financing. The shop lot
is owned by the business owners father. Besides, the sewing machine that played an
important role as a capital to produce the fashion products is owned by the business
owner for years before attending training to be a professional tailor. This is because
of her interest and passion towards sewing and hence, developed into a business.
The raw materials from suppliers and the utilities expenses is paid and supported by
the business owner alone. The financial is solely fund by the business owner who got
support from her spouse and other family members. Her business does not depend
on the loan from bank.

The financial organization structure of the company is managed solely by the

business owner. The owner did not hire any crew or employee to run the business
but the business owner is aided by her daughter. All the revenue of the company will
be collected by the business owner to cover the expenses and the rest will be the net
profit.
The fund is managed through the sales invoice issued by the business owner. It
keeps a record of the sales stating the products, quantity and even services together
with the agreed price and also the date of the sales invoice. The sales will then be
recorded into a journal that keep accounting transaction in sequence, posting to
ledger at the end of each month and prepare of trial balance for annual book keeping
purposes.

Discussion
After analyses the three different type of companies, we have found that, there are a
few difference between the company in the producing the financial year end report.
The differences between the companies is shown on the table below:
Balance sheet
Balance sheet is a summary of the financial balances of the company. Basically
the balance sheet of both of the three companies are same, where it includes
assets, liabilities and equity items of the company. The only different inside the
balance sheet is the complexity and type of items.
Single
Shared
Public Listed Company
Ownership
Ownership
-For the assets, normally will include
cash, merchandise, property,
customer receivable and equipment.
-For the liabilities, normally will include
taxes due, outstanding loans and
account payable.
-For the equity, it will include owners
capital for single ownership company
and partners capital for shared
ownership company.
-

Equity

-For the assets, liabilities and equity items

it has more complex items such as
intangible assets, deferred tax assets and
liabilities.
-The equity account for public listed
company also as varied as common
stock, preferred shares, dividend
payments, retained earnings and treasury
stock.
-The public listed company which is large
in size is required to prepare balance
sheet for each division of their business
which is then required to be incorporated
in the organizations annual report.

In preparing the financial year end report, one of the significance differences is
shown in equity. Equity is the residual value of investors in assets after all the
liabilities are paid.
Equity = Total Assets Total Liabilities
For the three analyzed companies, the shareholders equity is positive where the
shareholders deficit does not happen.
Single Ownership
The equity is spread
among owner.

Shared Ownership
The equity is divided
evenly among the two
shareholders.

Public Listed Company

The equity is not shared to
anyone but only the
business ownership.

Taxation
For taxation, the form need to fill by the three companies is different.
Single Ownership
Shared Ownership
Public Listed Company
-They need to fill in
-They need to fill in Form
- They need to fill in Form C
Form B for taxation
P and Form B for taxation
and Form BE for taxation
purpose and the
purpose. The Form P is fill purpose.
owner of the company by the company but the
- Form C is fill by the
need to pay the tax.
company no need pay the company and the tax is paid
tax, where the tax is pay
by using the company
by the partners/ stake
funding.
holder of the company.
- The director of the
-The partners/stake holder company need to fill the
need to fill in the Form B
Form BE and he need to pay
and the tax of the
their own income tax.
company is share by the
partners of the company.

Income Statement
The income statement for the above three company will be prepare first where the
net income or loss will become part of the Statement of Owners Capital. However
the income statement for the above three company has a significant different.
Single Ownership
- Not including any

Shared Ownership
-Same with single

Public Listed Company

- Basically same with single

salary expense and

ownership

and shared ownership but

income taxes

including income taxes and

salary expense

Financial Statement Requirement

A formal record of the financial activities of a business in well structure and easy to
understand.
Single Ownership
-Sole ownership is not

Shared Ownership
-The same applied as for

Public Listed Company

-The company is required to

required to prepare
audited financial
statements.
-They only need to do
book keeping to have
proper and substantial
accounting and other
records to show the
real financial status of
the company.

the single ownership. But

the shared ownership with
SDN BHD will have to
prepare audited financial
statements.
-The purpose of preparing
financial statement id for
the reference of the
partners in the company to
keep track of company
financial status.

prepare complete audited

financial statement which
includes profit and loss
account, balance sheet and
explanatory notes to the
account.
-The purpose of preparing
financial statement is for the
references of shareholder
and to publish it.

Summary
In summary, by analyses the financial statement of Natural Beauty Alteration
Centre (single ownership), Sin Hup Seng Trading (shared ownership) and YTL
Corporation Berhad (public listed company). We found that there are a few significant
differences between the in term of preparation of income statement, balance sheet,
and taxation for the financial year end report. Besides that, the financial organization
structure of the company and the way they manage their fund is also different
depend on the type of company.
However, the process of collect raw information for book keeping purpose is
same for both of the three companies, where both of the companies need to follow
the basic accounting cycle by go through the process of collection of source
document such as receipts, invoices and cheques, posting the information from the
document to the book of original entry, posting to ledgers at the end of each month,
preparation of pre-adjusted trial balance by extract the balance of ledger and
account, adjustment of accrued revenue and expenses, preparation of post-adjusted
trial balance, production of financial statements which including income statement
and balance sheet and finally closing entries of the year end account.

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