In the name of Allah, the Most Gracious and the Most Merciful, Alhamdulillah, fi rs t o f al l w e wo ul d l i k e t o t h an k Go d as fi n al l y w e w e re a bl e t o finish our assignment that

have been given by accountings lecturer to us. This task had been done with all afford by group members even though a little bit problem were happened among us while doing this assignment. Luckily, all the problems can be settle down and we were able to adapt properly and wisely. Besides that, a big thanks to our advisor and also our lecture Miss Farah Bt Idayu because without her guide our project cannot be done smoothly like this. She always give us supports and guide to us how to do our assignment in purpose to produce a good outcome from research that been studied. The company that has been chosen by our group are regarding the financial statement of Padini Holdings Berhad and Bonia Corporation Berhad. Finally, thank to our beloved group members that always stick together and also work hard to produce a good assignment with all effort and responsibility. Hope that all the effort will give a lot of benefits to us and also to our group project. Million thank also we wish to all our classmates because they also help us. They always give us some brilliant ideas and comments on our project so that we can improve our project in many ways.

Excutive Summary

Padini Holdings Berhad Padini Holdings Berhad is a Malaysia-based investment holding company. Through its subsidiaries, the Company acts as dealers of ladies shoes and accessories; acts as dealers of garments and ancillary products; acts as dealers of childrens garments, maternity wear and accessories, and provision of management services. During the fiscal year ended June 30, 2010 (fiscal 2010), the Company had a total of 137 stores-within-store. In fiscal 2010, the Companys subsidiaries were Vincci Ladies Specialties Centre Sdn. Bhd., Padini Corporation Sdn. Bhd., Seed Corporation Sdn. Bhd., Yee Fong Hung (Malaysia) Sendirian Berhad, Mikihouse Childrens Wear Sdn. Bhd., Padini Dot Com Sdn. Bhd., Padini International Limited, Vincci Holdings Sdn. Bhd. and The New World Garment Manufacturers Sdn. Bhd.

Board of Directors Mun Yee Ho Company Secretary Fong Ying Tam Company Secretary Pang Chaun Yong Managing Director, Executive Director Kwai Heng Chan Executive Director Chung Yet Cheong Executive Director Chin Lin Chong Executive Director Lai Wah Yong Executive Director Sahid Bin Mohamed Yasin Independent Non-Executive Director Kee Fatt Foo Independent Non-Executive Director

Bonia Corporation Berhad Bonia Corporation Berhad is a Malaysia-based investment holding and management company. The Company operates in three segments: 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, and investment and property development, which is engaged in investment holding and rental and development of commercial properties. 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 Berhad.

Board of Directors Sang Sem Chiang Group Executive Chairman of the Board, Chief Executive Officer Chin Look Chong Group Finance Director, Financial Controller, Executive Director Kwee Wah Chok Company Secretary Kean Wai Tan Company Secretary Oi Ling Ting Company Secretary Heng Kieng Chiang Group Managing Director, Executive Director Fong Tat Chiang Group Executive Director Sang Bon Chiang Group Executive Director Shahbudin bin Imam Mohamad Non-Independent Non-Executive Director Sai Sin Chong Independent Non-Executive Director

Backgroud of Company-History
Padini Holdings Berhad Padini Holdings Berhad is a Malaysia-based investment holding company. The company sells both mens' and ladies shoes and accessories, garments, ancillary products, childrens garments, maternity wear and accessories through various subsidiaries. Its most prominent brands are Padini and VINCCI. Its goods are exported to mainly Asian countries. Its goods are sold in retail flagship stores and concept stores. The Padini Concept Store is a concept which houses all Padini Holdings brands under one roof or one-stopshopping. The first of such outlets was opened in 1 Utama, Malaysia in the mid 2000's. Padini Holdings Bhd focuses on fast retailing, where new products come online within weeks. Padini began operations as Hwayo Garments Manufacturers Company in 1971, it was affiliated in garment manufacturing and wholesaling. It entered the retail industry in 1975 with flagship brand Padini. VINCCI was established to market ladies shoes, bags, belts and other accessories in 1986. Many brands including Miki and Speed AUTHENTICS labels were launched in the following decades. In 1991, Home Stores Sdn Bhd was launched to hold all the companies involved in the Group's retail, wholesale and manufacturing businesses. It was subsequently renamed to the present Padini Holdings a year later. In 1995, Padini Holdings Sdn Bhd was converted to a public company limited by shares and adopted the name, Padini Holdings Berhad and soon listed on the Second Board of the then Kuala Lumpur Stock Exchange. The year 2000 witnessed the establishment of Padini Dot Com Sdn Bhd to provide electronic business services and solutions for the group. Padini Holdings was transferred to the Main Board of the KLCI Bursa Malaysia in 2005. and PADINI

Bonia Corporation Berhad BONIA Group is a high-end fashion retailer based in Malaysia which has more than 700 sales outlets and 70 boutiques across Asia. It markets footwear, high-fashion leatherwear and accessories. It is also involved in manufacturing activities. In 1974, the company was founded by Mr. S.S.Chiang, the Group Executive Chairman, who started the business in designing, manufacturing and wholesaling of leather goods in Singapore. In 1990, present it expansion and listing. BONIA expanded its reach to Indonesia, Hong Kong, Brunei and Taiwan. BONIA actively participated in International Leather Trade Fair in Germany, Italy, Middle East, Hong Kong and Singapore. It was listed on the KLCI Bursa Malaysia secondary bourse in 1994 and later was transferred to the Main Board of Bursa Malaysia. The brand expanded into Syria in 2009, with flagship outlets located in Aleppo and Damascus

LIQUIDITY RATIOS

YEAR CURRENT RATIO

PADINI

BONIA

COMMENTS Bonia good performance in current ration comoared to Padini because lower liabilities. Bonia is better than Padini because the company can cover their current liabilities with all its current assets not included the inventories.

= 2.54

= 3.33

ACID TEST RATIO

= 1.30

= 1.58

The current ratio and quick ratio shows that BONIA stronger position relative to the PADINI.

EFFICIENCY RATIOS

YEAR

PADINI

BONIA

COMMENTS Bonia is better than Padini because the stock moving faster compared to Padini. Padini collect their debt faster than Bonia. Thus Padini can control their debtors to collect efficiently.

INVENTORY TURNOVER RATIO = 1.62 = 2.38

AVERAGE COLLECTION PERIOD

= 25 days

= 65 days

AVERAGE PAYMENT PERIOD

= 60 days

= 42 days

TOTAL ASSETS TURNOVER

= 1.28

= 1.24

Bonia pay their debt faster rather than Padini. So Bonia can control the creditors efficiently on better than Padini. The Padini ratio higher than Bonia. It shows Padini is more efficient rather than Bonia because it can generate more sales.

All activites ratios indicate that PADINI faser turnover of assets compare to the BONIA company. Further analysis is neccessary to determine whether the firm is in a weaker or stronger position. BONIA has higher turnover ratio than PADINI make indicate low inventrory resulting in stock out and last sales. PADINI has shorter average collection period ratio than BONIA make indicate that extremely efficient receivable management or credit terms that prohibit growth in sales. BONIA has shorter average payment ratio than PADINI make indicate that extremely efficient pay the debt.

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GEARING / DEBT RATIOS

YEAR DEBT RATIO

PADINI

BONIA

= 0.36

=0.34

COMMENTS Debt ratio for both company just same amounts. It shows the ratio debt can be covered by the assets is justify. Padini has higher ratio to cover it interest expenses compared to Bonia.

TIMES INTEREST EARNED RATIO = 67.79 = 13.16

Both of the firm has just same amount in the debt ratio make indicate that have same of of liabilities per assets. PADINI uses more debt than BONIA, resulting in higher interest obligations that could reduce its ability to meet financial obligations.

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PROFITABILITY RATIOS

YEAR GROSS PROFIT MARGIN

PADINI

BONIA

= 51.15%

= 57.90%

COMMENTS According to the ratios, Bonia is bettter than Padini in generate profit based on sales and it cost. Padini has better performance compared to Bonia on profit before it interest and taxes.

OPERATING PROFIT MARGIN

= 18.76%

= 13.26%

NET PROFIT MARGIN

= 13.32%

= 9.23%

Padini good performance in control it expenses to maximize their profit compared than Bonia. Padini is better than Bonia because the percentage is higher. It shows that Padini efficient in using it assets to generate profit.

RETURN ON ASSET (ROA)

= 17.04%

= 11.41%

RETURN ON EQUITY (ROE)

= 26.78%

= 17.25%

Percentage in Padini higher than Bonia. Hence, the shareholders in Padini can gain more benefits compared to Bonia.

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BONIA has higher growth profit margin thanPADINI, indicating either a higher sales price or a lower cost of goods sold.However, PADINI has higher operating profit margin than BONIA. Besides, BONIA has lower net profit margin than PADINI, indicating that expense other than cost o goods sold are higher than BONIA. PADINI has higher return on asset than BONIA, indicating that the shareholders can gain more benefits through investing in this company. Moreover, PADINI has higher return on equity ratio that BONIA. So, it can be said that the company had used the all its assets efficiently without much losses or wastage of assets. Most likely the damaging factor is high interest expenses due to a greater than average amount of debt. The increase leverage/gearing however magnifies the returned the owner received.

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MARKET RATIOS

YEAR

PADINI

BONIA

COMMENTS Price per earning ratio of Bonia is higher than Padini. Therefore, the higher the P/E ratio,the greater the investor confidence on Bonia. Market per book ratio of PADINI is higher than BONIA. Hence, PADINI expected to earn high returns than BONIA.

PRICE PER EARNING RATIO

RM 2.17

RM 2.25

MARKET PER BOOK RATIO

2.170 1 331 = 0.00163

2.250 3 310 = 0.00067

The P/E ratio measures the amount that investors are willing to pay for each dollar of a firms earnings. The level of this ratio indicates the degree of confidence that investors have in the firms future performance. For PADINI, the result indicates that investors were paying RM2.17 for each RM 1 of earnings while for BONIA, investors were paying RM2.25 for each RM1 of earnings. The higher the P/E ratio, the greater the investor confidence. The market/book value ratio provides an assessment of how investors view the firms performance. The M/B ratio for PADINI is 0.00163 while the M/B ratio for BONIA is 0.00067. Like P/E ratios, M/B ratios are typically assessed cross-sectionally to get a feel for the firms return and risk compare to peer firms.

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Conclusion and Reccomendation

The overall liquidity of the firm seems to exhibit a reasonally stable trend, having been maintained at a level that is relatively constant with the industry average in 2012. The firms liquidity seems to be good. BONIA inventory appears to be in good shape. Its inventory management seems to have improved, and in 2012 it performed at level above that of the industry. The firm may be experiencing some problems with accounts receivable. The average collection period seems to have crept up above that of the industry. BONIA also appears to be slow in paying its bills, it pays nearly 30 days slower than industry average. This could be adversely affect the firms credit standing. Although overall liquidity appears to be good, the management of receivables and payables should be examined. PADINI indebtedness increased over the 2010-2011 period and is currently above the industry average. Although this increase the debt ratio could be cause for alarm, the firms ability to meet interest and fixed payment obligations improved to a level that outperforms the industry. In summary, it appears that although 2010 was an off year, the company improved ability to pay debts in 2011 compensates for its increased degree of indebtedness. PADINI profitability relative to sales in 2012 was better than the average company in the industry, although it did not match the firms 2010 performance. However, PADINI net profit margin quite favourable when compared to the industry average. The exceptionally high 2011 level of return on common equity suggets that the firm is performing quite well. A look at market ratios is helpful in assessing risk. Investors have greater confidence on BONIA in 2011 as reflected the price/earnings ratio of RM2.25. The P/E ratio suggest that the firms risk has declined but remains above that of the average firm in its industry. The firms market/book ratio has increased over the year 2009-2011 and in 2011, it exceeds the industry average. This implies that investors are optimistic about the firms future performance. In summary, both firms appears to be growing and has recently undergone an expension in assets, finance primarily through the use of debt. The 2009-2011 period seems to reflect a phase of adjustment and recovery from the rapid growth in assets. In addition, the market response to these accomplishments appears to have been positive.
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Appendices Formula
LIQUIDITY RATIOS 1. CURRENT RATIO

2. ACID TEST RATIO

EFFICIENCY RATIOS 1. INVENTORY TURNOVER RATIO

2. AVERAGE COLLECTION PERIOD

3. AVERAGE PAYMENT PERIOD

4. TOTAL ASSETS TURNOVER

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GEARING / DEBT RATIOS 1. DEBT RATIO

2. TIMES INTEREST EARNED RATIO

PROFITABILITY RATIOS 1. GROOS PROFIT MARGIN

2. OPERATING PROFIT MARGIN

3. NET PROFIT MARGIN

4. RETURN ON ASSET (ROA)

5. RETURN ON EQUITY (ROE)

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