1.

1 INTRODUCTION

Fraser and Neave Holdings Bhd (F&N) is a one of the association in Malaysia
recorded on Bursa Malaysia's Main Board with authority and unmistakable staying in the
sustenance and drink business. Set up by John Fraser and David Chalmers Neave in 1883,
from whom the instantly prominent initials "F&N" are derived, F&N has progressed into
an infamous family stamp and the F&N Group today is among the most settled, most saw
and best associations in Singapore and Malaysia with focus inclination and specialist in the
Food and Beverage, Property and Publishing and Printing parts.

F&N is among the districts and Malaysia's most seasoned organizations and its
image appreciates the uncommon qualification of being a market pioneer and commonly
recognized name in numerous classifications. F&N works in Malaysia, Brunei, Thailand
and Indochina, and is a backup of Fraser and Neave, Limited, an organization recorded on
the Singapore Stock Exchange. An all-around cherished brand in Malaysia, today, F&N
has spread its wings to more than 40 nations worldwide and set up itself as a provincial
player.

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2.0 ANALYSIS AND DISCUSSION

2.1 NET PROFIT

Annual Profit And Loss Statement

8000000
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
2012 2013 2014 2015 2016
YEAR

NET PROFIT (RM) REVENUE (RM) COST OF GOODS SOLD (RM)

YEAR
Average
2012 2013 2014 2015 2016

Net Profit
273990 259458 259408 280072 385370 291660
(RM'000)

Revenue
3238786 3508225 3818802 4107606 4167567 3768197
(RM'000)

2351975 2472460 2703056 2802508 2683553 2602710

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Cost Of Goods
Sold (RM'000)

2.1.1 ANALYSIS

The values of net profit, revenue, and cost of goods sold in the graph above are
showing an increasing trend over the course of 5 years. Due to the increasing competition
in the market, the revenue for the year ended September 30, 2012, was expectedly lower at
RM3.24 billion, a 17 per cent drop when compare to the corresponding period last year.

However, Fraser & Neave Holdings Bhd managed to record an impressive

performance for the year ended 30 September 2013, chalking up double-digit growth in its
revenue. The revenue rose from 10.6 per cent to RM3.51 billion thanks to a stronger
performance at the soft drinks unit coupled with a notable post flood recovery and full year
contribution from Dairies Thailand which grew almost 40 per cent. Group profit after tax,
however, eased 4.9 per cent to RM260.6 million due to a lower deferred tax assets
recognition while the cost of goods sold was reduced by 5.12% to RM2.47 billion
compared with last financial year of 2012.

F&N Holdings Group or the Group defined yet another year with a resilient
performance with revenue growing 8.9 per cent to RM3.82 billion for the financial year
ended September 30, 2014. Although the cost of goods sold had risen by 8.53% to RM2.7
billion, the Group was able to meet up its production to fulfill the additional demand
without passing on the additional costs to consumers. As a result, Group was able to reduce
the declining in its net profits growth by 1.93% despite challenges in the market due to
reduced consumer disposable income from interest rate hikes, reduction of fuel subsidies
and heavier trade competitive pressure and presence

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 For the financial year in 2015, the high performance of the production units had
manage to led the Group's revenue improving by 6.3 % from RM3.85 million in FY2014
to RM4.06 billion in FY2015. On the back of this revenue, and supported by low
commodity prices, the Group's net profit also increased, by 7.4%, from RM259.4 million
to RM280.1 million over the year. However, with the increase in the production units, the
Group also have to suffer the increase in cost of goods sold from RM2.7 billion until RM2.8
billion.

The Group excellence performance continue in its financial year 2106 with the
increase of the revenue from RM4.11 billion in FY2015 to RM4.17 billion. Meanwhile,
operational and cost synergies derived from Group transformation initiatives, and boosted
by lower production cost, was able to contribute 37.6% hike in the net profit from RM280.1
million to RM385.4 million. The Group was able to decrease the cost per product
purchased causing the cost of goods sold to also decrease by 4.3% from RM2.8billion to
RM2.7billion.

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2.2 CURRENCY EXCHANGE

Year
Average
2012 2013 2014 2015 2016

Net Profit
273990 259458 259408 280072 385370 291659.6
(RM'000)

Revenue
3238786 3508225 3818802 4107606 4167567 18840986
(RM'000)

Cost Of
Goods Sold 2351975 2472460 2703056 2802508 2683553 13013552
(RM'000)

Revenue
32845015 34439298 38003343 36258906 35641491 35437611
(000)

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 Influence Of Currency Exchange
8000000 39000000
7000000 38000000
6000000 37000000
5000000 36000000
35000000
4000000
34000000
3000000 33000000
2000000 32000000
1000000 31000000
0 30000000
2012 2013 2014 2015 2016
YEAR

NET PROFIT (RM) REVENUE (RM)

COST OF GOODS SOLD (RM) REVENUE ()

2.2.1 CORRELATION AND ANALYSIS

Correlation

MYR THB

MYR 1

THB 0.692611589 1

In these results, the Revenue correlation between Malaysia Ringgit (MYR) and
Thailand Baht (THB) is 0.692611589, which indicates that there is a moderate positive
relationship between the variables.

2.2.2 COVARIANCE AND ANALYSIS

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 Covariance

MYR THB

MYR 125128.24

THB *424419921261.48 3003225

In these results, the covariance between Malaysia Ringgit (MYR) and

Thailand Baht (THB) is approximately 424419921261.48, which indicates that the
relationship is positive.

2.3 SHARE PRICES VERSUS FOREIGN CURRENCY EXCHANGE

Year Share Price (MYR) Foreign Exchange (THB)

2012 18.496 10.14115

2013 18.247 9.81673

2014 17.633 9.95164

2015 18.230 8.82726

2016 22.937 8.55211

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 Share Price VS Foreign Currency Exchange
25.000

20.000

15.000

10.000

5.000

0.000
2012 2013 2014 2015 2016

Share Price (MYR) Foreign Exchange (THB)

2.3.2 CORRELATION AND ANALYSIS

Correlation

Share Price Foreign Exchange

(MYR) (THB)

Share Price (MYR) 1

Foreign Exchange
(THB) -0.704023121 1

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 In these results, the covariance between Share Price (MYR) and Foreign Exchange
(THB) is approximately -0.704023121, which indicates there is a strong negative
relationship between the variables.

2.3.2 COVARIANCE AND ANALYSIS

Covariance

Share Price Foreign Exchange

(MYR) (THB)

Share Price (MYR) 3.7438159

Foreign Exchange
(THB) -0.873840871 0.411506196

In these results, the covariance between Share Price (MYR) and Foreign Exchange
(THB) is approximately -0.873840871, which indicates that the relationship is negative.

3.0 CONCLUSION

In conclusion, for overall 5 years from 2012 until 2016 of the F&N Group was able
to perform a steady improvement in its financial growth. Although there are several
challenge that had come, such as reduced consumer disposable income from interest rate
hikes and reduction of fuel subsidies that had occur during 2014, the Group was able to
face them all while continue to gain a steady annual revenue. Therefore, in order to
maintain a continuous growth on their revenue when facing against economic crisis
especially towards the currency uncertainties, a few strategies can be recommended. The
group must embarked on an organizational exercise to align the Groups operations and
management structure with its growth strategies. This is to ensure that the every

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management structure clearly understand each of their own role and responsibilities in
order to correspond with the Group growth strategies. Other than that, the group could
invest on their manufacturing plant which operates in another country. The country that
was chosen to build the manufacturing plant on must be a country that have stable currency
trading. The Group also should always focus and aware about the risk that the company
will faced or standby for the risk that may come. The best company is from the best
corporate governance which is can handle the good company in good condition.

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