BKAF3123 ANALYSIS AND USE OF FINANCIAL STATEMENTS GROUP B

Table of Contents
1.0 Background of Bright Packaging Industry Berhad ...................... 2 1.1 History........................................................................................... 2 1.2 Nature of operation ....................................................................... 3 1.3 Product Line .................................................................................. 4 1.4 Corporate Information .................................................................. 7 1.5 Five year financial analysis .......................................................... 8 1.6 Significant changes ....................................................................... 9 1.7 Future plans................................................................................... 9 1.8 Core Value .................................................................................. 11 1.9 Risk Factor .................................................................................. 12 2.0 Company Analysis ...................................................................... 15 2.1 Liquidity Ratio ............................................................................ 15 2.2 Trend analysis over the 5 years for liquidity ratio ..................... 17 2.3 Borrowing capacity ratio ............................................................ 21 2.4 Trend analysis over the 5 years borrowing capacity ratio .......... 22 2.5 Profitability ratio ......................................................................... 24 2.6 Trend analysis over the 5 years profitability ratio ...................... 25 3.0 Non financial factors................................................................... 27 4.0 Conclusion .................................................................................. 32 5.0 Reference .................................................................................... 34 6.0 Appendix ..................................................................................... 34

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BKAF3123 ANALYSIS AND USE OF FINANCIAL STATEMENTS GROUP B

1.0 Background of Bright Packaging Industry Berhad 1.1 History

Bright Packaging Industry Berhad known as BrightPack incorporated in 1998 was listed in the stock exchange of Malaysia (Bursa Saham) in 1996. BrightPack, an investment holding company, packaging manufactures materials in aluminium Malaysia. foil Now,

BrightPack is one of the largest companies in aluminium foil converting business in Asia Pacific and has earned a reputation for outstanding performance both regionally and globally. Indeed BrightPack manufacturing factory was located at Shah Alam, Selangor.

Nik Mustapha Bin Muhamad is BrightPack currently Executive Chairman and before this he act as Independent Non-Executive director. He is graduated with a Bachelor of Economic from University Malaya and he served as a Director in Perdana Hotel Sdn.Bhd, Perdana Resort Sdn.Bhd, Perdana Super Bowl Sdn.Bhd, Perdana Hill Resort Sdn.Bhd and many others. EncikNik Mustapha Bin Muhamad does not have any family relationship with any Directors and major shareholders of the company. He also has no conflict of interest with the company and has had no convictions for any offences within the past ten years.

BrightPack aims to be a world class aluminium foil converter. BrightPack exporting its product to Germany, Australia, Kore, India, Pakistan, Thailand, Indonesia, Singapore and so on. The range of specialised services that BrightPack provide to its valued customers is laminating, coating, slitting and sheeting. Aluminium foil and metalized film laminate to Page | 2

BKAF3123 ANALYSIS AND USE OF FINANCIAL STATEMENTS GROUP B

tissue, woodfree, board and inner frame are some of the quality product of BrightPack. Synonymous with quality and reliabilit, BrightPacks products have earned the trust and recognition from our worldwide customers in several segments such as value added services, confectionery, liquour and tobacco.

Laminating

Slitting

Ink Matching

Coating

1.2 Nature of operation

BrightPack focuses on foil or MPET laminating and coating a wide variety of substrates. BrightPack specialize in customized solutions and unique construction to meet their customer needs. From the lamination of foil or MPET to various weights and grades of papers and boards, BrightPack is equipped to handle the demands of multifaceted customers. Aluminium foil is a versatile and effective material, involved in many applications in particular for packaging and technical products.

BrightPack are renowned for supplying and making quick delivery of foil or MPET paper laminate which is extensively used in cigarette, liquor, confectionery and pharmaceutical packaging. Even when very thin it provides perfect protection and preservation of aroma and product characteristics. It can help to extend the viable life of sensitive products for many months, even years, fully retaining original aromas. By enabling products to be preserved for long periods without the need for refrigeration, aluminium foil packaging helps to prevent spoilage and can provide large energy savings. Page | 3

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1.3 Product Line

1. Tobacco For tobacco products, as tobacco is sensitive goods, BrightPack have to package cigarette to bring optimum condition to the customer. BrightPack is currently catering well-known cigarette companies in Malaysia and Asia Pacific Region.

Foil paper laminate can retain the characteristic aroma peculiar to each blend and brand and also gives the packaging a distinctive and quality appeal. Aluminium foil has become the preferred barrier material, particularly for the inner liner of cigarette packets. This is because it combines the ability to retain the characteristic aroma peculiar to each blend and brand, within a unique quality of feel and appearance which is light, robust and easy to re-seal. An aluminium foil/paper laminate also offers mechanical qualities not available in alternative materials.

2. Confectionery BrightPack is exclusively in packaging of confectionary to whet the appetite and encourage the customer to buy the products. BrightPack set maximum store by industry which mean specific requirements such as neutral colour and taste, as well as food hygiene and implement these for customer. For many types of confectionary, aluminium

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foil laminates barrier and decorative properties can be vital assets. Chocolate products often stored for long period, but exposed to moisture and light, it deteriorates and the surface can quickly loss its attractive gloss. Therefore, the ideal packaging choice to ensure the quality of the product is aluminium foil laminate. Additionally it can be folded tightly to the surface of chocolate. For all types of confectionery, aluminium foils glittering metallic surface also brings colour and impact, adding to the fun and enjoyment of the product.

Value added Services 1. Pharmaceutical Aluminium foil has numerous properties, which make it ideal for the safe, convenient and versatile packaging of pharmaceutical products, such as tablets and capsules. Foil comes in a completely sterile condition due to the annealing temperature and final conditioning processes. It is not hazardous to health, and many suppliers offer dedicated clean-room printing and laminating or printing and packing facilities to ensure medical standards of sterility

2. Coating Lacquering or gravure coating provides excellent decorative and barrier properties to aluminium foil or paper such as scratch resistant, moisture resistant and light resistant.

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3. Slitting / Rewinding BrightPack has the capabilities of slitting foil, paper, polyester film, non woven tape etc up to 1200mm width. For this operation, skill and experience are required to ensure smoothness and efficiency of packaging lines of our customers.

4. Sheeting / Die-Cutting / Guillotine Cutting

BrightPack provide precision sheeting up to 1200mm width and 1200mm length. BrightPack guillotine cutter performs high precision cutting for various substrates.

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1.4 Corporate Information

BOARD OF DIRECTORS

Nik Mustapha Bin Muhamad (Executive Chairman) Wong See Yaw (Managing Director) Wong Siew Yoong (Non-Independent Non-Executive Director)

Yeap Cheng Chuan (Independent Non-Executive Director)

Ruzainun Binti Abdul Halim (Independent Non-Executive Director)

AUDITORS
Ernst & Young (AF:0039) Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur

REGISTERED OFFICE
23, Jalan Delima 1/3, Subang Hi-Tech Industrial Park, 40000 Shah Alam, Selangor Darul Ehsan. Website : www.brightpack.net

SECRETARY
Koh Mei Ling (MAICSA 7027183)

AUDIT COMMITTEE
Ruzainun Binti Abdul Halim (Chairperson) Wong Siew Yoong Yeap Cheng Chuan

PRINCIPAL BANKERS
Affin Bank Berhad AmBank (M) Berhad

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1.5 Five year financial analysis

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1.6 Significant changes

Based on annual report, which have been audited by Ernst & Young, BrightPack has no significant changes in the nature of the principal activities over the last few years. Director of BrightPack has reported in Directors Report about there is no any significant changes in the nature of the principal activities.

1.7 Future plans

BrightPack have grown regionally and globally with earned a reputation of outstanding performance. BrightPack have knowledge and expertise in packaging industry and enable BrightPack to emerge as one of the highly experienced aluminium foil paper converter. BrightPack always follow ethical business practices throughout their organization and it helped BrightPack and its subsidiaries to maintain long and healthy relationship with the customers, suppliers as well the staffs. Hence, there were no material penalties imposed by regulatory bodies on the Company and/or its subsidiaries companies.

BrightPack have aims to be a world-class aluminium foil converter. To ensure BrightPack achieve the aims BrightPack is expanding at an immerse pace with consistent quality, production expertise, continuous innovation in products and technologies, a dedicated work force and a highly motivated corporate team. BrightPack also has staffs which have been striving diligently to reach this goal. The company continuously puts significant resources into implementing advanced machineries and technologies, improving product quality and incubating technical and management personnel.

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Next, BrigthPack has been fortunate to operate within an environment comparatively unaffected by the downturn of economy. It has been benefited following the recent year acquisition of regional cigarette manufacturers in Asia Pacific by its client, the world largest tobacco giant, and thereby giving rise of ample opportunities for it to penetrate into markets previously solely dominated by the local companies. It is clear that BrigthPack overseas customers continue its priority of focus on cheaper yet quality source of packaging supply, innovative product packaging as well as the promptness of response to ad-hoc requirement to minimize inventory holding and to adapt to the fi rce and volatile market condition. Considering this, BrigthPack has planned and placed orders for additional machineries and softwaresystems to beef up speed and its flexibility of supply. It has also continued its effort to invest extensively inhuman resources to sustain its market leadership position in the region. Riding on this position backdrop and having all the legal suits put behind us, BrigthPack is upbeat of its performance in the next year amidst the robust outlook of the alufoil packaging requirement in the region.

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1.8 Core Value

ISO 9001

BrightPack always ensure that their laminated paper and board to packaging products are strictly adherence to quality standard stipulated in ISO 9001 Quality Assurance Manual. This will ensure that BrightPack improve their products and give only the best for their customers.

BrightPack quality assurance experts take up several vigilant methods to ensure that their customers get only the products with approved quality specification. Stringent tests are carried out under Standard Operating Procedures (SOP) for checking raw materials and finished products. The company quality assurance department ensures that the finished products we deliver are clean, hygienic; defect free and strictly within the quality requirements. BrightPack has laboratory which is well equipped with Face Contact Angle Meter, Coefficient of Sliding Friction Tester, Rub Tester, Tearing Tester, Tensile Tester etc.

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1.9 Risk Factor

1. Cash and Cash equivalent For the purposes of the cash flow statement, cash and cash equivalents of BrightPack including cash on hand and at bank and deposits on call which have an insignificant risk of changes in values.

2. Trade Receivable On 2009 and 2010, the group has concentration of credit risk on the form of outstanding balance due from group of debtors. While 2006, 2007, and 2008, the group has no concentration of credit risk.

3. Foreign Currency Rate Since the group operates internationally and is exposed to United States Dollar. Foreign currency denominated assets and liabilities together with expected cash flows from highly probable purchases and sales give rise to foreign exchange exposures. Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

4. Internal Control The board recognizes that it has overall responsibility for maintaining a sound system of internal control for the Group in order to safeguard shareholders interest of the Groups assets. The systems of internal control not only covers financial controls but also operational and compliance controls as well as risk management.

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5. Responsibility The Board affirms overall responsibility for reviewing the adequacy and integrity of the Groups system of internal control and management information systems, including systems for compliance with applicable laws, rules, directives, guidelines and risk management practices.

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2.0 Company Analysis 2.1 Liquidity Ratio

1. Working capital Working capital = Current Asset Current Liabilities

Year 2006 2007 2008 2009 2010 = = = = =

Working Capital 19,797,761 - 18,917,952 26,585,145 - 17,849,517 26,585,145 - 17,849,517 27,656,911 - 6,971,272 27,483,871 - 5,505,094 RM RM RM RM RM

Total 879,809 8,735,628 19,372,727 20,685,639 21,978,777

2. Current Ratio Current Ratio = Current Asset Current Liabilities

= =

2006 19,797,761 18,917,952 1.047

= =

2007 26,585,145 17,849,517 1.489

= =

2008 30,487,343 11,114,616 2.743

= =

2009 27,656,911 6,971,272 3.967

= =

2010 27,483,871 5,505,094 4.992

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3. Quick Ratio Quick Ratio= (Cash Equivalents+ Marketable Securities + Net Receivable) Current Liabilities

2006 203,204 + 0 = + 5,836,790 18,917,952 = = 6,039,994 18,917,952 0.319

2007 (1,239,378 + 750,000 + 0 + 6,533,130) 17,849,517 8522508 17,849,517 0.477

2008 (172,986 + 0+ 7,147,855) 11,114,616 7320841 11,114,616 0.659

2009 (5,154,500 +0+ 5,554,358) 6,971,272 10708858 6,971,272 1.536

2010 (1928748 + 0+ 6,126,324) 5,505,094 8055072 5,505,094 1.463

= =

= =

= =

= =

4. Inventory Turnover ratio Inventory Turnover ratio = Cost of goods sold Average Inventory 2006 34,891,361 (5,722,821 + 9,701,695) /2 34,891,361 7712258 4.524 2007 = 37,233,808 (6,747,084 + 5722821) /2 = 37,233,808 6234952.5 = 5.972 2008 = 42,488,270 (12,009,161 + 6,747,084) /2 = = 42,488,270 9378122.5 4.531 2009 42,762,466 (5,843,809 + 12,009,161) /2 42,762,466 8926485 4.791 2010 38,224,085 ( 9,224,644 + 5,843,809) /2 38,224,085 7534226.5 5.073

= =

= =

= =

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2.2 Trend analysis over the 5 years for liquidity ratio

1. Working Capital Working capital is a financial metric which represents operating liquidity available to a business. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. 2006 RM 879,809 2007 RM 8,735,628 2008 RM 19,372,727 2009 RM 20,685,639 2010 RM 21,978,777

Working Capital
RM25,000,000 RM20,000,000 RM15,000,000 RM10,000,000 RM5,000,000 RM2006 2007 2008 2009 2010

For this company, along the 5 years business operation, the working capital is highly increase from 2006 to 2007 due to high new current asset, which is deposit with licensed bank and increasing in due from subsidiaries, but for the next two year from 2008 to 2010 the increasing in the working capital of this company is very low, not as much at the years before. This shows that, the operating liquidity of this company become slowly then the previous years. And these give a warning and the management should take point why this happen and what they should do to increase back the liquidity of the operation of this company, but at the same time this company still gain positive view from the stakeholder because of the increasing steadily in their working capital.

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2. Current ratio The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's current assets to its current liabilities. 2006 1.047 2007 1.489 2008 2.743 2009 3.967 2010 4.992

Current Ratio
6.000 5.000 4.000 3.000 2.000 1.000 0.000 2006 2007 2008 2009 2010

The graft of ratio above shows that from year 2006 to 2007 the increasing in the ratio is low than the next four years, which is from 2007 to 2010 the increasing is going with high stream then in 2006. This shows that, this company is in good situation which is they had enough to pay back their debt to the debtor and this situation is given positive view for this company to the debtor to their current abilities to pay their debt back, and this will give them good image in the view of creditor.

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3. Quick ratio Quick ratio indicates whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory. The acid-test ratio is far more strenuous than the working capital ratio, primarily because the working capital ratio allows for the inclusion of inventory assets. 2006 0.319 2007 0.477 2008 0.659 2009 1.536 2010 1.463

Quick Ratio
1.800 1.600 1.400 1.200 1.000 0.800 0.600 0.400 0.200 0.000 2006 2007 2008 2009 2010

By refer to the quick ratio of this company its shows that, their quick ratio from 2006 to 2008 is increasing slowly, but high increase changes from year 2008 to 2009, but latter on the quick ratio become decrease in 2010. This situation shows that, this company is not too enough in cover their current liabilities without selling their inventory for the last year, and this situation given negative view to the creditor also to the investor, and the management should take point about this situation and take care about this decreasing quick ratio because this situation give negative view to the stakeholder.

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4. Inventory turnover The inventory turnover is an equation that measures the number of times inventory is sold or used over in a period such as a year.

2006 4.524

2007 5.972

2008 4.531

2009 4.791

2010 5.073

Inventory Turnover
7.000 6.000 5.000 4.000 3.000 2.000 1.000 0.000 2006 2007 2008 2009 2010

Based on the graft, this company is inconsistent in their inventory turnover which is from year 2006 to 2007 the ratio is increasing with high changes, but on the next year 2008 there have decreasing in the ratio and shows increasing steadily from year 2008 to 2010, this is due to increasing in the average inventory for that three years period. This shows that, this company is going well in handling their inventory turnover which is make sure that the inventory sold is in increasing over the period of each year. This shows that, this company is good in handle the inventory turnover problem, where only one year after decreasing in this inventory ratio them success to bring up back the ratio of this inventory turnover, and this give positive view to the stakeholder of this company.

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2.3 Borrowing capacity ratio

1. Equity ratio Equity Ratio = Total Liabilities Shareholder Equity

2006 = 19,229,886 12,453,150 154.42% =

2007 18,114,594 17,586,079 103.01% =

2008 19,913,317 19,669,505 101.24% =

2009 16,284,190 21,068,098 77.29% =

2010 14,396,194 22,125,699 65.07%

2. Debt ratio Debt Ratio = Total Liabilities Total Assets 2006 18,917,952 + 311,934 11,885,275 + 19,797,761 19,229,886 31,683,036 = 60.69% = 2007 17,849,517 + 265,077 9,115,528 + 26,585,145 18,114,594 35,700,673 50.74% = 2008 11,114,616 + 8,798,701 9,095,479 + 30,487,343 19,913,317 39,582,822 50.31% = 2009 6,971,272 + 9,312,918 9,695,377 + 27,656,911 16,284,190 37,352,288 43.60% = 2010 5,505,094 + 8,891,100 9,038,022 + 27,483,871 14,396,194 36,521,893 39.42%

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2.4 Trend analysis over the 5 years borrowing capacity ratio

1. Equity Ratio Equity ratio measures of a companys financial leverage calculated by dividing its total liabilities by stockholders equity. It indicates what proportion of equity and debt the company is using to finance it asset. The lower this ratio is the better the company debt position. Equity ratio and debt ratio have same objectives. 2006 154.42% 2007 103.01% 2008 101.24% 2009 77.29% 2010 65.07%

Equity Ratio
180.00% 160.00% 140.00% 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% 2006 2007 2008 2009 2010

So we can see that ratio of company is same that show numbers of decreased from year 2006 to year 2010. But we can look ratio for year 2006, 2007 and year 2008 was 154.42%, 103.01% and 101.24. It show that more than 100%, it actually not good to the company because more liabilities than shareholders equity. It means company operation more by debt and it will cause bankruptcy to company. But in this case, Bright Packaging Industry Berhad have higher liabilities because the company must cover the accumulated lost from previous years. But, on year 2009, the situation is quite good. The shareholder equity more than total Page | 22

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liabilities, so it make equity ratio on that year is 77.29%. The good ratio was 65.07% at the year 2010. 2. Debt Ratio Debt ratio is a ratio indicates what proportion of debt a company has relative to its assets. It shows the ability the firm to paying long-term debt. The lower ratio is the better the company position. 2006 60.69% 2007 50.74% 2008 50.31% 2009 43.60% 2010 39.42%

Debt Ratio
70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2006 2007 2008 2009 2010

From the graph we can look the debt ratio of Bright Packaging Industry Berhad was decreased from year 2006 to year 2010. In year 2006 we can look debt ratio was 60.69%. We also can see on year 2006, value of total liabilities more than total asset. Debt ratio for this company for year 2007 and year 2008 indicates that substantially half of company assets were financed by outsiders. Meanwhile, for years 2009 and 2010 indicates that substantially less than half of company asset were financed by outsiders. The lower ratio is on year 2010 were debt ratio is only 39.42%.

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2.5 Profitability ratio

1. Rate of return on net sales Rate of return on net sales= Net income before tax/interest Sales 2008 = 2,536,749 48,718,380 5.21% = 2009 2,285,976 48,065,032 4.76% = 2010 1,641,190 43,831,942 3.74%

2006 = -191,512 37,026,058 -0.52% =

2007 5,912,320 43,062,384 13.73%

2. Rate of return on average owners (shareholders) equity ROE= Net Income Average Shareholder Equity 2008 = 2,083,426 = 2009 1,560,585 = 2010 1,037,365 (22,125,699 + 21,068,098) /2 1,037,365 21,596,899 4.80%

2006 = -705,575 =

2007 5,029,632

(12,453,150 (17,586,079 + + 11,196,091) 12,453,150) /2 /2 -705,575 = 5,029,632 11,824,621 15,019,615 -5.97% = 33.49%

(19,669,505 (21,068,098 + + 17,586,079)/ 19,669,505)/ 2 2 = 2,083,426 = 1,560,585 = 18,627,792 20,368,802 = 11.18% = 7.66% =

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2.6 Trend analysis over the 5 years profitability ratio

1. Rate of return on net sales This measure is helpful to management, providing insight into how much profit is being produced per dollar of sales. As with many ratios, it is best to compare a company's return on net sales over time to look for trends, and compare it to other companies in the industry. An increasing rate of return on net sales indicates the company is growing more efficient, while a decreasing rate of return on net sales could signal looming financial troubles. 2006 -0.52% 2007 13.73% 2008 5.21% 2009 4.76% 2010 3.74%

Rate of return on net asset

16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% -2.00% 2006 2007 2008 2009 2010

From the graph we can look the rate of return on net asset of Bright Packaging Industry Berhad was not consistent. It increase in year 2007 from -0.52% to 13.73%. This situation happen because of the sales on year 2007 has higher increase also the net income before interest and tax too. From year 2008 till 2010, their return on net asset little bit decrease. There is from 5.21% in year 2008, 4.76% in year 2009 and for year 2010 is 3.74%. This cause is from the decreases of net income before interest and tax but the sales are maintain in 40 Page | 25

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million. Net income before interest and tax are decrease because of the other operating expenses is increase so drastically. 2. Rate of return on average owners (shareholders) equity The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. 2006 -5.97% 2007 33.49% 2008 11.18% 2009 7.66% 2010 4.8%

Rate of return on average owner's equity

40.00% 30.00% 20.00% 10.00% 0.00% 2006 -10.00% 2007 2008 2009 2010

Rate of return on average owners equity of Bright Packaging Industry Berhad are not consistently on year 2007 and 2008. From 2006 it increase from -5.97% to 33.49%. Then it slowly decreases from year 2008 till 2010. For year 2008, the percentage of return on average owners equity is 11.18%. However for year 2009 is 7.66% and 4.8% for year 2010. The factor of decreases of return on average owners equity is because the net income for each following year is decreasing however the shareholder equity is increasing.

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3.0 Non financial factors Accounting is the mathematical science of collecting, recording, and then compiling financial information into financial statement that can communicate said information in an efficient and effective manner to their end user. Financial factor such as economic government policy always affect financial performance of a company. Accounting is intended to assist end users in performing the best possible financial decision under the circumstances. Sometimes, the financial information presented in financial statement is not enough or not reflective of the business actual financial circumstances. In this situation non-financial factor must be consider because it also will affect financial performance of a company. Below are non-financial factors affecting Bright Pack financial performance:-

1. Job satisfaction Job satisfaction is defined as an individuals attitude about work roles and the relationship to worker motivation. An entity should provide satisfy working environment to employee while should give proper training and development. It is because, employee engagement is widely acknowledged as key to business success and performance and also is a core component of effective leadership and management. Training and development programs are identified and scheduled for company staff to acquire necessary knowledge and competency to meet their performance and job expectation. Bright Pack is providing necessary training to their staff to improve their skills to operate high technology machines. Bright Pack provides training to the directors of company who are run the business and make decision for business growth. Directors of accompany are very important and they should acquire high knowledge about the environmental changes. BrightPack is looking into initiating its own comprehensive and formal training programme to be tailored to the needs of the Board of Directors. Training attended by the director is as below:Page | 27

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On other hand, BrightPack also provide training for their employee who wok hard to company growth. For example, training and development programs are identified and scheduled by BrightPack for employees to acquire the necessary knowledge and competency to meet their performance and job expectations. For example, BrightPack plant has an ink management system based on world famous pantone standard and this in house ink kitchen is run by our well-trained chemists. It always makes sure their employee is well trained and performed excellent work. Normally, this company was more conscious to the employee safety. On the occupational safety and health front, BrightPack implemented stringent health, safety and environmental (HSE) practices to ensure the safety of workforce and maintain BrightPack good safety record.

2. Corporate image and Backend profit/sales A corporate image refers to how an entity is perceived by outsiders. A corporation's image is not solely created by the company. Other contributors to a company's image could include news media, journalist, labour unions, environmental organisations, and other NGOs. Backend profit/sales refer that will come to the company as a result of investing in some nonprofitable projects such as charity to the needy. BrightPack has more customers because it has Page | 28

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a special business where it provides packaging service based on customer needs. It helps the company have a good corporate image but BrightPack did not have social responsibility because it did not do any charity. (It never discloses any charity fund in financial statement). Charity to needed people also will help the corporate image of a company and indirectly will help to improve company performance. Another corporate image to the company is environmental concern by each company. BrightPack always concern the environment where on the environmental front, BrightPack committed in making full compliance to the policies and requirements of Department of Environment (DOE). BrightPack is equipped with the facility of waste solvent recycling treatment and thereby making its waste disposal at minimal level.

3. Innovation Another non-financial factor that could affect the performance of BrightPack is innovation. Every member of BrightPack is fully aware with the changes in current era of rapidly evolving technology and innovation. They committed to fulfil BrightPack role in bringing on the innovations expected by nation. BrightPack always updated with the customers needs and try to fulfil their needs by doing several innovations and using high technology machines. With consistent quality, production expertise, continuous innovation in products and technologies, a dedicated work force and a highly motivated corporate team, BrightPack is expanding at an immerse pace. This factor is very important for BrightPack to compete with its competitors in locally or in overseas especially in serve the customers needs. The products and innovations made covered various aspects of future lifestyles in order to maintain the good performance of BrightPack.

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4.

Product quality

Product quality also gives some indirect effect on company performance likes loss of customer. BrightPack take due care of product quality therefore it have a separate quality assurance department, which is entirely engaged in quality checking of wide range of it products. BrightPack quality assurance experts take up several vigilant methods to ensure that their customers get only the products with approved quality specification. Product quality helps BrightPack to retain their customer and help them to earn more profit. All the product of BrightPack has ISO 9001 Quality Assurance which give more confident and reliability among customer. Moreover, BrightPack have an extremely well equipped laboratory, which acts as the watchdog to keep stringent control over quality of incoming materials as well as finished products. BrightPack laboratory is well equipped with Face Contact Angle Meter, Coefficient of Sliding Friction Tester, Rub Tester, Tearing Tester, Tensile Tester etc. In Addition, overseas customers of Bright Pack give high priority on cheaper yet quality source of packaging supply. In addition, BrightPack also undertake Precision Slitting on foil, paper, foil paper laminate, polyester film, and non-woven on widths ranging from 50mm to 1200mm done on high quality machines from Australia and Korea for providing a perfect finish to all products. BrightPack always consider about its quality of the product to satisfy it customer and to perform well in the business.

5. Customer Satisfaction

The relationship between organizations and customers influences on customer satisfaction and loyalty, and contributes to profitability and finally, increase of firm value. BrightPack believe in quality partnership and develop relationship based on total understanding of each and every customers specific needs for quality products and personalized services. It is the simple

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philosophy that has earned the company numerous long-term customers who have confidence in our products and professionalism. Moreover, BrightPack try to satisfy customer needs and wants by producing product based on their requirement. For example, BrightPack have wideranging coating and converting expertise with our in-house blending of lacquer to meet customers specific technical and design specifications. Indeed, BrightPack follow ethical business practices throughout organization and it has helped BrightPack to maintain long and healthy relationship with their customers. In addition, creative packaging by BrightPack tries to convince their customer to buy product through it. For instance, the packaging of exclusive confectionery has to whet the appetite and encourage the customer to buy. Not only quality but creative packaging also become major reasons to customer purchase the goods from seller.

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4.0 Conclusion Overall financial performance of this company for five years since 2006 to 2010 is good, which is by refer to its liquidity ratio, borrowing capacity ratio and also profitability ratio that had analyse as above. For the liquidity ratio, the ratio that had calculated was working capital, current ratio, quick ratio and also inventory turnover. This entire ratio shows positive view to all stakeholders except for quick ratio which have decreasing for the last years and also inconsistent ratio for inventory turnover, which shows that this company should manage and focus to this area to make sure the objective of the company is achieve and can bring a good reputation in the view of most of this company investor.

While, for borrowing capacity ratio, the ratio that has calculated was, equity ratio and debt ratio. Overall both of these ratios that had calculated and analyse shows positive view to all stakeholder especially the debtor. This situation shows that this company were good in handling their debt and have the ability to pay their debts and can bring confidence to stakeholder and can give them more opportunity to get trusted by debtor too.

And for profitability ratio, the ratio that has calculated and analyse was rate of return on net sales and also rate of return on average owners (shareholders) equity. For the rate of return on net sales, for the first year from 2006 to 2007 this company show increasing rate which indicate that this company is growing more efficient but after that year this company shows looming financial troubles since 2008 till 2010, which shows negative view to the stakeholders. And for the rate of return on average owners equity, it same goes like rate of return on net sales, which is for the first years is increase then decrease for the next years until end year of analyse period that had done. This situation was give negative view to the stakeholder and shows that this company overall profitability ratio is not so good and become Page | 32

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decrease. The management should handling this issues since this will affect the company growth and the perception given by stakeholder, and if this problem were no handling with good, this will give negative impact for this company in achieving their objective and affect to their ability to sustain in a long term period.

Therefore as conclusion, this company should stress more on profitability ratio area and maintain with good ratio for the liquidity and borrowing capacity ratio, since the area of profitability is not in a positive view, but for the liquidity and borrowing capacity this company were well good in manage it and should keep it up, in order to make sure this company can sustain and compete with their competitor also to make sure this company can achieve their objective.

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5.0 Reference Gibson, C.H. (2001) Financial Statement Analysis, 12th Ed, South Western Cengage Learning. Revsine, L., Collins, D.W., Johnson, W.B. & Mittelstadt (2009) Financial Reporting and Analysis, 4th Ed, McGraw-Hill Irwin. Bright Packaging Industry Berhad Retrieve on October 22, 2011 From www.brightpack.net/ Bright Packaging Industry Berhad Annual Report Retrieve on October 22, 2011 From www.brightpack.net/investor.htm Financial Statement Analysis - Efficiency Ratios Retrieve on November 16, 2011 From http://www.creditguru.com/ratios/ratiopg2.htm Job Satisfaction Retrieve on http://en.wikipedia.org/wiki/Job_satisfaction November 1, 2011 From

Non Financial Factors seen as Key to Improving Motivation Retrieve on November 1, 2011 From http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/MotivationKey.aspx Trend Analysis Retrieve on November 1, 2011 http://en.wikipedia.org/wiki/ Trend_analysis Investopedia Dictionary Retrieve on November 13, 2011 http://www.investopedia.com The Star, Market Watch Retrieve on November 21, 2011 http://biz.thestar.com.my Accounting for Management Retrieve http://www.accountingformanagement.com/ on November 19, 2011

Financial Term Retrieve on November 19, 2011 http://www.finance-lib.com Business Dictionary Retrieve on November 13, 2011 http://www.businessdictionary.com

6.0 Appendix

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