In our opinion we think that the possibility of Jamel short-changinng is high.

We have indentified the fraud symptoms as below: 1. Unusual behaviour - Jamels body language Unusual behaviour is seen through an individual's recognizable behaviour pattern to attempt to cope with the stress. The guilty leads to fear; fear leads to stress; and stress leads to behaviour changes. Research in psychology reveals that when a person, especially a first-time offender, commits a crime, he or she becomes engulfed by emotions of fear and guilt. Those emotions cause the individual to experience a significant amount of stress, and in order to cope with the stress, the individual will exhibit unusual and recognizable behaviour patterns. In this case, Jamels behaviour is very suspicious. First, body language such as the facial expressions and body posture can show people emotion and thinking especially when someone is trying to lying to another. In the meeting between Jamel and Mat Jon, Jamels reaction and expressions make him to be suspicious that he is doing something wrong and trying intentionally to cover it up from others knowing, especially his Pak Long, Mat Jon. We can see that Jamel looked very worry and nervous. He even trying hard to look confident, in order to not want his uncle to be monitoring the business closely and do not want his uncle to know what exactly happen in the business. Moreover, when Mat Jon question to Jamel the problem that he found in the business, he do not trying to explain to Mat Jon, but he go immediately on the defensive by saying that he is struggling hard to monitor and checking everything. He even is rude to his uncle and stormed off from the meeting when he feels Mat Jon do not believe in him. Lying will make someone feel uncomfortable and become flustered and upset in order to cover up what he trying to. Through all the expression of Jamel in the conversation, we can saying that he feel guilty and afraid that Mat Jon discover that he is short-changing in the Spetrol Station business.

2. Customer complaint Mat Jons petrol station was being complained by the customers that came to refuelling his car at the petrol station. Although he has pay the enough money, but he cannot get the equivalent quantity of petrol and had simply being ignore. This mean that someone have trying to hide the sales and short-changing the money. Through this, Jamel is the one have the biggest suspicious to do the short changing because he is the one that have the full charge in the Spetrol Station business.

3. Shortfall in physical balance of unleaded petrol From the stock balance report, we have found many suspicious figures and the balance of the stock in the report is far lower than the actual balance that the company should have. There are some shortfalls in the physical balance of the unleaded petrol. The amount of daily pump sales of unleaded petrol in stock balance report and the sales amount in station collection reports were appearing repeating figures that did not make sense, especially the figures of station collection in 21 and 27 July 2009 were totally same. Besides that, the figures were repeating in the same sequence that usually would not happen in sales transactions. For more clearly to understand the real condition, please refer to Appendix 1 and 2 where already bolded the repeating figures. Moreover, the figures in the physical stock balance had been altered intentionally by someone to hide the real stock balance. Jamel, who fully in charge in the petrol station, should have to concern about the stock balance. Through this, we can assume that Jamel might be intentionally to manipulate the figure in the stock balance report. Besides that, in 16 July, the received of petrol do not recorded in the physical stock balance, but the cheque was still paying out at the date. In 31 July, the same situation also happen again, just the cheque is still not paying out yet. From this we can making assumption that there actually do not have any receipt of petrol, and the cheque that debit out is for Jamel personal use and in order to cover the short-changing, he create a false record in the receipt of petrol.

4. Insufficient amount in cash deposit Compare the daily cash sales receive with the amount in the bank statement, we can find that the cash sales that deposit into the bank are lower than the actual sales, in the amount around RM2000 for every cash sales deposit. The amounts that do not deposit maybe are the short-changing of Jamal because it is not very possible that the station need to keep in such a big amount of petty cash in the station for the daily use. Moreover, the bank account had already overdraft of RM21, 019.42, while the bank overdraft facility is only can up to RM20, 000 and Jamal do not even report this situation to Mat Jon. From here, we can making the assumption that Jamal do not want Mat Jon to realise that there are somethings amiss in the business, especially the short-changing of the cash.

5. Inaccurate sales record Base on the station collection in July 2009, the daily sales collections were differ much for 1 July to 31 July. The sales figures for first two days were reasonable good, it was around RM32,000, but it was dropped significantly in the end of the month. The sales were drop to RM14,000 in 31st July. From the report, we found that there are some suspicious amounts in the 1 st and 2nd July. For example, in 1st July, the daily pump sales of unleaded petrol are equal to RM34 458.68, already exceed the total sales of the day (RM 32 220.40) without including the other revenues that generate by the station. This might be done intentionally or unintentionally. The balance gone without any reason and this is the possibility of fraud occurred. Jamel cannot explain the unusual sales when Mat Jon questions him. It is suspected that sales were take place but without recording. Besides that, the total sales for July were RM 538,139.80. However, according to the July 2009 bank statement, the total credit amount only RM409,375.68. The difference was RM128,764.12. In other words, the bank should be having RM128 thousand credit balance instead of RM21 thousand debit balance (overdraft). The amount maybe misappropriate by the management.

6. Adverse relationship between sales and cost of sales and potential shipments of petrol were missing

Sales Cost of Sales Estimated Cost of Sales Differences in COS (Actual - Estimated) Shipment of Petrol (Differences in COS/RM 57,002.40)

2006 6,804,000 5,987,520 5,443,200 544,320 9.55

2007 5,443,200 4,898,880 4,354,560 544,320 9.55

2008 5,170,040 4,964,198 4,136,832 827,366 14.5

Table above shows that the sales are decreased and the cost of sales are increased from year 2006 to 2008. By assuming the gross profit margin is maintain in 20%, the cost of sales was increase from 10% to 20% which is equal to 9.5-14.5 shipments of petrol. This is another symptom of fraud. It was quite unreasonable that when the revenues were declining, the cost of sales was climbing up. This relationship did not make sense. It was because when the revenue was declining, the cost of sales should not have much change and even have changes, it will just be low increment such as affected by the government policy in setting the price of fuel (APM formula). However, in this case, the increasing of cost of sales may be high possibility attributed by the dishonest staffs in misuse the business money to buy the petrol and sold it to third party privately for personal gain. Thus, the revenue was kept declining and cost of sales was increasing. If this was real, then we can explain the missing petrol in the stock balance report.

Horizontal Analysis
Item /Y ea r S ales C og s G rossProfit 2 0 0 4 1 0 0 % 1 0 0 % 1 0 0 % 2 0 0 5 2 0 0 6 1 0 5 % 9 4 .5 0 % 1 0 5 % 1 0 3 .9 5 % 1 0 5 % 5 6 .7 0 % 2 0 0 7 7 5 .6 0 % 8 5 .0 5 % 3 7 .8 0 % 2 0 0 8 7 1 .8 2 % 8 6 .1 8 % 1 4 .3 6 %

Common-size (horizontal) analysis took place to compare the performance of the company from year 2004 to 2008. Common-size analysis expresses comparisons in percentages. Thus, it makes the comparison more preferable and meaningful than absolute amount. By using year 2004 as the selected base year, the performance of the company was getting worse since years 2006. Gross profit decreased approximately 43% in 2006, 62% in 2007 and 86% in 2008 (compare with year 2004). The main concern is on the changes in the percentage of cost of sales. Cost of sales increased slightly in year 2006 despite the gross profit slash 43% (in comparison with the base year, 2004). In addition, the gross profit for year 2007 was only 37.8% compare with year 2004, but the cost of sales was 85% compare with the base year. Badly, the gross profit further decrease in year 2008 to only 14% compare with year 2004, but the cost of sales increased slightly compare with year 2007. There are three possibilities caused the problem: No record for sales The main concerns here and the most probable reason for decrease in profit is there was a fraud. In terms of percentage, the decreased in sales was relatively greater than the decrease in cost of sales. In comparison with previous year figure, the sale decreased significantly (10% in 2006, 20% in 2007, and 5% in 2008), but the cost of sales decreased relatively slightly (1% in 2006 and 18% in 2007) and increase again in 2008 (1%). This may due to the unrecorded sales. The cost of sales was incurred and recorded as expenses despite the sales figure was manipulated by the management, in this case, Jamel. Thus, it leads to drop of sales and increase in cost of sales and further slash the gross profit.

Increase in cost of sales According to the horizontal analysis above, the sales decreased more than cost of sales. For instance, the sales in year 2008 were 72% compare with base year. However, cost of sales was 86% compare with the base year. This reflects that the cost of sales was relatively higher than the sales made. High level of inflation may increase the cost of petrol thus leads to decrease in profit.

Competition The increase of competition since the second petrol station and third petrol station was opened next to Mat Jons petrol station in year 2006 and 2008 respectively. Thus, this affected Mat Jons business, the consumers have more options to get service in others petrol station.

Appendix 1 1.1. Stock Balance Report

Stock Balance Report (Unleaded Petrol), July 2009 Date July Daily Pump Physical Stock Missing Physical Stock 2009 Sales Receipts Balance Petrol Balance (edited) 1 13,647 32,760 25,131 2,031 27,162 2 14,701 0 10,461 2,000 12,461 3 7,542 0 4,919 0 4,919 4 6,199 32,760 28,480 3,000 31,480 5 7,973 0 23,507 0 23,507 6 5,420 0 18,087 0 18,087 7 3,647 0 14,440 0 14,440 8 8,701 32,760 34,499 4,000 38,499 9 5,542 0 32,957 0 32,957 10 2,525 0 30,432 0 30,432 11 1,973 0 23,459 5,000 28,459 12 1,420 32,760 49,799 10,000 59,799 13 8,647 0 50,152 1,000 51,152 14 4,701 0 46,451 0 46,451 15 7,542 0 38,909 0 38,909 16 6,199 32,760 32,710 32,760 65,470 17 4,973 0 27,737 32,760 60,497 18 5,420 0 22,317 32,760 55,077 19 3,647 0 18,670 32,760 51,430 20 8,701 0 9,969 32,760 42,729 21 5,542 32,760 37,187 32,760 69,947 22 2,525 0 34,662 32,760 67,422 23 4,973 0 29,689 32,760 62,449 24 611 0 29,078 32,760 61,838 25 3,647 32,760 58,191 32,760 90,951 26 5,701 0 52,490 32,760 85,250 27 5,302 0 47,188 32,760 79,948 28 2,525 0 40,663 36,760 77,423 29 1,973 32,760 55,450 52,760 108,210 30 1,420 0 50,404 56,386 106,790 31 3,651 32,760 38,960 96,939 135,899 166,990 294,840 1,017,048 662,996 1,680,044 **physical stock balance,June30, 2009 is 8049litres Diffrential= 135,899 litres-38,960 litres=96,369 litres Total Stock Balance(litres) 135899 Petrol Price Per Litre RM 2.55 Total Stock Balance (RM) RM 346,542.45

1.2.

Sales Date (July 2009) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Total Recorded Sales Sales of Petrol only (Include petrol, diesel, retail sales (Based on Daily of Jombeli store, manual car wash) Pump Sales) 32,220.40 34,458.68 34,117.60 37,120.03 21,231.40 19,043.55 18,814.00 15,652.48 22,006.31 20,131.83 17,411.80 13,685.50 14,220.40 9,208.68 23,317.60 21,970.03 17,631.40 13,993.55 12,200.80 6,375.63 11,206.31 4,981.83 10,211.80 3,585.50 23,220.40 21,833.68 16,117.60 11,870.03 21,231.40 19,043.55 18,814.00 15,652.48 16,606.31 12,556.83 17,411.80 13,685.50 14,220.40 9,208.68 23,317.60 21,970.03 17,631.40 13,993.55 12,200.80 6,375.63 16,606.30 12,556.83 6,755.80 1,542.78 14,220.40 9,208.68 19,917.60 14,395.03 17,631.40 13,387.55 12,200.80 6,375.63 11,206.31 4,981.83 10,211.80 3,585.50 14,227.60 9,218.78 538,339.54 421,649.75

Other Sales -2,238.28 -3,002.43 2,187.85 3,161.53 1,874.49 3,726.30 5,011.73 1,347.58 3,637.85 5,825.18 6,224.49 6,626.30 1,386.73 4,247.58 2,187.85 3,161.53 4,049.49 3,726.30 5,011.73 1,347.58 3,637.85 5,825.18 4,049.48 5,213.03 5,011.73 5,522.58 4,243.85 5,825.18 6,224.49 6,626.30 5,008.83 116,689.79

% of sales of petrol over total revenues: 78% % of sales of others over total revenues: 22%

Appendix 2

Station Collections, July 2009 Date July 2009 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Sales 32,2220.40 34,117.60 21,231.40 18,814.00 22,006.30 17,411.80 14,220.40 23,317.60 17,631.40 12,200.80 11,206.30 10,211.80 23,220.40 16,117.60 21,231.40 18,814.00 16,606.30 17,411.80 14,220.40 23,317.60 17,631.40 12,200.80 16,606.30 6,755.80 14,220.40 19,717.60 17,631.40 12,200.80 11,206.30 10,211.80 14,227.60 Station Collections Cash Sales 21, 754.28 20,070.56 14,923.55 11,629.10 17,305.36 11,388.26 8,132.24 16,488.20 10,860.41 8,970.68 7,404.73 6,037.67 18,337.34 10,482.32 12,338.84 10,888.40 11,454.73 10,717.67 10,687.34 16,488.20 13,586.69 7,740.56 9,563.78 3,653.48 9,655.30 12,216.44 13,586.69 8,150.60 6,684.10 7,280.03 9,159.32 Credit Sales 10,466.12 14,047.04 6,307.85 7,184.90 4,700.95 6,023.54 6,088.16 6,829.40 6,770.99 3,230.12 3,801.58 4,174.13 4,883.06 5,635.28 8,892.56 7,925.60 5,151.58 6,694.13 3,533.06 6,829.40 4,044.71 4,460.24 7,042.52 3,102.32 4,555.10 7,701.16 4,044.71 4,050.20 4,522.21 2,931.77 5,068.28

Appendix 3 Comparison between Sales Collections and Bank Statement (July 2009) Sales Collections Sales 32,220.40 34,117.60 21,231.40 18,814.00 22,006.31 17,411.80 14,220.40 23,317.60 17,631.40 12,200.80 11,206.31 10,211.80 23,220.40 16,117.60 Cash Sales 21,754.28 20,070.56 14,923.55 11,629.10 17,305.36 11,388.26 8,132.24 16,488.20 10,860.41 8,970.68 7,404.73 6,037.67 18,337.34 10,482.32 Credit Card 10,466.12 14,047.04 6,307.85 7,184.90 4,700.95 6,023.54 6,088.16 6,829.40 6,770.99 3,230.12 3,801.58 4,174.13 4,883.06 5,635.28 Deposit 7,563.78 19,754.28 18,070.56 12,923.55 9,629.10 15,305.36 9,388.26 6,132.24 14,488.20 8,860.41 6,970.68 5,404.73 4,037.67 15,337.34 5,205.83 13,688.55 11,909.39 24,821.01 5,504.18 Bank Statement TT Total 7,563.78 25,258.46 18,070.56 12,923.55 34,450.11 15,305.36 9,388.26 18,041.63 14,488.20 22,548.96 6,970.68 5,404.73 4,037.67 20,543.17 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -3,000.00 -8,542.86 -6,307.85 -7,184.90 20,120.06 -6,023.54 -6,088.16 5,079.99 -6,770.99 10,458.43 -3,801.58 -4,174.13 -4,883.06 -429.45 -10,542.86 -8,307.85 -9,184.90 18,120.06 -8,023.54 -8,088.16 3,079.99 -8,770.99 8,458.43 -5,801.58 -6,174.13 -6,883.06 -3,429.45 Cash Deposit Differences TT Total

July 1 2 3 4 5 6 7 8 9 10 11 12 13 14

15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

21,231.40 18,814.00 16,606.31 17,411.80 14,220.40 23,317.60 17,631.40 12,200.80 16,606.30 6,755.80 14,220.40 19,917.60 17,631.40 12,200.80 11,206.31 10,211.80 14,227.60 538,339.54

12,338.84 10,888.40 11,454.73 10,717.67 10,687.34 16,488.20 13,586.69 7,740.56 9,563.78 3,653.48 9,665.30 12,216.44 13,586.69 8,150.60 6,684.10 7,280.03 9,159.32 357,646.87

8,892.56 7,925.60 5,151.58 6,694.13 3,533.06 6,829.40 4,044.71 4,460.24 7,042.52 3,102.32 4,555.10 7,701.16 4,044.71 4,050.20 4,522.21 2,931.77 5,068.28 180,692.67

8,482.32 10,338.84 8,888.40 9,454.73 8,717.67 7,687.34 14,488.20 19,993.86 5,740.56 7,563.78 1,653.48 7,665.30 10,216.44 11,586.69 6,150.60 4,584.10 5,280.03 302,358.50 107,017.22 10,100.97 8,605.08 13,771.31 13,410.90

8,482.32 23,749.74 8,888.40 9,454.73 8,717.67 21,458.65 14,488.20 19,993.86 5,740.56 7,563.78 1,653.48 16,270.38 10,216.44 11,586.69 16,251.57 4,584.10 5,280.03 409,375.72

-2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -3,000.00 -2,000.00 6,407.17 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,000.00 -2,100.00 -2,000.00 -53,692.83

-8,892.56 5,485.30 -5,151.58 -6,694.13 -3,533.06 6,941.91 -4,044.71 -4,460.24 -7,042.52 -3,102.32 -4,555.10 903.92 -4,044.71 -4,050.20 5,578.76 -2,931.77 -5,068.28

-10,892.56 3,485.30 -7,151.58 -8,694.13 -5,533.06 3,941.91 -6,044.71 1,946.93 -9,042.52 -5,102.32 -6,555.10 -1,096.08 -6,044.71 -6,050.20 3,578.76 -5,031.77 -7,068.28

-63,209.33 -116,902.16

Irregularities In Sales And Cost Of Sales From the case, Mat Jon realized that in the financial statements, the revenues were going down but the cost of sales was steadily climbing up, there seems to be something wrong in it. Although there are competitors like Caltex and Petronas, it is impossible for the revenue to go down so drastically and the traffic volume is also high in that area, so it couldnt affect so much on it. This situation happened because someone was doing fraud. When sales were incurred, person who is responsible didnt record the transaction. It might be also cost of sales is incurred because might be someone recording expenses that are not related to the cost of sales in the company. Below is the table that shows how the profit decreases dramatically. Gross Profit Margin Table
Item/Year Sales (A) Cost of Sales Gross profit (B) Gross Profit Margin (B/A x 100) 2004 7,200,000 5, 760,000 1,440,000 20% 2005 7,560,000 6,048,000 1,512,000 20% 2006 6,804,000 5,987,520 816,480 12% 2007 5,443,200 4,898,880 544,320 10% 2008 5,171,040 4,964,198 206,842 4%

To prevent this kind of thing from happening in the future, regular independent checks by an accountant on the financial statements should be done to ensure that there are no irregularities in it. This is to make sure that the manager is doing his job honestly. If there are any irregularities in it, the accountant can discover it quickly and inform Mat Jon about it. The significant differences in inventory in hand and inventory in record According to the stock balance report (Unleaded Petrol), July 2009, there seems to be a difference between the records and physical balance. Surely there is something wrong as huge differences means there is a possibility of fraud. Based on Mat Jon, he found that some numbers was very odd; in fact the balance is far lower than what Spetrol should have. Usually, the person that can alter the records must be both responsible for recording the inventory in hand and in record.

Stock Balance Report (Unleaded Petrol), July 2009 (Audited)

Date July 2009 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Daily Pump Sales 13647 14701 7542 6199 7973 5420 3647 8701 5542 2525 1973 1420 8647 4701 7542 6199 4973 5420 3647 8701 5542 2525 4973 611 3647 5701 5302 2525 1973 1420 3651 Receipt s Physic al Stock Balanc e 25131* 10461 4919 28480 23507 18087 14440 34499 32957 30432 23459 49799 50152 46451 38909 32710 27737 22317 18670 9969 37187 34662 29689 29078 58191 52490 47188 40633 55450 50404 38960 Physical Stock Balance (Audited) 27162* 12461* 4919 31480* 23507 18087 14440 38499* 32957 30432 28459* 59799* 51152* 46451 38909 65470* 60497* 55077* 51430* 42729* 69947* 67422* 62449* 61838* 90951* 85250* 79948* 77423* 108210* 106790* 135899*

32760 32760

32760

32760

32760

32760

32760

32760 32760

From the table above, we can see that there are differences between the original physical stock balance and the audited physical stock balance. So the solution is that there must be segregation of duties between these two tasks. The concept of segregation of duties is to having two people do a task together or splitting the task into parts so that no one person handles the complete assignment. One person has to be responsible for the recording of the physical balance and the other one is responsible for recording the book. Other than that, the supervisor can also monitor the employees actions. When the supervisor is monitoring him, chances for fraud to occur will be reduced. With this, the employees that have

any bad intention will be afraid that they will be caught and lose their job. The monitoring can be done by supervisor to make sure the stock is in a good condition .By monitoring, we can easily know the status of our stock. Besides that, by implementing physical safeguards such as locks, keys, safes and fences to prohibit to access to the stock is also a good prevention. Irregularities in the sales collection Based from the station collections on July 2009, we can see that the sales from RM32, 000 plus in the beginning of the month decrease to RM14, 000 plus in the end of the month. The sales decreased by more than 50% from its original amount. That is really surprising as something had gone wrong. Normally, even there are competitors; the sales cant decrease so drastically. Furthermore the price of the petrol is controlled, so it is less likely to affect the sales figure. In addition, the station is located beside the BPK highway where the traffic volume is high. Surely, the possibility of fraud is there. In order to solve this, a good documentation should be in place assuming that before, the management dont really organize the documents especially sales receipts properly. All the documents should be place in a cabinet and organized according their preference, for example by dates. A systematic filing will help them to avoid losing any important documents. By having a good documentation, Mat Jon can keep track of all the sales and he can easily check if there are any discrepancies in the sales record. This will also ensure that time is not wasted in finding the documents when needed. All these suggestion will help to eliminate any opportunities in doing fraud. Problems with the bank overdraft limit According to the bank statement on July 2009, the closing balance is RM (21, 019.42) which is really absurd because as stated by Mat Jon, the overdraft facility is only up to RM 20, 000. One reason that this could happen is authorization is also given to Jamel, and this allow him increase the overdraft amount. Probably the approval by either one of them (Jamel or Mat Jon) is sufficient enough to grant the overdraft increase. In order to prevent this from happening in the future, Mat Jon should ask the bank for dual authorization so that Mat Jon is aware of what Jamel or the new manager (if Mat Jon decides replace his nephew) is doing. From there, without Mat Jon authorization, the approval for overdraft increase will be rejected.

Selling the business to Robert or Continue to run the business In this issue, Mat Jon need to consider whether continue to run this business but take over the management from Jamel or was he better off selling the business to Robert. To make the decision, we shall take a first look at the pros and cons of both choices. The following discuss whether Mat Jon should continue the business or selling the business.

Selling the business to Robert Avoid from the current business problems There is few reasons lead Mat Jon selling the business. First at all is Mat Jon can avoid from the current business problems such as the problems in total sales and the cost of sales figures, the shortfall in the physical balance of the unleaded petrol and so on. If Spetrols management was successfully to solve all the problems, companys financial position can be improved. Otherwise, all of these problems might lead business to a more worse condition.

Mat Jon are getting older Mat Jon and his wife are getting older so he asks his nephew, Jamel to manage the business. After that, Mat Jon had not paid much attention to the business because he assumed that Jamel was managing fine. Now he realizes that Jamel was not managing the business well and lead the business in a worse condition. So, if Mat Jon decides to sell the business to Robert, he does not have to worry about the business problems. And then, Mat Jon has no debts, can live comfortable and can spend more time with his family.

Competitions Besides, since the places of the Spetrol where it located between the Petronas and Caltex, these two well known competitors might definitely threathen the Spetrols business in longterm. This can reduce the possible of profits where the company is currently enjoying in future. So, this is a strong reason that Mat Jon should consider to sell the business.

 Rebuild reputation Next, by selling off the business, Spetrol can instead rebuild its reputation. This is because Mr. Robert Leung is very confident about himself in handling those problems faced by Spetrol. This can avoid Spetrol is being liquidated and at the same time the Spetrols brand could be sustained. Thus, it can result in customers retention towards the companys brand and images.

Summary Spetrol station is sandwiched between the two newer ones, which were operated by Caltex and Petronas. This really affected Mat Jons business. During the morning rush hour had a choice to turn to if there was a long queue at their petrol station. Besides, Jombeli store had been showing sluggish sales of late. Moreover, it is suspected that Jamel involve in fraud or defalcation in the petrol stations income. Therefore, it is better for Mat Jon to sell the business to Robert and Robert was fully confident he would be capable to turn around the business. Furthermore, Mat Jon will not create a rift between him and his sister and brotherin-law and can avoid all of the current problems of his business.

Continue to run the business but take over the management from Jamel Strategic location Mat Jon also should not closed his business because his petrol station is situated a strategic areas. That petrol station is closed to BPK highway and at Bintang Town that have three residential areas which is Taman Sinar, Taman Matahari and Taman Bulan. There were also a primary and secondary schools in the nearest and several rows of shop. On the eastern side also has industrial area with a number of electronic factories and warehouses. 30kms from the highway also situated a low cost air terminal.

Many target customer

Mat Jon can have many regular customers such as vehicle from residential areas, taxis from the air terminal, school buses from factory, primary and secondary school and also lorry from and to the factories and warehouse. At Jombeli also have snack food that can be buy student from nearest schools. Worker at that electronic factory also can by prepaid telephone at Jombeli.

Potential Business Robert Leung was a successful entrepreneur and already owned two Spetrol outlets in the Klang Valley and wish to buy over Mat Jons business by giving an offer. Robert was calling Mat Jon almost every alternate day to try and persuade Mat Jon to sell off the business. Indirectly, it shows that Spetrol station is a potential business if not Robert will not keen to buy over the business by given an offer and pestering Mat Jon regarding the matter.

Product diversification Mat Jon should continue his business because his products are diversifying into many types such as fuel, retail sales and manual car wash service. His business can satisfy his customer based on product them sales for example of fuel that he sales is petrol for people who are using car and motorcycle. Diesel fuel also will satisfy transport like bus or lorry and NGV will satisfy vehicle like taxi. He also have retail sale store, Jombeli that sales items such as pre paid telephone cards, bottled water, lubricants, newspapers and snack food

Summary Mat Jon should continue the business because Spetrol station is located in a strategic and convenient location with the high traffic volume. So, there is a reason why Robert is so keen to buy the petrol station by giving an offer even he know about the condition of Mat Jons business. With this reason, Mat Jon should not sell off the petrol station because it is a potential business nad able to yield a high profit. Mat Jon should implement the control mechanism as discussed above to protect the business and to prevent a recurrence of the

current problems, but not sell the business. Mat Jon should face and resolve the problems arise and also improve the management of control in his business.