FICB 103/SEMESTER 3 (2011/2012)/GROUP

ASSIGNMENT

EXECUTIVE SUMMARY OF AJINOMOTO (M) BERHAD

Ajinomoto (Malaysia) Berhad is engaged in manufacturing and selling of monosodium

glutamate and other related products. The Company is engaged in two areas of activity. Umami
segment consists of products, which are derived from fermentation process, such as monosodium
glutamate (MSG) and related products. The food and seasoning segment consists of products
derived from extracting and mixing process, such as industrial seasoning, tumix and related
seasonings. Other products sold by the Company consist of trading goods, such as industrial
sweetener, feed-use amino acids and frozen food.
This report aims to evaluate the financial performance of Ajinomoto Malaysia Berhad for the
past 3 years (2009-2011) and make relevant projections on the companys Income Statement,
Balance Sheet and Cash Flow Statement for the next 3 years. To analyze the companys liquidity,
profitability, activity/efficiency, debt/gearing/leverage and market/investment; financial ratio
method is calculated based on the ratios formulae.
Projections were made based on the past activities with consideration of the economical
instability. From the projections, it reflects the companys future position in the market which
acts as a basis for investor to determine their potential investment.

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HISTORY AND BACKGROUND OF AJINOMOTO (M) BERHAD

Principal activities
Ajinomoto (Malaysia) Berhad is engaged in the manufacturing and selling of monosodium
glutamate and other related products. The principal activities of the associated company are
trading in monosodium glutamate and processing of hydrolysed vegetable protein (HVP). The
ultimate holding company of the Company is Ajinomoto Co., Inc. Ajinomoto (Malaysia)
Berhads products include SERI-AJI and VONO. On November 27, 2007, the Company acquired
the entire leasehold properties of its associated company, Malaysia Ve-Tsin Manufacturing
Company Berhad upon the latters cessations of business.
History
Ajinomoto (Malaysia) Berhad started its business operations in 1961 as AJI-NOMOTO monosodium glutamate producer. It is also one of the very first Japanese joint-venture
companies to be set up in this country. Ajinomoto (Malaysia) Berhad has since grown into a
dynamic food seasoning manufacturer marketing diverse brand name that is trusted by Malaysian
for decades. Our AJI-NO-MOTO food seasoning is an indispensable item in almost every
Malaysian home.
Today, AJI-NO-MOTO is sold more than 100 countries, and Ajinomoto Group's 15 factories
around the world are supplying about one-third of the 1.5 million-ton global markets for
monosodium glutamate.

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FICB 103/SEMESTER 3 (2011/2012)/GROUP

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EXECUTIVE SUMMARY OF FRASER AND NEAVE HOLDINGS BHD

Fraser & Neave Holdings Bhd is a Malaysia-based investment holding company. The Companys
subsidiaries are engaged in the manufacture and sale of soft drinks, dairy products, glass
container, property development activities and the provision of management services. Its soft
drinks division offers carbonated soft drinks, isotonic, Asian drinks, teas, juices and energy
drinks. Its dairy products division offers F&N sweetened condensed milk; F&N evaporated milk;
Cap Junjung, Ideal, Tea Pot and Carnation brands of condensed and evaporated milk; Farmhouse
and Magnolia brands of pasteurized milk; Magnolia brand of sterilized and ultra-heat treatment
(UHT) milk; pasteurized juices under the brand names of Fruit Tree fresh and Sunkist brand;
Magnolia brand of ice cream; Bear Brand sterilized milk; Bear Brand and Milo UHT milk, and
Three-in-One coffee mix. The projects under the property division include Fraser Business Park
and HELP City Campus at Zon-E.
This report aims to evaluate the financial performance of Fraser and Neave Holdings for the past
3 years (2009-2011) and make relevant projections on the companys Income Statement, Balance
Sheet and Cash Flow Statement for the next 3 years. To analyze the companys liquidity,
profitability, activity/efficiency, debt/gearing/leverage and market/investment; financial ratio
method is calculated based on the ratios formulae.
Projections were made based on the past activities with consideration of the economical
instability. From the projections, it reflects the companys future position in the market which
acts as a basis for investor to determine their potential investment.

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HISTORY AND BACKGROUND OF FRASER AND NEAVE HOLDINGS BHD

Principal activities
The principal activity of F&N is investment holding. Its subsidiaries are primarily engaged in the
manufacture and sale of glass containers, soft drinks, dairy products, property development
activities and the provision of management services. Fraser & Neave was incorporated on 15
January 1961 in Malaysia as the Malaya Glass Factory. It was converted into a public company
in 4th may 1969. It changed its name from Malaya Glass Factory to Malaya Glass in 1987 and to
its present form in 1996.
History
F&N is amongst the regions and Malaysias oldest companies and its brand enjoys the rare
distinction of being a market leader and household name in many categories. A well-loved brand
in Malaysia, today, F&N has spread its wings to more than 20 countries worldwide and
established itself as a regional player.
From purveyors of carbonated soft drinks, the F&N Group is one of Malaysias diversified blue
chip companies with leadership of the nations beverages and dairy products.
The Group has grown from strength to strength with an annual turnover in access of RM4 billion
from its core business in the manufacture, sale and marketing of soft drinks, dairies, noncarbonated beverages as well as property.
With a unique blend of quality and innovative products that have stood the test of time, the F&N
brand has resonated with Malaysians for over 128 years. The company has come a long way
since 1883 when John Fraser and David Chalmers Neave formed The Singapore Straits Aerated
Water Company. Years later, F&N was consolidated and the companys love affair with the food
and beverage industry began. Our corporate milestones include, among others, the pioneering
and launching of the sweetened condensed filled milk in 1973, launching of a complete range of
icecream products in 1974, the launch of 100 Plus isotonic drinks in 1984 , and the acquisition
of Nestls canned milk business in Thailand and Malaysia in 2007.

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RATIO ANALYSIS FOR AJINOMOTO (M) BERHAD

RATIO
1.current ratio

2009
LIQUIDITY
5.07

2.net working capital

96 054 588

27 166 138

123 841 105

3.10

1.44

2.52

10.01

0.04

3.quick ratio

1.inventory turnover

ACTIVITY
5.26

2010

2011

2.11

4.08

2.average collection period

15.63 days

29.15days

37.4 days

3.average payment period

0.09

38.88

55.44

36.7%

18.5%

21.46

45.63

24.1%

22.7%

19.9%

2.operating profit margin

22%

16.6%

15.2%

3. net profit margin

17%

11%

11%

1.debt ratio
2.time interest earned

LEVERAGE
55.4%
69.06
PROFITABILITY

1.gross profit margin

MARKET INVESTMENT RATIO

1.price earning ratio

(17.52)

0.126

0.085

2.market book ratio

5.0

5.09

5.09

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EVUALATION FOR THE AJINOMOTO (M) BERHAD

LIQUIDITY
CURRENT RATIO
From the year 2009 to 2010 the current ratio of the company has decrease from 5.07 to 2.11 and
increase back on 2011, 4.08
NET WORKING CAPITAL
From the year 2009 to 2010, the net working capital of the company has decrease from 96 054
588 to 27 166 138 but on 2011 the net working capital of the company has increased back to 123
841 105
QUICK RATIO
On the year of 2009, to 2011 the quick ratio of the company has decrease on 2009 and increase
back in 2011.
ACTIVITY
INVENTORY TURNOVER
The ratio has increased from 5.26 to 10.01 on the year 2009 to 2010. And it decreased it ratio in
2011 to 0.04
AVERAGE COLLECTION PERIOD
The average collection period has increased in 2009 to 2010 which is 15.63 days to 29.15 days.
But then decreased the period to 23.30 days in 2011.
AVERAGE PAYMENT PERIOD
The average payment period has increase for 3 years respectively

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DEBT
DEBT RATIO
In the year of 2009, the ratio is 55.4% but it decreased it ratio to 36.7% in 2010 and keep on
decreasing in 2011 which is 18.5%.
TIME INTEREST EARNED
The time interest earned ratio decreased in the year of 2009 to 2010 which is from 65.06 to 21.46
and in the year of 2011 it increase to 45.63.Overall, this indicates that the company would have
to utilize outside funds to finance its asset to control this liabilities.
PROFITABILITY
GROSS PROFIT MARGIN
The gross profit margin has decrease for 3 years respectively, from 2009 to 2011.
OPERATING PROFIT MARGIN
The operating profit margin has decrease for 3 years respectively, from 2009 to 2011.
NET PROFIT MARGIN
The net profit margin for the year 2009 is 17. For the year 2010 it decrease to 11 and remain the
same for the year 2011.
Overall, the profitability ratios must be higher so that the company gain more profit.
MARKET
PRICE EARNINGS RATIO
The price earnings ratio of the company from 2009 to 2011 has increase for 3 years respectively.
MARKET BOOK RATIO
The market book ratio of the company falls in the year of 2009 to 2010 which is from 5.66 to
4.81. But then increased in a number in 2011 which is 5.09.
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RATIO ANALYSIS FOR THE FRASER AND NEAVE HOLDINGS BHD

RATIO
1.Current ratio
2.Net working capital
3.Quick ratio

1.Inventory turnover

2009
LIQUIDITY
1.5

2010

2011

2.1

1.78

465 958

1 052 841

556 298

0.98

1.73

1.34

(7.14)

8.62

ACTIVITY
5.45

2.Average collection period

60.76

53.0

50.17

3.Average payment period

99.01days

32.38days

96.7days

1.Debt ratio

LEVERAGE
0.49

0.39

0.37

54.29

35.70

32.5%

30.7%

9.6%

10.7%

10.4%

37.46%

10.77%

10.68%

2.Time interest earned

1.Gross profit margin

2.Operating profit margin
3. Net profit margin

1.Price earning ratio

2.Market book ratio

17.78
PROFITABILITY
34%

MARKET INVESTMENT RATIO

0.00008349
0.00026517
0.01

0.01

0.00389105
0.01

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EVUALATION FOR THE FRASER AND NEAVE HOLDINGS BHD

LIQUIDITY
CURRENT RATIO
From the year 2009 to 2011 the current ratio of the company has increase from 2009 to 2010, 1.5
to 2.1 and has decrease on year 2011 to 1.78.
NET WORKING CAPITAL
On the year 2009 to 2010 the networking capital as increase from 465 958 to 1 052 841 and
decrease on 2011 to 556 298. .
QUICK RATIO
On the year of 2009, 0.98, increase on 2009, 1.73 and decrease again on 2010 by 1.34.
ACTIVITY
INVENTORY TURNOVER
The inventory turnover from 2009 to 2011 has increase for 3 years respectively.
AVERAGE COLLECTION PERIOD
The average collection period from 2009 to 2011, has decrease from 3 year respectively.
AVERAGE PAYMENT PERIOD
The average payment period for 2009 is 99.02 days, on 2010 it decrease to 32.35, and increase
on 2011 with 96.78.

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DEBT
DEBT RATIO
In the year of 2009 to 2011, the debt ratio has decrease for 3 years respectively.
TIME INTEREST EARNED
The time interest earned ratio increase in the year of 2009 to 2010 which is from 17.78 to 54.26
and in the year of 2011 it decrease to 35.70. Overall, this indicates that the company would have
to utilize outside funds to finance its asset to control this liabilities.
PROFITABILITY
GROSS PROFIT MARGIN
In the year 2009 to 2011, the gross profit margin has decrease for 3 years respectively
OPERATING PROFIT MARGIN
The operating profit margin has increase from 2009 to 2010, and decrease for 2011.
NET PROFIT MARGIN
The net profit margin for the year 2009 is 37.46 for the year 2010 it decrease to 10.76 and 10.68
for the year 2011.
Overall, the profitability ratios must be higher so that the company gain more profit.
MARKET
PRICE EARNINGS RATIO
The price earnings ratio of the company from 2009 to 2011, has increase for 3 years respectively
MARKET BOOK RATIO
The market book ratio of the company remains the same from 2009 to 2011, with 0.01.

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CONCLUSIONS

In conclusion, Ajinomoto (M) Berhad has appeared to be growing in the stock market in
2009 to 2010 but it has been not much decline in 2011. On the other hand, Fraser and Neave
Holdings Bhd had bad reputation by showing dropped sharply in the stock market.
Besides, Fraser and Neave Holdings Bhd may be deal with some problems with accounts
receivable and it also appears to be slow in paying its bills. Same goes to Media Prima but it can
roll the capital within a short period of time rather than Ajinomoto (M) Berhad.
Even though Ajinomoto (M) Berhad is slow in paying its debt but they did
not have much debt to be paid compare to Fraser and Neave Holdings Bhd which have more debt
to be paid.
However, better profit gain is showing by Fraser and Neave Holdings Bhd. Ajinomoto
(M) Berhad has show better performance in 2009 but in 2010 it decline from 2009.

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RECOMMENDATIONS

From an investors point of view, Ajinomoto (M) Berhad Company do deserve additional
working capital loan as their debt ratio is decreases year by year. This shows Fraser and Neave
Holdings Bhd is good health in term of long term solvency. In other words, the company will
able to pay the loans includes with the interest due. This is because the lower debt ratio, the less
total debt the business in comparison to its asset. On the other hand, Fraser and Neave Holdings
Bhd high total debt ratio in contrast. the company is in danger of becoming or going bankrupt if
no efficient action taken. Therefore, its harder to obtain loan from banks
Another point of view of investor in Fraser and Neave Holdings Bhd is a good investment
because lower price of Earning per Share (EPS) than Ajinomoto company. It is attracting our
interest in investing in the company as it indicates company with potential for improvement in
industry. So we do not have to pay too much to get that worth earnings per share. It shows that
company is very efficient in generating earnings using shareholders common equity.

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APPENDICES

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