BACHELOR OF ACCOUNTANCY (HONS)
FACULTY OF ACCOUNTANCY
INTEGRATED CASE STUDY (MAF671)
SULAM PROJECT - ROSLI FOOD
FINANCE DEPARTMENT
SEMESTER OCTOBER 2020 - FEBRUARY 2021
MAC2208F
Prepared by:
NAME
MATRIC NO
NASYITAH BINTI KADIR
2017743113
NUR IZZATI BINTI M BAKRI
2017954439
NAJIHAH BINTI ABD LATIFF
2017777485
NURAQILAH BINTI MOHD SHARIF
2017749805
SITI NUR FARHANA BINTI MUHAMAD ROSLI
2017749121
FADZLUN SAEIDAH BINTI MOHD FAIDZULLAH
2017901905
Prepared for:
DR. HANAFIAH BINTI HASIN
Submission date:
08th JANUARY 2021
ACKNOWLEDGEMENT
In the name of Allah, the Most Gracious and the Most Merciful Alhamdulillah, all
praises to Allah for strengths and His blessing in completing this report. This report
was prepared for the subject Integrated Case Study (MAF671) In Universiti Teknologi
Mara (UiTM).
Special appreciation goes to our lecturer, Dr Hanafiah binti Hasin for the
opportunity, supervision and constant support. Her invaluable help of constructive
comments and suggestions have contributed to the success of this report. We also
take this opportunity to express our gratitude to Rosli Food for the instrumental
guidance and support in the successful completion of this case study and report.
The cooperation and support received from all the team members including
Nasyitah binti Kadir, Nur Izzati binti M. Bakri, Najihah binti Abd Latiff, Nuraqilah binti
Mohd Sharif, Fadzlun Saeidah binti Mohd Faidzullah, and Siti Nur Farhana binti
Muhamad Rosli was vital towards the success of this report. We are grateful for their
constant support and help. Without our cooperation and guidance, this report would
not have materialized.
Last but not least, deepest thanks and appreciation to our parents, family and
others for their financial support, cooperation, encouragement, constructive
suggestion and full of support for the report completion, from the beginning till the
end. Also thanks to all of our friends and everyone that has contributed by supporting
our work and helping during the report progress till it is fully completed.
Thank you.
i
TABLE OF CONTENT
NO
1.
TITLE
Introduction
PAGES
1
Risk Assessment
2.1 Ways to identify risks
2.
3.
2
2.2. Type of risks
3-4
2.3 Cause of risks
5
2.4 Ways to manage risks
6
Critical Success Factors
7
Analysis of the company vs industry
4.
4.1 PESTEL Analysis
8 - 10
4.2 SWOT Analysis
11 - 12
5.
Issues and Challenges
13
6.
Analysis of Issues
14
7.
Advise or recommendations
8.
Conclusion
23
9.
References
24
15 - 22
Appendices
10.
10.1 Interview Questions
25 - 26
10.2 Others (Pictures, tables, video, etc)
27 - 32
ii
1.0 INTRODUCTION
Rosli Food is the sole proprietorship company which was registered on 25
November 2015 with 100% of capital from the owner who is Encik Mohd Rosli bin
Husen. The company is 100% owned by bumiputera. And has been registered with
the Companies Commission of Malaysia (SSM). The employees in this business
have been given practical training in dress code, hygiene and good health as well as
safety training.
The purpose of having a finance department in the business is to monitor the
transaction of the business and ensure there are enough funds available to meet the
day-to-day payments. The basic functions of this finance department are recording,
analyzing and interpreting the business financial performance which includes the
tracking of all expenses and sales of finished products and also preparing the budget
for upcoming expenses.
For the finance department of Rosli Food is managed by Nur Athirah bt Mohd
Rosli. According to Madam Athirah, she keeps all the transactions of cash inflow and
outflow, bank statements is one of the sources for her to monitor cash flow.
1
2.0 RISK ASSESSMENT
2.1 WAYS TO IDENTIFY RISK
The definition of business risk can be any possibility that makes a company or
organization lower its profit and leads to an uncertain situation that brings failure.
Risk cannot be avoided as it is the nature of business as it also can be a challenge
for a business to go beyond and survive in the future. For example, a risk that can be
seen in the situation of pandemic Coronavirus. A business leader should find ways to
minimize the risk as this will affect the business's financial performance during this
pandemic.
There are a few steps that Rosli Food can apply in identifying risk. Firstly, Rosli
Food should identify and analyze internal and external risks which could affect the
financial performance of the business. An example of internal risk is no proper record
of the business transactions while an example of external risk could be Covid19
which affects the economy of the whole business.
Action should be taken by the managers or leaders of Rosli Food to reduce the
identified risks. In other words, their early action would help to minimize the loss that
they might incur. For example, Rosli Food should keep all the evidence and
transaction in proper accounting records as this would avoid inaccurate reporting of
company financials.
Thirdly, the employees should get involved in identifying risks. This may help the
managers to be more focused on the problem that arises in the financial department
and also with the full cooperation of employees would help the managers to find
ways to reduce risk. Without the support of staff in Rosli Food, the risk could not be
reduced. All staff of Rosli Food should work as a team and perform their tasks to
improve business financial performance.
Making a list of risks is another step in the process of identifying risks. This
would help the managers of Rosli Food to prepare what they need to do if they are
facing uncertain situations. For example, in pandemic Covid 19, Rosli Food needs to
think beyond and go out of their comfort zone as this would make them survive
during this pandemic to maintain their profit.
Lastly, create a record risk. This is required because the risks could arise over
and over again. By creating a record of all the risks that have been experienced by
the company since it started, management will be able to do a regular review of past
events to detect patterns that may better prepare the business for future financial
risks.
2
2.2 TYPE OF RISKS
Risk is one of the major concerns of every business across the world. The
business needs to realize what is risk and what type of risks are. There are few risks
that need to be considered for each business. As for the financial department, the
risk that involves is financial loss. Financial risk is the process of identification,
analysis, and acceptance or mitigation of uncertainty relating to the financial health of
the company. Financial risk generally arises due to instability and losses in the
financial market caused by the movements in stock prices, currencies, interest rate
and others.
Financial risk is one of the high priority risk types for each business and can be
classified into various types such as market risk, credit risk, liquidity risk, operational
risk, legal risk, economic risk and political risk. The financial department of Rosli
Food basically will face certain risks relating to the costs and profits earned. ‘Bangkit
Santan’ is a kind of traditional food which has its own market and fans. If the demand
for ‘Bangkit Santan’ drops, it will be risky for Rosli Food to survive in the market. For
example, Hari Raya Aidilfitri is a month that supposedly increased their sales by 70%
but in the year of 2020, their sales drop because of pandemic Covid-19. Even all the
finished products sold out, but they were forced to sell it below their selling price.
As for the operational risk, it is a type of risk that arises out of the operational
failures such as mismanagement or technical failures. Operational risk may arise due
to the lack of controls. Besides, political risk also gives such impact on the financial
risk of the business. It is a risk due to the uncertainty about government actions. But
during pandemic Covid-19, Rosli Food needed to cease their operations for 3 months
and many orders were cancelled by the customers. After the government announced
that all economic sectors and business activities can continue their operations by
following all the Standard Operating Procedures (SOP), Rosli Food continued to
produce their products. Meanwhile, they faced challenges where all their foreign
workers were deported to their origin countries.
3
Other than that, economic risk also gives such an impact on the business. Rosli
food always wanted to serve their customers with a high quality of product at an
affordable price. But the market price of the raw materials used to give such a
significant impact on the business. If the raw materials price kept increasing, Rosli
Food also tended to increase their selling price. Plus, pricing pressure between
competitors also gives a risk towards the business to maintain the existing
customers.
Rosli Food is a business with a lower risk in terms of financial. It is because Rosli
Food does not have any financial liabilities or debts that need to be settled. All the
transactions incur on a cash basis. So, they might have an opportunity to get
approval when applying for a loan in order for them to grow the business in the
future.
4
2.3 CAUSE OF RISKS
There are many causes that can create business risk. Because of this, it is
difficult for the company to protect itself from the risk. The cause that relates to the
finance department is economic causes. Economic causes are related to a chance of
loss due to the market changes. It can be a change in price, competition, demand for
goods, changes in technology or changes in the method of production and others.
Financial problems such as an increase in the interest rate and increase in taxation
are also one of the economic causes as it will raise the operation cost of the
business. All of these changes have a direct impact on company earnings. Rosli
Food produces and supplies 'Bangkit Santan' in Malaysia and other countries outside
Malaysia. The demand and supply for the products in the year 2020 are decreasing
due to the pandemic Covid-19 that hit all over the world. Due to that, the economy
becomes unstable and declining. Rosli Food had to lower the price of their products
to clear the stock. The decrease in the price of their products had affected the
profitability of the company.
5
2.4 WAYS TO MANAGE RISKS
Risk management is a process to identify what strategies need to be
implemented to reduce the risks. Businesses that have identified the risk would have
better prepared and have a more cost-effective way to deal with any type of risk. It
also looks at how to implement an effective risk management policy and program
which can increase business chances of success and reduce the possibility of failure.
The risk management process are:Firstly, is avoidance risks which are known as elimination. The purpose of
avoidance risk is to eliminate the hazardous which brings the pieces of evidence of
transaction to the risks. For example, related to Rosli Food, the managers should
prepare internal procedures in recording all transactions to avoid all the risk which
possibility arise.
The next reducing risks are known as reduction. It is a process to reduce the
probability and impact of risks. Related to the case, Rosli Food should keep all the
evidence of transactions properly and organized to prevent any unrecognized
expenses. This is to reduce risks of business expenses from mixing up with personal
expenses.
If risk cannot be avoided and reduce, transferring risk is needed. Rosli Food
needs to transfer the risk to the third party by buying insurances to protect the
business.
Lastly, retaining risk but this kind of risk has been safety nets by the managers.
This risk is known as retaining risk which the managers are brave to accept the
responsibility. For example, Rosli Food should get the audited report of financial
statements to get accurate financial reporting as this will help them if there is any
issue arise in the future.
6
7
3.0 CRITICAL SUCCESS FACTOR
Critical Success Factor (CFS) refers to specific procedures, or areas that a business
or organization depends on for its continued survival. CFS also can define as
indicators for opportunities, activities or conditions required to achieve an objective
within a project or mission. A CSF is a critical factor or activity required for ensuring
the success of a company or an organization. There is some critical success factor
(CSF) of Rosli Food:
1) Good communication and cooperation with another department.
Communication is an essential and important soft skill that all employees should
have. Communication not only in their own department but also in another
department. The finance department of Rosli Food needs to have good
communication and cooperation with another department because they need all
information regarding the work program and budget. With this, the finance
department can work effectively and productively without any problem. It also can
build and maintain the relationship between employees and contribute to the
growth of a company.
2) Sustain product price to ensure customer value.
Customer value is the satisfaction of the customer in term quality, price and
services. It is important to consider to improve quality and services as well as the
price to meet customer’s needs. To ensure customer value, Rosli Food can
sustain their product price. With this, it can attract new customers and maintain
existing customers to buy the product because the price is affordable and good
services and quality products. When many customers buy their product, it can
increase the revenue of the company.
3) Recruit and manage the right talent and employees.
Rosli Food should recruit and hire talented employees that are experts in the
accounting system. So that the finance department can record and document all
the accounting transactions properly without any mistakes. Rosli Food should give
the employee some accounting training to gain more knowledge if the company
wants to use accounting software.
8
4.0 ANALYSIS OF THE COMPANY VS INDUSTRY
4.1 PESTEL ANALYSIS
PESTEL analysis is a framework or tool used to analyze and monitor the external
environment factors that may impact the organization or firm‘s performance. PESTEL
is an acronym that stands for Political (P), Economic (E), Social (S), Technology (T),
Environmental (E) and Legal (L) factors. For Rosli Food, these are factors that occur
in the company:

Political Factor
The political environment can affect the economic setting of business in a variety
of forms such as increase and decrease in tax. Rosli Food should be up-to-date
on certain political consideration to know any changes in taxes or interest rate
that could affect business demand trends. There might be possible changes in
regulation where the government could alter their rule and regulation, in turn,
have an effect on the business. Rosli Food also must comply with the labour law
when they want to hire more employees in the finance department to avoid any
problem in the future. Labour law clarifies and comity the obligations of business
owners to their employees. It is important to follow this legislation to protect their
right and bargaining power of workers.

Economic Factor
Economics plays an important role in business. This is because when the
economy falls, it will give impacts to the company’s business. The example of
economic factors that may affect business include exchange rates, interest rates,
recession, inflation, taxes and demand or supply. Rosli Food has been involved
in producing and supplying ‘Bangkit Santan’ in Malaysia. But during pandemic
COVID 19, Rosli Food cannot operate as usual because the government has
imposed the Movement Control Order (MCO). This will affect the demand and
supply of ‘kuih bangkit’. The company still gets profits during MCO even though
the demand from customers is low. This is especially during Hari Raya Aidilfitri,
Rosli Food has produced 80% from their order early. Besides that, YB Tuan Haji
Ayub Bin Jamil also buys the product by bulk for presents or donations.
9

Social Factor
Social factors are related to the cultural and demographic trends of society.
Social norms and pressures are keys to determining consumer behaviour. These
factors include cultural aspects and perspective, age distribution, career attitudes
and others. Rosli Food will make sure the quality of product and service gives
satisfaction to customers. The cost, quality, performance and efficiency of the
product would give a great impression to the customer satisfaction. Maintaining
the price would be favourable and improving the quality of the product can reach
high satisfaction to them.

Technology Factor
The technological factor is a factor that could influence the business operation of
how the business might deliver its services and operations. Technology factors
are about the innovation of the business and also the competitors around.
Technology innovation must be focused also to have better performance in
business operation and management. As in the financial function, the innovation
that should be taken is upgrading the system of bookkeeping by investing in the
accounting software such as MYOB, UBS, Million and so on. Such innovation in
financial function would give a better impact to the company by smoothing the
management on recording the proper account of the company and it also could
give better forecasting for the company future align with other competitors.

Environmental Factor
The issues surrounding environmental protection have become important in
recent years as the implications of under-regulated economic activity. This has
become more significant with globalization as the impact of an organization's
actions may be felt outside of its native country and may incur unquantifiable
financial penalties. There are some factors that affect the industries and cross
their ability to function smoothly such as an environmental issue, energy or power
consumption, insurance policies, safe waste disposal, and dealing with
hazardous materials. Weather, climate, and geographical location are also
factors towards the environment. The newest issue is on the Pandemic Covid-19
where all people across the world need to face it. All industries include Rosli
Food required to cease their operation temporarily because the government
implemented a Movement Control Order (MCO) in Malaysia. This situation
10
affected the performance of the business where they could not produce ‘Bangkit
Santan’ in a normal quantity.

Legal Factor
Legal factors may have some overlap with political factors but legal factors do
cross over with the political factors. Legal factors include more specific laws such
as health and safety law, employment law, consumer right, product safety laws,
copyright and patent laws and others. Rosli Food needs to understand what is
legal and allowed to operate within the industry the company involved in. For the
company's financial, the company needs to follow the accounting standards to
prepare the financial statement. The standard is a guideline for the accountants
to prepare a proper financial statement that will help the company make a better
decision. It also provides information about the cash flows of the company,
results of operations and financial position. The financial statement then needs to
be audited by the auditor. The auditor needs to follow the auditing standards for
them to give the opinion. The opinion must be fairly presented or based on a true
and fair view. The purpose of the audit is to present a true and fair view of the
company's financial performance and position. Rosli Food also must be aware of
any changes in the legislation and the impact this may have on business
operations.
11
4.2 SWOT ANALYSIS

Strength
Rosli Food does not own any debt whether from the bank or any other institution.
It is believed that companies without debt do not face many risks. There are no
required payments and no threat of bankruptcy if the payments are not made.
The beginning capital is 100% come out from the owner. Next, Rosli Food keeps
all the accounting evidence such receipt and voucher in one place. It is easier for
the company to track any transaction within the activities. Keeping receipts of all
transactions will help to claim all of the possible deductions. Lastly, Rosli Food
experienced growing profit which shows that they effectively manage their cash.
Earning a profit is important to a small business because profitability impacts
whether a company can secure financing from a bank, attract investors to fund its
operations and grow its business. Companies cannot remain in business without
turning a profit.

Weakness
Rosli Food does not have a proper accounting record such as a statement of
profit or loss and statement of financial position. Properly recording the
transaction will enable the company to ensure that the financial statements of the
company comply with generally accepted accounting practice. It also will enable
the financial statements to be readily and properly audited. The second
weakness is the company is not being audited by an audit firm. Audit activities
are important to provide reasonable assurance that the financial statements were
free of material misstatement. It also promoted accountability and transparency.
Lastly, there are no segregation duties in the finance department since only one
person handles all the activities. Segregation or separation of accounting duties
means dividing the tasks so that different people are handling transaction
processing, data recording, financial statement preparation and auditing. Relying
on one person to handle all the accounting functions could lead to poor internal
controls, accounting fraud and misappropriation of company assets.

Opportunity
Opportunities are about the chances for something good to be offered and
happened. It usually about the outside offers that come to the organization. The
first opportunity that could be offered to Rosli Food is tax consultant assistance.
12
Tax consultant assistance could give services in terms of preparing the tax
return, looking for deductions in order to lower the tax burden of the company,
giving help and advice with trust and so few more things. Secondly, Innovation on
the new technology of the accounting system. The suggested innovation is
having an accounting software which could give simple and fast data processes.
Innovation in accounting systems also reduces automation of error due to the
automation of processes and also saves staff cost on manual accounting. The
last one of the opportunities that could be offered is attending seminars or
training on financial affairs. Since the innovation might change from year to year,
the seminar on adopting the new knowledge or innovation also needed to be
attended by the staff of the company to gain more knowledge and be more
effective and efficient in managing the financial affairs.

Threat
Threats are external factors that have the potential to negatively affect the
business. The threats to the financial department of Rosli Food are an economic
downturn. Economic downturn includes a shift in market requirements, rising
unemployment, falling share price, low consumer confidence and declining
investment. Although the company may not be able to completely protect the
business from an economic downturn, understanding how it could affect the
company will help the company develop a plan to minimize its impact. Other than
an economic downturn, an increase in tax payments is also one of the threats to
the company. Taxes need to be paid every year to foster economic growth and
for the development of the government. If the company did not pay the tax, the
amount of tax will be increased and it will be difficult for the company to pay.
Lastly, pandemic Covid-19 is a threat to the company's financial performance. In
the year 2020, pandemic Covid-19 has hit all over the world. This pandemic
causes the economy to decline and become unstable. It also has affected all the
businesses which make certain businesses need to shut down due to suffered
losses. The pandemic has affected the sales of Rosli Food. The sales of the
company decrease due to low demand from the customers. Rosli Food also had
to lower the price of their products to clear all the stocks to prevent bigger losses.
In this situation, the company has to make a better decision for the company's
benefits.
13
5.0 ISSUE AND CHALLENGES
i.
The challenges that Rosli Food faced is there are no allocation expenses for
financial.
ii.
The company does not have a proper accounting record and is not being
audited.
14
6.0 ANALYSIS OF ISSUES
Rosli Food focuses too much on operating activities and overlooks other parts of
the division. Undeniable operating activities are the most important for a company
which include manufacturing, sales, advertising and marketing activities. There is
typically an operating activities section of a company’s statement of cash flows that
shows inflows and outflows of cash resulting from a company’s key operating
activities. At the same point of view, the financial part also plays a substantial role in
a business. The challenges that Rosli Food faced is there are no allocation expenses
for financial. Next issue is the company does not have a proper accounting record
and is not being audited, it is difficult to determine the company’s appropriateness of
their financial activities. This issue would give impact on tax obligation processes and
also in preparing the budget and financial statement of the company. Financial
statements are important because they contain significant information about a
company’s health. It also helps companies make informed decisions since they
highlight which areas of the company provide the best return on investment.
15
7.0 ADVICE OR RECOMMENDATIONS
1) Prepare a proper accounting record and documentation.
Rosli Food should prepare a proper accounting record and documentation such
as cash book and bank statement, sales invoice and purchase invoice. These
three sets of records are very important and must maintain an organization to be
able to track all the transactions. Cashbook and bank statement is important to
be kept because it shows the payment in and out of the bank account. Sales
invoice is a documented file where the management could store the invoice by
putting the have not yet been paid at the front of the file to help control the debtor.
Meanwhile, the purchase invoice is a file in which the management practices
putting notes on the bill that has been paid and how they paid to ease the
accountant to allocate the bills into the accounts. These records must be kept
and updated regularly since it will be a tool of forecasting the expenses in the
income of the company. As can be seen from the bank statement, there are
some records which are not related to the business. The company should keep
the account clean and separated from personal accounts to have an accurate
idea of business expenses. This could help the bookkeeper to record the
transaction easily. Those who are responsible for finance activities have to put
time aside to do the bookkeeping regularly or the company can take initiative to
get help with the professional advisor on the finance matter.
2) Internal control activities.
Rosli Food should prepare a statement budget for each department, for example,
admin budget, marketing budget and operating budget. This allows the allocation
of the cost to prepare all the financial statements. Good communication among
departments is very important which smoothen the progress of each cost activity.
Financial statement and ratio analysis is important to perform audit activity that
would help to monitor and evaluate the performance of the company. Provided
together is the suggested budget for each department, statement of profit or loss,
statement of financial position and ratio analysis for the company:
16
ADMINISTRATION BUDGET - 2020
ITEMS
FIXED
ASSET
MONTHLY
EXPENSES
OTHERS
EXPENSES
TOTAL
(RM)
RENTAL
Building
600.00
7,200.00
Factory
6,000.00
72,000.00
FIXED ASSET
Office Equipment (Rengit)
4,021.60
4,021.60
Office Equipment (Jb)
7,200.00
7,200.00
Furniture& Fittings(Rengit)
1,500.00
1,500.00
Furniture & Fittings (Jb)
5,400.00
5,400.00
WORKING CAPITAL
Salary
7,800.00
93,600.00
Electricity bill
120.00
1,440.00
Water bill
50.00
600.00
Telephone
250.00
3,000.00
UTILITIES
OTHER EXPENSES
Stationery expenses
50.00
50.00
Renewal Business license
60.00
60.00
Insurance
6,000.00
Facility upkeep
600.00
Depreciation
50.00
1,260.00
1,260.00
15,470.00
1,370.00
203,931.60
TOTAL BUDGET
18,121.60
17
600.00
MARKETING BUDGETS - 2020
ITEMS
FIXED
ASSET
MONTHLY
EXPENSES
OTHERS
EXPENSES
TOTAL
(RM)
FIXED ASSET
Signboard (Rengit)
Signboard (Jb)
600.00
600.00
3,289.00
3,289.00
WORKING CAPITAL
Salary
2,400.00
28,800.00
200.00
2,400.00
Electricity bill
30.00
360.00
Water bill
15.00
180.00
Internet
89.00
1,068.00
Staff training
UTILITIES
OTHER EXPENSES
Business card
350.00
Social media advertising
100.00
350.00
1,200.00
Signage fee - majlis
750.00
750.00
Depreciation
328.90
328.90
1,428.90
39,325.90
TOTAL BUDGET
3,889.00
2,834.00
18
OPERATIONAL BUDGETS - 2020
FIXED ASSET
EXPENSES
(RM)
ITEMS
MONTHLY
EXPENSES
(RM)
OTHER
EXPENSES
(RM)
TOTAL
(RM)
Fixed Assets
Hilux
86,500.00
86,500.00
Van
60,000.00
60,000.00
3,380.00
3,380.00
Processing
8,360.00
8,360.00
machine
3,600.00
3,600.00
Mixer
40,000.00
40,000.00
Oven
450.00
450.00
Gas stove
300.00
300.00
Pot
100.00
100.00
Roller dough
100.00
100.00
50,000.00
50,000.00
2,500.00
2,500.00
Coconut Grinder
Machine
Coconut
Mold
Custom machine
Furniture
&
Fittings (Jb)
Working capital
Salaries
16,100.00
193,200.00
Raw Material
32,000.00
384,000.00
1,000.00
12,000.00
420.00
5,040.00
Utilities
Electricity Bill
Water Bill
19
Other expenses
First aid
45.00
45.00
Fire extinguisher
80.00
80.00
Uniform
390.00
390.00
Packaging
8,000.00
96,000.00
Gas
300.00
3,600.00
Petrol
500.00
6,000.00
Toll
250.00
3,000.00
Roadtax &
insurance
1,500.00
1,500.00
maintenance
700.00
700.00
Depreciation
8,537.00
8,537.00
11,252.00
969,382.00
Repair &
TOTAL
255,290.00
58,570.00
STATEMENT OF PROFIT OR LOSS
20
STATEMENT OF FINANCIAL POSITION
21
RATIO ANALYSIS
EFFICIENCY
RATIO
FORMULA
YEAR 2019
CURRENT
ASSET
TURNOVER
Net Sales
= RM 1,458,305
= RM 1,452,305
Average
Current
Assets
RM(377,471.27 +
362,875.82) /2
RM(266,612.27 +
377,471.27) /2
= 3.94 times
= 4.51 times
YEAR 2019
YEAR 2020
PROFITABILI
TY RATIO
FORMULA
GROSS
PROFIT
MARGIN
Gross Profit
= RM 1,107,305
= RM 1,029,705
Net Sales
RM 1,458,305
RM 1,452,305
= 75.93%
22
YEAR 2020
= 70.90%
ANALYSIS
Both year shows
good
performance
since the ratio is
above 1.
ANALYSIS
Year 2019 is
more efficient
since the ratio is
higher compared
to 2020.
3) Tax obligation.
A business should pay tax for the matter of investment and growth. If the
company missed filing taxes, it would lead to the monetary penalty. Taxable
income comprises gains and profit from business, dividend, interest, rents,
royalty, premium and other earnings. Rosli Food could get advice from any
certificated tax consultants to understand the basic knowledge about the tax and
look for any deductions to lower the tax burden. By paying the tax, Rosli food has
considered accomplishing civic duty while handing help to those who are less
fortunate and support common resources such as police and firefighters.
4) Risk Management Policy.
The purpose of risk management policy is to provide guidance for Rosli Food to
manage risk to achieve corporate objectives and financial sustainability. Other
than that, this is to create awareness of Rosli Food of risks might arise and plan
and timely completion to avoid and reduce risk. This could improve the
accounting management of Rosli Food. The effectiveness and efficiency of the
management of the finance department might be increased as well.
5) Product Liability Insurance.
Product liability insurance is to ensure the ‘Kuih Bangkit’ is not harmful to the
consumers. The benefits of Rosli Food should have this type of insurance to
protect production flaws which cause defects in the production of ‘Kuih Bangkit’.
Next, is to protect against any defects or errors that make the product unsafe for
use to the public. Lastly, this insurance also helps to reduce business’s risks
which can against any type of claim.
23
8.0 CONCLUSION
As for the conclusion, the financial department plays a big role in the company.
Since the performance of the company can be seen through the financial statement
and financial analysis. Rosli Food could manage to identify the risks and handle how
to manage the risks. By exercising the risk assessment, Rosli Food could form an
integral part of an occupational health and safety management plan which could help
in creating awareness of hazard and risk. Rosli Food also could excel and manage to
handle the risk to avoid affecting the operation and management.
In maintaining sustainability, Rosli Food could also maintain the critical factor of
good communication with each department, sustain the product price to maintain
customer value and recruit talented employees. Rosli Food is also able to analyze
the factors that have relationships between the industry and company to ensure that
Rosli Food operation and management align with the industry. SWOT analysis helps
Rosli Food in analyzing the strength to be maintained, weakness to be improved,
opportunities to be accomplished and threats to be aware of.
Lastly, issues and challenges always occur in every company. However, Rosli
Food could identify the challenges and work hard to manage and solve the
challenges for the company could overcome future obstacles and gain many great
advantages in growing the business.
24
9.0 REFERENCES
1) En. Muhd Irsyad bin Mohd Rosli, Marketing Manager of Rosli Food.
2) Pn. Nur Athirah bt Mohd Rosli, Secretary and person in charge of the Finance
Department of Rosli Food.
3) Pn. Norashikin bt Bachok, Operating Manager of Rosli Food.
4) Dr Hanafiah binti Hasin, Lecturer of Integrated Case Study (MAF671)
5) (4) Rosli Food Supplier | Facebook
6) https://instagram.com/roslifood?igshid=1maw6w7rez64r
7) https://smallbusiness.chron.com/importance-labor-laws-62734.html
8) https://corporatefinanceinstitute.com/resources/knowledge/strategy/pestel-analysis/
9) https://lciweb.com/5-key-success-factors-business-no-5-finances/
10) PESTEL Analysis: Factors of PESTEL Analysis, Examples and Videos (toppr.com)
11) Financial Risk | Types of Financial Risk | Advantages and Disadvantages
(educba.com)
12) 7 Types of Financial Risk - dummies
13) https://www.toppr.com/guides/business-studies/nature-and-purpose-ofbusiness/nature-of-business-risk/
14) https://www.business-to-you.com/scanning-the-environment-pestel-analysis/
15) https://www.mindtools.com/pages/article/newTMC_05.htm
16) https://web.actuaries.ie/sites/default/files/ermresources/risk_management_policy_template.pdf
17) https://www.investopedia.com/ask/answers/050115/how-can-companies-reduceinternal-and-external-businessrisk.asp#:~:text=Internal%20risks%20include%20personnel%20management,trade%
20wars%20hurting%20international%20sales
18) https://corporatefinanceinstitute.com/resources/knowledge/finance/business-risk/
19) https://www.pharmapproach.com/roles-responsibilities-finance-departmentpharmaceuticalindustry/#:~:text=Finance%20Department%20is%20the%20part,of%20funds%20on
%20various%20assets
20) https://www.zurich.com.my/en/insurance-products/business/for-my-liabilities/productliability-insurance
21) https://www.allianz.com.my/product-liability
22) https://www.mountainone.com/news/benefits-product-liability-insurance
25
10.0 APPENDICES
10.1 QUESTIONNARE
1. How much is your initial investment/paid-up capital at the beginning of your
business?
2. Do you have partners and what is the understanding?
3. What is your financial year-end date?
4. In preparing the company's financial statements, is your company in compliance
with the MFRS guidelines?
5. Do you use any accounting software to prepare your accounts? Have you had
your financial statements audited by the outside auditor?
6. Do you practice segregation of duties in your finance department?
7. Do you prepare the financial analysis of the business at the end of each reporting
year to assess the performance of your business?
8. What is the company's most significant financial challenge?
9. Since the start-up of your business, have you injected additional capital?
10. Do you receive financial support like a loan to a small business in your business?
11. Is there any help from government agencies?
12. Do you have your accountant with the company, or do you hire accountants or
outside parties to prepare your financial statements?
13. How did you manage the financial during this pandemic?
14. Did you manage to pay tax for your business?
15. Is there any difference in your business's sales performance before and after the
pandemic?
16. How did your business record the business transactions?
17. What is the business average sales from year to year?
18. Does your company keep accounting records including invoices, vouchers and
receipts for at least two years?
19. Who is responsible for preparing the financial statement or financial report? (If
they properly record the transaction)
20. Does your business prepare the profit or loss forecast each quarter to be
reviewed?
21. In a month, how many times did you restock your inventory?
22. How did you manage your debtors and creditors?
23. What is your plan to have proper financial management?
24. How did you compute the selling price per unit and how much the cost incurred?
26
25. State two financial goals for your business.
26. Do you have proper insurance for the business if anything happens? And how
much does it cost?
27. Do you have any other business? If yes, which part of your business is not
profitable?
28. How many assets do you have?
29. Do you buy assets by using a hire purchase method or cash?
30. Did you rent or owned the premise?
27
10.2 OTHERS (PICTURES, TABLES, VIDEO, ETC)
ADMINISTRATION DEPARTMENT - 2019
ITEMS
FIXED
ASSET
MONTHLY
EXPENSES
OTHERS
EXPENSES
TOTAL
(RM)
RENTAL
Building
600.00
7,200.00
FIXED ASSET
Office Equipment
4,021.60
4,021.60
Furniture& Fittings
1,500.00
1,500.00
WORKING CAPITAL
Salary
7,800.00
93,600.00
Electricity bill
120.00
1,440.00
Water bill
50.00
600.00
Telephone
250.00
3,000.00
UTILITIES
OTHER EXPENSES
Stationery expenses
50.00
50.00
Renewal Business license
60.00
60.00
Insurance
250.00
3,000.00
Facility upkeep
50.00
600.00
Depreciation
TOTAL BUDGET
5,521.60
9,120.00
28
-
-
110.00
115,071.60
MARKETING DEPARTMENT - 2019
ITEMS
FIXED
ASSET
MONTHLY
EXPENSES
OTHERS
EXPENSES
TOTAL
(RM)
FIXED ASSET
Signboard
600.00
600.00
WORKING CAPITAL
Salary
2,400.00
28,800.00
200.00
2,400.00
Electricity bill
30.00
360.00
Water bill
15.00
180.00
Internet
89.00
1,068.00
Staff training
UTILITIES
OTHER EXPENSES
Business card
350.00
Social media advertising
100.00
Signage fee - majlis
Depreciation
TOTAL BUDGET
600.00
2,834.00
29
350.00
1,200.00
250.00
250.00
-
-
600.00
35,208.00
OPERATION DEPARTMENT - 2019
FIXED ASSET
EXPENSES
(RM)
ITEMS
MONTHLY
EXPENSES
(RM)
OTHER
EXPENSES
(RM)
TOTAL
(RM)
Fixed Assets
Hilux
86,500.00
86,500.00
Van
60,000.00
60,000.00
1,690.00
1,690.00
machine
4,180.00
4,180.00
Mixer
1,200.00
1,200.00
Oven
16,000.00
16,000.00
Gas stove
150.00
150.00
Pot
100.00
100.00
Roller dough
50.00
50.00
Mold
50.00
50.00
Coconut Grinder
Machine
Coconut
Processing
Working capital
Salaries
21,100.00
253,200.00
Raw Material
33,000.00
396,000.00
1,000.00
12,000.00
420.00
5,040.00
Utilities
Electricity Bill
Water Bill
Other expenses
First aid
45.00
45.00
Fire extinguisher
80.00
80.00
Uniform
390.00
390.00
Packaging
9,000.00
108,000.00
Gas
300.00
3,600.00
Petrol
500.00
6,000.00
Toll
250.00
3,000.00
Roadtax
&
30
Insurance
Repair
1,500.00
700.00
700.00
10,000.00
10,000.00
-
-
12,715.00
969,475.00
&
maintenance
R&D Cost
Depreciation
TOTAL
1,500.00
169,920.00
65,570.00
STATEMENT OF PROFIT OR LOSS
Rosli Food
Statement Of Profit or Loss for the year end 2019
RM
Sales
(Less) Cost Of Good Sold
Opening Stock
Purchase
Net Purchase:
Add : Carriage Inward
Cost Purchase
(Less) Closing Stock
Cost of Good Sold
GROSS PROFIT
RM
1,458,305.00
2,200.00
396,000.00
398,200.00
500.00
398,700.00
1,800.00
400,500.00
1,057,805.00
(Less) Expenses
Administration expense
Marketing expenses
Operating expenses
109,550.00
34,608.00
799,555.00
943,713.00
Net Profit
114,092.00
31
STATEMENT OF FINANCIAL POSITION
Asset
Rosli Food
Statement Of Financial Position as at 2019
RM
RM
RM
Cost
Depreciation
Non-Current Assets
Office Equipment
Hilux
Van
Coconut Grinder Machine
Coconut processing machine
Mixer
Oven
Gas stove
Pot
Roller dough
Mold
Furniture & Fittings
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
-
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Tangible Assets
Signboard (Rengit)
1.00
-
1.00
13.00
Current Assets
Ending Inventory
Bank
Cash
1,800.00
360,671.27
15,000.00
377,471.27
377,484.27
Total Assets
Liabilities and Shareholders' Equity
Shareholders' Equity:
Capital
Net Profit
263,392.27
114,092.00
Total Shareholders' equity
377,484.27
32
33
BACHELOR OF ACCOUNTANCY (HONS)
FACULTY OF ACCOUNTANCY
INTEGRATED CASE STUDY (MAF671)
SULAM PROJECT - ROSLI FOOD
FINANCE DEPARTMENT
SEMESTER OCTOBER 2020 - FEBRUARY 2021
MAC2208F
Prepared by:
NAME
MATRIC NO
NASYITAH BINTI KADIR
2017743113
NUR IZZATI BINTI M BAKRI
2017954439
NAJIHAH BINTI ABD LATIFF
2017777485
NURAQILAH BINTI MOHD SHARIF
2017749805
SITI NUR FARHANA BINTI MUHAMAD ROSLI
2017749121
FADZLUN SAEIDAH BINTI MOHD FAIDZULLAH
2017901905
Prepared for:
DR. HANAFIAH BINTI HASIN
Submission date:
08th JANUARY 2021
ACKNOWLEDGEMENT
In the name of Allah, the Most Gracious and the Most Merciful Alhamdulillah, all
praises to Allah for strengths and His blessing in completing this report. This report
was prepared for the subject Integrated Case Study (MAF671) In Universiti Teknologi
Mara (UiTM).
Special appreciation goes to our lecturer, Dr Hanafiah binti Hasin for the
opportunity, supervision and constant support. Her invaluable help of constructive
comments and suggestions have contributed to the success of this report. We also
take this opportunity to express our gratitude to Rosli Food for the instrumental
guidance and support in the successful completion of this case study and report.
The cooperation and support received from all the team members including
Nasyitah binti Kadir, Nur Izzati binti M. Bakri, Najihah binti Abd Latiff, Nuraqilah binti
Mohd Sharif, Fadzlun Saeidah binti Mohd Faidzullah, and Siti Nur Farhana binti
Muhamad Rosli was vital towards the success of this report. We are grateful for their
constant support and help. Without our cooperation and guidance, this report would
not have materialized.
Last but not least, deepest thanks and appreciation to our parents, family and
others for their financial support, cooperation, encouragement, constructive
suggestion and full of support for the report completion, from the beginning till the
end. Also thanks to all of our friends and everyone that has contributed by supporting
our work and helping during the report progress till it is fully completed.
Thank you.
i
TABLE OF CONTENT
NO
1.
TITLE
Introduction
PAGES
1
Risk Assessment
2.1 Ways to identify risks
2.
3.
2
2.2. Type of risks
3-4
2.3 Cause of risks
5
2.4 Ways to manage risks
6
Critical Success Factors
7
Analysis of the company vs industry
4.
4.1 PESTEL Analysis
8 - 10
4.2 SWOT Analysis
11 - 12
5.
Issues and Challenges
13
6.
Analysis of Issues
14
7.
Advise or recommendations
8.
Conclusion
23
9.
References
24
15 - 22
Appendices
10.
10.1 Interview Questions
25 - 26
10.2 Others (Pictures, tables, video, etc)
27 - 32
ii
1.0 INTRODUCTION
Rosli Food is the sole proprietorship company which was registered on 25
November 2015 with 100% of capital from the owner who is Encik Mohd Rosli bin
Husen. The company is 100% owned by bumiputera. And has been registered with
the Companies Commission of Malaysia (SSM). The employees in this business
have been given practical training in dress code, hygiene and good health as well as
safety training.
The purpose of having a finance department in the business is to monitor the
transaction of the business and ensure there are enough funds available to meet the
day-to-day payments. The basic functions of this finance department are recording,
analyzing and interpreting the business financial performance which includes the
tracking of all expenses and sales of finished products and also preparing the budget
for upcoming expenses.
For the finance department of Rosli Food is managed by Nur Athirah bt Mohd
Rosli. According to Madam Athirah, she keeps all the transactions of cash inflow and
outflow, bank statements is one of the sources for her to monitor cash flow.
1
2.0 RISK ASSESSMENT
2.1 WAYS TO IDENTIFY RISK
The definition of business risk can be any possibility that makes a company or
organization lower its profit and leads to an uncertain situation that brings failure.
Risk cannot be avoided as it is the nature of business as it also can be a challenge
for a business to go beyond and survive in the future. For example, a risk that can be
seen in the situation of pandemic Coronavirus. A business leader should find ways to
minimize the risk as this will affect the business's financial performance during this
pandemic.
There are a few steps that Rosli Food can apply in identifying risk. Firstly, Rosli
Food should identify and analyze internal and external risks which could affect the
financial performance of the business. An example of internal risk is no proper record
of the business transactions while an example of external risk could be Covid19
which affects the economy of the whole business.
Action should be taken by the managers or leaders of Rosli Food to reduce the
identified risks. In other words, their early action would help to minimize the loss that
they might incur. For example, Rosli Food should keep all the evidence and
transaction in proper accounting records as this would avoid inaccurate reporting of
company financials.
Thirdly, the employees should get involved in identifying risks. This may help the
managers to be more focused on the problem that arises in the financial department
and also with the full cooperation of employees would help the managers to find
ways to reduce risk. Without the support of staff in Rosli Food, the risk could not be
reduced. All staff of Rosli Food should work as a team and perform their tasks to
improve business financial performance.
Making a list of risks is another step in the process of identifying risks. This
would help the managers of Rosli Food to prepare what they need to do if they are
facing uncertain situations. For example, in pandemic Covid 19, Rosli Food needs to
think beyond and go out of their comfort zone as this would make them survive
during this pandemic to maintain their profit.
Lastly, create a record risk. This is required because the risks could arise over
and over again. By creating a record of all the risks that have been experienced by
the company since it started, management will be able to do a regular review of past
events to detect patterns that may better prepare the business for future financial
risks.
2
2.2 TYPE OF RISKS
Risk is one of the major concerns of every business across the world. The
business needs to realize what is risk and what type of risks are. There are few risks
that need to be considered for each business. As for the financial department, the
risk that involves is financial loss. Financial risk is the process of identification,
analysis, and acceptance or mitigation of uncertainty relating to the financial health of
the company. Financial risk generally arises due to instability and losses in the
financial market caused by the movements in stock prices, currencies, interest rate
and others.
Financial risk is one of the high priority risk types for each business and can be
classified into various types such as market risk, credit risk, liquidity risk, operational
risk, legal risk, economic risk and political risk. The financial department of Rosli
Food basically will face certain risks relating to the costs and profits earned. ‘Bangkit
Santan’ is a kind of traditional food which has its own market and fans. If the demand
for ‘Bangkit Santan’ drops, it will be risky for Rosli Food to survive in the market. For
example, Hari Raya Aidilfitri is a month that supposedly increased their sales by 70%
but in the year of 2020, their sales drop because of pandemic Covid-19. Even all the
finished products sold out, but they were forced to sell it below their selling price.
As for the operational risk, it is a type of risk that arises out of the operational
failures such as mismanagement or technical failures. Operational risk may arise due
to the lack of controls. Besides, political risk also gives such impact on the financial
risk of the business. It is a risk due to the uncertainty about government actions. But
during pandemic Covid-19, Rosli Food needed to cease their operations for 3 months
and many orders were cancelled by the customers. After the government announced
that all economic sectors and business activities can continue their operations by
following all the Standard Operating Procedures (SOP), Rosli Food continued to
produce their products. Meanwhile, they faced challenges where all their foreign
workers were deported to their origin countries.
3
Other than that, economic risk also gives such an impact on the business. Rosli
food always wanted to serve their customers with a high quality of product at an
affordable price. But the market price of the raw materials used to give such a
significant impact on the business. If the raw materials price kept increasing, Rosli
Food also tended to increase their selling price. Plus, pricing pressure between
competitors also gives a risk towards the business to maintain the existing
customers.
Rosli Food is a business with a lower risk in terms of financial. It is because Rosli
Food does not have any financial liabilities or debts that need to be settled. All the
transactions incur on a cash basis. So, they might have an opportunity to get
approval when applying for a loan in order for them to grow the business in the
future.
4
2.3 CAUSE OF RISKS
There are many causes that can create business risk. Because of this, it is
difficult for the company to protect itself from the risk. The cause that relates to the
finance department is economic causes. Economic causes are related to a chance of
loss due to the market changes. It can be a change in price, competition, demand for
goods, changes in technology or changes in the method of production and others.
Financial problems such as an increase in the interest rate and increase in taxation
are also one of the economic causes as it will raise the operation cost of the
business. All of these changes have a direct impact on company earnings. Rosli
Food produces and supplies 'Bangkit Santan' in Malaysia and other countries outside
Malaysia. The demand and supply for the products in the year 2020 are decreasing
due to the pandemic Covid-19 that hit all over the world. Due to that, the economy
becomes unstable and declining. Rosli Food had to lower the price of their products
to clear the stock. The decrease in the price of their products had affected the
profitability of the company.
5
2.4 WAYS TO MANAGE RISKS
Risk management is a process to identify what strategies need to be
implemented to reduce the risks. Businesses that have identified the risk would have
better prepared and have a more cost-effective way to deal with any type of risk. It
also looks at how to implement an effective risk management policy and program
which can increase business chances of success and reduce the possibility of failure.
The risk management process are:Firstly, is avoidance risks which are known as elimination. The purpose of
avoidance risk is to eliminate the hazardous which brings the pieces of evidence of
transaction to the risks. For example, related to Rosli Food, the managers should
prepare internal procedures in recording all transactions to avoid all the risk which
possibility arise.
The next reducing risks are known as reduction. It is a process to reduce the
probability and impact of risks. Related to the case, Rosli Food should keep all the
evidence of transactions properly and organized to prevent any unrecognized
expenses. This is to reduce risks of business expenses from mixing up with personal
expenses.
If risk cannot be avoided and reduce, transferring risk is needed. Rosli Food
needs to transfer the risk to the third party by buying insurances to protect the
business.
Lastly, retaining risk but this kind of risk has been safety nets by the managers.
This risk is known as retaining risk which the managers are brave to accept the
responsibility. For example, Rosli Food should get the audited report of financial
statements to get accurate financial reporting as this will help them if there is any
issue arise in the future.
6
7
3.0 CRITICAL SUCCESS FACTOR
Critical Success Factor (CFS) refers to specific procedures, or areas that a business
or organization depends on for its continued survival. CFS also can define as
indicators for opportunities, activities or conditions required to achieve an objective
within a project or mission. A CSF is a critical factor or activity required for ensuring
the success of a company or an organization. There is some critical success factor
(CSF) of Rosli Food:
1) Good communication and cooperation with another department.
Communication is an essential and important soft skill that all employees should
have. Communication not only in their own department but also in another
department. The finance department of Rosli Food needs to have good
communication and cooperation with another department because they need all
information regarding the work program and budget. With this, the finance
department can work effectively and productively without any problem. It also can
build and maintain the relationship between employees and contribute to the
growth of a company.
2) Sustain product price to ensure customer value.
Customer value is the satisfaction of the customer in term quality, price and
services. It is important to consider to improve quality and services as well as the
price to meet customer’s needs. To ensure customer value, Rosli Food can
sustain their product price. With this, it can attract new customers and maintain
existing customers to buy the product because the price is affordable and good
services and quality products. When many customers buy their product, it can
increase the revenue of the company.
3) Recruit and manage the right talent and employees.
Rosli Food should recruit and hire talented employees that are experts in the
accounting system. So that the finance department can record and document all
the accounting transactions properly without any mistakes. Rosli Food should give
the employee some accounting training to gain more knowledge if the company
wants to use accounting software.
8
4.0 ANALYSIS OF THE COMPANY VS INDUSTRY
4.1 PESTEL ANALYSIS
PESTEL analysis is a framework or tool used to analyze and monitor the external
environment factors that may impact the organization or firm‘s performance. PESTEL
is an acronym that stands for Political (P), Economic (E), Social (S), Technology (T),
Environmental (E) and Legal (L) factors. For Rosli Food, these are factors that occur
in the company:

Political Factor
The political environment can affect the economic setting of business in a variety
of forms such as increase and decrease in tax. Rosli Food should be up-to-date
on certain political consideration to know any changes in taxes or interest rate
that could affect business demand trends. There might be possible changes in
regulation where the government could alter their rule and regulation, in turn,
have an effect on the business. Rosli Food also must comply with the labour law
when they want to hire more employees in the finance department to avoid any
problem in the future. Labour law clarifies and comity the obligations of business
owners to their employees. It is important to follow this legislation to protect their
right and bargaining power of workers.

Economic Factor
Economics plays an important role in business. This is because when the
economy falls, it will give impacts to the company’s business. The example of
economic factors that may affect business include exchange rates, interest rates,
recession, inflation, taxes and demand or supply. Rosli Food has been involved
in producing and supplying ‘Bangkit Santan’ in Malaysia. But during pandemic
COVID 19, Rosli Food cannot operate as usual because the government has
imposed the Movement Control Order (MCO). This will affect the demand and
supply of ‘kuih bangkit’. The company still gets profits during MCO even though
the demand from customers is low. This is especially during Hari Raya Aidilfitri,
Rosli Food has produced 80% from their order early. Besides that, YB Tuan Haji
Ayub Bin Jamil also buys the product by bulk for presents or donations.
9

Social Factor
Social factors are related to the cultural and demographic trends of society.
Social norms and pressures are keys to determining consumer behaviour. These
factors include cultural aspects and perspective, age distribution, career attitudes
and others. Rosli Food will make sure the quality of product and service gives
satisfaction to customers. The cost, quality, performance and efficiency of the
product would give a great impression to the customer satisfaction. Maintaining
the price would be favourable and improving the quality of the product can reach
high satisfaction to them.

Technology Factor
The technological factor is a factor that could influence the business operation of
how the business might deliver its services and operations. Technology factors
are about the innovation of the business and also the competitors around.
Technology innovation must be focused also to have better performance in
business operation and management. As in the financial function, the innovation
that should be taken is upgrading the system of bookkeeping by investing in the
accounting software such as MYOB, UBS, Million and so on. Such innovation in
financial function would give a better impact to the company by smoothing the
management on recording the proper account of the company and it also could
give better forecasting for the company future align with other competitors.

Environmental Factor
The issues surrounding environmental protection have become important in
recent years as the implications of under-regulated economic activity. This has
become more significant with globalization as the impact of an organization's
actions may be felt outside of its native country and may incur unquantifiable
financial penalties. There are some factors that affect the industries and cross
their ability to function smoothly such as an environmental issue, energy or power
consumption, insurance policies, safe waste disposal, and dealing with
hazardous materials. Weather, climate, and geographical location are also
factors towards the environment. The newest issue is on the Pandemic Covid-19
where all people across the world need to face it. All industries include Rosli
Food required to cease their operation temporarily because the government
implemented a Movement Control Order (MCO) in Malaysia. This situation
10
affected the performance of the business where they could not produce ‘Bangkit
Santan’ in a normal quantity.

Legal Factor
Legal factors may have some overlap with political factors but legal factors do
cross over with the political factors. Legal factors include more specific laws such
as health and safety law, employment law, consumer right, product safety laws,
copyright and patent laws and others. Rosli Food needs to understand what is
legal and allowed to operate within the industry the company involved in. For the
company's financial, the company needs to follow the accounting standards to
prepare the financial statement. The standard is a guideline for the accountants
to prepare a proper financial statement that will help the company make a better
decision. It also provides information about the cash flows of the company,
results of operations and financial position. The financial statement then needs to
be audited by the auditor. The auditor needs to follow the auditing standards for
them to give the opinion. The opinion must be fairly presented or based on a true
and fair view. The purpose of the audit is to present a true and fair view of the
company's financial performance and position. Rosli Food also must be aware of
any changes in the legislation and the impact this may have on business
operations.
11
4.2 SWOT ANALYSIS

Strength
Rosli Food does not own any debt whether from the bank or any other institution.
It is believed that companies without debt do not face many risks. There are no
required payments and no threat of bankruptcy if the payments are not made.
The beginning capital is 100% come out from the owner. Next, Rosli Food keeps
all the accounting evidence such receipt and voucher in one place. It is easier for
the company to track any transaction within the activities. Keeping receipts of all
transactions will help to claim all of the possible deductions. Lastly, Rosli Food
experienced growing profit which shows that they effectively manage their cash.
Earning a profit is important to a small business because profitability impacts
whether a company can secure financing from a bank, attract investors to fund its
operations and grow its business. Companies cannot remain in business without
turning a profit.

Weakness
Rosli Food does not have a proper accounting record such as a statement of
profit or loss and statement of financial position. Properly recording the
transaction will enable the company to ensure that the financial statements of the
company comply with generally accepted accounting practice. It also will enable
the financial statements to be readily and properly audited. The second
weakness is the company is not being audited by an audit firm. Audit activities
are important to provide reasonable assurance that the financial statements were
free of material misstatement. It also promoted accountability and transparency.
Lastly, there are no segregation duties in the finance department since only one
person handles all the activities. Segregation or separation of accounting duties
means dividing the tasks so that different people are handling transaction
processing, data recording, financial statement preparation and auditing. Relying
on one person to handle all the accounting functions could lead to poor internal
controls, accounting fraud and misappropriation of company assets.

Opportunity
Opportunities are about the chances for something good to be offered and
happened. It usually about the outside offers that come to the organization. The
first opportunity that could be offered to Rosli Food is tax consultant assistance.
12
Tax consultant assistance could give services in terms of preparing the tax
return, looking for deductions in order to lower the tax burden of the company,
giving help and advice with trust and so few more things. Secondly, Innovation on
the new technology of the accounting system. The suggested innovation is
having an accounting software which could give simple and fast data processes.
Innovation in accounting systems also reduces automation of error due to the
automation of processes and also saves staff cost on manual accounting. The
last one of the opportunities that could be offered is attending seminars or
training on financial affairs. Since the innovation might change from year to year,
the seminar on adopting the new knowledge or innovation also needed to be
attended by the staff of the company to gain more knowledge and be more
effective and efficient in managing the financial affairs.

Threat
Threats are external factors that have the potential to negatively affect the
business. The threats to the financial department of Rosli Food are an economic
downturn. Economic downturn includes a shift in market requirements, rising
unemployment, falling share price, low consumer confidence and declining
investment. Although the company may not be able to completely protect the
business from an economic downturn, understanding how it could affect the
company will help the company develop a plan to minimize its impact. Other than
an economic downturn, an increase in tax payments is also one of the threats to
the company. Taxes need to be paid every year to foster economic growth and
for the development of the government. If the company did not pay the tax, the
amount of tax will be increased and it will be difficult for the company to pay.
Lastly, pandemic Covid-19 is a threat to the company's financial performance. In
the year 2020, pandemic Covid-19 has hit all over the world. This pandemic
causes the economy to decline and become unstable. It also has affected all the
businesses which make certain businesses need to shut down due to suffered
losses. The pandemic has affected the sales of Rosli Food. The sales of the
company decrease due to low demand from the customers. Rosli Food also had
to lower the price of their products to clear all the stocks to prevent bigger losses.
In this situation, the company has to make a better decision for the company's
benefits.
13
5.0 ISSUE AND CHALLENGES
i.
The challenges that Rosli Food faced is there are no allocation expenses for
financial.
ii.
The company does not have a proper accounting record and is not being
audited.
14
6.0 ANALYSIS OF ISSUES
Rosli Food focuses too much on operating activities and overlooks other parts of
the division. Undeniable operating activities are the most important for a company
which include manufacturing, sales, advertising and marketing activities. There is
typically an operating activities section of a company’s statement of cash flows that
shows inflows and outflows of cash resulting from a company’s key operating
activities. At the same point of view, the financial part also plays a substantial role in
a business. The challenges that Rosli Food faced is there are no allocation expenses
for financial. Next issue is the company does not have a proper accounting record
and is not being audited, it is difficult to determine the company’s appropriateness of
their financial activities. This issue would give impact on tax obligation processes and
also in preparing the budget and financial statement of the company. Financial
statements are important because they contain significant information about a
company’s health. It also helps companies make informed decisions since they
highlight which areas of the company provide the best return on investment.
15
7.0 ADVICE OR RECOMMENDATIONS
1) Prepare a proper accounting record and documentation.
Rosli Food should prepare a proper accounting record and documentation such
as cash book and bank statement, sales invoice and purchase invoice. These
three sets of records are very important and must maintain an organization to be
able to track all the transactions. Cashbook and bank statement is important to
be kept because it shows the payment in and out of the bank account. Sales
invoice is a documented file where the management could store the invoice by
putting the have not yet been paid at the front of the file to help control the debtor.
Meanwhile, the purchase invoice is a file in which the management practices
putting notes on the bill that has been paid and how they paid to ease the
accountant to allocate the bills into the accounts. These records must be kept
and updated regularly since it will be a tool of forecasting the expenses in the
income of the company. As can be seen from the bank statement, there are
some records which are not related to the business. The company should keep
the account clean and separated from personal accounts to have an accurate
idea of business expenses. This could help the bookkeeper to record the
transaction easily. Those who are responsible for finance activities have to put
time aside to do the bookkeeping regularly or the company can take initiative to
get help with the professional advisor on the finance matter.
2) Internal control activities.
Rosli Food should prepare a statement budget for each department, for example,
admin budget, marketing budget and operating budget. This allows the allocation
of the cost to prepare all the financial statements. Good communication among
departments is very important which smoothen the progress of each cost activity.
Financial statement and ratio analysis is important to perform audit activity that
would help to monitor and evaluate the performance of the company. Provided
together is the suggested budget for each department, statement of profit or loss,
statement of financial position and ratio analysis for the company:
16
ADMINISTRATION BUDGET - 2020
ITEMS
FIXED
ASSET
MONTHLY
EXPENSES
OTHERS
EXPENSES
TOTAL
(RM)
RENTAL
Building
600.00
7,200.00
Factory
6,000.00
72,000.00
FIXED ASSET
Office Equipment (Rengit)
4,021.60
4,021.60
Office Equipment (Jb)
7,200.00
7,200.00
Furniture& Fittings(Rengit)
1,500.00
1,500.00
Furniture & Fittings (Jb)
5,400.00
5,400.00
WORKING CAPITAL
Salary
7,800.00
93,600.00
Electricity bill
120.00
1,440.00
Water bill
50.00
600.00
Telephone
250.00
3,000.00
UTILITIES
OTHER EXPENSES
Stationery expenses
50.00
50.00
Renewal Business license
60.00
60.00
Insurance
6,000.00
Facility upkeep
600.00
Depreciation
50.00
1,260.00
1,260.00
15,470.00
1,370.00
203,931.60
TOTAL BUDGET
18,121.60
17
600.00
MARKETING BUDGETS - 2020
ITEMS
FIXED
ASSET
MONTHLY
EXPENSES
OTHERS
EXPENSES
TOTAL
(RM)
FIXED ASSET
Signboard (Rengit)
Signboard (Jb)
600.00
600.00
3,289.00
3,289.00
WORKING CAPITAL
Salary
2,400.00
28,800.00
200.00
2,400.00
Electricity bill
30.00
360.00
Water bill
15.00
180.00
Internet
89.00
1,068.00
Staff training
UTILITIES
OTHER EXPENSES
Business card
350.00
Social media advertising
100.00
350.00
1,200.00
Signage fee - majlis
750.00
750.00
Depreciation
328.90
328.90
1,428.90
39,325.90
TOTAL BUDGET
3,889.00
2,834.00
18
OPERATIONAL BUDGETS - 2020
FIXED ASSET
EXPENSES
(RM)
ITEMS
MONTHLY
EXPENSES
(RM)
OTHER
EXPENSES
(RM)
TOTAL
(RM)
Fixed Assets
Hilux
86,500.00
86,500.00
Van
60,000.00
60,000.00
3,380.00
3,380.00
Processing
8,360.00
8,360.00
machine
3,600.00
3,600.00
Mixer
40,000.00
40,000.00
Oven
450.00
450.00
Gas stove
300.00
300.00
Pot
100.00
100.00
Roller dough
100.00
100.00
50,000.00
50,000.00
2,500.00
2,500.00
Coconut Grinder
Machine
Coconut
Mold
Custom machine
Furniture
&
Fittings (Jb)
Working capital
Salaries
16,100.00
193,200.00
Raw Material
32,000.00
384,000.00
1,000.00
12,000.00
420.00
5,040.00
Utilities
Electricity Bill
Water Bill
19
Other expenses
First aid
45.00
45.00
Fire extinguisher
80.00
80.00
Uniform
390.00
390.00
Packaging
8,000.00
96,000.00
Gas
300.00
3,600.00
Petrol
500.00
6,000.00
Toll
250.00
3,000.00
Roadtax &
insurance
1,500.00
1,500.00
maintenance
700.00
700.00
Depreciation
8,537.00
8,537.00
11,252.00
969,382.00
Repair &
TOTAL
255,290.00
58,570.00
STATEMENT OF PROFIT OR LOSS
20
STATEMENT OF FINANCIAL POSITION
21
RATIO ANALYSIS
EFFICIENCY
RATIO
FORMULA
YEAR 2019
CURRENT
ASSET
TURNOVER
Net Sales
= RM 1,458,305
= RM 1,452,305
Average
Current
Assets
RM(377,471.27 +
362,875.82) /2
RM(266,612.27 +
377,471.27) /2
= 3.94 times
= 4.51 times
YEAR 2019
YEAR 2020
PROFITABILI
TY RATIO
FORMULA
GROSS
PROFIT
MARGIN
Gross Profit
= RM 1,107,305
= RM 1,029,705
Net Sales
RM 1,458,305
RM 1,452,305
= 75.93%
22
YEAR 2020
= 70.90%
ANALYSIS
Both year shows
good
performance
since the ratio is
above 1.
ANALYSIS
Year 2019 is
more efficient
since the ratio is
higher compared
to 2020.
3) Tax obligation.
A business should pay tax for the matter of investment and growth. If the
company missed filing taxes, it would lead to the monetary penalty. Taxable
income comprises gains and profit from business, dividend, interest, rents,
royalty, premium and other earnings. Rosli Food could get advice from any
certificated tax consultants to understand the basic knowledge about the tax and
look for any deductions to lower the tax burden. By paying the tax, Rosli food has
considered accomplishing civic duty while handing help to those who are less
fortunate and support common resources such as police and firefighters.
4) Risk Management Policy.
The purpose of risk management policy is to provide guidance for Rosli Food to
manage risk to achieve corporate objectives and financial sustainability. Other
than that, this is to create awareness of Rosli Food of risks might arise and plan
and timely completion to avoid and reduce risk. This could improve the
accounting management of Rosli Food. The effectiveness and efficiency of the
management of the finance department might be increased as well.
5) Product Liability Insurance.
Product liability insurance is to ensure the ‘Kuih Bangkit’ is not harmful to the
consumers. The benefits of Rosli Food should have this type of insurance to
protect production flaws which cause defects in the production of ‘Kuih Bangkit’.
Next, is to protect against any defects or errors that make the product unsafe for
use to the public. Lastly, this insurance also helps to reduce business’s risks
which can against any type of claim.
23
8.0 CONCLUSION
As for the conclusion, the financial department plays a big role in the company.
Since the performance of the company can be seen through the financial statement
and financial analysis. Rosli Food could manage to identify the risks and handle how
to manage the risks. By exercising the risk assessment, Rosli Food could form an
integral part of an occupational health and safety management plan which could help
in creating awareness of hazard and risk. Rosli Food also could excel and manage to
handle the risk to avoid affecting the operation and management.
In maintaining sustainability, Rosli Food could also maintain the critical factor of
good communication with each department, sustain the product price to maintain
customer value and recruit talented employees. Rosli Food is also able to analyze
the factors that have relationships between the industry and company to ensure that
Rosli Food operation and management align with the industry. SWOT analysis helps
Rosli Food in analyzing the strength to be maintained, weakness to be improved,
opportunities to be accomplished and threats to be aware of.
Lastly, issues and challenges always occur in every company. However, Rosli
Food could identify the challenges and work hard to manage and solve the
challenges for the company could overcome future obstacles and gain many great
advantages in growing the business.
24
9.0 REFERENCES
1) En. Muhd Irsyad bin Mohd Rosli, Marketing Manager of Rosli Food.
2) Pn. Nur Athirah bt Mohd Rosli, Secretary and person in charge of the Finance
Department of Rosli Food.
3) Pn. Norashikin bt Bachok, Operating Manager of Rosli Food.
4) Dr Hanafiah binti Hasin, Lecturer of Integrated Case Study (MAF671)
5) (4) Rosli Food Supplier | Facebook
6) https://instagram.com/roslifood?igshid=1maw6w7rez64r
7) https://smallbusiness.chron.com/importance-labor-laws-62734.html
8) https://corporatefinanceinstitute.com/resources/knowledge/strategy/pestel-analysis/
9) https://lciweb.com/5-key-success-factors-business-no-5-finances/
10) PESTEL Analysis: Factors of PESTEL Analysis, Examples and Videos (toppr.com)
11) Financial Risk | Types of Financial Risk | Advantages and Disadvantages
(educba.com)
12) 7 Types of Financial Risk - dummies
13) https://www.toppr.com/guides/business-studies/nature-and-purpose-ofbusiness/nature-of-business-risk/
14) https://www.business-to-you.com/scanning-the-environment-pestel-analysis/
15) https://www.mindtools.com/pages/article/newTMC_05.htm
16) https://web.actuaries.ie/sites/default/files/ermresources/risk_management_policy_template.pdf
17) https://www.investopedia.com/ask/answers/050115/how-can-companies-reduceinternal-and-external-businessrisk.asp#:~:text=Internal%20risks%20include%20personnel%20management,trade%
20wars%20hurting%20international%20sales
18) https://corporatefinanceinstitute.com/resources/knowledge/finance/business-risk/
19) https://www.pharmapproach.com/roles-responsibilities-finance-departmentpharmaceuticalindustry/#:~:text=Finance%20Department%20is%20the%20part,of%20funds%20on
%20various%20assets
20) https://www.zurich.com.my/en/insurance-products/business/for-my-liabilities/productliability-insurance
21) https://www.allianz.com.my/product-liability
22) https://www.mountainone.com/news/benefits-product-liability-insurance
25
10.0 APPENDICES
10.1 QUESTIONNARE
1. How much is your initial investment/paid-up capital at the beginning of your
business?
2. Do you have partners and what is the understanding?
3. What is your financial year-end date?
4. In preparing the company's financial statements, is your company in compliance
with the MFRS guidelines?
5. Do you use any accounting software to prepare your accounts? Have you had
your financial statements audited by the outside auditor?
6. Do you practice segregation of duties in your finance department?
7. Do you prepare the financial analysis of the business at the end of each reporting
year to assess the performance of your business?
8. What is the company's most significant financial challenge?
9. Since the start-up of your business, have you injected additional capital?
10. Do you receive financial support like a loan to a small business in your business?
11. Is there any help from government agencies?
12. Do you have your accountant with the company, or do you hire accountants or
outside parties to prepare your financial statements?
13. How did you manage the financial during this pandemic?
14. Did you manage to pay tax for your business?
15. Is there any difference in your business's sales performance before and after the
pandemic?
16. How did your business record the business transactions?
17. What is the business average sales from year to year?
18. Does your company keep accounting records including invoices, vouchers and
receipts for at least two years?
19. Who is responsible for preparing the financial statement or financial report? (If
they properly record the transaction)
20. Does your business prepare the profit or loss forecast each quarter to be
reviewed?
21. In a month, how many times did you restock your inventory?
22. How did you manage your debtors and creditors?
23. What is your plan to have proper financial management?
24. How did you compute the selling price per unit and how much the cost incurred?
26
25. State two financial goals for your business.
26. Do you have proper insurance for the business if anything happens? And how
much does it cost?
27. Do you have any other business? If yes, which part of your business is not
profitable?
28. How many assets do you have?
29. Do you buy assets by using a hire purchase method or cash?
30. Did you rent or owned the premise?
27
10.2 OTHERS (PICTURES, TABLES, VIDEO, ETC)
ADMINISTRATION DEPARTMENT - 2019
ITEMS
FIXED
ASSET
MONTHLY
EXPENSES
OTHERS
EXPENSES
TOTAL
(RM)
RENTAL
Building
600.00
7,200.00
FIXED ASSET
Office Equipment
4,021.60
4,021.60
Furniture& Fittings
1,500.00
1,500.00
WORKING CAPITAL
Salary
7,800.00
93,600.00
Electricity bill
120.00
1,440.00
Water bill
50.00
600.00
Telephone
250.00
3,000.00
UTILITIES
OTHER EXPENSES
Stationery expenses
50.00
50.00
Renewal Business license
60.00
60.00
Insurance
250.00
3,000.00
Facility upkeep
50.00
600.00
Depreciation
TOTAL BUDGET
5,521.60
9,120.00
28
-
-
110.00
115,071.60
MARKETING DEPARTMENT - 2019
ITEMS
FIXED
ASSET
MONTHLY
EXPENSES
OTHERS
EXPENSES
TOTAL
(RM)
FIXED ASSET
Signboard
600.00
600.00
WORKING CAPITAL
Salary
2,400.00
28,800.00
200.00
2,400.00
Electricity bill
30.00
360.00
Water bill
15.00
180.00
Internet
89.00
1,068.00
Staff training
UTILITIES
OTHER EXPENSES
Business card
350.00
Social media advertising
100.00
Signage fee - majlis
Depreciation
TOTAL BUDGET
600.00
2,834.00
29
350.00
1,200.00
250.00
250.00
-
-
600.00
35,208.00
OPERATION DEPARTMENT - 2019
FIXED ASSET
EXPENSES
(RM)
ITEMS
MONTHLY
EXPENSES
(RM)
OTHER
EXPENSES
(RM)
TOTAL
(RM)
Fixed Assets
Hilux
86,500.00
86,500.00
Van
60,000.00
60,000.00
1,690.00
1,690.00
machine
4,180.00
4,180.00
Mixer
1,200.00
1,200.00
Oven
16,000.00
16,000.00
Gas stove
150.00
150.00
Pot
100.00
100.00
Roller dough
50.00
50.00
Mold
50.00
50.00
Coconut Grinder
Machine
Coconut
Processing
Working capital
Salaries
21,100.00
253,200.00
Raw Material
33,000.00
396,000.00
1,000.00
12,000.00
420.00
5,040.00
Utilities
Electricity Bill
Water Bill
Other expenses
First aid
45.00
45.00
Fire extinguisher
80.00
80.00
Uniform
390.00
390.00
Packaging
9,000.00
108,000.00
Gas
300.00
3,600.00
Petrol
500.00
6,000.00
Toll
250.00
3,000.00
Roadtax
&
30
Insurance
Repair
1,500.00
700.00
700.00
10,000.00
10,000.00
-
-
12,715.00
969,475.00
&
maintenance
R&D Cost
Depreciation
TOTAL
1,500.00
169,920.00
65,570.00
STATEMENT OF PROFIT OR LOSS
Rosli Food
Statement Of Profit or Loss for the year end 2019
RM
Sales
(Less) Cost Of Good Sold
Opening Stock
Purchase
Net Purchase:
Add : Carriage Inward
Cost Purchase
(Less) Closing Stock
Cost of Good Sold
GROSS PROFIT
RM
1,458,305.00
2,200.00
396,000.00
398,200.00
500.00
398,700.00
1,800.00
400,500.00
1,057,805.00
(Less) Expenses
Administration expense
Marketing expenses
Operating expenses
109,550.00
34,608.00
799,555.00
943,713.00
Net Profit
114,092.00
31
STATEMENT OF FINANCIAL POSITION
Asset
Rosli Food
Statement Of Financial Position as at 2019
RM
RM
RM
Cost
Depreciation
Non-Current Assets
Office Equipment
Hilux
Van
Coconut Grinder Machine
Coconut processing machine
Mixer
Oven
Gas stove
Pot
Roller dough
Mold
Furniture & Fittings
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
-
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Tangible Assets
Signboard (Rengit)
1.00
-
1.00
13.00
Current Assets
Ending Inventory
Bank
Cash
1,800.00
360,671.27
15,000.00
377,471.27
377,484.27
Total Assets
Liabilities and Shareholders' Equity
Shareholders' Equity:
Capital
Net Profit
263,392.27
114,092.00
Total Shareholders' equity
377,484.27
32
33
MAF 671 INTEGRATED CASE STUDY
GROUP BUSINESS ADVISORY
SGI BAROKAH ENTERPRISE
SEMESTER MAC 2021 – AUGUST 2021
LECTURER: DR. HAMIDAH BINTI HAJI BANI
CLASS
MAC220 8A
DEPARTMENT
FINANCIAL DEPARTMENT
GROUP MEMBERS
1.
2.
3.
4.
5.
6.
MOHD NIZAM BIN MD SAID (2018610152)
ZAIMAL BIN MD JAMAL (2018448508)
AMIRAH SUZANI BINTI ABDULLAH (2018287098)
NUR AIN SYAFIQAH BINTI ROSLI (2018440292)
NUR KHAIRUNNISA BINTI ADNAN (2018400188)
SOFEA JASMIN BINTI AHMAD (2018674676)
ACKNOWLEDGEMENT
Alhamdulillah, all praises to Allah for the strengths given and His blessing so that we could
complete this Group Business Advisory (GBA) for the Financial Department. This GBA was
prepared for the Service-Learning Malaysia – University for Society (SULAM) under course
Integrated Case Study (MAF671) conducted by University Technology MARA.
Special appreciation goes to our lecturer, Dr Hamidah Haji Bani for the consultation and advise
with the endless support. Without her guide we might not be able to complete this task
successfully. Also, we would like to take this opportunity to express our gratitude to SGI
Barokah Enterprise for their great cooperation by spending their valuable time to serve us in
answering the questions and supplying documents that we need.
Finally, thank you for every single person in our group who are determine in completing their
assigned task by sacrifice their time and energy to make sure this Group Business Advisory
can be produced. Even in the hard time, they still manage to find time and came out with
incredible ideas to finish this assignment according to the due date given.
TABLE OF CONTENT
No.
Particulars
Pages
ACKNOWLEDGEMENT
1.0
INTRODUCTION
1
2.0
OBJECTIVES OF FINANCIAL DEPARTMENT
2
3.0
FIRST ISSUE – BUDGET PLANNING
4.0
5.0
3.1.
OVERVIEW ON BUDGET PLANNING FOR THE SMES
3
3.2.
SGI BAROKAH ENTERPRISE AND THEIR BUDGET PLAN
3
3.3.
THE BENEFITS ON IMPLEMENTING BUDGETING SYSTEM
3-4
3.4.
BUDGETING METHODS
4-6
SECOND ISSUE – CRITICAL INVESTMENT ON CAPITAL EXPENDITURE
4.1.
WHAT IS CAPITAL EXPENDITURE?
7
4.2.
PROS & CONS OF CAPITAL EXPENDITURE SPENDING
7
4.3.
DECISION MAKING ON CAPITAL EXPENDITURE
4.4.
CAPITAL EXPENDITURE OF SGI BAROKAH ENTERPRISE
9-10
THIRD ISSUE – POTENTIAL FINANCIAL RISK
5.1.
5.2.
6.0
7-9
FINANCIAL RISK MANAGEMENT
5.1.1. Credit Risk
10-11
5.1.2. Liquidity Risk
11-12
INFORMATION TECHNOLOGY RISK
12-13
FINANCIAL ANALYSIS
6.1.
ACT AND STANDARD
13
6.2.
LIQUIDITY RATIOS
13-16
6.3.
EFFICIENCY RATIOS
16-17
6.4.
LEVERAGE RATIOS
6.5.
PROFITABILITY RATIOS
6.6.
SUMMARY OF FINANCIAL ANALYSIS
7.0
CRITICAL SUCCESS FACTOR
8.0
RECOMMENDATION
9.0
10.0
17
17-18
19
19-20
8.1.
CREATING INITIAL BUDGET PLANNING
20-22
8.2.
ACCOUNTING SOFTWARE FOR CRITICAL INVESTMENT
22-24
8.3.
MINIMIZE POTENTIAL RISK TO FINANCIAL ACTIVITIES
24-29
VALUE ADDED
9.1.
COMMITMENT ON TAX AND ZAKAT
29
9.2.
GREEN BUDGET
29
CONCLUSION
REFERENCES
APPENDICES
30
1.0 INTRODUCTION
SGI Barokah Enterprise is a sole proprietor company under Small and Medium Enterprises
(SMEs) and owned by Bumiputera. This company is based in Rawang, Selangor dedicated its
business in the food industry by producing sambal goreng tempe under brand Sambal Goreng
Ibu and bawang goreng under brand Bawang Goreng Ibu. Start their business in early 2012
as a small business from home, now they become as the main player in the industry and
continue to add value its business by certification from several agencies like Halal JAKIM,
MeSTI and from GMP soon.
Financial Department in SGI Barokah Enterprise is led by Madam Nurul Amani binti Zulkeple.
She will manage day-to-day financial operations and deal with the outsource firm to prepare
their financial statement for every year. Day-to-day financial operations include recording and
monitor cash inflow and outflow for the company, monitor their receivables and payables
account and responsible towards the company’s petty cash.
According to Puan Nurul Amani, all the documents such as invoice and receipt is using manual
basis, and she will record all the transactions using Microsoft Excel. She will use bank
statement as the main source for her to monitor the company’s cash flows.
By referring to their financial statement for the year 2020, SGI Barokah Enterprise still can
make a high revenue compared to the previous performance in the year of 2019, which is RM
844,800 and RM 415,800 respectively, even in the changing environment caused by Covid19 pandemic. Besides the opportunity, this can be a threat for them too because their success
will attract the entrance of new competitors.
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2.0 OBJECTIVES OF FINANCIAL DEPARTMENT
Financial Department should be the heart of the company. Their roles are not only on
recording day-to-day transactions, but it is more than that. By reengineering the roles and
responsibility of Financial Department in SGI Barokah Enterprise, we hope that the Financial
Department can contribute to the effectiveness and efficiency of the business, thus boost the
company potential.
To ensure the goals can be achieve, we had shortlisted three objectives that can be led by
Financial Department to drive SGI Barokah Enterprise become more competitive and
organized in term of their financial management. Not only focus on sales, the company also
should focus on their costing, budgeting, investment and mitigation of risks.
To be specific, the objectives of Financial Department is to help SGI Barokah Enterprise to
keep growth and achieve sustainability by:
1)
Introducing structural budget system with quarterly schedule meeting per year,
2)
Advise one (1) critical investment on capital expenditure,
3)
Determine three (3) potential risk with recommended solutions.
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3.0 FIRST ISSUE - BUDGET PLANNING
3.1 OVERVIEW ON BUDGET PLANNING FOR THE SMEs
Several surveys conducted by agency like MARA, SME Corp and journalist has identified that
many of the SMEs business owner did not have an awareness on preparing an effective and
well plan budget for their business. This is because they often driven by passion to achieve
their goals in the business in terms of making as many profits as possible, so they just focus
on how to make sales.
This has led government agency that relates with the SME development like MARA and the
agency under Ministry of Entrepreneur Development and Cooperatives (MEDAC) to come out
with many courses to create an awareness to the business owner in SMEs on the importance
of the financial management, one of them is budget planning.
3.2 SGI BAROKAH ENTERPRISE AND THEIR BUDGET PLAN
In the interview session with the Head of its Financial Department, Madam Nurul Amani binti
Zulkeple, there is no budget allocated to every department officially. Financial Department will
take out sum of money to be given to the representative of any department that need the
money to buy or to pay something when they really needed. It means there is no control
mechanism exist for their expenses and this method will potentially create risk on their
cashflow.
After observation of their financial statement for the year ended 31 December 2019 and
31 December 2020, this company is dealt with high sum of revenue and expenditure. Thus,
we encourage SGI Barokah Enterprise to develop a well plan budgetary system as one of their
internal control to safeguard their financial activities. Initially, preparing a budget may consume
more times for the company in administrative operation, but the outcome will be very
important, useful and the business will gain a lot of benefits.
3.3 THE BENEFITS ON IMPLEMENTING BUDGETARY SYSTEM
By adopting a proper budget system, SGI Barokah Enterprise will gain a lot of advantages.
Some of them are:
i.
Planning orientation
By creating budget allocation, the top management of SGI Barokah Enterprise can
decentralize every department with attached agreement that comes with the budget.
The agreement is activity that department plan to do with the allocation given and have
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the impact to the organization. At the same time, the top management can focus to
company long-term strategic plan and goals.
ii.
Resource Allocation
Like other company, SGI Barokah Enterprise also had limited resources so the
budgeting system will help the company to decide every department needs based on
their daily operations. This will help the company allocate their resources at the right
place and minimize waste.
iii.
Profitability review
Without budgeting and monitoring system, SGI Barokah Enterprise easily can lose
sight of where the company is making most of its money and where the company losing
their money, especially during the scramble of day-to-day operation. Budgeting system
that comes with good monitoring will point out this aspect so the management can
make decision on this.
iv.
Performance evaluations
The top management can measure performance of every department by their
feedback on performance report on every budget meeting. The performance can be
measure by the outcome or progress on the activity agreed before the allocation given.
This evaluation system is called responsibility accounting.
v.
Credit worthiness
The systematic budget plan will give an enhance credit worthiness for SGI Barokah
Enterprise through which adequate finance can be raised from banks, financial
institutions or government agencies.
3.4 BUDGETING METHODS
Before jump into any recommendation to SGI Barokah Enterprise on implementing the
budgeting system, these are four common types of budgets that companies use as shown in
Figure 1. Every method has their own advantages and disadvantages. This are the general
information on common types of budget.
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Figure 1
i.
Incremental budgeting
Incremental budgeting takes last year’s actual figures and adds or subtracts a percentage to
obtain the current year’s budget. It is the most common method of budgeting because it is
simple and easy to understand. Incremental budgeting is appropriate to use if the primary cost
drivers do not change from year to year. However, there are some problems with using the
method:

It is likely to perpetuate inefficiencies. For example, if a manager knows that there is
an opportunity to grow his budget by 10% every year, he will simply take that
opportunity to attain a bigger budget, while not putting effort into seeking ways to cut
costs or economize.

It is likely to result in budgetary slack. For example, a manager might overstate the
size of the budget that the team needs so it appears that the team is always under
budget.

It is also likely to ignore external drivers of activity and performance. For example,
there is very high inflation in certain input costs. Incremental budgeting ignores any
external factors and simply assumes the cost will grow by, for example, 10% this year.
ii.
Activity-based budgeting
Activity-based budgeting is a top-down budgeting approach that determines the amount of
inputs required to support the targets or outputs set by the company as per Figure 2. For
example, a company sets an output target of $100 million in revenues. The company will need
to first determine the activities that need to be undertaken to meet the sales target, and then
find out the costs of carrying out these activities.
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Figure 2
iii.
Value proposition budgeting
In value proposition budgeting, the budgeter considers the following questions:

Why is this amount included in the budget?

Does the item create value for customers, staff, or other stakeholders?

Does the value of the item outweigh its cost? If not, then is there another reason why
the cost is justified?
Value proposition budgeting is really a mindset about making sure that everything that is
included in the budget delivers value for the business. Value proposition budgeting aims to
avoid unnecessary expenditures – although it is not as precisely aimed at that goal as our final
budgeting option, zero-based budgeting.
iv.
Zero-based budgeting
As one of the most commonly used budgeting methods, zero-based budgeting starts with the
assumption that all department budgets are zero and must be rebuilt from scratch. Managers
must be able to justify every single expense. No expenditures are automatically “okayed”.
Zero-based budgeting is very tight, aiming to avoid all expenditures that are not considered
essential to the company’s profitable operation. However, it can be an extremely timeconsuming approach, so many companies only use this approach occasionally.
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4.0 SECOND ISSUE - CRITICAL INVESTMENT ON CAPITAL EXPENDITURE
4.1 WHAT IS CAPITAL EXPENDITURE?
Capital expenditures (CaPex) are funds used by a company to acquire, upgrade and maintain
physical assets such as property, plants, buildings, technology, or equipment. Purchasing
operational software for the company also can be categorized as capital expenditure. It is a
nature of capital investment for the company because it will upgrade the company’s capability
in generating revenues. It is a kind of capital investments that expected to enhance the value
of the organization.
However, before deciding to spend on any capital investment, SGI Barokah Enterprise must
be appraised according to their company’s financial ability. This is to ensure that the company
is not making hasty decisions that will result in bearing more costs than benefit to the company
as a whole. The company also need to consider about the pros and cons when spending to
the capital expenditure.
4.2 PROs & CONs OF CAPITAL EXPENDITURE SPENDING
a. Pros of Capital Expenditure

It will increase the company production capability and revenue potential

It can be the added value for the business

It could reduce long – term costs and contribute to efficiency of the business
b. Cons of Capital Expenditure

Upfront cost is high, depending on the type of capital expenditure

The company had to allocate new cost for the maintenance

Difficult to project long – term value
4.3 DECISION-MAKING ON CAPITAL EXPENDITURE
Figure 3 can be the guidance for SGI Barokah Enterprise in making decision on determine
the needs to spend on the right capital expenditure. These steps are very important because
the right capital expenditure will boost the potential of the company, if not the capital
expenditure will be a burden for the company for a long-term period.
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Figure 3
Step 1: Determine capital needs for both new and existing projects.
SGI Barokah Enterprise must determine its needs by deciding what capital improvements can
be categorize as critical and required for immediate attention. For example, the company may
determine that the new machinery for Production Department to boost their production against
demand on MCO or acquired new vehicles to distribute Sambal Goreng Ibu to the Petronas
fuel station.
Step 2: Identify and establish resource limitations.
With limitation resources, SGI Barokah Enterprise should evaluate their ability to invest in
capital expenditures given the availability of funds and time as refer to Table 1. If the company
is in a situation where they only have enough resources to invest in a limited number of
opportunities, the company must evaluate both the time and money needed to acquire each
asset.
Resource Limitations
Time Considerations
Money Considerations
Employee commitments
Lack of liquidity
Project set-up
Tied up in non-liquid assets
Time-frame necessary to secure financing
Up-front acquisition costs
Table 1
* When capital resources are limited, capital budgeting procedures are needed.
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Step 3: Establish baseline criteria for alternatives.
Once the ability to invest has been established, SGI Barokah Enterprise needs to set baseline
criteria and research for any alternatives option is available. Baseline criteria are measurement
methods that can help differentiate among alternatives. Common measurement methods
include the payback method, accounting rate of return, net present value, or internal rate of
return.
Step 4: Evaluate alternatives using screening and preference decisions.
To evaluate alternatives, businesses will use the measurement methods to compare
outcomes. The outcomes will not only be compared against other alternatives, but also against
a predetermined rate of return on the investment established for each project consideration.
Alternatives will first be evaluated against the predetermined criteria for that investment
opportunity, in a screening decision.
Step 5: Make the decision.
The screening decision allows companies to remove alternatives that would be less desirable
to pursue given their inability to meet basic standards. If one or more of the alternatives meets
or exceeds the minimum expectations, a preference decision is considered. Preference
decisions rank alternatives emerging from the screening process to help make the final
decision. Once the company determines the rank order, it is able to make a decision on the
best avenue to pursue. This can could be referred to Figure 4.
Figure 4
4.4 CAPITAL EXPENDITURE OF SGI BAROKAH ENTERPRISE
Looking for the Statement of Financial Position of SGI Barokah Enterprise for the year 2019
and 2020, we could see a large of additional acquiring of non-current assets for the company
and most of them are for the use of Production Department, besides new vehicles amounted
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to RM197,800 for the Marketing Department. We can conclude that, SGI Barokah Enterprise
has done some good investment of capital expenditure in 2020 by looking at their high revenue
compared to 2019 which recorded an increase of more than 100%, even their liabilities also
increase about 300% from the previous year. This is a critical part for Financial Department to
handle the huge changes in the volume of its business transactions.
5.0 THIRD ISSUE – POTENTIAL RISK TO FINANCIAL ACTIVITIES
5.1 FINANCIAL RISK MANAGEMENT
5.1.1 Credit Risk
Credit Risk is the most common risk facing by SMEs and sometimes referred as default risk
which arises from borrowing money. It is referring to the interest rate given to the company.
This is something that almost every business will need face at the beginning of the company
whether to fund start-up costs or perhaps to enable the business to expand and grow. During
Covid-19 pandemic, SGI Barokah Enterprise may be struggled to ensure that they can meet
its repayments because a failure to comply with the terms of the loan carries severe penalties.
1.
Bank Rakyat Loan
SGI Barokah Enterprise get business loan from Bank Rakyat amounted RM15,000.00 for
business capital to finance the business. Before the bank approved the loan, the bank will
check their CCRIS and MYCTOS reports do contribute a major part to that assessment. They
will look for factors such as:
Regular and timely bill or debt payments: This is the most important factor when it comes to
determining your credit score.
1.1. Amount owed monthly: Banks tend to have a negative impression on credit cards or
loans that are at the maximum limit which can indicate poor money management on
their end.
1.2. Length and pattern of credit history: The longer the history of using credit facilities such
as a loan or credit card, the better the credit history.
1.3. The types of loans you are holding: This is how bank assess their usage and
management of credit and loans.
Bank Rakyat offered Skim Pembiayaan Mikro-I Musk to SGI Barokah Enterprise for capital
expenditure and working capital. SGI Barokah Enterprise may borrow between RM1,000 to
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RM50,000 at flat profit rate of 12.56% p.a. which is quite high compared to other financial
institution as shown in the Figure 5. That is not all, they also need to repay your instalment as
soon as 1 month or stretch it up to 60 months.
Figure 5: Comparison Interest Rate between Financial Institutions
5.1.2 Liquidity Risk
Liquidity risk arises when cash is locked up in some parts of the business. Hence, the company
is unable to pay its short-term debt obligations. The term refers to the level of risk involved in
ensuring that company assets can quickly transform into available cash. This is of concern
especially for SMEs business which are subject to regular downturns in trade during lean
periods.
1. Cash Flows Struggles
Sales of SGI Barokah Enterprise have started to increase eventhough during COVID-19
pandemic. While their sales volumes may increse especially during festive season, SGI
Barokah Enterprise, also generate high credit of purchase and lead the increase in trade
payable. The raw material is increase may contribute to high operation cost. SGI Barokah
Enterprise need tracking day-to-day cash flow and still find their business in a tight spot and
can help track their inflow of revenue and outflow of expenses. It is critical point where as the
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owner just guessing at whether they have the money when they need it will increase chances
of facing late payments and other penalties on past due invoices.
Businesses that emerge in the greatest form after a period of pay cuts are likely to share these
characteristics :
a. They need to be consistent and fair for employees doing the same work get the same
cuts, and top position need to sacrifice more.
b. They are open about business financials and the company's strategy for recovery.
c. They have two-way conversations with employees and listen to workers' ideas.
d. They restore original pay as soon as it becomes sustainable.
5.2 INFORMATION TECHNOLOGY RISK
As an increasing number of consumers head online to source products and services, brickand-mortar stores are feeling the pinch. All information needs to be computerized to
established in fast and beneficial link with the customers, supplier which can ease the business
operations in term saving cost and time.
Besides, this is to ensure that a good and reliable financial report is produced and can assist
a multitude of users to make informed decision by relaying on the accurate accounting
information. Moreover, the emergence of ICT also can improve the safety of the accounting
records. Hence, organization including SME should no longer keep their business transaction
manually.
However, developments brought about by information and communication technology and its
increasing application in accounting information system. This has resulted to more risk
exposures faced by business organizations, such as risks associated with computer crimes,
frauds and to audit trail absence.
1. Accounting System using Microsoft Excel
SGI Barokah Enterprise use the Microsoft Excel in order to record all transaction of sales and
purchase. For short term purposes, it is the suitable system to make the accounting record.
However, if the business became large and more complex, SGI Barokah Enterprise may face
the difficulties and may arise several issues from the human errors.
The situation is different at larger organizations with finance or accounting departments
consisting of many people managing multiple divisions and cost centers. Team members need
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to share information with one another, especially during the period-end close. SGI Barokah
Enterprise may also have difficulties in handling the Microsoft Excel in term of pricing that have
different between traditional and online in order to attract customers.
Moreover, Microsoft Excel does not support any of proper accounting record or bookkeeping
in recording the large transaction of day-to-day operations. This accounting record are very
important in order to ensure the cash flow are recorded accordance with the statutory
regulations and standards.
6.0 FINANCIAL ANALYSIS
6.1 ACT AND STANDARD
Company Act 2016
A private entity is a private company as defined in Section 2 of the Companies Act 2016 that
to prepare or lodge any financial statements under any law administered by the Securities
Commission Malaysia.
Malaysian Private Entities Reporting Standard (MPERS)
Effective for annual periods beginning on or after 1 January 2016, the MPERS is identical to
the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for
SMEs) except for the requirements on property development activities and some terminology
changes. SGI Barokah Enterprise register their business in 2018, then the company should
apply MPERS in order to prepare their financial statement. In practice, SGI Barokah Enterprise
already and commit to prepare their financial statement for tax purposes and other users.
However, SGI Barokah Enterprise may improve their presentation accordingly with Section 4
Statement of Financial Position, Section 5 Statement of Comprehensive Income and Income
Statement and Section 7 Statement of Cash Flow in future. SGI Barokah Enterprise also need
to prepare Section 6 Statement of Changes in Equity and Statement of Income and Retained
Earning.
6.2 LIQUIDITY RATIOS
Liquidity ratio is a financial ratio that are used to test company’s short-term solvency or liquidity
position.
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SGI BAROKAH ENTERPRISE
250,000
200,000
150,000
100,000
50,000
0
8.32
117,548
103,973
1.88
2019
2020
133,598
221,459
Current Liability
16,050
117,486
Working Capital
117,548
103,973
8.32
1.88
Current Asset
Current Ratio
10
8
6
4
2
0
Figure 6
Working Capital
The excess of current asset over current liabilities. The information is importance to measure
the liquid reserves available to meet obligation when it due or meet contingencies and the
uncertainties surrounding company’s balance cashflow.
Based on the Figure 1, SGI Barokah Enterprise show positive working capital in 2019 and
2020, indicate the company has the ability to pay off its debt obligation when it due. Even so,
the company’s working capital had decline 11.5% from 2019 to 2020.
Current Ratio
Current ratio is liquidity ratio, whereas the information is used to measure company ability to
meet short-term obligations with its current assets. Current ratio less than 1 indicates the
company will have difficulty in meeting its short-term debt and payables. Potential creditors
use this ratio in determining whether or not to make short-term loans.
Based on the Figure 6, SGI Barokah Enterprise current ratio shows declining trend for two
subsequent years. The current ratio dropped significantly from 8.32 to 1.88 in 2019 to 2020.
However, the current ratio still above 1 and it indicates the may paying its suppliers and
creditors on time.
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SGI BAROKAH ENTERPRISE
Ringgit Malaysia (RM)
250,000
8.26
9
8
200,000
6
150,000
5
Times
7
4
100,000
1.84
3
2
50,000
1
0
0
2019
2020
Liquid Asset
132,638
216,423
Current liabilities
16,050
117,486
8.26
1.84
Acid Test Ratio
Figure 7
Acid Test Ratio
The quick ratio or acid test ratio used to measure company's ability to meet its short-term
obligations using its most liquid assets. Liquid assets include those current assets that can be
quickly converted to cash, so its logic to exclude inventory since it not an immediate source of
cash.
Based on Figure 7, SGI Barokah Enterprise acid test ratio in 2019 is 8.26 times indicated the
company capable to paying off its short-term debt without relying on the level or sales of
inventory. However, acid test ratio had declined to 1.84 in 2020. However, the acid test ratio
is more than 1 indicate the company have enough liquidity asset to pay debt when due come.
Ratio
SGI Barokah Enterprise
Day’s Sales in Receivables
Day’s Sales in inventory
2020
2019
51.65
6.32
57.10
2.43
Table 2
Day’s Sales in Receivables
Day’s sales in receivables measure the number of days it takes, on average to collect payment
from company’s account receivables during the past year. Based on Table 3, SGI Barokah
Enterprise day’s sale in receivable fallen slightly from 57.10 days to 51.65 days in 2019 to
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2020. The decline trend is due to the companies have a smaller portion of credit customer in
2020 against Net Sales. Thus, it indicates the company collection is efficient and effective
without experiencing delays in receiving payments that can cause a cash flow problem.
Day’s Sales in inventory
Day’s sales in inventory measure the number of days it takes to convert company’s inventory
into sales. Shorter day’s sales in inventory, sooner the company can convert its inventory into
cash. Based on Table 2, SGI Barokah Enterprise number of days to sell the inventory increase
from 2.43 days to 6.32 days in 2019 to 2020. It indicates the company’s efficiently and
frequently selling off its inventory, will increases company’s liquidity. Shorter days inventory
outstanding is preferred since the company may maintained its inventory freshness and avoid
overstocking.
6.3 EFFICIENCY RATIOS
Efficiency ratios, also known as activity ratios, that include the account receivable turnover,
inventory turnover and fixed assets turnover used by the analyst to measure how efficient a
company in using their assets to generate income and their ability to manage those assets.
SGI BAROKAH ENTERPRISE
60
57.12
51.63
50
40
30
20
10
0
6.39
7.07
Year 2019
Year 2020
ART (Times)
6.39
7.07
ART (Days)
57.12
51.63
Figure 8
Accounts Receivable Turnover (ART)
Account Receivable Turnover (ART) ratio indicates the liquidity of the receivables by
measuring how effective the company collect its debts and extend its credits. The higher the
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better. Figure 8 represents the Accounts Receivable Turnover (ART) for SGI Barokah
Enterprise at the end of their financial year of 2019 and 2020. It shows the trend for ART keep
increasing from year 2019 to 2020 with 6.39 times to 7.07 times respectively. We can conclude
that SGI Barokah Enterprise is serious in monitoring their receivable accounts.
6.4 LEVERAGE RATIOS
Leverage ratios, also known as solvency ratios, that include the Debt Ratio, Debt-To-Equity
Ratio and Times Interest Earned used to measure a company’s ability to sustain operations
indefinitely. Leverage ratios focus on the long-term sustainability of the company to pay off its
long-term obligations. It can be important indicator to measure the financial health of the
company’s performance into foreseeable future.
SGI BAROKAH ENTERPRISE
35
30
29
25
20
15
14
10
5
0
Year 2019
Year 2020
14
29
DR (%)
Figure 9
Debt Ratio to Assets (DR)
Debt-Ratio is a financial ratio that measures the extent of company’s leverage. The lower the
better for the company. Based on Figure 9, the debt ratio of SGI Barokah Enterprise looks not
stable for the 2 years period. It is a negative sign that SGI Barokah Enterprise did not good
control in its debt position with higher solvency. Further, the higher debt ratio disables the
company to obtain additional debt finance from the bank for further expansion because of the
higher risk to the bank.
6.5 PROFITABILITY RATIOS
Profitability is the ability of the firm to generate earnings. Profit analysis is essential concern
to stockholders because they derive revenue in the form of dividend. If profit increased it can
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cause rise to market price, leading to capital gain. Profit is crucial for creditors because it is a
source of funds for debt coverage.
SGI BAROKAH ENTERPISE
40
35
35
31
30
25
20
15
17
12
10
5
0
Year 2019
Year 2020
NPM (%)
12
17
ROA (%)
31
35
NPM (%)
ROA (%)
Figure 10
Net Profit Margin (NPM)
NPM ratio measures the net income of every RM generated by each sale. Based on
Figure 10 above, the NPM of SGI Barokah Enterprise shows the increasingly by 5% from year
2019 to 2020. It is indicating SGI Barokah Enterprise capability to covert income into profit and
is typically considered foremost when analyzing overall profitability. Net profit margin ratio
measures the net income of every RM generated by each sale.
Return on Assets (ROA)
ROA measures the firm’s ability to utilize its assets to create profit by comparing profits with
the assets that generates the profits. Based on Figure 10, ROA increase from 31% to 35%.
This indicates that SGI Barokah Enterprise might have over invested in assets that leads to
success of producing revenue growth, also showing that SGI Barokah Enterprise are
performing very well in year 2020 respectively.
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6.6 SUMMARY OF FINANCIAL ANALYSIS
Impact
No.
1
2
3
Ratios
Negative
Above 1/Positive
1.1 Working Capital
/
/
1.2 Current
/
/
1.3 Acid Test
/
/
Positive
Liquidity
1.4 Days’ Sales in Receivable
/
1.5 Days’ Sales in Inventory
/
Efficiency
2.1 Account Receivables Turnover
/
2.2 AR Turnover (Days)
/
Leverage
3.1 Debt – Ratio to Assets
4
/
Profitability
4.1 Net Profit Margin
/
4.2 Return on Assets
/
Table 3
Based on Table 3, SGI Barokah Enterprise may improve company’s liquidity and efficiency,
should keep a tight on accounts receivable. Ensure to invoicing customers as quickly as
possible, and there are not delaying time for payment. The more effective collection payments
from the customers, the more flexibility company have in paying their suppliers, investing in
innovation, and funding growth. Then, if company have good relationship with creditors, try to
negotiate for longer payment cycle so company may hold on money longer. If the companies
in a good position of liquidity, the company may have no difficulty in meeting short term
obligation. Overall, SGI Barokah Enterprise have a future good financial health if the company
maintain to increase the profit and control their cashflows in good condition.
7.0 CRITICAL SUCCESS FACTORS
Critical Success Factors (CSFs) are indicators for opportunities, activities or conditions that
required to achieve the objective within a project and mission. Every organization has different
CSFs based on their current and future objectives.
19 | P a g e
In SGI Barokah Enterprise, it is important to know their Critical Success Factors in any
discipline so that it can be highlighted and boost, so the company can use the strength to be
more success. There is some critical success factor (CSF) of SGI Barokah Enterprise:
1) Good Communication and Coordination Between Department
SGI Barokah Enterprise in every departments are come from their own family members and
that is why the communication between them is very good. With a good communication among
them, the coordination between department should be no problem. Everything is very smooth
and this will make the Finance Department of SGI Barokah Enterprise easier in setting new
discipline in the business program and budget as per objectives. As we know, in the process
of reengineering the Financial Department, good communication and coordination between all
department is very crucial.
2) Distribution Channel
After analysis on SGI Barokah Enterprise sales strategy, most of the revenues came from their
right option of distribution channel and it was confirmed by their sales representatives, Mr.
Zulkeple Mahmod and Mr. Muhammad Farid Ismail on our google meet interview session.
Their valuable distribution agreement with Kedai Mesra, Petronas around Malaysia and their
dropship program that giving the high margin of profit become success factor for their product
to penetrate the market.
3) Differentiation Product
The product itself is the critical success factor for the company. It is because differentiation of
product that give them place to be the leader of the market share. By average, we could see
so much product of sambal goreng ikan bilis around the market, but this company introduce
sambal goreng ibu that use tempe to differentiate their product with their competitors, and they
are successful in having their own loyal customer.
8.0 RECOMMENDATION
8.1 CREATING INITIAL BUDGET PLANNING
To begin in creating a systematic budget, SGI Barokah Enterprise need to make a decision
on what method of budget to be use. As explanation that has been shared on the 1 st issue of
Budget Planning, we recommended that SGI Barokah Enterprise start with the traditional
20 | P a g e
method which is incremental budgeting. This recommendation is based on the ability that SGI
Barokah Enterprise have, in terms of human resource and expertise.
In incremental budgeting, the Finance Department should justify the expenses that have been
spend by every department from current year by activities as shown as an example in Figure
11. This is to use as the based for calculating the next year budget. This is quite tough for the
first time, but it will be getting better then.
Figure 11
After getting the figures, Financial Department will forecast on their revenue for the next year
based on the market condition and trend. At this stage, Financial Department must set realistic
budget expectation to avoid budget slack, because in this traditional budget method there is
no standard or rules on setting the forecast figures. Then, by using extracted figures from the
current year, Financial Department will allocate the budget to each department on each activity
by observing the expenses spend for the current year and forecast for the next year.
21 | P a g e
By using this incremental budget, SGI Barokah Enterprise will set the forecast revenue as their
aim to achieve for the next year, at the same time they aware on their own limitation budgets
to be spend. After setup the budget system, top management can evaluate by monitoring
every department performance in every quarter of the year.
8.2 ACCOUNTING SOFTWARE FOR CRITICAL INVESTMENT
As mentioned in Issue 2, SGI Barokah Enterprise had investing in capital expenditure after
their Statement of Financial Position for the year 2020 shows they have acquired additional
non-current assets mostly for Production Department and Marketing Department purposes.
Regarding the critical part for Financial Department to handle the huge changes in the volume
of its business transactions after revenue and liabilities increase tremendously, we may
suggest that SGI Barokah Enterprise should change to a better and adequate software from
using basic Microsoft Excel. By using standardized accounting software, it is better and easier
in preparing bookkeeping in an organized manner. Many available software can be chosen
however SGI Barokah Enterprise needs to consider the price in parallel with the company's
financial ability so that the company will not overspend on expensive accounting software in
the market. In addition, SGI Barokah Enterprise also need to choose based on the needs of
the company and their suitability in steering the software for future use. The inexpensive
software that SGI Barokah Enterprise might afford are UBS Accounting System, MYOB, and
MR Accounting as shown in Figure 12.
22 | P a g e
Figure 12
1. REASONS TO PURCHASE ACCOUNTING SOFTWARE
i. Parallel with SGI Barokah Enterprise Mission and Vission
SGI Barokah Enterprise vision is to be one of the best agro-based entrepreneurs who
produce and market halal food with high quality. One of their mission also is to open new
branches by providing employment opportunities to younger generation. To achieve this
mission and vision, SGI Barokah Enterprise should be ready to upgrade on their system
and documentation management. By broader their business, it could lead to increase on
their transactions, document arrangement and database records. So, it is better for them
to start investing on this software now because it will need some time for them to become
proficient on it.
ii. Integrated usage
After communicating with Human Resource Department, they also proposed to use UBS
Accounting Software for them to use on payroll system. Since there is no proper system
that can manage the payroll and financial transaction for SGI Barokah Enterprise for now,
the Financial Department and Human Resource Department agree to invest in UBS
Software which has integrated usage function in both departments, with one price.
23 | P a g e
This is the prices that being quoted by HR Department. The prices which are not including
the installation, training & yearly support maintenance are:
Payroll 15 (15 Employees) - RM500
Payroll 30 (30 Employees) - RM1000
Payroll 60 (60 Employees) - RM1500
Payroll 100 (100 Employees) - RM2000
Payroll 150 (150 Employees) - RM2500
Payroll Premium (Unlimited Employees) - RM3000
iii.
Professional and Organized
By using the accounting software in financial and accounting activities, SGI
Barokah Enterprise will upgrade their image for looking professional in maintained
their record and it will be more organize. Beside consuming less time in generate
financial and accounting report, it will also help their outsource accountants to
prepare their financial statement faster and more accurate.
For example, the UBS Accounting Software have many useful features such as:

Accounting and Billing

Inventory and Billing

Building Service Maintenance

Point of Sale

Payroll
8.3 MINIMIZE POTENTIAL RISK TO FINANCIAL ACTIVITIES
1. Awareness of Low Interest Rates
Credit Risk management helps to optimise earnings and to mitigate financial and reputational
damage of SMEs. SGI Barokah Enterprise owner need to review carefully the financial
institution environment to ensure enough credit is available prior to expanding operations.They
can choose the business loan with lower interest if they need additional capital to finance their
business.
For example, small and medium enterprise (SME) financing facilities under Bank Simpanan
Nasional (BSN), TEKUN Nasional, MARA and SME Corp, under the PEMERKASA stimulus
package. According to Prime Minister Tan Sri Muhyiddin Yassin, RM300 million will be
channelled via BSN with a funding limit of RM50,000 at a reduced interest rate of 3% from
24 | P a g e
3.5% previously. The loan period will be for five years, while the instalment payments will only
start after the sixth month.
Meanwhile, RM50 million will be channelled via MARA’s Micro Prihatin Business Financing
Scheme, targeted to assist 1,000 Bumiputera micro-SMEs to ensure business continuity, with
a financing limit of RM50,000 at an interest rate of 3%. Additionally, SME Corp will provide
RM50 million to assist local SMEs in obtaining funding of up to RM250,000 at an interest rate
of 3%.
2. Government Incentive - MARA
In developing a dynamic entrepreneurial community, MARA is offering programmes that will
offer optimum opportunities for entrepreneurs to expand their businesses, particularly in ecommerce. MARA strategic plan 2021-2025 aim to sustain some 50,000 existing Bumiputera
entrepreneurs in facing numerous challenges during the pandemic.
MARA have developed programmes to allow the entrepreneurs to make use of online apps to
promote and sell their products. MARA also provided continuous learning opportunities for the
businessmen through courses, grants, while also financially assisting them in expanding their
business. MARA had also received additional allocation from the government through the
Strategic Programme to Empower the People and Economy (PEMERKASA), including RM50
millions to assist 300 Bumiputera contractors who were struggling to secure projects during
the pandemic.
In embracing digitalisation, MARA has migrated to online services for among others,
applications, loan repayments and entrepreneurial courses. MARA was giving attention to
entrepreneurs from five industries who faced difficulties in sustaining their business due to the
pandemic, namely, automotive, food and beverage (F&B), lifestyle, services and construction
which is SGI Barokah Enterprise had opportunity since the company from food and beverages
industries. MARA are also aiming to churn out some 15,000 new entrepreneurs, including
those from newly explored sectors as MARA produce graduates in fields like Internet of Things
(IoT) and Big Data. Figure 13 shown MARA was constantly looking for opportunities and
potential to work with e-commerce partners to revitalise the economy of Bumiputera
entrepreneurs. The latest collaboration was the signing of a Memorandum of Understanding
(MoU) with e-commerce platform Shopee Mobile Malaysia SDN. BHD. (Shopee).
25 | P a g e
Figure 13
Figure 14 shown B2B e-commerce solutions provider Dropee has signed a memorandum of
understanding (MoU) with Majlis Amanah Rakyat (MARA) to enable its BUMIPUTERA
entrepreneurs to grow their business using Dropee’s omni-commerce technology. Through
the partnership, its entrepreneurs gain access to a host of Dropee’s services and features,
which include:
 Dropee Finance: Business financing scheme for SMEs such as retailers or suppliers.
Dropee provides invoice factoring and supply-chain financing schemes to verified
businesses on its platform.
 Dropee Credit: Dropee provides an alternative payment method and extended credit
terms together with its partners with an automated know-your-customer (KYC) features
for various business sectors, from micro-SME (mSME) to distributors and
manufacturers.
 Dropee Direct: An easy-to-use dashboard to manage all business processes, from
ordering, procurement and payment collections.
 Dropee Digitalisation: Managed services and training, which assists all existing
industry players to transform their business procurement, sales and operations; and
 Dropee API & OmniChannel: Enables retailers and suppliers to buy and sell on both
B2B and B2C such as Shopee, Lazada and many others on one single dashboard.
26 | P a g e
Figure 14
The programme is focused on the application of technology in improving operational
efficiency, commercialisation, and growing sales by applying the market concept of business
to business to consumer” (B2B2C).
Figure 15 shown the registration to SMEs interested with the programme. Therefore, we will
strongly suggest SGI Barokah Enterprise to enter the programme for the future.
Dropee’s partnership will allow entrepreneurs to better understand and analyse price offerings
from manufacturers and distributors, manage inventory in a more structured manner, and
receive advice and guidance from market experts.
Source: www.mara.gov.my
Figure 15
27 | P a g e
1.
New Accounting System
SGI Barokah Enterprise need to move in parallel with other type of business in adopting ICT
in their organization. Relying on the excel is no longer adequate in preparing proper
accounting records and to make sure the effectiveness of the management accounts. ICT
brings considerable benefits such as time saving opportunity, reduced salaries expenses,
increased quality of products and developed innovative products.
SGI Barokah Enterprise may employ appropriate accounting software not only to reduce work
to be done and minimize the mistake but also serve systematic mechanism for maintaining
proper accounting records. Many accountings software is available in the market that can
consider such as MYOB and UBS Accounting System which have been used by many SMEs.
The price of accounting software shown in Figure 16.
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Source: http://www.myobaccounting.com.my/myob-price-list.aspx and https://www.ubs-softwares.my/ubsaccounting-software
Figure 16
9.0 VALUE ADDED
9.1 COMMITMENTS ON TAX AND ZAKAT
Referring to the Statement of Profit or Loss of SGI Barokah Enterprise for the year 2019 and
2020, there is not clearly stated that the company had engaged any commitment towards the
payment of tax and zakat, but verbally Madam Nurul Amani told that they had. We then
suggest that SGI Barokah Enterprise declare the commitments clearly on their Financial
Statement for the future to show that the company had fulfil their responsibilities towards the
government and religion obligation.
9.2 GREEN BUDGET
As business entity, SGI Barokah Enterprise should always support any green initiatives and
environment conservation. Financial Department can allocate some budget to support
activities regarding this feature. For examples, encourage sales and marketing department to
purchase environmentally friendly packaging and allocation for the employees to make
Corporate Social Responsibility activity like pick up trash on the beach on weekends.
29 | P a g e
10.0 CONCLUSION
SGI Barokah Enterprise as we known is having a good future in the food industry. Their
experience and passion in the business make them like no turning back. As one of the SME
company, they had done very well and try to complete every single requirement sets by the
authority like Halal cerficate, GMP and MeSTI to ensure their business can compete with the
other competitor.
Generally, SGI Barokah Enterprise is at the right track to be one of the main players in the
food industry. They are aggressively penetrating the offline and online market, showing that
they are fully utilised technology advancement and at the same time move in traditional
method.
But focusing on sales only is not enough. SGI Barokah Enterprise also must look for every
perspective to ensure they are making an improvement day-by-day on overall. On the financial
perspective, we had given our opinion on how important financial management like budgeting
and reporting to drive SGI Barokah Enterprise to be more responsive towards the changes
that happen on internal and external environment of the company. SGI Barokah Enterprise
also should identify potential risk that may arise.
Other than that, we suggest that the existence of Financial Department also should be
reengineered to become more functional in helping the top management to make decisions,
to growth and to keep sustain. We hope that our recommendation will contribute something
valuable to SGI Barokah Enterprise, thus achieve our objective to help SGI Barokah Enterprise
to keep growth and achieve sustainability.
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REFERENCES
1. https://www.sage.com/en-my/products/sage-ubs/
2.https://corporatefinanceinstitute.com/resources/knowledge/accounting/types-of-budgetsbudgeting-methods/
3. Financial Statements of SGI Barokah Enterprise for The Year ended 2019 and 2020
4. http://www.myobaccounting.com.my/myob-price-list.aspx
5. https://www.nationalfunding.com/blog/what-are-capital-expenditures-for-small-businesses/
6.rbes.com/sites/forbesfinancecouncil/2020/07/23/16-ways-small-businesses-can-tacklefinancial-risk-management/?sh=41ccd88c1be0
7.https://www.smecorp.gov.my/index.php/en/initiatives/2020-03-31-00-53-27/additionalmeasures-to-support-smes-affected-by-the-covid-19-outbreak
8.https://www.mara.gov.my/en/index/ent-menu/entrepreneurship-development/ent-coachingmentoring/
APPENDICES
Ratio
1. Working capital
Measurement
(Formula)
Current Asset –
Current Liabilities
Ratio Value (Calculation)
Year 2019
Year 2020
(RM)
(RM)
133,598 – 16050 =
221,459 – 117,486 =
117,548
103,973
133,598 / 16,050 =
8.32 times
221,459/117,486 =
1.88 times
(133,598 – 960) /
16,050 =
8.26 times
(221459 – 5036) /
117,486 =
1.84
2. Current ratio
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
3. Acid test ratio
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 −
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
4. Days’ sales in
receivables
𝐸𝑛𝑑𝑖𝑛𝑔 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠/365
65,049 /
(415,800/365) =
57.10
119,549 /
(844,800/365) =
51.65
5. Days’ sales in
inventory
𝐸𝑛𝑑𝑖𝑛𝑔 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
𝐶𝑂𝐺𝑆/365
960 /
(144,240/365) =
2.43
5,036 /
(290,934/365) =
6.32
Net Sales
Ending Gross
Receivables
415,800
65,049
= 6.39 times
844,800
119,549
= 7.07 times
365
Accounts Receivable
Times per Year
365
6.39
= 57.12 days
365
7.07
= 51.63 days
6.Accounts Receivable
Turnover
7.Accounts Receivable
Turnover in Days
8.Debt Ratio to Assets
Total Liabilities
Total Assets
=
=
=
=
= (16,050+7500) /
(29,800+133,598)
= 0.14 x 100
= 14 %
= (117,486+0) /
(182,005+221,459)
= 0.29 x 100
= 29 %
9.Net Profit Margin
Net Income
Net Sales
= 49,848 / 415,800
= 0.12 x 100%
= 12%
= 142,854 / 844,800
= 0.17 x 100%
= 17%
10.Return on Asset
Net Income
Ending Total
Asset
= 49,848 /
(29,800+133,598)
= 0.31 x 100%
= 31%
= 142,854 /
(182,005+221,459)
= 0.35 x 100%
= 35%
MAF671
INTEGRATED CASE STUDY
SERVICE LEARNING MALAYSIA –
UNIVERSITY FOR SOCIETY
(SULAM)
“ROSLI FOOD”
PREPARED FOR: DR HANAFIAH HASIN
GROUP: MAC2208F
ACKNOWLEDGEMENT
Assalamualaikum w.b.t,
First of all, we want to thank Allah SWT, Alhamdulillah for His blessings we are able to
finish and complete the assignment given successfully. Next, we would like to express our
sincerest gratitude to our beloved lecturer, Dr Hanafiah Hasin for the continuous support of our
SULAM study and research, for her patience, motivation, enthusiasm, and immense knowledge.
Her guidance helped us through ups and downs in finishing this report. We could not have
imagined having a better lecturer for this report.
Moreover, we would like to thank the rest of the classmates for the endless support,
amazing teamwork, wonderful encouragement, insightful comments and all the struggles that
we have went through. May all of us would succeed in our future and will never stopped learning
whenever there are chances for us to do so. Giving up is never an option.
Also, to our parents and family members, we could never do this without them. Learning
online at home feels different but we have managed to get through it with their help days and
nights. Furthermore, we would like to express our deep gratitude for Rosli Food, their generous
support had led us to experience a lot of new things. Thank you for giving us the chances to
conduct our assignment with, and all the sacrifice being made just to help us receive many useful
information. May Allah bless you in every way.
We are extremely thankful for every single person in our group who is willing to sacrifice
time and energy in order to make sure the group task can be completed. The completion of the
group task showed the commitment given by them, the ideas and opinions that they shared, and
the improvement that they suggested. We are hoping that all the hard work that we poured into
this task will be achieved the standard needed. We also hope that the group task made by us
will be impactful and give benefits to other people.
TABLE OF CONTENT
NO.
TITLE
PAGE
1
1.0 INTRODUCTION
1
2
2.0 OBJECTIVE OF THE STUDY AND METHOD
3
3
3.0 BACKGROUND OF THE COMPANY:
3.1 Company governance
3.2 Product and services
3.3 Sales and marketing
3.4 Customer demand and supply
3.5 Company’s policy
3.6 Risk assessment, Internal control, Innovation, R&D
3.7 Critical success factors to sustain
5
7
10
15
21
23
26
35
4
4.0 ANALYSIS OF THE COMPANY vs INDUSTRY
4.1 PESTLE
4.2 SWOT
39
40
53
5
5.0 ISSUES AND CHALLENGES
63
6
6.0 ANALYSIS OF ISSUES
69
7
7.0 ADVISE / RECOMMENDATIONS
74
8
8.0 CONCLUSION
81
9
9.0 REFERENCES
83
10
10.0 APPENDICES
10.1 Interview Questions
10.2 Others (pictures, videos, etc)
10.3 Expected Total Budget per Department
10.4 Financial Statements & Ratio Analysis
10.5 Marketing Personnel & Remuneration
10.6 Marketing Budget
87
1.0
INTRODUCTION
1.0 INTRODUCTION
Service Learning Malaysia - University for Society (or SULAM) is an initiative lead by
Ministry of Education to address the Shift 1 of Malaysia Education Blueprint 2015–2025 (Higher
Education) i.e. producing Holistic, Entrepreneurial and Balanced Graduates. It will also work
towards instilling the culture of happiness, love and mutual respect in HLIs in a bid to create a
fun and positive learning environment. SULAM is a multidimensional concept that embraces
both curricular and co-curricular approaches to service and educational opportunities. The words
"service" and "learning" in SULAM strongly suggests a balance between learning outcomes and
service outcomes that can be achieved only through an integration of each. SULAM can
generally be defined as a form of experiential education in which students engage in activities
that address community needs together with structured opportunities intentionally designed to
promote student learning. SULAM is not the same as student community service or
volunteerism. While sharing the word “service,” student community service, illustrated by a
student organization adopting a local village, rarely involves a learning agenda. In contrast,
SULAM make intentional efforts to engage students in planned and purposeful learning related
to the service experiences. Student community service activities will be integrated into an
academic course, utilizes the service experience as a platform for both academic learning and
civic learning.
Moreover, their goal is to frame pedagogical models and research agendas involving
service-learning at the national and international levels. It is also considered as Experiential
Education, as mentioned by Jacoby, 1996 “...as a form of experiential education in which
students engage in activities that address human and community needs, together with structured
opportunities for reflection designed to achieve desired learning outcomes”. It is developed,
implemented, and evaluated in collaboration with the community, respond to communityidentified concerns, attempts to balance the service that is provided and the learning that takes
place, enhances the curriculum by extending learning beyond the classroom and allowing
students to apply what they’ve learned to real-world situations, and provides opportunities for
critical reflection.
The reason why SULAM is being created SULAM is because, it has potential to transform
teaching and learning in IHLs and help future generation to develop social responsibility and an
ethic of service. Previous studies worldwide indicated positive student attributes, such as social
responsibility, tolerance of diversity, develop leadership and gain personal and social skills.
SULAM represents university’s third mission- university for society.
1
2.0
OBJECTIVES OF
THE STUDY &
METHOD
2
2.0 OBJECTIVES OF THE STUDY AND METHOD
The first objective of the study is to train students to be more confident and
communicate in groups effectively. Much of the current crisis in the education system is due
to low self-confidence, which has led a number of students to lack appropriate involvement and
insufficient improvement despite spending a lot of time in the classroom. As Norman & Hyland
(2003) stated that trust is a learning factor that can have an effect on student engagement and
success. Self-confidence is very important for a student to take chances and engage in learning
activities, and for those who have self-confidence, to be confident of their abilities and to set
goals for themselves and to work hard to reach their goals without worrying about the results.
The second objective is to provide appropriate disclosure among students involved
on current issues faced by the selected company. An article published by Shannon Watkins;
researchers also found that 45 per cent of students have shown "no significant learning gains"
after two years of college. They also found that, relative to students a few decades ago, today's
college students spend 50% less time learning. This proves that, students are becoming ignorant
regardless of what is happening around them. Therefore, this SULAM project can give more
positive impacts to the students involved as they will open their minds to explore new things by
completing this project.
The third objective is to identify the critical success factors of the selected company.
By recognizing and communicating these crucial success factors, it will help ensure that the
project is well-focused and avoid wasting time and money on less important areas. Through
making Critical Success Factors transparent and engaging with everyone involved, it will help
keep the project on track towards common priorities and objectives.
As for the method of the study, the medium is through online via emails, WhatsApp, and
even Facebook. This is due to the Movement Restriction Order (MCO) announced by the
government as the global pandemic COVID-19 is still spreading actively in the country. On the
other hand, another method is, we have sent a class representative to meet the Founder of the
selected company at their HQ. The third method to gather the information from Rosli Food is by
interviewing and preparing the questionnaire for them to answer our curiosity about the
company. The interview and questionnaire that we prepared help us to come out with the
analysis for the company.
3
3.0
BACKGROUND
OF THE
COMPANY
4
3.0 BACKGROUND OF THE COMPANY
Rosli Food Supplier is a sole proprietorship business that is fully and wholly owned by a
single person which is the founder of the company, Encik Mohammad Rosli Bin Husen. The
business is registered and established by the founder in 1997 and located at Batu Pahat, Johor.
That is the start of the great journey of Rosli Food Supplier that is soon to be a company starting
in 2021.
The business well-known slogan or motto which is ‘Rangup Di Luar Cair Di Dalam’ brings
out customer’s confidence in loyalty in trying to stay loyal to their products. This business also
has a mission and vision of the business which signify as the drive or motivation to expand their
business and reach the goal. The vision of the business is to provide high quality, fresh and
nutritious products. As mentioned, the business always shoots to fulfil the mission with the
utmost care. The long-term goal that the company wishes to accomplish is cooperation within
the company, innovative in R & D and technology and also to provide high-quality products.
The nature of the business is selling and supplying biscuits and traditional desserts. Rosli
Food Supplier actively supplying their products such as bangkit santan, bangkit gula melaka,
bangkit cheese, bangkit cheese oreo, bangkit salted egg and biskut jintan and also the business
also directly sells their products to the customers.
5
3.1
COMPANY
GOVERNANCE
6
3.1 COMPANY GOVERNANCE
PENGARAH
(MOHD ROSLI BIN HUSEN)
SETIAUSAHA
(NUR ATHIRAH BT MOHD
ROSLI)
HR & ADMIN
(NUR ADLINA BT MOHD
ROSLI)
PEGAWAI TEKNIKAL
(MOHD SYAHIR BIN ALI
JAUDIN)
PENGURUS PENGELUARAN
(NORASHIKIN BT BACHOK)
OPERATOR
10 ORANG
PENGURUS PEMASARAN
(MUHD IRSYAD BIN MOHD
ROSLI)
PENGURUS PEMASARAN
(MOHD ASYRAF BIN MOHD
ROSLI)
PENGARAH
(MOHD ROSLI BIN HUSEN)
SETIAUSAHA
(NUR ATHIRAH BT MOHD
ROSLI)
HR & ADMIN
(NUR ADLINA BT MOHD
ROSLI)
7
In Rosli Food, the Director position is held by the founder and owner, Mr Mohd Rosli
bin Husen himself. As the director, he oversees all the duties and long-term goals for the
company to achieve. He dedicated himself to be involved in company daily management and
growth strategy while ensuring to stay compliant.
The secretary role is being held by Nur Athirah Bt Mohd Rosli. She responsible for
providing general advices on matters relating to company secretarial matters. She also has to
follow up with the decisions made and ensure that company complies with its constitution. Under
her is Nur Adlina Bt Mohd Rosli, who held the responsibilities of managing Human Resources
(HR) & Administration for the company. She facilitates company organization and
communication between all of them. While she maintains the documentation of the company,
she also the one who in charge with the staff welfare for the company.
Technical officer, Mohd Syahir Bin Ali Jaudin help monitor and coordinate the
company. He also provides support with the on-going task of daily activities. Not only he
manages any technical difficulties if arises, he also maintains a healthy and conducive working
environment.
Operational manager, Norashikin Bt Bachok who has 10 operators under her wings,
ensures that all operations are carried on in an appropriate, cost-effective way. She also involved
in improving the operational management systems, processes and best practices, with a
destination to help the company’s processes remain legally compliant.
Both Muhd Irsyad Bin Mohd Rosli and Mohd Asyraf Bin Mohd Rosli are the company’s
marketing managers. They establish the marketing goals based on past performance and
market forecast, researches and analyses market trends, demographics, competitor products
and other relevant information to form marketing strategies.
8
3.2
PRODUCTS &
SERVICES
9
3.2 PRODUCTS & SERVICES
Rosli Food is a sole proprietorship company owned by 100% bumiputera holding that
supplies various flavours of traditional biscuits known as “Kuih Bangkit” since 2015. According
to them, the inspiration for these traditional Rosli Food biscuit products was inspired by the
inherited ideas of the company's own director from the family business.
The company will obtain raw materials from the supplier with halal certification approved
by Jakim for their products and will go through the process of producing '100% handmade' in
their workshop in an environment that is appropriate and safe for food products. Rosli Food has
a clear and strong objective that the company has high confidence that it can become a delicious
and 'HALAL' traditional biscuit making company that is viable, competitive and resilient based
on the planning that has been prepared.
List of Rosli Food production products:
1. Bangkit Santan
2. Bangkit Cheese
3. Bangkit Cheese Oreo
4. Bangkit Salted Egg
Rosli Food will produce their product daily to make sure their consumers will get a fresh
taste of the traditional biscuits. Other than that, Rosli Food will buy the raw materials in bulk to
make sure that they can save a lot of money on the cost of preparation of raw materials. The
company will also do a research background on the suppliers to make sure that the raw materials
such as the flour and eggs are truly clean and Halal.
10
List of raw materials:
No
Ingredients
Per Day Qty.
Price (RM)
(400 units)
Per
Month
Qty. Price (RM)
(8000 units)
1
Tapioca Flour
150 kg
330
3000 kg
6600
2
Wheat Flour
20 kg
48
400 kg
960
3
Coconut
200 pcs
200
4000 pcs
4,000
4
Egg
600 pcs
138
12,000 pcs
2,760
5
Sugar
60 kg
135
1,200 kg
2,700
6
Salt
200 g
1.00
4 kg
20
7
Margarine
24 kg
220
480 kg
4,400
8
Sesame Seed
15 kg
240
60 kg
960
9
Cheddar
25 kg
500
100 kg
2,000
40 kg
930
160 kg
3,720
Eggs 10 kg
426
40 kg
1,704
45
40 kg
180
Cheese
10
Oreo Crumbs
11
Salted
Powder
12
Palm Sugar
10 kg
TOTAL RAW MATERIALS (per month)
RM 30,004
11
List of packaging:
Per
Day Amount (RM)
Qty
Balang (Large)
200 units
Per
Month Amount (RM)
Qty
1.50 x 200 units = 4000 units
6000
300
Balang (Medium) 200 units
1.30 x 200 units = 4000 units
5200
260
Balang (Small)
200 units
0.90 x 200 units = 4000 units
3,600
180
Sticker label
-
400 pcs
Hedys (4 400 pcs
times
0.10 x 400 pcs = 40
8000 pcs
800
0.40 x 400 pcs = 160 1600 pcs
640
a
month)
TOTAL PACKAGING (per month)
RM 16,240
For the packaging, Rosli Food uses different sizes of a plastic container complete with a sticker
label (name of the product & short ingredients). Their products come in three sizes, which are
big, medium and small.
12
Labour cost:
Amount (RM)
10 employees
RM50 x 10 = RM 500
10,000
Manager
2,500
Technical Officer
1,800
Delivery Manager
1,800
TOTAL LABOUR COSTS (per month)
RM 16,100
13
3.3
SALES &
MARKETING
14
3.3 SALES AND MARKETING
3.3.1 SALES FORECAST
A company needs to calculate growth in the percentage of sales forecast for the second
year and third year for financial analysis components. Therefore, Rosli Food has computed the
sales forecast for year one, year two and year three which is from 2020 until 2022.
ROSLI FOOD
SALES FORECAST
YEAR
2020
MONTHS
SALES FORECAST (RM)
EVENTS
January
111,218
New Year
February
114,218
March
112,218
April
109,218
May
108,218
June
184,471
July
108,218
August
110,218
September
106,218
October
165,660
November
111,218
December
111,212
15
Chinese New Year &
Valentine’s Day
School Holiday
Eid Mubarak
Independence Day
Deepavali
Christmas Holiday
RM 1,452,305
TOTAL YEARLY
SALES
FORECAST FOR
2020
The total amount of RM 1,452,305.00 will be used in calculating for
the next year’s sales forecast value in Ringgit Malaysia (RM).
5% (percentage that Rosli Food assume) X
RM 1,428,305 (previous yearly sales forecast in 2020)
= RM 72,615.25
2021
Therefore, the total sales forecast for the year of 2021:
RM 72,615.25+ RM 1,452,305.00 = RM1,524,920.25
TOTAL YEARLY
RM1,524,920.25
SALES
FORECAST FOR
2021
10% (percentage that Rosli Food assume) X
RM1,524,920.25 (previous yearly sales forecast in 2021)
2022
= RM152,492.03
Therefore, the total sales forecast for the year of 2022:
RM152,492.03+ RM1,524,920.25 = RM 1,677,412.28
TOTAL YEARLY
RM 1,677,412.28
SALES
FORECAST FOR
2022
16
3.3.2 MARKETING
3.3.2.1 Product
i. Brand
The definition of the brand can be defined as a practice to create a new name, symbol,
design to identify the differences of the product the company is producing to the existing product.
For Rosli Food, their focus is on the production of 100% Homemade Biscuits and Traditional
Biscuits. The highest demands from this company are Traditional Biscuits which are Bangkit
Santan, Bangkit Gula Melaka, Bangkit Cheese, Bangkit Cheese Oreo, Bangkit Salted Egg. The
brand created by the company is not so specific and universal for their production.
ii. Quality
For this time being, Rosli Food has produced more than four various flavours of traditional
biscuits. The quality of their products is quite different and have many special features compared
to other competitors. Their traditional biscuits contain high-quality ingredients and the finished
products have been customers’ number one choice since there are combinations of sweetness,
and it will melt into the mouth due to its softness. In order to put the quality standard of their
product on a higher level to satisfy the customers, the production team will do the quality check
to each of the items before releasing it to the market. If there are any complaints from the
customers, the company will make some considerations or the customers can refund the
products due to any defect.
iii. Packaging
Rosli Food also uses high quality clear plastic containers as the packaging. The use of
clear plastic containers as the packaging to display the various traditional biscuits from the
outside, indirectly will build up attraction to the customers on the interesting vision of the product.
Hence, the company also uses stickers as part of the packaging, to write down all the products’
details such as product name, tagline, location and contact numbers, social media such as
Facebook and Instagram. It is because the customers can contact the company at any time and
will share their experience, feedback and from this medium, they can promote the products by
their purchase.
17
iv. Product Differentiation
In Rosli Food, the product differentiation made by the company to its products means
that even they are making hundreds to thousands production for day to day operations, but they
are able to maintain the quality of ingredients they used and the homemade taste which are
more delicious. They also produce more than five various flavours of traditional biscuits that give
the customers more choice to buy. Furthermore, they are making the traditional biscuits with
modern flavours such as Bangkit Cheese, Bangkit Cheese Oreo, and Bangkit Salted Egg which
are really following the trend.
v. Labelling
The use of labelling usually to inform about the product through the product explanation
and information on the label on every packaging such as product weight, expiry date to make
them aware on the use time of the product, list of ingredients such as flour, butter, sugar, cream
cheese and coconut cream used to make the products
3.3.2.2 Pricing
Rosli Food is a well-established company that enters the market by producing kuih
bangkit with an assortment of flavours. Their main focus is producing high-quality kuih bangkit
with such affordable prices. Results from the interview, Rosli Food sets the price using cost-plus
pricing. Cost-plus pricing involves adding a markup to the cost of goods and services to arrive
at a selling price. Under this approach, they add together the direct material cost, direct labour
cost, overhead costs and add to it a markup percentage in order to derive the price of the product.
The advantage for Rosli Food when implementing this pricing strategy is it is simply
because it is quite easy to derive a product price using this method, though they should define
the overhead allocation method in order to be consistent in calculating the prices of multiple
products. Next, this pricing method is justifiable. In cases where Rosli Food must persuade its
customers and agents of the need for a price increase, they can point to an increase in its costs
as the reason for the increase.
18
3.3.2.3 Promotion
For promotion, Rosli Food will have an advertising strategy, online promotion and in bulk
selling. Advertising is a marketing communication that promotes or sells service with the help of
other mediums to influence customers. By having this, it will be easier for the customer to find
more about their product. The details included in the business cards and online flyers are their
location, Facebook, phone number and WhatsApp link. They also update the menu in their social
media which has detail on their kuih bangkit flavours.
Besides, Rosli Food also created online accounts for their business such as Instagram
and Facebook. They wisely grabbed the opportunity to expand their business by using Facebook
and Instagram Advertising. As a result, this will increase their customers since they can get their
information on the internet. Thus, their product can be known faster with the internet as a medium
of promotion.
Not only that, they offer bulk discounts to the customers when they buy in bulk or large
volume. This strategy has been successful in raising the company’s profit especially during
festivals like Hari Raya and Deepavali. This can be proved by reviewing at the business’s sales
forecast where the sales and profit increased drastically by at least 40% to 70% of the ordinary
sales. As so, the business strategy that Rosli Food implemented was successful to attract more
customers to buy in large volume to get more discount.
3.3.2.4 Place Strategy
Rosli Food has chosen the strategic location to run their business. The management of
the entity has decided to implement a ‘Manufacturer to Agent to Wholesaler to Retailer to
Customer’ strategy. This strategy is focusing on more than one intermediary involving an agent
called in to be the middleman and assist with the sale of the goods. An agent receives a
commission from the producer. Agents are useful when goods need to move quickly into the
market soon after the order is placed. As for the distribution purpose, they place their premise in
the area near to the main road of the state of Rengit in order to make their customers and agents
easy to access and come to their shop. The location is very near to useful facilities and buildings
that surely will be one of the main points in the area. There are banks, restaurants, schools,
mosques, supermarkets, public offices, botanical gardens, car wash and petrol pump that are
just a stone throw away from their premise lot. Thus, their targeted customers and agents can
easily access their premise.
19
3.4
CUSTOMER
DEMAND &
SUPPLY
20
3.4 CUSTOMER DEMAND & SUPPLY
As the main supplier for the traditional biscuits which are various flavours of kuih bangkit,
Rosli Food Traditional receive a high amount of orders throughout the year because Malaysians
love to eat the simple yet delicious snacks. The target markets are not just adults but people of
all age are loving the taste. During Eid celebrations such as Hari Raya, Rosli Food usually
receives a higher demand than usual.
When the company receives a higher demand, the operation process will also increase.
Apart from the big increasing amount on the revenue, the cost of raw material will also increase
such as flour, eggs, sugar, salted eggs flour and more. Companies will usually make a new offer
or negotiation with all of the suppliers so that they can get a discount when placing a bigger
order than usual.
The "kuih raya" a staple snack and a gift to Aidilfitri every year, is what makes the month
of Syawal a sweet delight for everyone, whether they are Muslims or their non-Muslim friends
visiting open houses. Therefore, during the festive season, Rosli Foods stated that they received
a higher demand which is 3 times higher in volume compared to a normal month.
Other than that, what helps the company to receive a high volume of orders during the
pandemic is the availability of online orders that are offered by the company. Despite the
Movement Control Order (MCO), their products continue to be in demand. The varieties of the
kuih bangkit such as salted egg bangkit cheese also make them different from their competitors.
This is because other sellers will usually sell one kind or flavour of kuih bangkit, to keep the
authentic taste. Malaysians love the salted egg flavours because the taste is really difficult to be
made at home and the rich flavour is one of a kind.
Rosli Food also gains an advantage since they have less competitors in their area,
Rengit. Rengit is a small town and an autonomous sub-district in the Mukim Sungai Kluang
district of Batu Pahat. Rosli Food, therefore, had done a wonderful job by deciding to start their
business in a strategic area because there would be less competition to sell the same products.
In addition, Rosli Food can be said to be Rengit's best-known kuih bangkit supplier, so that
they're being less competitive and increase their profits easily.
21
3.5
COMPANY
POLICY
22
3.5 COMPANY POLICY
3.5.1 MARKETING DEPARTMENT
Company policy and procedures are basically set in place to establish the rules of
conduct within an organization, outlining the responsibilities of both employees and employers.
Company policy and procedures aim to protect the rights of workers as well as the business
interests of employers. In the marketing department, a marketing plan is a comprehensive
document that outlines a company’s overall marketing effort. It is a blueprint that outlines how a
company will implement its marketing strategy, and use a combination of resources to achieve
business objectives including sales target or customer acquisition.
Rosli Food has established a marketing manual that is appropriate to the organization
and meets the needs of the organization and complies with all statutory and regulatory
requirements. The policy statement below is communicated throughout the company. The
marketing manager is responsible for ensuring all employees understand the policy. To ensure
the policy remains appropriate, it is reviewed at least annually.
Rosli Food Supplier Policy:
●
It is the company’s goal to satisfy customers by providing them with products and
services that meet their needs and exceed their expectations at competitive
prices. Rosli Food will deliver these products and services as promised and
maintain the high quality of the products.
●
Rosli Food will strive to continually improve the effectiveness of the Marketing
Management System by monitoring the performance against the established
objectives, and through leadership that promotes employee’s involvement. This
concept represents the company’s commitment to superior and ethical sales and
marketing operations, and the desire to better serve the customers, shareholders
and employees.
●
The company will allow customer returns of products and provide timely and
accurate refunds while also performing inventory control on the returned items.
23
3.5.2 OPERATION DEPARTMENT
In order to define the code of conduct for an organization, company policies and procedures
are effectively set up, defining the roles of both workers and employers. Company policies and
practices are aimed at protecting employees' rights as well as employers' business interests.
●
All employees need to get a typhoid injection
Typhoid is a vaccine. All food handlers in Malaysia are required by law to obtain typhoid
vaccination in order to avoid the spread of infectious disease. So all employees are required to
take typhoid every 2 years.
●
Cleanliness of employees and factory
Employees should arrive to work with a clean body, short fingernails, wearing an apron, keep
their hair tidy, wearing a glove, mask and a cap. Do not bring the apron to the washroom.
Employees are prohibited to wear jewellery in the production area. Employees must practise
good hygiene in handling the products. Washing hands before and after handling the product
are required. Besides, employees are restricted to smoke and eat the product during production.
24
3.6
RISK ASSESSMENT,
INTERNAL CONTROL,
INNOVATION, &
RESEARCH &
DEVELOPMENT
25
3.6 RISK ASSESSMENT, INTERNAL CONTROL, INNOVATION AND RESEARCH
AND DEVELOPMENT
3.6.1 RISK ASSESSMENT
3.6.1.1 MARKETING DEPARTMENT
Marketing risk represents the potential failures or losses that may arise from a marketing
plan. Start by learning the potential risk factors most companies must review to stay competitive.
Then, implement a risk-assessment process that helps the company to identify problems in the
marketing plan to more quickly respond to change and to prevent losses for the company.
The first current risks faced by the company is Brand risk. Any company can lose its brand’s
value. This can be caused by stiff competition or poor marketing. Currently, Rosli Food
advertises their products through social media such as Facebook and Instagram. Thus, it limits
their range of customers as it only focuses on customers who use Facebook and Instagram to
acknowledge their products. Hence, the company will advertise their products through television,
radio and billboard in the future to attract more customers and maintain their brand value.
Secondly, Changing trends. In today’s digital world, marketing trends change on a daily
basis. If the company’s marketing strategies are not up to date, the business bottom line will be
threatened. Rosli Food only has a Facebook and Instagram account to post and promote their
products. In the future, the company should promote their products through various platforms
such as using flyers, bunting or brochures in order to attract more customers from various states.
The third risk in the Marketing Department is Lack of tracking. Marketing plans need to
include methods for tracking the success of the company’s marketing strategies. Otherwise, we
would not know which of the marketing attempts to work or are falling. The tracking system
needs to assess why sales go up or down and which strategies and promotions work best. Since
Rosli Food has entered the market globally, the company needs to keep track of economic
factors that may affect the company. Keeping on top of economic changes will help the company
to determine the marketing and promotional activities that need to be implemented to counter
negative conditions.
26
3.6.1.2 OPERATION DEPARTMENT
Risk assessment where the business detects the risk while in the middle of the operations
of the business. The reason to identify the risk is to ensure the company can handle the risk
without impacting the business. After completing the problems that lead to the risk, the company
needs to analyze and evaluate by making the risk analysis and risk evaluations.
One of the potential risks affecting Rosli Food business is lacking operation workers. Found
in the middle of the interviewing, the company is not only hiring local operation employees but
also foreign workers. During Covid-19, the foreign workers were restricted to cross the borders
since the operations for the flight industry had to be closed due to MCO. Usually, they had around
20 employees but due to the current employees, they had only about 10. The potential risk faced
by the company is the process of preparing orders and achieving the demand of customers
might get slow as a result of short operations employees. Mentioned by the owner, usually, they
will produce two kinds of kuih bangkit but nowadays they only produced one flavour as the impact
of this issue. This situation will become the impact and getting worse in the future since Rosli
Food’s business is getting well-known around Malaysia and even overseas such as Singapore
as well as in the future, they wish to enter Indonesia and Thailand market.
Another potential risk also involves the employees where the segregation of the work by
their own skills. The risk is where if the employees are absent then the task could not continue
since only a person knows their scope of work. Perfect segregation of work should be done in a
group to ensure others can help in this kind of situation. Moreover, the risk of fraud can be
avoided since there is no more sole responsibility of one person for the task given. Having more
than one person carry out the task will reduce the risk. Furthermore, insufficient space of
production can be one of risk towards the business. This is because their production only at
home where they only use three houses for the production activities where one house, they used
to produce the kuih bangkit, labelling and packaging while another two as a storing of the finished
products before distributing to their agents. The potential risk of having insufficient space are no
space for stocking overload orders from customers and insufficient working space will slow down
the workflow in processing the kuih bangkit.
27
3.6.1.3 FINANCE DEPARTMENT
As for the Finance Department, the risk that involves is financial loss. Financial risk is the
process of identification, analysis, and acceptance or mitigation of uncertainty relating to the
financial health of the company. Financial risk generally arises due to instability and losses in
the financial market caused by the movements in stock prices, currencies, interest rate and
others.
Financial risk is one of the high priority risk types for each business and can be classified
into various types such as market risk, credit risk, liquidity risk, operational risk, legal risk,
economic risk and political risk. The FINANCE DEPARTMENT of Rosli Food basically will face
certain risks relating to the costs and profits earned. ‘Bangkit Santan’ is a kind of traditional food
which has its own market and fans. If the demand for ‘Bangkit Santan’ drops, it will be risky for
Rosli Food to survive in the market. For example, Hari Raya Aidilfitri is a month that supposedly
increased their sales by 70% but in the year of 2020, their sales drop because of pandemic
Covid-19. Even all the finished products sold out, but they were forced to sell it below their selling
price.
As for the operational risk, it is a type of risk that arises out of the operational failures such
as mismanagement or technical failures. Operational risk may arise due to the lack of controls.
Besides, political risk also gives such impact on the financial risk of the business. It is a risk due
to the uncertainty about government actions. But during pandemic Covid-19, Rosli Food needed
to cease their operations for 3 months and many orders were cancelled by the customers. After
the government announced that all economic sectors and business activities can continue their
operations by following all the Standard Operating Procedures (SOP), Rosli Food continued to
produce their products. Meanwhile, they faced challenges where all their foreign workers were
deported to their origin countries.
28
Other than that, economic risk also gives such an impact on the business. Rosli food always
wanted to serve their customers with a high quality of product at an affordable price. But the
market price of the raw materials used to give such a significant impact on the business. If the
raw materials price kept increasing, Rosli Food also tended to increase their selling price. Plus,
pricing pressure between competitors also gives a risk towards the business to maintain the
existing customers.
Rosli Food is a business with a lower risk in terms of financial. It is because Rosli Food does
not have any financial liabilities or debts that need to be settled. All the transactions incur on a
cash basis. So, they might have an opportunity to get approval when applying for a loan in order
for them to grow the business in the future.
29
3.6.2 INTERNAL CONTROL
3.6.2.1 MARKETING DEPARTMENT
Internal controls are the mechanisms, rules, and procedures implemented by a company
to ensure the integrity of financial and accounting information, promote accountability, and
prevent fraud. In the marketing department, it is important to ensure that the internal control of
products complies with the laws and regulations. The regulation of food quality and integrity in
Malaysia is governed primarily by the Food Act 1983 ("Act") and its subsidiary legislation, the
most pertinent of which is the Food Regulations 1985 ("Regulations"). Compliance with the Act
and the Regulations is mandatory, except in relation to any food prepared, produced, or
packaged for export outside Malaysia. Rosli Food uses additional ingredients that will attract the
customers when the customers taste and eat it. The company also will do quality checks on
every product before they launch the product in the market in order to build trust and confidence
from customers to their business.
In advertising the products, The Food Act 1983 ("Act") prohibits any person from
publishing any advertisement which does not contain a statement setting forth the true name of
the person by whom or on whose behalf the advertisement is published and the address of his
place of business or residence. For Rosli Food, they advertise and label their products in
accordance with the Food Act 1983 where they use the name and address of the business as
stated in the company registration certificate of Suruhanjaya Syarikat Malaysia.
30
3.6.2.2 OPERATION DEPARTMENT
The standardized recipe is a procedure to be used in preparing the kuih bangit. Ensure
consistency in quality regardless of who does the kuih bangkit. The taste, appearance and cost
should be the same by following the correct portion of ingredients. This will help to stop running
out of food and control the amount of food lost as well.
Inventory management is really important, especially on storing raw materials. Keeping
track of the raw material is essential to ensure that the production processes do not run short of
material. Employees need to organize the inventory properly by segregating the materials
according to the expiry date, quality of the product and quantity. Use a first-in-first-out method,
where using the first material that comes first due to items purchased first are more likely to spoil
than items purchased later. This will help the company to control the quality of kuih bangkit.
Every step in producing the kuih bangkit should be documented. It will help the
employees to duplicate the original recipe from shift to shift. The information that should be
considered are the portion of the ingredients, equipment required, time taken for the kuih bangkit
to bake, weight, quantity and temperature. Knowing what happens to the product during the
production process is essential. Keeping track of product waste, ingredient usage and
material balance are the things that need to be recorded during production. This can
prevent from the excessive waste of materials and reduce cost.
31
3.6.3 INNOVATION AND RESEARCH AND DEVELOPMENT
3.6.3.1 MARKETING DEPARTMENT
Innovation in marketing is an activity that involves new ideas that have a positive impact
on a new product and service. The innovative marketing concept is all about conducting market
research into customer needs, behaviours and trends, develops a prototype or changes within
product designing, launching a new product in a unique place or pricing the product in a unique
way. Rosli Food made an innovation on their production which was before this, their production
of biskut bangkit were fully manual and traditional at home. However, there will be a combination
of traditional and modern production where they will produce their products using machines at
the factory. For their research and development, Rosli Food is in the process to create new
products and they are doing research and development on the products. The product is called
“Biskut Bangkit Madu”.
3.6.3.2 OPERATION DEPARTMENT
To maintain a business in the red ocean market a business should have to try to innovate
products where they create a competitive advantage to attract more customers. In order to Rosli
Food maintaining and sustaining their business, they create various flavours to make their
business different from others. The inspiration is coming from the survey they did through their
loyal customers and looking at trends in the market. From it, exist the results of creating various
kuih bangkit such as Bangkit Santan Bijan, Bangkit Cheese Oreo, Bangkit Salted Egg and
Bangkit Gula Melaka.
Research and development are the process of one business who intends to create new
or innovate the products or improve the existing products. These features will create a
competitive advantage for the business to compete with other businesses who offer the same
products. Even though the business will earn higher rewards but the process of research and
development is very complicated and exposed with so much risk.
32
In terms of research and developments by Rosli Food, they will always survey the market
demands through their loyal customers such as what is the current or trend in the market to
ensure they stay close and suit the changes of the taste of the customers. For instance, early
2020 which is in January they produced new flavour of the kuih bangkit which are Bangkit Salted
Egg and Bangkit Cheese Oreo. This is because salted egg and cheese are becoming a hot trend
among the public. The latest idea which is still in the process of research and development is
they try to create Bangkit Madu. On top of responding with a lot of orders from customers, Rosli
Food decided to invest more in their production machines where they had procured customs
machines in China for the process of moulding the kuih bangkit. The customs machine had a
conveyor belt which could produce around 70 pieces of the kuih bangkit in 10 seconds which
equates to one small jar of the biscuits. It is more efficient and effective where the company
could save some time and energy as well as operations employees as the machine can produce
more in less amount of time needed. The custom machines are for their new factory which is
located in Johor Bahru. This is to cover the orders that are getting higher day by day. The
company is also in the process of looking at currency of other Asia countries such as Thailand
and Indonesia to market and expand their kuih bangkit.
33
3.7
CRITICAL
SUCCESS
FACTOR TO
SUSTAIN
34
3.7 CRITICAL SUCCESS FACTOR TO SUSTAIN
Critical success factor (CSF) is a factor that makes the company focus on elements that
are necessary to achieve its own goals. The company has to identify the critical success factors
first where the management should discern between variables that correlate with outcomes and
the one that have causal effect.
The first critical success factor of Rosli Food is the company is still using Traditional
Methods in the production process. World today has a higher technology advancement that can
fully process a product without using human effort. However, this company believes that having
a human effort in the production is better than having fully developed technology in the
production process. Human effort in the operating system will produce a high-quality product
since the product could be inspected and monitored before it was passed to the packaging
department and out for customers. Having a fully machine in the production process could result
in high cost installing, maintenance and servicing. The quality of the product will not result in
good shape. Moreover, having a human effort in the production could open a large opportunity
for individuals to work and learn in this industry.
The second critical success that needs to be sustained is The Management
Continuously Developing A Relationship with The Company and other Businesses. This
way can result in more responsibility for the management to handle as there might be a
misunderstanding, different decisions and any other problems between the related companies.
The company might need an extra training session for the related staff in order to develop a
good business relationship between the companies. In another way around, these factors should
be sustained because this could help extend the company public relation and build an image in
other places. The sales of the product also will increase as the coverage area has increased.
The target market of the company now becomes larger than before where it resulted in
generating a higher profit. Rosli Foods also have already extended their business to other
countries such as Singapore and planning to extend to Indonesia, Brunei and Thailand. The
starting in extending their business is focused for Asian since the product produced by the
company most likely suits the taste of Asia people.
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Third critical success is Technology Advancement. The company continuously tries to
improve their technology by upgrading to a new machine and getting a custom-made machine
from China. Even though technology advancement will lead to the high cost of installing,
however, the maintenance cost surely will be reduced since it is a new machine compared to
the company that still uses old machines. Having a new upgrade machine could also reduce the
production cost for the company and more production can be made in a day. Therefore, Rosli
Food will not have any problem in producing and supplying large demand for their product. Plans
of extending their target market also will succeed if the company has a good operation process.
Other than that, currently, the company already has a software system that records the amount
of production in a day and this helps the operation department to monitor all the operation
processes in a day. Having an operational system also gives a huge advantage to the company
to manage their business. Rosli Food has already adopted a system to monitor the production
and the system will be kept upgrading from time-to-time in line with global technology
development. The function of the system adopted will also be improved. The same critical
problem that will be faced by the company is the high cost in upgrading the system but many
benefits could be gained and the cost will be covered up.
The fourth is having good communication and cooperation with another
department. Communication is an essential and important soft skill that all employees should
have. Communication not only in their own department but also in another department. The
finance department of Rosli Food needs to have good communication and cooperation with
another department because they need all information regarding the work program and budget.
With this, the finance department can work effectively and productively without any problem. It
also can build and maintain the relationship between employees and contribute to the growth of
a company.
The fifth is product price has to be sustained to ensure customer value. Customer
value is the satisfaction of the customer in term quality, price and services. It is important to
consider to improve quality and services as well as the price to meet customer’s needs. To
ensure customer value, Rosli Food can sustain their product price. With this, it can attract new
customers and maintain existing customers to buy the product because the price is affordable
and good services and quality products. When many customers buy their product, it can increase
the revenue of the company.
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The sixth CSF is the High market share through loyal customers. Rosli Food has
operated for more than 30 years in this industry and the recipe has been passed through a few
generations which means that their company managed to gain thousands of loyal customers.
The discount offered for a bulk purchase has also been a catalyst for the customers to stay plus
Rosli Food focused on more than one intermediary involving agents to assist them in making
sales which was seen as a golden chance for many people who looked for a side income. As
many people continued to support and buy their products, Rosli Food managed to increase their
market share in the industry and gained more competitive advantages.
Furthermore, Successful Product Positioning. The unique homemade recipe of Rosli
Food was hardly unbeaten by their competitors. Out of all their products, Bangkit has been their
highlight for years due to the high quality and unique taste of sweetness that made them different
from others. Moreover, it brought a traditional Malay culture that made it special as it is hard to
find in the modern era. This contributes to a high demand in the market especially when it comes
to a festival season such as Hari Raya Aidilfitri and Aidiladha. Some people who called
themselves a Bangkit lover would also order it during normal days and surely Rosli Food was
their first choice to buy them.
Next is the Introduction of new products. Rosli Food came with many different flavours
of Bangkit. As society behaviour changes through time, the company understands and reads the
trend well and follows the flow without wasting the time. People tend to look for something new
in their trusted seller or company that fits their taste. Therefore, Rosli Food did some innovation
in the original recipe without changing the quality of its Bangkit to give a new experience and
win the heart of their loyal customers by introducing the new five flavours of Bangkit which used
Gula Melaka, cheese, oreo and “bijan” as the extra ingredients.
Last but not least, the Effective Platform for Promotion. A variety of social media has
been used by Rosli Food (Facebook, Instagram & Whatsapp) to update and promote the latest
information regarding their products. Any special offer or new products would be posted regularly
to ensure they reach their customers correctly. This helps to increase the customer’s loyalty as
continuous updates will make the customers feel appreciated and increase the excitement to
repeat their purchase. Some of the sellers tend to abandon their online customers as they were
too busy to handle social media or they did not expert in creating a new style of marketing to
attract the customers. Unlike this company that always takes care of their existing customers.
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4.0
ANALYSIS OF
THE COMPANY
38
4.1
PESTLE
ANALYSIS
39
4.0 ANALYSIS OF THE COMPANY vs INDUSTRY
4.1 PESTLE ANALYSIS
4.1.1 MARKETING DEPARTMENT
•
Political Factors
These are all about how and to what degree a government intervenes in the economy
such as government policy, political stability or instability in overseas markets, foreign trade
policy, tax policy, labour law, environmental law, trade restrictions and so on. It has an impact
on companies and how they do business.
Due to the recent COVID-19 outbreak, some adjustments have been made to tax
deadlines thus, Rosli Food is also affected by these adjustments. For example, Rosli Food is
eligible to pay corporate tax as it is governed under the Income Tax Act 1967. The company files
the estimation of tax payable within 3 months of operation and makes monthly instalments
starting from the 6th month of the assessment year by the 15th of each month. An extension of
time is given until 31st May 2020 since the estimated tax submission falls within the Movement
Control period. After the assessment year has ended, the company is required to file its tax to
the LHDN through the e-filing portal within 9 months instead of 7 months due to the disruption
caused by the COVID-19 pandemic. Besides that, the remittance of MTD for the salaries of
March and April extended to 31st May 2020. It is an advantage gained by the company to
overcome the pandemic crisis. Hence, the company needs to be able to respond to the current
and anticipated future legislation and adjust their marketing policy accordingly.
•
Economic Factors
It is directly impacting a company which is resonating long term effects. Besides that,
economic factors also impact on how an organisation does business and how profitable they
are. For instance, a rise in the inflation rate of any economy would affect the way companies
price their products and services. Increasing the purchasing power of customers and changing
demand or supply for that economy. The high demands for the products can cause inflation as
customers are willing to pay more for the product, increasing prices and increases in production
costs such as raw materials and wages.
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Rosli Food is a well-established company in the food and beverage industry. The
company already has its wholesalers and customers which continuously buy the products.
Tapioca cookies are hard to find and the demand for the cookies are quite high. It causes inflation
as the customers are willing to pay for the cookies. Therefore, the marketing department of Rosli
Food creates branding guidelines and marketing policy. Branding guidelines consist of images
and messages about the company. It may gain trust and recognition from different target markets
including targeted customers and current customers. Conversely, marketing policy is a costeffective and efficient way to set clear guidelines and expectations for the marketing of the
company. This policy is important as it provides rules for use and misuse, lists general marketing
criteria, the procedure to be taken and others.
•
Social Factors
Social factors play an important role in the market and there are a few determinants. It is
also known as socio-cultural factors which involve the shared belief and attitudes of the
population. For example, cultural diversity, social status, artifacts, lifestyle and others.
Due to cultural diversity in the Malaysian population which comprises of Malay, Indian
and Chinese people, somehow these people of different ethnicities shared the same interest in
food which is tapioca cookies. It increases the demand for the cookies among the population in
Malaysia. Other than that, Rosli Food’s marketing strategy in terms of product which provides
different flavour and varieties of tapioca cookies which are oreo, salted eggs, cheese and others.
It attracts the customers to try different tastes of the cookies as the company follows the current
trend.
Besides that, Islam is the majority religion in the country. During Eid al-Fitr, Muslims
celebrate this festival and tend to buy more cookies during these months. Tapioca cookies
already become one of the traditional cookies that must be had in each house during the festival.
Thus, these buying trends for tapioca cookies are in high demand during the festive season.
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•
Technological Factors
It means innovations in technology that may affect the operations of the industry and the
market favourably or unfavourably. For example, automation, research and development, and
the amount of technological awareness that a market possesses.
Federal Agricultural Marketing Authority (FAMA) provides vast knowledge and skills in
marketing to help Rosli Food as FAMA’s objective is to develop and enhance efficient
management in the agricultural industry related to marketing activities or processing of
agricultural products. The vast knowledge and skills in marketing encourage the company to
implement a promotion strategy which includes advertising strategy, online promotion and in
bulk selling. An example of online promotion is through online accounts such as Instagram and
Facebook.
Besides that, a new, advanced machine which is one of the technology factors increases
the productivity of the company. The machine may produce 70 pieces of tapioca cookies in 10
seconds. As a result of advanced technology, Rosli Food is able to grab opportunities to expand
their business, increase productivity and efficiency of production. Thus, it drastically increases
the company’s sales. Lastly, it captures the customer's confidence in the quality and safety of
products and further enhances a good image of the company.
•
Environmental Factors
These factors include ecological and environmental aspects such as weather, climate,
environmental offsets, and climate change. Rosli Food is doing business as an ethical and
sustainable company as they implemented waste management accordingly. They also manage
their waste, sustainable as they buy ingredients of products in bulk to reduce packaging and did
not dump the wastage in the river. The packaging of the product is used high quality clear plastic
containers which harmless to customers and the environment. It shows that Rosli Food aware
regarding the environment.
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•
Legal Factors
The legal factors are several laws, rules and regulations that affect the business
environment which must be complied by the company. These legal factors take into
consideration consumer laws, safety standards and labour laws.
It shows that Rosli Food’s is practising legal and compliance of marketing rules. This is
because the company practised true and fair commercial practices, sales practices, products’
offers and also clear, conspicuous advertising. For example, the company did not falsely state
the products’ promotion will only be available for a short amount of time. The company offers
bulk discounts to the customers who buy in bulk or large volume without limited time.
The advertising made by the company on social media is not a bait advertising which is
luring in customers with adverts for products at special prices if the products are not in stock or
only in very limited supply and advertising goods which do not exist or making incorrect
comparisons to other products. In addition, the company also did not violate the business
protection from Misleading Marketing Regulations 2008 which the rule is misleading advertising
and comparative advertising is only permitted subject to certain conditions being met. The
company also registered under SSM which is one of the requirements when opening the
business. It clearly indicates the company is abiding by the laws and regulations and may avoid
them being reported to a local trading standards office which can result in fines and prosecution.
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4.1.2 OPERATION DEPARTMENT
●
Political Factors
During Covid-19 all businesses and industries were forced to disclose their operations
due to the Movement Control Order (MCO) from the government starting 18 March 2020. All
operations had to stop for six months as ordered by the government to stay at home as their
options in stopping the positive cases getting higher day by day and spreading the virus to others
since it is a contagious disease. The only way to stay in business is that the government has to
play a big role in stepping up the game, promoting the business and giving any incentives to aid
the health of the business. Rosli Food is not an exception during this pandemic and the business
severely affected especially with the sales of their products which are “Kuih Bangkit”.
The owner mentioned that after the celebration of Eid Celebration the business was
getting slow due to command by the government to continue with MCO for the second time since
the total of positive cases drastically increased and hit thousands of cases. Rosli Food was one
of luckier SME businesses where they were getting help from ADUN Rengit, YB Tuan Haji Ayub
bin Jamil who bought all the products as a token of supporting the business. YB Tuan Haji Ayub’s
help is in order to care for the cycle of the economy for the small business and through the help,
the company can recover the cost that has been spent even though they did not get much profits.
Furthermore, FAMA gives a hand in this situation by providing advice and a bit of knowledge on
how to market their products along with to make the small business become well-known around
Malaysia. With this advice, Rosli Food keeps getting bigger and has their own dealers or agents
around Malaysia and even overseas which is Singapore.
●
Economic Factors
Economics is one of the factors we should look up for in order to make the business go
big. There are several factors that make a business successful for instance economic trends,
international trade, inflation, raw materials costs and unemployment rates. In order to survive,
Rosli Food should keep reminding these questions themselves with “what economic will effect
to move forward, how the performance of the economic effects and the impact of price, revenues
and costs from each economic factor”.
Rosli Food ways of maintaining and sustaining the business during this hard time is
selling their products at a lower price than the usual price. The reason is as long as the company
44
can recover the cost that has already been expensed and to stay close as well as to keep the
name of the company in the mind of the customers. Unemployment rates during Covid-19 are
getting higher due to some companies’ layoff their employees since they cannot afford to pay
their employees. Align with these factors, Rosli Food determines in lowering the cost so it
becomes affordable to be purchased by the customers. Rosli Food does not have a physical
store so in order to reach new customers from other states they decided to spread the business
through agents. For current agents only available at certain states such as Melaka, Terengganu
and Kelantan. Due to statewide restrictions on the mandate by central authorities, the distribution
of stock will be passed through the agents. There are recommendations and requests to the
market as well as distribute the products to other Asia countries such as Indonesia and Thailand.
Before getting further, the owner decided to be careful and play with the currency if it is worth
supplying to both of the countries. However, this is a great opportunity for the company to
promote our traditional biscuit and spread the wings and fly high.
●
Social Factors
Social factors in Malaysia can come from various elements that affect the company. The
company can analyse the socio-economic environment of their market through customer
demographic, cultural limitations, lifestyle and education. As Malaysia is a multi-ethnic and multireligious country, the customers of Rosli Food that purchase the product are influenced by other
aspects such as seasonal festivals. The major race in Malaysia is Malay where the product
produced by this company is suitable for the taste of Malay and Nyonya. Therefore, during the
month of “Hari Raya”, the sales are higher than others. The company understands their target
market needs and continuously finds a way to bring the customer for a purchase. Expected
percentage of customers from Malay is 70%, Chinese 20% and 10% is Indian.
Rosli Food also plans to enter Brunei for a new target market. This could develop public
relation and social-economic relationship with other countries where it can be a potential success
for the company in generating revenue. Other than that, this company already entered the
Singapore market through dealers. The extension of this social relationship has built an image
for Rosli Foods in other countries. In addition, this company has been signing a contract with
one company to be a business partner where there will be newly developed products and only
this business partner has access to purchase. The continuous effort from the company to keep
extending their social factor will bring success for the company and the management put big
trust in their future plan.
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●
Technology Factors
Technology factors in Rosli Foods include technological advancements, the lifecycle of
technologies and the role of the internet. The company sells and markets their product fully from
networking where the agent around the countries is in charge. Currently, technology has been
developing faster in the world and Rosli Food is in line with the development. The machines
used in the operation of the company are fully custom in China. This is part of the company plan
to have better technology and can give a maximum production to the company with a lower
maintenance and service cost. Other than that, the company is planning to expand their product
to the Singapore market. These will create an opportunity in technology advancement where an
exchange of knowledge, skills and technology could happen between two countries. Singapore
is also known as one of the fastest developing countries in the world which can help to lead the
company to success.
Digital operation systems also could give a high benefit and low the risk in the company
if it was improved. The company has adopted a new operating system to record the number of
products produced by the factory and the number of product output. This has been a technique
for the company to control its operation process in a much easier way. This system will make
the function for the management to track, refer and analyse back the performance of the
operating system in a year.
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●
Legal Factors
Legal analysis coincides with political factors where to include specific laws such as
discrimination laws, antitrust laws, employment laws, consumer protection laws, copyright and
patent laws and health and safety laws. A company needs to understand what is and what is not
legal in order for their business to practice the requirements of the law to avoid any
consequences in future. This has become a very challenging task to tackle if a company trades
internationally since each nation has its own set of rules and regulations.
FOODS ACT & REGULATIONS
According to Food Regulations 1985, it is applied to ensure that a company regulates
the production, trade and handling of food as well as comprise the regulation of food control,
food safety and acceptable aspects of food trade. It is to ensure the quality of foods produced
not subjected to any illegal and misleading practices with the intention to deceive the customers.
In addition, stated in the law there shall be no person advertise for sale or sell any foods without
labelling the foods which are required by the regulations to be contained on a label. Any
information or direction such as food produced, ingredients, descriptions, contains, prepared or
packaged or imported food should use Bahasa Malaysia and English. As Rosli Food Based in
Malaysia, they have complied with the regulations in recognising the halal certification by using
the ingredients to produce kuih bangkit from halal resources. It is showing the understanding of
the company to use halal ingredients as it is necessary for Muslims in the countries. Besides
that, for the labelling aspect, Rosli Food had complied with the requirements as they included in
the package the description of ingredients and expiration date. This showed the approach of the
company to assure the safety of the products and customers should finish it before it is going
bad.
EMPLOYMENT ACT & LABOUR
According to the Employment Act 1955, a contract service should have specified a wage
which is not exceeding one month. The employer should not have to deduct any wages of the
employees unless it is according to the Acts. In the interview, Rosli Food mentioned they pay
their operation workers by daily payments while the operation staff are paid around RM2,000. In
addition, they also follow the operation hours as required by law.
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ENVIRONMENTAL FACTORS
Environmental factors have arisen recently. It becomes important due to the increasing
scarcity of raw material, pollution targets and carbon footprint targets set by governments.
Ecological and environmental aspects such as weather, environmental offset and climate
change which can give a huge impact on industries are some of the environmental factors.
Nowadays, the awareness for the health repercussions of the food we eat is growing faster.
Many people take care oftheir food intake since there are so many cases of obesity. Other than
that, environmental repercussions of the food we eat also in line with the growth of health
repercussions among people. As for Rosli Food, they are aware of the issue within the health
and they always ensure that their product is suitable for all layers of society. The company also
ensures the ingredients used by them are high quality and in good condition. The quality
inspection for the product also was made before it was distributed to the customers. Involving in
practices such as corporate social responsibility (CSR) and sustainability also included in the
environmental factors. The company has made several activities and one of them was selling
their product at a lower price to help those in need.
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4.1.4 FINANCE DEPARTMENT
•
Political Factor
The political environment can affect the economic setting of business in a variety of forms
such as increase and decrease in tax. Rosli Food should be up-to-date on certain political
consideration to know any changes in taxes or interest rate that could affect business demand
trends. There might be possible changes in regulation where the government could alter their
rule and regulation, in turn, have an effect on the business. Rosli Food also must comply with
the labour law when they want to hire more employees in the finance department to avoid any
problem in the future. Labour law clarifies and comity the obligations of business owners to their
employees. It is important to follow this legislation to protect their right and bargaining power of
workers.
•
Economic Factor
Economics plays an important role in business. This is because when the economy falls,
it will give impacts to the company’s business. The example of economic factors that may affect
business include exchange rates, interest rates, recession, inflation, taxes and demand or
supply. Rosli Food has been involved in producing and supplying ‘Bangkit Santan’ in Malaysia.
But during pandemic COVID 19, Rosli Food cannot operate as usual because the government
has imposed the Movement Control Order (MCO). This will affect the demand and supply of
‘kuih bangkit’. The company still gets profits during MCO even though the demand from
customers is low. This is especially during Hari Raya Aidilfitri, Rosli Food has produced 80%
from their order early. Besides that, YB Tuan Haji Ayub Bin Jamil also buys the product by bulk
for presents or donations.
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•
Social Factor
Social factors are related to the cultural and demographic trends of society. Social norms
and pressures are keys to determining consumer behaviour. These factors include cultural
aspects and perspective, age distribution, career attitudes and others. Rosli Food will make sure
the quality of product and service gives satisfaction to customers. The cost, quality, performance
and efficiency of the product would give a great impression to the customer satisfaction.
Maintaining the price would be favourable and improving the quality of the product can reach
high satisfaction to them.
•
Technology Factor
The technological factor is a factor that could influence the business operation of how
the business might deliver its services and operations. Technology factors are about the
innovation of the business and also the competitors around. Technology innovation must be
focused also to have better performance in business operation and management. As in the
financial function, the innovation that should be taken is upgrading the system of bookkeeping
by investing in the accounting software such as MYOB, UBS, Million and so on. Such innovation
in financial function would give a better impact to the company by smoothing the management
on recording the proper account of the company and it also could give better forecasting for the
company future align with other competitors.
•
Environmental Factor
The issues surrounding environmental protection have become important in recent years
as the implications of under-regulated economic activity. This has become more significant with
globalization as the impact of an organization's actions may be felt outside of its native country
and may incur unquantifiable financial penalties. There are some factors that affect the industries
and cross their ability to function smoothly such as an environmental issue, energy or power
consumption, insurance policies, safe waste disposal, and dealing with hazardous materials.
Weather, climate, and geographical location are also factors towards the environment. The
newest issue is on the Pandemic Covid-19 where all people across the world need to face it. All
industries include Rosli Food required to cease their operation temporarily because the
government implemented a Movement Control Order (MCO) in Malaysia. This situation affected
the performance of the business where they could not produce ‘Bangkit Santan’ in a normal
quantity.
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•
Legal Factor
Legal factors may have some overlap with political factors but legal factors do cross over
with the political factors. Legal factors include more specific laws such as health and safety law,
employment law, consumer right, product safety laws, copyright and patent laws and others.
Rosli Food needs to understand what is legal and allowed to operate within the industry the
company involved in. For the company's financial, the company needs to follow the accounting
standards to prepare the financial statement. The standard is a guideline for the accountants to
prepare a proper financial statement that will help the company make a better decision. It also
provides information about the cash flows of the company, results of operations and financial
position. The financial statement then needs to be audited by the auditor. The auditor needs to
follow the auditing standards for them to give the opinion. The opinion must be fairly presented
or based on a true and fair view. The purpose of the audit is to present a true and fair view of
the company's financial performance and position. Rosli Food also must be aware of any
changes in the legislation and the impact this may have on business operations.
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4.2
SWOT
ANALYSIS
52
4.2 SWOT ANALYSIS
4.2.1 ADMIN DEPARTMENT
Strength
From the administration department, we could identify the only strength based on the
respondent's reply from our survey that is the proper delegation and segregation of duty in the
department. Based on the response, it is clearly stated that all the staff related to the
administration department has a firm grasp on what they should do and what they can do to help
one another.
Weakness
The meeting is an important procedure that should be conducted before making any
decision involving the course and direction of the business or company. However, the
management or administration of Rosli Food Supplier rarely held a meeting in reviewing the
business matter. This could be simply because the business did not have an agenda to be voiced
in the meeting but regardless, the business has to enact a company policy to hold a meeting at
least once or twice every quarter of the year in order to keep up any problems arising from any
department or within the department.
Next, the business space for the administration department is rather inappropriate, since
the workspace of the administration department is in the owner’s own home, which could result
in a lot of distraction and withhold one’s working spirit.
Within the administration department, there is a severe shortage of staff. We identified
this weakness from the organizational chart of the administration department that only consists
of one person, which means that the staff of other departments often step in to help out the
administration department.
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Opportunity
Out there, there are various software for filing systems that exist. The business could
take this opportunity to implement a systematic filing system to organize all their data from
misplacement or missing when needed. The one-time cost of purchasing software for filing
systems is very beneficial to the business compared to existing manual filing systems.
Managers act as an intermediary between the higher-ups and the workers and
employees. Training and motivation from the manager who is the closest person with the
employees is important to improve the skill and productivity for the day-to-day operations of the
business.
Threat
Many competitors exist in the industry that the business has been immersed themselves
in. In the perspective of the administration department, surely long-existing competitors in this
market have better administration and management of their business. This becomes a huge
threat to the company, so it is advisable and recommended to the Rosli Food Supplier to improve
the administration department performance and conduct.
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4.2.2 MARKETING DEPARTMENT
Strength
•
Established company.
Rosli Food is a family business which was established 30 years ago. It is known and has
agents throughout Johor and other several states which include Kelantan, Terengganu and
Melaka. Even though the brand created by the company is not so specific and universal, the
company is 100% Homemade Biscuits and Traditional Biscuits which is difficult to find.
•
Product differentiation.
Rosli Food introduced creative, trendy and variety of flavour of tapioca cookies
comprising Bangkit Santan, Bangkit Gula Melaka, Bangkit Cheese, Bangkit Cheese Oreo,
Bangkit Salted Egg and many more. The company produces hundreds to thousands of cookies
for day to day operations, but they are able to maintain the quality of ingredients they used and
differentiated the homemade taste which is more delicious from other competitors. They also
produce more than five various flavours of traditional cookies that give the customers more
choice to buy.
•
High quality of packaging and labelling.
Rosli Food takes into consideration the container used and labelling of products
produced. The company uses high quality plastic containers and stickers to write down the
products’ details. It is to provide information regarding the products on the product name, expired
date, ingredients used, contact numbers and others. It is one of marketing method to attract
customers and indirectly promote the products.
Weaknesses
•
Lack of advertising.
Rosli Food did not implement vast knowledge and skills in marketing learned from FAMA.
For example, the company did not fully utilise the advanced technology which is social media as
lack of promotion through Facebook and Instagram. They rarely post the products’ information
and do not have their own business website. Thus, it may cause difficulty for the customers to
purchase and receive information on the products' prices, product’s description and how to buy.
55
The customers need to contact the agent or go to Rosli Food’s factory, which may be a hustle
to the customers. If the company actively updates their social media, it may increase the
interaction of customers and buyers and increase online sales transactions.
•
High costs.
Even though promotion through social media benefits the company to reach potential
customers worldwide, it causes the company to bear extra costs. Besides that, the company has
ongoing weak social media engagement as they rarely communicate with their customers. There
is less interaction between the company and customers, thus the customers are unable to obtain
information on the products that they are interested to buy. They also did fully utilize social media
even though they already made payment. The company rarely updates their products on social
media, it shows that they have poor publicity in the media and poor marketing efforts which
indirectly may damage the company’s brand and weaken value proposition. Hence, they should
improve their marketing strategy and engage more content with customers.
•
Limited of business agents.
Rosli Food is limited to some states which are Kelantan, Terengganu and Melaka. The
agents need to pick up products at the company’s factory. Higher business agents may increase
the network connection of sales transactions. More people know about the companys’ product.
During Covid19, the company had to send the stock directly to the agents because they cannot
cross states. The company incurs extra costs on delivery costs when they deliver the products.
Sometimes, the demands of the products are high but the supply is limited, hence the company
should increase the number of business agents as it may increase the customers’ number and
sales.
Opportunities
•
Expand the products.
Rosli Food has taken several strategies to expand their business to other countries such
as Thailand, Singapore and Thailand. The company conducted market research on the demand
of their product which includes costs incurred, target markets and others. They also collect
56
information that provides an insight into their potential customers thinking, buying patterns, and
location.
Therefore, by conducting market research, would beable to assist the company to
undertake an initial sales forecast, monitor market trends and keep an eye on what competitors’
strategies and plans are. Besides that, Rosli Food has signed a contract with a local company
to produce Bangkit Gula Melaka. However, they cannot produce these products for other parties.
All of these are possible due to marketing and advanced technology. Customers are able to
reach and buy Rosli Food products at their fingertip.
•
Nurture loyal customers.
The customers are the key to the success and Rosli Food should make use of, look after
them and encourage loyalty. Rosli Food provides privilege and exceptional customer service
which may keep these customers coming back and set the company apart from other
competitors. The strategies to build loyalty in customers include providing after-sale follow-up,
discount to those buy in bulk, delivering the products and others. Thus, it encourages customers
to stay loyal.
Threats
•
Inability to grow the customer base long-term.
Products produced by Rosli Food are traditional cookies, so it is risky for the company.
The new generation is not familiar with the traditional cookies, as it may reduce the demand of
the company and cause fluctuation in sales of the company. Besides that, customers have so
many different choices and it has been difficult for Rosli Food to maintain the sales. However,
with advances in technology, these no longer reasons for them to become discouraged and they
should fully utilize the resources to maintain the growing customer base in the long-term.
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4.2.3 OPERATION DEPARTMENT
Strengths
•
Innovation for the production of ‘Kuih Bangkit’
In order to fulfill the growing demand from their customers, Rosli Food tends to invest a
lot of money by ordering a custom-made machine from China that is fully specialized for the
production of ‘Kuih Bangkit’. With the custom-made innovation, not only Rosli Food is able to
reduce the production time but they are also able to cut the expenditure on workers’ salary and
wages.
•
Provide training for staffs and management
Rosli Food has a vision in supplying high-quality products to the market thus practical
training has been provided for the employees of the company including ethics, cleanliness and
staff welfare in order to achieve their own vision. The management staff of Rosli Food can also
be seen participating in the foodservice management course which is certified by the Ministry of
Health.
Weaknesses
•
Shortage of raw materials
Somehow, even with the availability of custom-made machines from China, Rosli Food
still faces challenges in producing their products as certain situations in the operation might lead
to the shortage of raw materials during production from time to time.
•
Low productivity
Rosli Food is not excluded from the effect of COVID-19 pandemic as they experience a
shortage of staffs since almost half of their operation workers which are Indonesian are not
allowed to cross the border thus, Rosli Food currently has low productivity in producing their
’Kuih Bangkit’ compared to pre-pandemic era.
•
Lack of product diversification
As Rosli Food is not the only traditional food supplier operated in Malaysia, they need to
diversify their product lines as product diversification is a common strategy to increase
profitability and achieve higher sales volume from new products especially in a highly
competitive environment such as the food industry itself.
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Opportunities
•
Less competition in the area of Rengit
Rengit is a town and an autonomous sub-district in Mukim Sungai Kluang, Batu Pahat
District. It has more than 30 villages and 25 schools. Based on Wikipedia, the area in total is
645.12 km2 (249.08 sq mi) which is just a small town. Therefore, Rosli Food had done a
wonderful job by deciding to start their business in a strategic area because there would be a
lesser competition of selling the same products. Moreover, Rosli Food can be said to be the
most known kuih bangkit seller at Rengit, thus, can be less competitive and increase their profit
easily.
•
Centre of attraction for bangkit lovers
Since Rosli Food is quite famous in Rengit, hence, it can be classified as a centre of
attraction for our famous and scrumptious traditional kuih bangkit lovers. People of Batu Pahat
or even Kluang, can simply drive their way to Rengit to purchase varieties of kuih bangkit based
on their preferences.
Threats
•
Price fluctuation for raw materials during the pandemic COVID-19
According to the New Straits Times, The Malaysian economy contracted 17.1 per cent
in the second quarter of 2020 from 0.7 per cent growth in the first quarter due to the
unprecedented effect of the strict containment measures to monitor the global and domestic
pandemic of Covid-19. Consequently, it has attacked harshly to the economy and also has
brought huge impacts on the price of the raw materials.
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4.2.4 FINANCE DEPARTMENT
Strength
Rosli Food does not own any debt whether from the bank or any other institution. It is
believed that companies without debt do not face many risks. There are no required payments
and no threat of bankruptcy if the payments are not made. The beginning capital is 100% come
out from the owner. Next, Rosli Food keeps all the accounting evidence such receipt and voucher
in one place. It is easier for the company to track any transaction within the activities. Keeping
receipts of all transactions will help to claim all of the possible deductions. Lastly, Rosli Food
experienced growing profit which shows that they effectively manage their cash. Earning a profit
is important to a small business because profitability impacts whether a company can secure
financing from a bank, attract investors to fund its operations and grow its business. Companies
cannot remain in business without turning a profit.
Weakness
Rosli Food does not have a proper accounting record such as a statement of profit or
loss and statement of financial position. Properly recording the transaction will enable the
company to ensure that the financial statements of the company comply with generally accepted
accounting practice. It also will enable the financial statements to be readily and properly audited.
The second weakness is the company is not being audited by an audit firm. Audit activities are
important to provide reasonable assurance that the financial statements were free of material
misstatement. It also promoted accountability and transparency. Lastly, there are no segregation
duties in the finance department since only one person handles all the activities. Segregation or
separation of accounting duties means dividing the tasks so that different people are handling
transaction processing, data recording, financial statement preparation and auditing. Relying on
one person to handle all the accounting functions could lead to poor internal controls, accounting
fraud and misappropriation of company assets.
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Opportunity
Opportunities are about the chances for something good to be offered and happened. It
usually about the outside offers that come to the organization. The first opportunity that could be
offered to Rosli Food is tax consultant assistance. Tax consultant assistance could give services
in terms of preparing the tax return, looking for deductions in order to lower the tax burden of the
company, giving help and advice with trust and so few more things. Secondly, Innovation on the
new technology of the accounting system. The suggested innovation is having an accounting
software which could give simple and fast data processes. Innovation in accounting systems
also reduces automation of error due to the automation of processes and also saves staff cost
on manual accounting. The last one of the opportunities that could be offered is attending
seminars or training on financial affairs. Since the innovation might change from year to year,
the seminar on adopting the new knowledge or innovation also needed to be attended by the
staff of the company to gain more knowledge and be more effective and efficient in managing
the financial affairs.
Threat
The threats to the financial department of Rosli Food are an economic downturn.
Economic downturn includes a shift in market requirements, rising unemployment, falling share
price, low consumer confidence and declining investment. Although the company may not be
able to completely protect the business from an economic downturn, understanding how it could
affect the company will help the company develop a plan to minimize its impact. Other than an
economic downturn, an increase in tax payments is also one of the threats to the company.
Taxes need to be paid every year to foster economic growth and for the development of the
government. If the company did not pay the tax, the amount of tax will be increased and it will
be difficult for the company to pay. Lastly, pandemic Covid-19 is a threat to the company's
financial performance. In the year 2020, pandemic Covid-19 has hit all over the world. This
pandemic causes the economy to decline and become unstable. It also has affected all the
businesses which make certain businesses need to shut down due to suffered losses. The
pandemic has affected the sales of Rosli Food. The sales of the company decrease due to low
demand from the customers. Rosli Food also had to lower the price of their products to clear all
the stocks to prevent bigger losses. In this situation, the company has to make a better decision
for the company's benefits.
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5.0
ISSUES &
CHALLENGES
62
5.0 ISSUES & CHALLENGES
5.1 ADMIN DEPARTMENT
For every success journey, they always faced challenges or problems for them to
overcome. Some say ‘No pain, no gain’, Kelly Clarkson admit that ‘What doesn’t kill you makes
you stronger’, the late legendary boxer Muhammad Ali quotes that ‘He who is not courageous
enough to take risks will accomplish nothing in life’, and one of the greatest entrepreneur Steve
Jobs said ‘I'm convinced that about half of what separates successful entrepreneurs from the
non-successful ones is pure perseverance’. All these quotes are aiming towards the same
direction and agree that success cannot be obtained without any challenges.
Admin department is the one who manages the affairs of an organization and becomes
the link between an organization's various departments and ensures the smooth flow of
information from one part to the other. They may not be visually focused by the external party
but internally, they conduct and provide technical support for the company such as areas of
human resources (HR), strategic planning, legal affairs and company constitution. An effective
administrator is an asset to an organization. For HR, they focused more on staff welfare and any
matters related to managing employees. Unavoidable, Rosli Food faced some issues under
these departments.
The common problem in a family business is that they are overly dependent on the
founder/owner. Mr Rosli is the owner of this business which comprises his own family as its
fellow staff. Normally in a family, we always depend on our figurehead which coincidentally is
the father in the family. So, the attitude of depending on their father in their household might not
be properly separate in their business as it is a natural feeling that one should not forget.
However, there should be a separate legal entity not only financial wise but also professional
wise among the members in the company.
Other issues arise under corporate governance as their job description is not clear. Even
though they separate and delegate their duties properly, they are also actively involved in any
activities outside of their department. Not that this is a bad thing because it does mean that they
have great teamwork in the company, but it should be pointed out as it will confuse any new staff
on what their scope of work is. They may be dissatisfied with the pay they receive as they actually
did more work than they should have.
Because the higher position is filled with Mr Rosli children, it can create a controversy
that they don't require any qualification for them to be able to work in the company or the
company has a low standard and quality judging from their staff alone. This can hinder the
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company when they intend to expand their business and include more parties involved by having
a bad reputation even though it is not true.
From our study, we have found that the company doesn’t provide the worker in any
contributions or insurance. According to Section 43(1) of the EPF Act, every employee (aged
from 14 years old and up to 75 years old) and employer within the meaning of this Act shall be
liable to pay monthly contributions on the amount of wages at the rate respectively set out in the
Third Schedule (effective from 1 January 2019) ('EPF'). All employees shall be insured against
certain contingencies via the Social Security Organization as provided under Section 5 of the
Employees' Social Security Act 1969 (‘SOCSO Act’). According to Section 16 of the Employment
Insurance System Act 2017 (Act 800) (‘EIS Act’), all employees between the age of 18 and 60
years old and their employers must make the statutory contribution under the EIS Act, except
for those employees who have reached the age of 57 before the coming into operation of the
EIS Act. Failure on the part of the employers to contribute their part or to contribute on behalf of
the employees will result in the employer being fined a maximum of RM10,000.00, or up to 2
years of imprisonment, or both.
Furthermore, there is no proper channel or space for the employee to communicate with
the manager. Lacking in this area will hinder the worker's complaint to the management as they
are afraid, they cannot be expressed so confidentially. The complaint doesn’t necessarily affect
the company negatively. It’s needed to be heard by the management so they can address the
issues and be alert of their staff welfare.
Currently, they literally don't have the proper space for the administration and HR
department. All they have is a table and a chair to pair up with. They might feel comfortable with
how it is right now. But lacking formality and proper space will affect their client's wants to deal
with them. Also, it shows that they have improper filing systems. Administration department is
the same as other departments where they also have to hold and keep important documents for
the sustainability of the business.
Other than that, they don't hold meetings regularly among themselves. They are indeed
working on a smaller scale compared to the corporate level of business where it is not as
frequent as them to meet all of their employees, but this doesn’t mean that they don’t need to
have meetings periodically. When they are expanding their business, and they acquire more
new workers, they may not have the luxury to meet all at once like before and the new employees
also might feel uncomfortable to discuss any matters about the company without a proper
assembly as it may seem informal and not be taken seriously.
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5.2 MARKETING DEPARTMENT
We noticed that there are some issues and challenges of marketing in Rosli Food. Below are
the issues and challenges faced by Rosli Food:
●
Lack of use of social media in promoting business.
Rosli Food did not use many social media as its business platforms to promote the products.
The business currently owns 2 social media which are Facebook (Rosli Food) and Instagram
(@roslifood). We noticed that Rosli Food did not fully utilize the use of its social media. In
addition, there is less information provided about its business and products on its Facebook and
Instagram. The company also does not have its own business website which makes it difficult
for customers to purchase and obtain information about the products. It shows that the use of
social media is really important nowadays since people like to shop online.
●
Lack of business promotions.
The lack of business promotions may certainly reflect in the business promotional efforts,
which include advertising, sales promotion, public relations and events. Rosli Food is currently
using signboards, business cards and flyers to advertise its products which are not enough to
attract more customers and promote its products. Rosli Food should have the ability to choose
from a broad range of communication channels to provide information about its products to the
customers. Thus, it will attract more customers to purchase its products.
●
Lack of business agents.
We noticed that Rosli Food’s agents are limited and there are only agents in Kelantan,
Terengganu and Melaka. Those agents went to Rosli Food’s factory to restock the products.
This is an issue to the business because the products are difficult to be obtained and purchased
by other states. The customers need to purchase the products directly from Rosli Food and
delivery costs might be included to send the products to them. But with agents, it will be easier
for the customers to purchase the products and the risk of receiving defects products are low.
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5.3 OPERATION DEPARTMENT
●
Recognition of Malaysia Halal Certification from JAKIM
Even as a growing supplier company that specializes in producing local traditional food such
as ‘Kuih Bangkit’, Rosli Food apparently still does not have the recognition of Malaysia Halal
Certification that is certified from the Department of Islamic Development Malaysia (JAKIM). The
certification is important as it verifies as an official document stating the halal status of products
and services according to the Malaysia Halal Certification scheme issued by the competent
authority.
●
Usage of technology in the production of ‘Kuih Bangkit’
To fulfil the increase of customers’ demand, Rosli Food seemingly is not operated fully
machine-oriented in the production of ‘Kuih Bangkit’ as some production stages such as
kneading the flour, moulding the mixture, baking, packing and labelling requires human power.
●
Lack of product diversification
Rosli Food has a bright potential in the future as they have already managed to expand their
business to Singapore plus, they are also in the early stage of planning to reach the market and
fulfil the demand of ‘Kuih Bangkit’ in Indonesia and Thailand. However, as Rosli Food is not the
only traditional food supplier operated in Malaysia, they need to diversify their product lines as
product diversification is a common strategy to increase profitability and achieve higher sales
volume from new products especially in a highly competitive environment such as the food
industry itself.
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5.4 FINANCE DEPARTMENT
Rosli Food focuses too much on operating activities and overlooks other parts of the
division. Undeniable operating activities are the most important for a company which include
manufacturing, sales, advertising and marketing activities. There is typically an operating
activities section of a company’s statement of cash flows that shows inflows and outflows of cash
resulting from a company’s key operating activities. At the same point of view, the financial part
also plays a substantial role in a business. The challenges that Rosli Food faced is there are no
allocation expenses for financial. Next issue is the company does not have a proper accounting
record and is not being audited, it is difficult to determine the company’s appropriateness of their
financial activities. This issue would give impact on tax obligation processes and also in
preparing the budget and financial statement of the company. Financial statements are important
because they contain significant information about a company’s health. It also helps companies
make informed decisions since they highlight which areas of the company provide the best return
on investment.
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6.0
ANALYSIS OF
ISSUES
68
6.0 ANALYSIS OF ISSUES
6.1 MARKETING DEPARTMENT
We had analyzed the issue stated above which may impact Rosli Food business. Below is
the analysis of issues:
●
Social media has a great impact on business. It benefits business owners by helping to
reach millions of customers worldwide. Lack of use of social media might affect business
growth. It is because of the least social interaction between business and customers.
Social media helps the customer to obtain information about the products. In addition,
customer feedback could be collected through social media. It will help Rosli Food to
improve its image and performance through social media marketing. Thus, social media
is one of the crucial aspects of promoting the business.
●
Promotion is the voice of the company that sends the brand’s message loud and clear to
customers. Lack of business promotions may reduce product awareness to customers
which makes it difficult for them to find out more about the products. In addition, the least
information will be obtained by interested customers. As a result, Rosli Food may lose
its potential and new customers. A proper promotion may attract new customers and
retain existing customers. Thus, it helps in boosting the company’s profit and
performances.
●
Lack of business agents may affect the ability of Rosli Food’s profit to increase. Agents
hire will help in boosting the company’s profit by promoting the products and attracting
new customers. In some cases, good agents may attract more customers and attain the
existing customers to always purchase the products. In addition, some agents may have
the experiences, skills and knowledge in good marketing. Thus, it will help Rosli Food to
promote its business while boosting its profit.
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6.2 OPERATION DEPARTMENT
As part of the SULAM project, several issues and challenges have been detected after
managing a few interview sessions and research on Rosli Food’s business profile. Through this,
we analysed issues found as it is important to analyze the current situation, to understand the
problems that prevent the organization from progressing and to generate a range of possible
opportunities for improvement of Rosli Food itself.
●
Recognition of Malaysia Halal Certification
Begin with the first issue which is getting the recognition of Malaysia Halal Certification
from JAKIM. During the research and several interview sessions with the company, it has been
noticed that Rosli Food does not have the recognition of Malaysia Halal Certification that is
certified from the Department of Islamic Development Malaysia (JAKIM). From the rough
observation on the local markets that also sell traditional food such as Rosli Food, the majority
of the local seller does not even have the Malaysia Halal Certification or Halal logo label on their
products’ packaging although the ingredients listed on the said packaging does not contain any
suspicious ingredients that could forbid them from getting the Halal certification. As stated
before, the Halal certification is important as it verifies as an official document stating the halal
status of products and services according to the Malaysia Halal Certification scheme issued by
the competent authority. Earning the Halal recognition from JAKIM would require a period of
time as several strict conditions and requirements are needed to be fulfilled in order to finally
receive the Malaysia Halal Certification. Furthermore, as Rosli Food’s ‘Kuih Bangkit’ is steadily
growing and has started to expand their markets to the neighbourhood country such as
Singapore, getting the recognition of Malaysia Halal Certification would not only boost the
demand and sales of the products but also the image of the company that produces halal and
hygiene products to their customers.
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●
Usage of technology in the production of ‘Kuih Bangkit’
During the interview sessions with Rosli Food regarding the operation of the company,
we identified that the production of ‘Kuih Bangkit’ apparently is not 100% fully machine-oriented.
From the information given by the company, their factory that is located in Rengit only utilizes
three machines or technology for the production such as coconut shredder machine, coconut
milk machine and mixer whereas other stages of production require human power such as
kneading the flour, moulding the mixture, baking, packing and labelling the product. In addition,
the ‘Kuih Bangkit’ factory that is located in Johor Bahru on the other hand recently acquired a
custom machine from China costs RM 50,000 which specialized in moulding the ‘Kuih Bangkit’
according to the variation of product sold by the company. Even with the utilization of the custom
machine, human resources for production purposes are still needed by Rosli Food as the
specialized machine for the stage production that requires human workforce such as kneading,
baking with oven, packaging and labelling are still unavailable plus, it would be costly for the
company to request for a custom machine.
●
Lack of product diversification
Product diversification is a common strategy in order to increase profitability and achieve
higher sales volume from new products especially in a highly competitive environment such as
the food and beverages industry. Relating to the Rosli Food’s case, the company currently tends
to sell only one type of product which is ‘Kuih Bangkit’ but they are available in four other
variations which are original, cheese, cheese oreo and salted egg. Although the demand for their
‘Kuih Bangkit’ is steadily increasing, Rosli Food should consider diversifying their product line by
not only supplying ‘Kuih Bangkit’. This is because the traditional food industry is highly
competitive as many local Malaysians also produce and sell traditional food or kueh both through
online and physical markets. Furthermore, in order to expand their markets to the neighbourhood
country such as Singapore, Indonesia and Thailand while boosting the company’s economic
benefit and image, it is highly recommended for Rosli Food to introduce new ‘Kuih Bangkit’
variation or new product line with the same traditional food-based that could fulfil the customers’
demand especially to the loyal and existing customers that have already built a brand
relationship with Rosli Food.
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6.3 FINANCE DEPARTMENT
Rosli Food focuses too much on operating activities and overlooks other parts of the
division. Undeniable operating activities are the most important for a company which include
manufacturing, sales, advertising and marketing activities. There is typically an operating
activities section of a company’s statement of cash flows that shows inflows and outflows of cash
resulting from a company’s key operating activities. At the same point of view, the financial part
also plays a substantial role in a business. The challenges that Rosli Food faced is there are no
allocation expenses for financial. Next issue is the company does not have a proper accounting
record and is not being audited, it is difficult to determine the company’s appropriateness of their
financial activities. This issue would give impact on tax obligation processes and also in
preparing the budget and financial statement of the company. Financial statements are important
because they contain significant information about a company’s health. It also helps companies
make informed decisions since they highlight which areas of the company provide the best return
on investment.
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7.0
ADVICE OR
RECOMMENDATIONS
73
7.0 ADVICE/RECOMMENDATIONS
7.1 ADMIN DEPARTMENT
Since the company is still expanding their business, we recommended them to create a
board of directors. The board can help oversee the conduct of the business and supervises
management. With the new corporate statutes, it allows directors to delegate certain powers to
the officers of the corporation such as the CEO or CFO. The board can delegates’ responsibility
for the company’s day-to-day affairs to the executives. Rosli Food should appoint some nonfamily related as the board must comprise a majority of independent directors where the
chairman of the board is not an independent director.
While they are at it, they should also have an internal auditor (IA) so that they will be
provided with an objective evaluation of the existing risk and internal control framework. Not only
IA can systematically analyse the business processes and associated controls, but they can also
be a source of information on major frauds and irregularities. BY having IA, the company will
immediately be viewed as a capable and trustable company from an outsider perspective.
To reduce founder dependency, they should document every key information and store
it properly. They should also delegate the duties and give responsibilities to each of them. By
doing this, each position can understand their duties better and have better control of it.
Therefore, they don't always need to ask for the owner's opinion for any unnecessary matters.
To protect their staff welfare, the cheapest method is that they can create a proper
employment contract. Not only will this prevent a bad working environment where the workers
are kept being forced to do tasks outside their supposed ones but can also benefit the company
by preventing any future claims by the workers. A good employment contract can reduce the
disputes between two parties and translate to minimize the time and expense of a courtroom
battle that neither party can afford. Contract bond employee and employer in certain boundaries
that minimize the chances of disputes. The contract should also include the contributions,
benefits and insurance that the employees will experience such as EPF and SOCSO.
74
Next, Rosli Food should create a complaint management system. By having it, the
company can address every employee complaint, and this will show that the company cares
about their staff. You want to emphasize that their safety and well-being is your top priority.
Showing that a company can resolve complaints in a timely, effective manner will give the
employees more confidence in their workplace. It can also save the company from hefty legal
fees. Employees who feel that their concerns were not properly addressed may take legal action,
which could lead to reputation damage and fines.
Mr Rosli stated that they will move to a new location with a larger space, the company
should not forget to prepare a proper office for the administrative and human resources
department. If they say they still cannot provide a proper office as unexpectedly the operations
use the whole space, they should use other alternatives such as rent in other places for their
office. By having a proper office, they can now implement new filing systems for each
department. They can start simple like by having a rack to store the documents properly and
organize it according to each department. This will avoid any mixed documents which will provide
problems and consume more unnecessary times for the company.
Regular staff meetings are important and have such a positive impact on the business. Staff
meetings can help keep everyone informed and up to date. It let the company collaborate as a
team by providing feedback, sharing ideas and asking questions. When staff is included in
discussions and decisions of certain issues, it will be good for morale and motivation in the
workplace. Clear communication is an important part of every business. Employees need to see
an open and transparent decision-making process and need to be included because many things
affect them directly.
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7.2 MARKETING DEPARTMENT
Overall, Rosli Food was doing great in the industry. However, in a world of ever-changing
trends and tactics, there are some aspects that could be improved to enhance the efficiency and
effectiveness of their marketing strategy. Firstly, the company should widen their uses in
technologies such as websites, television and radio as well as increase the variety of social
media such as Shopee and Lazada. In order to fit and adapt into the new norm due to the COVID19 pandemic, Rosli Food should know that social media has been the primary platform for
society to shop from their home as to obey the Government’s instruction since the restriction of
Movement Control Order (MCO). This could help the company to reach as many customers as
they could either online or offline easily as some people might use technologies that others did
not use for shop.
Secondly, Rosli Food should invest more in mediums such as bunting, flyers and
brochures that are usually used as an advertisement to promote their business. It was known
that the company only used social media and business cards to make people acknowledge their
existence. These mediums could be useful and convenient especially for the agents to distribute
them along with the products ordered by the customers as it already included the business’s
location, list of products and price as well as a guideline for those who look for suppliers and
many other details. This could save time for the agents and the company itself to explain the
basic matters to the customers.
Next, it would be great if Rosli Food could attract more agents to increase sales by
offering free membership and the great commission. Since the price in the bulk purchase is
lower, the capital needed is lower too. This would give an opportunity for the agents to mark up
the selling price and receive a high commission at the same time since they did not have to
spend more on the products. The membership offered is also free which is seen as benefits for
those who want to join as an agent. The more intermediate people involved, the higher sales
can be made which is a win-win situation for both parties.
Lastly, Rosli Food should try to expand the business to other neighbouring countries
such as Thailand and Indonesia. Currently, their products had successfully entered Singapore
through the dealer so they could view this as an opportunity to enter other countries as well.
Moreover, it is an honour as those countries can get to know our culture that comes through
Bangkit as the traditional biscuits. However, Rosli Food might also want to prepare for challenges
such as currencies if they wanted to expand internationally.
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7.3 OPERATION DEPARTMENT
“Adapt what is useful, reject what is useless, and add what is specifically your own.” An
amazing quote from Bruce Lee and will always be very inspirational for us as well. Below are the
recommendations that might be very useful not just for the current situation, but also for the
future of Rosli Food:
●
Disclosure of the detailed raw materials and finished products should be included
in the Quality Control
Quality Control (QC) is a mechanism by which an organization tries to ensure that product
quality is retained or enhanced. It also allows an organization to build an atmosphere in which
both management and workers strive for excellence. This is achieved by training workers, setting
expectations for product quality and evaluating goods to search for statistically relevant
differences. Therefore, it would be best if Rosli Food (RFS) can disclose the details along with
descriptions of raw materials being used and also the finished products in their Quality Control.
For example, RFS’s QC Leader should arrange his employees under the same department to
test the units produced per day and determine if they are within the specifications for the final
product. The test aims to recognize any need for corrective action in the manufacturing process.
Good quality management helps businesses satisfy customer demand for better goods. As a
result, RFS could achieve excellent Quality Control that could succour other departments in
manoeuvring their specific job scopes.
●
Hire part-timers to replace the Indonesian workers due to the pandemic COVID-19
We have been informed that initially, there were 20 workers altogether in the Operation
Department, however, the latest update was another 8 workers were actually from Indonesia
and they were not allowed to cross the border due to the global pandemic COVID-19. For this
reason, we suggested that RFS hire part-timers in order to substitute another 8 vacancies so
that the production can continue smoothly and steadily. This can also overcome many problems
such as currently, they aren’t able to produce 2 flavours of kuih bangkit per day because there
is a lack of workers, as a result, only 1 flavour can be managed to be produced. In consequence
of this, RFS can reduce the salaries and wages since the pandemic has impacted quite
significantly for the economy, hence, it is best to cut as many costs as they can, just to make
sure the business will survive no matter what happens in the unseen future. We can never expect
a perfect storm.
77
● Create a special team to focus on sales outside Malaysia
It was a brilliant idea to widen the sales of our famous traditional kuih bangkit as it is not just
because of the taste, but also, to introduce our traditional culture to the whole wide world,
indirectly. The New Straits Times had published news regarding how Kuih Bangkit is one of the
most popular souvenirs throughout the year, especially during the festive seasons. They also
mentioned that Kuih Bangkit got its name from the dough mixture that rises when fully baked
where “Bangkit” means a rise in Malay. On that account, we are convinced that RFS’s kuih
bangkit will make their name outside Malaysia. Having agents in Singapore and Brunei is enough
already, nonetheless, they should plan properly to succeed in either Singapore, Brunei or even
other neighbouring countries such as Thailand and Indonesia. On the other hand, it is very
crucial to adhere to the Standard of Procedures (SOP) outlined by the respective countries due
to the global pandemic COVID-19. This is to ensure a good diplomatic relationship between our
South East Asian countries as well. Therefore, a special team with special skills should be
established to specifically focus on how to make sales, how to handle customers’ demands etc.
78
7.4 FINANCE DEPARTMENT
•
Prepare a proper accounting record and documentation.
Rosli Food should prepare a proper accounting record and documentation such as cash
book and bank statement, sales invoice and purchase invoice. These three sets of records are
very important and must maintain an organization to be able to track all the transactions.
Cashbook and bank statement is important to be kept because it shows the payment in and out
of the bank account. Sales invoice is a documented file where the management could store the
invoice by putting the have not yet been paid at the front of the file to help control the debtor.
Meanwhile, the purchase invoice is a file in which the management practices putting notes on
the bill that has been paid and how they paid to ease the accountant to allocate the bills into the
accounts. These records must be kept and updated regularly since it will be a tool of forecasting
the expenses in the income of the company. As can be seen from the bank statement, there are
some records which are not related to the business. The company should keep the account
clean and separated from personal accounts to have an accurate idea of business expenses.
This could help the bookkeeper to record the transaction easily. Those who are responsible for
finance activities have to put time aside to do the bookkeeping regularly or the company can
take initiative to get help with the professional advisor on the finance matter.
●
Internal control activities.
Rosli Food should prepare a statement budget for each department, for example, admin
budget, marketing budget and operating budget. This allows the allocation of the cost to prepare
all the financial statements. Good communication among departments is very important which
smoothen the progress of each cost activity. Financial statement and ratio analysis are important
to perform audit activity that would help to monitor and evaluate the performance of the company.
Provided together in Appendices 10.3 & 10.4 are the suggested budget for each department,
statement of profit or loss, statement of financial position and ratio analysis for the company.
79
8.0
CONCLUSION
80
8.0 CONCLUSION
There are so many new things that we have learnt by completing this report. The first
one is we have managed to identify the activities of the chosen company. RFS is a local supplier
selling traditional kuih bangkit to promote Halal products widely. It is also to serve the local
consumers as the demand for local food is rising from time to time. Moreover, the recipe of the
unique and scrumptious kuih bangkit was originally from the owner’s families and relatives’
recipes since years ago and it had made the kuih bangkit to become extraordinary in the market.
The owner himself is very passionate in this business industry and that has led him to open up
a company to pursue his dreams.
The second one is, we had gone through the laws and regulations governing the industry
and we have recognized the responsible ministries overseeing the industry as stated before in
the report. This is one of the most vital parts of the report as it would encourage us to first seek
knowledge based on the rules being made by the government. We have also observed the
practical aspects of the operations of the industry in Malaysia. Furthermore, Islam also taught
us to always follow the rules and avoid ourselves from any violence that could harm a lot of
people. The law and regulations of the respective industry had made us become open-minded
about the things happening around us, despite our ages. Education is very important and so
does the law.
As for the third conclusion, the critical success factors of the chosen RFS company have
been identified and we have analyzed the performance of RFS by providing this comprehensive
report. Not just that, we also managed to discuss the current issues faced by the company and
have outlined the recommendations that we thought might be helpful for the company to improve
themselves in the future if God wills.
In a nutshell, we are so grateful to have the opportunity to learn about SULAM and
experience a reality version by researching a real SME which was Rosli Food. We have gained
a lot of new experience and useful knowledge to be applied at the right time soon.
81
9.0
REFERENCES
82
9.0 REFERENCES
1. https://www.nst.com.my/business/2020/08/616534/malaysias-economy-shrinks-171pctcovid-19-impact
2. https://www.facebook.com/roslifood/?ref=page_internal
3. https://www.bharian.com.my/wanita/lain-lain/2019/05/569254/usahawan-kuih-bangkitingin-bantu-wanita-lain-berjaya
4. https://en.wikipedia.org/wiki/Rengit
5. https://www.nst.com.my/news/nation/2020/01/552912/bring-home-unique-piecemalaysia-airport
6. file:///C:/Users/Usert/Downloads/462-Research%20Article%20Text-704-1-1020200122.pdf
7. https://www.jamesgmartin.center/2020/10/did-you-know-the-ignorance-of-collegegraduates/
8. INISIATIF SULAM TERJEMAH KONSEP UNIVERSITI UNTUK MASYARAKAT
https://www.moe.gov.my/en/menumedia/electronic-media/news-and-activities/sulam2019
9. Act 452 EMPLOYEES PROVIDENT FUND ACT 1991 As At 1 March 2018
10. Act 4 EMPLOYEES’ SOCIAL SECURITY ACT 1969 As At 1 Mac 2013
11. Act 800 EMPLOYMENT INSURANCE SYSTEM ACT 2017
12. Act 265 EMPLOYMENT ACT 1955 As At 30 April 2012
13. Malaysian Code on Corporate Governance 2012 (MCCG 2012)
14. https://i-sight.com/resources/what-to-look-for-in-a-complaint-management-system/
15. En. Muhd Irsyad bin Mohd Rosli, Marketing Manager of Rosli Food.
83
16. Pn. Nur Athirah bt Mohd Rosli, Secretary and person in charge of the Finance Department
of Rosli Food.
17. Pn. Norashikin bt Bachok, Operating Manager of Rosli Food.
18. Dr Hanafiah binti Hasin, Lecturer of Integrated Case Study (MAF671)
19. (4) Rosli Food Supplier | Facebook
20. https://instagram.com/roslifood?igshid=1maw6w7rez64r
21. https://smallbusiness.chron.com/importance-labor-laws-62734.html
22. https://corporatefinanceinstitute.com/resources/knowledge/strategy/pestel-analysis/
23. https://lciweb.com/5-key-success-factors-business-no-5-finances/
24. PESTEL Analysis: Factors of PESTEL Analysis, Examples and Videos (toppr.com)
25. Financial Risk | Types of Financial Risk | Advantages and Disadvantages (educba.com)
26. 7 Types of Financial Risk - dummies
27. https://www.toppr.com/guides/business-studies/nature-and-purpose-of-business/nature-ofbusiness-risk/
28. https://www.business-to-you.com/scanning-the-environment-pestel-analysis/
29. https://www.mindtools.com/pages/article/newTMC_05.htm
30. https://web.actuaries.ie/sites/default/files/ermresources/risk_management_policy_template.pdf
31. https://www.investopedia.com/ask/answers/050115/how-can-companies-reduce-internaland-external-businessrisk.asp#:~:text=Internal%20risks%20include%20personnel%20management,trade%20wa
rs%20hurting%20international%20sales
32. https://corporatefinanceinstitute.com/resources/knowledge/finance/business-risk/
84
33. https://www.pharmapproach.com/roles-responsibilities-finance-departmentpharmaceuticalindustry/#:~:text=Finance%20Department%20is%20the%20part,of%20funds%20on%20va
rious%20assets
34. https://www.zurich.com.my/en/insurance-products/business/for-my-liabilities/productliability-insurance
35. https://www.allianz.com.my/product-liability
36. https://www.mountainone.com/news/benefits-product-liability-insurance
37. https://www.facebook.com/roslifood
38. https://instagram.com/roslifood?igshid=1prqdgpokui1b
85
10.0
APPENDICES
86
10.0 APPENDICES
10.1 INTERVIEW QUESTIONS
10.1.1 ADMIN DEPARTMENT
1. What experience do you have in administrative?
2. What is the requirement that you seem fit to work in your company?
3. How many employees are there in your Admin Department?
4. What are your greatest professional strengths and weaknesses as the Admin Manager?
5. What software and office equipment are your company currently using?
6. How would you approach a situation in which you were given a task but didn’t receive
complete instructions?
7. What are the difficulties or challenges you are facing right now?
8. How do you stay organized as the admin team/management?
9. Describe the levels of management and their duties in the company?
10. With the current number of staffs, is it efficient enough in terms of operating and
expenses?
11. How is the management of the employee’s salary is settled?
12. How often do you hold your meeting?
13. Any social contribution (CSR) initiative implemented in the company?
14. How do you calculate your labour turnover?
15. How do you organize your filing and what software are you using?
16. How many branches do you have?
17. What is your vision, mission and objective of the company?
18. Is there any planning to expand your business to other states?
19. Are there any employee benefits?
20. How do you structure your organizational plan?
21. Is there any planning to diversify your product?
87
10.1.2 MARKETING DEPARTMENT
People
1. Who is your target market/buyer? And which level of ages?
2. Who is your competitor marketing to?
3. What preferences do your customers have in purchasing your products?
4. What is the company’s step to gain the trust from consumers?
Price
1. What price setting method is used in setting your products' price?
2. Does the price of the product is reasonable based on its features?
3. What are the price range differences between your product and competitor’s product
price?
Promotion
1. What platform did you use to promote your business? E.g website, social media or radio
2. What type of material do you use to advertise and how much is their average cost per
month? E.g banners, posters, brochures.
3. What kind of promotion do you use to attract customers? Eg, lower price when buy 2
4. How did you encourage customers to come and recommend them to their friends?
5. Is there any discount given to the customers for any occasion?
Product
1. What is the specialty of the company’s product compared to the existing product?
2. How can you measure the customers’ satisfaction towards your product and how do you
improve their satisfaction?
3. How to differentiate your product with other competitors?
4. Does your business keep up with the current trend?
5. Have you ever received any complaints towards your products? If yes, what is your action
to improve and handle the complaints?
6. Is there any problem in terms of the adequacy of the product? And if there is any excess
of the product for the day, how are you going to deal with it?
88
Place
1. Does this place belong to you? If rent, is this business place worth the cost of rent?
2. Why and how do you decide your current business’s location?
3. Does this business location give you the ability to expand and large enough for your
business?
4. Does this location easily can be accessed by the customers?
Where are your competitors’ business located?
89
10.1.3 OPERATION DEPARTMENT
1. Day-to-day process on making the kuih bangkit from raw materials to finished product.
2. Do Rosli Food perform Quality Checks on materials or products?
3. Comply with the Food Regulations?
4. Are there any contingency plans (e.g unable to get enough raw materials etc.)
5. Are there any differences on the operations pre-covid 19 and during covid-19?
6. Do you have any experience/problems negotiating contracts with outside suppliers?
7. Operations managers need to work with large amounts of data daily. Tell me about your goto data processing and statistical software.
8. What is your process for identifying and overcoming bottlenecks in your projects?
9. As efficiency and productivity increase, how do you ensure quality is maintained?
10. As you analyse current processes, what information do you look at? How do you identify
problems and solutions?
11. What is the specialty of your products more than other competitors?
12. Who do you think your competitors are?
13. Can you tell us about the daily tasks you have handled?
14. How do you manage the operating/process budget and manage the wastage of the day?
15. What are the challenges you faced in managing and allocating the operation process?
16. Please share an experience you had in dealing with a difficult employee and how you
handled the situation (if any)
17. Share more about how you organize, plan and prioritize your work.
18. How do you segregate the work of the day to ensure the job is done successfully?
19. Any specific policies established for the operations department.
20. Is there any internal control taken for the operations process?
21. Estimation of usage for the indirect cost such as electricity and water bills as well as other
hidden cost (transportation, shipping)
22. Where do you guys get the inspiration to innovate different kinds of kuih bangkit from other
competitors?
23. What is the specialty of your products more than other competitors?
24. Estimation of the price for raw materials (monthly)
90
10.1.4 FINANCE DEPARTMENT
1. How much is your initial investment/paid-up capital at the beginning of your business?
2. Do you have partners and what is the understanding?
3. What is your financial year-end date?
4. In preparing the company's financial statements, is your company in compliance with the
MFRS guidelines?
5. Do you use any accounting software to prepare your accounts? Have you had your financial
statements audited by the outside auditor?
6. Do you practice segregation of duties in your finance department?
7. Do you prepare the financial analysis of the business at the end of each reporting year to
assess the performance of your business?
8. What is the company's most significant financial challenge?
9. Since the start-up of your business, have you injected additional capital?
10. Do you receive financial support like a loan to a small business in your business?
11. Is there any help from government agencies?
12. Do you have your accountant with the company, or do you hire accountants or outside parties
to prepare your financial statements?
13. How did you manage the financial during this pandemic?
14. Did you manage to pay tax for your business?
15. Is there any difference in your business's sales performance before and after the pandemic?
16. How did your business record the business transactions?
17. What is the business average sales from year to year?
18. Does your company keep accounting records including invoices, vouchers and receipts for
at least two years?
19. Who is responsible for preparing the financial statement or financial report? (If they properly
record the transaction)
20. Does your business prepare the profit or loss forecast each quarter to be reviewed?
21. In a month, how many times did you restock your inventory?
22. How did you manage your debtors and creditors?
23. What is your plan to have proper financial management?
24. How did you compute the selling price per unit and how much the cost incurred?
25. State two financial goals for your business.
26. Do you have proper insurance for the business if anything happens? And how much does it
cost?
91
27. Do you have any other business? If yes, which part of your business is not profitable?
28. How many assets do you have?
29. Do you buy assets by using a hire purchase method or cash?
Did you rent or owned the premise?
92
10.2 OTHERS (PICTURES & VIDEOS)
93
94
10.3 EXPECTED TOTAL BUDGET PER DEPARTMENT
10.3.1 ADMINISTRATION DEPARTMENT - 2019
ITEMS
FIXED
ASSET
MONTHLY
EXPENSES
OTHERS
EXPENSES
TOTAL
(RM)
RENTAL
Building
600.00
7,200.00
FIXED ASSET
Office Equipment
4,021.60
4,021.60
Furniture& Fittings
1,500.00
1,500.00
WORKING CAPITAL
Salary
7,800.00
93,600.00
Electricity bill
120.00
1,440.00
Water bill
50.00
600.00
Telephone
250.00
3,000.00
UTILITIES
OTHER EXPENSES
Stationery expenses
50.00
50.00
Renewal Business license
60.00
60.00
Insurance
250.00
3,000.00
Facility upkeep
50.00
600.00
Depreciation
TOTAL BUDGET
5,521.60
9,120.00
95
-
-
110.00
115,071.60
10.3.2 MARKETING DEPARTMENT - 2019
ITEMS
FIXED
ASSET
MONTHLY
EXPENSES
OTHERS
EXPENSES
TOTAL
(RM)
FIXED ASSET
Signboard
600.00
600.00
WORKING CAPITAL
Salary
2,400.00
28,800.00
200.00
2,400.00
Electricity bill
30.00
360.00
Water bill
15.00
180.00
Internet
89.00
1,068.00
Staff training
UTILITIES
OTHER EXPENSES
Business card
350.00
Social media advertising
100.00
Signage fee - majlis
Depreciation
TOTAL BUDGET
600.00
2,834.00
96
350.00
1,200.00
250.00
250.00
-
-
600.00
35,208.00
10.3.3 OPERATION DEPARTMENT - 2019
ITEMS
FIXED ASSET
EXPENSES
(RM)
MONTHLY
EXPENSES
(RM)
OTHER
EXPENSES
(RM)
TOTAL
(RM)
Fixed Assets
Hilux
86,500.00
86,500.00
Van
60,000.00
60,000.00
1,690.00
1,690.00
machine
4,180.00
4,180.00
Mixer
1,200.00
1,200.00
Oven
16,000.00
16,000.00
Gas stove
150.00
150.00
Pot
100.00
100.00
Roller dough
50.00
50.00
Mold
50.00
50.00
Coconut Grinder
Machine
Coconut
Processing
Working capital
Salaries
21,100.00
253,200.00
Raw Material
33,000.00
396,000.00
1,000.00
12,000.00
420.00
5,040.00
Utilities
Electricity Bill
Water Bill
Other expenses
First aid
45.00
45.00
Fire extinguisher
80.00
80.00
Uniform
390.00
390.00
Packaging
9,000.00
108,000.00
Gas
300.00
3,600.00
Petrol
500.00
6,000.00
97
Toll
Roadtax
250.00
&
Insurance
Repair
1,500.00
1,500.00
700.00
700.00
10,000.00
10,000.00
-
-
12,715.00
969,475.00
&
maintenance
R&D Cost
Depreciation
TOTAL
3,000.00
169,920.00
65,570.00
98
10.4 FINANCIAL STATEMENTS & RATIO ANALYSIS (DRAFT)
Rosli Food
Statement Of Profit or Loss for the year end 2019
RM
Sales
(Less) Cost Of Good Sold
Opening Stock
Purchase
Net Purchase:
Add : Carriage Inward
Cost Purchase
(Less) Closing Stock
Cost of Good Sold
GROSS PROFIT
RM
1,458,305.00
2,200.00
396,000.00
398,200.00
500.00
398,700.00
1,800.00
400,500.00
1,057,805.00
(Less) Expenses
Administration expense
Marketing expenses
Operating expenses
109,550.00
34,608.00
799,555.00
943,713.00
Net Profit
114,092.00
99
Asset
Rosli Food
Statement Of Financial Position as at 2019
RM
RM
RM
Cost
Depreciation
Non-Current Assets
Office Equipment
Hilux
Van
Coconut Grinder Machine
Coconut processing machine
Mixer
Oven
Gas stove
Pot
Roller dough
Mold
Furniture & Fittings
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
-
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Tangible Assets
Signboard (Rengit)
1.00
-
1.00
13.00
Current Assets
Ending Inventory
Bank
Cash
1,800.00
360,671.27
15,000.00
377,471.27
377,484.27
Total Assets
Liabilities and Shareholders' Equity
Shareholders' Equity:
Capital
Net Profit
263,392.27
114,092.00
377,484.27
Total Shareholders' equity
100
RATIO ANALYSIS
EFFICIENCY
RATIO
FORMULA
CURRENT
ASSET
TURNOVER
Net Sales
= RM 1,458,305
= RM 1,452,305
Average
Current
Assets
RM(377,471.27 +
362,875.82) /2
RM(266,612.27 +
377,471.27) /2
= 3.94 times
= 4.51 times
PROFITABILI
TY RATIO
FORMULA
GROSS
PROFIT
MARGIN
Gross Profit
Net Sales
YEAR 2019
YEAR 2019
YEAR 2020
YEAR 2020
= RM 1,107,305
RM 1,458,305
= RM 1,029,705
RM 1,452,305
= 75.93%
= 70.90%
101
ANALYSIS
Both year shows
good
performance
since the ratio is
above 1.
ANALYSIS
Year 2019 is
more efficient
since the ratio is
higher compared
to 2020.
102
10.5 MARKETING PERSONNEL & REMUNERATION
LIST OF MARKETING PERSONNEL & REMUNERATION
Marketing personnel shows the total flow of salary and contribution made by the marketing
department in the company. As for Rosli Food, all the staff are required to make a contribution
on EPF and SOCSO with the fixed rate of 11% and 1.75% respectively.
POSITION
Marketing
NUMBER
MONTHLY
OF
SALARY
STAFFS
EPF
SOCSO
TOTAL
CONTRIBUTION
CONTRIBUTION
(RM)
(RM)
11% (RM)
1.75% (RM)
1
1,800
198
31.50
2029.50
1
1,800
198
31.50
2029.50
Staff
Total
103
10.6 MARKETING BUDGET
MARKETING BUDGET
Marketing budget is a detailed statement of financial results that are expected for a month. Rosli
Food has a signboard, salary of marketing staff, flyers and business card.
ITEMS
FIXED
WORKING
OTHER
ASSETS
CAPITAL
EXPENSES
(RM)
(RM)
(RM)
TOTAL
(RM)
FIXED ASSET
Signboard
2,500
WORKING CAPITAL
Salary/EPF/SOCSO
-Marketing Staff
2,029.50
MISCELLANEOUS
Flyers
310
Business Card
350
Packaging
12,000
Social Media Advertise
200
Staff Training
Total
200
2,500
2,229.5
104
12,860
17,589.50
ID
Task
Mode
1
2
3
4
5
6
7
8
9
10
11
12
13
Project: sulam
Date: Wed 1/6/21
Task Name
Duration
SURVEY
6 days
Begin
0 days
Analyze the the
5 days
business to be chosen
for the case study
Each department were 5 days
preparing the
questionaire
Making
final decision to 1 day
choose Rosli Food
INTERVIEW
11 days
Farhana represent
5 days
MAC2208F to contact
the owner of Rosli Food
Farhana met with the 1 day
owner
All department study 5 days
all the questionaire that
have been answered by
the owner
REPORT
13 days
Having consultation
1 day
with Dr.Hanafiah
Searching for
1 day
information that
related to Dr
theHanafiah
project 1 day
Submit
Start
Finish
Mon 11/23/20 Mon 11/30/20
Mon 11/23/20 Mon 11/23/20
Mon 11/23/20 Fri 11/27/20
Nov 22, '20
S
M
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W
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11/23
Mon 11/23/20 Fri 11/27/20
Mon 11/30/20 Mon 11/30/20
Tue 12/1/20
Tue 12/1/20
Tue 12/15/20
Mon 12/7/20
Tue 12/8/20
Tue 12/8/20
Wed 12/9/20 Tue 12/15/20
Wed 12/16/20 Fri 1/1/21
Wed 12/16/20 Wed 12/16/20
Thu 12/17/20 Thu 12/17/20
Fri 12/18/20
Fri 12/18/20
Task
Inactive Summary
External Tasks
Split
Manual Task
External Milestone
Milestone
Duration-only
Deadline
Summary
Manual Summary Rollup
Progress
Project Summary
Manual Summary
Manual Progress
Inactive Task
Start-only
Inactive Milestone
Finish-only
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ID
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Mode
14
15
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19
20
Project: sulam
Date: Wed 1/6/21
Task Name
Duration
Each department cost
budget for that need to
submit to financial
department
All department were
having discussion on
the problem arise and
also preparing the
report.
Financial department
was preparing the
financial statements
Presentation
All department are
preparing the slides
Presentation Day
End
Start
Finish
5 days
Mon 12/21/20 Fri 12/25/20
4 days
Mon 12/28/20 Thu 12/31/20
1 day
Fri 1/1/21
Fri 1/1/21
4 days
3 days
Mon 1/4/21
Mon 1/4/21
Thu 1/7/21
Wed 1/6/21
1 day
0 days
Thu 1/7/21
Thu 1/7/21
Thu 1/7/21
Thu 1/7/21
Nov 22, '20
S
M
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Task
Inactive Summary
External Tasks
Split
Manual Task
External Milestone
Milestone
Duration-only
Deadline
Summary
Manual Summary Rollup
Progress
Project Summary
Manual Summary
Manual Progress
Inactive Task
Start-only
Inactive Milestone
Finish-only
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Project: sulam
Date: Wed 1/6/21
Task
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External Tasks
Split
Manual Task
External Milestone
Milestone
Duration-only
Deadline
Summary
Manual Summary Rollup
Progress
Project Summary
Manual Summary
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Inactive Milestone
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Page 4
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INTRODUCTION TO MAF671
SULAM PROJECT ON SME
(week 9 - week 14)
TOTAL : 35% of THE TOTAL ASSESSMENT
§ group presentation (10%)
§ written report (10%)
§ project management (5%)
§ SME evaluation (10%)
intro to SULAM maf671
1
Guidelines for Case Analysis
1. Real life case analysis involving data
collection process from various sources
including online and telephone interviews,
internet and other published and
unpublished sources.
2. Prepare for group oral presentations.
3. Prepare group written report and
advisory report.
4. Taking different roles in a decision making
process.
intro to SULAM maf671
5. The ethical awareness
in decision-making.
2
Effective Case Analysis
• Gaining familiarity with facts and situation, and
recognizing the degree of certainty/uncertainty.
• Recognizing symptoms and the true problems.
• Identifying goals.
• Conducting systematic analysis (internal and external
environment analysis of the business such as Value
Chain Analysis, SWOT, DPESTE, Porter’s Five Forces etc.)
• Making the diagnosis to help prioritize problems and
predicaments.
• Coming up with detailed recommendations or
solutions
intro to SULAM maf671
3
SULAM ON SME
• This is a class project involving all
members of the class.
• Each class need to identify a SME (small
and medium size enterprise):
• For the manufacturing sector, a firm with
sales turnover not exceeding RM50 million
OR number of full-time employees not
exceeding 200.
• For the services and other sectors, a firm
with sales turnover not exceeding RM20
million OR number of full-time employees not
exceeding 75
intro to SULAM maf671
4
Group Organisation
• Divide the class into smaller teams (maybe according
to functions or department which ever is appropriate,
eg.teams for operation, accounting & finance, HR &
administration etc)
• each team will be responsible to study specific area(s)
of the business (unit/function/department).
• Identify the main issue(s) that the business
area/unit/function is facing, and try to come up with
suggestions or recommendations to resolve the
issue(s). Suggestions & recommendations given
should consider the strength and weaknesses of the
company and also the overall condition of the external
environment.
intro to SULAM maf671
5
Group Organisation
• Each team performance will be assessed
collectively during presentation and for the report
prepared.
• For business advisory report ( a comprehensive
report prepared for the SME); this report will be
assessed solely by the key person of the SME. All
students in the class will get the same mark for
this assessment. This report compiles all the
finding and recommendations obtained by all
teams in the class. make sure to prepare a
concise and not too lengthy report for the SME.
intro to SULAM maf671
6
Group Organisation
• A maximum of 5% will be awarded for excellent project
management. This is after considering the group
planning and organisation as well as teamwork shown
by all members in this class.
• Please demontrate high level of ethical
professionalism and appropriate communication skills
as you work and conduct the case study for this
project.
• Treat all data and information obtained from the
company as highly private and confidential at all time.
• Report the progress of the project to me every week
intro to SULAM maf671
7
what you need to do
• Conduct a case study analysis on the
company to identify:
• the background of the company, strengths and
weaknesses,
• the threats & opportunities
• the main issues or problems existed in the
company and
• finally prepare a business proposal to the
management highlighting the action plans or
initiatives that can be done to resolve the
issues or problems.
intro to SULAM maf671
8
SULAM PROJECT: the time line:
week task/activity
9
Identification of SME
Establishment of project committee members
Team/small groups formation
Distribution of tasks
10
SULAM interviews / data collection
11
SULAM interviews / data collection & analysis
12
Data analysis and preparation of
report/presentation
Group presentation
Submission of team/group report
13
14
Submission of Business Advisory Report
9
the assessment rubrics:
Assessment Component
Group Oral Presentations – SME Analysis (small group)
Group Business Advisory Report (small group)
SULAM Project Management (entire class)
SME Evaluation and Reflection (entire class)
TOTAL
intro to SULAM maf671
Weightage
10%
10%
5%
10%
35%
10
Group oral presentation (10%)
Particular
Poor
Moderate
Satisfactory
Good
Excellent
Total
marks
10
1
Execution, documentation, and
discussion of data collection
process
Data collection
process is extremely
poorly executed,
documented, and
explained
Data collection process is
poorly executed,
documented, and
explained
Data collection process is
satisfactorily executed,
documented, and
explained
Data collection process
is well executed,
documented, and
explained
Data collection process
is exceptionally well
executed and
documented, and
explained
2
Evaluation of strengths and
weaknesses of the assigned
area/functional department
within the company
Fail to identify the
strengths and
weaknesses of the
assigned
area/functional
department within the
company
Able to identify some of
the strengths and
weaknesses of the
assigned area/functional
department within the
company but fail to
explain them clearly
Able to identify the some
of the strengths and
weaknesses of the
assigned area/functional
department within the
company and explain
them clearly
Able to identify all
possible strengths and
weaknesses of the
assigned area/functional
department within the
company and explain
them clearly
Able to identify all
possible strengths and
weaknesses of the
assigned area/functional
department within the
company and explain
them very well
20
3
Evaluation of issues faced by
the assigned area/functional
department within the company
Fail to identify and
analyse the issues
faced by the assigned
area/functional
department within the
company
Able to identify the issues
faced by the assigned
area/functional
department within the
company but analyse
them only superficially
Able to identify the issues
faced by the assigned
area/functional
department within the
company and analyse
them fairly completely but
not thoroughly
Able to identify issues
faced by the assigned
area/functional
department within the
company and analyse
them insightfully and
thoroughly
Able to identify issues
faced by the assigned
area/functional
department within the
company, analyse them
insightfully and
thoroughly, and present
the analyses clearly
30
4
Appropriateness of proposed
recommendations for the
identified issues
No action and/or
inappropriate solutions
proposed for identified
issues
Little action and/or
slightly appropriate
solutions proposed for all
of the identified issues
Appropriate but
superficial solutions
proposed for some of the
identified issues.
Appropriate actions
and/or solutions
proposed for all of the
identified issues.
Appropriate and wellreasoned
actions/solutions
proposed for all of the
identified issues.
30
5
Presentation effectiveness
The presentation is
poorly done with poor
design of presentation
slides, flow of thoughts,
and verbal delivery of
the content.
The oral presentation is
fairly done with a fair
design of presentation
slides, flow of thoughts,
and verbal delivery of the
content.
The oral presentation is
satisfactorily done with
satisfactory design of
presentation slides, flow
of thoughts, and verbal
delivery of the content.
The oral presentation is
well done with good
design of presentation
slides, flow of thoughts,
and verbal delivery of
the content.
The oral presentation is
exceptionally well done
with excellent design of
presentation slides, flow
of thoughts, and verbal
delivery of the content.
10
100
intro to SULAM maf671
11
Group advisory report (10%)
Particular
Poor
Moderate
Satisfactory
Good
Excellent
Sufficiency of
industry and
strategy analyses
Depth and breadth
of the analysis of
the assigned
area/functional
department
performance
Industry and
strategy analyses
are insufficient
and poorly
discussed.
Industry and strategy
analyses are insufficient
but discussed fairly
satisfactorily.
Industry and strategy
analyses are sufficient and
discussed fairly
satisfactorily.
Industry and strategy
analyses are sufficient
and discussed well.
Industry and strategy
analyses are thorough and
discussed exceptionally well.
Analysis is
superficial with
no discussion on
the link between
the performance
of the assigned
area/functional
department and
the company’s
overall
performance.
Analysis is fairly
comprehensive with the
link between the
performance of the
assigned area/functional
department and the
company’s overall
performance poorly
discussed.
Analysis is comprehensive
with the link between the
performance of the
assigned area/functional
department and the
company’s overall
performance satisfactorily
discussed.
Analysis is
comprehensive with
the link between the
performance of the
assigned
area/functional
department and the
company’s overall
performance welldiscussed.
Analysis is very
comprehensive and insightful,
with the link between the
performance of the assigned
area/functional department
and the company’s overall
performance thoroughly
discussed.
20
3
Depth and breadth
of SWOT analysis
SWOT analysis is
superficial.
SWOT analysis is fairly
comprehensive but
poorly discussed.
SWOT analysis is
comprehensive and
satisfactorily discussed.
SWOT analysis is
comprehensive, and
well-discussed.
SWOT analysis is very
comprehensive and insightful,
and thoroughly discussed.
20
4
Originality of ideas,
views and/or
recommendations
No original ideas,
views, and/or
recommendation
s included in the
presentation.
Little original ideas,
views, and/or
recommendations
included in the
presentation.
Superficial and /or some
original ideas, views,
and/or recommendations
included in the presentation.
Many original ideas,
views, and/or
recommendations
included in the
presentation but some
are not well-reasoned.
Many original ideas, views,
and/or recommendations
included in the presentation
all of which are highly
convincing, and wellreasoned.
20
5
Presentation of
business advisory
report
The report is
extremely poorly
written with
numerous
grammatical and
spelling errors,
and a lack of
logical flow
making it hard to
follow.
The report is poorly
written with major
grammatical and
spelling errors, and a
lack of logical flow.
The report is satisfactorily
written with minor
grammatical and spelling
errors, but with a lack of
logical flow.
The report is wellwritten with minimal
grammatical and
spelling errors, and a
clear logical flow.
The report is exceptionally
well-written with no
grammatical and spelling
errors, and a very clear
logical flow.
20
1
2
TOTAL
intro to SULAM maf671
Total
Marks
20
100
12
Business Advisory Report (10%)
(assessed by SME)
Particular
POOR
MODERATE
SATISFACTORY
GOOD
EXCELLENT
1
Presentation of
business
advisory report
The report is
poorly written and
hard to follow.
The report is
satisfactorily
written and fairly
easy to follow.
The report is wellwritten and easy to
follow.
The report is exceptionally
well-written and extremely
easy to follow.
2
Originality and
practicality of
recommendatio
ns
The report is
extremely poorly
written and
extremely hard to
follow.
No original and
practical ideas,
views, and/or
recommendations
proposed in the
report.
Little original and
practical ideas,
views, and/or
recommendations
proposed in the
report.
Superficial and /or
some original and
practical ideas,
views, and/or
recommendations
proposed in the
report.
Many original and
practical ideas,
views, and/or
recommendations
proposed in the
report but some are
not well-reasoned.
Many original and
practical ideas, views,
and/or recommendations
proposed in the report all
of which are highly
convincing, and wellreasoned.
TOTAL
intro to SULAM maf671
Total
Marks
50
50
100
13
Project management (5%)
Particular
POOR
MODERATE
SATISFACTORY
GOOD
EXCELLENT
1
Overall project
planning and
execution
No contact with
interviewee and
advisor.
Limited contact
with interviewee
and advisor;
interviewee and
advisor are not
satisfied with the
project.
Interviewee and
advisor contacted
frequently;
interviewee and
advisor are satisfied
with project
progress.
Interviewee and advisor
contacted in timely
manner and thoroughly
satisfied with project
progress.
2
Project
coordination
The project is run
solely by the
team leader with
its progress never
communicated to
all team members
and advisor
The project is
poorly
coordinated with
its progress rarely
communicated to
all team members
and advisor
The project is well
coordinated with its
progress frequently
communicated to all
team members and
advisor
The project is
exceptionally well
coordinated with its
progress always
communicated to all team
members and advisor
20
3
Task delegation
Tasks are not
delegated.
Tasks are poorly
delegated to only
certain team
members.
Tasks are welldelegated to all
team members.
Tasks are exceptionally
well-delegated to all team
members.
20
4
Development of
interview
questions
Interview questions are
well developed with all
relevant aspects
accounted for.
20
Conduct of
interview
sessions
Interview
questions are
well developed
with all relevant
aspects
accounted for.
Interview session
runs poorly.
Interview questions
are well developed
with all relevant
aspects accounted
for.
5
Interview
questions poorly
developed with
major relevant
aspects not
accounted for.
Interview session
runs extremely
poorly.
Interviewee and
advisor contacted
frequently;
interviewee and
advisor are
satisfied with
project progress
but provided some
suggestions for
improvements.
The project is
satisfactorily
coordinated with
its progress
occasionally
communicated to
all team members
and advisor
Tasks are
satisfactorily
delegated to
nearly all team
members.
Interview
questions are well
developed with all
relevant aspects
accounted for.
Interview session
runs satisfactorily.
Interview session
runs smoothly.
Interview session runs
professionally well.
20
TOTAL
100
intro to SULAM maf671
Total
Marks
20
14