Analyzing Company Group Reporting Practice

This document provides an analysis of company group reporting practice, including the nature of business, management structure, type of company, non-controlling interest, investing activity, operating segments, foreign operation, and share based payment practice. It also discusses the issues and changes due to the global pandemic.

Analysing on the selected
company group reporting
practice

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
Nature of business and management structure............................................................................1
Type of company and non-controlling interest (MFRS 10)........................................................1
Investing activity in associate company or joint venture (MFRS 11 & 128)..............................1
Operating segments of company (MFRS 8)................................................................................2
Foreign operation of company (MFRS 121)...............................................................................3
Share based payment practice in the company (MFRS 2)...........................................................3
Employee benefits provided by the company (MFRS 119)........................................................4
Issues and changes due to global pandemic................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Annual report gives important information about company's operation and financial position
to investors and stakeholders. It affects the decision making of those who are interested in annual
report of organization (Ascui and Lovell, 2012). It increases transparency and credibility of the
organization. It gives detail about organization's achievement, profitability, market share gain
etc. The main reason of these report is to satisfy investors about their investment. It is kind of
marketing tool as it creates impression about organization among customer and investors. Press
metal is a multinational company which is serving in different countries. It is established in the
year 1986 by Poh Keong in Malaysia. The company is selling aluminium ingots in domestic and
export market. In this report we discuss about the nature of business and management structure,
analysis on type of company and non- controlling interest, analysis on investigating activity,
analysis on operating activity, analysis on foreign operations, analysis on share based pricing
practice, analysis on employee benefit provided by the company.
TASK
Nature of business and management structure.
The company is manufacturing and trading in aluminium products range from cookie mould to
architectural shapes. They are providing wide range of metal for different use. They are
providing best quality product to their customer. Press metal group is wide ranging group in
South East Asia as its smelting productivity is 760000 tonnes and extrusion capacity is 160000
tonnes per annum.
Management structure define job description and responsibility in a business unit. In Press
Metal, management provide information to the board of directors on quarterly basis. The
information includes financial information and performance indicators like Product sales
analysis, operating cost analysis and cash flow performance. Member of board visit business
operating units and management team in every 6 months.
Press Metal Berhad  System of Environmental Management based on
ISO 14001:2015
 System of Occupational Health and Safety
Management based on ISO 45001:2018
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PMB Sdn. Bhd. System of Quality Management based on ISO 9001:2015
Press Metal International Limited  System of Environmental Management based on
ISO 14001:2015
 System of Quality Management based on ISO
9001:2015
 Management of Occupational Health and Safety
based on BS OHSAS 18001:2007
 System of Energy Management based on ISO
50001:2011
Press Metal Sarawak Sdn. Bhd.  System of Quality Management based on ISO
9001:2015
 System of Environment Management based on
ISO 14001:2015
 System of Occupational Health and Safety
Management based on ISO 45001:2018
Press Metal Bintulu Sdn. Bhd.  System of Quality Management based on ISO
9001:2015
 System of Environment Management based on
ISO 14001:2015
 System of Occupational Health and Safety
Management based on BC OHSAS 18001:2007
Press Metal International
Technology Ltd.
 System of Quality Management based on ISO
9001:2015
 System of Environment Management based on
ISO 14001:2015
 System of Occupational Health and Safety
Management based on BS OHSAS 18001:2007
Press Metal Aluminium Rods Sdn.
Bhd.
 System of Quality Management based on ISO
9001:2015
 System of Environment Management based on
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ISO 14001:2015
 System of Occupational Health and Safety
Management based on OHSAS 18001:2007
Type of company and non-controlling interest (MFRS 10).
Press Metal is a multinational group dealing in variety of products. It is a Malaysian based
company, producing and trading aluminium products (Boučková, 2015). The company is having
its operation in metal mining industry and is of large scale with global reach. They are doing
upstream smelting operations to downstream extruding activity. The company have speciality in
aluminium smelting, aluminium billet, high purity aluminium ingot, aluminium wire rod,
aluminium extrusion etc. They have annual production of aluminium around 760000 tonnes.
They have their manufacturing unit located in Malaysia and Chine and has distribution office
across world.
MFRS 10 is a consolidated financial statements which is equivalent to the IFRS 10 and its
objective is to establish the presentation and should prepare the financial statements and which
have proper control on more than one entities so the decision regarding the company’s future
growth are to be taken in proper manner and it also helps in analysing the profit and loss of the
company. The debt equity instruments are not traded in the market so the decision regarding this
should be taken properly so that the company would not get affect.
MFRS 10 should have a proper control on the consolidated financial statements. Non-
controlling interest is a position where shareholder's ownership in outstanding share is less than
50% and there is no control of parent company over subsidiary corporation. It is also known as
minority interest. Through analysing the Press Metal Group's report, it has been identified that
non-controlling interest of the company for the year 2019 is 97,630. It is equity in a subsidiary
and not outstanding directly or indirectly to the owners at the end of period. These are presented
in consolidated financial statements and statements of change in equity. It is presented in the
consolidated profit and loss statement and as an allocation of profit and loss in other
comprehensive and whole year total comprehensive income between owner of company and
non-controlling interest. The group make changes in ownership interest in subsidiary and it does
not result in loss because of equity transaction between non-controlling interest and owners.
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Investing activity in associate company or joint venture (MFRS 11 & 128).
MFRS 11: It is a new standard adopted by the companies and replace all the values of the
IAS 31. This section introduces the new definition of the Joint control as they agreed upon the
sharing of control of an arrangement which exist only when the consent parties having the proper
control on it. It helps in identifying the transparency and the credibility of the financial accounts
of Malaysian. The objective is to establish the principals which have the interest in the
arrangement and are jointly controlled.
MFRS 128: The objective of an MFRS128 helps in prescribing the accounting for
standards and the investments and helps in setting out the requirements for the methods of equity
when the investments are associates and are jointly ventured.
These sections help PRESS METAL ALUMINIUM HOLDINGS BERHAD group the
amendments of the company are to have the contribution of assets between the investors and the
joint ventures so the decision taken by the company in proper manner (Bromiley and et.al.,
2015). The MFRS 11 can be applied in the company only when the companies have to or more
parties and have the joint control in the company. If there is an agreement or the parties have a
joint control on the company, then only the MFRS 11 will be applied. It helps in taking the
decision about the relevant activities of an organisation and the parties sharing the control
properly.
If the company has the joint arrangement with the other, then the decision related to the
MFRS 11 can be taken place in a proper manner. It helps in accomplishing the rights of an
organisation so the decision is taken properly and will not affect the company. MFRS 128 is
applied in all the entities in which the investors have the proper control and also have an
influence over the investee so the decision regarding the company is to be done in a proper
manner and will not affect the organisation. Under section MFRS 128 of the PRESS METAL
ALUMINIUM HOLDINGS BERHAD group helps in providing the long term interest so the
decision is to be taken properly in an organisation. IT helps the company can associate at the fair
value and can use the equity methods so the decisions in a company is to be taken properly. The
metal aluminium company choose each methods for the investment and should have an initial
recognition so the decision is to be taken care in proper manner.
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Operating segments of company (MFRS 8).
MFRS 8 is same as the IFRS 8 it is an operating segment which includes the issuance and the
effective date of an organisation. This helps in disclosing the information and helps in evaluating
the nature and the effects in the business activities and also engage in the economic environment
so the decision is to be taken in proper manner. The MFRS 8 will apply to the separate or the
financial individual statements and the consolidate finance so the decision is to be taken care in
the proper manner. This helps in providing the limit of the disclosure of the information as the
company can not disclose its all performance like financial statements so the decisions are to be
taken care in the proper manner and it will not affect the organisation properly. It is done in the
large firm so the performance is to be evaluated and the decision is to be taken care in the proper
manner. It helps in identifying the most and the less effective segments. It is important for the
companies as the stakeholders have the proper views on the activities so the organisation growth
can be achieved and helps in identifying the profit and loss of the companies (Bui and De
Villiers, 2017).
These sections help PRESS METAL ALUMINIUM HOLDINGS BERHAD group to
have its future growth and helps in identifying the information about the operating segments in
an organisation so that there is the proper disclosure related to the products and the services so
the decision can be taken easily by an organisation. These segments are not included in the
financial statements so the decisions are to be taken properly in an organisation and will also
have a growth in the future. The press metal aluminium company engage in the activities which
helps in earning the revenues and incur the expenses so that there is easy flow in the company
and have the proper use of resource in a company. IT helps the company to allocate the resource
in a most effective way so the decisions related to the company are to be taken properly and
using the resource where there is a high effectiveness and can also have a future growth. IT helps
in disclosing the information about the companies in which the revenues are earned and the
firm’s major customers so the information is disclosed properly so the decision is to be taken on
the timely basis (Mouritsen and Kreiner, 2016).
Foreign operation of company (MFRS 121).
MFRS 121 is a treatment in which the transactions related to the foreign exchange rates take
place and helps in dealing with the foreign currency by which the company has to pay the tax.
Various tax treatment is to be take in the organisation. The companies who are dealing in the
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Foreign exchange have to pay the heavy taxes and will not affect the company. The currency is
to be measured in an organisation when the financial statements are prepared there should be a
proper record of the currency. The transaction of the currency is to be recorded by the spot
exchange rate between the foreign and the functional currency in which the transaction take
place and should be recorded in a proper manner. The foreign activities in an organisation take
place in two ways that the companies are doing the transaction in foreign currency or the
company have the foreign operations. Which helps in translating the financial statement into the
currency (Burns, 2014).
These sections help PRESS METAL ALUMINIUM HOLDINGS BERHAD group as if
the company have a foreign transaction or the operations they are to be recorded in a proper
manner and will not get affected easily. The company record all the transaction of a company
except the transactions which are derivatives and is within the scope of the MFRS 9 instruments.
It helps in doing the work properly by the equity methods and is to be recorded in a proper
manner and will have the future growth. It helps in determining the financial position in the
currency and have the spot exchange rates between the functional and the foreign currency so the
company can take the decision easily. The press metal aluminium company has the foreign
operations and are to be recorded properly as during the preparation of the financial accounts
currencies are recorded and to be evaluated properly. As per the rates prescribed in the MFRS
121 a company may translate the financial statements in the currency. The translation of the
foreign exchange rates is not deductible nor taxable. The various transactions of the company in
the foreign exchange helps in recording the transaction properly and will not get affected in the
future.
Share based payment practice in the company (MFRS 2).
The concept of Malaysian financial reporting standard 2 is a share based payment which are
mainly for outlays of company and is needed to be determined in the annual income statement
for the year (Modell, 2012). It is observed that MFRS 2 entire application combine with Basis of
Conclusion which are entirely based on IASB statements which provide the situation of the
mentioned SSP. From the annual report of press metal aluminium holdings Berhad it has been
determined that with the exception of share-based payment and leasing purchases, their fair
valuation or responsibility is calculated as the value that will be earned for the disposal of assets
or charged for the exchange of a responsibility in an immediate relationship between at the
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calculation date, economic actors. The calculation assumes that perhaps the exchange to
purchase the asset or move the obligation occurs in even the most desirable sector, or even in the
largest product or in the lack of a main market. Towards it finally, a methodical mechanism for
setting the remuneration of directors and executive executives has been approved by the Board.
In conjunction with the components of remuneration are designed to bind Executive Directors
and other Senior Management staff to the incentives for individual and organizational success
are focused on remuneration packages for non-executive directors. Their position on the board,
their involvement in boardroom activities and the particular skills or knowledge they bring to
bear (Chiucchi, Gatti and Marasca, 2012).
As far as the regulation of remuneration matters is concerned, the Committee having set
up a specialized committee, which include the RC, which includes a specialized committee. With
Independent Directors solely. The RC is capable of selecting the Executive Products of
Compensation directors and Senior Management to something like the Board in relation to the
specified terms throughout the Directors' including Senior Management remuneration policy of
Management. The compensation of non-Executive Members is a question to be determined by
the Committee in its entirety, the Director involved abstained from proceedings and voted on
judgments in relation to his or her particular person. Remuneration, subsequent to such filing for
existing shareholders. Thus the employee remuneration committee has focus on the practices of
market which they are dealing for the exact payment of share for the non-executive manager at
each level. The Committee has, on its advice and decision was taken to boost the fee structure by
5% from a year ago. The pricing system for both the newly formed RMC is identical to that for
the towards that of the AC. In the Listed Companies, the comprehensive depends on a wide
range of the Management and high five (5) Top Leadership are revealed the press metal
aluminium holdings berhad analysis.
Employee benefits provided by the company (MFRS 119).
MFRS 19 'Employee Benefits' allows a corporation to re-measure the income statement
obligation or investment whenever a company pension agreement is amended, or curtailed or
settled. After the move to the company pension package took effect. Modifications to MFRS
119, released now they need a business in March 2018, when amending a defined contribution
package, during a time and curtailed or resolved the responsibility or asset for the net workplace
pension that one is re-measured as just a consequence of operations, to:
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 Analyse the desired service costs and net interest in terms of the duration following the
re-measurement using the theories used by the re-measuring.
 Set the debt servicing for the remaining time on the basis of the net defined gain re-
measured responsibility or asset.
On analysis the financial or annual report for the year 2019, it has been defined that press metal
aluminium holdings berhad have developed and provided number of employee benefit which
makes their employee attached and more focused to work on the desired goals to reach that
within a particular time (Li, 2013). It is mentioned in the annual document that company have
added a series of additional benefit plans which exactly meet the actual need and expectation of
employee. These packages are healthcare insurance for individual employee and few family
members, compassionate and parental, study or examination holidays, bonus for festivals, yearly
performance appreciation awards, subsidies for home, extra curriculum opportunities,
recreational practise etc. which all makes working and new employee work with full efficiency
and efforts to meet the annual goals. It is also stated in the annual report, that in year financial
year 2019 total 143 workers have taken parental holiday and around 88% of them have returned
to work afterwards. The company have divided employee benefit into two categories which are
short term employee benefits and state plans that are as follows:
Short term plans: Short-term worker compensation commitments are assessed on a cost less
accumulated depreciation basis in terms of wages, bonus payments, paid leave days and annual
time but are paid directly as the associated service is rendered (McManus, 2013). A
responsibility is accepted for the required amount to be compensated under simple terms salary
increase or revenue arrangements if, as a result of personal service rendered by the worker, the
Group has a current legally enforceable right to compensate this payment and the liability can be
accurately calculated for every worker.
State plans: In the financial year 2019 the total assistances made by press metal aluminium
holdings berhad to constitutional pension reserves will be salaried for advantage or loss in the
financial year to which they apply. Prepaid donations shall be regarded as an advantage to the
grade that they are qualified for cash repayments or a discount in upcoming payments (Macinati
and Anessi-Pessina, 2014).
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Issues and changes due to global pandemic.
The Covid-19 pandemic has affected the various industry in a different way as well as the
performance of press metal aluminium holdings berhad have also decline in the following period.
The outbreak of coronavirus showing its impact mainly from march 2020. The average price of
metal and mining industry are decreased by 10% and many companies have lost approximately
40 to 50% of market value. Mining is heavy dependent on the availability of labour who initiate
the groundwork, many such unsettled labours have retreated to their home base. Additionally, the
lock-down has not only closed for workers but also placed restrictions the movement of goods
and services from one place to another. Due to downfall in metal and mining industry, the other
industries are dependent on supply of steel such as auto-mobiles have been shut down to the
whole world.
Changes in the prices of some commodities like gold, copper, coal, zinc fell by>5% lower near
demand for press metal aluminium holdings berhad. Only price of the gold has been increased
around 8% since the beginning of the year. In case of changes in copper, copper prices have
reduced by 15% due to failure in demand from various industries (McLellan, 2014). Zinc prices
are rapidly increased from 2015 to 2019 by 32% but now they are facing issues in downfall
around 18% from 2019 to 2020. Issues are due to the coronavirus transportation facility and
shipping charges are increased. Production shortages will be intense by supply break caused by
the governments because of the Covid-19 precautions. However, increased in the metal stocks
and reduced in the metal prices convey that mining industry will be negatively impact on the
coronavirus at least changes for a short term. Due to pandemic situation, many companies faces
their own problems like transportation facility, export and import of goods during their lock-
down period. Most governments have allowed mining to continue but somewhat limited
restrictions are there. At last, many players in the industry know that how to manage their
businesses and they are ready for the situations too that is faced by respective company. The
study has finds that FY20's sales forecast has declined to RM 7.370.2, FY21 RM 10.866.2, as
well as FY21 RM 11.137.1. The FV also decreased by 29%, centered on 15 times the FY21F
shareholder equity (EPS), to RM3.03 (formerly RM4.24) (from RM4.24 depending on 18 times
FY21F EPS previously).
The market price of the export of FY20 to FY22 aluminium estimates was lowered by 11% and
4% to USD 1,600 per truckload, US$ 1,800 per truckload as well as US$1,850 per tonne. Up to
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now, the price of aluminium has reached 1,710 dollars per tonne and then last exchange was
1.482 dollars per tonne. However, the successful agreement of a 15-year energy purchasing
agreement of Sarawak Energy Bhd by Press Metal may alleviate this problem. In compliance
with the signed deal, it will also produce an extra yearly aluminium melt ability of 42 per percent
by 2021 with an extra infrastructure of 400 megawatts, from 760 thousand tonnes to 1.08 000
tonnes, and raise total smelting ability by 42 per cent by 2021.
CONCLUSION
In the last of report, it has been concluded that financial standards are mainly useful for
the preparation of accurate and reliable reports. This actually support in publishing the reports
free from any accounting error or mis-presentation so that different user can get the suitable
information and make the decision as per the requirement. implement different Malaysia
financial reporting standards which enables in preparing the faithful, reliable, timely, accurate
report which are beneficial for number of external and internal stakeholders. The implementation
of different MFRS make changes of Zero errors in the annual report such as MFRS 2 is helpful
to attract, retain and inspire directors and senior management staff, a fair remuneration package
is important. MFRS 119, nevertheless, was not clear about how to calculate the expenses
involved and MFRS 121 states that when the transaction of the organisation is taxable and is to
be avoided when they are released. All the change related to group's share of net assets before
and after the change and any consideration paid or received.
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REFERENCES
Books and Journals
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of Cleaner Production. 36. pp.48-59.
Boučková, M., 2015. Management accounting and agency theory. Procedia Economics and
Finance. 25. pp.5-13.
Bromiley, P. and et.al., 2015. Enterprise risk management: Review, critique, and research
directions. Long range planning. 48(4). pp.265-276.
Bui, B. and De Villiers, C., 2017. Business strategies and management accounting in response to
climate change risk exposure and regulatory uncertainty. The British Accounting
Review. 49(1). pp.4-24.
Burns, J., 2014. Qualitative management accounting research in QRAM: some reflections.
Qualitative Research in Accounting & Management. 11(1). pp.71-81.
Chiucchi, M. S., Gatti, M. and Marasca, S., 2012. The relationship between management
accounting systems and ERP systems in a medium-sized firm: a bidirectional
perspective. Management Control.
Li, J., 2013. Accounting conservatism and debt contracts: Efficient liquidation and covenant
renegotiation. Contemporary Accounting Research. 30(3). pp.1082-1098.
Macinati, M. S. and Anessi-Pessina, E., 2014. Management accounting use and financial
performance in public health-care organisations: Evidence from the Italian National
Health Service. Health Policy. 117(1). pp.98-111.
McLellan, J. D., 2014. Management Accounting Theory and Practice: Measuring the Gap in
United States Businesses. Journal of Accounting, Business & Management. 21(1).
McManus, L., 2013. Customer accounting and marketing performance measures in the hotel
industry: Evidence from Australia. International Journal of Hospitality
Management. 33. pp.140-152.
Modell, S., 2012. Strategy, political regulation and management control in the public sector:
institutional and critical perspectives. Management Accounting Research. 23(4). pp.278-
295.
Mouritsen, J. and Kreiner, K., 2016. Accounting, decisions and promises. Accounting,
Organizations and Society. 49. pp.21-31.
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