Managerial Accounting Mid term examination Answer all questions STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 Group Company 2019 2018 2019 2018 RM'000 RM'000 RM'000 RM'000 (Loss)/profit for the financial year (371,156) (1,143,604) (80,094) 144,354 Other comprehensive (loss)/income: Items that will not be reclassified to profit or loss Actuarial (loss)/gain on defined benefit plan (5,602) 2,034 140 36 Fair value changes in financial assets at fair value through other comprehensive income 13,176 (18,671) Items that may be subsequently reclassified to profit or loss Currency translation differences (9,059) (7,126) Realisation of foreign exchange reserve upon disposal of a subsidiary (3,658) Share of other comprehensive loss of an associate (1,056) Share of other comprehensive loss of joint ventures (38,606) (12,842) Cash flow hedge reserve (5,528) (158 57,907) (20,126) Total other comprehensive (loss)/income for the financial year, net of tax (50,333) (36,763) 140 36 Total comprehensive (loss)/income for the financial year (421,489) (1,180,367) (79,954) 144,390 Total comprehensive (loss)/income attributable to: Owners of the Company (292,355) (1,112,303) (79,954) 144,390 Non-controlling interests (129,134) (68,064) (421,489) (1,180,367) (79,954) 144,390STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2019 Group Company 31.12.2019 31.12.2018 1.1.2018 31.12.2019 31.12.2018 1.1.2018 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 Note Restated) (Restated (Restated) (Restated) ASSETS Non-current assets Property, plant and equipment 20 8,190,118 8,501,173 8,391,626 10,600 10,892 28,029 Right-of-use assets 21 2,213,761 2,365,422 2,381,293 33,436 37,797 13,429 Investment properties 22 106,049 118,370 118,169 13,065 13,947 16,046 Intangible assets 23 969,754 996,021 1,536,568 25,411 32,064 34,899 Investment in subsidiaries 24 8,424,764 8,784,754 8,763,967 Interests in associates 25 39,757 101,082 275,478 Interests in joint ventures 26 437,064 488,175 585,773 Receivables 27 86,736 76,211 88,057 Amount due from a significant shareholder 29 52,276 134,982 Amounts due from joint ventures 29 1,017 62,929 26,941 Amounts due from other related companies 29 12,218 126,334 Amounts due from subsidiaries 29 634,340 Deferred tax assets 51 651,301 608,045 742,706 28,320 327 Derivative financial assets 30 561 717 Financial assets at fair value through other comprehensive income 31 107,434 86,224 91,302 Financial assets at fair value through profit or loss 36 66,575 Loans due from joint ventures 32 70,201 71,431 12,867,485 13,735,730 14,376,636 9,141,616 8,907,774 8,856,697STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2019 Group Company 31.12.2019 31.12.2018 1.1.2018 31.12.2019 31.12.2018 1.1.2018 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 Note Restated) (Restated) (Restated) (Restated) Current assets Inventories 33 1,313,037 2,063,235 2,132,303 Biological assets 34 45,766 42,446 54,338 Receivables 27 1,213,217 1,235,861 1,364,216 16,753 17,306 19,579 Contract assets 28 28,417 33,733 13,091 Amount due from a significant shareholder 29 70,375 27,610 218,757 20 20 20 Amounts due from subsidiaries 29 440,128 722,222 774,524 Amounts due from joint ventures 29 148,011 326,389 472,938 Amounts due from other related companies 29 76,618 50,206 122,209 224 199 230 Loans due from subsidiaries 35 62,600 6,999 3,664 Tax recoverable 51,264 202,006 203,309 187 10,480 Financial assets at fair value through profit or loss 36 58,940 46,055 55,730 Derivative financial assets 30 18,388 3,706 6,875 Deposits, cash and bank balances 37 1,617,622 1,220,351 1,740,658 9,187 12,677 47,872 4,641,655 5,251,598 6,384,424 528,912 759,610 856,369 Assets held for sale 38 192,499 4,829 72,239 4,834,154 5,256,427 6,456,663 528,912 759,610 856,369 Total assets 17,701,639 18,992,157 20,833,299 9,670,528 9,667,384 9,713,066 EQUITY AND LIABILITIES Capital and reserves Share capital 39 7,029,889 7,029,889 7,029,889 7,029,889 7,029,889 7,029,889 Treasury shares 40 (302) (705) (1,484) (302) (705) (1,484) Foreign exchange reserve 41 52,218 103,551 119,077 Reorganisation reserve 42 (3,089,497) (3,089,497) (3,089,497) Other reserves 43 (20,682) (31,003) (12,029) 416 Retained earnings 201,575 452,918 1,531,137 100,379 180,333 35,943 Equity attributable to owners of the Company 4,173,201 4,465,153 5,577,093 7,129,966 7,209,517 7,064,764 Non-controlling interests 1,927,099 2,138,628 2,253,750 Total equity 6,100,300 6,603,781 7,830,843 7,129,966 7,209,517 7,064,764STATEMENTS OF CASH FLOWSEE] FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 Group 2019 2018 '000 '000 (restated) Net cash generated fromused in) operating activities 1,975,443 1,024,294 Net cash (used in)/generated from investing activities (484,049) (814,194) Net cash used in nancing activities (1,017,470) (785,867) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 473,924 (595,767) Effect of foreign exchange rate changes (1,644) (2111) CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 1,096,007 1,693,318 Add: Decrease in assets held for sale 160 567 CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 1,568,447 1,096,007 A new set of board members and management team has been appointed at Felda Global Venture to turnaround the company. You have been appointed as director in-charge of the Financial affair. The board member want you to enlightened them on the nancial standing of the company. Hence they want you to deliberate on the three type of financial statements above to project the strength and weaknesses of the company's financial standing. 1. Income statement Highlight the company's standing in terms of: - Business size and volume - Operational profitability - Financial burden and capacity - Operational profit - Earning per share, share price and capitalization value ( 10 marks I 2. Balance sheet Highlight the company's - Assets - Liabilities - Net assets value (NAV) - NTA per share ( 10 marks) 3. Cash flow statement - Cashflow prot - Cash from from Investment - Cashflow from financing - Explain also the difference between Operating prot and Cash ow profit ( 10 marks) 4. The company target to enhance the share price to RM3.00 per share 2022. The par value ofthe company is RM1.00 per share. FGV is in plantation and plantation related businesses. Determine: i. What should be the targeted Earning per share (EPS) to achieve the targeted share price, assuming that the price earning ratio {PER} remained constant for the next few years. {5 Mark) ii. What should be the targeted profit after tax for the year ended 2015 to achieve the targeted earning per share (EPS) ? {5 Mark} iii. What should be the targeted Return on Equity and Return on Assets of the company for 2021 and 2022? {5 Mark) v. What should be the targeted Revenue of the company for 2022 to achieve the targeted profit after tax? {5 Marks) vi. Referring to the Du-pont analysis, what other effort could be explored in trying to achieve the targeted capitalization using the de-composition of ratios strategy.?. Explain. {10 marks} 5. What is the Break even point of the company a. What is the safety margin ? What can be commented on this margin on FGV? (10 marks ) b. What is the Degree of Operating leverage ? What can be commented on this measure on FGV ? ( 10 marks ) c. What is the Degree of Financial leverage ? What can be commented on this measure on FGV? [ 10 marks ) 6. What is the Altman score for FGV for 2019. What can be implied from the score ? [ 10 marks ) [ 100 marks ) End of questions