Pensonic had a poor performance in 2018 where its revenue was decrease and huge net losses (-RM 3,345,711) was incur to the company after deducted all the operating and other expenses, thus the net profit margin for financial year 2018 is in negative figure (-1.06%). As compared to 2017 with net profit generated, Pensonic's cost of sales, operating expenses and finance costs has reduced slightly but the reduction of these expenses has led to a loss. This is due to the revenue in 2018 was decreased by 7.1% to RM 316,920,590, reduction of other income by 71.86% to RM 848,550. But, the most significant impact is the tax expenses increased drastically to RM 7,591,268 (2017: 192,270). Despite the challenging macro environment and the local and overseas market depression owing to competitive pressure and the global economy slowdown, Pensonic group is still able to deliver profit before tax of RM4.2 million, but after deduct the tax expenses, the profit become negative (-RM 3,345,711) which indicates losses to the company. The large tax expenses arose from the provision for income tax of RM6.8 million relative to the particular revisions made to the tax holidays enjoyed by certain subsidiaries in prior years. Previously, certain subsidiaries under Pensonic were granted a pioneer status for five years period beginning 1 June 2012 so the involved subsidiaries enjoyed tax holiday from being exempted from income tax charged during the pioneer status period. Upon the expiry of the status, the group submitted an application for the tax exemption for another 5 years period but the terms for the pioneer status has been modified from fully to partially exemption on 20 July 2018, therefore the group had to bear for partial tax expenses which has been accumulated for a total of RM 6.8 million from the previous exemption period and lead to a losses for the company in financial year 2018.

For the financial year 2019, Pensonic was able to pull back the group's net income to positive figure with a rise of 2.35% of total sales generated to RM324.4 million, thus the net profit margin increased 1.19% to 0.13% from -1.06%. The mainly contribution of the sales increased was due to the surge of local sales. Despite the positive net income, the net profit margin for Pensonic was still low over the years due to the high operating expenses and the finance costs which also lower down the profit before tax (PBT) by 57.48%. High operating expenses including the growth of 17.6% for all the subsidiaries' director's salaries and other emoluments, rise of rental expenses and also the expenses of various marketing activities and promotional campaign such as cooking program and new kitchen appliances launching promotion. While the high finance costs incur was due to the incremental of Pensonic's borrowings by RM8.4 million with 0.78 gearing ratio in 2019. Since the tax expenses incurred in prior years has been repay partially in 2018, so the tax expenses for financial year 2019 has mitigate substantially and hence Pensonic is able to generate positive net income for the group with RM 427,253.

Suggest any FOUR (4) future improvements for the respective companies as based on

financial performance.

**Provide examples.