Comparison and analysis of the format and the presentation of income statement and balance sheets

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The companies that I have chosen to do my analysis and comparison is Dutch Lady Milk Industries Berhad and Padiberas Nasional Berhad. Dutch lady Milk Industries Berhad is the leader company which holds leader branded dairy business in Malaysia. The company was incorporated in 1963, and it was the first milk company in Malaysia which is to be listed on Bursa Malaysia, the local stock Exchange in 1968. The first shareholder of this company is Royal FrieslandCampina, a Dutch multinational cooperation which is the largest milk companies in the world. The second largest shareholder for this company is Permodalan Nasional Berhad.

Dutch lady Malaysia manufactures and sells a wide range of quality dairy products and fruit juices for home use and also export market. The form product that manufactured by them are Infant Formula, Growing-up Milk, Powdered Milk, Condensed Milk, UHT Milk, Sterilised Milk, Pasteurised Milk, Cultured Milk, Yoghurt and Fruit Juice Drinks. This is the first company in the world introduce a growing up milk powder specifically formulated for children from ages one to three. This product is currently marketed in Malaysia as Dutch Lady 123 and Dutch Lady 456.Dutch Lady also a company that purchases local fresh milk in large amount from Veterinary Services Department.

The quality of Dutch Lady's products is supreme. The company gives important to Quality Control and Quality Assurance. In accordance to this, the Company has continually been accredited with ISO 9001 certification since 1995. The management also have strong emphasis on food safety with HACCP (Hazard Analysis Critical Control Point) System covering all its plants. In addition, the Company also has in place ISO 14001 Environment Management System and OHSAS 18001 (Occupational Health and Safety Assessment Series).The product produce by this company is all halal-certified.

Dutch Lady Malaysia's annual revenue is RM 692 million. The company's factory is situated in in Petaling Jaya and it employs 600 Malaysians.

The second company that I choose is Padiberas Nasional Berhad (BERNAS) is a company listed on the Main Board of Bursa Malaysia. Since BERNAS is the nation's partner in the domestic paddy and rice industry, the group of companies are involved in the procurement and processing of paddy and rice industry. Not forgetting also, importation, warehousing, distribution and marketing of rice in Malaysia. This company currently controls about 24% of the paddy market and 45% of the local rice demand.

Recently, the BERNAS Group of companies involved in seed and farming activities, international rice joint venture, as well as rice complementary businesses. BERNAS have its staff of 1,600 people. With this staff strength, the company could fulfil its obligation under a Privatisation Agreement signed with the Government 1996. Under the obligation, they have to maintain the nation's rice stockpile, acting as the buyer of last resort for paddy farmers, managing the Bumiputera Rice Millers Scheme and the distribution of Paddy Price Subsidies to farmers on behalf of the Government.

Padiberas Nasional Berhad annual revenue is RM 3,260 million. The company's factory is situated in in Petaling Jaya.


Business Entity Concept

The Dutch Lady Milk Company is based on cooperative modal. Even the Padiberas Nasional Berhad also uses cooperative types of business. Cooperative means a business organization owned and operated by a group of individuals for their mutual benefit. It also can be defined as a business owned and controlled equally by the people who use its services or also by the people who works there. So in this case, this both companies also public listed company where they have more shareholders who can give idea and also go against an idea.

Going Concern Concept

The Dutch Lady Milk and BERNAS is a well doing business and this can be proven by seeing their income statement and also balance sheet. The revenue for this both companies are in millions. In addition, their assets on property, plant and equipment is increased from previous year. For an example, for Dutch Lady their property plant and equipment compare from the year 2008 to 2009 is 21 Million meanwhile for BERNAS the increases is 152 Million.

Accounting Period Concept

Under this accounting period concept, the both companies are using quarterly accounting concept for their internal accounting period where from 1st Jan - 31st Mac, 1st Apr - 30th June, 1st July - 30th Sept and 1st Oct - 31 Dec. But than, they are using yearly accounting period concept for external accounting which means 12 month accounting period where the closing date will be at 31 Dec.


Currency Format

The currency formats used by the both companies are in RM format. Since, the business are involves millions so they uses RM followed by three zero's. Those amounts that should deducted and also negative is shown in the bracket and the places that don't have any values are indicated with dash symbol. But, for the Dutch Lady Milk Company there is no dash mark is available in the income statement neither balance sheet.

Arrangement of Non Current Assets, Current Assets, Liabilities and Owner Equity

The accounting format that used for the arrangement of non current assets for the both companies are different. This can be clearly seen, where for the BERNAS non current assets arrangement they have include the freehold land amount, building infrastructure, plant and machinery, work in progress, others and total meanwhile the arrangement in the Dutch Lady Milk Company don't include the freehold land details, infrastructure and also others.

When come to the current assets, the difference in their inventory level between current years compared to previous year for Dutch Lady Milk Industries, there is decrease in the amount of finished goods (RM 10,045,000), raw materials (RM 6,911,000) and also packing materials (RM 394,000). In the point of BERNAS inventory the paddy and rice, finished increases where the paddy and rice inventory should be RM 161,248 since the Government Rice Stockpile is amounting to RM 239,000 should not included in the inventory. For the both companies cash in bank and also cash in hand decreases compared to year 2008.

Liabilities for the both company's shows, decrease in the amount of owing. Whereby, for Dutch Lady Milk Company the amount is RM 32,215,000 in the year 2008 and RM 16,438,000 that decreases about RM 15,777,000 and for BERNAS the liability amount for the year 2008 is RM 871,578,000 and RM 773,359,000 for the year 2009. The difference in reduced amount is RM 98, 219, 00. In owner equity matter the amount in the income sheet shows profit and when its plus together with the capital its shows the owner equity increases.


The both companies are using straight line basis depreciation method where as:-

Dutch Lady Milk Industries Berhad

Depreciation is recognised in the income statement on straight line-basis over the estimated useful life of each part of an item of non current assets. Leased assets are depreciated over the shorter of the lease term and their useful lives. Non current assets which still under construction are not depreciated until the assets are ready for use. Other than that, the balance sheet shows that, the assets that currently purchased is not mentioned together with the accumulated depreciation but the assets that has purchased so long ago has been deducted with the depreciated amount.


The cost of non current assets for the rice processing industry is depreciated on a straight-line basis over the assets useful lives. Management estimates the useful lives of these non current assets to be within 5 to 25 years. These are common life expectations applied in the industry. For this kind of industry, the changes are depends on the expected level of usage and technological development.


In my point of view, I think this two business are business that wont face loses because they are companies that produces very important source for human health and BERNAS produces our nations primary food and they also running business under Government agreement . In certain circumstances, Dairy Milk Company prone to losses if they don't give importance for cleanliness which can cause any disorder to human health. They also among the companies that pay a huge amount tax to our nation.