Sample of good assignment

FACULTY OF BUSINESS AND MANAGEMENT

SEMESTER MEI / 2012

BBPW3203
FINANCIAL MANAGEMENT II

NO. MATRIKULASI :
NO. KAD PENGNEALAN :
NO. TELEFON :
E-MEL :
Content Page
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Introduction on the two selected company
i) Company 1 2
ii) Company 2 4

Identification of the company’s financing sources for the 6

years 2008 and 2009 for company 1

Identification of the company’s financing sources for the 10

years 2008 and 2009 for company 2

Comparison of financing sources between the two companies 13

Summary 18

Reference

1
INTRODUCTION OF THE SELECTED COMPANY

Background for company 1

KFC established in 1952 by Mr. Colonel Harland Sanders when he decided to franchise
his famous Kentucky Fried Chicken recipe blends of 11 herbs and spices to the rest of
America. By the early 70's, that special recipe reached Malaysia. The first KFC restaurant
was opened in 1973 on Jalan Tunku Abdul Rahman. KFC is among the best-established
brands in the Western Quick Service Restaurants market. Today there are more than 500
KFC restaurants nationwide and still counting. In 2006, the successful first steps were
taken to rebrand our Rasa Ayamas outlets as RasaMas and to reposition the outlets as
dine-in restaurants.

The board is led by Chairman Independent Non Executive Director - Dato’ Hj Ayub bij
Mion, Ahamad bin Mohamad as a Deputy Chairman Non Independent Non Executive
Director, Jamaludin bin Md Ali as a Managing Director, Datin Paduka Siti Sa’diah bt
Sheikh Bakir as a Non independent Non Executive and also have five Independent Non-
Executive Directors. They are Kua Hwee Sim, Tan Sri Dato’ Dr Yahya bin Awang,
Hassim bin Baba, YAM Tengku Sulaiman Shah Alhaj Ibni Almarhum Sultan Salahuddin
Abdul Aziz Shah Alhaj and Datuk Ismee bin Ismail. The board comprises a balance of
members with experience in business and finance required for an effective and
independent decision making at the board level. The chairman is responsible for the
orderly conduct and working while the Managing Director is responsible for the
management of the group as well as to implement policies and strategies adopted by the
board. KFC Holdings (KFCH) Malaysia Berhad vision is ‘To be the leading integrated
food services group in the Asia Pacific region based on consistent quality products and
exceptional customer focused service and the mission are ‘To maximize profitability,
improve shareholder value and deliver sustainable growth year after year. The core
business activities of KFC Holdings to are extensively involved in poultry production
and processing, as well as a host of ancillary businesses such as commissary operations,

2
baking and sauce production.

For the business development, corporate social responsibility at KFC Holdings is an

integral part of the day-to-day business. It is an evolving, ever expanding scene which
covers a diverse range of areas. It is vital for them to take advantage of every chance to
further advance the value of lives of the society we work and serve in. New marketing
strategies enable us to offer our products to people all over Malaysia, even in the smallest
of neighbor stores. For support KFCH development core business it integrated structure
is crucial to our operations, providing consistent support services, a stable source of
quality chicken at very competitive prices, better cost control and the ability to supply the
fast-expanding open poultry market, locally and abroad.

It also introduced innovative marketing strategies to capture the lower-end of the market
under the concept of Base of Pyramid (BOP) and Sudut Ayamas (Shop-in-Shop). To be
the largest integrated food services group in the Asia-Pacific region with focus on
consistent quality products and exceptional customer-focused service and involve a series
of innovative new products. In our new territory of India, the second most populated
country in the world, we will open 12 KFC restaurants across the bustling cities of
Mumbai and Pune. Ensure these restaurants are as welcoming, pleasing and comfortable
as possible.

Financial Highlight

The Company’s Board composition was further strengthened with the new appointment
of a Non-Independent Non Executive Director. Necessary skill and experience to bring
independent judgments to bear on the issues relating to strategy, performance and
resources. Financial highlight are show as below for the years 2008 and 2009.

2008 (RM’000) 2009 (RM’000)

Total Revenue 2,179,788 2,297,431

3
Profit Before Tax 167,457 190,015
Profit /Loss Attributable to 118,535 130,403
Equity Holders
Total Asset 1,154,407 1,290,470
Shareholder’s Equity 692,158 791,757
Basic Earning/Loss Per 14.9 16.4
Share (sen)
Gross Dividend Per Share 22 24
(sen)
Share Price as at 31 7.45 7.40
December (RM)

In the year 2009 group revenue was better when compared to the year 2008. This can be
seen when group revenue reached RM2,297.4 million for the current financial year,
representing a growth of 5.4% over prior year’s RM2,179.8 million. The Group
registered a profit before tax of RM190 million, against 2008’s RM167.5 million. Total
assets held in the year 2009 also increased from 1,154,407 for 2008 to RM1, 290.470 for
the year 2009, which increase of 11.8%. We are pleased to announce a record set of
results for 2009, testament to the vision of our Board and management team whose
strategy of restaurant expansion coupled with aggressive marketing promotions and cost
control initiatives has proved to be a winning formula.

Background for company 2

KLCC Property Holdings Berhad (KLCCP) was incorporated as a public limited

company on 7 February 2004. KLCCP owns a diverse property portfolio largely within
the KLCC Development comprising office buildings, a leading shopping mall and luxury
hotel. The subsidiaries of KLCCP include Arena Johan Sdn. Bhd., Kompleks Dayabumi
Sdn. Bhd., Arena Merdu Sdn. Bhd., Impian Cemerlang Sdn. Bhd., KLCC Parking
Management Sdn. Bhd., KLCC Urusharta Sdn. Bhd., Asas Klasik Sdn. Bhd. and Suria

4
KLCC Sdn. Bhd. For the year under review, KLCC Property Holdings Berhad (KLCCP)
continued to be underpinned by the long term tenancies of the office segment. Total
assets increase from RM11.6 billion at the beginning of the year to RM12.6 billion. The
quality, prestige and strategic location of the commercial properties rendered them as the
most sought after address in Malaysia and also amongst the most well known in the
region and globally.

For the development, the group also realises that the long term sustainability of strong
and profitable performance rests not only on revenue growth but also on effective cost
management. Hence, the group continues the pursuit of optimum operating cost
environment in matching its effort to expand the revenue pie going forward. In persuit of
sustainable growth, it is imperative that KLCCP Group continues to introduce new assets
as well as ‘sweating’ the existing ones to a level which would enhance value to
shareholders value. The commencement of operations of Lot C office tower which has
been renamed PETRONAS Tower 3 on the year is expected to enhance the group’s
profitability to a certain extend. Other more, further improvement in demand for the
hotel is dependent on a sustained recovery of the global economy.

Financial Highlight

Financial highlight for the KLCCP Group of the year 2008 and 2009 are shown below:

2008 (RM’000) 2009 (RM’000)

Revenue 843,000 861,000
Operating Profit 626,000 627,000
Profix Before 904,000 1,032,000
Taxation
Profix After 713,000 837,000
Taxation
Total Assets 9,979,000 10,640,000

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Total Liabilities 3,158,000 3,130,000
Total Equity 6,821,000 7,510,000

In the year 2009 total revenue increased by 14.2% which was recorded at RM861,000
million compared to last year's RM843,000 million. The total of operating profit it is
increase 0.16% only for the year 2009 of the amount earned RM626,000 million in year
2008. For profit before taxation in 2009, the total increase was 14.16% to RM128 million
and a high number compared to previous year's RM904,000 million. Despite the
economic downturn, profit after taxation increases by 17.39% from the year 2008 which
it is RM713,000 million on the back of sustained revenue and cost containment success.
For total assets, the KLCCP very proud of the high performance of the total assets of
RM10,640 million or 6.62% in 2009 compared with previous years, only about RM9, 979
million. Total liabilities are reduced by RM 28 million or 0.89% in 2009 compared to
RM3, 158 million in 2008. This is because in year 2009, the company is capable of
managing money by using resources more effectively. While the total equity increased to
RM7,510 million in 2009 compared to RM6,821 million in the previous year. The total
increase 10.1%.

IDENTIFICATION OF THE COMPANY’S FINANCING SOURCES FOR THE

YEARS 2008 AND 2009 FOR COMPANY 1

To fulfill the requirements of the question, I have to identify and analyze all financial
sources used by the company KFC Holdings in business for the years 2008 and 2009.
Firms use several types of financing sources to meet their capital requirements. For the
company, it is use sources-short term financing, intermediate-term and long-term
financing. Therefore, short-term financing is used primarily as a tool to finance accounts
receivables and for building up inventory.

Loans are borrowings that a corporation obtains from a bank. Most firms use bank loans
as a major source of financing after trade credit. A short-term loan is a debt for which the
repayments are scheduled. Short-term loans are often used to raise cash for cyclical

6
inventory needs, accounts payable, and working capital. The loan can be divided into two
basic categories. These are secured and unsecured loans. However for short-term
financing are use by KFC Holding can be categories into two basic forms. It is known as
spontaneous financing (accruals and accounts payable) and non-spontaneous (bank loans
and commercial papers) and one more categories as an alternative sources of financing
like factoring, accounts receivable financing, inventory financing and others.

Sources of Short-Term Financing

Spontaneous sources of financing arise from the normal operations of the firm, most
notably accruals and accounts payable. Accruals are a form of spontaneous short-term
financing. Accruals are liabilities for services received for which payment has yet to be
made. Accounts payable on the other hand is a form of finance generated from credit
purchases and represents the major source of unsecured short-term financing. For the
year 2008, as a spontaneous and accounts payable accruals recorded RM275, 424 million
compared to the year 2009 it increased to RM321, 187 million. Percent increase is 16.6%.
This kind of financing is unsecured and does not require the pledge of specific assets as
collateral. In addition, KFC Holdings also has the financial resources of the loans and
borrowing obtain from a bank.

Short-term loans are used to raise cash for cyclical inventory needs and working capital.
Total loan and borrowing in the year 2009 decreased by RM43,064 million and for the
unsecured loans of about 5.7% when compared to the year 2008, which total amount to
RM75,111 million. Bank loan are divided by two categories namely secured loans and
unsecured loans. Secured loans for the year 2008 is RM32,000 million and for the
unsecured loans RM43,111 million. For the year 2009 KFC Holdings consists only of
unsecured loans. Example of the is form of loans secured debt in which this is because
KFC Holdings still has the financial resources of the past and use the profits last year as
working capital. In addition, many needs have been purchased in 2008. So in connection
with the short-term debt in 2009 will be reduced. Employee benefits in 2009 decreased
by 35.63% compared to the year 2008 is RM623,000. While the current tax liabilities in

7
the year 2009 is RM12,159 million. Total short-term financial resources for 2008 and
2009 can be seen in the table below:

Short-term sources 2008 (RM’000) 2009 (RM’000)

Payables and accruals 275,424 321,187
Loans and borrowing 75,111 32,049
Employee benefits 623 401
Current tax liabilities - 12,159
Total of short term sources 351,158 365,796

Intermediate-Term Financing

Intermediate-term financing is self-liquidating and is thus similar to short-term financing.

However, intermediate-term financing can fulfill the requirements for permanent funding.
Furthermore it can serve as an interim substitute for long-term financing. Banks tend to
give out term loans in the 3-5 year maturity period, whereas, insurance companies are
willing to make longer-term loans. The most important use of intermediate-term
financing is to provide credit when the expected cash flow of the firms such as that debt
can be retired steadily over a period of several years. For the company, intermediate term
loans are use to plant facilities and equipment, particularly when buying new machinery.
This can be used to increase working capital when the cost of a public offering of bonds
and stocks are high. However KFC Holdings only use sources of term loans. Term loans
or known as a loan and borrowing for the year 2009 decreased by 40.7% which was
recorded at RM11,590 million compared to the year 2008, which amount to RM19,544
million. Deduction in loans and borrowing in the year 2009 is about RM7,954 million.
Intermediate-term loan can be seen as below :

Intermediate-term sources 2008 (RM’000) 2009 (RM’000)

Loans and borrowing 19,544 11,590

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Total of short term sources 19,544 11,590

Advantages of using term loans are the borrower can take a term loan in such a way that
the economic life of the asset being financed generates enough cash flow surplus to
service the loan without putting any additional financial burden on the borrower.

Long-Term Debt Financing

In addition, the company's KFC also use financial resources from long term debt. Long-
term debt financing is the most popular form of external financing. Long-term loans are
debt instruments which are arranged when the scheduled repayment of the loan and the
estimated useful life of the assets purchased example building, land, machinery,
equipment and shelving is expected to exceed one year. Long-term loans are normally
secured, first by the new assets purchased and then by other unencumbered physical
assets of the business. The lender will expect the borrower to have the appropriate
insurance to protect the assets. For the KFC Holdings, a list of financial sources that are
under long-term loan in 2008 and 2009 can see as below:

Long-Term Loan 2008 (RM’000) 2009 (RM’000)

Loan and borrowing 46,400 72,797
Deferred tax liabilities 31,602 32,940
Employee Benefit 3,313 3,099
Total Long-Term Loan 81,315 108,836

From the table can be seen on the 2008 total loan and borrowing is RM65,944 million but
RM46,400 only categorized as long-term loan. This is because of RM19,544 million is
based on the intermediate loan and loan repayment period is between 3 to 5 years.
Similarly, for the year 2009, long-term loan
2 only recorded RM72,797 million of the total
of RM84, 387 million. This is also because of RM11,590 million maturing in not more
than 5 years. There was an increase of long-term loan in 2009, about 56.89%.

9
Loan and borrowings are get from mortgage property to the bank as a lender which use a
loan to purchase a structure as a to buy office building and finance home purchases. A
mortgage loan has collateral, an asset that backs the loan. Mortgage loans have a maturity
of 15 to 30 years and thus considered as long-term finance. Therefore, this type of loan
usually carries a lower interest rate as compared to an equivalent risk loan with no
collateral. For the deferred tax liabilities which include property, plant and equipment,
land and building revolution of it was recorded at RM32,940 million in 2009 and
RM31,602 million in 2008. Total deferred tax liabilities increased by 4.23% in 2009,
where the total increase is RM1,338 million. A company also get it resources from the
employee benefits or pension funds. For the year 2009 the total loans from the pension
funds is a decrease of 6.46% to RM3,099 million compared to the year 2008 it is
recorded a total of RM3,313 million, where it is decreased around RM214 million. This
reduction occurs because KFC Holdings has received a high amount of loans through the
bank where do a mortgage. However, there are also disadvantages when making the
mortgage if the borrower files required to make the payments on the mortgage, the
lenders can take ownership of the property.

IDENTIFICATION OF THE COMPANY’S FINANCING SOURCES FOR THE

YEARS 2008 AND 2009 FOR COMPANY 2

After analysis, all sources of financing KLCCP Group are in short and long-term
sources only. Intermediate-term resources are not available in this company
because construction in which the time and maturity a source is more than ten
years.

Short Term Financing Sources

Sources of short-term 2008 (RM’000) 2009 (RM‘000)

Trade and other payables 194,117 175,111
Borrowing 408,510 194,432
Taxation 5,468 8,281

10
Total of short term 608,095 377,824
sources

From the table, can be analyzed that the short-term sources of financing available in this
company is spontaneous financing of the trade and other payable with totally RM194,117
million in 2008 and RM175,111 million in the year 2009. Among the items found in
other payables are trade payables, rental deposits and accrued interest margins and profit
sharing cost which commonly known as trade credit. In addition, the company also uses
non-spontaneous sources of financing that borrowing from the bank. Total short-term
borrowing for the year 2008 are RM408,510 million which is more higher than 2009
which only committed a loan of RM194,432 million. Short-term financing or borrowing
is used as a tool to finance accounts receivable and for building up inventory in company.
However for short-term borrowings in the KLCCP Group it only have a secured loans
which it is means a form of debt in which specific assets have been pledge to guarantee
payment. Borrowing include are private debt securities RM145,885 million for year 2008
and RM166,432 million for the year 2009. For the other one are term loans which it is
recorded RM262,625 for year 2008 and RM28 million for the 2009. Total term loan in
2009 was reduced to RM234.625 million decreases of 89.33% from the previous year.
This is because the company had to add inventory and loans have reached maturity at the
end of 2008. So in connection with this it will be minimize the short-term debt with the
banks. In addition, taxation charged increase in 2009 of a total which 51.44% compared
with 2008 where it is recorded RM5,468 million. Taxation means the total amount of tax
that an group is legally obligated to pay to an authority as the result of the occurrence of a
taxable event.

Long-Term Financing Sources

In addition, for long-term financing companies also get advances from financial sources
of the total corporate loan as a other loan liabilities for 2008 is RM111,515 million and
RM49,338 million for the year 2009. It is decreased 55.76% in year 2009 if compare with

11
the previous years. The advances from a corporate shareholder are unsecured with
repayment period 15 years at an interest rate of 5.50%. Unsecured means is promise to
pay a debt. Loan is arranged and negotiate by the firm’s financial manager. The company
also makes long-term loans to cover construction that takes a long time, more than ten
years to complete a project. Long-term loans normally secured first by the new asset
building or purchased assets of the business. The useful life of the asset is directly
reflected in the depreciation schedules which the equipment purchased shows up in the
section on long-term assets. Total long term borrowing in 2009 increased to
RM1,874.632 million which has been an increase of 11.65% when compared with the
previous year in which occurs a difference of RM195,567 million. Increase the amount of
this loan is due to its high capital needs for the purchase of new machinery for use in
development projects being carried out. However, long-term long carry higher interest
rate than short-term loans because the lender assumes a higher risk due to the exposure to
longer periods of certainty that may lead to a default of repayments.

Loan stocks RM37,663 for the year 2008 and RM33,634 for the year 2009. Loan stock is
stock issued by a company in exchange for a loan, but carries no security or guarantee.
Two types of loan stock are unsecured loan stock and convertible loan stock. However
for the group are use unsecured loan stock which is similar to unsecured loans for
individuals. Deferred tax liabilities for the year 2008 RM721,529 million and for 2009
RM794,815. Deferred tax liabilities of the company means an account on a company's
balance sheet that is a result of temporary differences between the company's accounting
and tax carrying values payable for the current year. This liability may or may not
be realized during any given year, which makes the deferred status appropriate. List and
differentiate of long term sources for the year 2008 and 2009 can be refer as below:

Long-term sources 2008 (RM’000) 2009 (RM’000)

Other long-term liabilities 111,515 49,338
Long term borrowing 1,679,065 1,874,632
Loan stocks 37,663 33,634

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Deferred tax liabilities 721,529 794,815
Total of long-term sources 2,549,772 2,752,419

COMPARISON OF FINANCING SOURCES BETWEEN THE TWO

COMPANIES

Comparison between the two companies in 2008 and 2009.

COMPANY KFC HOLDING (KFCH) KLCC PROPERTY

HOLDINGS BERHAD
TYPES
(KLCCPH)
SOURCES

SHORT TERM KFCH get a source from payables The short-term sources of
SOURCES and accruals. Accruals are a form of financing available in this
spontaneous short-term financing. company is spontaneous
For the year 2008, as a spontaneous financing of the trade and
and accounts payable accruals other payable with totally
recorded RM275,424 million RM194,117 million in
compared to the year 2009 it 2008 and RM175,111
increased to RM321,187 million. million in the year 2009.
Percent increase was 16.6%. These Among the items found in
spontaneous financing sources also other payables are trade
have no explicit costs attached to payables, rental deposits
them. Therefore, these types of and accrued interest
financing become more attractive to margins and profit sharing
firms for daily operations. This kind cost which commonly
of financing is unsecured and does known as trade credit. A
not require the pledge of specific

13
assets as collateral. In addition, KFC company also uses non-
Holdings also has the financial spontaneous sources of
resources of the loans and financing that borrowing
borrowing obtain from a bank. from the bank. Total short-
term borrowing for the
Short-term loans are used to raise year 2008 are RM408,510
cash for cyclical inventory needs million which is more
and working capital. Total loan and higher than 2009 which
borrowing in the year 2009 only committed a loan of
decreased by RM43,064 million and RM194,432 million.
for the unsecured loans of about
5.7% when compared to the year Short-term financing or
2008, which total amount to borrowing is used as a tool
RM75,111 million. Bank loan are to finance accounts

divided by two categories namely receivable and for building

secured loans and unsecured loans. up inventory in company.
Secured loans for the year 2008 is However for short-term
RM32,000 million and the borrowings in the KLCCP
for
unsecured loans RM43,111 million. Group it only have a
For the year 2009 KFC Holdings secured loans which it is
consists only of unsecured loans. means a form of debt in
Employee benefits in 2009 which specific assets have
decreased by 35.63% compared to been pledge to guarantee
the year 2008 is RM623,000. While payment. Taxation means
the current tax liabilities in the year the total amount of tax that
2009 is RM12,159 million. an group is legally
obligated to pay to an
authority as the result of
the occurrence of a taxable
event. It is can be

14
 calculated by applying the
appropriate tax rate to the
taxable event's tax base.

INTERMEDIATE- Intermediate-term financing is self-

TERM SOURCES liquidating and is thus similar to
short-term financing. Banks tend to
give out term loans in the 3-5 year
maturity period, whereas, insurance
companies are willing to make
longer-term loans. For the company,
intermediate term loans are use to None
plant facilities and equipment,
particularly when buying new
machinery. This can be used to
increase working capital when the
cost of a public offering of bonds
and stocks are high. However KFC
Holdings only use sources of term
loans. Term loans or known as a
loan and borrowing for the year
2009 decreased by 40.7% which
was recorded at RM11,590 million
compared to the year 2008, which
amount to RM19,544 million.
Deduction in loans and borrowing in
the year 2009 is about RM7,954
million.

15
LONG-TERM Long-term loans are debt For long-term financing
SOURCES instruments which are arranged companies also get
when the scheduled repayment of advances from financial
the loan and the estimated useful life sources of the total
of the assets purchased example corporate loan for 2008 is
building, land, machinery, RM111,515 million and
equipment and shelving is expected RM49,338 million for the
to exceed one year. Long-term loans year 2009. It is decreased
are normally secured, first by the 55.76% in year 2009 if
new assets purchased and then by compare with the previous
other unencumbered physical assets years. The advances from a
of the business. For the year 2008 corporate shareholder are
total loan and borrowing is unsecured with repayment
RM65,944 million but RM46,400 period 15 years at an
only categorized as long-term loan. interest rate of 5.50%.
This is because of RM19,544
million is based on the intermediate The company also makes
loan and loan repayment period is long-term loans to cover
between 3 to 5 years. Similarly, for construction that takes a
the year 2009, long-term loan only long time, more than ten
recorded RM72,797 million of the years to complete a project.
total of RM84, 387 million. This is Long-term loans normally
also because of RM11,590 million secured first by the new
maturing in not more than 5 years. asset building or purchased
There was an increase of long-term assets of the business.
loan in 2009, about 56.89%. Total long-term borrowing
in 2009 increased to
Loan and borrowings are get from RM1,874.632 million
mortgage property to the bank as a which has been an increase
lender which use a loan to purchase of 11.65% when compared

16
a structure as a to buy office with the previous year in
building and finance home which occurs a difference
purchases. For the deferred tax of RM195,567 million.
liabilities which include property, Increase the amount of this
plant and equipment, land and loan is due to its high
building revolution of it was capital needs for the
recorded at RM32,940 million in purchase of new machinery
2009 and RM31,602 million in for use in development
2008. Total deferred tax liabilities projects being carried out.
increased by 4.23% in 2009, where Loan stocks RM37,663 for
the total increase is RM1,338 the year 2008 and
million. RM33,634 for the next
year.
A company also get it resources
from the employee benefits or Loan stock is stock issued
pension funds. For the year 2009 the by a company in exchange
total loans from the pension funds is for a loan, but carries no
a decrease of 6.46% to RM3,099 security or guarantee.
million compared to the year 2008 it Deferred tax liabilities for
is recorded a total of RM3,313 the year 2008 RM721,529
million, where it is decreased million and for 2009
around RM214 million. RM794,815. This liability
may or may not be realized
during any given year,
which makes the deferred
status appropriate.

17
SUMMARY

KFC established in 1952 by Mr. Colonel Harland Sanders when he decided to franchise
his famous Kentucky Fried Chicken recipe blends of 11 herbs and spices to the rest of
America. By the early 70's, that special recipe reached Malaysia. The board comprises a
balance of members with experience in business and finance required for an effective and
independent decision making at the board level. For the business development, corporate
social responsibility at KFC Holdings is an integral part of the day-to-day business. It is
an evolving, ever expanding scene which covers a diverse range of areas. For financial
highlight, the board views that the number and composition of the current Board
members are sufficient and well-balanced for the company to carry out its duties
effectively. KLCC Property Holdings Berhad (KLCCP) was incorporated as a public
limited company on 7 February 2004. KLCCP owns a diverse property portfolio largely
within the KLCC in construction and development. For the development, the group also
realises that the long term sustainability of strong and profitable performance rests.
Financial highlight for KLCCP Group is more better than year 2008. All sources are use
with effectively.

KFC Holdings Firms use several types of financing sources to meet their capital
requirements for the years 2008 and 2009. For the company, it is use sources-short term
financing, intermediate-term and long-term financing. Therefore, the loan can be divided
into two basic categories. These are secured and unsecured loans. Short-term financing is
used primarily as a tool to finance accounts receivables and for building up inventory.
Loans are borrowings that a corporation obtains from a bank. Intermediate-term financing
is self-liquidating and is thus similar to short-term financing. However, intermediate-term
financing can fulfill the requirements for permanent funding. Banks tend to give out term
loans in the 3-5 year maturity period. In addition, the company's KFC also use financial
resources from long term debt. Long-term debt financing is the most popular form of
external financing. Long-term loans are debt instruments which are arranged when the
scheduled repayment of the loan and the estimated useful life of the assets purchased.

18
For KLCC Property Holdings, the sources are use is a short-term loan and long-term
loan. From the table, can be analyzed that the short-term sources of financing available in
this company is spontaneous financing of the trade and other payable, short-term
financing or borrowing is used as a tool to finance accounts receivable and for building
up inventory in company. In addition, it also include taxation means the total amount of
tax that an group is legally obligated to pay to an authority as the result of the occurrence
of a taxable event. In addition, for long-term financing companies also get advances from
financial sources of the total corporate loan which include in other loans liabilities. The
company also makes long-term loans to cover construction that takes a long time, more
than ten years to complete a project. Deferred tax liabilities of the company means an
account on a company's balance sheet that is a result of temporary differences between
the company's accounting and tax carrying values payable for the current year. The
difference in source between the two companies are quite substantial. This is because the
shape or types of resources available is dependent on the amount of capital required and
the form of business. For consumer company long-term loans is less than the construction
company. Construction company requires a large capital to cover the cost of the project
so need a long period for secured the purchase of machinery and construction equipment
as well as.

(5,104 words)

19
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http://www.lacity.org/lahd/MRB.htm. Retrieved 2007-02-24.

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