UNIVERSITI KUALA LUMPUR

BUSINESS SCHOOL

SEMESTER SEPTEMBER 2020

ACCOUNTING THEORY AND PRACTICES (EAB 30903)

GROUP ASSIGNMENT 3
AC30

PREPARED BY:

NO. NAME ID NO

1. SYAZWAN BIN RAFAR 62213219191

2. MOHAMMAD ADAM BIN SHAHARUDIN 62213219418

3. NUR NADIAH BINTI ZAINAL ABIDIN 62213219343

4. NUR FARAH ALIA BINTI ABD HALIM 62213219338

5. MUHAMMAD ARIF BIN AHMAD AZMAN 62213117302

SUBMITTED TO:
MDM MARLINA BINTI BAHARUDDIN

SUBMISSION DATE:
30 DECEMBER 2020
TABLE OF CONTENT

NO. PARTICULAR PAGE NUMBER

1 Introduction 1

2 Background of financial reporting in Malaysia 3

3 Comparative table 4

Analysis
 Pos Malaysia
 CJ Century
4 7 - 22
 GD Express
 Tiong Nam Logistic
 Nationwide Express

5 Recommendation 23

6 Conclusion 24

7 References 25
1.0 INTRODUCTION
According to this assignment we should to choose a several companies to review the
financial annual report the latest companies report which is 2019 as to complete the report
and we should to download the annual report for each of among of the members group to
represent the comparison of the financial report on the same industrial and sector but
different company services in Malaysia as our reference to answer the question given. We
had decided to choose the companies as we stated below which is:

Pos Malaysia Berhad

The Pos Malaysia Group is a dynamic postal (mail, retail, courier, and international),
logistics, aviation, financial and supply chain solutions provider with the largest delivery and
touchpoint network in Malaysia, offering an extensive retail network experience through its
core business segments. With a track record of over 200 years, the Group connects the
nation with over 200 postal operators globally and extended its capability to support South
East Asia’s rapidly expanding cross-border eCommerce businesses.

CJ Century

CJ Century is a leading provider of supply chain solutions. From a forwarding agent

in the 1970s, the Group has since diversified into integrated logistics, oil logistics,
procurement logistics as well as data management solutions. CJ Century's unique model of
value-added solutions encompasses warehousing and distribution services that can be
scaled and customised to cater to the needs of customers based on the demands and
delivery service requirements for their products. With the innovative solutions offered, CJ
Century has evolved to managing the contract logistics of discerning clientele, where the
value propositions are to improve operational efficiencies that positively enhance the
clientele and their end customers.

GD Express

GDEX Bhd, formerly GD Express Carrier Bhd, is a Malaysia-based investment

holding company. The Company, through its subsidiaries, is engaged in the provision of
provision of express delivery services, logistics services and property investment holding.
The Company's segments are Express delivery, Logistics and Property Investment. Its
domestic express carrier services include next day delivery service, same day delivery
service (SDD), diplomatic service, bulk service, reverse charge service, delivery order return
service, late pick-up and early deliveries. Its international express carrier services include

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international delivery service and freight service. Its logistics services include warehousing
and distribution, temperature control rooms, packing and customs clearance.

Tiong Nam Logistic

Tiong Nam Logistics Berhad was beginning as a small scale cargo business,
handling cargo and micro-distribution within Peninsular Malaysia. It was founded in 1975 and
listed in Bursa Malaysia in 1992. The headquarters is located in Johor Bahru, Johor,
Malaysia and engaging with numerous branches within Malaysia.In 1978, Tiong Nam
became an incorporated enterprise by expanding its plan. Tiong Nam also widens its reach
to Malaysia borders into Thailand and Singapore. Myanmar, Laos, Vietnam, and China the
new economic center of the world were added to their trucking and warehouses network.
There are three segments available in the business operation such as Logistics and
Warehousing services, Investment and Property development. There is a range of services
offered by Tiong Nam which consist of logistics 2 solutions, lifting and transportation
services, refrigerated transport, and storage, free commercial zone warehouses with
automation tools provided and logistics facilities equipment.

Nationwide Express

Nationwide Express Courier Services Bhd (NATWIDE) provides express courier and
customised logistics services. The principal activities of the Group consist of providing
express courier services, trucking services, freight forwarding services, customised logistics
services, mailroom management services and warehousing. NATWIDE provides speedy
pickup and door-to-door delivery of time sensitive documents and parcels mainly in
Malaysia, Singapore and Brunei. The company is also engaged in the provision of freight
forwarding and logistics services through its wholly owned subsidiary, Nationwide Express
Freight Forwarders Sdn Bhd. The Company was incorporated in 1985 and is based in Shah
Alam.

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2.0 BACKGROUND OF FINANCIAL REPORTING IN MALAYSIA

The growth of Malaysia's economy and business led to a call for companies to be
more transparent and accountable. Since the Colonial rule had incorporated into Malaysia's
regulatory framework, including accounting regulations, Malaysia has experienced a number
of changes to its accounting regulatory framework and capital market.

The Malaysian Institute of Certified Public Accountants was the first professional
body established in Malaysia (MICPA). Malaysia adopted international accounting standards
between 1978 and 1999 and enacted the Financial Reporting Act 1997. The promulgation of
the Financial Reporting Act 1997 led to the establishment of the Malaysian Accounting
Standard Board of Directors (MASB). The objective of the standard-setting body is to
develop and promote high-quality accounting and reporting standards that are consistent
with international best practises.

The Financial Reporting Foundation (FRF) is established under the Financial

Reporting Act 1997, whereby the FRF is a trustee body that responsible to oversight of the
MASB’s Performance, financial and funding arrangement and as the initial source of views
for the MASB on proposed standards and pronouncement.

The member of the foundation comprise representation from all relevant parties in
the standard setting process, including prepares, users, regulators and the accountant
professions. There are twelve members who are appointed by Minister of Finance. Eight of
the member are ex officers representing Minister of Finance, the Central Bank of Malaysia,
the Securities Commission Malaysia, the Audit Oversight Board, the Registrar of
Companies, Bursa Malaysia Berhad, The Malaysian Institute of Accountants and the
members of MASB and the other four members are people who possess knowledge and
experience in matters of financial accounting, law, business or finance.

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3.0 Comparative Table
Pos Malaysia CJ Century GD Express Tiong Nam Logistic Nationwide Express
Berhad
a) The Main Market  Main market  RM56,078,639 •Revenue RM 589,865  RM 86,521 Million
company  RM 1.171 Billion  RM 492 Million (revenue in 2018, (Revenue)
Million
performance (revenue) (revenue) no stated in 2019)  RM 30,572 Million
and position  RM 244,153,000  RM 7.531 Million  RM2,892,510 • Profit After Tax RM (loss after tax)
in the (Loss after tax) (loss after tax) (loss after tax in  RM36,207 Million
0.604 Million
Malaysia RM 1,3376,783  RM 315,864 Million 2018, no stated in (shareholder’s
market (shareholder’s (shareholder’s 2019) •Shareholders’ equity fund)
equity) equity)  RM479,164 RM 702,105 Miliion  RM 24.8 sen (net
Rm1.25 (net Asset  81 sen (net asset Million loss per share)
per share per share) (shareholder’s • Net assets per share
equity) RM 1.52
 0.08 sen (net
asset per share)
b) The type Government link  public limited  Public limited • Public Limited Liability  Public limited
of ownership, company liability company liability Company. company
and the 5 Malay Men  8/9 Male  7/9 Male • Board consisted of  2 Male Malaysian
composition 3 Malay Women  5/9 Malaysian  7/9 Malaysian nine (9) directors, one  2 Female
of board of (1) Chairman, two (2) Malaysian
directors Independent Non-
Executive Directors,
three (3) Non-
Independent Non-
Executive Directors,
two (2) Executive
Directors
and one (1) Managing
Director.
• Male (7 chinese 1
malay ) and female (1
chinese ).

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c) The
measuremen
t approach
use in
determining Historical cost  Historical cost Historical cost • Historical cost basis Historical cost
the
companies’
assets and
liabilities.
d) Disclosure Goodwill. initially Goodwill. Goodwill is
of intangible recognised as an asset initially measured at cost.
assets in at cost and is Following initial
their Goodwill  Goodwill subsequently measured • Goodwill recognition, goodwill is
reporting. at cost less any measured at cost less
accumulated accumulated impairment
impairment losses. losses.
e) Identify
whether the
company
Sustainability  Sustainability • Sustainability
provide Sustainability reporting Sustainability reporting
reporting reporting reporting
Other
independent
report
f) The use of
high or new
technology in
reporting NO, since Pos
NO NO NO NO
such as Malaysia is GLC
XBRL or
Quantum
Leap

5
6
3.0 Comparative table explanation

The table above shows the comparison each company annual reports, there are 5
company that we have choose to do this comparison. The company is Pos Malaysia Berhad,
CJ century, GD express carrier, Tiong Nam Logistic, and Nationwide express. All this
companies involve in transportation and logistics sector in Malaysia, which is has been listed
in Bursa Malaysia. Firstly, for company performance the best is Tiong Nam Logistis, this is
because the company market value per share is RM 1.52 which is better than Nationwide
Express that loss in their market share RM 24.8 sen per share which is Tiong Nam Logistics
market value per share is also higher than other company, Next is, all of this companies is
listed under main market in Bursa Malaysia.

The majority types of ownership for the companies is public limited liability company
which is GD express carrier, CJ century, GD express carrier. For the board composition,
there are three companies that all of their directors is Malaysia which is Pos Malaysia
Berhad, Tiong Nam Logistic, and Nationwide express, this is good because the Malaysian
can be managed the companies to be more competitive in the market with a minded to
improve the Malaysia economy rather than making their own profit.

For The measurement approach use in determining the companies’ assets and
liabilities, the most companies is using historical cost, which is historical cost is a measure
of value used in accounting in which the value of an asset on the balance sheet is recorded
at its original cost when acquired by the company.

For disclosure of intangible asset company, all of the company disclose their goodwill as
intangible asset. This is initially to recognised as an asset at cost and is subsequently
measured at cost less any accumulated impairment losses.

Next is all of the company provide sustainability reporting as their other independent
report, which is this reporting enables organizations to report on environmental and social
performance to the stakeholders. Unfortunately, no company is using new technology in their
reporting.

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 4.0 Analysis

Pos Malaysia

a. How do the companies maintain its competitive advantage using annual reports as
medium/mechanism?

In the age of technological progress, everything can be access through internet. The
users of financial report can see all the company annual report in Bursa Malaysia website. E-
Commence has taken over the company to a new level. In the past five years, the amount of
parcels in daily mailings has been increasing rapidly. In order to survive, the organisation
must have a strategic advantage over its competitor. A competitive advantage is the
characteristic that allows the company to outperform its rivals. This benefit would allow a
company to generate big returns relative to its rivals and increase the profitability of the
company and its shareholders. The Pos Malaysia annual reports provide all the information
for the users about the companies’ operation. To maintain its competitive advantage, Pos
Malaysia provide their financial statement which is to show the users of financial report how
they outperform the competitors. Based on their company annual report for the year 2019,
they suffered a loss for financial year 2019 for RM 244,153,000. However, they still giving
their shareholders the first dividend amounting RM 31,311,000 or 4.0 sen per share. Since
the Pos Malaysia is Government Link Company and the Malaysian’s Gross Domestic
Product (GDP) declined 0.04% from 4.7% in 2018. The company needs to maintain its
healthy financial statement which is it can survive even the economy is not stable. Pos
Malaysia's provider claims that automating parcel sorting is crucial to delivering quicker
distribution hence giving them a competitive edge among others.

b. How do the companies use its EES/ESG/GRI disclosure to be more accountable and
responsible to their stakeholders?

Companies have a big responsibility to take good care of their stakeholder. A

stakeholder is a party that has an interest in the company and can either affect or be
affected by the businesses. There is a three-sector that a company needs to consider, which
is economic, environmental, and social (EES). In Pos Malaysia 2019 annual report they
stated how they show their progress on creating a positive Economic, Environmental and
Social (EES) impacts. Their sustainability strategies are guided by the material topics that
affect their ability to deliver a long-term value to their stakeholders, customers, employees,
suppliers and the greater community. For the economic impact, Pos Malaysia conduct a new
policy, ICT Operations Management Policy. Since we have progress into the digital
transformation, it is crucial to monitor their IT services and infrastructure. This policy

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 provides a holistic and effectiveness approach to the operation of infrastructure components,
applications and processes by monitor their IT on day to day basis. Moreover, for the
Environmental Stewardship, the new policy is regarding the Safety, Health and
Environmental Policy are their commitment to greening is supported by Pos Malaysia's
policy on safety, health and the environment. Employees are expected to improve the quality
of the environment and minimise pollution around our operations by using the relevant
technology and by implementing it. Regulated monitoring activities and appropriate working
practises. For the Social Equity, It is essential to create a favourable and nurturing working
environment for a high-performing workforce. Accordingly, Pos Malaysia employees are
guided by this code in order to establish a culture of transparency, accountability and
inclusiveness. This code applies to all levels of the workforce.

c. What are the major credentials do you think that the companies have in order to
sustain in the market?

In order to gain more share market in postal service in Malaysia, the company must
have their own major credentials that can help them steps ahead from the competitors.
Major credentials mean has an advantage among the rivals. Since the Pos Malaysia has
been operated more than 20 decades, they will know what is the best for their customer.
Acting as a catalyst linking urban and rural areas, the Postal Transformation Plan has
enabled hundreds of thousands of rural people to collect mail and parcels at their doorstep
or from pick-up points. This connectivity makes them better prepared to take advantage of
the opportunities provided by the digital era.

d. What is your opinion about the companies’ corporate governance system?

Whenever a group of people comes together to collaborate on something, there are

expected to be differences of opinion and conflicts of interest. The notion of corporate
governance has become important due to conflicts of interest between stakeholders in
companies. Conflicts emerge mainly between the upper management and the shareholders,
although they can occur between other parties and individuals. Corporate governance
reports provide mechanisms for stakeholders to ensure that companies are committed to
good corporate governance and that they comply with all relevant laws and regulations.
According to Pos Malaysia's Corporate Governance Report 2019, the Board of Directors of
Pos Malaysia Berhad is responsible for managing the company and its subsidiary
companies to manage its policy, conduct and business in order to establish sustainable
value for the benefit of its shareholders. Although, the corporate governance report 2019
shown that the Pos Malaysia follow Bursa Malaysia listing requirement and corporate
governance guidelines that issued by Bank Negara Malaysia.

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e. What type of theory would you use to support or to describe the companies’ (i.e.
managers) actions in their EES/ESG/GRI reporting practise in question b? (Note: You
may use one or more theories to support your answer).

Accounting theory enhances the understanding of the rationale for the behaviour and
practise of managers. The theories are developed by various accounting theories, using
either a deductive or an inductive approach. The best theory that can be apply for Pos
Malaysia are Legitimacy Theory and Stakeholder Theory. The legitimacy theory assumes
that by managing the legitimacy, company will able to ensure the inflow of capital,
customers, employees, suppliers and other related parties. Pos Malaysia is aware that in
finding solutions and managing Greenhouse Gas Emissions (GHG) across their value chain
will not only multiply their efficiency but will minimise negative impacts and open up
opportunities for their business, customers and society. Their environmental endeavour is
steered by the national environmental laws and regulations that help them to identify the
causes of infrastructure and services risks towards our business as well as our stakeholders.
Furthermore, the stakeholders’ theory suggest that the managers must be able to manage
the interest of stakeholders in order to guarantee the long term success of a company. With
their ability to create value for the stakeholders go hand-in-hand with our commitment to
meaningfully contribute to Economic, Environmental and Social (EES) progress. They
understand the strong relationship between business and sustainability, which is increasingly
influencing market decision. This is the driving force behind Pos Malaysia’s transformation,
as they strive to maintain long-term value creation and effectively address sustainability
risks. The business decisions revolve around achieving strong financial outcomes and a
positive EES performance.

f. Who do you think that should involve in the process for continuance enhancement for
the companies’ benefits?

For the continuance enhancement in order to give company a benefits and be

renown through the industry, the directors of the company must become a role player. They
should embrace the rapidly evolving industry by showing the good leadership to the
employees to increase the morale of the workers. Furthermore, the directors should play a
crucial role in innovating and revolutionising the industries.

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 CJ Century

a. How do the companies maintain its competitive advantage using annual reports as
medium/mechanism?

The CJ Century annual reports provide companies information for the users about
the companies’ operation. To maintain its competitive advantage, CJ century can provide
their financial statement which is to show that they have a good financial statement for that
year. Based on their company annual report for the year 2019, their balance sheet remains
healthy with shareholder equity of RM 315.9 Million and the net asset per share is 81 sen for
the year 2019, this shows that even Malaysia’s Gross Domestic Product decreased by
0.04% which is for 2018 Malaysia’s gross domestic product is 4.7% and for the year 2019 is
4.3%, CJ Century still can have positive balance sheet even the economy is not very well for
the year 2019. The company needs to maintain its healthy financial statement which is it can
survive even the economy is not stable. Next, the company can show its investment
information in the annual report to strengthen its competitive advantage over the other
company in the main market of “Bursa Malaysia”. This is to show their capability & capacity
in providing integrated supply chain solution for the customers, in the annual report, CJ
Century invests more than 17 million to expand their capabilities which is to emerging of e-
commerce business industry in the coming years. After that, CJ Century can improve to
produce more high-quality products and services to meet the customer need and
expectation about their business and to have brand recognition by society. Next, the
company can access new environmentally friendly technology which is to install a monitoring
system on fuel consumption& vehicle tracking that analyses the vehicle performances with
the ultimate objective is to reduce carbon emissions.

b. How do the companies use its EES/ESG/GRI disclosure to be more accountable and
responsible to their stakeholders?

Companies have a big responsibility to take good care of their stakeholder. A

stakeholder is a party that has an interest in the company and can either affect or be
affected by the businesses. There is a three-sector that a company needs to consider, which
is economic, environmental, and social (EES). The first sector is economics, the companies
can set out procurement policy & procedures required for the vendors to consistently provide
products and services that meet customers' needs. Next is to improve the company quality
management, they have their quality policy which is to maintain the highest level of services
and product quality. Next is data protection and security which is to safeguard customers’ &
vendors’ data, every data that the company receives about their stakeholders, they are
required to sign non – disclosure agreement which is to keep their data confidential and

11
 private. Next is the environmental sector, the company reports waste management and
performance as they recognize the need to reduce, recycle, and reuse. This is to respond to
climate change, pollution, and resource depletion. CJ Century effort to reduce environmental
impact is worn rubber casing sent for retreat and rethreaded tires send to designated tire
recycling partner for recycling, Other than that, the company uses minimal diesel and petrol
to have a low of carbon emission and they use a special device to monitoring the vehicle
system on fuel consumption. The last sector is Social, CJ century care about their worker,
some of the benefits that employee get is car allowance, petrol entitlement, and transport
allowance. Next, CJ Century also doing community engagement which is programs that
strengthen more with the stakeholder. Example of the programs is back to school programs,
iftar with orphanage and Ramadhan donation for the staff year 2019

c. What are the major credentials do you think that the companies have in order to
sustain in the market?

There is a major credential that companies have to sustain in the market. Firstly, the
establishment of sustainability committee and corporate structure with ultimate responsibility
from the board of the director, the chairman of the sustainability committee is tasked for
driving and managing sustainability matters across the business and ensures that key
sustainability results are met with the support of the committee. The members of the
sustainability committee comprised of seven key head of departments which are Human
Resources, Quality Management, Finance, Transport, Courier, Sales, and IT. Furthermore,
to ensure better communication as well as control the company uses a new multi–storey
facility which has resulted in front – end as well as the backroom teams to be consolidated in
one location.

d. What is your opinion about the companies’ corporate governance system?

Based on the companies’ corporate governance system in CJ Century it shows that

the corporate governance acts in the best interest of the company for its stakeholder without
compromising the best interest of other stakeholders. The board is effectively promoting the
best interest of the company to add long term value to the company shares, shareholders,
and other stakeholders. In CJ Century there are 9 members of the board of directors, 3 of
them are Independent Non – Executives Directors, 4 of them are Non – Independent Non –
Executives Directors, and 2 of them are Executives Directors. The majority of the board is a
male, 5 out of 9 members is Malaysian which is good to have the majority of Malaysia in the
Board of Director, but in CJ Century the board practice no discrimination in term of
appointment of director which they are open in choosing Board of the Director.

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e. What type of theory would you use to support or to describe the companies’ (i.e.
managers) actions in their EES/ESG/GRI reporting practise in question b? (Note: You
may use one or more theories to support your answer).

Stated in the CJ sustainability statement, the company is take a good care of their
stakeholder, to support the company action in the sustainability statement we can conclude
that the suitable theory for the company. The best theory about the company is stakeholder
theory, this theory suggest that the manager must be able to manage interests if
stakeholders to guarantee the long term success of the company. In CJ Century they are
manage the interest of all their stakeholder. for example, CJ Century implement a system in
the vehicle to reduce carbon emission, this will give positive impact to the stakeholders
especially community, local ecology and employee. Another example to support this theory
is procurement policy set up for the vendors will give benefit to supplier which is they can
improve while maintaining good relationship with them.

f. Who do you think that should involve in the process for continuance enhancement for
the companies’ benefits?

To continuance enhancement for the companies’ benefit, the person should involve
is the directors because the director can promoted good governance culture which they can
provide a practical ways to do a decision making at all levels, they also create an investment
opportunities and can boost employee morale, reputation and a legacy. Next they also can
ensure effective communication with stakeholders, this is to build strong business
relationship and get better responses from stakeholders.

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 GD Express Carrier

a. How do the companies maintain its competitive advantage using annual reports as
medium/mechanism?
The GD express annual reports provides companies information for users about the
companies operation, education and training. To maintain competetive advantage, GD
express had intensified its effort to improve every aspect of its operations and service
capabilities in the year under review. In particular, the management focused on improving
quality through the inttroduction of new digital based apps, upgraded the digital infrastructure
and systems to speed up the response time for cutomers. They also emphasised on
improving the skill sets and wellfate or their people. Competition in the express delivery
services industry has become muchmore intense despite a slowing of the economy following
the protracted trade row between US and China. Demand for express delivery services
continued to grow but the downside was that it attracted many newcomers to “gatecrash” an
already crowded industry. In fact, competition has become so robust and vicious that many
players resorted to throwing prices just to get market share. As a result, most express
carriers are operating on much reduced operating margins or even running into losses. Due
to the very challenging environment, the Group posted a decline in earnings. For the year
ended 30 June 2019, Group profit before taxation declined 27.4 percent to RM32.4 million.
However, Group turnover increased 7.1 percent to RM313.9 million. Group profit after
taxation (PAT) also increased 37.7 percent to RM32.5 million. The Group’s EBITDA
(Earnings Before Interest, Tax, Depreciation and Amortization) declined to RM53.7 million
from RM61.4 million previously.
b. How do the companies use its EES/ESG/GRI disclosure to be more accountable and
responsible to their stakeholders?
Companies have big responsibility to take good care of their stakeholder. Stakeholder
is an individual or group that has an interest in any decision or activitiy in an organization.
Taking into every consideration how the business will operate in the economic, environment,
and social (EES). For the first one sector is economic. The social-economic and geo-political
trends, as wll as embracing technological innovations are key factor. It is also about
connecting people with goods, services, ideas and technologies to cretae opportunities in
the marketplace. Next is GDEX in striving for continuous improvement building strong
partners and strategic alliances. Is making these connections which result in greater
conveniences and better customer experiences.
Second sector is environment, the group maintains an effective organisation structure
with clear objective, responsibilities, authority and segregation of duties. The authority levels
which duty approved by the Board are appropriately delegated with clear and proper

14
 documentation. The limits are regularly reviewed, revised as the need arises, and approved
by the management and the Board in accordance to their LOA, in line with changes in
business, structural and operational perspectives. For the last sector is social, as part of our
social and humanitarian programme, CSR team continues to conduct annual visits to
orphanages, homes for the handicapped and orang asli community, especially during the
festive season to bring some cheer and much needed goods such as foodstuff, toys and
educational items to the less fortunate.

c. What are the major credentials do you think that the companies have in order to
sustain in the market?
There is a major credential that the companies have in order to sustain in the market
which is corporate sustainability programme also strives to meet and deliver key
performance index targets and financial returns as well as increase revenue, reduce waste
and energy expenses, increase employee productivity and commitment. Next is the group
looks to create long-term consumer and employee value that is environment friendly, while
taking into every consideration how the business will operate in the social, cultural, and
economic environment. It is also has to develop policies that foster longevity by practicing
transparency, ethical practices and proper employee.

d. What is your opinion about the companies’ corporate governance system.

The Board is accountable and responsible for the overall governance, management,
performance and strategic direction of the Group’s goals and objectives. Therefore, it is the
responsibility of the Board to oversee the effective performance of the management in order
to protect and enhance shareholder value and to meet the Group’s obligations to its
employees and other stakeholders. The current Board is led by experinced and competent
Board members of whom three are Executive Director, four are Independent Non-Excutive
Directors and two are Non-Independent Non-Executive Director. All directors have suitable
background, qualifications, skills and relevant knowledge to ensure that they have proper
understanding of the Group’s operation and business and are able to challenge and facilitate
discussion and decision making.

e. What type of theory would you use to support or to describe the companies’ actions
in their EES/ESG/GRI reporting practise in question b?
According to the question b, we can say that the company are using stakeholder
theory. The company more focused on customer, supplier, vendors and business partners,
government and regulator, shareholder and investor, private sector regulation. The essential
idea on the theory is that such group may effect and give effect to the performance of a

15
 company. To support my answer, they ensure relevancy in their products and services by
offering cost effective and innovative product packges including enhanced liabilitycoverage
and one-stop solutions. Thus, ensuring timely and secured delivery to meet customer needs
and satisfaction. The second one to support my answer is suppliers and vendors are also
expected to organise regular workshops and seminar to ensure their technical staff are fully
trained and capable of handling the products used. Every year, they conduct supplier
evaluation exercise to ensure suppliers and vendors meet the quality standards set by the
group. Third one is they gave inputs into the training and building of skills to enhance the
human resources aspect of the insudtry. Second is legitimacy theory. Companies that spend
more on corporate social responsibilties (CSR) activities have greater CSR disclosure.
These companies tend to employ disclosures strategies in order to change public perception
and expectation. To support my answer, GD express send CSR team continues to conduct
annual visits to orphanages, homes for the handicapped and orang asli community,
especially during the festive season to bring some cheer and much needed goods such as
foodstuff, toys and educational items to the less fortunate

f. Who do you think that should involve in the process for continuance enhancement for
the companies’ benefit?

In the process for continuance enhancement for the companies’ benefit, the board of
director should be involved. It is because the Board acknowledges that maintaining a good
corporate governance to enhance the long-term and corporate value of the company as well
as delivering sustainable growth in the interests of all its shareholders and other stakeholder.
Board of director are also responsibility to ensure that the principle and best practices in
corporate governance.

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 Tiong Nam Logistic

a. How do the companies maintain its competitive advantage using annual reports as
medium / mechanism?

The Tiong Nam Logistics Holdings Bhd financial analysis covers the income
statement and ratio trend-charts with balance sheets and cash flows presented on an annual
and quarterly basis. The report outlines the main financial ratios pertaining to profitability,
margin analysis, asset turnover, credit ratios, and company’s long-term solvency. This sort of
company's information will assist and strengthen the company’s decision-making processes.
In the section that explains Tiong Nam Logistics competitors and the industry as a whole, the
company's financial ratios are contrasted with those of its competitors and the industry as a
whole. A unique understanding of the competition and the rivals of the sector, along with
comprehensive details on the internal and external influences impacting the related industry,
can help to navigate the make a good decision. Business and distribution operations of the
company can be improved by having an insight into the competitor business. The article also
includes related news, review of PR-activity and fluctuations in stock markets. The above are
associated with the appropriate news and press releases, and a number of analysts and
market research companies make annual and quarterly predictions. This information makes
aware of the key trends in the Tiong Nam Logistics Holdings Bhd market.

b. How do the companies use its EES/ESG/GRI disclosure to be more accountable and
responsible to their stakeholders?

Environment

The company manage operations in a manner that minimizes disruption to the

environment, including a focus on reducing fuel consumption and carbon emissions. In this
regard, the majority of their trucks are equipped with environmentally friendly Euro 2
engines. They are also converted various trucks to run on natural gas which further reduces
their carbon footprint.

Additionally, their vehicles undergo regular service and maintenance works, as well
as inspection by Pusat Pemeriksaan Kenderaan Berkomputer (“Puspakom”) to mitigate the
risk of unscheduled disruptions, potential air pollution due to faulty vehicles, and accidents
and traffic interruptions. The Group has a Fleet Management Department which is
responsible to monitor and updates the Puspakom inspection status and schedule of their
vehicles, in order to ensure that vehicle inspections are carried out on a timely basis.

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Social

The Group is committed to upholding transparency, accountability and ethics in the

conduct of their business and operations with their stakeholders, including the Government
and Authorities, Shareholders and Investors, Customers, Suppliers, Employees and
Communities. The company aim to develop and foster good relationships, trust, mutual
respect, and understanding with their stakeholders. The Group has introduced various
channels to engage with their stakeholders to understand and respond to their interests with
regards to their services and operations. Maintaining active engagement with their
stakeholders remains a priority, as they strive to build a sustainable business in the long run.
To this end, they also remain dedicated in playing their part as responsible corporate citizen,
and are committed to the welfare their employees, community and the environment that their
operation.

Governance

All the Directors have been advised to attend at least one (1) or more
programme/seminar/forum for the new financial year 2020 which have direct relevance to
the disposal of their duties and responsibility as Director and keep abreast with the latest
developments in the capital markets, relevant changes in laws and regulations and the
business environment from time to time. The Company Secretary normally circulates the
relevant statutory and regulatory requirements from time to time for the Board’s reference
and briefs the Board on the updates, where applicable. The Group Senior Financial
Controller and External Auditors also brief the Board members on any changes to the
Malaysian Financial Reporting Standards that affect the Group’s financial statements for the
financial year under review.

The Board acknowledges the importance of openness and responsibility to

shareholders and prospective investors. The different means of contact are through
meetings with mutual shareholders and investor communities, quarterly reports of financial
performance to Bursa, related announcements and circulars, periodic and extraordinary
general meetings, where appropriate, and through the website of the Company at
www.tiongnam.com.

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c. What are the major credentials do you think that the companies have in order to
sustain in the market?

In 1975 Tiong Nam started out as a small-scale cargo business handling

consolidated cargo and micro-distribution within Peninsular Malaysia. After than that Tiong
Nam began its expansion plan and became an incorporated enterprise. The company
expanded across the border into Singapore and started to cross-border transportation and
customs brokerage services in 6 years to develop the relation with another country outside
of Malaysia. Not only they get listed on KLSE, they also started their reefer trucking division
and extended their reach into Thailand. Their solution to e-commerce logistics, instant,
commenced operations. They are also opened their Vietnam and China branches and
started their ASEAN cross-border trucking deliveries.

d. What is your opinion about the companies’ corporate governance system?

The Board of Directors of Tiong Nam Logistics Holdings Berhad (the “Company” or
“TNLHB”) support high standards of corporate governance and is committed to ensuring that
good corporate governance is being practiced throughout the Group as a fundamental part
of discharging its responsibilities to enhance shareholders’ value and financial performance
of the Group. This Board Charter sets out the authority, role, function, composition and
responsibilities of the Board to assist the Board members to be aware of their duties and
responsibilities. The Board assumes, amongst others, the following roles and
responsibilities:

 Reviewing and adopting a strategic plan for the company, addressing the
sustainability of the group’s business.

 Overseeing the conduct of the group’s business and evaluating whether or not
its businesses are being properly managed.

 Identifying principal business risks faced by the group and ensuring the
implementation of appropriate internal controls and mitigating measures to
address such risks.

 Ensuring that all candidates appointed to senior management positions are of

sufficient calibre, including having in place a process to provide for the orderly
succession of senior management personnel and members of the board.

 Overseeing the development and implementation of shareholder

communications policy.

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  Reviewing the adequacy and the integrity of the group’s internal control and
management information systems.

e. What type of theory would you use to support or to describe the companies’ (i.e.
Managers) actions in their EES/ESG/GRI reporting practise in question b?

Base on my answer in question b, Tiong Nam Logistic company action in

Evironment, Social, Governance (ESG) reporting pratices as i mention above, for me the
theory would suitable with Legitimacy Theory refer to the assumption that the action of a
company of a company are appropriate and proper within the social system (norms, belief
and value) of their respective societies in which they are operated. The theory assumes that
by managing the legitimacy, company will able to ensure the inflow of capital, customers,
employees, suppliers and other related parties for the company survival and sustainability.

f. Who do you think that should involve in the process for continuance enhancement for
the companies’ benefits?

In my opinion to keep going the process for continue enhancement chairman and
managing director because for me the Chairman provides overall leadership to the Board
and ensures that the Group’s corporate objectives are met. Hence, the Managing Director is
primarily responsible for making and implementing operational decisions and managing the
day-to-day operations of the Group.

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Nationwide Express

a. How do the companies maintain its competitive advantage using annual reports as
medium/mechanism?
Nationwide Express believes that corporate sustainability is an important part of
preserving the sustainability and competitiveness of the industry. A sustainability report
presents the organization’s value and governance model and demonstrate the link
between its strategy and commitment to a sustainable global economy. At Nationwide
Express, they thoroughly appreciate the ethical obligation to be good corporate citizens
and are committed to professionally and ethically appropriately managing business
operations. They believe in providing the best to all the stakeholders, in line with their
mission,' Nationwide Express D.E.L.I.V.E.R.S.' They will build on our platform of
fostering good corporate governance by incorporating environmental and social
concerns into their operations to generate long-term value for stakeholders.

b. How do the companies use its EES/ESG/GRI disclosure to be more accountable

and responsible to their stakeholders?
By implementing economic, environmental and social concerns into business
activities, Nationwide Express builds on platform to promote good corporate governance.
Their strategy is constantly reviewed and reassessed to ensure that their efforts resulting
in improved benefits for all the stakeholders. The Board is accountable for overall
management of our sustainability strategy. Their strategy is to increase consideration of
Environmental, Social and Governance (ESG) matters into business decisions and
operations. Through an ongoing process of identification and evaluation, the Board
establishes the direction of our sustainability strategy. Nationwide Express worked to
reduce greenhouse gas emissions by introducing more energy-saving programmes
throughout the year, such as continuing five (5) year vehicle replacement programme.
The following activities were registered are via programmes such as recycling the use of
paper, using energy-saving light bulbs, etc., we have carried out further conservation
efforts. Next, Nationwide Express have continued to concentrate on talent growth by
giving their workers multiple learning opportunities. Their intranet is also a focal point for
workers to access the company's timely and detailed data and current developments.
Other than that, Nationwide Express also invested or donated make a meaningful impact
to deserving local communities in terms of time, products, services, influence,
management skills and other tools. Nationwide Express' Community contributions shall
consist of cash and in-kind gifts, employee contribution rewards and voluntary employee
programmes.

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c. What are the major credentials do you think that the companies have in order to
sustain in the market?

In the marketplace, a significant number of important stakeholders are located

including shareholders, vendors, consumers, participating agencies, government
agencies, business organisations and regulatory bodies. Nationwide Express believes in
working responsibly with these communities in a number of ways, such as encouraging
the demand for good goods and services, participating in responsible procurement and
organising regular dialogues. In the context of our product creation process, we consult
market stakeholders and decide on issues that concern them.

d. What is your opinion about the companies’ corporate governance system?

Corporate governance is the backbone of a good company. Good corporate

governance will ensure that the Board of Directors meets on a regular basis, maintains
power over the company and is consistent in the division of their duties, as well as
ensuring a system of risk management. As for Nationwide Express, the Board met on ten
(10) occasions, where it deliberated upon a variety of matters. Other than that, the
Secretary of the Company shall be responsible for duties such as ensuring that board
processes are followed and that all applicable rules and regulations are complied with.
As for Nationwide Express, Company Secretaries attend all Board and Board Committee
meetings. They are responsible for ensuring the meeting procedures and many more
duties, although the system of governance will often vary from company to company.
Nationwide Express employing good corporate governance, holding board meetings and
making decisions as a board, these goals can be kept in mind.

e. What type of theory would you use to support or to describe the companies’ (i.e.
managers) actions in their EES/ESG/GRI reporting practise in question b?
In my opinion, the theory that can relate to Nationwide Express is Legitimacy
theory. Legitimacy theory takes into managing the legitimacy, company will able to
ensure the inflow of capital, customers, employees, suppliers and other related parties
for the company survival and sustainability. It is stated that The Board is accountable for
overall management of their sustainability strategy. It refers to how they invested or
donated money, time, products, services influence, management knowledge and other
resources make a positive contribution to deserving local communities. Community
investment at Nationwide Express will include cash and donations in-kind to
organisations, corporate incentives for employee contribution and employee volunteer
programs.

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f. Who do you think that should involve in the process for continuance enhancement
for the companies’ benefits?
In my opinion, the top management are main role for the company. Although
continuous improvement can vary from basic improvements for company's day-to-day
activities to substantial changes in focus and procedures across a global framework.
Other than that, it is possible that a community that promotes creativity, innovation and
out-of-the-box thinking will lead to a profitable business that continues to come up with
new ideas. The efforts of workers are constrained by a stifling corporate culture, making
it impossible for the organization to advance. As workers know they have the support of
the top management team, without holding back, they contribute. So, good internal
control produce quality product.

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5.0 Recommendation

Some companies have to improve of their weaknesses. For the first one is clearly
plan out the document. It is important to clearly document and diagram to make it clear, as
possible but must include every detail that is needed to make it function. With provides the
blueprint on which will be benchmarked when a problem arises, it will save the time, as it will
help immediately define the cause of the problem and give a good basis of which to take
corrective action. Next is use the data to benchmark. We have to collect as much data as
you can on your freight track pricing down to the product level track pricing via mode and via
lane technology. It would easier than before to collect and analyse the data.

For the third one is the company send the CSR team to conduct annual visit to
orphanages, homes for the handicapped and orang asli community, especially during the
festive season. However, the company should expand more the CSR activity which is visit to
inland areas or even in rural areas. To manage their risk, recruit employees, bolster their
brand in the eyes of investor and consumers, ease their supply chains and save money.

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6.0 Conclusion

In a nutshell, business is investing to develop and protect their long term value in a
changing world, but CEOs are often left frustrated that these efforts don’t get the recognition
they deserve. In order to have good reporting, Integrated reporting (IR) promotes a more
cohesive and efficient approach to corporate reporting and aims to improve the quality of
information available to provider of financial capital to enable a more efficient and productive
allocation of capital. Other than that, stakeholder needs to understand the inherent risk and
reward because the lender will never have control over your business hence there is no
need for a guarantee to be prepared by the borrower.

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7.0 References
 https://www.theedgemarkets.com/article/tiong-nam-invest-rm200m-new-warehouses-
fleet-expansion
 https://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?
id=195356&name=EA_DS_ATTACHMENTS
 https://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?
id=195812&name=EA_DS_ATTACHMENTS

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