FACULTY OF CHEMICAL AND NATURAL RESOURCES

ENGINEERING
SEMESTER II 2017/2018

BKF3142 PROCESS ENGINEERING ECONOMICS

KEA CONSULTANT & PARTNERS

Instructor’s Name : DR. SHAIFUL ZAIDI

Section : 02
Group : 12
Group of Member :

ID
NAME
NUMBER
ANIS NABILA BINTI MOHD AULI KA14038
NUR AIDA FARIHIN BINTI AHLIYASAH KA14039
KOHMALAM A/P AYANASAMY KA16232
DATE OF SUBMISSION: 4 MAY 2018

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Table of Contents
1.0 INTRODUCTION 1

1.1 Company Background 1

1.2 Project Background and Business Understanding 2

1.3 Technological Analysis On the Proposed Project 3

2.0 INDUSTRIAL ANALYSIS 4

2.1 Local Competitors 4

3.0 MARKET ANALYSIS 5

3.1 Consumption 5

3.2 Supply 6

3.3 Demand 7

4.0 FINANCIAL ANALYSIS 8

4.1 Financial Performance 8

4.2 Balance Sheet 9

4.3 Statement of Income 12

4.4 Cash Flow 14

4.5 Ratio Analysis17

4.5.1 Current Ratio 19

4.5.2 Accounts Receivable Turnover 20

4.5.3 Percent Gross Profit 21

4.5.4 Debt to Total Assets 22

4.6 Project Costing for The New Production Line 23

4.6.1 Fixed Capital Investment (FCI) 23

4.6.2 Cost of Operating Labor (COL) 25

4.6.3 Cost of Utilities (CUT) 26

i
 4.6.4 Cost of raw material (CRM) 27

4.6.5 Cost of Manufacturing (COM) 28

4.7 PROFIT ANALYSIS (PRO FORMA) 29

4.7.1 SALES INCOME (PRO FORMA) 29

4.7.2 Balance Sheet (Pro Forma) 32

4.7.3 Cash Flow From/ (Used In) Operating Activities of Pro Forma (2015-2020)
34

5.0 THE FUNDING METHODOLOGY AND TIMING FOR THE PROJECT 39

6.0 RISK ANALYSIS 40

6.1 Identifying Principal Risks And Ensuring The Implementation Of Appropriate Systems
To Manage These Risks 40

6.2 Recognise and Manage Risk 40

6.2.1 Sound framework to manage risk 40

6.2.2 Internal Audit Function 42

6.3 Risk Management 42

6.4 Internal Control 43

6.5 Internal Audit Function 45

6.6 Financial Risk Management 46

6.6.1 Market risk 46

6.6.2 Interest rate risk 47

6.6.3 Credit risk 47

6.6.4 Liquidity risk 48

7.0 DISCUSSION 48

8.0 CONCLUSION AND RECOMMENDATION 49

9.0 REFERENCES 49

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iii
 1.0 INTRODUCTION

1.1 Company Background

KEA Consultant & Partners is a multinational management consulting firm with 200 employees
in 10 offices around the Malaysia. We focus on strategy, marketing, pricing, and sales. Founded
in 2000, we have more than 10 years of experience and are regarded as the national’s leading
pricing advisor. We are true profit experts and help our clients to sustainably boost their profits.
Our projects typically achieve a profitability improvement about 50%. In recent years, many
companies have achieved considerable improvements on the cost side, and have now taken cost
cutting as far as it can go.

KEA Consultant & Partners specialized in plant and machinery valuation. We supports many
leading mechanical and plant engineering companies in boosting their profitability by conducting
power pricing and sales excellence programs. The challenges we tackle range from developing
growth strategies for emerging markets to product optimization for regional requirements and
pricing concepts for global players. In addition, we cover all aspects of sales. This includes
optimizing sales processes and structures, enhancing sales performance, and key account
management. Our specialization also focused on several other consultation categories such as:

 Power pricing programs to boost profits by 2-3 percentage points

 Launching and pricing new products
 Two-product-line strategies for emerging markets
 Price positioning for existing and new products
 Sales excellence programs to boost sales performance
 Service and spare parts strategies in sales and pricing
 Key account management

1
1.2 Project Background and Business Understanding

LNG Resources Berhad was incorporated in Malaysia as a public limited company in year 2002
under the Companies Act, 1965 as an investment holding company and was officially listed on
the MESDAQ Market of the Bursa Malaysia Securities Berhad in year 2003. LNG Group is led
by a strong Board of Directors and Management Team with substantial commercial knowledge
and experience. By leveraging operational and business best practices across the Group, they
enhance and improve their performance year by year. Investment are continuously made in order
to support growth to ensure that we continue to create value for shareholders.

LNG Group is principally engaged in high precision mould, high precision metal, plastic
components and sub-components assembly. This company aimed to be a reputable global source
for precision connector solutions provider with innovative approach in design, and processing
methods, using the latest technology. Only by understanding clients and market need can make a
real difference in creating more genius innovations motivates their company management.
Hence, collaboration with the most suitable specialists are done for every project. They believe
that, only by continually challenging themselves as well as their clients, build a stronger brand
can be built.

Thus, with emerging market growth in high precision industries, a consultation for expanding
LNG Group performance are proposed. Proposed project will covers manufacturing in which
machines, tools and labor to produce goods for use or sale. The term is most commonly applied
to industrial production in which raw materials are transformed into finished goods on a large
scale. Such finished goods may be used for manufacturing other, more complex products, such
as aircraft, household appliances or automobiles, or sold to wholesalers, who in turn sell them to
retailers, who then sell them to end users which is the consumers.

The group was looking to build a new manufacturing facility in Batu Kawan, with the investment
will be over RM10 millions as they believe from the market analysis that largest contributor

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would come from the manufacturing of precision components for the telecommunication,
aerospace, industrial electronics, semiconductor and energy management system industries. LNG
Group had recently secured orders to deliver some US$2mil worth of precision tooling products
within this upcoming year to a new customer in the energy management system business.

1.3 Technological Analysis on the Proposed Project

LNG Resources’ precision tooling metal and plastic components are supplied to the
telecommunication, aerospace, industrial electronics, semiconductor, and energy management
system industries. Their subsidiary company that focused on high precision mould design and
fabrication is engaged in high precision engineering services and capable of providing a host of
synergistic operations ranging from design, modification, fabrication and repairs to assembly of
precision connector moulds, tools, dies, jigs and fixtures. The main products consist of precision
connector moulds, tools, dies, jigs and fixtures for the semi-conductor, electronics and electrical,
computers and peripherals, telecommunications, automotive and aerospace industries.

Machinery and technology own by LNG Group consists of a comprehensive and technological
advance range of CNC machinery such as Swiss made Doebeli 11-axis Profile Grinding
machine, Doebeli 5-axis Profile Grinding machine, Fanuc High Speed Efficiency Machining
Center, CNC EDM machine etc. In addition, for the product design and development process, 3D
CAD and CAM software technologies are applied to develop designs of moulds, tools, dies, jigs
and fixtures. The usage of 3D CAD and CAM software enables to simulate assembly in the
context of a full-scale digital mock-up.

3
2.0 INDUSTRIAL ANALYSIS

2.1 Local Competitors

Year
Company Main Business Location
Founded
 NAICS 1: Saw blade and Hand tool Sungai Petani,
Skill Plas Sdn. Bhd Manufacturing Kedah 1993
 SIC 1: Precision Tools, Machinist’
 NAICS 1: Cutting tool and Bayan Lepas,
Polytool Industry Sdn Machine Tool Accessory Pulau Pinang
1984
Bhd Manufacturing
 SIC 1: Machine Tool Accessories
 NAICS 1: Saw Blade and Handtool Ulu Tiram,
Manufacturing Johor
 NAICS 2: Other Industrial
Tnh Metal
Machinery Manufacturing 1994
Engineering Sdn Bhd
 SIC 1: Precision Tool Machinist’
 SIC 2: Special Industry Machinery,
Nec
 NAICS 1: Saw Blade and Handtool Bayan Lepas,
Kmwe Malaysia Sdn
Manufacturing Pulau Pinang 2009
Bhd
 SIC 1: Precision Tools , Machinist’
 NAICS 1: Cutting tool and Bayan Lepas,
Wanjung Precision Machine Tool Accessory Pulau Pinang
1996
Machining Sdn Bhd Manufacturing
 SIC 1: Machine Tool Accessories
Table 2.1: Local competitors' information.

3.0 MARKET ANALYSIS

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3.1 Consumption

3.1.1 Composite materials – main threat to aluminum use in aircrafts

The use of composite materials has been rapidly growing in the aerospace industry. The latest
generation of aircraft have demonstrated huge progress with the A350 XWB’s structure at 53 %
composite and the Boeing 787 at 50 %. The most common target within the industry is to
achieve 50 % composite content and 20 % weight reduction by 2022. With implementation of
the new generation of twin-aisle jets, composite demand is expected to triple over the next 20
years.

Composite materials are significantly more expensive to produce than aluminum. For example,
thermo set composite materials cost about 15 times and thermoplastics cost around 75 times what
it costs to produce the equivalent in machined aluminum, according to Oliver Wyman
consultancy.

Conclusion on the future of aluminum in comparison with advanced composites in the aerospace
industry:

 A number of characteristics of composites, including: lightness (lower weight than

aluminum), better corrosion resistance and high strength properties, made the way to
composites to dominate (~ 50%) in latest generation of aircrafts (Boeing 787 and Airbus
A 350).

 Advanced aluminum alloys with excellent properties are fighting back and making
aircraft manufacturers’ choice more difficult. However, the aluminum industry has to
manage the handling problems during fabrication of aluminium-lithium alloys to compete
with advanced composite materials.

 The structural flexibility of composite materials helps in designing efficient structures for
an aircraft. On the other hand, there is a problem with delamination, impact damage,
repair and recycling, and the internal flaws assessment is set back.

3.2 Supply

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In economics, supply is the amount of something that firms, consumers, laborers, providers
of financial assets, or other economic agents are willing to provide to the marketplace. The
aerospace industry is constantly seeking solutions for the needs of today’s global economy. The
industry faces the same challenges plaguing many of the world’s industries: costly raw materials,
increasing energy costs, and inflation of the U.S. dollar. In an effort to hurdle these obstacles,
companies on all levels of the aerospace supply chain—from aerospace OEM’s to parts suppliers
—are developing ways to benefit from the rapid globalization of the industry. From the
implementation of new technologies in component design to manufacture of aerospace parts,
more and more elements of the aerospace industry are being outsourced across the world.

This increase in outsourcing will ultimately benefit the companies who prove able to adapt, but
will without a doubt leave companies that lack in innovation out to dry. Those companies that
are willing to change with the industry, and aren’t afraid to take advantage of this rapid
globalization, will revolutionize the industry and remain or become integral parts of the
aerospace supply chain.

Figure 3.1: Traffic and fleet growth.

3.3 Demand

6
Demand is a buyer's willingness and ability to pay a price for a specific quantity of a good or
service. Demand refers to how much (quantity) of a product or service is desired by buyers at
various prices. The quantity demanded is the amount of a product people are willing or able to
buy at a certain price and the relationship between price and quantity demanded is known as the
demand.

The future of the aerospace industry appears bright and will be characterized by strong aircraft
demand for the foreseeable future. Consequently, demand for aluminum alloys for this industry
will remain high as well.

The worldwide commercial passenger and cargo aircraft fleet, as well as the annual number of
passengers, are forecast to double over the next two decades. According to Deloitte, over the
next 20 years’ passenger and freight traffic are expected to grow at an average annual growth
rate of 4.6 % and 4.4 % respectively, contributing to increases in aircraft production. An
increasing in aircraft production will increasing the part of the products that the LNG resources
Berhad produce. The increased passenger travel demand in countries experiencing growing
living standards, primarily India, China, the Middle East, and other Asia-Pacific region
countries, is driving global passenger leisure and business travel growth, and increasing freight
transportation requirements. The need for improvements in fuel burning, lower maintenance
costs, and reduced noise and emissions will drive aircraft manufacturers to optimize design
solutions for a new generation of aircraft.

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4.0 FINANCIAL ANALYSIS

4.1 Financial Performance

Table 5.2: Financial Performance 2013-2017

31.12.201 31.12.201 31.12.201 31.12.201 31.12.201

Year 3 4 5 6 7
Group RM'000 RM'000 RM'000 RM'000 RM'000
Revenue 33,735 24,913 55,476 57,760 56,861
Profit before tax 4,086 889 9,536 611 -5,126
Profit for the year 3,523 478 7,492 449 -5,331
Profit attributable to owners of
3,523 504 7,577 431 -5,326
the Company
Total equity attributable to
43,153 39902 56,974 58311 53,524
owners of the Company
Total assets 50,155 45182 94,609 92838 86,776
 
Share Information
Basic earnings per share (sen) 1.88 0.27 3.23 0.18 -2.20
Gross dividends per share
3.00 - 0.30 - -
(sen)
Net assets per share (RM) 0.23 0.21 0.24 0.24 0.22
 
Financial Ratios
Profit before tax margin 12% 4% 17% 1% -9%
Net profit margin 10% 2% 14% 1% -9%
Return on equity attributable to
8% 1% 13% 1% -10%
owners of the Company
Return on total assets 7% 1% 8% 0% -6%
Revenue growth rate -8% -26% 123% 4% -2%

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4.2 Balance Sheet

Table 5.3: Balance Sheet for 2016 and 2017.

The Group
2017 2016
RM RM
Assets
 
Non-Current Assets
Property, plant and equipment 39,876,786 40,143,451
Investment property - 769,595
Prepaid lease payments 2,041,030 2,146,148
Goodwill 10,655,631 13,567,631
Deferred tax assets - 50,460
  52,573,447 56,677,285

Current Assets
Inventories 11,345,471 11,858,171

Trade and other receivables, including derivatives 13,162,247 13,466,372

Prepayments 726,537 283,322

Tax coverable 464,184 754,032
Bank and cash balances 7,737,209 9,798,912
  33,435,648 36,160,809
Assets classified as held for sale 767,258 -
  34,202,906 36,160,809
TOTAL ASSETS 86,776,353 92,838,094

Equity And Liabilities Equity

Share capital 24,199,499 24,199,499

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Reserves 29,324,139 34,111,950

Equity attributable to owners of the Company 53,523,638 58,311,449

Non-controlling interests 86,770 77,818

TOTAL EQUITY 53,610,408 58,389,267

NON-CURRENT LIABILITIES
Long-term borrowings 9,793,196 12,001,614
Deferred tax liabilities 313,333 353,333
 Deferred tax liabilities 1,567,284 2,151,793
11,673,813 14,506,740

CURRENT LIABILITIES  
Trade and other payables 11,328,672 8,447,596
Loans and borrowings 10,138,380 11,441,834
Tax payable 25,080 52,657
  21,492,132 19,942,087
TOTAL LIABILITIES 33,165,945 34,448,827

TOTAL EQUITY AND LIABILITIES 86,776,353 92,838,094

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4.3 Statement of Income

Table 5.4: Statement of Income for 2016 and 2017.

2017 2016
 
RM RM
Revenue 56,861,202 57,759,744
- -
Cost of sales
51,946,694 50,383,181
Gross profit 4,914,508 7,376,563
Other income 2,706,940 1,665,897
Selling and distribution expenses -393,830 -308,158
-
Administrative expenses -6,647,814
11,128,865
Other expenses -6,015 -169,887
Operating (loss)/profit -3,907,262 1,916,601
Interest income 75,503 97,275
Finance costs -1,294,576 -1,402,835
(Loss)/Profit before tax -5,126,335 611,041
Tax expense -204,259 -162,405
(Loss)/Profit for the year -5,330,594 448,636
Other comprehensive income for the year, net of tax: Items that are
or may be reclassified subsequently to profit or loss: - Foreign 551,735 175,358
currency translation differences for foreign operations

Total comprehensive income for the year, net of tax -4,778,859 623,994

(Loss)/Profit for the year attributable to: 

Owners of the Company -5,326,073 431,186
Non-controlling interests -4,521 17,450
  -5,330,594 448,636

Total comprehensive income for the year, net of tax attributable to:

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Owners of the Company -4,787,811 603,919
Non-controlling interests 8,952 20,075
  -4,778,859 623,994
(Loss)/Earnings per ordinary share attributable to the owners of the Company
Basic (sen) -2.20 0.18

4.4 Cash Flow

Table 5.5: Cash flow for 2016 and 2017.

2015 2014
RM RM
Cash flows from operating activities
(Loss)/Profit before tax -5,126,335 611,041

12
Adjustments for :
Amortisation of deferred income -40,000 -46,667
Amortisation of prepaid lease payments 105,118 105,117
Depreciation 5,693,540 5,117,610
(Gain)/Loss on disposal of property, plant and equipment -2,564 169,748
Impairment loss on goodwill 2,912,000 -
Impairment loss on loans and receivables 5,696 -
Interest expense 1,181,660 1,291,556
Interest income -75,503 -97,275
Inventories written down 196,463 394,375
Property, plant and equipment written off 319 139
Reversal of impairment loss on loans and receivables - -77,845
Reversal of inventories written down - -38,809
Unrealised gain on foreign exchange -1,133,641 410,801
Unrealised gain on forward foreign currency contracts - 6,400
Operating profit before working capital changes 3,716,753 7,011,789

Changes in working capital

Inventories 306,799 3,012,062
Trade and other receivables and prepayments 788,697 1,991,159
Trade and other payables 2,984,329 -2,334,558
Cash generated from operations 7,796,578 9,680,452
Interest paid -1,181,660 -1,291,556
Tax paid -715,784 -1,581,581
Tax refunded 241,610 142,225
Net cash from operating activities 6,140,744 6,949,540

Cash flows from investing activities

Additions of investment property -17,400 -
Interest received 75,503 104,903
Proceeds from disposal of property, plant and equipment 31,287 314,200
Purchase of property, plant and equipment -2,999,586 -5,061,628

13
Withdrawal/(Placement) of pledged deposits 478,703 -13,150
Net cash used in investing activities -2,431,493 -4,655,675

Cash flows from financing activities

Drawdown of term loans 2,654,531 2,434,333
Net (decrease)/increase in other loans and borrowings -2,294,734 1,001,071
Proceeds from sale of treasury shares - 733,646
Repayment of finance lease liabilities -1,457,520 -1,599,763
Repayment of term loans -4,266,500 -3,212,608
Net cash used in financing activities -5,364,223 -643,321

Foreign currency translation differences 272,783 173,624

Net (decrease)/increase in cash and cash equivalents -1,654,972 1,650,544
Cash and cash equivalents at beginning of the year 6,304,774 4,480,606
Cash and cash equivalents at end of the year 4,922,585 6,304,774

14
4.5 Ratio Analysis
Table 5.5: Ratio Analysis for 2016 and 2017.

  2017 2016
Liquidity ratios
Current ratio 1.5914 1.8134
Quick ratio 0.9474 1.1369
Accounts receivable to working capital 0.9559 0.7713
Inventory to Working Capital 0.8930 0.7312
Long-Term Liabilities to Working Capital 0.1479 0.1547
Sales to Working Capital 4.4736 3.5610
 
Activity Ratios
Accounts Receivable Turnover 5.0097 4.8702
Days Sales in Receivables 76.3190 79.1292
Fixed assets turnover 1.1250 1.0754
Total assets turnover 1.0014 0.6221
 
Profitability Ratios
Gross profit margin 8.6400 12.7700
Net operating margin -0.0586 0.0166
Profit margin on sales -0.0937 0.0078
Return on net worth (return on equity) -0.0994 0.0084
Return on total assets -0.0614 0.0048

15
 
Coverage ratios
Debt to total assets 0.2297 0.2525
Percent Owners' Equity 92.8400 94.6100
Equity Multiplier 0.9347 0.9792
Debt to Equity 0.0860 0.1108

16
4.5.1 Current Ratio

Current Assets / Current Liabilities

This ratio reflects the number of times short-term assets cover short-term liabilities and is a fairly
accurate indication of a company's ability to service its current obligations. A higher number is
preferred because it indicates a strong ability to service short-term obligations. The composition
of current assets is a key factor in the evaluation of this ratio.

The current ratio for LNG Group in 2016 is 1.8134, meanwhile in 2017 shows a turnover
decreasing 1.5914 due to expansion project in their Vietnam base. This ratio reflects liquidity
ratio that measures a company's ability to pay short-term and long-term obligations and shows
the number of times short-term assets cover short-term liabilities and is a fairly accurate
indication of a company's ability to service its current obligations. A higher number is preferred
because it indicates a strong ability to service short-term obligations. The composition of current
assets is a key factor in the evaluation of this ratio.

Current ratio
1.8500
1.8000
1.7500
Ratio Score

1.7000
1.6500
1.6000
1.5500
1.5000
1.4500
2014 2015
2016 2017
Year

Figure 5.2: Current ratio for 2016 and 2017.

17
4.5.2 Accounts Receivable Turnover

Sales / Trade Accounts Receivable

This ratio measures the number of times receivables turn over in a year and reveals how
successful a company is in collecting its outstanding receivables. A higher number is preferred
because it indicates a shorter time between sales and cash collection.

The accounts receivable turnover for LNG Group Berhad is 4.8702 in 2016, which compared to
5.0097 in 2017. The ratio is intended to evaluate the ability of a company to efficiently issue
credit to its customers and collect funds from them in a timely manner and reveals how
successful a company is in collecting its outstanding receivables. A higher number is preferred
because it indicates a shorter time between sales and cash collection.

Accounts Receivable Turnover

5.0500

5.0000
Ratio score

4.9500

4.9000

4.8500

4.8000
2014 2015
Year

Figure 5.2: Accounts Receivable Turnover for 2016 and 2017.

18
4.5.3 Percent Gross Profit

((Sales - Cost of Sales) / Sales) * 100

This ratio measures the gross profit earned on sales and reports how much of each sales dollar is
available to cover operating expenses and contribute to profits. The percent gross profit shown is
12.77% in 2016 as compared to 8.64% in 2017 which indicates unprofitable indication of
financial health for the company. Although the value is unprofitable for 2017 due to expansion
project, but for the past 5 years gives a positive increment of gross profit value. This ratio
measures the profit a company makes after deducting the costs associated with making and
selling its products, or the costs associated with providing its services. Percent of gross profit
below shows how much of each sales dollar is available to cover operating expenses and
contribute to profits.

Percent gross profit

14.0000
12.0000
10.0000
Percent

8.0000
6.0000
4.0000
2.0000
0.0000
2014 2015
Year

Figure 5.3: Percent gross profit for 2016 and 2017.

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4.5.4 Debt to Total Assets

Total Liabilities / Total Assets

This ratio measures what proportion of debt a company is carrying relative to its assets. A ratio
value greater than one indicates a company has more debt than assets. Naturally, companies and
creditors prefer a lower number.

The debt to total assets ratio is an indicator of financial leverage. A ratio value greater than one
indicates a company has more debt than assets. From Figure 5.4, higher debt to total asset ratio in
2016 indicates the major expansion that has been done in Vietnam and loans that has been made
for that expansion. Naturally, companies and creditors prefer a lower number.

Debt to total assets

0.2550
0.2500
0.2450
0.2400
Ratio

0.2350
0.2300
0.2250
0.2200
0.2150
2014 2015
Year

Figure 5.4: Debt to total assets for 2016 and 2017.

20
4.6 Project Costing for the New Production Line

4.6.1 Fixed Capital Investment (FCI)

Accumulate
At Net Book
d
Depreciatio
Cost Value
2017 n
RM RM RM
Leasehold land 858,478 44,308 814,170
Leasehold buildings and 13,671,82 10,782,48
2,889,337
improvements 0 3
Renovation 606,708 99,392 507,316
Plant machinery, tools and 65,997,79 24,528,90
41,468,886
equipment 5 9
Computers, office
equipment, furniture, 3,459,848 2,569,698 890,150
fittings and signboard
Motor vehicles 1,484,131 916,899 567,232
86,078,78 38,090,26
47,988,520
  0 0

Accumulate
At Net Book
d
Depreciatio
Cost Value
2018 n
RM RM RM
Leasehold land 858,478 59,499 798,979
Leasehold buildings and 13,671,82 10,367,95
3,303,866
improvements 0 4

21
 Renovation 606,708 123,660 483,048
Plant machinery, tools and 65,997,79 19,249,08
46,748,710
equipment 5 5
Computers, office
equipment, furniture, 3,459,848 2,915,683 544,165
fittings and signboard
Motor vehicles 1,484,131 1,093,511 390,620
86,078,78 31,833,85
54,244,928
  0 2

Fixed capital investments are typically depreciated on the company’s accounting

statements over a long period of time, up to 20 years or more. Examples of fixed capital
investments are leasehold land, buildings, renovation, computers, office equipment and motor
vehicle which are anything that is not continually purchased in the course of production of a
good or service [CITATION Fix15 \l 17417 ]. For our business project, the approximate value
for fixed capital investments that need to consider is stated above.

Fixed Capital Investment

40,000,000
38,000,000
36,000,000
34,000,000
RM

32,000,000
30,000,000
28,000,000
2015 2016
Year

Figure 5.5: Fixed capital investment for 2017 and 2018.

22
4.6.2 Cost of Operating Labor (COL)

For the latest project in LNG Resources Berhad, we need to reduce certain number of employees
since the new technology can operate with least operators. For the business plan project, the
estimation of new workers that need to employ is about 40 workers. Therefore, cost for operating
labor for 40 workers is calculated.

Table 5.6: Cost of operating labor for 2017 and 2018.

Operating
Plant operating Cost No of Cost
Year labor cost in a
hours in a year (RM/hour) worker (RM/worker)
year (RM)
2017 8000 4 50 32000 1,600,000
2018 8000 4.8 40 38400 1,536,000

Cost of Labor
1,620,000
1,600,000
1,580,000
1,560,000
1,540,000
1,520,000
1,500,000
2015 2016

Cost of Labor

Figure 5.6: Cost of operating labor for 2017 and 2018.

23
4.6.3 Cost of Utilities (CUT)

Table 5.7: Cost of utilities for 2017 and 2018.

At Accumulated Net Book

Electrical installation,
Cost Depreciation Value
furniture and fittings
RM RM RM

2017 3,260,947 -1,574,421 1,686,526

2018 3,260,947 -1,691,815 1,569,132

Cost of Utilities
1,700,000

1,650,000

1,600,000
RM

1,550,000

1,500,000
2015 2016

Year

Figure 5.7: Cost of utilities for 2017 and 2018.

24
4.6.4 Cost of raw material (CRM)

Table 5.8: Cost of raw material for 2017 and 2018.

Years Cost of raw material, RM

2017 3,885,274
2018 4,662,329

Cost of raw material

5000000

4000000

3000000
RM

2000000

1000000

0
2015 2016
Year

Figure 5.8: Cost of raw material for 2016 and 2017.

25
4.6.5 Cost of Manufacturing (COM)

The COM (with depreciation) can be obtained by adding the three categories resulting the
following equation:

COM = 0.280FCI + 2.73COL+ 1.23 (CUT+ CRM)

Table 5.9: Cost of manufacturing for 2017 and 2018.

Item Cost RM (2015) Cost RM (2016)

Fixed Capital Investment (FCI) 38,090,260 31,833,852

Operating Labor (COL) 1,600,000 1,536,000
Utilities (CUT) 1,686,526 1,569,132
Raw Materials (CRM) 3,885,274 4,662,329
Manufacturing (COM) 21,886,587 20,771,456

26
4.7 PROFIT ANALYSIS (PRO FORMA)

4.7.1 SALES INCOME (PRO FORMA)

Sales income referred to amount of money that a company actually receives during a
specific period, including discounts and deductions for returned merchandise [ CITATION
Rev15 \l 17417 ]. LNG Resources Berhad annual growth is 1.6 % decrement from the year of
2016 to 2017 and is estimated will have ±10% increment for the following years. The sales
income of the product can be summarized as follows:

Table 5.10: Revenues for 2017-2022.

Year 2017 2018 2019 2020 2021 2022

Revenue,
56,861,000 62,547,100 68,801,810 75,681,991 83,250,190 91,575,209
RM

Revenue
100,000,000
90,000,000
80,000,000
70,000,000
60,000,000
50,000,000
RM

40,000,000
30,000,000
20,000,000
10,000,000
0
2015 2016 2017 2018 2019 2020
Year

Figure 5.9: Revenues for 2017-2022.

27
 Table 5.11: Gross profit for 2017-2022.

Year 2017 2018 2019 2020 2021 2022

Gross Profit
4,914,508 5,897,410 7,076,892 8,492,270 10,190,724 12,228,869
(RM)

Based on annual report, the gross profit margin was projected at a range of 20% to 22% for the
years 2017 to 2022 based on average gross profit margin levels experienced over the last three
years.

Gross Profit
14,000,000
12,000,000
Gross Profit (RM)

10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
2015 2016 2017 2018 2019 2020
Year

Figure 5.10: Gross profit for 2017-2022.

Based on 10% of gross profit, total income is calculated as above.

Table 5.12: Total income for 2017-2022.

Year 2015 2016 2017 2018 2019 2020

Total -4,778,859 589,741 707,689 849,227 1,019,072 1,222,887

28
income

Total Income
2,000,000
1,000,000
0
2015 2016 2017 2018 2019 2020
-1,000,000
RM

-2,000,000
-3,000,000
-4,000,000
-5,000,000
-6,000,000
Year

Figure 5.11: Total income for 2017-2022.

29
4.7.2 Balance Sheet (Pro Forma)

Table 5.63: Balance sheet for 2017-2022.

Year 2017 2018 2019 2020 2021 2022

Total 127,316,16 138,340,71 149,365,26
86,776,000 105,267,075 116,291,622
assets 9 6 3
Total
53,524,000 60,715,139 64,228,371 67,741,603 71,254,835 74,768,067
equity
Total
liabilitie 21,490,000 28,328,200 32,494,300 36,660,400 40,826,500 44,992,600
s
Debt to
equity 0.401502 0.46657556 0.5059182 0.54118 0.5729646 0.6017622
ratio

Financial Forecast from 2017 to 2022

160000000
140000000
120000000
100000000
80000000
RM

60000000
40000000
20000000
0
2015 2016 2017 2018 2019 2020
Year

Total assets Total equity Total liabilities

Figure 5.32: Balance sheet for 2017-2022.

30
The debt to equity ratio is a financial leverage ratio. Financial leverage ratios are used to measure
a company's ability to handle its long term and short term obligations. The formula for calculate
the net debt to equity ratio is shown in below.

Total Liabilities
Debt ¿ Equity=
Total Equity

Debt to equity ratio

0.7
0.6
0.5
0.4
Ratio

0.3
0.2
0.1
0
2015 2016 2017 2018 2019 2020
Year

Figure 5.13: Debt to equity ratio for 2017-2022.

31
 4.7.3 Cash Flow From/ (Used In) Operating Activities of Pro Forma (2017-2022)

2017 2018 2019 2020 2021 2022

RM RM RM RM RM RM
Cash flows from operating activities
(Loss)/Profit before tax -5,126,335 -2,646,427 -1,945,754 453,464 3,854,987 4,309,238
Adjustments for:
Amortisation of deferred income -40,000 -33,333 -26,666 -19,999 -13,332 -6,665
Amortisation of prepaid lease payments 105,118 105,119 105,120 105,121 105,122 105,123
Depreciation 5,693,540 6,269,470 6,845,400 7,421,330 7,997,260 8,573,190
(Gain)/Loss on disposal of property, plant -2,564 155,353 235,466 345,555 554,350 845,343
and equipment
Impairment loss on goodwill 2,912,000 5,824,000 8,736,000 11,648,000 14,560,000 17,472,000
Impairment loss on loans and receivables 5,696 11,392 17,088 22,784 28,480 34,176
Interest expense 1,181,660 1,071,764 961,868 851,972 742,076 632,180
Interest income -75,503 -53,731 -31,959 -10,187 11,585 33,357
Inventories written down 196,463 234,242 456,324 675,443 864,534 963,455
Property, plant and equipment written off 319 508 697 886 1,075 1,264
Reversal of impairment loss on loans and - 77,845 155,690 233,535 311,380 389,225
receivables
Reversal of inventories written down - 38,809 77,618 116,427 155,236 194,045
Unrealised gain on foreign exchange -1,133,641 -923,423 -732,423 135,453 343,566 534,353
Unrealised gain on forward foreign currency - -3,434 -1,343 3,454 6,543 9,678
contracts
Operating profit before working capital 3,716,753 12,774,581 16,798,88 21,529,774 25,667,875 29,780,724
changes 0

32
Changes in working capital
Inventories 306,799 434,676 645,323 935,524 1,032,423 2,334,325
Trade and other receivables and 788,697 567,573 756,342 943,452 1,987,643 2,556,340
prepayments
Trade and other payables 2,984,329 4,303,216 6,622,103 7,940,990 9,259,877 13,578,764
Cash generated from operations 7,796,578 8,432,467 10,233,42 13,589,458 16,239,842 19,343,457
6
Interest paid -1,181,660 -1,071,764 -961,868 -851,972 -742,076 -632,180
Tax paid -715,784 150,013 1,015,810 1,881,606 2,747,404 3,613,201
Tax refunded 241,610 340,995 440,380 539,765 639,150 738,535
Net cash from operating activities 6,140,744 13,157,176 18,751,51 24,978,823 31,164,263 41,532,442
6

Cash flows from investing activities

Additions of investment property -17,400 -23,453 -3,455 1,345 15,632 24,563
Interest received 75,503 131,938 173,309 193,256 254,315 354,982
Proceeds from disposal of property, plant 31,287 93,259 135,094 162,340 194,535 250,549
and equipment
Purchase of property, plant and equipment -2,999,586 -937,544 1,124,498 3,186,540 5,248,582 7,310,624
Withdrawal/(Placement) of pledged deposits 478,703 972,556 1,465,409 1,958,262 2,451,115 2,943,968
Net cash used in investing activities -2,431,493 236,756 2,894,855 5,501,743 8,164,179 10,884,686

Cash flows from financing activities

Drawdown of term loans 2,654,531 2,874,729 3,094,927 3,315,125 3,535,323 3,755,521
Net (decrease)/increase in other loans and -2,294,734 -1,945,305 -1,326,793 -935,435 -532,462 -95,435
borrowings
Proceeds from sale of treasury shares - - - - - -
Repayment of finance lease liabilities -1,457,520 -1,315,277 -1,173,034 -1,030,791 -888,548 -746,305

33
Repayment of term loans -4,266,500 -3,943,231 -2,875,748 -1,685,947 -983,547 -537,582
Net cash used in financing activities -5,364,223 -5,258,508 -4,048,782 -2,716,738 -1,872,095 -1,283,887

34
 Table 5.74: Cash flow from/ (used in) investing activities (2017-2022)

Year (RM)
Cash Flow Statement
2017 2018 2019 2020 2021 2022
Net cash generated from operating 614074 1315717 1875151 2497882 3116426
41532442
activities 4 6 6 3 3
-
243149 236756 2894855 5501743 8164179 10884686
Net cash used in investing activities 3
Net cash used in financing activities -643321 -5364223 -5258508 -4048782 -2716738 -1872095

Net cash generated from operating activities

45000000
40000000
35000000
30000000
25000000
RM

20000000
15000000
10000000
5000000
0
2015 2016 2017 2018 2019 2020
Year

Figure 5.44: Net cash generated from operating activities for 2017-2022.

35
 Net cash used in investing activities
12000000
10000000
8000000
6000000
RM

4000000
2000000
0
2015 2016 2017 2018 2019 2020
-2000000
-4000000
Year

Figure 5.15: Net cash used in investing activities for 2017-2022.

Net cash used in financing activities

-100...

-200...
RM

-300...

-400...

-500...

-600...
Year

Figure 5.16: Net cash used in financing activities for 2017-2022.

36
5.0 THE FUNDING METHODOLOGY AND TIMING FOR THE PROJECT

The estimation cost needed to create and to build the new production line for the process to
produce our product which is high precision moulding. The new production line absolutely will
increase the production rate of our company by 10 to 15%. The cost needed for the project is
approximately the total amount of the machine we required to produce the product which is:

Machine RM (Price/unit) No of required Total

Mitsubishi ZE 40A Gear

293,940 5 1 469,700
Grinding machine

Steel molding machine 331,200 5 1 656,000

CNC EDM machine 103,500 5 517,500

High speed efficiency

207,000 5 1,035 000
machining center

Others

Factory Expansion - 11 000,000

Plant commissioning and

- 1 000,000
start-up

TOTAL 16, 678,200

Table 6.1: Prices for the new production plant.

37
Based on gross profit, this company has a large profit by the end of 2018 which is RM8 492,270.
Therefore, loan is needed to support for this project. It means that this company is can afford half
of the budget to support the whole cost for this project.

6.0 RISK ANALYSIS

6.1 Identifying Principal Risks and Ensuring the Implementation of Appropriate Systems
to Manage These Risks

The Board oversees the Enterprise Risk Management (“ERM”) framework of the Group and
monitors the Group’s risk profile with the assistance from its Risk Management Committee
(“RMC”). The RMC comprising the Executive Directors and Senior Management vide its
periodically meeting will continue to assess to Group’s risk exposure and implementation of
appropriate actions to manage the risks. The RMC advises the AC and the Board on areas of high
risk and the adequacy of compliance and control procedures throughout the organization.

6.2 Recognise and Manage Risk

6.2.1 Sound framework to manage risk

With the assistance of its outsourced Internal Auditors (“IA”), the AC oversees the Enterprise
Wide-Risk Management framework of the Group and reviews the risk management framework
formulated by the Management.

The Company had also formed its Risk Management Committee (“RMC”) on 11 April 2013 to
closely monitor the Group’s risk profile. The RMC will review and recommend to the Board the
type and level of business risks of LNGRES Group and the appropriate framework and policies
for managing such risks.

The Group employed the “Top-down” methodology for the risk assessment process. The
approach to conducting the risk assessment shall include the following steps:

38
a) Review of Information - The Group shall perform Risk Management mapping process entails
reliance on available data.

b) The RMC identify and review the Group’s processes and issues that present the most
significant risks to the Group, based on the assessment and forecast of the business and operating
environment. The Executive Directors and Heads of Departments will discuss risks related to
their specific areas as well as comment on their perceptions of risks to the overall organisation.
During the meetings, the strategies, objectives, current and planned changes in operations, and
related risks shall be discussed.

c) In assessing risk, the summarized results should be compared to the risk universe. The four
major categories of risks are business strategy, compliance, financial and operational. The
identification of primary business processes would enable the prioritization of risk throughout
the organization.

Overall, the risk assessment is based on collective inputs from the Executive Directors and
Heads of Departments, review of various data and management reports and application of
cumulative knowledge of the industry. The identified risk exposures can be used in developing a
risk-based internal audit plan with Internal Auditors.

The risk response strategy adopted in respond to the various identified risk in the aforementioned
audit risk universe are Transfer, Reduce, Accept and Avoid.

The RMC reviewed and assessed the Group’s Risk Register on quarterly basis and tabled the
details RMC report to the AC and the Board on half yearly basis.

39
6.2.2 Internal Audit Function

The Group has engaged the services of an independent professional firm to provide much of the
assurance it requires regarding the effectiveness as well as the adequacy and integrity of the
Group’s systems of internal control. The internal auditors report directly to the AC on its
activities based on the approved annual Internal Audit Plans. Its principal role is to provide
independent assurance on the adequacy and effectiveness of governance, risk management and
internal control processes.

The Statement on Risk Management and Internal Control set out on pages 37 to 39 of this
Annual Report provides an overview of the state of risk management and internal controls within
the Group.

6.3 Risk Management

The Board recognises the importance for identifying, evaluating and managing the significant
risks that could potentially impact the Group. The Group had carried out a review on Enterprise-
Wide Risk Assessment in 2014, which includes identifying and prioritising the Group’s business
risks. The Board is aware that risk management practices need to be embedded into the
organisations business process. Hence, risk registers and risk profiles are used as one of the
business tools to highlight the risks exposures and their risks mitigation to Management and
Board. The risk register and risk profiles for all business units of the Group are updated as and
when there are changes to the business environment or regulatory guidelines. This process is
regularly reviewed by the Audit Committee. The Group formed its Risk Management Committee
in April 2013 to provide risk management support for the management of the Group as a whole.

The key elements of the Group’s Risk Management Framework are described below:
1. The Group maintains a sound system of risk management by ensuring that the risk
management and control framework are embedded into the culture, processes and
structure of the Group and to the achievement of its business objectives.
2. The Group has established an organisation structure with clearly defined limits of
authority, lines of responsibility and accountability that aligned to the Group’s business
objectives.

40
 3. The respective Head of Department and Senior Management staff are responsible for
identifying, assessing and managing the risks faced by their departments. The results of
risk assessment activities are shared across the business unit for appropriate actions to be
taken.
4. Periodic operational/management meetings are held to ensure that the risks identified are
monitored and appropriately addressed to the Executive Directors and the Executive
Directors shall highlight those significant risks identified to the Audit Committee and the
Board
5. The Board is assisted by the Audit Committee in overseeing the effectiveness of the
Group’s policies and guidelines to ensure proper management of risks to which the
Group is exposed and to take appropriate and timely action to manage the risks.

6. The Board through the Audit Committee maintains risks oversight for the Group by
carrying out the following:
i. Ongoing reviews with the key management within the Group on the development and
maintenance of risk management and the internal control framework.
ii. Review the results of the internal audit programme, processes or investigation
undertaken on a quarterly basis, and whether or not appropriate action is taken on the
recommendations made by the internal auditors.
iii. Review with external auditors on the results of their audit, the audit report and
internal control recommendations in respect of internal control weaknesses noted in
the course of their audit on a yearly basis.

6.4 INTERNAL CONTROL

The Board has established an appropriate control structure to manage risks identified by taking
into consideration the nature and extent of the risks, the extent and sources of risk which it
regards as acceptable for the Group, the likelihood of the significant risks materialising, the
Group’s ability to reduce the incidence of risks that do materialise and manage their impact on

41
the business and the costs of operating particular controls relative to the benefit derived from
managing the related risks.

The key elements of the Group’s Internal Control System are described below:
1. The Board has established a hierarchical organisation structure with proper segregation of
duties for key functions of the operations of the Group.
2. Delegation of authority including authorisation limits at various levels of management
and those requiring the Board’s approval are clearly defined to ensure accountability and
responsibility.
3. Clear, formalised and documented internal policies, standards and procedures are in place
to ensure compliance with internal controls and relevant laws and regulations. LNGRES
has a stand-alone Whistle Blowing Policy to provide an avenue for staff or any external
party to report any breach or suspected breach of any law or regulation, including
business principles and the Group’s policies and guidelines.
4. The significant operations of each business unit of the Group are accredited with ISO
9001 Quality Management System and ISO 14001 Environmental Management System,
and are subject to yearly audit reviews. This ensures that the quality and environmental
management system comply with international standards and are continuously improved
upon.
5. An annual budget where key performance indicators for each business unit are set, are
submitted to the Board for approval. Actual performance is reviewed against budget on a
quarterly basis allowing timely response and corrective actions to be taken to mitigate
significant risks.
6. The Group’s performance is monitored through management and operational meetings
attended by senior management. The Executive Directors are also actively involved in the
day-to-day operations of the Group.
7. There are guidelines within the Group for hiring and termination of staff. Appointment of
staff is based on the required level of qualification, experience and competency to fulfil
their responsibilities. An induction programme is conducted for all new employees to
ensure that they are aware of the existing code of ethical conduct and culture. Training
and development programmes are identified and scheduled for employees to ensure that
employees are equipped with the necessary knowledge and competencies to carry out

42
 their responsibilities. In addition, a formal employee appraisal to evaluate and measure
the employees’ performance and their competency is performed at least once a year.
8. Quarterly and yearly financial and management reports are submitted to the Audit
Committee and the Board for review and approval.
9. There exists sufficient insurance coverage and physical safeguards on major assets to
ensure the Group’s assets are adequately covered against any mishap that could result in
material loss. A yearly policy renewal exercise is undertaken in which Management
reviews the coverage based on the current fixed asset inventory and the respective net
carrying amounts and “replacement value”, i.e. the prevailing market price for the same
or similar item, where applicable.
10. Through internal audits, the Audit Committee assesses compliance with policies and
procedures and relevant laws and regulations. In addition, it examines and evaluates the
effectiveness and efficiency of the Group’s internal control system.

6.5 INTERNAL AUDIT FUNCTION

The Group has outsourced its internal audit function to an independent professional service
provider (the “Internal Auditors”) which carries out its functions independently using the risk-
based approach and provides the Audit Committee and the Board with the assurance on the
adequacy and effectiveness of the system of internal control.

The key elements of the Group’s Internal Audit Function are described below:
1. Prepare a detailed Annual Audit Plan in consultation with the senior management on the
scope and frequency of the internal audit activities for the Audit Committee’s approval.
2. Carry out all activities to conduct the audits in an effective, professional and timely
manner.
3. Inform the Management upon completion of each audit for any significant control lapses
and/or deficiencies noted from the reviews for their verification and corrective action
plan.

43
 4. Report to the Audit Committee on a quarterly basis on any non-compliance, internal
control weaknesses and agreed actions taken by Management to resolve the audit issues
identified.

The cost incurred for the internal audit function for the financial year ended 31 December 2017
was RM40,000.

6.6 FINANCIAL RISK MANAGEMENT

The Group’s and the Company’s activities are exposed to financial risks arising from their
operations and the use of financial instruments. The key financial risks include market risk,
credit risk and liquidity risk. The Group’s and the Company’s overall financial risk management
policy focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group’s and the Company’s financial performance.

The following sections provide details on the Group’s and the Company’s exposure to the
abovementioned financial risks and the objectives, policies and processes for the management of
these risks.

6.6.1 Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates
and other prices will affect the Group’s and the Company’s financial position or cash flows. The
Group and the Company are not exposed to other price risk.

Foreign currency risk

Foreign currency risk is the risk that the fair value of future cash flow of a financial instrument
will fluctuate because of changes in foreign currency exchange rates.

The Group and the Company are exposed to foreign currency risk on transactions arising from
sales and purchases and balances that are denominated in currencies other than the respective

44
functional currencies of the Group entities, primarily Ringgit Malaysia (RM), Vietnamese Dong
(VND), United States Dollar (USD) and Indian Rupees (INR). The currencies giving rise to this
risk are United States Dollar (USD) and Singapore Dollar (SGD).

The Group enters into forward foreign currency contracts to reduce the risk of exposure to
fluctuations on foreign currency. These forward foreign currency contracts are recognised in the
financial statements as financial derivatives.

6.6.2 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and of the
Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arise primarily from their interest-
bearing financial assets and liabilities.

The Group and the Company do not hedge interest rate risk but ensure that they obtain
competitive interest rates under the most favourable terms and conditions.

6.6.3 Credit risk

Credit risk is the risk of loss that may arise on outstanding financial assets should a counterparty
default on its obligations.

The Group’s exposure to credit risk arises primarily from trade and other receivables and
deposits placed with licensed banks. The Group manages its exposure to credit risk arising from
trade and other receivables by the application of credit approvals, credit limits and monitoring
procedures on an ongoing basis.

The Company’s exposure to credit risk arises from amount due from subsidiaries, unsecured
financial guarantees provided to banks in respect of banking facilities granted to the subsidiaries
and deposits placed with licensed banks. The Company monitors on an ongoing basis the results
of the subsidiaries and repayments made by the subsidiaries.

45
For bank deposits, the Group and the Company minimise their credit risk by placing the deposits
with high credit rating financial institutions.

6.6.4 Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting
obligations associated with financial liabilities that are settled by delivering cash or another
financial asset.

The Group’s and the Company’s exposure to liquidity risk arise primarily from their various
payables and loans and borrowings.

The Group and the Company maintain a level of cash and cash equivalents and bank facilities
deemed adequate by the management to ensure that they will have sufficient liquidity to meet
their liabilities when they fall due.

7.0 DISCUSSION

FY2017 had been a very challenging year for the Group. The Group reported revenue of
RM56.86 million for FY2017, representing a decrease of 1.6% as compared to FY2016. Despite
the slight drop in Group’s revenue, the profits of the Group dropped significantly and the Group
recorded a loss before tax of RM5.13 million for FY2017 as compared to a profit before tax of
RM0.61 million in FY2016. The significant decline in profit before tax was due to sales of
lower margin products, increase in operating expenses and impairment loss on goodwill of
RM2.91 million.

From the project, we have learnt the methods to go through and obtain the necessary data in
order to successfully analyse the financial report of the company. Thus, we have completed the
objective of this project.

46
8.0 CONCLUSION AND RECOMMENDATION

As a conclusion from the industrial and market analysis, strategic development should be
implemented either in local or international because it is potential for LNG Resources Berhad
Group to grow its business. Strategic collaboration with other company also will help in increase
the company values and expanding the business. General business environment remained
uncertain and volatile. Risks to the global outlook remain tilted to the downside and relate to
ongoing adjustments in the global economy. Premised on the above, we remained cautious on the
overall outlook for financial year ending 2018 (“FY2018”).

Based on the researches done, there are some recommendations that can be included in
the project proposal. Precision machining and stamping segment is foreseeing growth thanks to
increase awarded projects from security products, industrial switches, automobile and aerospace
industries. In order to increase the growth of the precision machining and stamping of this
company, the production line should be increase in the future for the products such as security
products, industrial switches, automobile and aerospace industries by using different types of
materials to meet the demands in different machine and industrials.

9.0 REFERENCES

http://www.bursamarketplace.com/index.php?ch=ch_themarket&pg=pg_tm_stocksss&ac=53

http://www.lng-res.com/index.php

https://www.mhi-global.com/company/technology/review/pdf/e523/e523005.pdf

47