CENTRE FOR FOUNDATION STUDIES

FHBM1214 FINANCIAL ACCOUNTING

OCTOBER 2021 TRIMESTER

Company : BERJAYA SPORTS TOTO BERHAD

Tutor : Koo Xi Min

Prepared by
Tutorial Digital
No ID No. Name
Group Signature
1 2105094 Lee Yi Ling 7

2 2105113 Lim En Gee 7

3 2104860 Lim Hao Liang 7

4 2104924 Low Xin Yue 7

5 2106773 Ning Yu Jie 7

6 2106197 Thiam Chee Yuen 7

7 2104954 Yang Yong Phin 7

Date of submission: 6 December 2021 Marks

50
 Table of content
No Title Page
1a Identify and explain the nature of business 1
conducted by the company.
1b Identify any 2 stakeholders that will use the 1-2
information contained in the financial statement for
decision making. Briefly describe the decisions that
would be made by the mentioned stakeholders
respectively.
1c (i) Calculate the changes by using the horizontal 2-4
method for both SOCI and SOFP.
1c (ii) Choose any 6 components, 3 each from SOCI and 5-13
SOFP respectively (3 from SOCI and 3 from
SOFP) that you want to further analyze and give
comments.
1d Your decision as to whether you would invest in 13-14
the company or not, based on the analysis made.
You are required to provide 3 relevant reasons to
support your decision. Reasons can be from
analysis you made and other sources that might be
relevant to be included.
Appendices 15-18
References 19
As an investor, you are trying to look for a good public listed company to invest in.

Therefore, you plan to take a look at the company’s financial statement before deciding

whether to invest in the company. You are required to download the latest annual

report of a company listed in Bursa Malaysia (www.bursamalaysia.com) and then

prepare a report. Your report must contain the following items:

(a) Identify and explain the nature of business conducted by the company.

(2 marks)

Nature of business states that a business in Berjaya Sports Toto Berhad in which basic

resources are assembled and processed to provide goods and services to clients. The purpose

is to maximize the profits. The nature of business of Berjaya Sports Toto Berhad includes

investment holding and provision of management services to its subsidiary companies.

(b) Identify any TWO (2) stakeholders that will use the information

contained in the financial statement for decision making. Briefly describe

the decision(s) that would be made by the mentioned stakeholders

respectively. (2 marks)

i. Manager (Internal User)

A manager is a person who makes decisions on the operations of Berjaya Sports Toto Berhad.

The role of manager is to figure out the ways to improve the business and the profit of the

company. Nerine Tan Sheik Ping as the manager of Berjaya Sports Toto Berhad is principally

responsible for the overall management, marketing and strategic direction and is also the

decision maker in every financial operation and financial statement.

ii. Investor (External User)

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An investor must analyze the value of the Berjaya Sports Toto Berhad and premeditate

whether the company’s shares represent a good value. Besides, investor must also concern

the success of Berjaya Sports Toto Berhad and should have the ability to measure the

company’s future success by looking at its financial strength and evaluating its future cash

flow in order to estimate what income they can expect from their investment.

(c) Analyse the company performance (Statement of Comprehensive Income)

and financial position (Statement of Financial Position).

(i) Calculate the changes by using the horizontal method for both SOCI and SOFP

(refer to slides guidelines). You may use font size’s 10 for this table.

(4 marks)

BERJAYA SPORTS TOTO BERHAD

STATEMENTS OF FINANCIAL POSITION

Group Increase (Decrease)
2021 2020 Amount Percentage
RM'000 RM'000 RM'000 (%)
ASSETS
Non-current assets
Property, plant and equipment 304,305 183,111 121,194 66.19
Right-of-use assets 324,735 335,466 (10,731) (3.20)
Investment in subsidiary companies - - - 0.00
Investment in associated companies 104,708 119,269 (14,561) (12.21)
Investment in joint venture - - - 0.00
Long term investments 101,840 118,977 (17,137) (14.40)
Investment properties 117,534 113,238 4,296 3.79
Deferred tax assets 21,824 22,827 (1,003) (4.39)
Retirement benefit assets 9,927 - 9,927 0.00
Intangible assets 707,742 691,292 16,450 2.38
1,691,615 1,584,180 107,435 6.78
Current assets
Inventories 325,873 438,681 (112,808) (25.72)
Receivables 470,966 559,398 (88,432) (15.81)
Contract assets 7,471 6,631 840 12.67
Tax recoverable 4,108 12,309 (8,201) (66.63)
Amounts due from subsidiary companies - - - 0.00
Deposits with financial institutions 254,100 120,174 133,926 111.44

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Cash and bank balances 109,655 187,594 (77,939) (41.55)
1,172,173 1,324,787 (152,614) (11.52)
Non-current asset
classified as held for sale 7,529 - 7,529
1,179,702 1,324,787 (145,085) (10.95)
           
TOTAL ASSETS   2,871,317   2,908,967 (37,650) 1.29

EQUITY AND LIABILITIES

Equity attributable to
owners of the parent
Share capital 135,103 135,103 - 0.00
Reserves 301,744 289,300 12,444 4.30
Retained earnings 393,106 345,596 47,510 13.75
Equity funds 829,953 769,999 59,954 7.79
Treasury shares (18,631) (32,165) (50,796) 157.92
Net equity funds 811,322 737,834 73,488 9.96
Non-controlling interests 63,783 51,458 12,325 23.95
TOTAL EQUITY 875,105 789,292 85,813 10.87

Non-current liabilities
Retirement benefit obligations 608 2,267 (1,659) (73.18)
Long term borrowings 505,107 772,851 (267,744) (34.64)
Other long term liabilities 52,111 1,966 50,145 2550.61
Lease liabilities 232,991 242,691 (9,700) (4.00)
Contract liabilities 162 248 (86) (34.68)
Amount due to a subsidiary company - - - 0.00
Deferred tax liabilities 28,383 18,159 10,224 56.30
819,362 1,038,182 (218,820) (21.08)

Current liabilities
Short term borrowings 551,152 434,702 116,450 26.79
Provisions 2,128 2,696 (568) (21.07)
Payables 420,220 434,457 (14,237) (3.28)
Lease liabilities 32,078 30,745 1,333 4.34
Contract liabilities 169,756 178,370 (8,614) (4.83)
Amounts due to subsidiary companies - - - 0.00
Tax payable 1,516 523 993 189.87
1,176,850 1,081,493 95,357 8.82
TOTAL LIABILITIES   1,996,212   2,119,675 (123,463) (5.82)
TOTAL EQUITY AND LIABILITIES   2,871,317   2,908,967 (37,650) (1.29)

Statement Of Comprehensive Income

3
 Group Increase (Decrease)

2021 2020 Amount Percentage

RM'000 RM'000 RM'000 (%)

Revenue 4,829,148 4,635,664 193,484 4.17

(4,006,030 (3,790,046 (215,984
Cost of sales ) ) ) 5.70
Gross profit 823,118 845,618 (22,500) (2.66)
Selling and distribution expenses (213,575) (266,787) 53,212 (19.95)
General and administrative expenses (292,968) (339,135) 46,167 (13.61)
Profit before other    
income and expenses 316,575 239,696 76,879 32.07
Investment related income 1,942 12,452 (10,510) (84.40)
Investment related expenses (5,172) (2,549) (2,623) 102.90
Other income 46,640 42,446 4,194 9.88
359,985 292,045 67,940 23.26
Finance costs -60,668 (63,316) 2,648 (4.18)
Share of results of associated companies -16,408 (1,913) (14,495) 757.71
Profit before tax 282,909 226,816 56,093 24.73
Income tax expenses -95,512 (93,111) (2,401) 2.58
Profit for the financial year 187,397 133,705 53,692 40.16

Other comprehensive income

Items that may be reclassified
subsequently to profit or loss
Effects of foreign exchange differences 15,833 35,726 (19,893) (55.68)
Share of other comprehensive income/
(loss) of an associated company 180 (138) 42 (30.43)
Items that will not be reclassified
subsequently to profit or loss
Net changes in fair value of investments
at fair value through other
comprehensive income ("FVTOCI") (20) (23,118) 23,098 (99.91)
Share of associated companies' changes
in fair values of FVTOCI investments (789) - (789)
Actuarial gain/(loss) recognized in
defined benefit pension scheme 11,974 5,223 6,751 129.26
Tax effect relating to defined
benefit pension scheme (2,977) (1,001) (1,976) 197.40
Share of other comprehensive
loss of associated companies (99) (19) (80) 421.05
Total comprehensive    
income for the financial year 211,499 141,934 69,565 49.01

4
 (ii) Choose any SIX (6) components, THREE (3) each from SOCI and SOFP

respectively (3 from SOCI and 3 from SOFP) that you want to further analyse and give

comments.

Statement of Comprehensive Income

Net profit of the financial year:

Profit(RM)
200,000,000
180,000,000
160,000,000
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0
Year 2020 Year 2021
Profit(RM)

2020(RM) 2021(RM) Increase (RM) Increase (%)

Net profit 133,705,000 187,397,000 53,692,000 40.16

Comparison of net profit between year 2020 and 2021

= RM 187,397,000 – RM133,705,000

= RM 53,692,000

Percentage increase in net profit from year 2020 to 2021

= RM 53,692,000 / RM 133,705,000 x 100%

= 40.16%

Analysis

5
             Compared with 2020, Berjaya Sports Toto Berhad’s net profit in the year 2021 has

increased by RM53,692,000 (40.16%). The net profit of the company has increased from

RM133,705,000 to RM187,397,000. This is caused by the increase in revenue earned and

expenses used.

Total revenue of the financial year:

Revenue(RM)
4,900,000,000

4,850,000,000

4,800,000,000

4,750,000,000

4,700,000,000

4,650,000,000

4,600,000,000

4,550,000,000
Year 2020 Year 2021

Revenue(RM)

2020(RM) 2021(RM) Increase (RM) Increase (%)

Total revenue 4,690,562,000 4,877,730,000 187,168,000 3.99

Comparison of total revenue between year 2020 and 2021

= RM 4,877,730,000 – RM 4,690,562,000

= RM 187,168,000

Percentage increase in the total revenue from year 2020 to 2021

= RM 187,168,000 / RM 4,690,562,000 x 100%

= 3.99%

Analysis

6
             The revenue of Berjaya Sports Toto Berhad in the year 2021 has increased by

RM187,168,000 (3.99%) compared to the year 2020.The revenue of company has increased

from RM4,690,562,000 to RM4,877,730,000. Besides that, the other income of Berjaya

Sports Toto Berhad in year 2021 also increased by RM4,194,000 (9.88 %) compared to year

2020, which is from RM42,446,000 to RM46,640,000.

Total expenses for the financial year:

Expenses(RM)
4,750,000,000

4,700,000,000

4,650,000,000

4,600,000,000 2
4,550,000,000
Cost of sales 3
4,500,000,000
Share of results of 1
4,450,000,000
Year 2020 Year 2021
associated companies
Expenses(RM)

Income tax expenses 9

Investment related 2

expenses

Selling and 2

distribution expenses

General and 3

administrative

expenses

Finance costs 6

Total expenses 4

7
Comparison of total expenses between year 2020 and 2021

= RM 4,690,333,000 – RM 4,556,857,000

= RM 133,476,000

Percentage increase in the total expenses from year 2020 to 2021

= RM 133,476,000 / RM 4,556,857,000 x 100%

= 2.93%

Analysis

              The expenses of Berjaya Sports Toto Berhad in the year 2021 also increased by

RM133,476,000 (2.93%) compared to the year 2020.The expenses of company has increased

from RM4,556,857,000 to RM4,690,333,000. Apart from that, cost of sales also increased by

RM215,984,000 (5.7 %) compared to the year 2020. The cost of sales expenses has increased

from RM3,790,046,000 to RM4,006,030,000. Moreover, the income tax expenses increased

by RM2,401,000 (2.58 %) compared to the year 2020. The income tax expenses increased

from RM93,111,000 to RM95,512,000. On addition to this, share of result of associated

company expenses also increased by RM14,495,000 (757.71 %) compared to the year

2020.The share of result of associated company expenses increased from RM1,913,000 to

RM16,408,000. The investment related expenses increased by RM2,623,000 (1.03%)

compared to the year 2020. The investment related expenses increased from RM2,549,000 to

RM5,172,000.

Statement of Financial Position

Total Assets:

8
 Assets(RM)
3,500,000,000

3,000,000,000

2,500,000,000

2,000,000,000
Year 2020 (R
1,500,000,000

1,000,000,000 Total Assets 2,908,967,00

500,000,000

0
Year 2020 Year 2021
Comparison of
Non-current assets Current Assets
total assets

between year 2020 and 2021

= RM 2,871,317,000 – RM 2,908,967,000

= -RM 37,650,000

Percentage decreased in total assets from year 2020 to 2021

= RM 37,650,000 / RM 2,908,967,000 x 100%

= 1.29%

Analysis

The total assets of Berjaya Sports Toto Berhad in the year 2021 decreased by

RM37,650,000 (1.29%) compared to the year 2020.The assets is decreased from

RM2,871,317,000 to RM2,908,967,000. Besides that, the changes of inventories in the year

2021 had a major decrease by RM112,808,000 (25.72 %) compared to the year 2021, which

is from RM438,681,000 to RM325,873,000. Other than that, the long-term investments of

Berjaya Sports Toto Berhad in the year 2021 had decreased by RM17,137,000 (14.40 %)

compared to the year 2020.The long-term investments had decreased from RM118,977,000 to

9
RM101,840,000. Receivable assets of Berjaya Sports Toto Berhad in the year 2021 also

decreased by RM88,432,000 (15.81%) compared to the year 2020.The receivable assets had

decreased from RM559,398,000 to RM470,966,000.

Total Liabilities:

Liabilities(RM)
2,500,000,000

2,000,000,000

1,500,000,000

1,000,000,000

500,000,000

0
Year 2020 Year 2021

Non-current liabilities Current liabilities Year 2020 (RM)

Total Liabilities 2,119,675,000

Comparison of total liabilities between year 2020 and 2021

= RM 1,996,212,000 – RM 2,119,675,000

= -RM 123,463,000

Percentage decreased in total liabilities from year 2020 to 2021

= RM 123,463,000 / RM 2,119,675,000 x 100%

= 5.82%

Analysis

The total liabilities of Berjaya Sports Toto Berhad in the year 2021 also decreased by

RM123,463,000 (5.82%) compared to the year 2020. The liabilities are decreased from

RM2,119,675,000 to RM1,996,212,000. Based on the statement of financial position, the

retirement benefit obligations in year 2021 had decreased by RM1,659,000 (73.18%)

10
compared to the year 2020. The retirement benefit obligations had decreased from

RM2,267,000 to RM608,000. Besides, the long-term borrowings of Berjaya Sports Toto

Berhad in the year 2021 had decreased by RM267,744,000 (34.64 %) compared to the year

2020. The long-term borrowings had decreased from RM772,851,000 to RM505,107,000.

The lease liabilities in year 2021 had also decreased by RM9,700,000 (4%) compared to year

2020. The lease liabilities had decreased from RM242,691,000 to RM232,991,000.

Furthermore, the contract liabilities for non-current liabilities in the year 2021 had decreased

by RM86,000 (34.68%) compared to year 2020. The contract liabilities had decreased from

RM248,000 to RM162,000. The provisions of year 2021 had decreased by RM568,000

(21.07%) compared to year 2020. The provisions had decreased from RM2,696,000

toRM2,128,000. Apart from that, the payable of Berjaya Sports Toto Berhad in the year 2021

had decreased by RM14,237,000 (3.28%) compared to the year 2020. The payable had

decreased from RM434,457,000 to RM420,220,000. Moreover, the contract liabilities for

current liabilities in year 2021 had decreased by RM8,614,000 (4.83%) compared to year

2020. The contract liabilities had decreased from RM178,370,000 to RM169,756,000.

Total Owner’s Equity:

Owner's Equity
900,000,000
880,000,000
860,000,000
840,000,000
820,000,000
800,000,000
780,000,000
760,000,000
740,000,000
Year 2020 Year 2021

Owner's Equity

11
 Year 2020 (RM) Year 2021 (RM) Increase (RM) Increase (%)

Total Owner’s Equity 789,292,000 875,105,000 85,813,000 10.87

Comparison of total owner’s equity between year 2020 and 2021:

= RM 875,105,000 – RM 789,292,000

= RM 85,813,000

Percentage increase in total owner’s equity from year 2020 to 2021:

= RM 92,813,000 / RM 782,292,000 x 100%

= 10.87%

Analysis

The total owner’s equity of Berjaya Sports Toto Berhad in the year 2021 increased by

RM85,813,000 (10.87%) compared to the year 2020.The owner’s equity is increased from

RM789,292,000 to RM875,105,000. The reserves of Berjaya Sports Toto Berhad in the year

2021 increased by RM12,444,000 (4.3 %) compared to the year 2020. The reserves had

increased from RM289,300,000 to RM301,744,000. Furthermore, the retained earnings in

year 2021 had increased by RM47,510,000 (13.74%) compared to year 2020. The retained

earnings had increased from RM345,596,000 to RM393,106,000. Besides, the non-

controlling interest in year 2021 had increased by RM12,325,000 (23.95 %) compared to the

year 2020. The non-controlling interest had increased from RM51,458,000 to RM63,783,000.

(d) Your decision as to whether you would invest in the company or not, based on the

analysis made. You are required to provide THREE (3) relevant reasons to

support your decision. Reasons can be from analysis you made and other sources

12
 that might be relevant to be included.

(15 marks)

After a thorough investigation of Berjaya Sports Toto Berhad and the analysis made, it is

decided that I would invest into the company. Based on the analysis provided on the

Statement of Comprehensive Income of Berjaya Sports Toto Berhad, total revenue of the

company has seen an increase of 3.99% from the year 2020 to 2021, going from

RM4,690,562,000 to RM4,877,730,000. The expenses of the company from the year 2020 to

2021 have increased by 2.93%, from RM 4,556,857,000 to RM 4,690,333,000 but the net

profit of the company between the year 2020 to 2021 is RM 53,692,000, showing an increase

of 40.16% in profit, from RM133,705,000 to RM 187,397,000. This is a good reason for an

investment into the Berjaya Sports Toto Berhad because the Statement of Comprehensive

Income of the company shows that it is profiting very well and not losing money, which is

always what an investor looks for when investing in a company. Besides that, another good

reason for investing into Berjaya Sports Toto Berhad is based on the Statement of Financial

Position of the company. Even though the assets of the company have decreased by 1.29%

from RM2,908,967,000 to RM2,871,317,000 comparing the year 2020 to 2021, it is only a

minor decrease, and the company still has enough assets to pay to the creditors, meaning that

the company will not owe too much money and file for bankruptcy. To prove this point

further, the total liabilities of Berjaya Sports Toto Berhad has shown a decrease of 5.82%

from the year 2020 to 2021, going from RM 2,119,675,000 to RM 1,996,212,000. This shows

that the company has enough money to pay to its creditors. Total owner’s equity of Berjaya

Sports Toto Berhad in the year 2021 increased by RM85,813 compared to the year 2020,

increasing by 10.87%. This provides assurance to investors of the company as this shows that

the owners have invested more into the company throughout the year. In addition, the third

reason to invest this company is that I predict the stock price of company will rise. Based on

13
my analysis ，Berjaya Sport Toto Berhad was forced to suspend business on 1 JUNE 2021

due to Movement Control Order (MCO) and caused stock price of company to drop

seriously. On 14 September 2021, Government has allowed all the lottery companies to

resume operations in various stages. In this time, most of the outlets of the company have

reopened and have seen quick rebound in jackpot sales. Maybank Investment Bank Research

predict the sales will recover to around 80% of pre-Covid-19 levels in the future.

Appendices

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References

1)https://www.thestar.com.my/business/business-news/2021/10/14/nfos-see-quick-rebound-

in-jackpot-sales

2)https://www.bursamalaysia.com/

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