BACHELOR OF BUSINESS ADMINISTRATION WITH HONOURS

MAY/ 2023

BBPW3103

FINANCIAL MANAGEMENT I

MATRICULATION NO :
IDENTITY CARD NO. :
TELEPHONE NO. :
E-MAIL :
LEARNING CENTRE : SEBERANG JAYA
1. Introduction of the selected companies
1.1 Maxis Berhad
COMPANY BACKGROUND
Established in 1995, Maxis was one of the first mobile communications providers
in Malaysia.
The company is constantly revamping its business model and was one of the first
operators to introduce 4G services in 2013. Its 4G service reaches 15% of the
Malaysian population, making Maxis a market leader in this area.
Maxis also offers cloud computing to small and medium businesses. The
company's 2G and 3G networks cover 95% and 83% of the Malaysian population
respectively.
Maxis' CEO is Norwegian Morten Lundal, former CEO of DiGi.Com, another
Malaysian telecommunications company. He was also a top executive at
Vodafone, the U.K.'s leading mobile phone company.
Maxis is more than 60% controlled by Usaha Tegas, a private investment arm of
Malaysian billionaire Ananda Krishnan.

BUSINESS SUMMARY
Maxis Bhd. is an investment holding company, which engages in the provision
integrated telecommunication services. It operates through Malaysia, and Other
Countries geographical segments. It offers postpaid, prepaid, phones, and
broadband. The company was founded on August 7, 2009 and is headquartered in
Kuala Lumpur, Malaysia.
1.2 Digi.Com Berhad
COMPANY BACKGROUND
DiGi is the third largest mobile operator in Malaysia. DiGi.Com Berhad (DiGi)
commenced operations in Malaysia in May 1995 when it launched its fully digital
GSM 1800 MHz services, the first digital mobile communications service offering
in Malaysia. DiGi offers mobile voice, roaming and value-added services on both
prepaid and contract bases. DiGi is currently one of the leading operators in the
prepaid segment, which is the largest consumer segment in the Malaysian mobile
market. On 7 May 2008, DiGi obtained a 3G spectrum licence with all of its rights
and benefits via a transfer from TIME dotCom (TdC) for a consideration of 27.5
million new shares. In March 2009 DiGi launched 3G broadband services for PCs,
while 3G voice and data services for mobile phones were introduced in October
2009. In 2001, when Telenor increased its shareholding in DiGi from 32.9% to
61.0% through a voluntary partial take-over offer, the transaction was approved
by the Foreign Investment Committee and the Ministry of Energy,
Communication and Multimedia on the following conditions:  Telenor’s equity
interest in DiGi must be reduced to 49% within five years; and  DiGi must have
at least 30% Bumiputra (indigenous Malays) equity shareholding before 31
December 2006. The deadline to comply was later extended to 30 June 2008. As a
result of the 3G spectrum transfer in May 2008 and an earlier placement exercise,
TdC’s shareholding in DiGi at that point in time increased to 10%, which later has
been reduced to 3.5%. At the same time, Telenor’s ownership interest in DiGi was
reduced to 49%. As a result, DiGi is now in compliance with the 49% foreign
equity condition and has been exempted from the need to comply with the 30%
Bumiputra equity condition imposed by the Foreign Investment Committee. In the
Economic Transformation Programme update on 16 November 2012, the Prime
Minister of Malaysia announced that up to 70% foreign equity would be allowed
for individual class Network Facilities Provider (NFP) and Network Service
Provider (NSP) licences. As at 31 December 2013, DiGi had 11.0 million mobile
subscriptions and the estimated mobile penetration (SIM cards) and number of
inhabitants in Malaysia were 144% and 30 million, respectively.
2. Calculation of relevant profitability ratios

What Are Profitability Ratios?

Profitability ratios determine the ability of the company to generate profits as against :
(i) Sales, (ii) Operating Costs, (iii) Assets and (iv) Shareholder’s Equity. This means
such ratios reveal how well a company makes use of its assets to generate profitability
and create value for shareholders.
Therefore, companies usually seek higher profitability ratios as these imply greater
revenues, profits and cash flows for the company. With the help of these ratios,
business owners or managers decide whether to distribute the earnings or reinvest the
profits in business.
Maxis Berhad
Digi Berhad
3. Analysis of the relevant profitability ratios
Maxis Berhad Company

Digi.Com Berhad
4. Comparison of the companies’ profitability
Conclusion
The main purpose of this study is to evaluate the profitability, financial performance
and operating position of selected chemical companies in addition to make
suggestions for improvement in profitability or operating position of the selected
companies. The present study is made for the period of three years from 20119 to
2021. Two companies were selection. Four ratios were used in this study: net profit
ratio, gross profit ratio, material cost ratio and factory overhead ratio. The major
findings of this study indicate that there are no significant difference in various
profitability ratios and operating ratios of selected chemical companies during the
study period.