BWFX 4908

1.0 INTRODUCTION

Practicum is one of the elective components under the Bachelor of Finance with

Honors programme which carrying 8 credit hours.

The students are required to undergo practicum for a period of 16 weeks and

they are encouraged to do so during their final year semester break. This practical

training has been included in their respective programmes credit hours.

Practicum will enhance the knowledge of the students in the industries related

to their field of studies as well as providing them the proper skill and qualities before

they venture into the working atmosphere. The students also have the opportunity to

apply the knowledge learnt during lectures into the real scenario. Feedbacks and

criticisms by the employers will be embodied in the syllabus to enhance the

programme curriculum, thus ensuring it meets the current market needs.

As for me, I have successfully finished my 16 weeks of practicum training at

Tenaga Nasional Berhad branch Seri Manjung from 22nd February 2016 until 10th

June 2016, Alhamdulillah praise to Allah SWT. All what I have learnt are very useful

and it teaches me about the real working life.

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1.1 Practicum Objectives

The purposes of attending and completing practicum as one of the components

in the programme are to:

1. Expose students about knowledge, experience and environment of working

which could not be received during lectures;

2. Give opportunities to the students to apply knowledge and theories which

has been learnt during lectures with the practical application related to

their field of study;

3. Increase the opportunities of the students in selecting and getting jobs;

4. Introduce the students with the industries activities which relating to the

field of study;

5. Improve and strengthen the relationship between the industries and the

University in areas such as research, teaching, training and consultancy.

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2.0 BACKGROUND OF THE COMPANY

2.1 Company Profile

Tenaga Nasional Berhad (TNB) is the largest supplier of electricity utility in

Malaysia with totalling RM110.7 billion in asset. TNB is responsible in

keeping the lights on for all residents of Peninsular Malaysia, Sabah and

Labuan. It is also the most experienced energy player in the country along 65

years in industry.

Recently, TNB has become a champion of Renewable Energy (RE) as

par of their commitment to promote a greener and more sustainable energy

sector. They are responsible for signing Renewable Energy Purchase

Agreements (REPAs) with RE producers and for the administration of the

Feed-in Tariff which funds the supply of RE onto the National Grid. Besides,

TNB inspired to expand their existence within the region by providing

expertise to Nations experiencing a surge in power demand as a result of rapid

in development of socio-economic. A new division which is Energy Ventures

has been established towards this end with the mandate. This division is to

discover possible ventures for TNB to participate in within Southeast Asia and

the Middle East. They are also adding value to all stakeholders in order to

safeguard the sustainability of their operations. TNB also integrate themselves

fully into the communities where have a presence via educational and other

socially empowering activities.

TNB has been a key contributor to the social and economic of nation

over the years. The company also committed to retain the status quo in order

to change into a more efficient and effective organization that is able to create

a Better. Brighter. future for the nation and its people.

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2.2 History of Tenaga Nasional Berhad

2.2.1 A Private Company

On 4 May 1988, the Government announced to privatize National

Electricity Board of the States of Malaya (NEB) as its final decision.

Keeping the interest of nation in mind, two pieces of legislation were

passed to replace the existing Electricity Act, and to provide for the

establishment of a new corporation TENAGA NASIONAL

BERHAD (TNB) that replaces NEB (Successor Company Act). Datuk

Hj. Ibak bin Abu Hussein was the last Deputy Chairman and General

Manager of NEB and the first Managing Director of TNB. Prime

Minister Dato Seri Dr. Mahathir bin Mohamad officially proclaimed

TNB as the heir and successor to NEB on 1 September 1990.

2.2.2 Logo History

Figure 2.3: Logo

Firstly, Tenaga National Berhad was known as the Central Electricity

board (CEB), and then known as the National Electricity Board (NEB)

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or Lembaga Letrik Negara (LLN). Based on the logo above, it has an

unsheathed keris sitting perpendicular which represent an indirect

allusion to a flash of light from the central feature of the shield. The

coat of arms was made up of a shield with a central radiating sphere in

silver, with gold rays illuminating the dark blue background, it

represents electricity and the Companys good heraldry. This coat of

arms was, in turn, supported by the tiger and panther; strong, fearless

and bold Malayan animals. The silver collars around them indicates the

tin industry and its large usage of electricity. Beneath these elements

was a green base which refers to Malayas natural greenery, holding

together a banner stating Tenaga Membena Negara, or Power Builds

the Nation.

2.2.3 Legal Status

Name of Company : Tenaga Nasional Berhad

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Date of Company Register : 1 September 1999

Address : Tenaga Nasional Berhad,

Bahagian Pembahagian, Lot.

1754,Jalan Dato Seri

Kamaruddin, 32040 Seri

Manjung, Perak

Telephone Number : 05-6882020

Fax Number : 05-6884763

Website : www.tnb.com.my

2.3 Vision & Mission of the Company

2.3.1 Vision

To be among the leading corporations in energy and relates businesses

globally.

2.3.2 Mission

We are committed to excellent in our product and services.

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2.3.3 Objectives

1. To provide our customers with products that will meet our declared

specifications.

2. To deliver our products to customers within the mutually agreed

timeframe required by the customers.

3. To assists clients to expand their business network and

opportunities locally and internationally.

4. To relieve the administrative and financial burden of the

government.

5. Improve the effectiveness and quality of the public services.

6. Encourage the spread of private entrepreneurship in the public

sector.

7. Contribute the attainment of the goals set for the New Economic

Policy (NEP).

2.4 Companys Products/Services

Tenaga Nasional Berhad core-business is made up of three operating unit

namely Generation Division, Transmission Division and Distribution

Division.

2.4.1 Generation Division

One of the core business divisions of TNB, the Generation Division is

entrusted to develop, operate and maintain the portfolio of TNB

relating to power generating units. This division operates thermal

assets and hydroelectric generation scheme in Peninsular Malaysia and

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one Independent Power Producer (IPP) operating in Pakistan. It has

generation capacity of 11296 MW in the peninsula. In 2015, TNB

increased the hydroelectric generation in order to expand its generation

capacity. By 2025 with the same purpose, the company plans to

commissioning the first nuclear power plant in Malaysia if the

government decides to include nuclear as an acceptable energy option.

2.4.2 Transmission Division

In conformity with the Malaysian Grid Code, TNBs Transmission is

aimed at providing a safe, reliable and economical operation of the grid

system. Recently, the TNB Group has a complete system including the

National Grid which is energised at 132, 275 and 500 KV. It is with its

tallest electricity pylon in Malaysia and Southeast Asia being the

Kerinchi Pylon located near to Menara Telekom, Kerinchi, Kuala

Lumpur. TNB also involved in the manufacturing of transformers, high

voltage switchgears and cables, consultancy services, architectural,

civil and electrical engineering works and services, repair and

maintenance services and fuel undertakes research and development,

property development and project management services through its

subsidiaries.

2.4.3 Distribution Division

The Distribution Division is entrusted to conduct two value chain

business activities on behalf of TNB, which are the Distribution

Network Operations and Electricity Retail Operations. First,

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Distribution Network Operations plans, constructs, operates, performs

repairs and maintenance as well as manages the assets of the 33 kV, 22

kV, 11 kV, 6.6 kV and 415/240 volts in Peninsula Malaysias

distribution network. Second, Electricity Retail Business operates a

network of state and area offices to purchase electricity from

embedded generators. It is also help to market and sell electricity,

connects new supply, provides counter services, collects revenues,

operates call management centres, provides supply restoration services,

and cultivates strong customers and government relationships.

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2.5 Structure of the company

Figure 2.1: Organizational Structure of TNB

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Figure 2.2: Organizational Structure of TNB, Seri Manjung

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3.0 ANALYSIS OF FINANCIAL ASPECTS IN THE COMPANY

FINANCIAL RATIO
2010 2011 2012 2013 2014 2015
Liquidity Ratio
Current Ratio 1.66 1.40 1.58 1.51 1.06 0.99
Quick Ratio 1.51 1.22 1.39 1.33 1.04 0.97
Working Capital 0.08 0.04 0.06 0.05 0.01 (0.002)
Cash Ratio 0.77 0.37 0.50 0.48 0.31 0.04
Leverage/solvency
Ratio
Debt Ratio 0.56 0.56 0.60 0.65 0.59 0.57
Debt Equity Ratio 1.29 1.25 1.52 1.83 1.43 1.31
Times interest earned
ratio 0.28 1.42 0.49 0.31 0.16 0.21
Equity multiplier 2.29 2.25 2.52 2.83 2.43 2.31
Profitability Ratio
Profit Margin 9.53% 1.39% 9.35% 13.18% 15.00% 13.96%
Return on Asset 3.95% 0.63% 3.81% 5.13% 6.31% 5.69%
Return on Equity 9.04% 1.42% 9.61% 14.55% 15.37% 13.15%
Market prospect Ratio
Earnings Per Share 58.92 9.16 17.71 82.81 114.59 108.41
Efficiency Ratio
Inventory turnover 20.09 22.19 19.39 18.00 172.60 127.35
Account Receivable
turnover 0.122 0.12 0.149 0.145 0.12 0.13
Total Asset turnover 0.41 0.45 0.41 0.39 0.42 0.41
Payables turnover 0.12 0.12 0.10 0.12 0.13 0.17

Table 3.1: Financial Ratio of TNB

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3.1 Liquidity Ratio

Current Ratio
1.90

1.70

1.50

1.30
TNB
1.10

0.90

0.70

0.50
2010 2011 2012 2013 2014 2015

Current ratio is called current because, unlike some other liquidity

ratios, it incorporates all current assets and liabilities. As we know, the current

ratio measures a companys ability to pay their short term and long term

obligation. It calculated by dividing current asset with current liabilities. Based

on the graph above, it shows the TNBs current ratio for six years starting

from 2010 to 2015. We can see that the current ratio of TNB was slightly

dropping in 2011and increasing in 2012. After 2012, it keeps dropping year by

year.

Besides, the highest current ratio for TNB during those six years is in

2010 which is 1.66. It means, TNB could cover about 166% of their existing

1-year debt obligations with their current liquid assets. The lowest current

ratio is recorded in year 2015 with amount only 0.99. Although the ratio in

2015 is the lowest one, but the dropping percentage is same as in 2013. The

dropping percentage is about 6.88%. We can also see that the ratio dropped

drastically in 2014 which is from 1.51 to 1.06. In 2012, the ratio was

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increasing during the year with the amount of 12.81%. Then, the higher the

current ratio is better for a company.

Quick Ratio
1.60

1.50

1.40

1.30

1.20
TNB
1.10

1.00

0.90

0.80
2010 2011 2012 2013 2014 2015

Quick ratio is similar to the current ratio except that it excludes

inventory, which is generally the least liquid current asset. The generally low

liquidity of inventory results from two primary factors. First, many types of

inventory cannot be easily sold because they are partially completed items,

special-purpose items, and the like. Second, inventory is typically sold on

credit which means that it becomes an account receivable before being

converted into cash. Based on the graph above, it shows the TNBs quick

ratios for six years starting from 2010 to 2015. The shape of quick ratios

graph is quite same as with the current ratios graph. This is because as

mentioned before, the quick ratio is similar to current ratio by excluding

inventory element in the calculation.

We can see that the quick ratio of TNB was slightly dropping in

2011and increasing in 2012. After 2012, it keeps dropping year by year. In

2010, the quick ratio is the highest one compared to the other years which is

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1.51. It also shows that the company is more liquid in 2010 rather than others

and able to pay off their obligations without having to sell of any long term

assets. Besides, the lowest ratio is in 2015 which is recorded with amount of

0.97. It means, the company was having difficulty in term off paying their

debts or current liabilities and ought to sell of their any capital assets so that

they can pay the obligations. In 2012, the quick ratio increased about 14.10%.

Working Capital
0.09

0.08

0.07

0.06

0.05

0.04 TNB

0.03

0.02

0.01

-
2010 2011 2012 2013 2014 2015
(0.01)

Working capital ratio is same as a current ratio, it measures ability of

the company use their current asset to pay off their current liabilities. It

calculated by dividing net current asset (current assets current liabilities)

with total assets. Based on the graph above, the highest working capital ratio is

in 2010 compared to others. This is because the net current assets after minus

with current liabilities is the highest one all over the other five years. After

that, the ratio decreased in year 2011 which is 0.04. The percentage of

decreasing during this year is about 45.31%.

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Besides, the lowest ratio shows in year 2015 which is negative in

value, -0.002. TNB got negative ratio due to the negative amount of current

assets after deducting or pay off the current liabilities. In order words, the

company does not have enough current assets to cover their current liabilities.

It is not good to the company because it shows that they are in unstable

condition which might involve them in facing problems with the company

liquidity. But, the largest percentage of decreasing is in 2014 with 86.38%.

Then, TNB should be aware with their spending on current assets and control

their current liabilities so that the ratio can be improved.

Cash Ratio
0.90

0.80

0.70

0.60

0.50

0.40 TNB

0.30

0.20

0.10

-
2010 2011 2012 2013 2014 2015

Cash ratio is a refinement of quick ratio and indicates the extent to

which readily available fund/cash to pay off current liabilities. It only looks at

the most liquid short-term assets of the company, which are those that can be

most easily used to pay off current obligations. Based on the graph above, we

can see that the highest cash ratio of TNB is in year 2010. This is because in

the statement of financial position shows that the deposits, bank and cash

balances of TNB is highest compared to other five years. It means, the

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company has enough available fund/cash such as many people deposited their

fund into TNB to open new account of electricity and other services so that

they can pay the obligations from the fund. As we can see in the graph, a sharp

decreases happened in 2011. It decreased about 52.22% in that year.

Besides, a slightly increases happened in 2012. The deposits, bank and

cash balances elements in balance sheet shows a little improvement compared

to before. The ratio increase from 0.37 to 0.50 which is 35.63% increasing.

Then, it keeps dropping in 2012 to 2015. The lowest cash ratio over the six

years is in 2015. It drops to 0.04 compared to year before, 2014. It means, the

company has decreasing in cash and they are having difficulty to settle down

their obligations. Then, the company ought to maintain their cash balances so

that they can manage the obligations as well as they want.

3.2 Leverage/Solvency Ratio

Debt Ratio
0.66
0.64
0.62
0.60
0.58
TNB
0.56
0.54
0.52
0.50
2010 2011 2012 2013 2014 2015

Debt ratio measures the proportion of total assets financed by the

firms creditors. Based on the graph above, it shows the TNBs debt ratio for

six years starting from 2010 to 2015. As we can see, 2013 resulted to get

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highest debt ratio compared to the other years which is 0.65. This value

indicates that TNB has financed close to 65% of its assets with debt. It means,

the higher the debt ratio the greater the amount of other peoples money being

used to generate profits. It could increase their risk if the company keeps using

debt to finance their assets. This is because the company might not be able to

obligate their debt due to high interest charged by the creditors.

Besides, the lowest debt ratio for this company is in 2011 which is

0.557. In 2011, the company has low degree of indebtedness and the less

financial leverage it has. The company just used debt around 55.7% to finance

their assets so that they can generate earnings. Starting from 2011 to 2013, the

pattern of debt ratios graph is increasing and continue to drop in 2014 and

2015. It means, the company less finance their assets using debt.

Debt Equity Ratio

1.90
1.80
1.70
1.60
1.50
1.40 TNB
1.30
1.20
1.10
1.00
2010 2011 2012 2013 2014 2015

Debt to equity ratio is used to measure how much a debt the company

is using to finance its asset relative to the amount of value represented in

shareholders equity. In other words, it is a financial ratio which indicates the

relative proportion of shareholders' equity and debt used to finance a

company's assets. Based on the graph above, we can see that the highest ratio

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is in 2013 which is 1.83. It means, the company use around 183% to finance

their assets relative to the amount of value represented in shareholders equity

by debt. This indicates the company aggressively in financing growth with

debt and it will increase the overall level of risk for the company as the

company is facing more volatile earnings as a result of additional interest

payment.

Besides, 2011 resulted to get lowest debt to equity ratio compared to

the other years which is 1.25. It means, the company was having stability in

finance the assets. The lower debt equity ratio also indicates more investor

financing (shareholders) used than creditor financing (bank loans). Although it

was recorded as the lowest one, but the ratio is still high which is more than

1.00. As we can see, the ratio decreased in 2011 but increased drastically in

2012 and 2013. The ratio decreased again in 2014 and 2015.

Time Interest Earned Ratio

1.60
1.40
1.20
1.00
0.80
TNB
0.60
0.40
0.20
-
2010 2011 2012 2013 2014 2015

Times interest earned ratio, sometimes called the interest coverage

ratio, measures the companys ability to make contractual interest payments.

In other words, it is used to measure the proportionate amount of income that

can be used to cover interest expenses in the future. This ratio is calculated by

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dividing the earnings before interest and taxes (EBIT) by the interest expense

of the company. Based on the graph above, we can see that the ratio was

drastically increased in 2011 from 0.28 to 1.42, drastically decreased in 2012

which is 0.49, slightly decreased in 2013, 0.31 and 2014, 0.16 and increased a

little bit in 2015 which is 0.21. Obviously the highest ratio of this company is

in 2013, 1.42 compared to the other five years. The higher ratio is considered

more favourable to TNB because the company can afford to pay its interest

payment when the due comes.

Besides, the lowest times interest earned ratio of TNB is in 2014 which

is 0.16. It shows that the company is having difficulty in fulfilling its interest

obligations. Then, the company ought to improve and maintain their times

interest earned ratio because it shows the ability of the company to pay the

interest payment when they come due and the company is presenting less of

risk to investor and creditors in term of solvency.

Equity Multiplier
2.90
2.80
2.70
2.60
2.50
2.40 TNB
2.30
2.20
2.10
2.00
2010 2011 2012 2013 2014 2015

Equity multiplier is a ratio of a companys total assets to its

stockholders equity. It is also refers to a measurement of a companys

financial leverage. Based on the graph above, we can see that the ratio

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decreased from 2.29 to 2.25 in 2011. It decreased about 1.45%. But, the equity

multiplier keeps increasing from 2011 to 2013, which are 2.25, 2.52 and 2.83

respectively. It is also shows that the company starts to increase their debt to

purchase the assets for the company. The ratio decreased again in 2014 and

2015, 2.42 and 2.31 respectively.

Obviously the highest equity multiplier of this company is in 2013,

which is 2.83 compared to the other five years. It means, the company

considered to be highly leveraged and more risky for investors and creditors.

The company rely too heavily on debt financing which could include the debt

service costs and it will increase the companys cash flows in order to pay

their operations and obligations. Furthermore, the lowest ratio is in year 2011

which is 2.25. This indicates the company use a smaller portion of asset

financing through debt in this year and use large portion of asset financing

through equity and thats why the ratio is low. The company more careful and

conservative in financing their assets which is less dependent on debt

financing and dont have high debt servicing costs.

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3.3 Profitable Ratio

Profit Margin
16.00

14.00

12.00

10.00

8.00
TNB
6.00

4.00

2.00

-
2010 2011 2012 2013 2014 2015

Profit margin ratio measures the percentage of each sales dollar

remaining after all costs and expenses including interest, taxes and preferred

stock dividends, have been deducted. Based on the graph above, we can see

that the profit margin was dropping during 2011 which is from 9.53% to

1.39%, and increasing in value until year 2014 which are 9.35%, 13.18% and

15% respectively. In 2015, it starts to drop back to 13.96%.

As we can see, the highest profit margin is in 2014 which is 15%. It

indicates the company has a net income of $0.15 for each dollar of total

revenue earned. The higher the margin is better for a company. It can makes

creditors and investors feel confidence to give loan and invest in the company

because they has high profits so that they able to pay back the loans and

distribute the dividend respectively. Besides, obviously we can see that in

2011 the margin was dropping drastically over the year. It decreased about

85.44%. This happen when the operating expenses in that year high or the

company spent too much in their operating business and it affects the net

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profit at that time. Sales or revenue just can cover enough for the operating

expenses in the year. In order to generate additional revenue, the company

should cutting expenses and managers generally tend to reduce spending

budgets to improve profit ratio. Then, we can see the profit margin has

increased and improved as time goes starting in 2012.

Return On Asset
7.00

6.00

5.00

4.00
TNB
3.00

2.00

1.00

-
2010 2011 2012 2013 2014 2015

Return on total assets (ROA), often called the return on investment

(ROI), measures the overall effectiveness of management in generating profits

with its available assets. Based on the graph above, it shows the TNBs return

on assets (ROA) for the six years starting from 2010 to 2015. As we can see,

the TNBs ROA are fluctuated over the 6 years. The ROA was dropping

during 2011 which is from 3.95% to 0.63%, and increasing in value until year

2014 which are 3.81%, 5.13% and 6.31% respectively. In 2015, it starts to

drop back to 5.69%.

Besides, 2014 resulted to get highest return on assets compared to the

other years which is 6.31%. This value indicates the company earned 6.31

cents on each dollar of asset investment. The higher the companys ROA is the

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better. A high ROA is a telltale sign of solid financial and operational

performance. ROA gives a quick indication of whether the business is

continuing to earn an increasing profit on each dollar of investment. Investors

expect that good management will strive to increase the ROA which is to

extract greater profit from every dollar of assets at its disposal. Furthermore,

the lowest ROA of the company is in 2011 which is 0.63%. It means, the

company just earned 0.63 cents on each dollar of their asset investment. The

decreasing percentage of that year is about 84.06% and it is a huge value

involve. A falling ROA is a sure sign of trouble around the corner and it is not

good for a company.

Return On Equity
18.00
16.00
14.00
12.00
10.00
8.00 TNB
6.00
4.00
2.00
-
2010 2011 2012 2013 2014 2015

The return on common equity (ROE) measures the return earned on the

common stockholders investment in the firm. Generally, the owners are better

off the higher is this return. Based on the graph above, it shows the return on

equity (ROE) of TNB for the six years starting from 2010 to 2015. As we can

see, the ROE are fluctuated over the 6 years. The ROE was decreasing during

2011 which is from 9.04% to 1.42%, and increasing in value until year 2014

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which are 9.61%, 14.55% and 15.37% respectively. In 2015, it starts to

decrease again to 13.15%.

Besides, we can see that the highest ROE is in 2014 with the amount of

15.37%. It indicates that during 2014 the company earned 15.37 cents on each

dollar of common stock equity. The higher the ratio percentage, the more

efficient management is in utilizing its equity base and the better return is to

investors. This will increase the investors confidence level to invest in the

company. Furthermore, the lowest ROE of the company is in 2011 which is

1.42%. It means, the shareholders of the company just earned 1.42 cents for

their investment in the company. The decreasing percentage of that year is

about 84.29% and it is a huge value involve. During this year, TNB did not

efficiently use and spend the money from shareholder to generate profit.

3.4 Market Prospect Ratio

Earnings Per Share

140.00

120.00

100.00

80.00

60.00 TNB

40.00

20.00

-
2010 2011 2012 2013 2014 2015

The companys earnings per share (EPS) is generally of interest to

present or prospective stockholders and management. EPS also represents the

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number of dollars earned during the period on behalf of each outstanding share

of common stock. Based on the graph above, we can see that the lowest EPS

of the company is in 2011 which is 9.16. It means, in 2011, the company only

earned $9.16 during the period on behalf of each outstanding share of common

stock. The EPS then starts to increase in value in 2012 to 2014, which are

17.71, 82.81 and 114.59 respectively. A drastically improved shows in 2013

which increased about 38.38%. It shows that the company has improvement in

distributing the income to common shareholders.

Besides, 2014 resulted to get the earnings per share compared to the

other years which is 114.59. This value indicates the company could earned up

to $114.59 during the period on behalf of each outstanding share of common

stock. This shows that the company has enough and more profit to distribute to

its shareholders. To determine the quality of earnings, investors can refers to

operating cash flow. Even though a company bearing a negative cash flows, it

still can shows a positive earnings on the income statement. This is not a good

situation in long term because it means the company has to borrow money to

keep operating. In 2015, the EPS starts to drop again which is from 114.59 to

108.41. The decreasing percentage is around 5.39%.

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3.5 Efficiency Ratio

Inventory Turnover
200.00
180.00
160.00
140.00
120.00
100.00
TNB
80.00
60.00
40.00
20.00
-
2010 2011 2012 2013 2014 2015

Inventory turnover is a ratio showing how many times a companys

inventory is sold and replaced over a period. It is also measures how efficient

a company can control its merchandise. Based on the graph above, we can see

that the highest inventory turnover happened in 2014 which is 172.60. It

means that the company has high turnover of their inventory which is the

inventory are quickly sold and replaced back. The higher the ratio is better to a

company because it shows how efficient the company manage their inventory.

It drastically increased from 18 to 172.60. But, it starts to drop in 2015 which

is 127.35. The decreasing percentage is about 26.21%.

Besides, the lowest inventory turnover is in 2013 which is 18. It

indicates the company only replaced their inventory about 18 times in that

year. The inventory is not sold as well as they want in the year. The low value

indicates that the company is having problem in their sales of inventory and

replaced it back. It means, the company takes time to sold their products to

customers and that why the inventory turnover is low. When there is a low rate

of inventory turnover, this implies that a business may have flawed purchasing

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system that bought too many goods or that stocks were increased in

anticipation of sales that did not occur.

Account Receivable Turnover

0.16

0.15

0.14

0.13
TNB

0.12

0.11

0.10
2010 2011 2012 2013 2014 2015

Account receivable turnover ratio indicates the efficiency with which a

company manages the credit issues to customers and collects on that credit.

Because accounts receivable are moneys owed on a credit management

without interest, by maintaining account receivable company are indirectly

extending interest-free loans to their clients. Based on the graph above, it

shows the account receivable turnover of TNB for the six years starting from

2010 to 2015. As we can see, the account receivable turnover are fluctuated

over the 6 years.

We can see that the highest turnover happened in 2012 which is 0.149

times. The turnover frequency increased about 20.52%. It means, TNB is more

favourable in term of collecting their receivables in that year. It is a good sign

for a company because the faster they can collects the cash from customer, the

faster they can obligate their debt or liabilities. Besides, 2010 resulted to get

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the lowest account receivable turnover which is only 0.122 times. It means,

the company has problem with their collection of the receivable from clients.

In other words, the collection team management did not manage and collect

their receivable properly and thats why the receivable which has been

collected is low.

Payables Turnover
0.18

0.16

0.14

TNB
0.12

0.10

0.08
2010 2011 2012 2013 2014 2015

Payables turnover is a short-term liquidity measure used to quantify

the rate at which a company pays off its suppliers. Based on the graph above,

it shows the payables turnover of TNB for the six years starting from 2010 to

2015. As we can see, the ratio are fluctuated over the 6 years. Starting 2010

the ratio keep dropping until 2012 which is 0.12 to 0.10. Then, it starts to

increase and continue increase until 2015.

The highest payables turnover is in 2015 which is 0.17 times. This

value indicates the company could pay off their suppliers around 0.17 times in

that year. A higher value of account payable turnover is good to a company

because it means that a company is paying its suppliers very quickly. It is also

can increase the suppliers confidence level to give loans because the company

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is able to pay them in a short period and frequently. Besides, 2012 resulted to

get the lowest one which is only 0.10 times. It means, this is a sign that the

company is taking longer to pay off its suppliers than it was before.

3.6 Conclusion

In this section, I will make a conclusion based on the five different prospect

ratio including liquidity ratio, leverage or solvency ratio, profitability ratio,

market prospect ratio and efficiency ratio. First, liquidity ratio which is

including current ratio, quick ratio, working capital and cash ratio. Based on

the graphs and calculations, I can say that Tenaga Nasional Berhad is a

company which is having low in liquidity. This is because their ratios show

decreasing in value stating from 2012. It will affect the company performance

because they might not be able to obligate their current liabilities if the current

assets is less than the current liabilities. Thus, the company needs to manage

their current assets in a good manner.

Second, leverage or solvency ratio which includes debt ratio, debt

equity ratio, times interest earned ratio and equity multiplier. In general, the

more debt a company uses in relation to its total assets, the greater its financial

leverage. In 2013, the ratios seem to look high compared to other years. Then,

it can be concluded that TNB has highly finance their assets by using debt or

leverage in that year. In order to maintain their financial leverage, the

company needs to fairly use the debt and equity. Third, profitability ratios

which includes profit margin, return on asset and return on equity. TNB was

having improvement in 2012 to 2015 and it is a good sign for the company.

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From that, TNB is able to generate more earnings in managing its asset, equity

and sales of their company.

Next, market prospect ratio which include earnings per share. This

ratio give insight into how investors in the marketplace feel the company is

doing in terms of risk and return. They tend to reflect, on a relative basis, the

common stockholders assessment of all aspects of the firms past and

expected future performance. A drastically improved shows in 2013 and it

shows that the company has improvement in distributing the income to

common shareholders. Last but not least, efficiency ratios which includes

inventory turnover, account receivable turnover, total asset turnover and

payables turnover. It measures how speed the company could convert the

various accounts are into sales or cash. In a sense, activity ratios measure how

efficiently a company operates along a variety of dimensions such as

inventory management, disbursements and collections.

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4.0 SWOT AND TOWS ANALYSIS

SWOT analysis are strategic planning method used to evaluate the Strengths (S),

Weaknesses (W), Opportunities (O), and Threats (T) of company. Strengths and

Weaknesses are the internal factors which can affect organization performance.

Opportunities and Threats are the external factors which are external environment to

the organization.

4.1 Strengths

Strengths are classified as internal forces influence and affect every company,

organization and individual. One of the vital key strength of Tenaga Nasional

Berhad (TNB) branch Seri Manjung is job rotation. In this branch, each

employee will experience and get opportunities in doing different jobs relating

to their unit. They will do the specific jobs based on the period which has been

decided by management team. Employees who are served in a long period of

time at the division will be transferred into different division. For example,

individual who are working in finance department also can be changed into

administration department. From this they can experience in doing different

scope of jobs. Employees also could be changed or transferred into another

stations which different from original branch such as Seri Manjung into Seri

Iskandar. The particular individual will find new experiences and knowledge

at new station.

Second, TNB Seri Manjung is good in managing their employees

performance as time goes so that employees can achieve their own target in

doing jobs. This is because management team often sent their employees to

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attend certain courses regarding to the employees jobs scope. This will help

the employees to earn new input or knowledge in order to improve their job

performance as well as help them to achieve their own target at the company.

When the employees improve their performance, it means they are able to

fulfil and satisfy the customers need.

Third, TNB Seri Manjung has many skilful and talented workforce.

Architects and civil engineers of TNB are very equipped with vast knowledge

on the current trend and preference of modernized citizens. Head of clerk in

each department also expert in doing their work. They are very alert and focus

about customers need for example head of clerk in finance department focus

on collecting the customers debt and expert in handling the problems occur.

4.2 Weaknesses

There is no perfect in managing a company. As well as TNB, it has

weaknesses while operating the business. Weaknesses are classified as internal

forces influence and affect every company, organization and individual. Based

on my observation, the weakness exist in the company is about lack of

punctuality in work. This is because there are certain employees who are still

come late to work and take it easy in this issue. Although their attendance

records show red sign, they just ignore and do not think too much on it.

When they come late to office, the matters which involving customers will

delay for a while. Thus, customers have to wait to deal with them. This aspect

needs to be changed and improved in the company so that they can perform

well.

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Besides, the weakness of the company is the employees are not really

friendly among each other in term of work. In order words, the employee

do not take care about the other employees work. For example, individual

who are in credit control do not know about meter managements work. This

is not good in a company because they could not help each other if there is

anything happen to the particular individu. At least they can share and find

solutions to improve the works together.

4.3 Opportunities

Opportunities are classified as external forces influence and affect every

company, organization and individual. Firstly, the opportunity of TNB is

market expansion. Chief executive officer Datuk Seri Azman Mohd. Azman

said TNBs sustainable and continued growth lie in both domestic and foreign

expansion. They are exploring several opportunities abroad, especially in the

emerging economies in tandem wih the companys growth aspirations. TNB

also decided to enter into ventures close to the electricity business which they

know best. Market expansion is needed because it will increase the amount of

company sales and revenue as well as improve their profitability. This also

will help the company to maximise the shareholders value.

Secondly, the other opportunity is new projects and green energy

initiatives. It is a Greenfield power plant with good prospect and with the

increased generation capacity of 2000 MW upon completion of the project.

The acquisition will lead to positive value to TNB in the long run. The project

is expected to have a positive impact on the earnings of TNB based on

financial analysis. Chief executive officer Datuk Seri Azman Mohd. Azman

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feel confident with the Project 3B which could enhance its shareholders value

and bring positive value in the long term. This is one of good opportunity to

TNB in expanding their business.

4.4 Threats

External threats are anything from the organizations outside environment that

can adversely affect its performance or achievement of its goals. Ironically,

stronger organizations can be exposed to a greater level of threats than weaker

organizations, because success breeds envy and competition to take what your

organization has achieved. One of threats for this company is energy supply

security. This is because the security of energy supply is need to be improved.

Many customers complained to the company that their energy supply are easy

to be stole by the other irresponsible people. It will increase the cost of

customers which is electric bill although they are not using it. This shows that

the company is still lack in their security management. The company ought to

improve this problem in order to reduce their costs.

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4.5 TOWS Matrix

Strengths Weaknesses

1. Job rotation. 1. Lack of punctuality in

INTERNAL FACTORS 2. Good in managing their work.

employees performance. 2. Employees are not

3. Many skilful and talented really friendly among

workforce. each other in term of

EXTERNAL FACTORS work.

Opportunities SO WO

1. Market expansion. 1. Improve the existing 1. Organize programmes

2. New projects and green projects to produce more which is involving all

energy initiatives. innovative and creative employees. (W2, O2)

products in order to fill the 2. Reward employees who

demand in the market. (S3, are the least come late

O1, O2) to office. (W1, O1)

2. Job training for employees

to handle the new projects.

(S2, O2)

Threats ST WT

1. Energy supply security. 1. Improve the security of 1. Organize certain course

energy supply to reduce to improve the original

the company costs. (S3, system in the company.

T1) (W2, T1)

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4.6 Recommendations

4.6.1 Improve the existing projects

TNB ought to improve their existing projects. This is because the

company can expand their market in the industry. Large market could

help the company to maximize their profit and shareholders wealth.

Besides, it will help the company to produce more innovative and

creative products in order to fill the demand in the market.

4.6.2 Job training for employees to handle the new projects

Job training for employees is important to ensure that they are able to

handle the new projects as well as the company wants. The particular

individual who are responsible to handle the new projects should have

enough knowledge and input in proceeding the projects. This will save

the investment costs if the projects are managed in a good manner.

This is because if there is any problem happen and it might affect the

performance of the projects as well as can lead to a failure.

4.6.3 Improve the security of energy supply to reduce the company

costs

Thus, there is a need to the company to improve the security in order to

fulfil the customers demand. This is because the company should alert

about the leakage of electricity supply which caused of steal by

irresponsible person. It is also help to reduce the costs.

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4.6.4 Organize programmes which is involving all employees

The company should organize programmes which is involving all

employees. This will help them to gather in a place at the same time.

During that time they can discuss about their own jobs and it will help

them to earn new knowledge about the other jobs. Besides, employees

can improve their relationship so that the working environment can be

more cheerful and excite. This will encourage them to go to work.

4.6.5 Reward employees who are the least come late to office

As we know, majority of workers are not able to manage their time

properly. They are not punctual and come late to office. This will lead

to bad reputation of a company. Thus, TNB should improve this aspect

by rewarding person who are the least come late to office. It will be

more good if they do not have come late record in the company. This

will encourage workers to come early to the office and also can

improve the companys reputation.

4.6.6 Organize certain course to improve the original system in the

company

TNB should organize certain course to improve the original system in

the company. This will help the company in improving their existing

system. So, customers will feel more confident to use the companys

products and the profit of company can be increased as time goes.

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5.0 SELF-EXPERIENCES

I received a lot of knowledge and experiences during the internship period at TNB

Seri Manjung, Perak. There are consist of three department in TNB Seri Manjung

including administration department, finance department and customers services

department.

5.1 Administration Department

In administration department, I have learnt on how to key in the workers log

sheets in ERMS system. The log sheet indicates on how much kilometres (km)

has been travelled by the workers in a day. Workers are allowed to use TNB

vehicles such as vans, coasters and lories to do their works. After that, workers

can get claim for fuel or other expense from finance clerk based on details of

the log sheet.

Figure 5.1: Log sheet

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Based on the figure above, it shows on how the worker write the details. There

are consist of budget code, locations, plate number of vehicle and quantity of

mileage (km) has been travelled in that day. Then, all the details need to be

key in into the ERMS system so that HQ can traced the record. After complete

key in the details, we need to write the postal code numbers and stamped the

log sheet on based on the date of day we record the details to ensure that we

have key in the details. Postal code numbers is important to be recorded

because if there is any correction need to be done, clerk will contact HQ and

mention the numbers so that they will make the correction.

Figure 5.2: ERMS system

Besides, I experienced on how to file the workers documents such as

certificates, leave form, pay slips, attendance records, course attended by the

workers and other important documents according to their own files. Filing

systems are used to keep the documents in a manner way and easy to find it if

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the workers want to refer back the certain documents. Filing documents also

important to ensure that the records run smoothly according to formal

procedures and methods. It can increase the efficiency and accuracy of the

information, keep the information in private and safe, eliminating duplication

of records as well as standardize the procedure.

Furthermore, I learnt how to key in the workers attendance details in

EASy system. The details are need to be recorded because it declares the

reasons why the workers attendance is red in sign. In other words, sometimes

the attendance slips show the workers are absent and late go to office. So,

EASy system declare the reasons based on what the workers write on the

form. The form should be approved by the authority then clerk can proceed to

declare the reasons. This system help the company to manage the attendance

aspect properly so that workers do not take easily in this matter and nurture a

discipline in the working environment.

Figure 5.3: Attendance of worker.

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As we can see, the red font determine the worker absent or attend course at

somewhere or come late to office. So, clerk need to declare the reasons based

on the date of day he/she got the red sign.

Figure 5.4:EASy Employee Attendance System.

5.2 Finance Department

Next in finance department, I have learnt on how to manage the refund of

customers deposits. This happen when the customers closed electricity

account and there is surplus in their account after deducting the outstanding

balance. Thus, TNB needs to refund the deposits to the owners. There are two

class of refund which are refund below RM400 and refund RM400 and above.

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The difference between these refund is based on how TNB pay to the

customers. For refund below RM400, the customers ought to come to TNB by

themselves to get the refund and they get in cash. While, refund RM400 and

above, finance clerk will issue a cheque and transfer the amount of refund to

the customers account bank. Besides, a cheque also can be issued by the clerk

in case the customer is staying outside Perak.

There are a few steps need to be done before the deposits can be

refund:

1. Print 3 copy of vouchers for credit control division, finance division

and consumers. Refer to Appendix 1.

2. Separate the vouchers into amount below RM400 and amount RM400

and above.

3. Print open item/payment and final bill for the particular customer. This

documents are important to ensure that the customer do not have

outstanding balance in the account.

4. Call customers to obtain the account bank numbers in case the deposits

is RM400 and above as well as customers who lives outside Perak.

5. Recheck the amount of refund on the open item and the voucher.

6. Prepare vouchers to write down the details. Refer Appendix 2.

7. Clear refund by the clerk. Refer to Appendix 3.

8. Issue cheques or give cash to the customers.

9. After the deposits has been transferred into the customers account

bank, official letter will be created to inform customers about it and the

letter will be posted to the correspondence address which stated on the

form. Refer to Appendix 4.

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Besides, I also experienced to handle the claiming process. It means,

workers will come to see finance clerk to get their claim based on their

performance. There are three type of claims which including lodging claim,

mileage claim and daily claim. First, lodging claim refers to claim on workers

expenditure which involve during their trip to somewhere relating to work.

Example of expenditures which can be claimed are meals, tolls,

accommodations, fuels and other else. Workers are needed to attach all the

receipt regarding to the expenditure involved as evidence to ensure that they

are not lying. This claim occurs anytime and workers can get the money from

the clerk if their documents and attachments have been approved by the

authority. Second, mileage claim refers to claim which based on how far in

kilometres (km) the workers go to do work from TNB to the particular

destination such as shutdown, breakdown and other. Workers are allowed to

use their own vehicles to go to work. The claim usually will be distributed on

15th of every month. Third, daily claim refers to claim based on workers

lodging which exceed 25km in a day and get RM16 per day. This claim

usually will be distributed on 10th of every month.

Next, I have learnt on how to reconnect the customers electricity

supply through e-CIBS system. We need to reconnect it via system because

the DCs staffs do not reply the work order message to inform that they have

reconnect the electric supply. This reconnection process can be done by

following these steps:

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1. First, we need to enter the account number of customers.

2. The customers details will pop up as shown in the figure above.

We need to focus on plan disconnection date and payment date. If

both date are in the same month, disconnector no need to change. If

the month is different, we need to change it to staff named

Baharuddin (10045292).

3. Fill the reconnect date and reconnect time.

4. Reconnection remark must be SS which represents to Sambung

Semula.

5. Fill up the amount of outstanding balance paid by the customers as

same as shown on prev. reading.

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6. Then reconnection process complete.

5.3 Problems and Solutions to Encounter it

During my internship at TNB Seri Manjung, I faced a few problems regarding

to the work. First, regarding to file the staffs documents. Not all the

documents are labelled with the staff numbers. Sometimes I need to read the

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documents to identify the staff numbers. It took some times for me to

complete the task and it affect my times to do the other task given by the other

clerk. Thus, I find a way so that I can reduce my time on searching the staff

numbers. I decided to file all the documents which already stated the staff

numbers first and then focus on the documents which do not have the staff

numbers. I also refer to the clerk about it and the filing process can be done.

Next, TNB does not provide trainees with their own table and personal

computer at office. It is difficult for me to complete the task regarding to

system or need to use computer. Then, I have to wait until one of the staffs

PC is empty. The time is limited for me to complete the task before the staff

want to use the PC and I need to manage the time in a good manner.

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6.0 RECOMMENDATIONS

6.1 Provide computer for practical students

The company should provide own place for trainees so that they can do the

works easily and comfortably without disturbing other public employees. For

example, TNB should provide a table and computer for us and we can

complete the task easily.

6.2 Give opportunity to students to do more extreme tasks

The clerk should give opportunities to trainees to do more extreme tasks so

that they can apply the knowledge or skills which acquired through learning

process at their college. This will expose them with the real working life and

environment as well as increase their confidence level in doing adventure

tasks.

6.3 Kiosk machine services should be added

Kiosk machine should be added more because it will avoid the long queue of

customers. It also will save the customers time due to more machine at the

kiosk. There is still have an option for customers to choose if one of the

machine corrupted or having problem.

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7.0 CONCLUSION

After completed my internship period at Tenaga Nasional Berhad Seri Manjung, I

have learnt a lot of things and gain more knowledge about the real working life. There

are a few of benefits which I obtained and received during my internship session.

First, it helps me to improve my skills in finance. I could improve my confidence

level in making a decision and faced a real life such as call customers to inform about

refund of their deposits. I also can expose my theoretical knowledge which have been

learnt during lectures towards the tasks given.

Second, it encourages me to discipline in time management. I could follow the

rules which is punctual to come to the office. It also helps me to realize the important

of time setting and schedule which is needed so that I can manage my time in a good

manner. Third, I able to work as a dynamic worker. This is because trainee was train

how to be a good and independent worker. The trainee was exposed to the real

environment in working that is difference from study environment. This will help me

to solve the problems quickly, fast in doing the job given, have good attitude and

work in a team.

Last but not least, it helps me to improve my communication skill.

Communication skill is one of the important interpersonal skills the trainee must have.

During internship period, trainee learnt how to communicate with TNBs staffs and

consumers.

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8.0 REFERENCES

Malaysiastock.bizz. (2016). Tenaga Annual Report. Retrieved 1 June 2016, from

http://www.malaysiastock.biz/Corporate
Infomation.aspx?type=C&value=KLCI&securityCode=5347

New Straits Time Online. (2015). TNB Exploring Opportunities in Emerging

Economies. Retrieved 3 June 2016, from
http://www.nst.com.my/news/2015/12/117245/tnb-exploring-opportunities
emerging-economies

Tenaga Nasional Berhad. (2016). History. Retrieved 1 June 2016, from

https://www.tnb.com.my/about-tnb/history

Tenaga Nasional Berhad. (2016). Management Team. Retrieved 1 June 2016, from
https://www.tnb.com.my/about-tnb/management-team

The Star Online. (2015). TNB Eyes Overseas Power Assets. Retrieved 3 June 2016,
from http://www.thestar.com.my/business/business-news/2015/12/14/tnb
eyes-overseas-power-assets/

The Star Online. (2015). TNB: Takeover of Power Project Not a Bailout. Retrieved 2
June 2016, from http://www.thestar.com.my/business/business
news/2015/06/20/tnb-upbeat-on-project-3b/

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