Executive Summary The following is a proposal for a new start-up company

Executive Summary

The following is a proposal for a new start-up company, OZON aims to be the provider in creating a high quality, environmental friendly and customized fibre ceiling panel that can withstand harsh conditions for our clients. OZON will begin operating on Jan, 2019. OZON will be a partnership, owned and operated by Yang Eu Zhi, Cheong Man Kien, Leng Keng Hui, Lee Jingxuan and Tam Siew Yin.
OZON will ensure to provide a low price, but with high resistance to fire, water and pesticide ceiling panel to clients. Moreover, OZON will guarantee to create ceiling panel which statisfy the requirement of customer in aspect of design, composition, dimension and more.
OZON will target places which are easily to be caught on fire, places which faces leakage of water often and places with termite problem. From there, OZON will seek major contracts with environmentalist, decoration company and local business people.
In general, the demand of the ecological product will increase as the awareness of consumer toward the increase in environmental issue. From here, government of Malaysia is introducing the waste separation and implementation method to most of the state. This is the effective way to increase the awareness and consciousness of national toward environmental protection. According to statistic what conducted by Index Mundi, the birth rate in Malaysia is 19.1 birth/1000 population in 2017. Thus, the demand of the eco-friendly product is expected to increase.
OZON will distinguish its company where prior joining this company, Yang Eu Zhi and Cheong Man Kien was professionals in application of natural resources and natural resources composite engineer from the company NaturalResouceSdn.Bhd. Their experience and knowledge in this field will help generate sales lead for the company. While there are currenly companies selling ceiling panel that are environmental friendly or cost–effective and none offers both environmental friendly and cost-effective ceiling panel to clients.
Based on the scope of the market and OZON defined market range, OZON’s sales projection for the first year are RM510,000. OZON’s mission is to have a growth rate of 25% per year for the first three years. OZON will use multiple internet-based methods to increase awareness of customer. Social media is an essential tool for anything; the social media marketing strategy utilises social media platforms. OZON will use Twitter and Facebook to share specials, contents, news relevant to product; use Instagram to post photos of anything related to OZON system or product.
OZON seeks RM250,000 as an initial investment to build a proof of concept. In order to have a proper funding for the start-up of OZON, together the partners will contribute a total of RM100,000. With that, the remaining funds will be taking out loan of RM150,000.
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Company description

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Mission statement
OZON vision is to become a recognized leader in ceiling panel industry and OZON mission is to provide low price but with high resistance to fire, water and pesticide ceiling panel and providing quality and customized composition of ceiling panel to our customers with natural resources and composites.

Company Goals
OZON is a partnership between Yang Eu Zhi, Cheong Man Kien, Leng Keng Hui, Lee Jingxuan and Tam Siew Yin. Mr. Yang Eu Zhi and Mr. Cheong Man Kien is Professional in application of natural resources and natural resources composite engineer from the company NaturalResourceSdn.Bhd. Mr. Leng Keng Hui is a professional Quality inspector with more than 15 years of experience in ceiling panel industry. Ms. Tam Siew Yin is an accountant with 10 years of experience. Lastly, Ms. Lee Jingxuan is our marketing manager with more than 20 years of experience in ceiling panel industry. As a promise to our customer, our product will have different option on composition and design customized by customer to the extent that we able to allow.
OZON key to success is to achieve highest amount of productivity among other ceiling industry and maximize customer satisfaction towards our product. We hope for the reputation of our company grows further and popular until it creating more profit across different countries.

Market Section
OZON will target places that easily cause fire, places that face leakage of water on ceiling and places with termite within West Malaysia.

Company Objectives
Objectives of OZON in 5 years of operation including:
1. To create a ceiling panel which satisfy the requirement of the customer in the aspect of design, composition, dimension and etc.
2. To increase stakeholders retention to 40% after the second year of being in business.
3. To start up the company by surviving off of our cash flow and make revenue after the third year of business.

Registered Name and Corporate Structure
OZON the company is registered as a corporation. OZON website is domain on online purchasing or ordering and has opened an outlet in Genting Kelang, Setapak at rent.
Investor Equity
Loan invested by different investors from third party.

Product or Service Plan

Product
Details of the ceiling panel with different composition offered by OZON shown as below.
? Gypsum false ceiling ? Fibre false ceiling

Our Slogan is “Water, fire and termite not your concern anymore”
In short, our company is focusing on selling ceiling panel which have different dimension and all sort of protection. All of our ceiling panel are sold will be the highest quality which fulfills the requirement of customer. The margin of this business is unusually high because of the quality of material that we used. Our targeted customer is towards the places (office, home, classroom and etc) that will happen fire, leaking of water and contain of termite.

Service
On our website, we provide online ordering and purchasing. After online purchasing, we also provide free delivering services and provide profession to do the free installation service. If customers made a mass purchase, we will offer free delivery service within 2 days. In case of emergency, we will proceed to our backup plan.

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Industry Analysis
PEST Analysis

Political factor
The government of Malaysia has established a technical committee and eco-label task force to create guideline for good practices in sustainable construction and green buildings and to develop eco-label accreditation scheme for construction materials which is led by Construction Industry Development Board Malaysia(CIDB) (Hamid, 2011). This show that government of Malaysia concern about the environment friendliness of the construction field Besides, the government of Malaysia has implement a tax cut for businesses and individuals on certain types of green energy investments on their taxes. Such write-offs mean that you essentially declare these investments as an “expense,” which will be subtracted from your income and reduce the amount of money that you owe in taxes. Tax cuts are common for individuals, but they are used in government subsidies (Hamid, 2011). Green product manufacturers and eco-friendly companies have been the recipients of government subsidies for many years. Essentially, the government has provided some type of assistance to these businesses by subsidy.
Economic factor
The level of employment will affect the demand for consumer’s purchasing power. When people have a steady income, they will have a more chance of making discretionary spending purchases. On the other word, if the employment rate of a country is low, the spending power of its nation is low. Unemployment rate in Malaysia was above 3.23 per cent in the 2007. From 2007, the unemployment rate kept increasing until it reached its peak of 3.69 per cent in 2009. Starting from 2010, the reverse trend was in evidence. Due to the economic boom in the country the unemployment rate was shrinking and, in 2013, it amounted to 3.11 per cent. From 2016 to 2017, the unemployment rate in Malaysia remained at a moderate level of approximately 3.43 per cent. The statistic show that a Malaysia has a low unemployed rate compare to other country. Besides, consumer confidence is another important factor affecting the demand for consumer purchasing power. When people have high consumer confidence, they will more willing to spend money. The perfect timing for a new business to enter the market is during the period of high consumer confidence.
Social factor
The demand of the ecological product will increase as the awareness of consumer toward environmental issue increase. According to the green purchase behaviour defined by Chan, there is a particular type of environmental friendly behaviour that consumers express their caring and attention to the environment. In addition, green purchase behaviour also refers to the consumption of products that are recyclable or conservable, beneficial or benevolent to the environment, and sensitive or responsive to ecological concern (Chan, 2001). Government of Malaysia is introducing the waste separation and implementation method to most of the state. This is the effective way to increase the awareness and consciousness of national toward environmental protection. Thus, the demand of the ecological product will be increase.
Besides, there is also some study about the willingness of consumer pay more for eco-friendly product. The result show that most of the women who were married and has at least 1 child willing to buy eco-friendly product with more money. According to statistic what conducted by Index Mundi, the birth rate in Malaysia is 19.1 birth/1000 population in 2017. The demand of the eco-friendly product is expected to increase.

Technological factor
May 25, 2010, Master Builders Association Malaysia (MBAM) president Datuk Ng Kee Leen encourage more players to use new equipment which are efficient, environment friendly and with better productivity and more safety features. Datuk Ng is suggesting increase the use of eco-friendly material in government projects. On the other hand, there are few private manufacturers of construction materials also try to innovate the products and processes to improve the product offering. Cement manufacturers like the Holcim Group created a green sustainable solution for cement. The company is trying to minimize the impact of cement manufacturing in the environment. The company focuses on bringing down carbon dioxide (CO2) emissions by reducing the clinker factor by using mineral components as alternative materials.

Five porters analysis of OZON
Porter five force Pressure
Threat of new entrants High
Rivalry among existing firms Medium
Threat of Substitute product Medium to high
Bargaining power of buyers Low
Bargaining power of suppliers Low

1. Threat of new entrants
The threat of new entrant to the marketplace have a high chance to threaten our market share is low. This is mainly cause by two factors which includes the high cost of establishing partition production industry and high product differentiation. Our product faces an intense competition from the gypsum partition board and other type of partition board. The new entrant to the marketplace of partition board may need high amount of capital to start up. Our product is more environment friendly, lighter and cheaper make our product have high potential to compete with other company. Our company can let customer to customize their partition board.
2. Rivalry among existing firms
The rivalry among existing firms is a medium force in the marketplace for our product. OZON is in direct competition with Europe board trading and Shandong Huamei board. These companies committed heavily on research and development and marketing which same as our company. Thus, the competitive force of our company is strong. Another force which possess solely by our company is our product is made of rice husk which is newly exist to the market. Our product is relatively lighter and more environment friendly compare to other product. This is also one of factor that make our company and product more competitive.
3. Threat of Substitute product
The treat of substitute product is a medium to high force to our marketplace for our product. There are many partition board company appear in the marketplace. The switching cost relatively low as price of the product only slightly lower than other product. However, our price of material is relatively low compare to gypsum board. Part of the profit can use to improve the service and the quality of product to increase the competitive. The demand of our products is expected to continue as more and more country are more prefer to eco-friendly building material.
4. Bargaining power of buyers
The bargaining power of buyers have a low force to our marketplace for our product. The buyer of our products is not concentrated because this is a new exist product created by our company. So, customer cannot pressure us to reduce the cost of our product. The bargaining power remain on big bulk trader’s hand which they can widen their partnership with our competitor. However, OZON, as the first founder of biomass partition board, will win better trust from the customer. Besides, OZON are able to produce product that meet customer’s perception and dimension which limited by most of the large company.
5. Bargaining power of suppliers
The bargaining power of the supplier is a relatively feeble force in our marketplace. Our haggle power is strengthening by the high number of potential suppliers for OZON and the sufficient amount of supply. Our core product which is rice husk partition board is made of rice husk which is type of waste from rice industry. According to statistic, the world annual production of rice husk amount is about 120 million tonnes. Thus, the bargaining power of rice husk suppliers is not a major concern of OZON.
Market Analysis

Market Segmentation
OZON’s customers basically comprise of 3 target group which are environmentalist, decoration company and local business people. These two groups are could be say are potentially strong client segments. The mix of client benefit is to help maintain consistent business throughout the year. For example, the reason to choose environmental as market segment because OZON’s ceiling panel is environmental friendly which means environmentalist may use this as their house ceiling to further protect environment of the world. Moreover, local business people would consider this product as this is new to the market and they would be interested. The graph below shows that the percentage of support OZON Company’s ceiling panel as their house ceiling panel at different age.

Graph 1: Percentage support OZON company’s ceiling panel at different age.

Customer’s needs and wants
Currently many people are paying close attention at environmental problem. For instance, the government banned styrofoam food container and replace it with biodegradable plastic food container. Therefore, the biggest advantages of OZON’s ceiling panel than others is that our product is environmental friendly and the material properties and mechanical properties also fulfil the requirement of ceiling panel. With that, we also provide lower purchasing price than market value. Currently, the majority of ceiling panel is made from non-environmental friendly material. Thus, environmental friend ceiling panel will attract environmentalist to buy it with affordable price. OZON company’s ceiling panel could be say such a new thing for market. Local business people may treat the benefit of OZON company’s ceiling panel as a chance for their business so, ceiling panel will be the main supplier for the local business people. Other than that, decoration company need to update their service and end product. This is because limited service or product will reduce the customer of company. OZON company’s ceiling panel offer decoration company a new product so, it will help decoration company to be able to attract more customers in the future.

Competitor’s analysis
One of the players in the industry is LEDEX (LEDEX, 2008), they introduced different type of ceiling panel but their products are not environmental friendly ceiling panel. The key selling point of them is using different type ceiling panel to attract customer. Another competitor in the field is ECOWOOL (ECOWOOL, 2018), their product proposed is also environmental friendly ceiling panel.
With the strong background and reputation of these two core competitors, consumer will logically choose for their services over OZON as our OZON company are just start-ups in the competitive market. Nonetheless, OZON company has the product which LEDEX company don’t provide which is the ceiling panel with environmental friendly properties. However ECOWOOL company has similar product with OZON company but as our company size is small therefore we provide the key impact which is efficiency of making a decision or any changes. All these significant aspects may bring massive threat to our company. However, the key features of our company that we focus on the most is that our product is affordable.
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Marketing Plan

Product
Ceiling panel of OZON company is replaced the current material to rice husk. The celling panel made by this material is much lighter than other material is due to rice husk has lower density compare with them. Although the OZON’s ceiling panel is lighter but the durability, strength and toughness of the OZON’s ceiling panel does reach the requirement of a standard of a normal ceiling panel. Besides that, OZON’s ceiling panel is environmental friendly since its main resource is rice husk so the agriculture waste can turn into a useful product.
The ceiling panel will be sold batch by batch and, each batch contain 50 ceiling panel. With that, customer could change the desire shape and size of the ceiling panel according their preference after a batch of ceiling panel. It will lead customize become easier for OZON company and also for the customers.
Batch type and unit type of production line will be choose as OZON’s company production line. Each batch contain 50 same type of ceiling panel. As mention above, the operator can change the size and shape after a batch of ceiling panel, it is actually make customer to be able to customize the product easily with a lower cost as compare to mass product and continuous production. OZON’s company have also unit type of production to allow the client who do not want to order a large amount of ceiling panel can place their order as well. With that, we are able to attract clients from smaller range to bigger range.

Price
OZON is currently executing penetration pricing. In other words, it means that the prices are set lower end than previous material market price, while being above OZON costs of production. The aim of this act is to grasp as much of the market before big players starts to focus on OZON. Discounts are offered to the staff’s friends and family, students, teachers, and military personnel. OZON pricing product is competitive, yet used to create image. OZON does not under-price itself by pricing the product too low, yet they are also not the highest-priced product in the current market.

Place
To be able to obtain business in a manufacturing field, the most beneficial way is to go out and look for interested customers. Other than that, we have also provided an online order and provide free delivery services as stated before. OZON company are located near by the material supplier and the transportation hub where more likely suburb area. The transportation of resource can be done easily as it is near by the supplier. Furthermore, the clients and workers are also able to access to OZON company as it is near to the transportation hub. Thus, clients are able to make order on the spot as the management offices are located at the same location. The thought of having a good use of the location are able to help the company to increase sales. With that, we are then able to increase our revenues and also profit.

Promotion
OZON company will use multiple internet-based methods to increase awareness of customer. The official OZON website will have a list on the product, and simple search will lead the website pop up on Google Places. OZON is also listed some review-based websites. Social media is an essential tool for anything; the social media marketing strategy utilises social media platforms, such as Facebook, Twitter, Linkedln, Google+, and Instagram. OZON will use Twitter and Facebook to share specials, contents, news relevant to product; use Instagram to post photos of anything related to OZON system or product. OZON is also planning to organize environment protection activities to increase the environment awareness to more people so our environmental friendly ceiling panel sales may increase.

Sales Forecast
OZON company has predict the sales per month in 2019 base on the percentage of supporter as shown in graph 1. Prediction of the sales for the first two month is very low due to the unwell-known of OZON company. After a period of time the sales will rise exponentially because the promotion of OZON company are able to split reputation very fast. The prediction of how many piece ceiling panel sales per month in 2019 is shown as below.
Month Sale of product (piece)
Environmentalist Decoration company Local business people Total sale per month
January 100 200 300 600
February 150 240 360 750
March 300 500 550 1350
April 440 710 700 1850
May 520 760 750 2030
June 700 900 900 2500
July 950 980 1020 2950
August 1080 1030 1090 3200
September 1110 1090 1100 3300
October 1200 1210 1170 3580
November 1270 1350 1270 3890
December 1330 1370 1300 4000
30000
Table 1: Prediction of sales of product (piece) for every month in 2019.

Graph 1: Prediction of sales of product (piece) per month in 2019.

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Financial Projection
In this section, a pro forma financial performance of OZON Sdn Bhd for three years will be presented based on some reliable assumptions.
This section contains: 1) Assumption sheet
2) Sources and uses of fund statement
3) Pro forma profit and loss (Pro forma income statement)
4) Pro forma cash flow
5) Appendix (Depreciation table, sales forecast, salaries for workers)

Assumption sheet
1. Tax rate per annum is 24%.
2. Term loan RM 150 000 repayable over 7 years at fixed interest rate 6% per annum.
3. Selling price per piece is RM17; Cost per piece is RM3.50.
4. Ozon will have an annual sales profit growth rate of 25%.
5. Cost of product will also increase by 25% by year.
6. Expenses increase by 20% by year.
7. All purchases and sales are based on CASH basis. (No credit sales)
8. Machine is depreciated by straight-line method over 5 years. (20% per annum)
9. Payroll tax given by employer:- Employees Provident Fund (EPF) = 13%; SOCSO = 1.75%.
10. Dividend (10% of net profit) only will be given to partners annually when company earn at least RM150000 per year.
11. Partners which are also core management peoples will receive a salary monthly.
12. Accounting, audit, secretarial fees will be paid half-yearly.
13. Factory (2000-2500 s.f) will be in Kepong Entrepreneurs Park with monthly rental RM 3000.

Sources and uses of fund statement
PROJECTED STARTUP EXPENDITURE & FUNDING REQUIREMENT
Items RM
Source of funds
Investment from partners
Bank loan (Term loan)
Total Source of Funds

Uses of funds
Machine in factory
Computer hardware and software license
Furniture for office (Office table, chair, etc)
Total Capital Expenditure
Deposit (for rental, utilities) and prepayments
Working capitals
Total Uses of Funds
100 000
150 000
250 000

115 000
10 000
10 000
135 000
15 000
100 000
250 000

Pro forma profit and loss statement
PROJECTED PROFIT AND LOSS STATEMENT FOR FIRST YEAR (2019)
Month First year-2019 (RM) Total (RM)
Jan Feb Mac Apr May June July Aug Sept Oct Nov Dec
Sales revenue
LESS: Cost of product 10200
2100 12750
2625 22950
4725 31450
6475 34510
7105 42500
8750 50150
10325 54400
11200 56100
11550 60860
12530 66130
13615 68000
14000 510000
105000
Gross Profit 8100 10125 18225 24975 27405 33750 39825 43200 44550 48330 52515 54000 405000
Gross Profit Margin (%) 79.4% 79.4% 79.4% 79.4% 79.4% 79.4% 79.4% 79.4% 79.4% 79.4% 79.4% 79.4% 79.4%
LESS: Expenses
Accounting, audit, secretarial fees
Sales and marketing cost
Rental (2500 s.f)
Utilities
Miscellaneous overheads
Salaries for employees
Employees Provident Fund (EPF)
SOCSO 550
450
3000
2300
500
21000
2730
367 550
450
3000
2300
500
21000
2730
367 550
450
3000
2300
500
21000
2730
367 550
450
3000
2300
500
21000
2730
367 550
450
3000
2300
500
21000
2730
367 550
450
3000
2300
500
21000
2730
367 550
450
3000
2300
500
21000
2730
368 550
450
3000
2300
500
21000
2730
368 550
450
3000
2300
500
21000
2730
368 550
450
3000
2300
500
21000
2730
368 550
450
3000
2300
500
21000
2730
368 550
450
3000
2300
500
21000
2730
368 6600
5400
36000
27600
6000
252000
32760
4410
Total Expenses 30897 30897 30897 30897 30897 30897 30898 30898 30898 30898 30898 30898 370770
EBITDA (22797) (20772) (12672) (5922) (3492) 2853 8927 12302 13652 17432 21617 23102 34230
Depreciation 2250 2250 2250 2250 2250 2250 2250 2250 2250 2250 2250 2250 27000
Profit before interest and taxes (25047) (23022) (14922) (8172) (5742) 603 6677 10052 11402 15182 19367 20852 7230
Loan interest 750 750 750 750 750 750 750 750 750 750 750 750 9000
Profit before tax (25797) (23772) (15672) (8922) (6492) (147) 5927 9302 10652 14432 18617 20102 (1770)
Tax – – – – – – – – – – – – –
Net Profit (25797) (23772) (15672) (8922) (6492) (147) 5927 9302 10652 14432 18617 20102 (1770)
Cumulative Profit/Loss (25797) (49569) (65241) (74163) (80655) (80802) (74875) (65573) (54921) (40489) (21872) (1770) (1770)
*EBITDA- Earnings Before Interest, Taxes, Depreciation and Amortization

PROJECTED PROFIT AND LOSS STATEMENT FOR ALL THREE YEARS (2019 & 2020 & 2021)
Year 2019 (RM) 2020 (RM) 2021 (RM)
Sales revenue
LESS: Cost of product 510000
105000 637500
131250 796875
164063
Gross Profit 405000 506250 632812
Gross Profit Margin (%) 79.4% 79.4% 79.4%
LESS: Expenses
Accounting, audit, secretarial fees
Sales and marketing cost
Rental
Utilities
Miscellaneous overheads
Salaries for employees
Employees Provident Fund (EPF)
SOCSO 6600
5400
36000
27600
6000
252000
32760
4410 7590
6210
41400
31740
6900
289800
37674
5072 8729
7141
47610
36501
7935
333270
43325
5832
Total Expenses 370770 426386 490343
EBITDA 34230 79864 142469
Depreciation (5 years life- straight line method) 27000 27000 27000
Profit before interest and taxes 7230 52864 115469
Loan interest 9000 9000 9000
Profit before tax (1770) 43864 106469
Tax (24%) – 10527 25552
Net Profit (1770) 33337 80917
Cumulative Profit/Loss (1770) 31567 112484
*Tax will not be charged on first year as there is negative profit.

Assumption as mentioned before:
*Ozon will have an annual sales profit growth rate of 25%.
*Cost of product will also increase by 25% by year.
*Expenses increase by 15% by year.

Pro forma cash flow statement
PROJECTED CASH FLOW STATEMENT FOR FIRST YEAR (2019)
Month First year-2019 (RM) Total (RM)
Jan Feb Mac Apr May June July Aug Sept Oct Nov Dec
(+) CASH IN
Investment from partners
Bank loan
Sales revenue 100000
150000
10200 –

12750 –

22950 –

31450 –

34510 –

42500 –

50150 –

54400 –

56100 –

60860 –

66130 –

68000 100000
150000
510000
Total Cash Inflow 260200 12750 22950 31450 34510 42500 50150 54400 56100 60860 66130 68000 760000
(-) CASH OUT
Total capital expenditure
Deposit and prepayments
Purchases (Cost of product)
Accounting, audit, secretarial fees
Sales and marketing cost
Rental
Utilities
Miscellaneous overheads
Salaries for employees
Employees Provident Fund (EPF)
SOCSO
Loan interest payment
Loan principle payment 135000
15000
2100
3300
450
3000
2300
500
21000
2730
367
750
1786 –

2625

450
3000
2300
500
21000
2730
367
750
1786 –

4725

450
3000
2300
500
21000
2730
367
750
1786 –

6475

450
3000
2300
500
21000
2730
367
750
1786 –

7105

450
3000
2300
500
21000
2730
367
750
1786 –

8750

450
3000
2300
500
21000
2730
367
750
1786 –

10325
3300
450
3000
2300
500
21000
2730
368
750
1786 –

11200

450
3000
2300
500
21000
2730
368
750
1786 –

11550

450
3000
2300
500
21000
2730
368
750
1786 –

12530

450
3000
2300
500
21000
2730
368
750
1786 –

13615

450
3000
2300
500
21000
2730
368
750
1786 –

14000

450
3000
2300
500
21000
2730
368
750
1786 135000
15000
105000
6600
5400
36000
27600
6000
252000
32760
4410
9000
21432
Total Cash Outflow 188283 35508 37608 39358 39988 41633 46509 44084 44434 45414 46499 46884 656202
Cash surplus/deficit 71917 (22758) (14658) (7908) (5478) 867 3641 10316 11666 15446 19631 21116 103798
ADD: Opening cash balance – 71917 49159 34501 26593 21115 21982 25623 35939 47605 63051 82682 103798
Closing cash balance 71917 49159 34501 26593 21115 21982 25623 35939 47605 63051 82682 103798 103798
* Accounting, audit, secretarial fees will be paid half-yearly.
PROJECTED CASH FLOW STATEMENT FOR ALL THREE YEARS (2019 & 2020 & 2021)
Year 2019 (RM) 2020 (RM) 2021 (RM)
(+) CASH IN
Investment from partners
Bank loan
Sales revenue 100000
150000
510000 –

637500 –

796875
Total Cash Inflow 760000 637500 796875
(-) CASH OUT
Total capital expenditure
Deposit and prepayments
Purchases (Cost of product)
Accounting, audit, secretarial fees
Sales and marketing cost
Rental
Utilities
Miscellaneous overheads
Salaries for employees
Employees Provident Fund (EPF)
SOCSO
Loan interest payment
Loan principle payment 135000
15000
105000
6600
5400
36000
27600
6000
252000
32760
4410
9000
21432 –

131250
7590
6210
41400
31740
6900
289800
37674
5072
9000
21432 –

164063
8729
7141
47610
36501
7935
333270
43325
5832
9000
21432
Total Cash Outflow 656202 588068 684838
Cash surplus/deficit 103798 49432 112037
ADD: Opening cash balance – 103798 153230
Closing cash balance 103798 153230 265267

Appendix
Depreciation by straight-line method for 5 years
Items Cost (RM) Life (Years) Depreciation (RM)

Machine in factory

Computer hardware and software license

Furniture for office
115 000

10 000

10 000
5

5

5 23 000

2 000

2 000
Total Depreciation per Year: 27 000
Total Depreciation per Month: 2 250

Sales forecast for first year (2019)
Month First year-2019 (RM) Total
Jan Feb Mac Apr May June July Aug Sept Oct Nov Dec
Sales
Environmentalist
Decoration company
Local business people
1700
3400
5100
2550
4080
6120
5100
8500
9350
7480
12070
11900
8840
12920
12750
11900
15300
15300
16150
16660
17340
18360
17510
18530
18870
18530
18700
20400
20570
19890
21590
22950
21590
22610
23290
22100
155550
175780
178670
Total Sales 10200 12750 22950 31450 34510 42500 50150 54400 56100 60860 66130 68000 510000
Cost of sales
Environmentalist
Decoration company
Local business people
350
700
1050
525
840
1260
1050
1750
1925
1540
2485
2450
1820
2660
2625
2450
3150
3150
3325
3430
3570
3780
3605
3815
3885
3815
3850
4200
4235
4095
4445
4725
4445
4655
4795
4550
32025
36190
36785
Total Cost of Sales 2100 2625 4725 6475 7105 8750 10325 11200 11550 12530 13615 14000 105000

Salaries of employees and EPF, SOCSO for first year (2019)
Month First year-2019
Jan Feb Mac Apr May June July Aug Sept Oct Nov Dec
Management
Cheong Man Kien
Lee Jingxuan
Tam Siew Yin
Leng Keng Hui
Yang Eu Zhi

Factory
Normal Technician
4100
3550
3550
3650
4100

2050
4100
3550
3550
3650
4100

2050
4100
3550
3550
3650
4100

2050
4100
3550
3550
3650
4100

2050
4100
3550
3550
3650
4100

2050
4100
3550
3550
3650
4100

2050
4100
3550
3550
3650
4100

2050
4100
3550
3550
3650
4100

2050
4100
3550
3550
3650
4100

2050
4100
3550
3550
3650
4100

2050
4100
3550
3550
3650
4100

2050
4100
3550
3550
3650
4100

2050
Total Salaries 21000 21000 21000 21000 21000 21000 21000 21000 21000 21000 21000 21000
Employees Provident Fund (EPF) (13%) 2730 2730 2730 2730 2730 2730 2730 2730 2730 2730 2730 2730
SOCSO (1.75%) 367 367 367 367 367 367 368 368 368 368 368 368
*In order to reduce expenses, management peoples which are also partners will have lower salary than market price since company just start-up