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Asia Media Group Bhd Annual Report 2011
 

Asia Media Group Bhd Annual Report 2011

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Asia Media Group Bhd Annual Report 2011

Asia Media Group Bhd Annual Report 2011

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    Asia Media Group Bhd Annual Report 2011 Asia Media Group Bhd Annual Report 2011 Document Transcript

    • 2011 ANNUAL REPORTASIA MEDIA GROUP BERHAD(Company No. 813137-V)(Incorporated in Malaysia under the Companies Act, 1965)
    • CONTENTS02 Our Philosophy03 Corporate Structure04 Corporate Information05 Financial Highlights08 Chairman’s Statement10 Chief Executive Officer‘s Report12 Significant Milestones19 Event Highlights22 Board of Directors’ Profile24 Statement on Corporate Governance30 Audit Committee Report34 Statement on Internal Control35 Additional Compliance Information36 Directors Report40 Statement by Directors | Statutory Declaration41 Independent Auditors Report43 Statements of Financial Position44 Statements of Comprehensive Income45 Statements of Changes in Equity47 Statements of cash Flows49 Notes To The Financial Statement80 Analysis Of Shareholdings83 Notice Of Fourth Annual General Meeting86 Appendix I88 Appendix II Proxy Forms
    • OURPHILOSOPHYAt Asia Media, we believe in integrity and trust. Both these valuesform the foundations and pillars of our organization and foster ourrelationship with all of our stakeholders which include our valuedcustomers, our communities in which we operate, our investorsas well as our greatest assets, our people.The company has experienced rapid growth and expansion sinceits inception, is continuing to build a reputable presence in thecountry’s digital out-of-home industry.2 ASIA MEDIA GROUP BERHAD (813137-V)
    • CORPORATE STRUCTURE ASIA MEDIA GROUP BERHAD (“AMGB” or “Company”) (Company No.813137-V) (Incorporated in Malaysia under the Companies Act, 1965) * Asia Media Sdn Bhd (“AMSB” or “Asia Media”)Ω Ω Ω Asia Media Transnet Asia Media Asia Media Marketing Express Interactive Broadcasting Sdn Bhd Sdn Bhd Sdn Bhd Sdn Bhd (“AMMSB”) (“TESB”) (“AMISB”) (“AMBSB”) (Formally known as Maha Semarak Sdn Bhd) * Ω 100% owned subsidiary of Asia Media Group Berhad 100% owned subsidiary of Asia Media Sdn Bhd 70% owned subsidiary of Asia Media Sdn Bhd ANNUAL REPORT 2011 3
    • CORPORATE INFORMATION BOARD OF DIRECTORS REGISTERED OFFICE DATUK WIRA SYED ALI Level 8, Symphony House BIN TAN SRI ABBAS ALHABSHEE Pusat Dagangan Dana 1 (Non-Independent Non-Executive Chairman) Jalan PJU 1A/46 47301 Petaling Jaya DATO’ WONG SHEE KAI Selangor Darul Ehsan (Executive Director and Chief Executive Officer) T : 03-7841 8000 F : 03-7841 8199 SABARUDDIN BIN AHMAD SABRI (Executive Director) PRINCIPAL PLACE OF BUSINESS (Resigned on 23 March 2012) No. 35, First Floor Jalan Bandar 16 DATO’ HUSSIAN @ RIZAL BIN A. RAHMAN Pusat Bandar Puchong (Independent Non-Executive Director) 47100 Puchong Selangor Darul Ehsan YEONG SIEW LEE T : 03-5882 7788 (Independent Non-Executive Director) F : 03-5882 6622 W : www.asiamedia.net.my PRINCIPAL BANKERS AUDIT COMMITTEE AmBank (M) Berhad Dato’ Hussian @ Rizal Bin A. Rahman HSBC Amanah Malaysia Berhad Chairman AUDITORS Datuk Wira Syed Ali Bin Tan Sri Abbas Alhabshee Member STYL Associates (AF 001929) Chartered Accountants Yeong Siew Lee 107B Jalan Aminuddin Baki Member Taman Tun Dr Ismail 60000 Kuala Lumpur T : 03-7727 5573 F : 03-7727 0771 NOMINATION COMMITTEE SPONSOR Dato’ Hussian @ Rizal Bin A. Rahman Chairman TA Securities Holdings Berhad (14948-M) Menara TA One Datuk Wira Syed Ali Bin Tan Sri Abbas Alhabshee No.22, Jalan P.Ramlee Member 50250 Kuala Lumpur T : 03-2072 1277 Yeong Siew Lee F : 03-2031 0052 Member SHARE REGISTRAR REMUNERATION COMMITTEE Tricor Investor Services Sdn Bhd Dato’ Hussian @ Rizal Bin A. Rahman Level 17, The Gardens North Tower Chairman Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Dato’ Wong Shee Kai T : 03-2264 3883 Member F : 03-2282 1886 Yeong Siew Lee Member STOCK EXCHANGE LISTING ACE Market of Bursa Malaysia COMPANY SECRETARIES Securities Berhad See Siew Cheng (MAICSA 7011225) Stock Name : AMEDIA Leong Shiak Wan (MAICSA 7012855) Stock Code : 01594 ASIA MEDIA GROUP BERHAD (813137-V)
    • FINANCIAL HIGHLIGHTS 79.77% 88.73% 114.43% 87.05%Notes:1. Proforma consolidated results prepared for illustration purposes is based on the audited financial statement of the companies in the group and on the assumption that the current structure of the group has been in existence through out the period under review.2. Based on audited three (3) months financial period ended 31 December 2007.3. Based on proforma consolidated results for the financial years ended 31 December 2008, 31 December 2009 and 31 December 2010 respectively for illustrative purposes.4. Based on audited financial statement of the group for the financial year ended 31 December 2011.CAGR = Compound Annual Growth Rate ANNUAL REPORT 2011 5
    • FINANCIAL HIGHLIGHTSCont’dSUMMARISED GROUP INCOME STATEMENTSFinancial Year Ended (“FYE”) 31 December Proforma Audited Audited (3 months) (15 months) 2007 (1) 2008(2) 2009(2) 2010(2) 2010(3) 2011(3) FYE 31 December RM RM RM RM RM RM Revenue 3,501,620 6,533,187 13,150,080 23,375,537 16,554,093 36,548,114 Cost of Sales (1,709,095) (2,702,900) (6,267,488) (12,050,436) (8,644,850) (13,834,194) Gross profit ("GP") 1,792,525 3,830,287 6,882,592 11,325,101 7,909,243 22,713,920 EBITDA 968,759 2,187,285 4,233,739 9,246,887 11,297,585 17,224,148 Less: Amortisation - (5,422) (5,458) (25,979) (24,176) (263,705) Depreciation (143,721) (815,758) (830,127) (1,439,401) (960,720) (2,319,794) Net interest income/(cost) (113,993) 45,682 (39,664) (39,414) (26,074) 372,796 Profit before tax ("PBT") 711,045 1,411,787 3,358,490 7,742,093 10,286,610 15,013,445 Taxation (5,821) - - (4,872) (4,872) (4,450) Profit after tax ("PAT") 705,224 1,411,787 3,358,490 7,737,221 10,281,738 15,008,995 Net profit attributable to shareholders 705,224 1,411,787 3,358,490 7,7377,221 10,281,738 15,011,647 (4) Issued and paid-up share 130,000,000 130,000,000 130,000,000 130,000,000 130,000,000 228,000,000 capital base Basic EPS (sen) 0.54 1.09 2.58 5.95 14.87 6.61 Profit Margin GP margin (%) 51.2 58.6 52.3 48.5 47.8 62.1 EBITDA margin (%) 27.7 33.5 32.2 39.6 68.2 47.1 PBT margin (%) 20.3 21.6 25.5 33.1 62.1 41.1 PAT margin (%) 20.3 21.6 25.5 33.1 62.1 41.1 Growth Rates Revenue (%) N/A 86.6 101.3 77.8 N/A 56.4 EBITDA (%) N/A 125.8 93.6 118.4 N/A 86.3 PBT (%) N/A 98.6 137.9 130.5 N/A 94.0 PAT (%) N/A 100.2 137.9 130.4 N/A 94.06 ASIA MEDIA GROUP BERHAD (813137-V)
    • FINANCIAL HIGHLIGHTS Cont’dSUMMARISED GROUP’S FINANCIAL POSITIONAs at 31 December 2011 Audited RM Current assets 19,556,533 Current liabilities 34,616,892 Current ratio (times) 0.56 Short term debt 1,694,155 Long term debt 40,515 Total debt 1,734,670 Total equity 59,648,210 Total debt/total equity (times) 0.03 Cash reserve 13,279,128 Net cash 11,544,458 Net Assets/Share 0.46 Note :1. Based on audited three (3) month financial period ended 31 December 2007.2. Based on proforma consolidated results for the financial years ended 31 December 2008, 31 December 2009 and 31 December 2010 respectively for illustrative purposes.3. Based on audited Financial Statement of the group for the financial year ended 31 December 2010 and 31 December 2011 respectively.4. The issued and paid-up share capital was increased from 130,000,000 to 228,000,000 during the financial year through public issue of 98,000,000 new ordinary shares. ANNUAL REPORT 2011 7
    • On behalf of the Board of Directors (“Board”), I am pleased to present the Annual Report and Audited Consolidated Financial Statement of Asia Media Group Berhad (“AMGB” or "Company") and its subsidiary companies ("Group") for the financial year ended 31 December 2011 ("FYE 2011").Economic Review The Group achieved a tremendous result in the 2011 compared to the last financial year. The Group’s revenueThe Malaysian economy experienced a strong rebound in and profit before tax for the FYE 2011 were recorded at2010, achieving Gross Domestic Product growth of 7.2% RM36.55 million and RM15.01 million respectively, whichcompared with a contraction of 1.7% in 2009. The had increased by 56.4% and 94.0% respectively comparedeconomic expansion was largely due to the increase in to the proforma result for the FYE 31 December 2010.export-driven manufacturing activities and higher demandfor services. The Group adopted a prudent financial management strategy where the Group’s debt to equity ratio is only 0.03FYE 2011 Financial Performance times as at 31 December 2011, with total debt of RM1.73 million against total equity of RM59.65 million. The cashThe Group’s financial performance continued to improve in balance of the Group was RM13.28 million. With a healthy2011, mainly due to the strong performance of the balance sheet position, the Group is confident that it willmultimedia advertising services, media communication enhance its market opportunity in the near future.particularly in our programme sponsorship segment. Thiswas mainly due to the increase in existing customer’sdemand and successfully securing a large number of newcustomers.8 ASIA MEDIA GROUP BERHAD (813137-V)
    • CHAIRMAN’S STATEMENT Cont’dThe Group’s financial liquidity remained healthy with operating cash inflow of RM44.47 million in FYE 2011. The net cashused in investing activities was RM54.52 million, mainly due to the purchases of the broadcasting and digital equipment forbusiness expansion. The positive financing cashflow of RM21.67 million was mainly derived from issuance of new sharesduring the financial year. Overall, the Group achieved a net increase in cash balance of RM11.62 million in FYE 2011, ascompared to the RM0.97 million in previous financial year.Corporate GovernanceIn AMGB, we believe in adhering to the best practices of corporate governance to sustain business efficiency andsustainability in the long term. Therefore, the Group has consistently upheld the integrity of business practices as a pivotalpart of ensuring consistent growth in our core business.The Group’s measures towards this objective are highlighted in the Corporate Governance Statement in this Annual Report.Corporate Social ResponsibilityThe Group believes that effective corporate responsibility can deliver benefits to its businesses and, in turn, to itsshareholders by enhancing reputation and business trust, staff motivation and retention, customer loyalty and long-termshareholder value.The Group,its Directors and staff supported a number of community services in the FYE 2011 including: - Nursing and Care Home, Kampung Baru, Jalan Sungai Way, Petaling Jaya - Rumah Pengasih, Warga Prihatin, CherasAppreciationWe would like to express our warmest appreciation to all our shareholders, business partners, suppliers customer andregulatory authorities for their continuing support and confidence in our Group. I would also like to take this opportunity toacknowledge the contributions of my fellow Directors and employees for their unwavering dedication and professionalismthroughout 2011, without which it would not be possible to continue to deliver growth in our shareholders’ value.DATUK WIRA SYED ALI BIN TAN SRI ABBAS ALHABSHEECHAIRMAN ANNUAL REPORT 2011 9
    • CHIEF EXECUTIVE OFFICER’S STATEMENT Financial Performance of the Group : The Group’s revenues have increased greatly since inception, posting year-on-year (“y-o-y”) growth rates of 86.6%, 101.3%, 77.8% and 56.4% in 2008, 2009, 2010 and 2011 respectively. This is testament to the increasing acceptance and the rising demand for advertising in the Digital-Out-of-Home (“DOOH”) sector. Rising revenues are also attributable to the success of marketing efforts to promote the Group’s network, which include greater engagement with media agents. Concurrently, EBITDA margins have also improved, rising from 27.7% in 2007 to 47.1% in 2011 as a result of economies of scale attained due to higher demand for DOOH advertising. The notable growth and profitability improvements were achieved in spite of the recent global financial crisis. The Group’s net profit has improved at a compound annual growth rate (“CAGR”) of 114.8% since 2007 (based on annualised 3 months of 2007 results), having recorded a stellar, 94.0% y-o-y jump in 2011 to RM15.01million (EPS: 6.61 sen), on the back of a 56.4% increase in revenue.OPERATIONS REVIEW Boost from Broadcasting LicenseIn 2011, the Group actively expanded its business AMGB is one of the few companies in Malaysia that areoperations by securing new projects and adding new permitted to offer broadcasting services and facilities. A fullcustomers into its portfolio. Content Application Service Provider (“CASP”) license allows the Group to operate 24-hour non-subscriptionTrial of Live Digital Broadcasting on Buses broadcasting, subscription broadcasting and terrestrial radio broadcasting services nationwide.The Group has successfully completed live testingtelevision broadcasting on selected buses that cover the The Group is the only DOOH Transit Media operator inShah Alam and Kelana Jaya routes. Real-time Malaysia to have a fully-fledged Content Applicationbroadcasting will reduce on-going maintenance cost in the Service Provider Individual License (“CASP-i”), Networklong run, eliminating the need for regular manual update of Facilities Provider Individual License (“NFP-i”), Networkcontent. The Group’s Digital Terrestrial Television Service Provider Individual License (“NSP-i”) andBroadcasting (“DTTB”) will link up with the LCD-TV Application Service Provider (“ASP”) Class License.screens installed on public transport and will receivecontent over the airwave through real-time programmingtransmissions.10 ASIA MEDIA GROUP BERHAD (813137-V)
    • CHIEF EXECUTIVE OFFICER’S REPORT Cont’dBoost from Broadcasting License cont’d INDUSTRY OUTLOOK AND PROSPECTSApart from its improved margins, the Group’s license to Private consumption remains healthy amid robust labourprovide Free-to-Air (“FTA”) broadcasting services offers an market conditions. Private capital spending – driven byavenue for bigger media players eyeing a piece of the initiatives such as the ETP, expansion of capacity andelectronic media market. investment in new growth areas – will help Malaysia to sustain its Gross Domestic Product (“GDP”) growth.CORPORATE ACHIEVEMENTS Many multinational corporations who contribute to global as well as Malaysian advertising expenditure (“ADEX”) have had strong results in 2011 with mounting cashDeployment of Digital Media Broadcasting under reserves. Personal consumption products like mobileEconomic Transformation Program (“ETP”) phones, health and beauty care, entertainment, food and beverages outlets, government, social and politicalAMGB has completed its trial run for its first DTTB service organisations will be the key drivers of ADEX growth inin Klang Valley, and is expected to be fully roll-out by third 2012.quarter of 2012. The project, part of the ETP, would costabout RM 500.0 million over the next ten years. The Group Looking further ahead, prospects for the DOOH transitplans to expand its live broadcasting in Penang and Johor media are promising. The independent market researchBahru, followed by other states in Peninsular Malaysia firm, Frost & Sullivan, expects the DOOH transit mediawithin two to three years. Of the RM22.5 million raised in industry to grow at a CAGR of 39.01% p.a., eventuallyits initial listing exercise, RM16.0 million were utilised for reaching RM159.9 million in 2015.building infrastructures of the DTTB which consist oftransmission towers and various network facilities. Weview this as a very positive step forward because this ACKNOWLEDGEMENTSwould inherently place AMGB as the front runner insecuring any future projects within the Government sector. I would like to take this opportunity to thank everyone, especially the shareholders, investors, customers,In conjunction with the roll-out of DTTB by the third quarter business associates and the regulatory authorities for theirof 2012, this will create new territories for media and continuous support. I would also like to extend my gratitudeadvertisers, allowing instantaneous measuring of market to the staff, management and the Board of Directors forresponse. The possibility of swift delivery of messages their dedication and commitment to the Group.makes it ideal for time and location sensitive advertising,such as customer loyalty offers at shopping centres andevent promotions. In order to leverage the strength of short Thank you.messaging advertising, timely and reliable delivery ofmessages is paramount.In addition, the roll-out of DTTB and mobile interactive willenhance existing programme sponsorships as it will enable DATO’ WONG SHEE KAIprovision of additional services such as ringtone CHIEF EXECUTIVE OFFICERdownloads, mobile games and subscription to contentaside from the generic contests and voting activities.Media Partnership CollaborationsIn 2011, the Group has entered into media partnershipcollaboration with animation and entertainment companies,e.g. Animasia Studio Sdn Bhd, Les’ Copaque ProductionSdn Bhd, Halo Music (M) Sdn Bhd and Millenium Art SdnBhd to develop and provide multimedia and creativecontent for our transit networks. ANNUAL REPORT 2011 11
    • SIGNIFICANT MILESTONES2007Asia Media began operations in Pusat Bandar Puchong, Selangor.Asia Media was awarded the concession to operate the Transit-TV Network System in 1,050 RapidKL stage buses, thelargest integrated public transport company wholly owned by the Ministry of Finance Malaysia, via LCD digital screens toshow infotainment programme, advertisement, community driven messages and public service bulletins to over 1.5 millionbus users daily.In October 2007, Asia Media was awarded the MSC status by the Multimedia Development Corporation Sdn Bhd with five(5) years tax-free incentives.2008The installation of LCD TV screen in 1,050 Rapid KL buses was completed in early 2008. Transnet KL was officiallylaunched. The transit channel has been on trial service since November 2007 in 600 Rapid KL buses. Rapid KL buses wasinstalled with two 19-inch LCD TV screens to broadcast a variety of programmes including news, sports and documentariesin 30minutes slots that are interspersed with advertisements.12 ASIA MEDIA GROUP BERHAD (813137-V)
    • SIGNIFICANT MILESTONES Cont’d2008 cont’dAsia Media was awarded the concessions to operate Transit-TV Network System in Causeway Link stage buses in JohorBahru owned by Handal Indah Sdn Bhd (“Handal Indah”). A total of 500 LCD TV screens were installed in 250 buses. Theinstallation was completed in September 2008.In mid-2008, Asia Media successfully acquired Transit Vision Holdings Sdn Bhd which operates LCD TV screen in 200 luxurycoaches own by Konsortium Transnasional Berhad. With this acquisition, the Group has expanded its coverage to Pluslinerand Nice++ express buses. Transit Vision Holdings Sdn Bhd was subsequently renamed as Transnet Express Sdn Bhd andoperates under the brand name of TransNet.Awarded as “Best Start-up Company” by MSC Malaysia at the Asia Pacific ICT Awards.Asia Media certified as the “Biggest Transit-TV Network (Bus)” by the Malaysian Book of Records with 3,175 LCD screeninstalled in 1,391 stage and express buses.Asia Media is the winner of the SME Rising Star Award 2008 by SMI Association of Malaysia. ANNUAL REPORT 2011 13
    • SIGNIFICANT MILESTONES2009Asia Media was recognized and awarded as one of SME Magazine’s ‘SME 100’ award winners.Asia Media and The Star Publications announced a Joint Media Collaboration to cross-promote their respective mediaproducts on the other’s media platform. Asia Media dedicated 10% of its air time to promote The Star Group’s products. Inreturn, The Star Group featured Asia Media’s products on its platforms which include newspaper, magazines and radiostations.2010Asia Media was awarded the winner of the BrandLaureate-SMEs Chapter Award.14 ASIA MEDIA GROUP BERHAD (813137-V)
    • SIGNIFICANT MILESTONES Cont’d2010 cont’dAsia Media participated the Asia-Pacific Broadcasting Union Digital Broadcasting Symposium 2010 officiated by the Ministerof Information Communication and Culture, Y.B Dato’ Seri Utama Dr. Rais Yatim to create awareness amongst thebroadcasting industry players.Asia Media was awarded with three (3) licenses (NFP-i, NSP-i and CASP-i) from Malaysian Communications andMultimedia Commission and Spectrums for the deployment of Digital Multimedia Broadcasting.Asia Media was allocated 3 Blocks of “L” Band Spectrums, at 1452.960, 1454.672 & 1456.384 MHz respectively to beutilised for digital multimedia broadcasting.The Group planned to utilise the allocated frequencies to deploy a Digital Terrestrial Television Broadcasting to provideinnovative services and applications, such as mobile devices, traffic and safety information, interactive programmes anddata information.The group’s Chief Executive Officer (“C.E.O.”) Dato Ricky Wong won the Most Promising Entrepreneur Award by AsiaPacific Entrepreneurship Awards (APEA). The award recognises individuals who have shown promising tenacity,perseverance and courage in business. ANNUAL REPORT 2011 15
    • SIGNIFICANT MILESTONES2010 cont’dThe group’s C.E.O. Dato Ricky Wong was awarded the JCI - Creative Young Entrepreneur Award 2010. Datuk MohdBadlisham Ghazali, C.E.O. of Multimedia Development Corporation (MDeC) presented the award.2011The company was successfully listed on the ACE Market of Bursa Securities Malaysia Berhad on 11 January 2011. The IPOinvolved an issuance of 98 million new shares at RM0.23 each and was oversubscribed by 21.46 times.The share debuted with RM0.17 premium to RM0.40 per share and closed at RM0.285 with 40.92 million shares transactedon the first day of trading.In November 2011, Asia Media started live broadcasting trial on selected buses in Klang Valley.16 ASIA MEDIA GROUP BERHAD (813137-V)
    • SIGNIFICANT MILESTONES Cont’d2011 cont’dEconomicTransformationProgramme (ETP)The ETP is an initiative by the MalaysiaGovernment to turn Malaysia into a highincome economy by the year of 2020. It ismanaged by the Performance Managementand Delivery Unit (PEMANDU), an agencyunder the Prime Minister Department. Theprogramme provides strong focus on 12National Key Economic Areas (NKEAs).These NKEAs are expected to makesubstantial contributions to Malaysia’seconomic performance, and they will receiveprioritised public investment and policysupport. The ETP projects will be led by theprivate sector where the Government willprimarily play the role of a facilitator. Communications Content and infrastructure (CCI) Among the 12 NKEAs, Asia Media will be involved in the CCI sector. The CCI sector spans a wide ecosystem, from content generation to networks, services and devices. In 2009, the sector contributed RM22 billion from telecommunications, TV and broadcasting as well as post and courier. The sector should now build on the infrastructure investments of the past and shift to providing applications and content in order to enable the knowledge-based society. The CCI NKEA aims at driving continued high growth in communications and enabling the paradigm shift from infrastructure to applications and content.Asia Media in the ETPThe Group intends to invest RM500 million over the next DTTB is a type of infrastructure that employs digitalfive to ten years to develop developing the first Digital Live broadcasting to transmit TV signals from terrestrialTransit-TV Broadcasting infrastructure in Malaysia. By transmission towers to a conventional aerial. With DTTB,adopting international broadcasting infrastructure, Asia the Group will be able to deliver real-time content andMedia is capable of delivering live video and voice into the information to the targeted mobile audience via livetransportation industry within the country. broadcasts. Additionally, Asia Media intends to improve its capabilities to broadcast information and entertainment toAsia Media intends to leverage on the three licences a large range of devices (i.e. mobile phones, personal(NFP-i, NSP-i, and CASP-i) awarded by the Malaysian computers, personal digital assistant) apart from publicCommunications and Multimedia Commission (MCMC) in transports.2010 for the deployment and integration of DigitalMultimedia Broadcasting and Digital Terrestrial TelevisionBroadcasting into the TransNet network. ANNUAL REPORT 2011 17
    • SIGNIFICANT MILESTONESCont’dNEWS & ARTICLES18 ASIA MEDIA GROUP BERHAD (813137-V)
    • EVENT HIGHLIGHTSAsia-Pacific Broadcasting Union Digital Broadcasting Symposion Group Investors and Analysis Briefing ANNUAL REPORT 2011 19
    • EVENT HIGHLIGHTSMedia Sponsorship for Events20 ASIA MEDIA GROUP BERHAD (813137-V)
    • EVENT HIGHLIGHTS Corporate Social Responsibility - Visit to Oldfolks HomeCorporate Social Responsibility - Visit to Orphanage Home ANNUAL REPORT 2011 21
    • BOARD OF DIRECTORS’ PROFILEDATUK WIRA SYED ALI DATO’ WONG SHEE KAIBIN TAN SRI ABBAS ALHABSHEE (Executive Director and Chief Executive Officer)(Non-Independent Non-Executive Chairman) Dato’ Wong Shee Kai, a Malaysian, age 30, is theDatuk Wira Syed Ali Bin Tan Sri Abbas Alhabshee, a Executive Director and Chief Executive Officer of theMalaysian, age 50, is the Non-Independent Non-Executive Company and he was appointed to the Board on 6 OctoberChairman of the Company and he was appointed to the 2009. He is a member of the Remuneration Committee ofBoard on 5 May 2010. He is a member of Audit and the Company. He is also the founder of the Company. HeNomination Committees of the Company. He has great has contributed significantly to the growth andknowledge and executive experience in leading private, development of the Company and has successfully led thepublic and government controlled organisations from a Company to become an established and reputable playerbroad range of industries. Datuk Wira ventured into in the DOOH transit media industry in Malaysia. Dato’business in the early 1980s and currently sits on the board Wong Shee Kai has achieved several recognitions andof several private and public corporations involved in a awards personally and has also led the Company to adiverse range of businesses such as C.I. Holdings Berhad, string of accolades and rewards. The recognitions andTanjung Offshore Berhad, UZMA Berhad and Redtone awards received by Dato’ Wong Shee Kai include JuniorInternational Berhad. He was appointed as a member of Chamber International (“JCI”) Creative Young Entrepreneurthe Malaysian Senate (Dewan Negara) on 21 April 2003 Award from Junior Chamber International Group in 2008;until April 2009. Datuk Wira obtained his Professional Excelence Leadership under the 8th Asia PacificDiploma in Leadership and Management from the New International Entrepreneur Excellence Award in 2009; theZealand Institute of Management in 2003. He is currently 2009 Top 10 JCI Creative Young Entrepreneur Awardinvolved in the business and strategies development of the (Malaysia) from JCI in 2009 and the Most PromisingCompany. Entrepreneur Award by Asia Pacific Entrepreneurship Awards in 2010. He is mainly responsible for the CompanyDatuk Wira does not have any family relationship with any overall strategy and development of the overall vision ofDirectors and/or major shareholders of the Company or the Company. He began his career with Ford Motorany conflict of interest in any business arrangement Company (UK) as an Account Analyst from 2002 to 2003.involving the Company. He has had no conviction for any Subsequently, he joined Major Fibre Sdn Bhd in Malaysiaoffences within the past ten (10) years. His details of as Finance Manager and his last position with theattendance at the Board of Directors’ Meeting are set out Company being the General Manager in overseeingin the Statements on Corporate Governance. manufacturing process, sales, marketing and materials sourcing, where he observed and discovered arbitrage media advertising opportunity in Malaysia and subsequently founded the Company. Dato’ Wong Shee Kai obtained his Bachelor Degree in Accounting and Finance with First Class Honours from Lancaster University, United Kingdom in 2003. He is currently responsible in leading the business direction and strategies development of the Company. Dato’ Wong is a Director and shareholder of Wong SK Holdings Sdn Bhd, a major shareholder of the Company. He does not have any family relationship with any other Directors or any conflict of interest in any business arrangement involving the Company. He has had no conviction for any offences within the past ten (10) years. His details of attendance at the Board of Directors’ Meeting are set out in the Statements on Corporate Governance.22 ASIA MEDIA GROUP BERHAD (813137-V)
    • BOARD OF DIRECTORS’ PROFILE Cont’dSABARUDDIN BIN AHMAD SABRI In addition, he was awarded the certificate of Master of the(Executive Director) Oxford Centre for Leadership from The Oxford Centre for(Resigned on 23 March 2012) Leadership, United Kingdom.Sabaruddin Bin Ahmad Sabri, age 47, is the Executive Dato’ Hussian does not have any family relationship withDirector of the Company and he was appointed to the any Directors and/or major shareholders of the CompanyBoard on 5 May 2010. He is involved in the business or any conflict of interest in any business arrangementdevelopment of the Company. He started his career at involving the Company. He has had no conviction for anyMalaysian National News Agency ‘Bernama’ covering offences within the past ten (10) years. His details ofissues on business and the economy for nine (9) years. He attendance at the Board of Directors’ Meeting are set out inthen served as Deputy Editor for one of Malaysia’s largest the Statements on Corporate Governance.circulating newspaper, Utusan Malaysia. Subsequently, hejoined Bridgecon Holdings Berhad as a Public RelationManager and Business Development Manager. YEONG SIEW LEESabaruddin subsequently became a host for Radio (Independent Non-Executive Director)Television Malaysia covering business issues and currentaffairs as well as political issues. In 2003, he was Yeong Siew Lee, a Malaysian, age 34, is the Independentappointed as a Senior Private Secretary to the Malaysian Non-Executive Director of the Company and she wasInformation Minister where he served till 2008. He is a appointed to the Board on 5 May 2010. She is a membermember of the Malaysia-Indonesia Journalist Solidity of the Audit, Nomination and Remuneration Committees ofAlliance, an initiative to promote bilateral ties by local the Company. She obtained her Bachelor of Sciencemedia practitioners. Sabaruddin has been at the forefront (Honours) degree in Accounting and Finance fromof the media industry for over two (2) decades and offers a University of Wales College, Newport, United Kingdom inwealth of experience and business acumen. Sabaruddin 2001 and obtained her professional degree in Associationdoes not have any family relationship with any Directors of Chartered Certified Accountants, United Kingdom inand/or major shareholders of the Company or any conflict 2004. She is a chartered accountant and is currently aof interest in any business arrangement involving the member of the Malaysian Institute of Accountants (MIA).Company. He has had no conviction for any offences within She began her career with GHL Systems Berhad (“GHL”),the past ten (10) years. His details of attendance at the a company listed on the Main Market of Bursa Securities,Board of Directors’ Meeting are set out in the Statements as an Assistant Accountant in 2003 and moved up theon Corporate Governance. ranks and became Head/Assistant General Manager of Finance in 2008 to supervise the company’s local and overseas accounting teams. She left GHL in August 2009DATO’ HUSSIAN @ RIZAL BIN A. RAHMAN to venture into business in the consumer industry and was(Independent Non-Executive Director) working as a finance adviser for SMR HR Group Sdn Bhd. Ms. Yeong does not have any family relationship with anyDato’ Hussian @ Rizal bin A. Rahman, a Malaysian, age Directors and/or major shareholders of the Company or50, is the Independent Non-Executive Director of the any conflict of interest in any business arrangementCompany and he was appointed to the Board on 5 May involving the Company. She has had no conviction for any2010. He is the Chairman of the Audit, Nomination and offences within the past ten (10) years. Her details ofRemuneration Committees of the Company. He has attendance at the Board of Directors’ Meeting are set out inextensive experience in the ICT industries in Malaysia. the Statements on Corporate Governance.Currently, he is the Executive Director/Chief ExecutiveOfficer of MobilityOne Limited, a company listed on AIM ofthe London Stock Exchange, and is responsible for thedevelopment of MobilityOne Limited group of companies’overall management, particularly in setting the businessdirections and strategies. Dato’ Hussian obtained thePostgraduate Diploma in Business Management from TheOxford Association of Management, Oxford, England(“OXIM”) and was also admitted to the membership ofCertified Master of Business Administration from the OXIM,a membership that recognises management competencyand professional development. ANNUAL REPORT 2011 23
    • STATEMENT ON CORPORATE GOVERNANCETHE IMPORTANCE OF CORPORATE GOVERNANCEThe Board of the Group is committed to the principles and the best practices of corporate governance as set out in theMalaysian Code on Corporate Governance (“the Code”), in order to meet the standard of corporate governance as afundamental part of discharging its responsibilities to protect and enhance shareholders’ value and financial performance ofthe Group.The Company continues to apply the key principles of the Code with an objective to maintain the promulgated standards oftransparency, accountability and integrity.The Board is pleased to outline the key principles and best practices of the Code adopted by the Board.THE BOARD OF DIRECTORSRole and ResponsibilitiesThe Board manages the Group’s activities by appraising and deliberately the business directions strategies and futureventures, overseeing the Group’s business conduct and affairs, developing shareholders and investors relations, riskmanagement, reviewing the system of internal control and managing succession planning.An effective and experienced Board comprising members with a wide range of skills, knowledge and experience necessaryto govern the Group. This includes international and regional operational experience, understanding of economics of thesector in which the Company operates and knowledge of world capital markets.A brief profile of each of the Directors is presented on pages 22 and 23 of the Annual Report.The key functions of the Chairman, apart from conducting meetings of the Board and shareholders, include facilitating thesetting of business directions and strategies of the Company, ensuring all Directors are properly briefed during Boarddiscussions and shareholders are adequately informed of subject matters where their approvals are required.The Chief Executive Officer in particular is responsible for implementing the policies and decisions of the Board, overseeingthe operations as well as coordinating the development and implementation of business and corporate strategies. TheExecutive Directors contribute significantly in corporate policies and strategies, performance monitoring, allocation ofresources as well as improving corporate governance and internal controls, using their intimate knowledge andunderstanding of the business and industry.The Board has delegated specific responsibilities to three (3) Board committees namely the Audit Committee, NominationCommittee and Remuneration Committee, which were established with specific terms of reference. These Committeeshave the authority to examine pertinent matters within their terms of reference and is responsible for reporting to the Boardon issues together with their recommendations. The ultimate responsibility for final decision on all matters, however, lieswith the entire Board.Board Composition and IndependenceThe Board consists of five (5) members, comprising of:• One Non-Executive Chairman• Two Executive Director• Two Independent Non-Executive DirectorsThe presence of the two (2) Independent Non-Executive Directors provides an important balance in the Board to provideclear and effective leadership through their independent judgement and assessment of proposals presented by theExecutive Director and the management team of the Group. This ensures the Group maintains the highest standards ofconduct, integrity, accountability and check and balance.24 ASIA MEDIA GROUP BERHAD (813137-V)
    • STATEMENT ON CORPORATE GOVERNANCE Cont’dTHE BOARD OF DIRECTORS cont’dBoard Composition and Independence cont’dThe Board composition complies with Rule 15.02 of the Bursa Securities Listing Requirements for ACE Market whichrequires that at least two (2) directors or 1/3 of the board of directors, whichever is the higher, are Independent Directors. Allthe Independent Directors are independent of management and are free from any relationship that could materially interferewith their judgement and decision.Board MeetingsThe Board meets every quarter and additional meetings are held as and when necessary. For this financial year underreview, the Board of Directors met five (5) times on the following dates:-• 21 February 2011• 22 March 2011• 23 May 2011• 29 July 2011• 21 October 2011The attendance of the Directors at Board meetings are shown in the table below:-Directors Board Meeting Attended %(i) Datuk Wira Syed Ali Bin Tan Sri Abbas Alhabshee 5/5 100(ii) Dato’ Wong Shee Kai 5/5 100(iii) Sabaruddin Bin Ahmad Sabri 4/5 80(iv) Dato’ Hussian @ Rizal Bin A. Rahman 5/5 100(v) Yeong Siew Lee 5/5 100The Board is scheduled to meet at least four (4) times a year, at quarterly intervals, with additional meetings convened asnecessary. The Chairman, with the assistance of Management and the Company Secretary, is responsible for setting theagenda of Board meetings.Appointments to the BoardThe current composition of the Board brings the required mix of skills and core competencies required for the Board todischarge its duties effectively. The Board reviews the required mix of skills of the Board from time to time in order to identifycandidate with the qualifications and experience who will further complement the current Board and assist in managing orsteering the Company effectively. The Board continuously reviews its size and composition, with particular consideration onits impact on the effective functioning of the Board.The Board appoints its members through a formal and transparent selection process. This process has been reviewed,approved and adopted by the Board. The decision on appointment is the responsibility of the full Board after considering therecommendation of the Nomination Committee.Re-election of DirectorsIn accordance with the Company’s Articles of Association, at least one-third (1/3) of the Directors or if the number is not three(3) or a multiple of three (3) then the nearest one-third (1/3) shall retire from office at each Annual General Meeting. AllDirectors shall retire from office once at least every three (3) years but shall be eligible for re-election. Directors who areappointed by the Board during the financial year are subject to re-election by the shareholders at the next Annual GeneralMeeting following their appointments. This provides an opportunity for shareholders to review and approve their tenure inoffice. ANNUAL REPORT 2011 25
    • STATEMENT ON CORPORATE GOVERNANCECont’dTHE BOARD OF DIRECTORS cont’dRe-election of Directors cont’dTo assist shareholders in their decision, sufficient information such as personal profile, attendance at meetings and theirshareholdings in the Company for each Directors standing for election are furnished in the Annual Report.Board CommitteesThe Board has established the following Committees, which operate within defined terms of reference to assist the Board inthe execution of specific responsibilities:Audit CommitteeThe Audit Committee reviews issues of accounting policy, financial reporting of the Company, monitors the work andeffectiveness of the internal audit function and ensures an objective and professional relationship is maintained with theexternal auditors. The Committee has full access to auditors, both internal and external, who, in turn, have access at alltimes to the Chairman of the Committee. The composition and duties of the Audit Committee are set out in the AuditCommittee Report on pages 30 to 33 of the Annual Report.Nomination CommitteeThe Nomination Committee is responsible to propose for new nominee for the Board and to evaluate each individual Directoron an on-going basis. The Nomination Committee also seeks to ensure an optimal mix of qualification, skill and experienceamong the Board members.The Nomination Committee comprises the following members:-Name DesignationDato’ Hussian @ Rizal Bin A. Rahman ChairmanDatuk Wira Syed Ali Bin Tan Sri Abbas Alhabshee MemberYeong Siew Lee MemberRemuneration CommitteeThe Remuneration Committee is responsible to recommend to the Board the remuneration packages of Executive Directorsand senior management of the Company. The remuneration packages of Non-Executive Directors are determined by theBoard of Directors as a whole.The Remuneration Committee comprises the following members:-Name DesignationDato’ Hussian @ Rizal Bin A. Rahman ChairmanDato’ Wong Shee Kai MemberYeong Siew Lee Member26 ASIA MEDIA GROUP BERHAD (813137-V)
    • STATEMENT ON CORPORATE GOVERNANCE Cont’dTHE BOARD OF DIRECTORS cont’dSupply of InformationThe Chairman ensures that all Directors have unrestricted access to timely and accurate information in the furtherance oftheir duties. Board papers are distributed in advance to enable Directors to have sufficient time to review the Board papersand to obtain further explanation or clarification to facilitate the decision-making process and the meaningful discharge oftheir duties. All proceedings of Board meetings are minuted and signed by the Chairman of the meeting.Every Director has unhindered access to the advice and services of the Secretary who is responsible for ensuring Boardmeeting procedures are followed and that applicable rules and regulations are complied with, and if so required, may seekindependent advice, at the Company’s expense, in furtherance of his duties.Directors’ TrainingThe Directors possess the commitment to quality, and to create value by being relevant at all times, consistent with evolvingchanges and challenges in the business environment. The Directors, in this connection, have participated in and benefitedfrom numerous conferences, seminars and training programmes on areas pertinent to the enhancement of their roles andresponsibilities as Directors of a public listed company.The Board encourages its Directors to attend talks, workshops, seminars and conferences to update and enhance their skillsand to assist them in discharging their responsibilities towards corporate governance, operational and regulatory issues.All Directors have attended and successfully completed the Mandatory Accreditation Program conducted by Bursatra SdnBhd.DIRECTORS’ REMUNERATIONThe remuneration of Directors is determined at levels which enable the Company to attract and retain Directors with therelevant experience and expertise to assist in managing the Group effectively.The aggregate remuneration of the Directors of the Company and its subsidiaries for the FYE 31 December 2011categorised into appropriate components as follows: Executive Non-Executive Directors Directors RM RMRemuneration-Fees 236,000 126,000 236,000 126,000The number of Directors in the Company whose remuneration falls in each successive bands of RM50,000 are asfollows: Number of DirectorsRange of Remuneration Executive Directors Non-Executive DirectorsBelow RM50,000 1 2RM50,001 - RM150,000 - 1RM150,001 - RM200,000 1 - ANNUAL REPORT 2011 27
    • STATEMENT ON CORPORATE GOVERNANCECont’dINVESTOR RELATIONS AND SHAREHOLDERS COMMUNICATIONInvestor RelationsThe Board acknowledges the need for shareholders to be informed on all key issues and major development affecting theGroup. In addition to various announcements made during the year, the timely release of financial results on a quarterlybasis provides shareholders with an overview of the Company performance and operations.Shareholders, investors and analysis are kept abreast with major developments of the Company through the Company’swebsite at www.asiamedia.net.my, annual report and announcements made to Bursa Securities.Annual General MeetingThe Annual General Meeting is the primary channel of communication with its shareholders. Shareholders may enquireabout the resolutions being proposed at the meeting and the financial performance and business operations in generalduring the open and answer session.ACCOUNTABILITY AND AUDITFinancial ReportingThe Board aims to provide and present a balanced and meaningful assessment of the Group’s financial performance andprospects at the end of the financial year, primarily through the annual financial statements, quarterly announcement ofresults to shareholders as well as the Chairman’s statement in the Annual Report.The Audit Committee assists the Board in overseeing the Group’s financial reporting processes and the accuracy, adequacyand completeness of its financial reporting.Internal ControlThe Directors acknowledge their responsibilities for the internal control system in the Group, covering not only financialcontrols but also controls relating to operational, compliance and risk management. The Group’s Internal Control Statementis set out on page 34 of the Annual Report.Relationship with AuditorsThe Company has through the Audit Committee established a formal and transparent arrangement with the auditors to meettheir professional requirements and comply with the Amended Code on Corporate Governance.The role of the Audit Committee in relation to the external auditors is set out in the Audit Committee Report on page 33 ofthe Annual Report.Compliance StatementThe Group has the intention to comply with all best practices set out in the Code. At this point, the Board of Directors of theCompany is of the view that disclosure of the remuneration bands of the Directors of the Company is sufficient to meet theobjectives of the Code.Directors’ Responsibility StatementThe Directors are required under Rule 15.26 of the ACE Market Listing Requirements of Bursa Securities to issue astatement explaining their responsibility for preparing the annual audited financial statements.28 ASIA MEDIA GROUP BERHAD (813137-V)
    • STATEMENT ON CORPORATE GOVERNANCE Cont’dACCOUNTABILITY AND AUDIT cont’dDirectors’ Responsibility Statement cont’dThe Directors are required by law to prepare financial statements for each financial year which give a true and fair view ofthe state of affairs of the Group and of the Company as at the financial year end and of the results and cash flows of theGroup and of the Company for the financial year then ended.The Directors consider that, in preparing the financial statements of the Company for the financial year ended 31 December2011 on pages 41 to 79 of the printed version of this Annual Report, the Company has used appropriate accounting policies,consistently applied and supported by reasonable and prudent judgements and estimates. The Directors also consider thatall applicable approved accounting standards in Malaysia have been followed and confirm that the financial statements havebeen prepared on a going concern basis.The Directors are responsible for ensuring that the Company keeps proper accounting records, which disclose the financialposition of the Company and comply with the provisions of the Companies Act, 1965.The Directors are also responsible for taking such steps that are necessary to safeguard the assets of the Company and toprevent and detect fraud and other irregularities. ANNUAL REPORT 2011 29
    • AUDIT COMMITTEE REPORTThe Board of the Group is pleased to present the report of the Audit Committee for the financial year ended 31 December2011.MEMBERSHIPThe Audit Committee comprises three (3) members, a majority of whom are Independent Directors and all is Non-ExecutiveDirectors.Name Designation(i) Dato’ Hussian @ Rizal Bin A. Rahman Independent Non-Executive Director (Chairman)(ii) Datuk Wira Syed Ali Bin Tan Sri Abbas Alhabshee Non-Independent Non-Executive Chairman (Member)(iii) Yeong Siew Lee Independent Non-Executive Director (Member)TERMS OF REFERENCEThe terms of reference of Audit Committee are as follows:Composition of Audit CommitteeThe Audit Committee comprising at least three (3) members, all of whom must be Non-Executive Directors, with a majorityof them being Independent Directors. No alternate director shall be appointed as a member of the Audit Committee.At least one member of the Audit Committee:-i. must be a member of the Malaysian Institute of Accountants, orii. if he is not a member of Malaysian Institute of Accountants, he/she must have at least Three (3) years’ working experience, and (a) he must have passed the examination specified in Part I of the 1st Schedule of the Accountants Act, 1967, or (b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967.iii. fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad.In the event of any vacancy in the Audit Committee resulting of non-compliance of the above, the Company must fill thevacancy within three (3) months.Term of officeThe term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board ofDirectors at least once every three (3) years to determine whether the Audit Committee and its members have carried outtheir duties in accordance with their terms of reference.Chairman of the Audit CommitteeThe Chairman of the Audit Committee shall be an Independent Non-Executive Director elected among the members.30 ASIA MEDIA GROUP BERHAD (813137-V)
    • AUDIT COMMITTEE REPORT Cont’dTERMS OF REFERENCE cont’dSecretary of the Audit CommitteeThe Secretary of the Company shall be the Secretary of the Audit Committee.Meetingsi. Frequency of MeetingThe Audit Committee shall meet not less than four (4) times a year or as many times as the Audit Committee deemsnecessary with due notice of issues to be discussed.ii. QuorumIn order to form a quorum in respect of a meeting of Audit Committee, the majority of members present must be IndependentDirectors.iii. Proceedings of MeetingIn the absence of the Chairman of the Audit Committee, the members present may appoint one amongst themselves whoshall be an independent director to be Chairman of such meeting.Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes the Chairman of theAudit Committee shall have a second or a casting vote.iv. Attendance at MeetingThe representatives of senior management of the Company and the Group, external auditors, financial controller andinternal auditors (if any) shall attend the Audit Committee Meetings by invitation. Other members of the Board may attendany particular meeting upon the invitation of the Audit Committee. In addition, the members shall meet the external auditorstwice a year without presence of the Executive Directors.v. Keeping of MinutesThe Company shall cause minutes of all proceedings of Audit Committee Meeting to be entered in books kept for thatpurpose.The minutes are to be signed by the Chairman of the Audit Committee Meeting at which the proceedings were held or bythe Chairman of the next succeeding meeting shall be evidence of the proceedings to which it relates. The minutes shall bekept by the Company Secretary, and distributed to members of the Committee and to the Directors for notation at the nextBoard of Directors’ Meeting.AuthorityThe Committee is authorised by the Board:-i. To have explicit authority to investigate any matter within its terms of reference,ii. To have the resources which are required to perform its duties,iii. To have full access to any information and employees of the Company and the Group which are required to perform its duties,iv. To have direct communication channels with internal and external auditors, ANNUAL REPORT 2011 31
    • AUDIT COMMITTEE REPORTCont’dTERMS OF REFERENCE cont’dv. Keeping of Minutes cont’dv. To obtain outside legal or independent professional advice in the performance of its duties at the cost of the Company, To invite outsiders with relevant experience to attend its meetings, if necessary, andvi. To be able to convene meetings with internal and external auditors or both, excluding the attendance of other Directorsvii. and employees of the Company, whichever deemed necessary.Duties and ResponsibilityThe duties and responsibilities of the Audit Committee shall include the following:-i. To consider the appointment, resignation and dismissal of external auditors, the audit fee,ii. To review and discuss the nature, scope and quality of external audit plan/arrangements with the internal and external auditors before audit commences,iii. To review quarterly and annual financial statements of the Company and the Group set our below before submission to the Board:- (a) the going concern assumption, (b) compliance with accounting standards and regulatory requirements, (c) any changes in accounting policies and practices, and (d) significant issues arising from the audit and major judgmental issues.iv. To discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish to discuss in the absence of management where necessary,v. To review the external auditors’ management letter and management’s response,vi To do the following, in relation to the internal audit function:- (a) Review the adequacy of the scope, functions and resources of the internal audit function, and that it has the necessary authority to carry out its work, (b) Review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function, (c) Review any appraisal or assessment of the performance of members of the internal audit function, (d) Approve any appointment or termination of senior staff members of the internal audit function, and (e) Take cognizance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning.vii. To consider any related-party transactions that may arise within the Company or the Group,viii. To consider the major findings of internal investigations and management’s response, andix. To consider other topics as defined by the Board of Directors.32 ASIA MEDIA GROUP BERHAD (813137-V)
    • AUDIT COMMITTEE REPORT Cont’dSUMMARY OF ACTIVITIES OF THE COMMITTEEThe Audit Committee met five (5) times during the financial year under review on the following dates:-• 21 February 2011• 22 March 2011• 23 May 2011• 29 July 2011• 21 October 2011The attendance records of the Audit Committee Members are shown in the table below:- Audit CommitteeMembers Meeting Attended %(i) Dato’ Hussian @ Rizal Bin A. Rahman 5/5 100(ii) Yeong Siew Lee 5/5 100(iii) Datuk Wira Syed Ali Bin Tan Sri Abbas Alhabshee * 2/2 100 * Appointed on 23 May 2011.The activities of the Audit Committee include the following:-Financial Reporting(a) Reviewed the quarterly and half-yearly unaudited financial results of the Group before recommending them for approval by the Board,(b) Reviewed the annual audited financial statements of the Group with the external auditors prior to submission to the Board for their approval. The review was to ensure that the financial reporting and disclosures are in compliance with: • Companies Act, 1965, • ACE Market Listing Requirements of Bursa Securities, • Applicable approved accounting standards in Malaysia, and • Other legal and regulatory requirements.In the review of the annual audited financial statements, the Committee discussed with management and the externalauditors the accounting principles and standards that were applied and their judgement of the items that may affect thefinancial statements.Internal Audit(a) Reviewed the annual audit plan to ensure adequate scope and comprehensive coverage over the activities of the group,(b) Reviewed internal audit reports which were tabled during the year, the audit recommendations made and management’s response to these recommendations, and(c) Monitored the corrective actions on the outstanding audit issues to ensure that all the key risks and control lapses have been addressed.External AuditReviewed with the external auditors:• Their audit plan, audit strategy and scope of work for the year,• The results of the annual audit, their audit report and management letter together with management’s response to the findings of the external auditors.Related Party TransactionsReviewed and considered any related party transactions that may or have arisen within the Company or the Group. ANNUAL REPORT 2011 33
    • STATEMENT ON INTERNAL CONTROLINTRODUCTIONThe Board is pleased to provide a statement on the state of the internal control of the Group prepared in accordance withParagraph 15.26(b) of the ACE Market Listing Requirements of Bursa Securities and the Statement on Internal Control:Guidance for Directors of Public Listed Companies in this annual report for the financial year ended 31 December 2011.BOARD RESPONSIBILITYThe Board acknowledges its overall responsibility for the group’s system of internal controls and for reviewing the adequacyand integrity of systems of internal controls. The Board is also committed to establishing and maintaining a system of internalcontrol and risk management practices in order to achieve the following objectives:Given the inherent limitations in any system of internal control, such system can only manage the risk rather than eliminatethe risk of failure to achieve the Group’s corporate objectives. Therefore, the system can only provide reasonable but notabsolute assurance against material misstatement or loss, contingencies, fraud or any irregularities.RISK MANAGEMENT FRAMEWORKThe Board also recognises that risk management should be an integral part of the business operation.On a day-to-day basis, respective Heads of Departments are responsible for managing risks related to their functions ordepartments. Weekly management meetings are held to ensure that the risks faced by the Group are monitored andproperly addressed. It is at these meetings that key risks and corresponding controls implemented are communicatedamongst the senior management team. Significant risks identified are subsequently brought to the attention of the Board attheir scheduled meetings.The abovementioned risk management practices of the Group is an on-going process of identifying, evaluating andmanaging significant risks that may affect the Group’s achievement of its corporate objectives.INTERNAL AUDIT FUNCTIONThe Group’s internal audit function is outsourced to an independent professional firm which reports directly to the AuditCommittee. The internal audit function is guided by its Audit Charter and to assist the Board and the Audit Committee inproviding independent assessment of the effectiveness, adequacy and integrity of the Group’s system of internal controls.OTHER KEY ELEMENTS OF INTERNAL CONTROLSThe other key elements of the Group’s internal control systems are:(i) Quarterly review of the financial performance of the Group by the Board and the Committee.(ii) Clearly defined and structured lines of reporting and responsibility.(iii) Operations review meetings are held to monitor the progress of business operations, deliberate significant issues and formulate corrective measures.(iv) Documented internal policies as set out in a series of memorandums to various departments within the Group.ASSURANCEThe Board is of the view that the group’s system of internal controls is adequate to safeguard shareholders’ investments andthe group’s assets. However, the Board is also cognizant of the fact that the Group’s system of internal control and riskmanagement practices must continuously evolve to meet the changing and challenging business environment. Therefore,the Board will, when necessary, put in place appropriate action plans to further enhance the system of internal controls.34 ASIA MEDIA GROUP BERHAD (813137-V)
    • ADDITIONAL COMPLIANCE INFORMATION1. SHARE BUY-BACK The Company does not have a scheme to buy-back its own shares.2. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES The Company does not have any options, warrants or convertible securities in issue or exercised during the financial year ended 31 December 2011.3. DEPOSITORY RECEIPT PROGRAMME The Company did not sponsor any depository receipt programme for the financial year ended 31 December 2011.4. IMPOSITION OF SANCTIONS AND/OR PENALTIES The Company is not aware of any sanctions and/or penalties imposed on the Company and/or its subsidiary companies, Directors or Management by the relevant regulatory bodies.5. NON-AUDIT FEES The Company did not pay any non-audit fees during the financial year ended 31 December 2011.6. PROFIT GUARANTEE During the financial year ended 31 December 2011, there were no profit guarantees given by the Company.7. EMPLOYEES’ SHARE OPTION SCHEME The Company does not have an Employees’ Share Option Scheme.8. MATERIAL CONTRACTS There were no material contracts subsisting at the end of financial year ended 31 December 2011 entered into by the Company and its subsidiaries involving the interests of the Directors and major shareholders.9. RECURRENT RELATED PARTY TRANSACTION There were no recurrent related party transactions for the Group for the financial year under review. ANNUAL REPORT 2011 35
    • DIRECTORS’ REPORTThe directors hereby submit their report together with the audited financial statements of the Group and of the Company forthe financial year ended 31st December 2011.PRINCIPAL ACTIVITIESThe Company is principally an investment holding company. The principal activities of the subsidiaries are as disclosed inNote 9 to the Financial Statements. There have been no significant changes in the nature of these principal activities duringthe financial year.FINANCIAL RESULTSThe results of the operations of the Group and of the Company for the financial year are as follows: GROUP COMPANY RM RMProfit/(Loss) before tax 15,013,445 (414,629)Income tax expense (4,450) -Net profit/(loss) for the financial year 15,008,995 (414,629)Attributable to:Equity holders of the Company 15,011,647 (414,629)Non-controlling interests (2,652) - 15,008,995 (414,629)DIVIDENDSNo dividend has been paid or declared by the Company since the end of the previous financial period. The Directors alsodo not recommend the payment of any dividend in respect of the current financial year.RESERVES AND PROVISIONSThere were no material transfers to or from reserves or provisions during the financial year other than those as disclosed inthe Financial Statements.ISSUE OF SHARES AND DEBENTURESPursuant to the approval given by the shareholders of the Company at the Extraordinary General Meeting held on 4thJanuary 2011, the issued and paid-up share capital of the Company was increased from RM13,000,000 to RM22,800,000during the financial year through public issue for cash of 98,000,000 new ordinary shares of RM0.10 each in the Companyat an issue price of RM0.23 per new ordinary share in the following manner:(i) 90,000,000 new ordinary shares of RM0.10 each by way of Private Placement to selected investors, and(ii) 8,000,000 ordinary shares of RM0.10 each for application by the public.The resultant share premium arising from the shares issued during the financial year of RM12,740,000 has been creditedto the share premium account. All new ordinary shares issued rank pari-passu with the existing ordinary shares of theCompany.The entire issued paid-up share capital of the Company comprising 228,000,000 ordinary shares of RM0.10 each wereadmitted to the Official List of the Bursa Malaysia Securities Berhad and quoted on the ACE Market of Bursa MalaysiaSecurities Berhad on 11th January 2011.The Company has not issued any debentures during the financial year.36 ASIA MEDIA GROUP BERHAD (813137-V)
    • DIRECTORS’ REPORT Cont’dSHARE OPTIONSNo options have been granted by the Company to any parties during the financial year to take up unissued shares of theCompany.No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares ofthe Company. As at the end of the financial year, there were no unissued shares of the Company under options.DIRECTORSThe directors who served since the date of the last report are:Dato Wong Shee KaiDatuk Wira Syed Ali Bin Tan Sri Abbas AlhabsheeDato Hussian @ Rizal Bin A RahmanSabaruddin Bin Ahmad SabriYeong Siew LeeYong Kheng Wah (appointed on 21.3.2011, resigned on 23.5.2011)Teh Sew Wan (resigned on 23.5.2011)DIRECTORS’ BENEFITSSince the end of the previous financial period, no director of the Company has received or become entitled to receive anybenefit (other than the benefit included in the aggregate amount of emoluments received or due and receivable by thedirectors in the financial statements or the fixed salary of full-time employee of the Company or a related corporation) byreason of a contract made by the Company or a related corporation with the director or with a firm of which the director is amember, or with a company in which the director has a substantial financial interest.Neither during nor at the end of the financial year, was the Company a party to any arrangements whose object is to enablethe directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other bodycorporate.DIRECTORS INTERESTSThe shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Registerof Directors Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows: No. of ordinary shares of RM0.10 each Balance Balance as at as at 1.1.2011 Bought Sold 31.12.2011Shares in the CompanyRegistered in name of directorsDatuk Wira Syed Ali Bin Tan Sri Abbas Alhabshee - 100,000 - 100,000Dato Hussain @ Rizal Bin A Rahman - 200,000 (200,000) -Sabaruddin Bin Ahmad Sabri - 50,000 - 50,000 ANNUAL REPORT 2011 37
    • DIRECTORS’S REPORTCont’dDIRECTORS INTERESTS cont’d No. of ordinary shares of RM0.10 each Balance Balance as at as at 1.1.2011 Bought Sold 31.12.2011Shares in the CompanyDeemed interestDato Wong Shee Kai 104,000,000 - - 104,000,000 (i)(i) Deemed interest by virture of his interest in Wong SK Holdings Sdn. Bhd., the substantial shareholder of the Company pursuant to Section 6A of the Companies Act, 1965.None of the other directors in office at the end of the financial year held shares or had beneficial interest in the shares of theCompany during and at the end of the financial year.STATUTORY INFORMATION ON THE FINANCIAL STATEMENTSa) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps: (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that no known bad debts need to be written off and that adequate allowance had been made for doubtful debts, and (ii) to ensure that any current assets which were unlikely to realise in the ordinary course of business their values as shown in the financial statements of the Group and of the Company had been written down to an amount which they might be expected to realise.b) At the date of this report, the directors are not aware of any circumstances: (i) which would require the writing off of bad debts or which would render the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent, or (ii) which would render the values attributable to current assets in the financial statements of the Group and of the Company misleading, or (iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.c) At the date of this report, there does not exist: (i) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability of any other person, or (ii) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.d) No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.38 ASIA MEDIA GROUP BERHAD (813137-V)
    • DIRECTORS’ REPORT Cont’dOTHER STATUTORY INFORMATIONa) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.b) In the opinion of the directors, (i) the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and (ii) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.SIGNIFICANT EVENTSThe significant events are disclosed in Note 32 to the Financial Statements.AUDITORSThe auditors, Messrs. STYL Associates, have indicated their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the Directors,DATO WONG SHEE KAI DATUK WIRA SYED ALI BINDirector TAN SRI ABBAS ALHABSHEE DirectorPetaling JayaDate: ANNUAL REPORT 2011 39
    • STATEMENT BY DIRECTORSWe, DATO WONG SHEE KAI and DATUK WIRA SYED ALI BIN TAN SRI ABBAS ALHABSHEE, being two of thedirectors of ASIA MEDIA GROUP BERHAD, do hereby state that, in the opinion of the directors, the accompanyingstatements of financial position and statements of comprehensive income, statements of changes in equity andstatements of cash flows, together with the notes thereto, are drawn up in accordance with the provisions of theCompanies Act, 1965 and Financial Reporting Standards so as to give a true and fair view of the financial positionof the Group and of the Company as at 31st December 2011 and of their results and cash flows of the Group and ofthe Company for the year then ended.The supplementary information set out in Note 29 on page 38, which is not part of the financial statements, isprepared in all material respects, in accordance with Guidance on Special Matter No.1 "Determination of Realisedand Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad ListingRequirements" as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia SecuritiesBerhad.Signed on behalf of the Board in accordance with a resolution of the Directors,DATO WONG SHEE KAI DATUK WIRA SYED ALI BINDirector TAN SRI ABBAS ALHABSHEE DirectorPetaling JayaDate:STATUTORY DECLARATIONI, ANG LAY CHIENG, being the Officer primarily responsible for the financial management of ASIA MEDIA GROUPBERHAD, do solemnly and sincerely declare that the accompanying statements of financial position and statements ofcomprehensive income, statements of changes in equity and statements of cash flows, together with the notes thereto, areto the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to betrue, and by virtue of the provisions of the Statutory Declarations Act, 1960.Subscribed and solemnly declared by the ANG LAY CHIENGabovenamed ANG LAY CHIENGat Petaling Jaya, onBefore me:40 ASIA MEDIA GROUP BERHAD (813137-V)
    • INDEPENDENT AUDITORS’ REPORT to the Members of Asia Media Group Berhad (Incorporated in Malaysia)REPORT ON THE FINANCIAL STATEMENTSWe have audited the financial statements of Asia Media Group Berhad, which comprise the statements of financial positionas at 31st December 2011 of the Group and of the Company, and the statements of comprehensive income, statements ofchanges in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summaryof significant accounting policies and other explanatory notes, as set out on pages 43 to 79.Directors Responsibility for the Financial StatementsThe directors of the Company are responsible for the preparation of financial statements that give a true and fair view inaccordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control asthe directors determine is necessary to enable the preparation of financial statements that are free from materialmisstatement, whether due to fraud or error.Auditors ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit inaccordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on our judgement, including the assessment of risks of material misstatementof the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controlrelevant to the Companys preparation of financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectivenessof the Companys internal control. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financialstatements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards andthe Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of theCompany as at 31st December 2011 and of their financial performance and cash flows for the year then ended.REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSIn accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.(b) We have considered the financial statements and the auditors reports of all the subsidiaries of which we have not acted as auditors, as mentioned in Note 9 to the Financial Statements, being financial statements that have been included in the consolidated financial statements.(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Companys financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes. ANNUAL REPORT 2011 41
    • INDEPENDENT AUDITORS’ REPORTto the Members of Asia Media Group Berhad(Incorporated in Malaysia)Cont’dREPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS cont’d(d) The auditors reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under Subsection (3) of Section 174 of the Act.OTHER MATTERSThe supplementary information set out in Note 29 to the Financial Statements is disclosed to meet the requirement of BursaMalaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation ofthe supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised andUnrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad ListingRequirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa MalaysiaSecurities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with theMIA Guidance and the directive of Bursa Malaysia Securities Berhad.This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the CompaniesAct, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of thisreport.STYL ASSOCIATESFirm No. AF 1929Chartered AccountantsTAN CHIN HUATApproval No: 2037/06/12(J)Chartered AccountantDate:Kuala Lumpur42 ASIA MEDIA GROUP BERHAD (813137-V)
    • STATEMENT OF FINANCIAL POSITION as at 31st December 2011 (with comparative figures as at 31 December 2010) GROUP COMPANY 2011 2010 2011 2010 Note RM RM RM RMASSETSNon-Current AssetsProperty, plant and equipment 6 69,967,842 17,732,658 - -Development costs 7 69,919 93,099 - -Other intangible assets 8 2,145,725 2,211,950 - -Investment in subsidiaries 9 - - 12,999,998 12,999,998Goodwill on consolidation 10 2,570,627 2,570,627 - -Total Non-Current Assets 74,754,113 22,608,334 12,999,998 12,999,998Current AssetsTrade receivables 11 6,014,454 2,980,962 - -Other receivables and prepaid expenses 11 262,951 29,576 1,308 -Deferred expenditure 12 - 844,150 - 844,150Amount owing by subsidiary 9 - - 20,623,761 -Deposits with licensed bank 13 693,028 707,588 - -Cash and bank balances 12,586,100 967,915 6,181 5,002Total Current Assets 19,556,533 5,530,191 20,631,250 849,152Total Assets 94,310,646 28,138,525 33,631,248 13,849,150EQUITY AND LIABILITIESCapital and ReservesShare capital 14 22,800,000 13,000,000 22,800,000 13,000,000Reserves 15 36,700,862 10,278,438 10,818,504 (177,644)Equity Attributable to Owners of the Company 59,500,862 23,278,438 33,618,504 12,822,356Non-controlling interests 147,348 - - -Total Equity 59,648,210 23,278,438 33,618,504 12,822,356Non-Current LiabilitiesHire purchase creditor 16 40,515 - - -Term loan 17 - 414,755 - -Deferred tax liability 18 5,029 2,174 - -Total Non-Current Liabilities 45,544 416,929 - -Current LiabilitiesTrade payables 19 2,017,750 1,995,170 - -Other payables and accrued expenses 19 30,900,694 784,701 12,744 396,634Amount owing to director 20 - 840,534 - -Amount owing to subsidiary 9 - - - 630,160Borrowings 21 1,694,155 820,055 - -Tax liabilities 4,293 2,698 - -Total Current Liabilities 34,616,892 4,443,158 12,744 1,026,794Total Liabilities 34,662,436 4,860,087 12,744 1,026,794Total Equity and Liabilities 94,310,646 28,138,525 33,631,248 13,849,150 The accompanying Notes form an integral part of the Financial Statements. ANNUAL REPORT 2011 43
    • STATEMENTS OF COMPREHENSIVE INCOMEfor the Year ended 31st December 2011(with comparative figures for the period 1st October 2009 to 31st December 2010) GROUP COMPANY 2011 2010 2011 2010 (12 Months) (15 Months) (12 Months) (15 Months) Note RM RM RM RMRevenue 36,548,114 16,554,093 - -Other operating income 433,455 4,916,601 1,201 -Purchases and other direct costs (13,834,194) (8,644,850) - -Staff cost (2,239,527) (701,211) - -Amortisation of development costs (26,680) (24,176) - -Amortisation of intangible assets (237,025) - - -Depreciation of property, plant and equipment (2,319,794) (960,720) - -Directors remuneration 22 (366,800) (311,200) (162,000) (108,000)Other operating expenses (2,894,947) (490,538) (253,830) (66,344)Profit/(Loss) from operations 15,062,602 10,337,999 (414,629) (174,344)Profit/(Loss) from operations is stated after charging/(crediting):Audit fee - statutory - current year 26,100 21,800 10,000 10,000 - overprovision in prior year (1,800) (6,100) - - - special - current year - 20,800 - 3,800 - overprovision in prior year (2,200) - - -Amortisation of development costs 26,680 24,176 - -Amortisation of intangible assets 237,025 - - -Depreciation of property, plant and equipment 2,319,794 960,720 - -Directors remuneration 366,800 311,200 162,000 108,000Rental of premises 135,470 31,385 - -Reversal of impairment loss on trade receivables (5,530) - - -Interest income from short term deposits (421,953) (25,310) (1,201) -Negative goodwill on consolidation - (4,867,095) - -Finance costs 23 (49,157) (51,389) - -Profit/(Loss) before tax 15,013,445 10,286,610 (414,629) (174,344)Income tax expense 24 (4,450) (4,872) - -Total comprehensive income/(loss) for the financial year/period 15,008,995 10,281,738 (414,629) (174,344)Attributable to:Equity holders of the Company 15,011,647 10,281,738 (414,629) (174,344)Non-controlling interests (2,652) - - -Total comprehensive income/(loss) for the financial year/period 15,008,995 10,281,738 (414,629) (174,344)Earnings per share attributable to equity holders of the Company:Basic (sen) 25 6.61 14.87Diluted (sen) 25 N/A N/A The accompanying Notes form an integral part of the Financial Statements.44 ASIA MEDIA GROUP BERHAD (813137-V)
    • STATEMENTS OF CHANGES IN EQUITY for the Year ended 31st December 2011 (with comparative figures for the period 1st October 2009 to 31st December 2010) Attributable to Equity Holders of the Company Distributable reserve - Retained Non distributable earnings/ Issued reserve - (Accumulated Non-controlling Total GROUP capital Share premium loss) Total interests equity RM RM RM RM RM RM Balance as at 1st October 2009 2 - (3,300) (3,298) - (3,298) Total comprehensive income for the financial period - - 10,281,738 10,281,738 - 10,281,738 Issuance of shares during the financial period 12,999,998 - - 12,999,998 - 12,999,998 Balance as at 31st December 2010 13,000,000 - 10,278,438 23,278,438 - 23,278,438 Total comprehensive income for the financial year - - 15,011,647 15,011,647 (2,652) 15,008,995 Transaction with owners: Issue of shares by subsidiary to non-controlling interests - - - - 150,000 150,000 Issuance of shares during the financial year 9,800,000 12,740,000 - 22,540,000 - 22,540,000 Share issue expense - (1,329,223) - (1,329,223) - (1,329,223) Balance as at 31st December 2011 22,800,000 11,410,777 25,290,085 59,500,862 147,348 59,648,210ANNUAL REPORT 201145 The accompanying Notes form an integral part of the Financial Statements.
    • 46 STATEMENTS OF CHANGES IN EQUITY for the Year ended 31st December 2011 (with comparative figures for the period 1st October 2009 to 31st December 2010) Attributable to Equity Holders of the CompanyASIA MEDIA GROUP BERHAD (813137-V) Non distributable Issued reserve - Accumulated Total COMPANY capital Share premium loss equity RM RM RM RM As at 1st October 2009 2 - (3,300) (3,298) Total comprehensive loss for the financial period - - (174,344) (174,344) Issuance of shares during the financial period 12,999,998 - - 12,999,998 Balance as at 31st December 2010 13,000,000 - (177,644) 12,822,356 Total comprehensive loss for the financial year - - (414,629) (414,629) Issuance of shares during the financial year 9,800,000 12,740,000 - 22,540,000 Share issue expense - (1,329,223) - (1,329,223) Balance as at 31st December 2011 22,800,000 11,410,777 (592,273) 33,618,504 The accompanying Notes form an integral part of the Financial Statements.
    • STATEMENTS OF CASH FLOWS For the Year Ended 31st December 2011 (with comparative figures for the period 1st October 2009 to 31st December 2010) GROUP COMPANY 2011 2010 2011 2010 (12 Months) (15 Months) (12 Months) (15 Months) RM RM RM RMCASH FLOWS FROM OPERATING ACTIVITIESProfit/(Loss) before tax 15,013,445 10,286,610 (414,629) (174,344)Adjustments for: Amortisation of development costs 26,680 24,176 - - Amortisation of intangible assets 237,025 - - - Depreciation of property, plant and equipment 2,319,794 960,720 - - Finance costs 49,157 51,389 - - Interest income (421,953) (25,310) (1,201) - Negative goodwill recognised - (4,867,095) - -Operating profit/(loss) before working capital changes 17,224,148 6,430,490 (415,830) (174,344)Changes in working capital: Increase in trade receivables (3,033,492) (2,446,399) - - (Increase)/Decrease in other receivables and prepaid expenses (233,375) 15,245 (1,308) - (Increase)/Decrease in deferred expenditure 844,150 (844,150) 844,150 (844,150) Increase in amount owing by subsidiary - - (20,623,761) - Increase in trade payables 22,580 1,495,170 - - Increase/(Decrease) in other payables and accrued expenses 30,115,993 763,480 (383,890) 393,334 Increase/(Decrease) in amount owing to director (840,534) 766,022 - - Increase/(Decrease) in amount owing to subsidiary - - (630,160) 630,160Cash Generated From/(Used In) Operations 44,099,470 6,179,858 (21,210,799) 5,000 Finance costs paid (49,157) (51,389) - - Interest received 421,953 25,310 1,201 -Net Cash From/(Used In) Operating Activities 44,472,266 6,153,779 (21,209,598) 5,000CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (54,495,578) (5,883,430) - - Additions in intangible assets (170,800) (25,000) - - Additions in development costs (3,500) (102,850) - - Acquisition of investment in subsidiaries, net of cash acquired (Note 9) 150,000 1,424,685 - -Net Cash Used In Investing Activities (54,519,878) (4,586,595) - -(FORWARD) ANNUAL REPORT 2011 47
    • STATEMENTS OF CASH FLOWSFor the Year Ended 31st December 2011(with comparative figures for the period 1st October 2009 to 31st December 2010) GROUP COMPANY 2011 2010 2011 2010 (12 Months) (15 Months) (12 Months) (15 Months) RM RM RM RMCASH FLOWS FROM FINANCING ACTIVITIES Increase in short term bank borrowing 1,683,111 Repayment of term loan (1,234,806) (524,059) - - Repayment of hire purchase obligation (7,845) - - - (Increase)/Decrease in deposits with licensed bank 14,560 (75,212) - - Proceeds from issuance of shares 22,540,000 - 22,540,000 - Payment of share issue expenses (1,329,223) - (1,329,223) -Net Cash From/(Used In) Financing Activities 21,665,797 (599,271) 21,210,777 -NET INCREASE IN CASH AND CASH EQUIVALENTS 11,618,185 967,913 1,179 5,000CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR/PERIOD 967,915 2 5,002 2CASH AND CASH EQUIVALENTS AT END OF YEAR/PERIOD (Note 26) 12,586,100 967,915 6,181 5,002Note:During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM54,554,978 ofwhich RM59,400 were acquired under hire purchase arrangement. Cash payments by the Company for the acquisition ofproperty, plant and equipment amounted to RM54,495,578.In 2010, the Company issued 129,999,980 new ordinary shares of RM0.10 each at par for the purpose of acquisition of100,000,000 ordinary shares of RM0.10 each in Asia Media Sdn. Bhd., representing 100% equity interest in saidcompany.The accompanying Notes form an integral part of the Financial Statements.48 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS1) GENERAL INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the ACE Market of Bursa Malaysia Securities Berhad. The Company is principally an investment holding company. The principal activities of the subsidiaries are as disclosed in Note 9 to the Financial Statements. There have been no significant changes in the nature of these principal activities during the financial year. The registered office of the Company is located at Level 8, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan. The principal place of business of the Company is located at No: 35-1, Jalan Bandar 16, Pusat Bandar Puchong, 47100 Puchong, Selangor Darul Ehsan. The financial statements are presented in Ringgit Malaysia (RM). The financial statements of the Group and of the Company have been authorised by the Board of Directors for issuance on 21st February 2012.2) BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia. Changes in Accounting Policies The accounting policies adopted by the Group and by the Company are consistent with those adopted in prior years except for the adoption of the following Financial Reporting Standards ("FRS") and the Issues Committee ("IC") Interpretations: FRS 1 First-time Adoption of Financial Reporting Standards FRS 3 Business Combinations FRS 127 Consolidated and Separate Financial Statements Amendments to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters and Additional Exemptions for First-time Adopters Amendments to FRS 2 Share-based Payment Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued Operations Amendments to FRS 7 Improving Disclosures about Financial Instruments Amendments to FRS 132 Financial Instruments: Presentation – Classification of Rights Issues Amendments to FRS 138 Intangible Assets IC Interpretation 4 Determining Whether an Arrangement Contains a Lease IC Interpretation 12 Service Concession Arrangements IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation IC Interpretation 17 Distributions of Non-cash Assets to Owners IC Interpretation 18 Transfers of Assets from Customers Amendments to IC Interpretation 9 Reassessment of Embedded Derivatives ANNUAL REPORT 2011 49
    • NOTES TO THE FINANCIAL STATEMENTSCont’d2) BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS cont’d Changes in Accounting Policies cont’d The adoption of the above FRSs, amendments and interpretations does not have any significant impact on the financial statements of the Group and of the Company except as follows: i) FRS 3: Business Combinations Under the revised FRS 3, all acquisition-related costs are recognised as an expense in profit or loss in the period in which they are incurred. All considerations transferred, including contingent considerations, are measured at fair value as at the acquisition date. Any equity interests held prior to the date control is obtained and is remeasured at fair value, with the resulting gains or losses recognised in profit or loss. There is now an option on a case to case basis to measure non-controlling interests either at fair value or at the non-controlling interests’ proportionate share of the net identifiable assets of the assets acquired. Goodwill arising from the business combination is measured as the difference between the aggregate fair value of consideration transferred, any non-controlling interests in the acquiree and the fair value at acquisition date of any previously held equity interest in the acquiree, and the fair value of identifiable assets acquired and liabilities assumed (including contingent liabilities) at acquisition date. ii) FRS 127: Consolidated and Separate Financial Statements The revised FRS 127 requires that changes in ownership interest which do not result in a loss of control be accounted for as equity transactions, instead of in profit or loss. Where changes in ownership interest results in loss of control, any remaining interest in the entity is remeasured at fair value and any resulting gains or losses is recognised in profit or loss. Total comprehensive income will be proportionately allocated to non-controlling interests, even if it results in the non-controlling interests being in a deficit position. iii) Amendments to FRS 7 Improving Disclosures about Financial Instruments Prior to 1st January 2011, information about financial instruments was disclosed in accordance with the requirements of FRS 7 Financial Instruments: Disclosures. Amendments to FRS 7 required enhanced disclosure about fair value measurements in which a three-level fair value hierarchy was introduced. Each class of financial instrument is to be classified in accordance to this hierarchy which reflects the inputs used in making the fair value measurement. It also reinforces the existing principles for disclosures on liquidity and credit risks. The adoption of this amendment resulted in additional disclosures in the financial statements but did not have any financial impact on the Group and the Company. Standards and Interpretations in issue but not yet effective The Group and the Company have not applied the new and revised FRSs and the IC Interpretations which have been issued as at the reporting date by the Malaysian Accounting Standards Board ("MASB") as described hereunder: Effective for financial period beginning on or after FRS 1 Amendments to FRS 1, First-time Adoption of Financial Reporting 1st January 2012 Standards - Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters FRS 7 Amendments to FRS 7, Financial Instruments Improving Disclosures 1st January 2012 about Transfers of Financial Assets FRS 9 Financial Instruments 1st January 2013 FRS 10 Consolidated Financial Statements 1st January 201350 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d2) BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS cont’d Standards and Interpretations in issue but not yet effective cont’d Effective for financial period beginning on or after FRS 11 Joint Arrangements 1st January 2013 FRS 12 Disclosure of Interests in Other Entities 1st January 2013 FRS 13 Fair Value Measurement 1st January 2013 FRS 119 Employee Benefits 1st January 2013 FRS 127 Separate Financial Statements 1st January 2013 FRS 128 Investment in Associates and Joint Ventures 1st January 2013 FRS 101 Amendment to FRS 101, Presentation of Financial Statements - 1st July 2012 Presentation of Items of Other Comprehensive Income FRS 112 Amendment to FRS 112, Income Taxes – Deferred Tax: 1st January 2012 Recovery of Underlying Assets FRS 124 Amendment to FRS 124, Related Party Disclosures 1st January 2012 IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments 1st July 2011 IC Interpretation 14 Amendments to IC Interpretation 14, Prepayments 1st July 2011 of a Minimum Funding Requirement The directors expect that the adoption of the standards and interpretations above will have no material impact on the financial statements in the period of initial application. Convergence of the FRS Framework in Malaysia with the IFRS Framework issued by the IASB On 19th November 2011, MASB issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards Framework (“MFRS Framework”). The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1st January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture and IC Interpretation 15 Agreements for Construction of Real Estate (IC 15), including its parent, significant investor and venturer (“Transitioning Entities”) The Group and the Company will be required to prepare financial statements using the MFRS Framework in its first MFRS financial statements for the year ending 31st December 2012. In presenting its first MFRS financial statements, the Group and the Company will be required to restate the comparative financial statements to amounts reflecting the application of the MFRS Framework. The majority of the adjustments required on transition will be made, retrospectively, against opening undistributed income. The Group and the Company expect to be in a position to fully comply with the requirements of the MFRS Framework for the financial year ending 31st December 2012.3) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The operations of the Group are subject to a variety of financial risks, including foreign currency exchange risk, market risk, credit risk, interest rate risk and liquidity risk. The Group has formulated a financial risk management framework whose principal objective is to minimise the Groups exposure to risks and/or costs associated with the financing, investing and operating activities of the Group. ANNUAL REPORT 2011 51
    • NOTES TO THE FINANCIAL STATEMENTSCont’d3) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES cont’d Foreign currency exchange risk Foreign currency risk is that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign currency exchange rates. However as at 31st December 2011, the Group’s exposure to foreign currency risk is not significant. The Group has not entered into any forward foreign exchange contracts as at 31st December 2011. Market risk Market risk is the risk that changes in market prices, and other prices will affect the Groups financial position and cash flows. The Group has in place policies to manage its competitive risks from its competitors in providing better alternatives in terms of better services. Credit risk Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Groups exposure to credit risk arises principally from its receivables from customers. The Companys exposure to credit risk arises principally from trade receivables. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statements of financial position. Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are measured at their realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than 120 days, which are deemed to have higher credit risk, are monitored individually. The ageing of trade receivables as at the end of the reporting period was: GROUP 2011 2010 RM RM Not past due 2,879,840 1,352,550 Past due 0 - 30 days 1,907,215 331,800 Past due 31 - 60 days 1,149,550 591,037 Past due 61 - 90 days 24,909 350,000 Past due 91 - 120 days 16,800 300,000 Past due more than 120 days 128,263 153,228 6,106,577 3,078,61552 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d3) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES cont’d Credit risk cont’d The movements in the allowance for impairment losses of receivables during the financial year/period were: GROUP 2011 2010 RM RM As at beginning of year/period 97,653 - Impairment loss reversed (5,530) 97,653 As at end of year/period 92,123 97,653 Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market interest rates. The Group’s investment in financial assets are mainly short term in nature and mostly placed in financial deposits. Changes in interest rates are not expected to have a significant impact on the Group’s profit or loss. No sensitivity analysis is prepared as the Group and the Company do not expect any material effect on the Groups and the Companys profit net of tax and equity arising from the effect of reasonably possible changes to interest rates on interest bearing financial instruments at the end of the reporting period. Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. The Group practises prudent liquidity risk management to minimise the mismatch of financial assets and liabilities and to maintain sufficient funds for contingent funding requirement of working capital. Fair values The fair value of financial instruments is the amount at which the instrument could be exchanged for or settled between knowledgeable parties at an arm’s length transaction, other than a forced or liquidation sale. The carrying amounts of the financial assets and financial liabilities as reported in the statements of financial position as at 31st December 2011 approximate their fair values because of the immediate/short maturity terms of these financial instruments. Capital Risk Management Policies and Procedures The primary objective of the Groups capital management is to ensure that it maintains an optimal capital structure and healthy capital ratios in order to support its business and maximise shareholder value. ANNUAL REPORT 2011 53
    • NOTES TO THE FINANCIAL STATEMENTSCont’d3) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES cont’d Capital Risk Management Policies and Procedures cont’d The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year ended 31st December 2011 and 31st December 2010. The Group is not subject to any externally imposed capital requirements.4) SIGNIFICANT ACCOUNTING POLICIES a) Basis of Accounting The financial statements are prepared under the historical cost convention unless otherwise indicated in the accounting policies below. b) Revenue Recognition Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the enterprise and the amount of the revenue can be measured reliably. Revenue is measured at the fair value of consideration received or receivable, net of returns, allowances and trade discounts. Revenue from services are recognised when services are rendered. Revenue represents the invoiced value of services rendered net of discounts and allowances. Interest income is recognised on accrual basis. c) Foreign Currency Conversion (i) Functional and Presentation Currency The individual financial statements of each entity in the Group are measured using the primary economic environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Companys functional currency. (ii) Foreign Currency Transactions Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. d) Employee Benefits (i) Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.54 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d4) SIGNIFICANT ACCOUNTING POLICIES cont’d d) Employee Benefits cont’d (ii) Defined contributions plans As required by law, companies in Malaysia make contributions to the state pension scheme, Employees Provident Fund. Such contributions are recognised as an expense in profit or loss as incurred. e) Income Taxes (i) Current tax Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the reporting date. Current taxes are recognised in profit or loss, except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. (ii) Deferred tax Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences, unused tax losses and unused tax credit to the extent that it is probable that taxable profit will be available against which those deductible temporary differences, unused tax losses and unused tax credits can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The tax effects of unutilised reinvestment allowances are only recognised upon actual realisation. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. ANNUAL REPORT 2011 55
    • NOTES TO THE FINANCIAL STATEMENTSCont’d4) SIGNIFICANT ACCOUNTING POLICIES cont’d e) Income Taxes cont’d (ii) Deferred tax cont’d Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group and the Company expect, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle its current tax assets and liabilities on a net basis. f) Property, Plant and Equipment All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. At each reporting date, the Group assesses whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write down is made if the carrying amount exceeds the recoverable amount. Depreciation of property, plant and equipment, other than capital work-in-progress which is not depreciated, is calculated to write off the cost of the property, plant and equipment on a straight-line basis over the expected useful lives of the property, plant and equipment concerned. The annual depreciation rates used are as follows: % Transit TV system 10 Broadcast centre 10 Furniture and fittings 20 Computer software 10 Motor vehicles 20 Office equipment 20 Plant and machinery 10 Renovation and signboard 10 Gain or loss arising from the disposal of an asset is determined as the difference between the estimated net disposal proceed and the carrying amount of the asset, and is recognised in profit or loss.56 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d4) SIGNIFICANT ACCOUNTING POLICIES cont’d g) Basis of Consolidation (i) Subsidiaries The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to the end of the financial year. Subsidiaries are those entities in which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from their activities. Subsidiaries are consolidated using the purchase method of accounting. Under the purchase method of accounting, subsidiaries are fully consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. The cost of acquisition is measured as fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition dates. On an acquisition- by-acquisition basis, the Group recognises any non-controlling interests in the acquiree either at fair value or at the non-controlling interests proportionate share of the acquirees net assets. The excess of the consideration transferred, the amount of any non-controlling interests in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Groups share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the statements of comprehensive income. All significant intercompany balances and transactions have been eliminated on consolidation. (ii) Transactions with non-controlling interests Transactions with non-controlling interests that do not result in loss of control are accounted as equity transactions - that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate and joint venture of financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. ANNUAL REPORT 2011 57
    • NOTES TO THE FINANCIAL STATEMENTSCont’d4) SIGNIFICANT ACCOUNTING POLICIES cont’d h) Subsidiaries A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities. In the Companys separate financial statements, investments in subsidiary are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. i) Research and Development Costs Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated: (i) the technical feasibility of completing the intangible asset so that it will be available for use or sale, (ii) the intention to complete the intangible asset and use or sell it, (iii) the ability to use or sell the intangible asset, (iv) how the intangible asset will generate probable future economic benefits, (v) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and (vi) the availability to measure reliably the expenditure attributable to the intangible asset during its development. The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally- generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred. Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses. The average expected life of the development projects is five (5) years. j) Intangible Assets (i) Goodwill Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Groups cash-generating units that are expected to benefit from the synergies of the combination. The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.58 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d4) SIGNIFICANT ACCOUNTING POLICIES cont’d j) Intangible Assets cont’d (i) Goodwill cont’d Where goodwill forms part of a cash-generating units and part of the operation within that cash-generating units is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstances is measured based on the relative fair values of the operations disposed of and portion of the cash-generating units retained. (ii) Other Intangible Assets Other intangibles assets which represent licences, copyrights and other incidental costs incurred, are stated at cost less accumulated amortisation and impairment losses, are amortised over a period of ten (10) years. k) Financial Instruments (i) Initial recognition and measurement A financial instrument is recognised in the financial statements when, and only when, the Group becomes a party to the contractual provisions of the instrument. A financial instrument is recognised, initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. (ii) Financial instrument categories and subsequent measurement The Group categories financial instruments as follows: Financial assets a) Financial assets at fair value through profit or loss Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term. Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income. Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date. Investment in quoted securities are designated as fair value through profit or loss on initial recognition. ANNUAL REPORT 2011 59
    • NOTES TO THE FINANCIAL STATEMENTSCont’d4) SIGNIFICANT ACCOUNTING POLICIES cont’d k) Financial Instruments cont’d Financial assets cont’d b) Held-to-maturity investments Held-to-maturity investments category comprises debt instruments that are quoted in an active market and the Group has the positive intention and ability to hold to maturity. Financial assets categorised as held-to-maturity investments are subsequently measured at amortised cost using the effective interest method. c) Loans and receivables Loans and receivables category comprises debt instruments that are not quoted in an active market, trade and other receivables and cash and cash equivalents. Financial assets categorised as loans and receivables are subsequently measured at amortised cost using effective interest method. d) Available-for-sale financial assets Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss. All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment. Financial liabilities All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss. Fair value through profit or loss category comprises financial liabilities that are held for trading or financial liabilities that are specifically designated into category upon initial recognition. Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.60 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d4) SIGNIFICANT ACCOUNTING POLICIES cont’d k) Financial Instruments cont’d (iii) Derecognition A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial assets expire or the financial asset is transferred to another party without retaining control or substantially transferring all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss. A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. l) Hire Purchase Arrangement Assets held under hire purchase are treated as if they had been purchased at cost at the commencement of the hire purchase agreements. These costs are included under property, plant and equipment and depreciation is provided accordingly. The corresponding obligations under hire purchase are included under liabilities. The charges of instalments payable are charged to profit or loss over the period of the hire purchase agreements. m) Impairment The Group and the Company assess as at each reporting date whether there is any objective evidence that financial and non-financial assets are impaired. (i) Trade and other receivables and other financial assets carried at amortised cost To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Groups and the Companys past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables. If any such evidence exists, the amount of impairment loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate of the financial asset. The impairment loss is recognised in profit or loss. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occuring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss. ANNUAL REPORT 2011 61
    • NOTES TO THE FINANCIAL STATEMENTSCont’d4) SIGNIFICANT ACCOUNTING POLICIES cont’d m) Impairment cont’d (ii) Non-financial assets The carrying amounts of non-financial assets (except for inventories and non-current assets (or disposal groups) classified as held for sale) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable amount is estimated. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit"). The goodwill acquired in a business combination, for the purpose of impairment testing is allocated to cash-generating units that are expected to benefit from the synergies of the combination. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit or group of units on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognised. n) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. o) Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.62 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d4) SIGNIFICANT ACCOUNTING POLICIES cont’d o) Borrowing Costs cont’d Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the year in which they are incurred. p) Cash and Cash Equivalents Cash and cash equivalents comprise cash at bank and in hand, demand deposits and short term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. q) Share Capital An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments. Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. r) Contingencies A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group. Contingent liabilities and assets are not recognised in the statements of financial position of the Group. s) Operating Segments An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Groups expenses, including revenues and expenses that relate to transactions with any of the Groups other components. An operating segments operating results are reviewed regularly by the chief operating decision maker, which in this case is the Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.5) CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY The preparation of financial statements in conformity with Financial Reporting Standards requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported results during the reported period. It also requires directors to exercise their judgement in the process of applying the Groups and the Companys accounting policies. Although these estimates and judgement are based on the directors best knowledge of current events and actions, actual results may differ. Critical judgements in applying the Groups and the Companys accounting policies In the process of applying the Groups and the Companys accounting policies, which are described in Note 4 above, management is of the opinion that there are no instances of application of judgement which are expected to have significant effect on the amounts recognised in the financial statements. ANNUAL REPORT 2011 63
    • NOTES TO THE FINANCIAL STATEMENTSCont’d5) CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY cont’d Key sources of estimation uncertainty Management believes that there are no key assumptions made concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year other than as follows: i) Property, plant and equipment and depreciation The Group determines the estimated useful lives and related depreciation charges for the Groups property, plant and equipment. The estimate is based on the historical experience of the actual useful lives of property, plant and equipment of similar nature and function. Management will revise the depreciation charge where useful lives are different to those previously estimated, or it will write off or write down technically obsolete or non strategic assets that have been abandoned or sold. ii) Impairment on receivables The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Groups loans and receivables at the reporting date is disclosed in Note 11 to the Financial Statements. iii) Estimated impairment of goodwill and intangible assets The Group determines whether goodwill and intangible assets have been impaired at least on an annual basis. The recoverable amounts of the cash-generating units ("CGU") are determined based on the value-in-used method. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows.64 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTE TO THE FINANCIAL STATEMENTS Cont’d 6) PROPERTY, PLANT AND EQUIPMENT GROUP Capital Furniture Renovation Transit TV work-in- Broadcast and Computer Motor Office Plant and and system progress centre Fittings software vehicles equipment machinery Signboard Total RM RM RM RM RM RM RM RM RM RM 2011 Cost As at 1st January 2011 13,138,664 6,930,841 - 105,758 - 35,965 253,077 692,636 99,510 21,256,451 Additions - 52,862,464 1,024,327 28,658 97,290 82,079 75,352 - 384,808 54,554,978 Reclassifications 6,930,841 (6,930,841) - - - - - - - - As at 31st December 2011 20,069,505 52,862,464 1,024,327 134,416 97,290 118,044 328,429 692,636 484,318 75,811,429 Accumulated depreciation As at 1st January 2011 2,709,967 - - 59,820 - 32,381 161,969 526,492 33,164 3,523,793 Charge for the year 2,006,950 - 102,433 25,719 9,729 17,312 63,483 45,736 48,432 2,319,794 Reclassifications - - - - - - (4,590) 4,590 - - As at 31st December 2011 4,716,917 - 102,433 85,539 9,729 49,693 220,862 576,818 81,596 5,843,587 Net book value as at 31st December 2011 15,352,588 52,862,464 921,894 48,877 87,561 68,351 107,567 115,818 402,722 69,967,842 2010 Cost As at 1st October 2009 - - - - - - - - - - Additions - 5,858,227 - 528 - 4,480 7,943 1,928 10,324 5,883,430 Arising from acquisition of subsidiaries 13,138,664 1,072,614 - 105,230 - 31,485 245,134 690,708 89,186 15,373,021 As at 31st December 2010 13,138,664 6,930,841 - 105,758 - 35,965 253,077 692,636 99,510 21,256,451 Accumulated depreciation As at 1st October 2009 - - - - - - - - - - Charge for the period 875,912 - - 13,360 - 896 33,172 30,402 6,978 960,720 Arising from acquisition of subsidiaries 1,834,055 - - 46,460 - 31,485 128,797 496,090 26,186 2,563,073 As at 31st December 2010 2,709,967 - - 59,820 - 32,381 161,969 526,492 33,164 3,523,793 Net book value as atANNUAL REPORT 2011 31st December 2010 10,428,697 6,930,841 - 45,938 - 3,584 91,108 166,144 66,346 17,732,65865 Cost and net book value as at year end for property, plant and equipment acquired under hire purchase were RM82,079 and RM65,663 respectively.
    • NOTES TO THE FINANCIAL STATEMENTSCont’d7) DEVELOPMENT COSTS GROUP 2011 2010 RM RM At cost Balance as at beginning of year/period 129,958 - Arising from acquisition of subsidiaries - 27,108 Additions during the year/period 3,500 102,850 Balance as at end of year/period 133,458 129,958 Less: Accumulated amortisation: Balance as at beginning of year/period (36,859) - Arising from acquisition of subsidiaries - (12,683) Charge for the year/period (26,680) (24,176) Balance as at end of year/period (63,539) (36,859) Net 69,919 93,0998) OTHER INTANGIBLE ASSETS GROUP 2011 2010 RM RM At cost Balance as at beginning of year/period 2,211,950 - Additions during the year/period 170,800 25,000 Arising from acquisition of subsidiaries - 2,186,950 Balance as at end of year/period 2,382,750 2,211,950 Less: Accumulated amortisation: Balance as at beginning of year/period - - Charge for the year/period (237,025) - Balance as at end of year/period (237,025) - Net 2,145,725 2,211,95066 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d9) INVESTMENT IN SUBSIDIARIES COMPANY 2011 2010 RM RM Unquoted shares - At cost 12,999,998 12,999,998 The amount owing by/(to) subsidiary arose mainly from advances given and payments made on behalf which are unsecured, interest-free and repayable on demand. The details of the subsidiaries are as follows: Place of Equity Interest Principal Activities Name of Company Incorporation 2011 2010 % % Direct Subsidiary Asia Media Sdn. Bhd. Malaysia 100 100 Business of multimedia advertising services, media communications, commercialisation of narrowcasting network solutions and dynamic and automation contents and provision of integration, maintenance and support services relating to the above products. Indirect Subsidiaries Transnet Express Sdn. Bhd. Malaysia 100 100 Production and marketing of electronic audio and visual media. Asia Media Interactive Sdn. Bhd. Malaysia 100 100 Dormant Asia Media Marketing Sdn. Bhd. Malaysia 100 100 Dormant Asia Media Broadcasting Sdn. Bhd Malaysia 70 - Dormant (formally known as Maha Semarak Sdn. Bhd.) All the above subsidiaries are audited by another firm of auditors other than auditors of the Company. ANNUAL REPORT 2011 67
    • NOTES TO THE FINANCIAL STATEMENTSCont’d9) INVESTMENT IN SUBSIDIARIES cont’d During the financial year, the Group acquired 70% equity interest in Asia Media Broadcasting Sdn. Bhd., a company incorporated in Malaysia, for a total consideration of RM350,000. In 2010, the Group acquired 100% equity interest in Asia Media Sdn. Bhd., a company incorporated in Malaysia, for a total consideration of RM12,999,998, satisfied by the issuance of 129,999,980 ordinary shares of RM0.10 each in the Company. The effects of the acquisition on the financial results of the Group during the financial year/period are as follows: GROUP 2011 2010 (12 Months) (15 Months) RM RM Revenue - 16,554,093 Cost of sales - (8,644,850) Other operating income 245 49,506 Other operating expenses (9,086) (2,364,890) Profit/(Loss)before tax (8,841) 5,593,859 Income tax expense - (4,872) Non-controlling interests 2,652 - Increase/(Decrease) in Group’s profit attributable to shareholders (6,189) 5,588,987 The effect of the acquisition on the financial position of the Group as at the end of the financial year/period is as follows: GROUP 2011 2010 RM RM Net assets acquired: Property, plant and equipment - 12,809,948 Development costs - 14,425 Intangible assets - 2,186,950 Goodwill - 2,570,627 Trade receivables - 534,562 Other receivables and prepaid expenses - 44,821 Deposits with licensed bank - 632,376 Cash and bank balances 355,200 1,424,685 Trade payables - (500,000) Other payables and accrued expenses - (17,921) Bank borrowings - (1,758,869) Amount owing to directors - (74,511) Negative goodwill on consolidation - (4,867,095) Non-controlling interests (150,000) - 205,200 12,999,998 - (12,999,998) Total consideration satisfied by issuance of shares Total cash consideration 205,200 - Less: Cash and bank balances (355,200) (1,424,685) Cash flow on acquisition, net of cash and cash equivalents acquired (150,000) (1,424,685)68 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d10) GOODWILL ON CONSOLIDATION GROUP 2011 2010 RM RM Balance as at beginning of year/period 2,570,627 - Arising from acquisition of indirect subsidiaries - 2,570,627 Balance as at end of year/period 2,570,627 2,570,62711) TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES Trade receivables comprise amounts receivable for services rendered. The credit period granted on services rendered is 30 days. Other credit terms are assessed and approved on a case-by-case basis. GROUP 2011 2010 RM RM Trade receivables 6,106,577 3,078,615 Less: Allowance for doubtful debts (92,123) (97,653) Net 6,014,454 2,980,962 Other receivables and prepaid expenses consist of: GROUP COMPANY 2011 2010 2011 2010 RM RM RM RM Other receivables 214,666 11,499 - - Prepaid expenses 1,744 1,744 - - Refundable deposits 46,541 16,333 1,308 - 262,951 29,576 1,308 - The trade and other receivables are all denominated in Ringgit Malaysia.12) DEFERRED EXPENDITURE Deferred expenditure of the Group and of the Company represents professional charges and expenses incurred in connection with the listing exercise of the Company. The deferred expenditure is written off against share premium upon the successful listing of the Company on the ACE Market of Bursa Malaysia Securities Berhad during the financial year. ANNUAL REPORT 2011 69
    • NOTES TO THE FINANCIAL STATEMENTSCont’d13) DEPOSITS WITH LICENSED BANKS Deposits with licensed bank represent fixed deposits which are pledged to the licensed banks for banking facilities granted. Deposits of the Group have an average maturity period of 12 months. Bank balances are deposits held at call with banks. Deposits of the Group earn return at 2.50% per annum.14) SHARE CAPITAL No. of ordinary shares of Amount RM0.10 each 2011 2010 2011 2010 RM RM Authorised Balance as at beginning of year/period 500,000,000 - 50,000,000 - Subdivision of par value into RM0.10 each - 1,000,000 - 100,000 Created during the period - 499,000,000 - 49,900,000 Balance as at end of year/period 500,000,000 500,000,000 50,000,000 50,000,000 Issued and fully paid Balance as at beginning of year/period 130,000,000 - 13,000,000 - Subdivision of par value into RM0.10 each - 20 - 2 Issued during the year/period 98,000,000 129,999,980 9,800,000 12,999,998 Balance as at end of year/period 228,000,000 130,000,000 22,800,000 13,000,000 As approved by the shareholders on 30th April 2010, the authorised share capital of the Company was increased from RM100,000 to RM25,000,000 during the financial period by the creation of additional 249,000,000 new ordinary shares of RM0.10 each. Also, the issued and paid-up share capital of the Company was increased from RM2 to RM13,000,000 during the financial period by the allotment of 129,999,980 new ordinary shares of RM0.10 each for the purpose of acquisition of 100,000,000 ordinary shares of RM0.10 each in Asia Media Sdn. Bhd., representing 100% equity interest in said company. These new shares rank pari-passu with the then existing ordinary shares of the Company. Subsequently, as approved by the shareholders on 24th November 2010, the authorised share capital of the Company was further increased from RM25,000,000 to RM50,000,000 in 2010 by the creation of additional 250,000,000 new ordinary shares of RM0.10 each. Pursuant to the approval given by the shareholders of the Company at the Extraordinary General Meeting held on 4th January 2011, the issued and paid-up share capital of the Company was increased from RM13,000,000 to RM22,800,000 during the financial year through public issue for cash of 98,000,000 new ordinary shares of RM0.10 each in the Company at an issue price of RM0.23 per new ordinary share in the following manner: (i) 90,000,000 new ordinary shares of RM0.10 each by way of Private Placement to selected investors, and (ii) 8,000,000 ordinary shares of RM0.10 each for application by the public. The resultant share premium arising from the shares issued during the financial year of RM12,740,000 has been credited to the share premium account. All new ordinary shares issued rank pari-passu with the existing ordinary shares of the Company.70 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d15) RESERVES GROUP COMPANY 2011 2010 2011 2010 RM RM RM RM Non Distributable Reserve: Share premium 11,410,777 - 11,410,777 - Distributable Reserve: Retained earnings/(Accumulated loss) 25,290,085 10,278,438 (592,273) (177,644) Balance as at end of year/period 36,700,862 10,278,438 10,818,504 (177,644) GROUP AND COMPANY 2011 2010 Share premium RM RM Issuance of 98,000,000 new ordinary shares of RM0.10 each at a premium of RM0.13 per share 12,740,000 - Share issue expenses (1,329,223) - Balance as at end of financial year/period 11,410,777 -16) HIRE PURCHASE CREDITOR GROUP 2011 2010 RM RM Gross balance Less: Hire purchase interest in suspense 57,757 - (6,198) - Net balance outstanding 51,559 - Less: Portion payable within the next 12 months (Note 21) (11,044) - Portion payable after the next 12 months 40,515 - Included in the portion payable after the next 12 months consist of: Repayable between 1 and 2 years 11,717 - Repayable between 2 and 5 years 28,798 - 40,515 - The interest rate on the hire purchase is at 2.88% per annum. ANNUAL REPORT 2011 71
    • NOTES TO THE FINANCIAL STATEMENTSCont’d17) TERM LOAN GROUP 2011 2010 RM RM Secured term loan - 1,234,810 Less: Portion due within the next 12 months (Note 21) - (820,055) Portion payable after the next 12 months - 414,755 The non current portion of this term loan is repayable as follows: 2012 - 414,755 The term loan bears interest at 5.00% per annum and is secured by third partys property as well as jointly and severally guaranteed by the directors.18) DEFERRED TAX LIABILITY GROUP 2011 2010 RM RM As at beginning of year/period 2,174 - Recognised in profit and loss (Note 24) 2,855 2,174 As at end of year/period 5,029 2,174 The recognised deferred tax liability is made up of the unrealised fixed deposit interest.19) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES Trade and other payables comprise amounts outstanding for trade and ongoing costs. The average credit period granted to the Group for trade purchases ranges from 30 to 90 days. Other payables and accrued expenses consist of: GROUP COMPANY 2011 2010 2011 2010 RM RM RM RM Other payables 30,861,133 635,692 1,994 382,584 Accrued expenses 39,561 149,009 10,750 14,050 30,900,694 784,701 12,744 396,634 The trade and other payables are all denominated in Ringgit Malaysia.72 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d20) AMOUNT OWING TO DIRECTOR The amount owing to director, which arose mainly from expenses paid on behalf and advances given, is unsecured, interest-free and repayable on demand.21) SHORT TERM BANK BORROWING GROUP 2011 2010 RM RM Hire purchase creditor - current portion (Note 16) 11,044 - Term loan - current portion (Note 17) - 820,055 Revolving credit 1,683,111 - 1,694,155 820,055 As at 31st December 2011, the Group has bank facility (excluding term loan as mentioned in Note 17) totalling RM3,000,000 obtained from a licensed bank. The facility bears interest range from 3.65% to 3.66% per annum above the Bank Negara Malaysias funding rate and is secured by the following: i) First party legal charge over properties owned by one of the director of the Company, and ii) Corporate guarantee by the Company.22) DIRECTORS REMUNERATION GROUP COMPANY 2011 2010 2011 2010 (12 Months) (15 Months) (12 Months) (15 Months) RM RM RM RM Executive directors: Other emoluments 200,000 200,000 - - Fees 124,800 27,200 120,000 24,000 Non-executive directiors: Fees 42,000 84,000 42,000 84,000 366,800 311,200 162,000 108,000 The number of directors of the Company whose total remuneration during the financial year/period fell within the following bands is analysed below: Number of Directors 2011 2010 Executive Directors: RM100,001 - RM200,000 1 - RM50,001 - RM100,000 1 - RM1 - RM50,000 1 1 Non-Executive Directors: RM50,001 - RM100,000 - 1 RM1 - RM50,000 2 2 ANNUAL REPORT 2011 73
    • NOTES TO THE FINANCIAL STATEMENTSCont’d23) FINANCE COSTS GROUP 2011 2010 (12 Months) (15 Months) RM RM Interest on: hire purchase 2,356 - revolving credit 9,054 - term loans 37,747 82,939 49,157 82,93924) INCOME TAX EXPENSE GROUP COMPANY 2011 2010 2010 2009 (12 Months) (15 Months) (12 Months) (15 Months) RM RM RM RM Taxation based on short term deposit interest received 1,595 2,698 - - Deferred tax liability (Note 18) 2,855 2,174 - - 4,450 4,872 - - A numerical reconciliation of income tax expense and the product of the accounting profit/(loss) multiplied by the applicable statutory income tax rate of the Group and of the Company is as follows: GROUP COMPANY 2011 2010 2011 2010 (12 Months) (15 Months) (12 Months) (15 Months) RM RM RM RM Accounting profit/(loss) 15,013,445 10,286,610 (414,629) (174,344) Tax at the applicable statutory income tax rate of 20%/25% 3,753,361 2,603,451 (103,657) (34,869) Tax effects in respect of: Expenses that are not deductible for tax purposes 226,107 91,854 103,657 35,169 Utilisation of deferred tax assets not recognised previously - (13,532) - - Net deferred tax not recognised (981,915) - - - Income exempted from tax (100,738) (1,157,825) - (300) Income not subject to tax (2,892,365) (1,216,774) - - Other temporary differences - (302,302) - - Income tax expense 4,450 4,872 - -74 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d25) EARNINGS PER ORDINARY SHARE Basic Basic earnings per share is calculated by dividing the profit for the year/period attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year/period as follows: GROUP 2011 2010 Profit attributable to equity holders of the Company (RM) 15,011,647 10,281,738 Weighted average number of ordinary shares in issue 227,194,521 69,124,736 Basic earnings per share (sen) 6.61 14.87 Diluted The diluted earnings per share of the Group has not been presented as there are no dilutive potential ordinary shares.26) CASH AND CASH EQUIVALENTS GROUP COMPANY 2011 2010 2011 2010 RM RM RM RM Deposits with licensed bank 693,028 707,588 - - Cash and bank balances 12,586,100 967,915 6,181 5,002 13,279,128 1,675,503 6,181 5,002 Less: Deposits pledged as security (693,028) (707,588) - - 12,586,100 967,915 6,181 5,002 ANNUAL REPORT 2011 75
    • 76 NOTE TO THE FINANCIAL STATEMENTS Cont’d 27) SEGMENTAL INFORMATION Primary Reporting Format - Business Segments Multimedia Production and advertising services, marketing of Investment media electronic audio and holding communications etc. visual media Eliminations ConsolidatedASIA MEDIA GROUP BERHAD (813137-V) RM RM RM RM RM 2011 REVENUE External sales - 36,344,364 203,750 36,548,114 RESULTS Profit/(Loss) from operations (414,629) 15,390,205 87,026 15,062,602 Finance costs (49,157) Profit before tax 15,013,445 OTHER INFORMATION Segment assets 33,631,248 94,007,703 295,454 (33,623,759) 94,310,646 Segment liabilities 12,744 55,556,671 59,430 (20,971,438) 34,657,407 Capital expenditure - 54,729,278 - 54,729,278 Non-cash expenses Depreciation of property, plant and equipment - 2,265,231 54,563 2,319,794 Amortisation of development costs - 26,680 - 26,680 Amortisation of intangible assets - 237,025 - 237,025 (Forward)
    • NOTE TO THE FINANCIAL STATEMENTS Cont’d 27) SEGMENTAL INFORMATION cont’d Primary Reporting Format - Business Segments cont’d Multimedia Production and advertising services, marketing of Investment media electronic audio and holding communications etc. visual media Eliminations Consolidated RM RM RM RM RM 2011 REVENUE External sales - 16,419,143 134,950 16,554,093 RESULTS Profit/(Loss) from operations (174,344) 5,592,625 52,623 5,470,904 Finance costs (51,389) Profit before tax 5,419,515 OTHER INFORMATION Segment assets 13,849,150 27,958,941 290,863 (13,960,429) 28,138,525 Segment liabilities 1,026,794 4,470,308 141,865 (781,054) 4,857,913 Capital expenditure - 6,011,280 - 6,011,280 Non-cash expenses Depreciation of property, plant and equipment - 924,066 36,654 960,720 Amortisation of development costs - 24,176 - 24,176 Secondary Reporting Format - Geographical SegmentsANNUAL REPORT 201177 The Group has no secondary reporting format as the Group operates predominately in Malaysia.
    • NOTES TO THE FINANCIAL STATEMENTSCont’d28) SIGNIFICANT RELATED PARTY TRANSACTIONS For the purposes of these financial statements, parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group and of the Company either directly or indirectly. The key management personnel include all the directors of the Group and of the Company. The remuneration of directors and other members of key management during the year/period is as follows: GROUP COMPANY 2011 2010 2011 2010 (12 Months) (15 Months) (12 Months) (15 Months) RM RM RM RM Short-term employee benefits (Note 22) 366,800 311,200 162,000 108,00029) SUPPLEMENTARY INFORMATION Supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad are as follow: GROUP COMPANY 2011 2010 2011 2010 RM RM RM RM Retained earnings/(Accumulated loss) carried forward are analysed as follows: Unrealised (5,029) (2,174) - - Realised 25,295,114 10,280,612 (592,273) (117,644) 25,290,085 10,278,438 (592,273) (117,644)30) CHANGE OF FINANCIAL YEAR END In 2010, the Company changed its financial year end from 30th September to 31st December.31) CHANGE OF NAME AND CONVERSION TO PUBLIC LIMITED COMPANY As approved by the shareholder at the Extraordinary General Meeting held on 31st March 2010, the Company was converted from a private limited company to a public limited company in 2010 and assumed the name Asia Media Group Berhad.78 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTES TO THE FINANCIAL STATEMENTS Cont’d32) SIGNIFICANT EVENTS On 11th January 2011, the Company was successfully listed on the ACE Market of Bursa Malaysia Securities Berhad which involves inter alia the following: a) Public issue of 98,000,000 new ordinary shares of RM0.10 each at an issue price of RM0.23 to the Malaysia public and identified investors, ("Public Issue"), and b) Listing of and quotation for the Companys entire enlarged issued and paid-up share capital of RM22,800,000 comprising 228,000,000 ordinary shares of RM0.10 each upon completion of the Public Issue on the ACE Market of Bursa Malaysia Securities Berhad.33) CORPORATE PROPOSAL On 27th January 2012, Bursa Malaysia Securities Berhad has vide its letter dated 27th January 2012 approved the listing and quotation of up to 22,800,000 new ordinary shares of RM0.10 each in the Company, representing not more than ten percent of the existing issued and paid up share capital of the Company via Proposed Private Placement.34) COMPARATIVE FIGURES The comparative figures as shown in the financial statements are for the period 1st October 2009 to 31st December 2010 or a period of 15 months. ANNUAL REPORT 2011 79
    • ANALYSIS OF SHAREHOLDINGSas at 31 March 2012Authorised Share Capital : RM50,000,000Issued and Fully Paid-up Capital : RM22,800,000Class of Shares : Ordinary Shares of RM0.10 eachVoting Rights : One vote per shareholder on a show of hands One vote per share on a pollSIZE OF SHAREHOLDINGS No. of % of No. of % of Issued Size of Shareholdings Shareholders Shareholders Shares Share Capital Less than 100 shares 2 0.12 100 0 100-1,000 shares 89 5.53 74,500 0.03 1,001-100,000 shares 637 39.57 4,447,500 1.95 10,001-100,000 shares 736 45.71 28,469,200 12.49 100,001 to less than 5% of issued shares 145 9.01 91,008,700 39.92 5% and above of issued shares 1 0.06 104,000,000 45.61 Total 1,610 100 228,000,000 100LIST OF SUBSTANTIAL SHAREHOLDERS No. of Percentage Name of Substantial Shareholders Shares (%) Wong SK Holdings Sdn Bhd 104,000,000 45.61 Dato’ Wong Shee Kai 104,000,000* 45.61 Teh Sew Wan 104,000,000* 45.61* Deemed interest by virtue of his/her equity interest in Wong SK Holdings Sdn Bhd.STATEMENT OF DIRECTORS’ INTEREST IN SHARES Name of Director Asia Media Group Berhad Direct Interest Indirect Interest No. of No. of Shares % Shares % Dato’ Wong Shee Kai - - 104,000,000* 45.61 Teh Sew Wan ** - - 104,000,000* 45.61 Dato’ Hussian @ Rizal Bin A Rahman 200,000 0.09 - - Datuk Wira Syed Ali Bin Tan Sri Abbas Alhabshee 100,000 0.04 - - Sabaruddin Bin Ahmad Sabri 50,000 0.02 - - Yeong Siew Lee (F) - - - -* Deemed interest by virtue of his/her equity interest in Wong SK Holdings Sdn Bhd.** Resigned as Director on 23 May 201180 ASIA MEDIA GROUP BERHAD (813137-V)
    • ANALYSIS OF SHAREHOLDINGS as at 31 March 2012 Cont’dLIST OF 30 LARGEST SHAREHOLDERS No. ofNo. Name of Shareholders Shares Percentage 1. Wong SK Holdings Sdn Bhd 1 104,000,000 45.61 2. Cimsec Nominees (Tempatan) Sdn Bhd 10,000,000 4.39 CIMB Bank for Koh Kin Lip (MY0502) 3. BTV Cinebus Sdn Bhd 7,800.000 3.42 4. JF Apex Nominees (Tempatan) Sdn Bhd 6,980,000 3.06 Pledged Securities Account for Puan Kam Fook (Margin) 5. Citigroup Nominees (Tempatan) Sdn Bhd 5,000,000 2.19 UBS AG Singapore for Tan Swee Yeong 6. Universal Trustee (Malaysia) Berhad 3,950,000 Ta Dana Fokus 7. Transnet (JB) Sdn Bhd 3,450,000 1.51 8. JF Apex Nominees (Asing) Sdn Bhd 3,436,000 1.51 Pledged Securities Account for On Chee Seng (Margin) 9. EB Nominees (Tempatan) Sendirian Berhad 2,600,000 1.14 Pledged Securities Account for Loo Poh Keng (SFC)10. EB Nominees (Tempatan) Sendirian Berhad 2,600,000 1.14 Pledged Securities Account for Chan Tuck Leong (SFC)11. EB Nominees (Tempatan) Sendirian Berhad 2,600,000 1.14 Pledged Securities Account for Fanny Kong (SFC)12. Tan Yew Sing 2,030,000 0.8913. BHLB Trustee Berhad 2,010,700 0.88 Ta Small Cap Fund14. Mayban Nominees (Tempatan) Sdn Bhd 1,480,000 0.65 Mayban Trustees Berhad for Pheim Asia Ex-Japan Fund (260366)15. Amsec Nominee (Tempatan) Sdn Bhd 1,379,400 0.61 Amtrustee Berhad for Apex Dana AL-SOFI-I (UT-APEX-SOFI)16. Yeoh Swee Kim 1,267,200 0.5617. Amsec Nominees (Tempatan) Sdn Bhd 1,100,000 0.48 Tang Pen San (9984-1101)18. Mayban Nominees (Tempatan) Sdn Bhd 1,000,000 0.44 Pheim Asset Management Sdn Bhd for Benta Wawasan Sdn Bhd (A/C 95-230135)19. Koh Kim Boon 891,500 0.3920. Balamurugeshwaran A/L Vengadasamy 882.400 0.3921. HSBC Nominees (Tempatan) Sdn Bhd 846,000 0.37 HSBC (M) Trustee Bhd for Pheim Emerging Companies Balanced Fund (4033)22. Loo Poh Keng 730,000 0.3223. ECML Nominees (Tempatan) Sdn Bhd 650,000 0.29 Pledged Securities Account for Ee Soo Yim (015)24. Mayban Nominees (Tempatan) Sdn Bhd 550,000 0.24 Mayban Trustees Berhad for Pheim Asia Ex-Japan Islamic Fund (260508)25. HSBC Nominees (Tempatan) Sdn Bhd 541,000 0.24 HSBC (M) Trustee Bhd for Pheim Income Fund (4058) ANNUAL REPORT 2011 81
    • ANALYSIS OF SHAREHOLDINGSas at 31 March 2012Cont’d LIST OF 30 LARGEST SHAREHOLDERS cont’d No. of No. Name of Shareholders Shares Percentage 26. Cimsec Nominees (Tempatan) Sdn Bhd 500,000 0.22 CIMB for Nazimah Binti Syed Majid (PB) 27. JF Apex Nominees (Tempatan) Sdn Bhd 500,000 0.22 Pledged Securities Account for Lai Wai Ming (STA 2) 28. Lau Boon Seng 500,000 0.22 29. Mayban Nominees (Tempatan) Sdn Bhd 500,000 0.22 Pledged Securities Account for Chai Nyuk Thin 30. Ong Teck Wan 500,000 0.2282 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTICE OF FOURTH ANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN that the Fourth Annual General Meeting of Asia Media Group Berhad (“the Company”) will beconvened and held at Ivory 10 Room, Holiday Villa Hotel and Suites Subang 9, Jalan SS12/1, 47500 Subang Jaya, SelangorDarul Ehsan on Wednesday, 23 May 2012 at 9.00 a.m. for the following purposes :-AGENDAAs Ordinary Business:-1. To receive the Statutory Financial Statements for the year ended 31 December 2011 together with the Directors’ and Auditors’ Reports thereon. (Resolution 1)2. To approve the payment of Directors’ Fees of RM162,000 for the year ended 31 December 2011. (Resolution 2)3. To re-elect Dato’ Hussian @ Rizal Bin A Rahman who retires in accordance with Article 70 of the Company’s Articles of Association. (Resolution 3)4. To re-appoint Messrs STYL Associates as Auditors of the Company and to authorise the Directors to fix their remuneration. (Resolution 4)As Special Businesses:-5. To consider and if thought fit, to pass the following resolutions:- Ordinary Resolution Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965 “THAT subject always to the Companies Act, 1965, the Company’s Articles of Association and the approvals of the relevant government and/or regulatory authorities, the Directors be and are hereby empowered pursuant to Section 132D of the Companies Act, 1965 to issue and allot new shares in the Company at any time at such price, upon such terms and conditions, for such purposes and to such person(s) whomsoever as the Directors may in their absolute discretion deem fit and expedient in the interest of the Company, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the total issued share capital of the Company for the time being and THAT the Directors be and are also empowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued and THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.” (Resolution 5)6. Special Resolution I Proposed Amendments to the Articles of Association of the Company to comply with recent amendments to the Bursa Malaysia Securities Berhad ACE Market Listing Requirements “THAT the proposed amendments to the Articles of Association of the Company to comply with recent amendments to the Bursa Malaysia Securities Berhad (“Bursa Securities”) ACE Market Listing Requirements as contained in Appendix I annexed to the Annual Report be and are hereby approved.” (Resolution 6)7. Special Resolution II Proposed Amendments to the Articles of Association of the Company to facilitate the Proposed Transfer of Listing from the ACE Market to the Main Market of Bursa Malaysia Securities Berhad “THAT subject to the approval of Bursa Securities, Securities Commission and other relevant government and/or regulatory authorities on the Proposed Transfer of Listing of the Company from the ACE Market to the Main Market of Bursa Securities (“Proposed Transfer of Listing”), the proposed amendments to the Articles of Association of the Company to facilitate the said Proposed Transfer of Listing as contained in Appendix II annexed to the Annual Report be and are hereby approved.” (Resolution 7) ANNUAL REPORT 2011 83
    • NOTICE OF FOURTH ANNUAL GENERAL MEETINGCont’d8. To transact any other business for which due notice shall have been given.ON BEHALF OF THE BOARDSEE SIEW CHENG MAICSA 7011225LEONG SHIAK WAN MAICSA 7012855Joint Company SecretariesPetaling Jaya30 April 2012NOTES:1. A member of the Company entitled to attend and vote at this meeting may appoint not more than two (2) proxies to vote in his stead. Where a member appoints two proxies, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy. A proxy may but need not be a member of the Company and the provisions of Section 149(a) and 149(b) of the Companies Act, 1965 shall not apply to the Company.2. A member who is an authorised nominee as defined under the Securities Industry (Central Depositor) Act, 1991 may appoint at least one (1) proxy in respect of each securities account.3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such appointer is a corporation, it must be under its seal or under the hand of an officer or attorney duly authorised.4. The instrument appointing a proxy to be deposited at Ground Floor, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.EXPLANATORY NOTE TO SPECIAL BUSINESSES: -Resolution 5 - Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965As at the date of this Notice, no new shares in the Company were issued pursuant to the authority granted to the Directorsat the Third Annual General Meeting held on 23 June 2011 and which will lapse at the conclusion of the Fourth AnnualGeneral Meeting.The proposed Ordinary Resolution 5, if passed, will authorise the Directors of the Company to issue and allot shares up toan aggregate amount not exceeding 10% of the issued and paid-up capital of the Company for the time being for suchpurposes as the Directors would consider to be in the interest of the Company. This authority, unless revoked or varied ata general meeting, will expire at the next conclusion of the Annual General Meeting of the Company.The authority is to avoid any delay and cost involved in convening a general meeting to approve such an issue of shares.The aforesaid authority is to give the Directors the authority and flexibility to raise fund more expediently via issuance ofshares for purpose of funding future investments, working capital and/or any acquisitionResolution 6 – Proposed Amendments to the Articles of Association of the Company to comply with the recentamendments to the Bursa Securities ACE Market Listing RequirementsThe proposed Resolution 6, if passed, will give effect to the amendments to the Articles of Association of the Company asper Appendix I and will bring the Company’s Articles of Association in line with the recent amendments to the BursaSecurities ACE Market Listing Requirements and any other relevant statutory and regulatory requirements.Resolution 7 – Proposed Amendments to the Articles of Association of the Company to facilitate the ProposedTransfer of Listing from the ACE Market to the Main Market of Bursa SecuritiesThe proposed Resolution 7 is to facilitate the Proposed Transfer of Listing from the ACE Market to the Main Market of BursaMalaysia Securities Berhad which is subject to the approval by the Bursa Securities, Securities Commission and otherrelevant government and/or regulatory authorities.84 ASIA MEDIA GROUP BERHAD (813137-V)
    • NOTICE OF FOURTH ANNUAL GENERAL MEETING Cont’dStatement Accompanying Notice of Fourth Annual General MeetingPursuant to Article 70 of the Company’s Articles of Association, the Director who is standing for re-election are as follows:-(i) Dato’ Hussian @ Rizal Bin A Rahman.The details of the above Director who is standing for re-election are set out in his respective profile which appears in theDirectors’ Profiles on page (23) of this Annual Report.His shareholdings in the Company are set out in the Analysis of shareholdings which appear on pages (80) of this AnnualReport. ANNUAL REPORT 2011 85
    • APPENDIX IIN RELATION TO THE PROPOSED AMENDMENTSTO THE ARTICLES OF ASSOCIATIONPROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY TO COMPLYWITH RECENT AMENDMENTS TO THE BURSA MALAYSIA SECURITIES BERHAD ACE MARKET LIST-ING REQUIREMENTSTHAT the existing articles in the Articles of Association be amended by substituting with the proposed articlesas set out below:-Article Existing Articles Proposed Articles Rationale (s)No.2. Definition Definition WORDS MEANINGS WORDS MEANINGS New Provision Share Issuance A scheme involving a Pursuant to Scheme new issuance of shares Para 7.03 of the to the employees Listing Requirements3(2)(a). No Director shall participate in a share No Director shall participate in a Share Pursuant to scheme for employees of the Company Issuance Scheme for employees of the Para 7.03 of the unless the shareholders in general meetings Company unless the shareholders in general Listing have approved of the specific allotment to be meetings have approved of the specific Requirements made to such Director. allotment to be made to such Director.56 (c). by any Member or Members present in by any Member or Members present in To be consistent person or by proxy and representing not less person or by proxy and representing not less with Section 146 than one-tenth of the total sum paid up on all than one-tenth of the total voting rights on all (b)(ii) of the the shares conferring the right; or the shares conferring the right; or Companies Act, 59. Subject to any rights or restrictions for the Subject to any rights or restrictions for the To be consistent time being attaching to any class or classes time being attaching to any class or classes with Para of shares at meetings of Members or classes of shares at meetings of Members or classes 7.21A(2) of the of Members each Member shall be entitled to of Members each Member shall be entitled to Listing be present and to vote. The Member may be present and to vote. The Member may Requirements vote in person or by proxy or by attorney or vote in person or by proxy or by attorney or authorised representative. On a resolution to authorised representative. On a resolution to be decided on a show of hands, every be decided on a show of hands, every Member who is personally present and Member who is personally present and entitled to vote, or by proxy or by attorney or entitled to vote, or by proxy or by attorney or other duly authorised representative shall other duly authorised representative shall have one vote. On a resolution to be decided have one vote and the person so appointed by poll, every Member present in person or shall be entitled to exercise the same rights by proxy or by attorney or other duly autho- as member to speak at the general meeting. rised representative shall have one (1) vote On a resolution to be decided by poll, every for every one (1) share he holds. Member present in person or by proxy or by attorney or other duly authorised representa- tive shall have one (1) vote for every one (1) share he holds. 64 (2). Where a member of the Company is an Where a member of the Company is an To be consistent authorised nominee as defined under the authorised nominee as defined under the with Article 64(1) Securities Industry (Central Depositories) Act Securities Industry (Central Depositories) Act to appoint not 1991, it may appoint at least one (1) proxy in 1991, it may appoint not more than two (2) more than two respect of each Securities Account it holds proxies in respect of each Securities Account (2) proxies for with ordinary shares of the Company stand- it holds with ordinary shares of the Company each member ing to the credit of the said Securities standing to the credit of the said Securities Account. Account.86 ASIA MEDIA GROUP BERHAD (813137-V)
    • APPENDIX I IN RELATION TO THE PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION Cont’dPROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY TO COMPLYWITH RECENT AMENDMENTS TO THE BURSA MALAYSIA SECURITIES BERHAD ACE MARKETLISTING REQUIREMENTS Cont’dTHAT the existing articles in the Articles of Association be amended by substituting with the proposed articlesas set out below:-Article Existing Articles Proposed Articles Rationale (s)No.64(3) New Provision (to be inserted immediately i) Where a member of the Company is an To be consistent after the amended Article 64(2)) exempt authorised nominee which holds with Para 7.21 ordinary shares in the Company for of the Listing multiple beneficial owners in one securi- Requirements ties account (“omnibus account”), there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each omnibus account it holds. ii) An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Deposito- ries) Act 1991 (“SICDA”) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA. 65 The instrument appointing a proxy shall be in The instrument appointing a proxy shall be in Requirements writing (in the common or usual form) under writing (in the common or usual form) under the hand of the appointer or of his attorney the hand of the appointer or of his attorney duly authorised in writing or, if the appointer duly authorised in writing or, if the appointer is a corporation, either under seal or under is a corporation, either under seal or under the hand of an officer or attorney duly autho- the hand of an officer or attorney duly autho- rised. A proxy may but need not be a Member rised. A proxy may but need not be a Member of the Company. If the proxy is not a member of the Company. If the proxy is not a member of the Company, he need not be an of the Company, he shall be any person advocate, an approved company auditor and there shall be no restriction as to the or a person approved by the Registrar of qualification of the proxy. The instrument Companies. The instrument appointing a appointing a proxy shall be deemed to confer proxy shall be deemed to confer authority to authority to demand or join in demanding a demand or join in demanding a poll. poll. ANNUAL REPORT 2011 87
    • APPENDIX IIIN RELATION TO THE PROPOSED AMENDMENTSTO THE ARTICLES OF ASSOCIATIONPROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY TO FACILITATETHE PROPOSED TRANSFER OF LISTING FROM THE ACE MARKET TO THE MAIN MARKET OF BURSAMALAYSIA SECURITIES BERHADTHAT the existing articles in the Articles of Association be amended by substituting with the proposed articlesas set out below:-Article Existing Articles Proposed Articles Rationale (s)No.2. Definition Definition WORDS MEANINGS WORDS MEANINGS The Listing The Listing The Listing The Listing require- To facilitate for Requirements requirements of the Requirements ments of the Exchange the transfer of Exchange for the ACE for the Main market for listing to Main market for the time the time being, including Market. being, including any any amendments amendments thereto thereto that may be that may be made from made from time to time. time to time. Approved Market A stock exchange which Deleted Pursuant to Place is specified to be an Para. 7.12 of the approved market place Listing pursuant to an exemp- Requirements tion order made under Section 62A of the Securities Industry (Central Depositories) Act 1991. Market day A day on which the ACE Market day A day on which the To facilitate for market is open for stock market of the the transfer of trading in securities. Exchange is open for listing to Main trading in securities. Market.29. Where - Where - Pursuant to (a) the securities of the Company are listed (a) the securities of the Company are listed Para. 7.12 of the on an Approved Market Place; and on other stock exchange; and Listing Requirements (b) the Company is exempted from (b) the Company is exempted from compli- compliance with Section 14 of the ance with Section 14 of the Central Central Depositories Act or Section 29 Depositories Act or Section 29 of the of the Securities Industry (Central Securities Industry (Central Deposito- Depositories) (Amendment) Act, 1998, ries) (Amendment) Act, 1998, as the as the case may be, under the rules in case may be, under the rules in respect respect of such securities. of such securities.88 ASIA MEDIA GROUP BERHAD (813137-V)
    • APPENDIX II IN RELATION TO THE PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION Cont’dPROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY TO FACILITATETHE PROPOSED TRANSFER OF LISTING FROM THE ACE MARKET TO THE MAIN MARKET OF BURSAMALAYSIA SECURITIES BERHAD Cont’dTHAT the existing articles in the Articles of Association be amended by substituting with the proposed articlesas set out below:-Article Existing Articles Proposed Articles Rationale (s)No.29. The Company shall, upon request of a The Company shall, upon request of a Pursuant to securities holder, permit a transmission of securities holder, permit a transmission of Para. 7.12 of the securities held by such securities holder from securities held by such securities holder from Listing the register of holders maintained by the the register of holders maintained by the Requirements registrar of the Company in the jurisdiction of registrar of the Company in the jurisdiction of the Approved Market Place (hereinafter the other stock exchange, to the register of referred to as the “Foreign Register”), to the holders maintained by the registrar of the register of holders maintained by the Company in Malaysia and vice versa registrar of the Company in Malaysia provided that there shall be no change in the (hereinafter referred to as the “Malaysian ownership of such securities. Register”) provided that there shall be no change in the ownership of such shares. For the avoidance of doubt, no company Deleted which fulfils the requirements of subparagraph (a) and (b) above shall allow any transmission of securities from the Malaysian Register into the Foreign Register. ANNUAL REPORT 2011 89
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    • ASIA MEDIA GROUP BERHAD (Company No. 813137-V) (Incorporated in Malaysia under the Companies Act, 1965) PROXY FORMI/We, (NRIC/Company No.) (Full Name in Block Letters)of (Full Address)being a Member of ASIA MEDIA GROUP BERHAD hereby appoint (NRIC) (Full Name in Block Letters)of (Full Address)or failing him/her (NRIC) (Full Name in Block Letters)of (Full Address)or failing whom, the Chairman of the meeting as my/our proxy to attend and vote for me/us and on my/our behalf at theFourth Annual General Meeting of the Company to be held at Ivory 10 Room, Holiday Villa Hotel and Suites Subang 9,Jalan SS12/1, 47500 Subang Jaya, Selangor Darul Ehsan on Wednesday, 23 May 2012 at 9.00 a.m. and at anyadjournment thereof on the following resolutions in the manner indicated below:- FOR AGAINST Ordinary Resolution:- Resolution 1 To receive the Statutory Financial Statements for the year ended 31 December 2011 together with the Directors’ and Auditors’ Reports thereon. Resolution 2 To approve the payment of Directors’ Fees of RM162,000 for the year ended 31 December 2011. Resolution 3 To re-elect Dato’ Hussian @ Rizal Bin A Rahman as Director. Resolution 4 To re-appoint Messrs STYL Associates as Auditors of the company and to authorise the Directors to fix their remuneration. Resolution 5 Authority to issue shares pursuant to Section 132D of the Act, 1965 Special Resolution:- Resolution 6 To approve the proposed amendments to the Articles of Association of the Company as contained in Appendix I annexed to the Annual Report Resolution 7 To approve the proposed amendments to the Articles of Association of the Company as contained in Appendix II annexed to the Annual Report(Please indicate with an ‘X’ in the appropriate box against each Resolution how you wish your proxy to vote. If no instruction is given, thisform will be taken to authorise the proxy to vote at his/her discretion). No. of Shares heldThe proposition of my holdings to be represented by my* proxy/proxies are as follows:- First Name Proxy % Second Name Proxy % 100 %In the case of a vote taken by a show of hands, the First Proxy shall vote on *my/our behalf.* Strike out whichever is not desired.Signed this day of 2011 Signature of Shareholder or Common Seal
    • Fold This Flap For Sealing Then Fold Here AFFIX STAMP The Secretary ASIA MEDIA GROUP BERHAD 813137-V Level 8, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/46 47301 Petaling Jaya Selangor Darul Ehsan 1st Fold HereNOTES:1. A member of the Company entitled to attend and vote at this meeting may appoint not more than two (2) proxies to vote in his stead. Where a member appoints two proxies, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy. A proxy may but need not be a member of the Company and the provisions of Section 149(a) and 149(b) of the Companies Act, 1965 shall not apply to the Company.2. A member who is an authorised nominee as defined under the Securities Industry (Central Depositor) Act, 1991 may appoint at least one (1) proxy in respect of each securities account.3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such appointer is a corporation, it must be under its seal or under the hand of an officer or attorney duly authorised.4. The instrument appointing a proxy to be deposited at Ground Floor, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.
    • ASIA MEDIA GROUP BERHAD (Company No. 813137-V) (Incorporated in Malaysia under the Companies Act, 1965) Head Office No: 35, 1st Floor, Jalan Bandar 16, Pusat Bandar Puchong, 47100, Puchong, Selangor Darul Ehsan, Malaysia. Tel: +603 5882 7788 Fax: +603 5882 6622 www.asiamedia.net.my