Case Study of Berjaya Media Berhad

1. APRIL 14, 2019
SUNDAY
PN17COMPANY
slide 04 slide 12
slide 14
To submit regularisation plan
Lau Sie Hung
(CXA180001)
Muhammad Ashraf Danish
(CXA180007)
Reporter
Financial
Analysis
Strategy to improve
Company’s
Performance
Corporate Governance Practice
Listed in June, 21 2017

2. Company Background
Financial Analysis
Trend Analysis
Potential Strategies to improve
Company’s Performance
Analysis of Corporate
Governance Practice of Berjaya
Media
Contents
Company Performance

3. Company
Background

4. Financial Analysis
Ratio Analysis
Performance

5. 0.37
0.36
0.23
0.00
0.10
0.20
0.30
0.40
GROSS PROFIT RATE
GROSS PROFIT RATE
2016 2017 2018
-0.23
-0.68
-0.54
-0.80
-0.60
-0.40
-0.20
0.00
RETURN ON ASSETS
2016 2017 2018
-0.30
-0.66
-1.12
-1.50
-1.00
-0.50
0.00
RETURN ON
STOCKHOLDERS' EQUITY
2016 2017 2018
0.37
-0.36
-0.23
-0.30
0.36
-0.49
-0.68 -0.66
0.23
-0.62
-0.54
-1.12
Gross Profit Rate Return on Sales Return on Assets Return on Stockholders'
Equity
2016 2017 2018
“The declining trend from 2016 -
2018, company not able to
generate profits from its
operations and experience losses”
-0.36
-0.49
-0.62
-0.80
-0.60
-0.40
-0.20
0.00
RETURN ON SALES
2016 2017 2018
IA: -0.29 IA: -0.64 IA: -1.33
IA: Industry AverageLegend

6. 2.63
1.92
0.98
0.00
1.00
2.00
3.00
Current Ratio
2016 2017 2018
1.92
1.41
0.66
0.00
0.50
1.00
1.50
2.00
2.50
Acid Test Ratio
2016 2017 2018
0.89
0.54
0.19
0.00
0.20
0.40
0.60
0.80
1.00
Cash Ratio
2016 2017 2018
“The Trend from 2017 – 2018
showing a decreasing rate.
Reduced in ability to pay their
short-term liabilities”
(Current Assets) (cash, marketable securities,
and current receivables) (cash and cash equivalent)
2.63
1.92
0.89
1.92
1.41
0.54
0.98
0.66
0.19
Current Ratio Acid Test Ratio Cash Ratio
2016 2017 2018
IA: Industry AverageLegend
IA: 3.67 IA: 3.36
CA;
Inventories
Trade and other receivables
Amount owing by subsidiary companies
Tax recoverable
Cash and bank balances

7. 6.02
0.64
5.83
1.38
6.34
0.88
0
1
2
3
4
5
6
7
Receivable Turnover Total Asset Turnover
2016 2017 2018
6.02
5.83
6.34
5.4
5.6
5.8
6
6.2
6.4
Receivable Turnover
2016 2017 2018
0.64
1.38
0.88
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
Total Asset Turnover
2016 2017 2018
2016 -2017
Become efficient in collection
of receivables
2017 -2018
Become less efficient in
collection of receivables
2016 -2017
Become efficiency in using its
assets to generate sales
2017 -2018
Become less efficient in in
using its assets to generate
sales

8. 0.15
0.85
0.17
0.25
0.75
0.33
0.44
0.56
0.80
0.00
0.20
0.40
0.60
0.80
1.00
Debt Ratio Equity Ratio Debt-Equity Ratio
2016 2017 2018
0.17
0.33
0.80
0.00
0.20
0.40
0.60
0.80
1.00
Debt-Equity Ratio
2016 2017 2018
% Debt
% Equity
=100%
(Total Assets)
IA: Industry AverageLegend
IA: 0.28

9. Company
Performance
Net Loss of RM 12,500 million
Revenue was recorded at RM 33,336 million
Cost of sales at RM 25,544 million
Administrative Expenses RM 17,356 million
“lower advertising demand from
advertisement and weak market
sentiments where most of their
corporate clients and advertisers
more emphasize on digital media
advertising”
Reason?

10. Market Condition

11. Company
Performance
Net Loss of RM 21,128 million
Revenue was recorded at RM 42,821 million
Cost of sales at RM 27,489 million
Administrative Expenses RM 20,791 million
“the advertising and media industry was
impacted by declining consumer demand
resulting from prevailing economic
conditions”
advertising expenditure for consumer products
and services were being increasingly diverted
to television and digital channels, events and
activation programmes, substantially reducing
the budget deployment in newspapers
Reason?

12. Company
Performance
Net Loss of RM 15,907 million
Revenue was recorded at RM 44,573 million
Cost of sales at RM 28,165 million
Administrative Expenses RM 19,664 million
lower advertising sales generated due to
challenging market conditions aggravated by
lower advertising budgets for the print media.
Major advertising and media specialist agencies
had reported that their advertising investment in
newspaper prints have declined by 15% to 20%
during the past 12 months (July 2014 to June
2015), largely because clients are deploying their
budgets into television and digital/ social media,
at the expense of print media.
Reason?

13. Potential
Strategies to
Improve
Company’s
Performance

14. Potential
Strategies to
Improve
Company’s
Performance
 Considering Alternative Source of
Revenue
 Review of Product Offering
 Review of Administrative
Expenses
Embrace the digital media advertising
Other than advertising revenue
Second item contribute to higher cost
4IR

15. Analysis of
Corporate
Governance
Practice

16. Analysis of
Corporate
Governance
Practice
 Corporate governance practices with reference
to the 3 principles as set out in the Malaysian
Code of Corporate Governance (MCCG)
 Comprehensive set of policies (relationships and
responsibilities between management, directors and
stakeholders)
 Complies with its governance policies

17. CORPORATE GOVERNANCE
PERFORMANCE
Documents Used For Analysis were sourced from
Website www.berjaya.com

18. website www.berjaya.com/berjaya-media

19. Malaysian Code of Corporate
Governance (MCCG)
• Board Leadership and Effectiveness
• Effective Audit and Risk Management
• Integrity in Corporate Reporting and Meaningful
relationship with stakeholders

20. Malaysian Code of Corporate Governance
(MCCG)

21. BOD & Terms of Reference
• Board Charter
• Board Diversity
• Terms of Reference of the Audit Committee
• Terms of Reference of the Nomination Committee
• Terms of Reference of the Remuneration Committee
• Code of Conduct
• Remuneration Policy
• Whistleblowing Policy
Documents Analysed
(i) BOD and Terms of References
(ii) Annual Reports
Annual Reports
2018
2017
2016
2015
2014

22. Corporate Governance Policies
Principle A : Board Leadership and Effectiveness
• Board Responsibilities
• Board Composition
Doc. Available : Board Charter, Board Diversity
Policy
• Remuneration
Doc. Available :
Remuneration Policy,
TOR for Remuneration
Committee
TOR for Nominating Committee

23. Board Charter
Board Diversity Policy
Remuneration Policy

24. TOR for Remuneration Committee
TOR for Nominating Committee

25. Corporate Governance Policies
Principle B : Effective Audit and
Risk Management
• Audit Committee
• Risk Management and Internal
Control Framework
Doc. Available : TOR for Audit
Committee

26. Corporate Governance Policies
Integrity in Corporate
Reporting and Meaningful
Relationship with
Stakeholders
• Communication with
Stakeholders
• Conduct of General
Meetings
Doc. Available : Code of
Conduct, Whistleblowing
Policy

27. Corporate Governance Policies
• Apparently there are adequate corporate governance policies in place
for ensuring proper checks and balances, making it difficult for
anyone to conduct unethical and illegal activities.

28. Corporate Governance Practices

29. Board of Directors
• Dato’ Sri Robin Tan Yeong Ching - Chairman
Non-Independent Non-Executive Director
• Chan Kien Sing
Non-Independent Executive Director
• Datuk Robert Yong Kuen Loke
Independent Non-Executive Director
• Datuk Seri Azman Bin Ujang
Independent Non-Executive Director
Different individuals for :
(i) the Chairman of the Board of Directors,
(ii) the Executive Director (managing director)
of the management
2 out of the 4 members in
the Board of Directors are
independent non-executive
directors

30. Board Committees
• Audit and Risk Management Committee
• Nominating Committee
• Remuneration Committee
• Datuk Robert Yong Kuen Loke (Chairman)
Independent Non-Executive Director
• Datuk Seri Azman Bin Ujang
Independent Non-Executive Director
• Dato’ Sri Robin Tan Yeong Ching
Non-Independent Non-Executive Director
• Datuk Seri Azman Bin Ujang (Chairman)
Independent Non-Executive Director
• Dato’ Sri Robin Tan Yeong Ching
Non-Independent Non-Executive Director
• Datuk Robert Yong Kuen Loke
Independent Non-Executive Director
• Dato’ Sri Robin Tan Yeong Ching (Chairman)
Non-Independent Non-Executive Director
• Datuk Robert Yong Kuen Loke
Independent Non-Executive Director
• Datuk Seri Azman Bin Ujang
Independent Non-Executive Director

31. Corporate Governance Practices
• Based on their Annual Reports, Berjaya Media Berhad apparently
complies with its governance policies in order to look out for the
interests of the company's investors and other stakeholders.

32. THANK YOU