Asia Media Group Bhd Annual Report 2011

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Asia Media Group Bhd Annual Report 2011

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Asia Media Group Bhd Annual Report 2011

  1. 1. 2011 ANNUAL REPORTASIA MEDIA GROUP BERHAD(Company No. 813137-V)(Incorporated in Malaysia under the Companies Act, 1965)
  2. 2. 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
  3. 3. 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)
  4. 4. 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
  5. 5. 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)
  6. 6. 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
  7. 7. 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)
  8. 8. 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
  9. 9. 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)
  10. 10. 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
  11. 11. 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)
  12. 12. 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
  13. 13. 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)
  14. 14. 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
  15. 15. 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)
  16. 16. 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
  17. 17. 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)
  18. 18. 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
  19. 19. SIGNIFICANT MILESTONESCont’dNEWS & ARTICLES18 ASIA MEDIA GROUP BERHAD (813137-V)
  20. 20. EVENT HIGHLIGHTSAsia-Pacific Broadcasting Union Digital Broadcasting Symposion Group Investors and Analysis Briefing ANNUAL REPORT 2011 19
  21. 21. EVENT HIGHLIGHTSMedia Sponsorship for Events20 ASIA MEDIA GROUP BERHAD (813137-V)
  22. 22. EVENT HIGHLIGHTS Corporate Social Responsibility - Visit to Oldfolks HomeCorporate Social Responsibility - Visit to Orphanage Home ANNUAL REPORT 2011 21
  23. 23. 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)
  24. 24. 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
  25. 25. 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)
  26. 26. 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
  27. 27. 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)
  28. 28. 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
  29. 29. 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)
  30. 30. 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
  31. 31. 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)
  32. 32. 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
  33. 33. 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)
  34. 34. 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
  35. 35. 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)
  36. 36. 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
  37. 37. 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)
  38. 38. 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
  39. 39. 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)
  40. 40. 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
  41. 41. 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)

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