ASIA MEDIA GROUP BERHAD GROUP MEDIA ASIA ASIA MEDIA GROUP BERHAD (formerly known as Gerak Bayan Sdn Bhd) (Company No. 813137-V) ASIA MEDIA GROUP BERHAD (Incorporated in Malaysia under the Companies Act, 1965) (formerly known as Gerak Bayan Sdn Bhd) (Company No. 813137-V) (Company No. 813137-V) 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 Homepage www.asiamedia.net.my Annual Report 2010 02 Our Philosophy 03 Corporate Structure 04 Corporate Information 05 Financial Highlights 08 Chairman’s Statement 10 Chief Executive Officer‘s Report 13 Significant Milestones 17 Event Highlights 18 Board of Directors’ Profile 20 Statement on Corporate Governance 26 Audit Committee Report 30 Statement on Internal Control 31 Additional Compliance Information 32 Directors' Report 36 Statement by Directors 36 Statutory Declaration 37 Independent Auditors' Report 39 Statements of Financial Position 40 Statements of Comprehensive Income 41 Statements of Changes in Equity 42 Statements of Cash Flows 43 Notes to the Financial Statements 67 Analysis of Shareholdings 70 Notices of Annual General Meeting CONTENTS Proxy Forms Our Philosophy At Asia Media, we believe in integrity and trust. Both these values form the foundations and pillars of our organisation and foster our relationships with all of our stakeholders which include our valued customers, our communities in which we operate, our investors as well as our greatest assets, our people. The company has experienced rapid growth and expansion since its inception, is continuing to build a reputable presence in the country’s digital out-of-home industry. 2 ASIA MEDIA GROUP BERHAD (813137-V) CORPORATE STRUCTURE ASIA MEDIA GROUP BERHAD (Company No. 813137-V) (Incorporated in Malaysia under the Companies Act, 1965) Asia Media Sdn Bhd 100% Asia Media Asia Media Marketing Interactive Transnet Sdn Bhd Sdn Bhd Express Sdn Bhd 100% 100% 100% AANNANNUALNNUUALAL RERREPORTPORP T 20102010 3 CORPORATE INFORMATION BOARD OF DIRECTOR REGISTERED OFFICE DATUK WIRA SYED ALI Level 8, Symphony House BIN TAN SRI ABBAS ALHABSHEE Pusat Dagangan Dana 1 (Non-Executive Chairman) Jalan PJU 1A/46 (Redesignated on 23 May 2011) 47301 Petaling Jaya Selangor Darul Ehsan DATO’ WONG SHEE KAI T : 03-7841 8000 (Executive Director and Chief Executive Officer) F : 03-7841 8199 SABARUDDIN BIN AHMAD SABRI PRINCIPAL PLACE OF BUSINESS (Executive Director) No. 35, First Floor DATO’ HUSSIAN @ RIZAL BIN A. RAHMAN Jalan Bandar 16 (Independent Non-Executive Director) Pusat Bandar Puchong 47100 Puchong YEONG SIEW LEE Selangor Darul Ehsan (Independent Non-Executive Director) T : 03-5882 7788 F : 03-5882 6622 TEH SEW WAN W : www.asiamedia.net.my (Non Independent Non-Executive Director) (Resigned on 23 May 2011) PRINCIPAL BANKERS AmBank (M) Berhad AUDIT COMMITTEE Malayan Banking Berhad Dato’ Hussian @ Rizal Bin A. Rahman Chairman AUDITORS Datuk Wira Syed Ali Bin Tan Sri Abbas Alhabshee STYL Associates (AF 001929) Member Chartered Accountants 107B Jalan Aminuddin Baki Yeong Siew Lee Taman Tun Dr Ismail Member 60000 Kuala Lumpur T : 03-7727 5573 NOMINATION COMMITTEE SPONSOR Dato’ Hussian @ Rizal Bin A. Rahman Chairman PM Securities Sdn Bhd (66299-A) Mezzanine Floor, Menara PMI Datuk Wira Syed Ali Bin Tan Sri Abbas Alhabshee No.2, Jalan Changkat Ceylon Member 50200 Kuala Lumpur T : 03-2715 1330 Yeong Siew Lee Member SHARE REGISTRAR Tricor Investor Services Sdn Bhd REMUNERATION COMMITTEE Level 17, The Gardens North Tower Dato’ Hussian @ Rizal Bin A. Rahman Mid Valley City Chairman Lingkaran Syed Putra 59200 Kuala Lumpur Dato’ Wong Shee Kai T : 03-2264 3883 Member F : 03-2282 1886 Yeong Siew Lee STOCK EXCHANGE LISTING Member ACE Market of Bursa Malaysia COMPANY SECRETARIES Securities Berhad Stock Name : AMEDIA See Siew Cheng (MAICSA 7011225) Stock Code : 0159 Eow Willey (MAICSA 7031441) 4 ASIA MEDIA GROUP BERHAD (813137-V) FINANCIAL HIGHLIGHTS Revenue Gross Profit (RM million) (RM million) 23.38 (3) 11.36 (3) 25 12 10 20 CAGR CAGR (3) 88.3% (3) 8 85.1% 6.88 15 13.15 6 10 3.83 (3) 6.53 (3) 4 (2) (2) 5 3.5 1.79 2 0 0 2007 (1) 2008 (1) 2009 (1) 2010 (1) 2007 (1) 2008 (1) 2009 (1) 2010 (1) Profit Before Tax Earning Per Share (“EPS”) (RM million) (Sen) 7.74 (3) 5.95 (3) 8 6 5 6 CAGR CAGR 121.7% 4 122.5% 3.36 (3) 2.58 (3) 4 3 2 (3) (3) 2 1.41 1.09 0.71 (2) 1 0.54 (2) 0 0 2007 (1) 2008 (1) 2009 (1) 2010 (1) 2007 (1) 2008 (1) 2009 (1) 2010 (1) 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 throughout 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. CAGR = Compounded Average Growth Rate ANNUAL REPORT 2010 5 FINANCIAL HIGHLIGHTS cont’d SUMMARISED GROUP INCOME STATEMENTS Financial Year Ended 31 December Proforma* Audited 2007(1) 2008(2) 2009(2) 2010(2) 2010(3) FYE 31 December RM RM RM RM RM Revenue 3,501,620 6,533,187 13,150,080 23,375,537 16,554,093 Cost of Sales (1,709,095) (2,702,900) (6,267,488) (12,020,436) (8,644,850) Gross profit (“GP”) 1,792,525 3,830,287 6,882,592 11,355,101 7,909,243 EBITDA 968,759 2,187,285 4,233,739 9,244,683 11,297,585 Less: Amortisation - (5,422) (5,458) (25,980) (24,176) Depreciation (143,721) (815,758) (830,127) (1,439,402) (960,720) Net interest income/(cost) (113,993) 45,682 (39,664) (39,385) (26,079) Profit before tax (“PBT”) 711,045 1,411,787 3,358,490 7,739,916 10,286,610 Taxation (5,821) - - (2,698) (4,872) Profit after tax (“PAT”) 705,224 1,411,787 3,358,490 7,737,218 10,281,738 Net profit attributable to shareholders 705,224 1,411,787 3,358,490 7,737,218 10,281,738 Issued and paid-up share capital base 130,000,000 130,000,000 130,000,000 130,000,000 130,000,000 Basic EPS (sen) 0.54 1.09 2.58 5.95 14.87 (4) Profit Margin GP margin (%) 51.2 58.6 52.3 48.6 47.8 EBITDA margin (%) 27.7 33.5 32.2 39.5 68.2 PBT margin (%) 20.3 21.6 25.5 33.1 62.1 PAT margin (%) 20.1 21.6 25.5 33.1 62.1 Growth Rates Revenue (%) n/a 86.6 101.3 77.8 n/a EBITDA (%) n/a 125.8 93.6 118.4 n/a PBT (%) n/a 98.6 137.9 130.5 n/a PAT (%) n/a 100.2 137.9 130.4 n/a 6 ASIA MEDIA GROUP BERHAD (813137-V) FINANCIAL HIGHLIGHTS cont’d SUMMARISED GROUP’S FINANCIAL POSITION As at 31 December 2010 Audited 2010 FYE 31 December RM Current assets 5,530,191 Current liabilities 4,443,158 Current ratio (times) 1.24 Short term debt 820,055 Long term debt 414,755 Total debt 1,234,810 Total equity 23,278,438 Total debt/total equity (times) 0.05 Cash reserve 1,675,503 Net cash 440,693 Shareholders’ funds 23,278,438 Net Assets/Share 0.18 ANNUAL REPORT 2010 7 CHAIRMAN’S STATEMENT Dear Shareholders, On behalf of the Board of Directors (“Board”), I am pleased to present the Annual Report and the Audited Consolidated Financial Statements of Asia Media Group Berhad (“AMGB” or “Company”) and its subsidiary companies (“Group”) for the financial year ended 31 December 2010 (“FYE2010”). FINANCIAL PERFORMANCE Net profit attributable to shareholders was RM10.282 million in FYE2010 which is translated into earnings per The Group achieved favourable financial performance share of 14.87 sen. The Group’s shareholder funds were in FYE2010 backed by the recovery of the Malaysian RM 23.278 million and net assets per share was 18 sen economy and the rebound of consumer sentiment. The as at end of 2010. GDP of Malaysia registered a growth rate of +7.2% y-o-y in 2010 against -1.7% y-o-y in 2009. Likewise, a more The Group adopted a prudent financial management positive consumer sentiment played an essential role to strategy where the Group’s debt to total equity ratio is only instil stronger business confidence amongst advertisers 0.05 times at the end of 2010, with total debt of RM1.235 in 2010. The Group recorded a revenue of RM16.554 million against total equity of RM23.278 million. The cash million and profit before taxation of RM 10.287 million, balances conserved as at end of FYE2010 was RM1.676 that were mainly contributed by Asia Media Sdn Bhd million. With a healthy balance sheet position, the Group is (“AMSB”) and Transnet Express Sdn Bhd (“TESB”), on stronger footing to seize any market opportunities that following the successful acquisition of AMSB and TESB by may arise in the near future. the Company. AMSB and TESB were acquired as wholly owned subsidiaries by the Company on 3 May 2010. 8 ASIA MEDIA GROUP BERHAD (813137-V) CHAIRMAN’S STATEMENT cont’d The Group’s financial liquidity remained healthy with positive operating cash inflow of RM6.154 million in FYE2010.