Cover - Pg 12 - Berjaya Corporation Berhad

6berjaya media berhad(Company No: 290601-T) annual report 2011CHAIRMAN'S STATEMENTOn behalf of the Board of Directors, it is my pleasure to present the Annual Report and Financial Statementsof Berjaya Media Berhad (“BMedia”) for the financial year ended 30 April 2011.FINANCIAL PERFORMANCEFor the financial year ended 30 April 2011, theGroup registered a revenue of RM55.7 million, anincrease of 18% from RM47.2 million in the precedingyear. The Group recorded a pre-tax profit of RM9.5million against a pre-tax loss of RM4.64 million inthe preceding year. The turnaround in profitabilitywas mainly attributed to the higher advertisementincome recorded by its principal subsidiary, SunMedia Corporation Sdn Bhd, gain on disposal ofcertain quoted investments as well as the receipt ofdividend income from its quoted investments duringthe financial year.DIVIDENDThe Board does not recommend the payment ofdividends for the financial year ended 30 April 2011.REVIEW OF OPERATIONSSun Media Corporation Sdn BhdFor the financial year under review, Sun Mediaregistered a revenue of RM55.7 million, an increase of18% compared with the previous financial year. Pretaxprofit rose from RM1.3 million to RM8.1 million.The increase in revenue was mainly attributed tothe increase in advertisement income due to thecontinuous branding and marketing campaignscarried out by the company coupled with thenewspaper’s strong market appeal built by strongdistribution reach.theSun continues to be the preferred choice ofreaders and advertisers as it delivers top quality newsin an appealing, concise and easy-to-read format aswell as providing creative advertising solutions tomarketers. Its strong content, especially the TellingIt As It Is style of journalism, has won theSun a loyaland growing group of readers, particularly amongthe younger generation and working professionals.theSun continues to maintain its lead position witha distribution of more than 300,000 copies everyweekday at 3,200 pick-up points, providing a mixof the latest news and current affairs, both fromhome and abroad, including news on politics andgovernment, business and society, culture andlifestyle, entertainment and sports.Over and above the regular content offerings, theSunalso publishes special pullouts, offering advertisersopportunities to select their preferred editorial sectionnamely, education (Education Focus), beauty andhealth (Glow), food & beverage (Gourmet Guide),youth (U), etc. The full jacket cover (4-page full wrap)and the half cover (2-page half wrap) have been highlypopular with the advertisers and have become themost creative and impactful way to launch or brand aproduct or service.During the year under review, theSun set up a fullfledgedbusiness desk bringing in a veteran businessjournalist who set up a team including three seniorjournalists and one junior reporter. The business pagesdoubled from two to four, giving comprehensivecoverage of local and foreign economic news includinga page featuring images ofthe week’s major events. Theexpansion of the businesspages makes the newspapermore complete, catering tourban professionals.In an effort to add value to theoverall content of the paper,theSun launched two newsupplements, Urban Lifestyleand Digital Lifestyle, duringthe year under review. Itis envisaged that the newsupplements will create newopportunities for advertisers,thus generating strongerrevenue. Urban Lifestyle which includes topicson health and wellness, property, interior design,shopping and holidays, has proven to be popularamong property developers.A monthly section on education showcasing postgraduatecourses has also been introduced to meetthe growing demands of theSun‘s discerning readers,which has created yet another avenue for advertisersespecially from the education sector.Another prominent change that took place duringthe year under review was the revamping of thetheSun’s 11-year old website. The website’s namewas changed from sun2surf.com to thesundaily.myand it went live in June 2011.With a more breezy lookand user-friendly features,the website is anticipated toattract more online readersas well as advertisers to utilizethis website to connect withtheSun’s online audience.During the year under review,the company acquired itssecond Krause CtP pre-pressmachine to meet the growingadvertisement demand. Fulltransformation of pre-pressfrom analogue to digitalsystem took place in March2011 and is expected topositively impact theSun’sadvertising business withbetter quality print productions, time savings,reduced equipment and material usage as well asreduced manpower and production cost.FUTURE OUTLOOK AND PROSPECTS"theSun continues tobe the preferredchoice of readers andadvertisers as it deliverstop quality news in anappealing, concise andeasy-to-read format aswell as providing creativeadvertising solutionsto marketers.""A monthly section oneducation showcasingpost-graduate courseshas also been introducedto meet the growingdemands of theSun‘sdiscerning readers, whichhas created yet anotheravenue for advertisersespecially from theeducation sector."The Malaysian economy achieved a healthy growthof 4.6% in the first quarter of 2011 and the growthmomentum is expected to moderate in the secondquarter due to supply disruptions from the Japancatastrophe, rising inflation fears and pullback incommodity prices. However, a rebound is anticipatedin the Malaysian economy during the second half ofthe year spurred largely by supportive governmentpolicy measures and implementation of the EconomicTransformation Programme, which augurs well fortheSun’s advertising business.Editorially, theSun brand holds astrong position. The newspaper’spopularity is founded on the strongmarket perception of its non-alignedindependence. Its comprehensivecontent which includes investigativereporting and opinion writing is wellaccepted by the sophisticated andsocially conscious urban readers.theSun will continue to build on thisreputation by further enhancing thequality of its news and features, aswell as the layout designs, to remainattractive and relevant to urbanreaders and advertisers.Rapid advancement of the digitaltechnology and the gaining popularity of the newmedia have created greater opportunities for theSunto promote online advertising to its customers.theSun’s newly revamped website is an excitingavenue for the advertisers to target their messageand interact with potential customers.Armed with a weekday distribution of more than300,000 copies nationwide and accompanied bywell-received editorial content and strong marketingstrategies, theSun has gained substantial marketshare in both readership and advertising revenue.In the interest of ensuring long term sustainability,the company is actively building relationships withadvertisers and is generating relevant and effectiveprint and digital marketing solutionsthat support advertisers’ urbanadvertising objectives.As theSun is driven predominantlyby advertising for cash flow, it willcontinue to formulate strategies andinitiatives to adapt to changes incustomer demand as well as boostits advertising sales with innovativebranding and marketing campaigns.Barring any unforeseen circumstancesand taking into account the prevailingeconomic conditions, the Boardof Directors expects the Group tomaintain its current level of operatingperformance for the financial yearending 30 April 2012.ACKNOWLEDGEMENTSOn behalf of the Board, I would like to thank therelevant authorities, business associates, advertisersand advertising agencies for their continued support.To the management and staff, we appreciate themfor their dedication, hard work and commitment andto our shareholders, we thank you for the confidenceand support and look forward to your continuedsupport and cooperation in the future.DATO’ ROBIN TAN YEONG CHINGChairman5 August 2011

erjaya media berhad(Company No: 290601-T) annual report 20117Statementon internalControlINTRODUCTIONThe Malaysian Code on Corporate Governance requireslisted companies to maintain a sound system of internalcontrol to safeguard shareholders’ investments andthe Group’s assets. The Bursa Malaysia SecuritiesBerhad (“Bursa Securities”) Main Market ListingRequirements require directors of listed companies toinclude a statement in annual reports on the state oftheir internal controls. The Bursa Securities’ Statementon Internal Control: Guidance for Directors of PublicListed Companies (“Guidance”) provides guidancefor compliance with these requirements. The Board’sInternal Control Statement, which has been prepared inaccordance with the Guidance, is set out below.RESPONSIBILITYThe Board has established an organisation structure withclearly defined lines of accountability and delegatedauthority. It has extended the responsibilities of the Auditand Risk Management Committee to include the workof monitoring all internal controls and risk management.Its review covers matters such as responses to significantrisks identified, output from the monitoring process andchanges made to the internal control systems.OTHER KEY ELEMENTS OF INTERNALCONTROLThe other key elements of the Group’s internal controlsystems are described below:-• Clearly defined delegation of responsibilities tocommittees of the Board and to management of HeadOffice and operating units, including authorisation levelfor all aspects of the business which are set out in anauthority matrix;• Regular and comprehensive information provided tomanagement, covering financial performance and keybusiness indicators, such as cashflow performance;• An internal audit function which assesses theeffectiveness of the internal control system andhighlights significant risks affecting the Group; and• Regular visits to operating units by senior management.The system of internal control was satisfactory and hasnot resulted in any material losses, contingencies oruncertainties that would require disclosure in the Group’sAnnual Report.AUDIT AND RISK MANAGEMENTCOMMITTEE REPORTThe Board of Directors of Berjaya Media Berhad is pleased to present the report of the Audit and Risk ManagementCommittee for the financial year ended 30 April 2011.Members and Meetings AttendancesThe members of the Audit and Risk Management Committee are as follows:-Loh Chen Peng – Chairman/Independent Non-Executive DirectorDatuk Seri Azman Bin Ujang – Independent Non-Executive DirectorDatuk Zainun Aishah Binti Ahmad – Independent Non-Executive DirectorThe Audit and Risk Management Committee held five (5) meetings during the financial year ended 30 April 2011.The details of attendance of the Audit and Risk Management Committee members are as follows:-NAMEAttendanceLoh Chen Peng 5/5Datuk Seri Azman Bin Ujang 5/5Datuk Zainun Aishah Binti Ahmad 5/5The Deputy General Manager of Group Internal Audit and the Head of Group Accounts and Budgets of BerjayaCorporation Berhad were also invited to attend the Audit and Risk Management Committee meetings. The externalauditors were also invited to attend all of these meetings. The Committee also met with the external auditors withoutthe presence of executive Board members and the Management.SUMMARY OF ACTIVITIES OF THE AUDIT AND RISK MANAGEMENT COMMITTEEDURING THE FINANCIAL YEAR ENDED 30 APRIL 2011The activities were as follows:-a. reviewed the internal audit reports presented and considered the findings of internal audit in the Group’s operatingsubsidiary and associated company through the review of internal audit reports tabled and management responsesthereof;b. reviewed the external auditors’ scope of work and audit plan for the year;c. reviewed the risk management reports of operating subsidiary;d. reviewed the unaudited quarterly financial statements and the year end financial statements of the Company andthe Group and recommending the same for approval by the Board, upon being satisfied that the financial reportingand disclosure requirements of the relevant authorities have been complied with. Any significant issues resultingfrom the audit of the financial statements by the external auditors were noted;e. reviewed the Internal Audit Plan for year 2011;f. reviewed the related party transactions and the circular to shareholders in connection with the recurrent relatedparty transactions.SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTIONThe Company does not have its own in-house Internal Audit function. The internal audit function was outsourced to theinternal auditors of Berjaya Corporation Berhad, to assist the Audit and Risk Management Committee in discharging itsduties and responsibilities. Their role is to provide the Committee with independent and objective reports on the stateof internal controls of the operating units within the Group and the extent of compliance by such units with the Group’sestablished policies and procedures.The activities undertaken by the Internal Audit Division during the financial year ended 30 April 2011 included thefollowing:1. Tabled Internal Audit Plan for the Audit and Risk Management Committee’s review and endorsement.2. Reviewed the existing systems, controls and governance processes of various operating units within the Group.3. Conducted audit reviews and evaluated risk exposures relating to the Group’s governance process and system ofinternal controls on reliability and integrity of financial and operational information, safeguarding of assets, efficiencyof operations, compliance with established policies and procedures and statutory requirements.4. Provided recommendations to assist the various operating units and the Group in accomplishing its internal controlrequirements by suggesting improvements to the control processes.5. Issued internal audit reports incorporating audit recommendations and management’s responses in relation toaudit findings on weaknesses in the systems and controls to the Audit and Risk Management Committee and therespective operations management.6. Followed up review to ensure that the agreed internal audit recommendations are effectively implemented.7. Presented internal audit reports to the Audit and Risk Management Committee for review.For the financial year under review, the Internal Audit Division conducted audit assignments on operating units of theGroup involved in publication, printing and distribution of daily and weekly newspapers.The estimated cost for the Internal Audit function in respect of the financial year ended 30 April 2011 was approximatelyRM96,000.

8berjaya media berhad(Company No: 290601-T) annual report 2011AUDIT AND RISK MANAGEMENT COMMITTEEREPORT (CONTINUED)TERMS OF REFERENCE OF THE AUDIT AND RISK MANAGEMENT COMMITTEE1. MEMBERSHIPThe Audit and Risk Management Committee (“theCommittee”) shall be appointed by the Board fromamongst the Directors and shall consist of not lessthan three members and all the Committee membersmust be non executive directors, with majority of thembeing independent directors and at least one memberof the Committee must be a member of the MalaysianInstitute of Accountants or such other qualifications andexperience as approved by the Bursa Malaysia SecuritiesBerhad (“Bursa Securities”).If a member of the Committee resigns, dies or for anyother reason ceases to be a member with the result thatthe number of members is reduced to below three, theboard of directors shall, within three months of that event,appoint such number of new members as may be requiredto make up the minimum number of three members.2. QUORUMA quorum for the Committee shall consist of twomembers and a majority of the members present must beIndependent Directors.3. CHAIRMANThe Chairman of the Committee shall be an IndependentDirector appointed by the Board. He shall report on eachmeeting of the Committee to the Board.4. SECRETARYThe Company Secretary shall be the Secretary of theCommittee and shall be responsible, in conjunction withthe Chairman, for drawing up the agenda and circulatingit, supported by explanatory documentation to theCommittee members prior to each meeting.The Secretary shall also be responsible for keeping theminutes of meetings of the Committee and circulatingthem to the Committee members and to the othermembers of the Board of Directors.5. FREQUENCY OF MEETINGSMeetings shall be held not less than four times a year andwill normally be attended by the Director charged withthe responsibilities of the Group’s finance and Head ofInternal Audit. The presence of external auditors will berequested if required and the external auditors may alsorequest a meeting if they consider it necessary.6. AUTHORITYThe Committee is authorised by the Board to investigateany activity within its terms of reference and shall haveunrestricted access to both the internal and externalauditors and to all employees of the Group. TheCommittee is also authorised by the Board to obtainexternal legal or other independent professional adviceas necessary.The Committee is also authorised to convene meetingswith the external auditors, the internal auditors orboth, excluding the attendance of other directors andemployees of the Company, whenever deemed necessary.7. DUTIESThe duties of the Committee shall be:(a) To review and recommend the appointment ofexternal auditors, the audit fee and any questions ofresignation or dismissal including recommending thenomination of person or persons as external auditors;(b) To discuss with the external auditors where necessary,on the nature and scope of audit and to ensurecoordination of audit where more than one audit firmis involved;(c) To review the quarterly results and year-end financialstatements prior to the approval by the Board, focusingon:- going concern assumption- compliance with applicable financial reportingstandards and regulatory requirements- any changes in accounting policies and practices- significant issues arising from the audit- major judgemental areas(d) To prepare Audit and Risk Management CommitteeReport at the end of each financial year;(e) To discuss problems and reservations arising from theinterim and final external audits, and any matters theexternal auditors may wish to discuss (in the absenceof management, where necessary);(f) To review the external auditors’ management letterand management’s response;(g) To review any related party transaction and conflict ofinterest situation that may arise within the Company orGroup including any transaction, procedure or courseof conduct that raises questions of managementintegrity;(h) To do the following in relation to internal auditfunction:-- review the adequacy of scope, functions, competencyand resources of the internal audit departmentand that it has the necessary authority to carry outits work;- review internal audit programme;- ensure coordination of external audit with internalaudit;- consider the major findings of internal auditinvestigations and management’s response, andensure that appropriate actions are taken on therecommendations of the internal audit function;- review any appraisal or assessment of theperformance of the staff of the internal auditfunction;- approve any appointment or termination of seniorstaff member of the internal audit function;- inform itself of resignations of internal audit staffmembers and provide the resigning staff member anopportunity to submit his/her reason for resignation;- to monitor related party transactions entered intoby the Company and its subsidiaries, and to ensurethat the Directors report such transactions annuallyto shareholders via the annual report;- to review and monitor the effectiveness of internalcontrol systems and to evaluate the systems with theexternal auditors;(i) To carry out such other responsibilities, functionsor assignments as may be defined jointly by theCommittee and the Board of Directors from time totime;(j) In compliance with Paragraph 15.16 of the Main MarketListing Requirements, where the Committee is of theview that a matter reported by it to the Board has notbeen satisfactorily resolved resulting in a breach of theListing Requirements, the Committee must promptlyreport such matter to Bursa Securities.(k) To undertake the following risk management activities:Establishing Strategic Context – Ensuring that thestrategic context of the risk management strategyis complete and takes into account the environmentwithin which the Group operates and the requirementsof all stakeholders and the Board.Establishing Risk Management Processes – Determiningthe overall risk management processes that shouldbe adopted by the business units and developingappropriate guidelines and policies for implementation.Establishing Risk Management Structure – Ensuringa short and long term risk management strategy,framework and methodology have been implementedand consistently applied by all business units.Embedding Risk Management Capability – Ensuringrisk management processes are integrated into allcore business processes and that the culture of theorganisation reflects the risk consciousness of theBoard.Establishing Reporting Mechanism – Providing aconsolidated risk and assurance report to the Board tosupport the statement relating to internal control in thecompany’s annual report.Integrating & coordinating assurance activity – Ensuringalignment and coordination of assurance activity acrossthe organisation.Establishing Business Benefits – Identifyingopportunities to release potential business benefitsthrough the enhancement of risk managementcapabilities within the Group.Establishing Effectiveness of Risk ManagementProcesses – Simplifying and improving the effectivenessof existing risk management structures.Managing the Group Wide Risk ManagementProgramme – Supporting the implementation of therisk management processes within the business. TheCommittee will act as steering committee for theGroup Wide Risk Management Programme (GWRM).

10berjaya media berhad(Company No: 290601-T) annual report 2011CLIENTS' VISITS TO theSunGuinness Anchor BerhadJanuary 2011Guinness Anchor Berhadbrought early Chinese NewYear cheer to theSun. Tousher in the Year of theRabbit, they treated theSunto a spectacular lion danceperformance and broughtgoodies along to create anair of festivity – their wayof bringing good tidingsof fortunea n dgoodluck forthe newyear!JobsDB Fair18 – 20 March 2011This Expo attracted over 75,000 job applicationsnationwide.theSun was happy to collaborate as Media Partner, forthe 2nd consecutive year.This fair provided theSun readers and participants witha paperless and seamless process, from registrationto job application. Jobseekers were given bar-codedregistration cards which they simply needed to scanwhen applying for a job vacancy. Needless to say, theExpo was a huge success. Jobseekers were impressedwith participating companies and numerous jobopportunities, while employers were happy with thequality of candidates and number of visitors.RibenaJanuary 2011Ribena paid a visit to theSun, bringing festive cheer with“health & wealth in abundance” during the ChineseNew Year period.AstroJanuary 2011Astro paid theSun a courtesy call prior to Chinese NewYear. They brought along an entourage of dancersand singers, complete with God of Prosperity bearingangpows and “kum” to signify rolling good fortune forthe forthcoming Rabbit year.Resorts WorldMid ValleyMegamallJanuary 2011Mid Valley Megamall’s visit to theSun was a hive of activity.To usher in the year of the Rabbit, client brought in aLion Dance troupe complete with “kum”, good fortunegoodies and Chinese New Year ornaments bearing goodtidings for the new year. Client thanked theSun for itsmedia support and was glad to maintain goodwill andrapport during such an auspicious occasion.April 2011Resorts World made their annual visit to theSun’s officebearing cakes and goodies to share with everyone. Thiswas to mark theSun’s anniversary and also to foster betterties through the years.

erjaya media berhad(Company No: 290601-T) annual report 201111CarlsbergJanuary 2011Carlsberg decided to celebrate Chinese New Year with grandeur at theSun’s office. A float decorated with varioussymbols of good fortune and happiness themed up with lion dancers and 8 Gods of Prosperity was a sight to behold.Corporate SocialResponsibilitytheSun-MAPCU ScholarshipFund 2010 22 January – 24 August 2010The first ever scholarship event heldby theSun. Out of 740 applicants, 49ecstatic candidates were awardedscholarships totalling RM1.5 millionfrom theSun-Malaysian Associationof Private Colleges and Universities(MAPCU) Scholarship Fund 2010.theSun was more than happy to partnerMAPCU in its CSR effort, aimed atproviding deserving students & the lessfortunate, the opportunity to receivequality private education.MAPCU HigherEducation Fair 201122 – 23 January 2011theSun’s participation in the MAPCUHigher Education Fair was a resoundingsuccess. The Fair saw a turnout of morethan 20,000 visitors where top-notcheducational institutes provided visitorswith ample information on study optionsin the country and abroad.Everyone CanRetire WellConference& Exhibition13 – 14 October 2010This initiative saw theSun and Financial PlanningAssociation of Malaysia (FPAM) working togethertowards building a platform for theSun readers to learnhow to improve their financial health status, optionsin retirement, enabling businesses to examine currenttrends and opportunities, simultaneously having themeans to evaluate and compare business performancesin the financial industry.Topics covered included those related to healthcareand social issues.

12berjaya media berhad(Company No: 290601-T) annual report 2011