P7 P10+11 STAYING THE COURSElibapps2.nus.edu.sg/nus_hl/nexnews12006.pdf · FINANCIAL STATEMENTS CHAIRMAN’S ... Vincent Tan Chee Yioun Loh Chen Peng SHARE OPTION SCHEME ... accounting

P12

— FOR SHAREHOLDERS ONLY —

NEXNEWS BERHAD (290601-T) ANNUAL REPORT 2006

FINANCIAL STATEMENTS

CHAIRMAN’S STATEMENT P7DEPUTY CHAIRMAN’S STATEMENT P8+9

THE YEAR IN PICTURESP10+11

CORPORATE SOCIAL RESPONSIBILITYP28+29

Navigating the road towards long-term sustainable growth

STAYING THE COURSE

CORPORATE INFORMATION 2PROFILE OF DIRECTORS 2CORPORATE GOVERNANCESTATEMENT 4INTERNAL CONTROL STATEMENT 6AUDIT COMMITTEE REPORT 6RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE 26

ANALYSIS OF SHAREHOLDINGS 27NOTICE OF ANNUALGENERAL MEETING 30ANALYSIS OF WARRANT HOLDINGS 32PROXY FORM 33LIST OF SUBSTANTIAL HOLDERS 35SUMMARY OF DIRECTORS’ HOLDINGS 35

2 NEXNEWS BERHAD ANNUAL REPORT 2006

C O R P O R A T E I N F O R M A T I O N A s a t 2 9 M a y 2 0 0 7

BOARD OF DIRECTORSTan Sri Dato’ Seri Vincent Tan Chee YiounChairman, Non-Independent Non-Executive Director

Tong Kooi OngDeputy Chairman Non-Independent Executive Director

Ho Kay TatGroup Managing Director Non-Independent Executive Director

Ng Seng HinNon-Independent Executive Director

Tan Boon KeanNon-Independent Executive Director

Tong Kooi SoonNon-Independent Executive Director

Freddie Pang Hock ChengNon-Independent Non-Executive Director

Lim Hooi KiangIndependent Non-Executive Director

Loh Chen PengIndependent Non-Executive Director

Shamsul-Bahrain bin IbrahimIndependent Non-Executive Director

Chan Kien Sing Alternate Director to Tan Sri Dato’ Seri Vincent Tan Chee Yioun

COMPANY SECRETARIESTong Kooi Soon (MIA 5416)- ean Siew Hein (MAICSA 7002315)

AUDIT COMMITTEE /RISK MANAGEMENT COMMITTEEShamsul-Bahrain bin IbrahimLim Hooi KiangNg Seng Hin

NOMINATING COMMITTEE Shamsul-Bahrain bin IbrahimLim Hooi Kiang

REMUNERATION COMMITTEETan Sri Dato’ Seri Vincent Tan Chee YiounLoh Chen Peng

SHARE OPTION SCHEME COMMITTEELoh Chen PengShamsul-Bahrain bin IbrahimNg Seng Hin

REGISTERED OFFICELevel 5, Lot 6, Jalan 51/21746050 Petaling JayaSelangor Darul EhsanTel: 03-7787 9922Fax: 03-7787 9920

REGISTRARPFA Registration Services Sdn BhdLevel 13, Uptown 1 No. 1, Jalan SS21/58Damansara Uptown47400 Petaling JayaSelangor Darul EhsanTel : 03-7725 4888Fax : 03-7722 2311

AUDITORSDeloitte KassimChanLevel 19, Uptown 1No. 1, Jalan SS21/58Damansara Uptown47400 Petaling JayaSelangor Darul EhsanTel: 03-7726 1833, 03-7723 6500Fax: 03-7726 3986, 03-7726 8986

STOCK EXCHANGE LISTINGMain Board of Bursa Malaysia Securities BerhadStock Name : NEXNEWSStock code : 6025

TAN SRI DATO’ SERI VINCENT TAN CHEE YIOUNChairmanNon-Independent Non-Executive Director

Tan Sri Dato’ Seri Vincent Tan Chee Yioun, aged 55, a Malaysian, was appointed to the Board as Chairman and Non-Independent Non-Executive Director on 20 February 2002. He is also the Chairman of the Remuneration Committee.

He is a businessman and entrepreneur with varied interests in property development and investment, gaming, stockbroking, manufacturing, trading, hospitality, Internet-related businesses, utilities, media, telecommunications, insurance and education through various public and private companies namely, Berjaya Corporation group of companies, Intan Utilities Berhad, Matrix International Berhad, MOL.com Berhad and MiTV Corporation Sdn Bhd.

He is currently the Chairman/Chief Executive Offi cer of Berjaya Corporation Berhad and the Managing Director of Sports Toto Malaysia Sdn Bhd. He is also the Chairman of Informatics Education Ltd, Singapore, Berjaya Times Square Sdn Bhd and Convenience Shopping Sdn Bhd; the owner of the 7-Eleven franchise in Malaysia and MiTV Networks Sdn Bhd, a new 3G mobile operator in Malaysia.

He also holds directorships in Berjaya Vacation Club Berhad, Berjaya Hills Berhad (formerly known as Bukit Tinggi Resort Berhad), Bukit Kiara Resort Berhad and Berjaya Golf Resort Berhad as well as several other private limited companies including Sun Media Corporation Sdn Bhd.

He does not have any confl ict of interest with the Company. He is not related to any member of the Board and has not been convicted of any off ence within the past ten (10) years.

TONG KOOI ONGDeputy Chairman Non-Independent Executive Director

Tong Kooi Ong, aged 48, a Malaysian, was appointed to the Board on 1 June 2000. He is the Deputy Chairman of the Company. Prior to joining Nexnews Berhad, he was the founder, Chief Executive Offi cer and Director of Phileo Allied Berhad, a fi nancial services group from 1994 until his resignation in May 2000.

He ventured into the media industry in 1993 with the publication of � e Edge, Malaysia’s fi rst business and investment weekly. His media interests outside of Malaysia are represented by - e Edge Asia Inc, which publishes � e Edge Singapore, a business weekly, and Asia Inc, a regional bi-monthly, and other personal fi nance titles.

He is also the Executive Chairman of Sunrise Berhad, a property-development company. He is also on the board of a number of private companies in Malaysia.

Tong is also the Executive Chairman and Chief Executive Offi cer of Taiga Building Products Ltd, listed on the Toronto Stock Exchange, with annual sales of over C$1.3 billion. It is the largest independent wholesale distributor of building products in Canada with sales throughout North America and overseas.

He is a graduate of Simon Fraser University, Canada, with a Bachelor of Arts in Business Administration and a Master of Arts in Economics and Finance. In 2002, he obtained his Doctor of Laws (Honoris Causa) from Simon Fraser University.

He does not have any confl ict of interest with the Company. He has not been convicted of any off ence within the past ten (10) years.

His brother, Tong Kooi Soon, is also a member of the Board.

HO KAY TATGroup Managing DirectorNon-Independent Executive Director

Ho Kay Tat, aged 48, a Malaysian, was appointed to the Board as a Non-Independent Executive Director on 10 June 2000 and was subsequently redesignated as the Group Managing Director on 3 May 2005.

He has been in the media industry as a journalist for several newspapers including New Straits Times, % e Malay Mail, % e Business Times (Singapore) and Reuters Wire Service. He holds a Bachelor of Social Science (Hons) degree majoring in political science from Universiti Sains Malaysia. Currently, he is the Group Editor-in-Chief of � e Edge and theSun, publications under the Group.


NG SENG HINNon-Independent Executive Director

Ng Seng Hin, aged 48, a Malaysian, was appointed to the Board as a Non-Independent Executive Director on 1 June 2000. He is a member of the Audit Committee/Risk Management Committee and also a member of the Share Option Scheme Committee. He holds a Bachelor of Accounting (Hons) from Universiti Kebangsaan Malaysia and is a member of the Malaysian Institute of Accountants.

He commenced his career in accounting and auditing with an international accounting fi rm. He has held senior positions in auditing, fi nance and business operations in public-listed companies.

He was a member of the Board of Directors of two public-listed companies where he was involved in running the business and fi nance operations, and implementing the companies’ policies and strategies.


TAN BOON KEANNon-Independent Executive Director

Tan Boon Kean, aged 51, a Malaysian, was appointed to the Board as a Non-Independent Executive Director on 10 June 2000. He became a Non-Independent Non-Executive Director on 1 January 2004 but was subsequently redesignated to his earlier executive appointment on 3 May 2005.

He holds a BA and MA in Political Science from Columbia University, New York, a Master in - eological Studies from the Divinity School, Harvard University, and a PhD from Institut Pengajian Tinggi, Universiti Malaya. He was a Wolfson College, Cambridge University, Press Fellow in 1987. Tan has worked as a journalist, economic consultant, and fi nancial communications adviser for both Malaysian and foreign companies for more than two decades.


TONG KOOI SOONNon-Independent Executive Director

Tong Kooi Soon, aged 54, a Malaysian, was appointed to the Board as a Non-Independent Executive Director on 1 June 2000.

He is a chartered accountant and a member of the Malaysian Institute of Accountants.

He has more than twenty-fi ve (25) years’ experience in the fi eld of fi nancial services and auditing and has worked with audit and stockbroking fi rms in Malaysia. He has also been a corporate secretary and was involved in management consultancy prior to becoming a director of Nexnews Berhad.

He does not have any confl ict of interest with the Company. He has not been convicted of any off ence within the past ten (10) years.

His brother, Tong Kooi Ong, is the Deputy Chairman of the Company.

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CHAN KIEN SINGAlternate Director to Tan Sri Dato’ Seri Vincent Tan Chee Yioun

Chan Kien Sing, aged 51, a Malaysian, was appointed as Alternate Director to Tan Sri Dato’ Seri Vincent Tan Chee Yioun on 26 February 2004.

He is a member of the Malaysian Institute of Certifi ed Public Accountants and Malaysian Institute of Accountants.

Having articled with Messrs Peat Marwick Mitchell (now known as KPMG) from 1975 to 1981, he subsequently joined Arab-Malaysian Merchant Bank Berhad (now known as AmMerchant Bank Berhad) specialising in corporate fi nance until 1989 when he joined Berjaya Group Berhad.

Currently, he is the Chief Executive Offi cer of Berjaya Capital Berhad and an Executive Director of Berjaya Corporation Berhad and Berjaya Sports Toto Berhad. He is the Chairman of Matrix International Berhad and Berjaya Holdings (HK) Limited, a Director of Intan Utilities Berhad, Berjaya Group Berhad, Berjaya Vacation Club Berhad and International Lottery & Totalizator System Inc., United States of America. He also holds directorships in several other private limited companies.


FREDDIE PANG HOCK CHENGNon-Independent Non-Executive Director

Freddie Pang Hock Cheng, aged 52, a Malaysian, was appointed to the Board as a Non-Independent Non-Executive Director on 18 February 2004.

He began his career with a predecessor fi rm of Messrs Ernst & Young where he worked for seven (7) years until 1982 during which he qualifi ed for entry as a member of the Malaysian Institute of Certifi ed Public Accountants. He is also a member of the Malaysian Institute of Accountants. - ereafter, he joined the Corporate Advisory Department of Malaysian International Merchant Bankers Berhad where he was actively involved in a wide variety of corporate exercises in an advisory capacity until his departure in 1990 to join Berjaya Group Berhad.

He is currently an Executive Director of Berjaya Corporation Berhad and Berjaya Sports Toto Berhad. He is also a Director of MOL.com Berhad, Dunham-Bush (Malaysia) Bhd, Berjaya Group Berhad, Intan Utilities Berhad, Berjaya Vacation Club Berhad and Informatics Education Ltd, Singapore. He also holds directorships in several other private limited companies.


LIM HOOI KIANGIndependent Non-Executive Director

Lim Hooi Kiang, aged 46, a Malaysian, was appointed to the Board as an Independent Non-Executive Director on 21 December 2001. He is a member of the Audit Committee/Risk Management Committee and also a member of the Nominating Committee. He holds a Bachelor of Arts degree from Monash University, Australia.

He has been running his own business in insurance, publishing, import and export since 1991. He holds directorships in several private limited companies. Earlier in his career, he worked in an architectural fi rm and a fi nance company.


LOH CHEN PENGIndependent Non-Executive Director

Loh Chen Peng, aged 53, a Malaysian, was appointed to the Board as an Independent Non-Executive Director on 8 January 2003. He is the Chairman of the Share Option Scheme Committee and also a member of the Remuneration Committee.

He is an accountant by profession and a member of the Malaysian Institute of Certifi ed Public Accountants (MICPA). He started his career with an international accounting fi rm in 1975 and gained membership to the MICPA. He then joined a merchant banking group in 1980 and for the next thirteen (13) years, held senior management positions in the areas of corporate fi nance and corporate banking. - ereafter he had a short stint in a stockbroking group. In 1994, he helped establish a commercial bank and served on its Executive Committee of Directors until 2001.

He is now involved in some private ventures and is an Independent Non-Executive Director of Major Team Holdings Berhad, Dijaya Corporation Berhad and Sunrise Berhad.


SHAMSUL-BAHRAIN BIN IBRAHIMIndependent Non-Executive Director

Shamsul-Bahrain bin Ibrahim, aged 71, a Malaysian, was appointed to the Board as an Independent Non-Executive Director on 10 June 2000. He is the Chairman of the Audit Committee/Risk Management Committee. He is also a member of the Nominating Committee and a member of the Share Option Scheme Committee.

Shamsul-Bahrain was in the Royal Malaysian Air Force during the Indonesian confrontation against Malaysia and later served onboard the Royal Malaysian Navy ships mostly in mine-sweeping and patrol craft squadrons based in Woodlands, Singapore. He left the service in the rank of Lieutenant-Commander. In 1976 he was admitted to the Honourable Society of Inner Temple and was called to the Bar of England and Wales in 1979. On his return he was admitted to the Malaysian Bar and practised as an advocate and solicitor of the High Court in Malaya.

He served as honorary-secretary to the Kuala Lumpur and Selangor Bar for two (2) terms and the Asean Law Association of Malaysia for three (3) terms and in the same period he was also the editor of its newsletter. During the same period he was appointed by the Prime Minister’s Department to sit on the Kuala Lumpur Rent Tribunal and by the Ministry of Trade and Industry on Asean Business Council. From 1995 until 2001 he was elected as the Secretary-General of Asean Law Association with its registered offi ce in Manila.

He is currently a partner in one of the leading legal fi rms in the country and a committee member of the Association of Malay Journalists Malaysia. He is on the Board of Apex Unit Trusts Berhad.


P R O F I L E O F D I R E C T O R S ( f r o m p a g e 2 )

STAYING THE COURSEThe media business epitomises the saying about life being a journey but not the destination. In looking towards the horizon, we have invested in a strategy for long-term sustainable growth — and driving change along the way.

Picture courtesy of Ford Motor Company

4 NEXNEWS BERHAD ANNUAL REPORT 2006

are structured so as to link rewards to corporate and indi-vidual performances. In the case of Non-Executive Directors, the level of remuneration refl ects the experience and level of responsibilities undertaken by the particular Non-Executive Director concerned.

e Remuneration Committee consists exclusively of Non-Executive Directors and the members of the Remuneration Committee are stated on page 2. is Committee is responsible for setting the policy framework and for making recommenda-tions to the Board on all elements of the remuneration and other terms of employment of the executive Directors.

e executive Directors will abstain from the deliberations and voting on decisions in respect of their own remuneration. Save for Directors’ fees, the remuneration of Non-Executive Directors is to be decided by the Board.

e aggregate Directors’ fees for all Directors is approved by the shareholders at the annual general meeting. e details of the Directors’ remuneration for the fi nancial year ended 31 December 2006, distinguishing between executive and Non-Executive Directors in aggregate, with categorisation into appropriate components and the number of Directors whose remuneration falls into each category, are set out below:

C O R P O R A T E G O V E R N A N C E S T A T E M E N T

The Board of Directors fully recognises the im-portance of establishing and maintaining high standards of corporate governance within the Group. In connection therewith, the Board has taken and is taking the necessary steps to im-plement the principles and best practices in

Corporate Governance as set out in Parts 1 and 2 of the Malaysian Code on Corporate Governance (“the Code”) in order to enhance shareholder value and the fi nancial performance of the Group.

e Board is pleased to report below the manner in which the Group has applied the principles and the extent of compliance pursuant to Paragraph 15.26 of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).

A. DIRECTORS

I THE BOARD Composition e Board currently has ten (10) members, fi ve (5) Executive Directors and fi ve (5) Non-Executive Directors of whom three (3) are Independent Directors. A brief profi le of each Director is presented on pages 2 and 3.

e roles of the Chairman, the Deputy Chairman and the Group Managing Director are clearly defi ned in their individual position descriptions. Generally, the Chairman of the Board is responsible for ensuring Board eff ective-ness and conduct, whilst the Deputy Chairman and the Group Managing Director, together with the Executive Directors, ensure that strategies, policies and matters approved by the Board are eff ectively implemented. e Non-Executive Directors who are not involved in the day-to-day running of the Group’s business operations have enhanced the Board’s objectivity in discharging its responsibility eff ectively.

Board ResponsibilitiesIn pursuing the objectives of the Company to enhance corporate profit and shareholder value, the Board is accountable for the success of the Company by taking the responsibilities to lead, control and manage the Company.

In order to further enhance business and operational ef-fi ciency, the Board has established sub-committees to assist the Board in certain areas of deliberation:

• Audit Committee/Risk Management Committee• Nominating Committee• Remuneration Committee• Share Option Scheme Committee

ese Committees have the authority to examine particu-lar issues and report to the Board with their recommenda-tions. e ultimate responsibilities for the fi nal decision on all matters, however, lie with the entire Board.

Directors’ TrainingAll Directors have attended the Bursa Securities Manda-tory Accreditation Programme (“MAP”) prescribed by the Bursa Securities. Apart from the MAP training, the Directors have also attended the Continuing Education Programme (“CEP”) conducted by various course leaders. All Directors will continue to attend such further training from time to time to keep abreast of developments in the marketplace as well as the current changes in legislation and regulations. In line with the amendments to the List-ing Requirements, the Directors shall be responsible for determining their training needs to aid them in discharg-ing their duties and to enhance their skills and knowledge where relevant.

Meetings of the Board e Board meets on a quarterly basis with additional meet-ings held as and when necessary. During the year ended 31 December 2006, the Board met a total of six (6) times where it deliberated on and considered a variety of sig-nifi cant matters including the Group’s strategic decisions and direction, corporate proposals and announcements of the quarterly fi nancial results prior to releasing them to Bursa Securities.

e attendance record of each Director during the fi nan-cial year ended 31 December 2006 is as follows:

II BOARD BALANCEAs at 31 December 2006, the Board consisted of ten (10) members, comprising the Chairman who is a non-in-dependent Non-Executive Director, five (5) executive Directors including the Deputy Chairman, and four (4) Non-Executive Directors, of whom three (3) are Independ-ent Directors.

e Executive and Non-Executive Directors, with their diff erent backgrounds and experiences in the fi eld of fi nance, accounting, media, business and law made up a balanced and eff ective Board. e presence of Independent Directors provides objectivity to the Board’s decisions, ensuring that all strategies proposed by the management are fully discussed and examined, and take into account the long-term interests of stakeholders, including shareholders, employees, custom-ers, suppliers and the various communities in which the Company conducts its business.

III SUPPLY OF INFORMATION e Directors have access to all information within the Group whether in their individual capacity or through the Board, in furtherance of their duties. In addition, the Directors have access to the advice and services of the Company Secretaries as well as independent professional advice. e Minutes of each Board meeting are circulated to all Directors.

As a general rule, the agendas and issues discussed are prepared and circulated to all the Board members prior to the meeting. is is to give them suffi cient time to be briefed on issues to be raised at the meeting for their active participa-tion in Board decisions and enable them to discharge their duties eff ectively.

IV APPOINTMENTS TO THE BOARD e Nominating Committee consists exclusively of inde-pendent Non-Executive Directors. Members of the Nomi-nating Committee are stated on page 2. is Committee is responsible, among others, for recommending new Director nominees to the Board, for assessing Directors on an ongoing basis and to annually review the required skills and core com-petencies of Non-Executive Directors. Any new nominations received will be reviewed and put to the Board, which makes all decisions on such appointments.

V RE-ELECTIONIn accordance with the Company’s Articles of Association, one-third (⅓) of the Directors shall retire from office, at least once in three (3) years. Retiring Directors can off er themselves for re-election. Directors who are appointed by the Board during the fi nancial year are subject to retirement and also available to off er themselves for re-election by the shareholders at the Annual General Meeting (“AGM”) held following their appointments.

Pursuant to Section 129(2) of the Companies Act, 1965, Directors who are over the age of seventy (70) years shall retire at every AGM, and may off er themselves for re-appointment to hold offi ce until the next ATM. At present, there is one (1) Director of the Company, Shamsul-Bahrain bin Ibrahim, who is subject to such retirement and re-appointment.

B. DIRECTORS’ REMUNERATION e objective of the Group’s policy on Directors’ remunera-tion is to ensure that the Group attracts and retains Directors of the calibre needed to run the Group successfully. In the case of executive Directors, the components of remuneration

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Directors No of Meetings Attended Tan Sri Dato’ Seri Vincent Tan Chee Yioun 3/6 Tong Kooi Ong 5/6 Ho Kay Tat 6/6 Ng Seng Hin 6/6 Tan Boon Kean 4/6 Tong Kooi Soon 6/6 Freddie Pang Hock Cheng 4/6 Lim Hooi Kiang 4/6 Loh Chen Peng 3/6 Shamsul-Bahrain bin Ibrahim 6/6 Izlan bin Izhab (resigned w.e.f. 01.01.2007) 4/6

Range of Executive Non-Executive Remuneration (RM) Director(s) Director(s)* 0 – 50,000 0 6 50,001 – 100,000 1 — 300,001 – 350,000 1 — 350,001 – 400,000 1 — 500,001 – 550,000 1 — 750,001 – 800,000 1 —

* The Directors’ remuneration for � nancial year ended 31 December 2006 includes the payment of Director’s fee to an Independent Non-Executive Director who has resigned with effect from 1 January 2007.

C. SHAREHOLDERS

I DIALOGUE BETWEEN THE COMPANY ANDITS INVESTORS e Board recognises the importance to keep the sharehold-ers well informed of all major developments in the Company on a timely basis. e Corporate Communications division plays an active role in maintaining the Company’s relations with shareholders and investors, among others.

The various disclosures and announcements made to Bursa Securities, inter alia the quarterly and annual results, and corporate developments facilitate the dissemination of information to the shareholders and investors.

II THE ANNUAL GENERAL MEETING e Company provides a platform for dialogue and interac-tion with all shareholders through its AGM. At each AGM, the Board presents the progress and performance of the Group’s businesses and encourages shareholders to partici-pate through a question-and-answer session. e Directors and external auditors of the Company are available to respond to shareholders’ queries during the AGM.

D. ACCOUNTABILITY AND AUDIT

I FINANCIAL REPORTING e Directors are responsible for ensuring that the fi nancial statements prepared are drawn up in accordance with the provisions of the Companies Act, 1965, and applicable ap-proved accounting standards in Malaysia. In presenting the fi nancial statements, the Company has used appropriate accounting policies, consistently applied and supported by reasonable judgements and estimates.

e quarterly fi nancial results and audited fi nancial state-ments were reviewed by the Audit Committee and approved by the Board before they are released to Bursa Securities. e details of the Company and Group’s fi nancial statements for the fi nancial year ended 31 December 2006 are disclosed on pages 12 to 26.

II INTERNAL CONTROL e Board of Directors has overall responsibility for main-taining a system of internal control, which provides reason-able assessments of eff ective and effi cient operations, internal controls and compliance with laws and regulations.

NEXNEWS BERHAD ANNUAL REPORT 2006 5

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III RELATIONSHIP WITH AUDITORS e external auditors, Messrs Deloitte KassimChan, have continued to report to the members of the Company on their fi ndings (which are included as part of the Company’s fi nancial reports) with respect to each fi nancial year’s audit on the statutory fi nancial statements. In doing so, the Company has established a transparent arrangement with the auditors to meet their professional requirements. From time to time, the auditors highlighted to the Audit Committee and Board on matters that require the Board’s attention.

DIRECTORS’ RESPONSIBILITY STATEMENT IN RESPECT OF FINANCIAL STATEMENTS e Directors are required to prepare the fi nancial statements for each fi nancial year to give a true and fair view of the state of aff airs of the Group and the Company at the end of the fi nancial year, and of the results and cashfl ows of the Group and the Company for the fi nancial year then ended.

e Directors consider that, in preparing the fi nancial statements for the fi nancial year ended 31 December 2006, the Group has used appropriate accounting policies and ap-plied them consistently and made judgements and estimates that are reasonable and prudent. e Directors also consider that all applicable approved accounting standards have been followed and confi rm that the fi nancial statements have been prepared on a going-concern basis.

e Directors are responsible for ensuring that the Group and the Company keep accounting records which disclose with reasonable accuracy at any time the fi nancial position of the Group and the Company and which enable them to en-sure that the fi nancial statements comply with the provisions of the Companies Act, 1965, and the applicable approved accounting standards in Malaysia.

1. Utilisation of ProceedsDuring the � nancial year ended 31 December 2006, the Company obtained approval from the Securities Commission via its letter dated 1 March 2006 on the implementation of Renounceable Rights Issue of 28,140,132 new ordinary shares of RM1 each at an issue price of RM1 per rights share together with 56,280,264 free detachable warrants on the basis of one (1) rights share and two (2) free warrants for every three (3) existing shares held. The proceeds from the Renounceable Rights Issue were used in the following manner:

RMCorporate exercise expenses 576,456Group working capital 27,563,676 28,140,132

2. Options, Warrants or Convertible SecuritiesDuring the � nancial year ended 31 December 2006, a total of 56,280,264 free warrants were issued pursuant to the Renounceable Rights Issued implemented by the Company.

3. Sanctions and/or PenaltiesThe Company and its subsidiaries, Directors and management have not been imposed with any sanctions and/or penalties by any regulatory bodies.

4. Non-audit feesThe non-audit fee paid to the external auditor by the Group for the � nancial year ended 31 December 2006 is RM15,000.

5. Variation in resultsThe Company has not released or announced any unaudited results, pro� t estimation, � nancial forecast and projection for the � nancial year ended 31 December 2006.

6. Pro$ t GuaranteeThe Company has not issued any pro� t guarantees in the � nancial year ended 31 December 2006.

7. Material ContractsOther than those disclosed in the � nancial statements, there were no material contracts including contracts relating to any loans entered into by the Company and its subsidiaries involving Directors’ and major shareholders’ interests.

8. Revaluation Policy on Landed PropertiesThe Company does not own any landed properties as at 31 December 2006.

9. Recurrent related party transactions of a revenue or trading natureAs disclosed on page 26.

10. Employee Share Option Scheme The Company had obtained approval from its shareholders at the Annual General Meeting held in 2005 to implement an Employee Share Option Scheme (“ESOS”) for the eligible employees and directors of the Company and its subsidiaries. As at 31 December 2006, the Company had not implemented the ESOS.

11. Continuing Education ProgrammeAs disclosed on page 4.

C O R P O R A T E G O V E R N A N C E S T A T E M E N T

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P7 P10+11 STAYING THE COURSElibapps2.nus.edu.sg/nus_hl/nexnews12006.pdf · FINANCIAL STATEMENTS CHAIRMAN’S ... Vincent Tan Chee Yioun Loh Chen Peng SHARE OPTION SCHEME ... accounting