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Malaysia Today - Your Source of Independent News

Malaysia Today - Your Source of Independent News


Malaysia Airlines' short-term outlook bleak despite new alliance with AirAsia

Posted: 26 Aug 2011 10:33 AM PDT

By Centre for Asia Pacific Aviation

Malaysia Airlines (MAS) reported a heavy loss in 2Q2011 (three months to 30-Jun-2011) as soaring costs, led by fuel, weighed on the result. The 2Q2011 loss is MAS' second-consecutive quarterly loss and the carrier expects to remain in the red for the rest of the year.

MAS reported a net loss of MYR525.8 million (USD177.7 million) in the second quarter, seasonally its weakest. Aggressive capacity deployment, under-performance from its revenue management and sales teams and increasing competition from regional and Gulf-based rivals also hurt the 2Q2011 result. The net result was a slight year-on-year improvement, but the airline's operating loss swelled to MYR412.5 million (USD139 million) from MYR285.6 million (USD95 million) in the same period last year.

The deteriorating operating performance reflects the sharp increase in operating costs, led chiefly by fuel, which surged 41% in the period, and a weaker cargo performance, which pushed the airline deeply into the red. MAS' operating margin for the quarter was -12.0%.

Various initiatives will be undertaken to reverse MAS' woes. Most notably, MAS has announced a tie-up with Malaysian LCC powerhouse AirAsia and its long-haul offshoot AirAsia X, the airline grouping largely responsible for MAS' struggles over the past decade.

MAS said its board "has identified immediate priorities to focus on in the short-term", aimed at stemming losses. "Working with the new executive committee…recovery initiatives will be implemented to turn the company's fortunes around and to start rebuilding cash reserves," which have fallen sharply in 2011. Immediate initiatives will include, among others, more prudent capacity management, implementing new dynamic pricing to improve yields and revenues and a review of products and brand positioning.

Revenue up, but costs neutralise gains
MAS recorded an 8.5% increase in top-line revenue to MYR3,429 million (USD1.17 billion). Revenue gains were, however, neutralised by soaring costs, which increased 11.4% in the period to MYR3,897 million (USD1.31 billion), which pushed the airline deeply into the red for the quarter.

MAS revenue and operating expenses (MYR million) and growth (% change): 2Q2007 to 2Q2011
 
Source: Centre for Asia Pacific Aviation and MAS
MAS net profit (MYR million): 2Q2007-2Q2011
 
Source: Centre for Asia Pacific Aviation and MAS
Passenger revenue increased 9.1% to MYR2,086 million (USD698 million) and revenue from fuel and administration surcharges rose 45.2% to MYR495 million (USD166 million).

Cargo revenue however was much weaker in the period, reflecting the lower year-on-year trade volumes seen in the region, which was skewed by the replenishing of global restocking of inventories in early 1H2010 following the global financial crisis. Total cargo revenue fell 16%, led by a 24% fall in belly and freighter revenue. The cargo segment's fuel surcharge, which increased 6.6% to MYR145 million (USD48.5 million), helped mitigate the sharp fall in cargo revenue.

But spiralling costs significantly outweighed revenue growth. Operating costs increased 11.5% to MYR3,987 million (USD1.31 billion). Fuel, unsurprisingly, led the rise in costs. Fuel costs surged 41% in 2Q to MYR1,550 million (USD519 million), to account for 40% of total operating costs, up from 30% in 2Q2010. The sharp fuel price rise masks what would otherwise have been an impressive cost performance in 2Q2011, with non-fuel operating costs down 2%, reflecting MAS' aggressive and consistent cost control measures.

ASKs increased 10% and RPKs increased 12%, pushing average loads up 1.5ppts to 75.5%. The stronger load factors and other various yield-supportive measures, such as fare increases and fuel surcharges, saw yields increase 1% to 24.2 sen (USD8.16 cents), with RASK up 3% to 18.2 sen (USD6.14 cents).

Strategic shake-up aimed at ending MAS' woes
Since the end of 2Q2011, a major strategic development has taken place as MAS forged earlier this month a tie-up with rival AirAsia, which has moved aggressively into MAS' short-haul, regional, and more recently, its long-haul markets. Khazanah, a national investment vehicle and majority shareholder in MAS, purchased a 10% stake in AirAsia from Tune Air, as part of a cross-equity deal. Khazanah will also purchase a 10% stake in AirAsia X. Tune Air, the largest shareholder in AirAsia and the investment vehicle of CEO Tony Fernandes, acquired a 20% stake in MAS from Khazanah.

See related report: Turning the industry on its head: AirAsia joins Malaysia Airlines

A Joint Collaboration Committee (JCC) was formed on 09-Aug-2011, which will look into key areas for collaboration to realise synergies and cost efforts, MAS says. MAS and AirAsia aim to cooperate in areas such as engineering and ground support, aircraft purchasing, catering and training and cargo services.

The Malaysian government said the agreement would end cut-throat competition between the airline groups, allowing them to grow together and more profitably than would otherwise be the case. Mr Fernandes said the deal allows his airline to focus on growing the business, "as opposed to spending a lot of time on politics and fighting unnecessary battles". The collaboration should also boost yields for both airlines.

Better market segmentation should also be achieved under the deal, with one partner targeting the low-cost, leisure market and the other, the higher-yielding and premium market. Firefly, MAS' LCC subsidiary, also recorded heavy losses in 1H2011 and will be re-structured to focus on the short-haul premium travel space using turboprop equipment. MAS said a longer-term solution for Firefly would be developed by the management team to put the airline on course for sustained profitability.

While Firefly will retain its ATR-72s, the carrier's B737 fleet is expected to be transferred to the new regional, full-service airline, Sapphire. But it remains unclear how MAS, which also has a regional carrier unit in east Malaysia with ATR-72 operator MASwings, will juggle so many brands. Of particular interest will be how the Sapphire unit differs from MAS' existing regional narrowbody services.

MAS, in releasing its 2Q2011 earnings, also said its multi-year re-fleeting programme will be accelerated. As of mid-Aug-2011, the airline has taken delivery this year of five new B737-800s and five new A330-300s. Over the next four months, MAS will take delivery of six more aircraft – two B737-800s, two A330-200Fs and two ATR-72s. Excluding these aircraft, MAS' order book comprises 38 B737-800s, ten A330s, six A380s and two A330-200Fs. The airline said its fleet delivery schedule would be accelerated in the next few years, adding that all required financing activities for 2012 have been completed.

Weak result matched by gloomy outlook
MAS expects a weak second-half due to elevated fuel prices and sovereign debt fears in key markets which will continue to weigh on consumer confidence and economic growth. The airline's forward bookings indicate challenges in the European, US and Japanese markets, with "normal" trends for other regions. The third quarter will be soft owing to the month of Ramadan, when travel is seasonally slow.

In response to the challenging outlook, MAS will moderate its capacity growth in 2H2011. The airline will also review its route network and adjust capacity accordingly. MAS will retire two B747-200Fs, one B747-400 and three B737-400s by Oct-2011.

The airline will also have a heavier focus on yield management, with new revenue systems to be introduced in 2H2011. MAS aims to enhance its yield performance through front-end business class initiatives, implementation of fuel surcharges and step up its yield/revenue management.

A loss in 2H2011 is still expected, though MAS said it would be less severe than 1H2011, due to these initiatives.

MAS' most significant turn in fortunes is likely to come from its tie-up with AirAsia, a deal that effectively neutralises a major competitor and a leading cause of losses in recent years. Under the agreement, MAS also gains two successful and experienced aviation executives on its board, in Tony Fernandes and AirAsia deputy CEO Kamarudin Meranun. This expertise at senior management level should help MAS overhaul its network, alliance and fleet strategies and navigate the flag carrier through some more desperate times.

Rise of strict Islam exposes tensions in Malaysia

Posted: 25 Aug 2011 07:20 PM PDT

Analysts say this emphasis on Islamic practice is superficial. They blame it on the competition for Malay-Muslim voters between the ruling party, the United Malays National Organisation (UMNO), and the opposition Pan-Malaysian Islamic Party (PAS), both of which are trying to position themselves as defenders of Islam.

By Jennifer Pak, BBC News 

Muslim women without headscarves are a common sight on the streets of the Malaysian capital, Kuala Lumpur.

But engaging them in a discussion about the hijab is difficult.

Norhayati Kaprawi is a Malaysian activist whose recent documentary Aku Siapa (Who Am I) deals with the issue of how women in Malaysia should dress. She found some women unwilling to show their faces in her film - not on religious grounds, but becasue they feared reprisals.

This is a damning reflection on Malaysia's Muslim society, says Ms Norhayati.

"It's full of fear. If you don't follow the mainstream you will be lynched."

According to the activist, the pressure to wear the hijab grew after the Iranian revolution in 1979, and it is now the most visible sign of Malaysia's rising Islamic fundmentalism.

Muslims account for over half the population of 28 million people and are mainly ethnic Malays. Malaysia often prides itself on being a moderate Muslim nation, which allows other religions freedom of worship.

And while there are no laws forcing women to wear the hijab, Ms Norhayati says many Muslims feel compelled.

Crime and punishment

Increasingly, there is a greater emphasis on Islamic codes of conduct.

For the first time last year, Malaysian authorities caned women under Sharia law. The three women sentenced were found guilty of having sex outside of marriage.

And a part-time Muslim model was sentenced to the same punishment in 2009 for drinking beer in public. Islamic authorities eventually reduced Kartika Sari Dewi Shukarno's sentence to community service last year after the story made international headlines.

Analysts say this emphasis on Islamic practice is superficial. They blame it on the competition for Malay-Muslim voters between the ruling party, the United Malays National Organisation (UMNO), and the opposition Pan-Malaysian Islamic Party (PAS), both of which are trying to position themselves as defenders of Islam.

The youth wing of the PAS has often lobbied the government to ban Western pop artists from perfoming in Malaysia, deeming them to be un-Islamic.

Since 2008, when elections delivered a record number of seats to the opposition Pakatan Rakyat coalition, of which the PAS is a member, the party has tried to moderate its stance.

Although the PAS has not abandoned the goal of making Malaysia into an Islamic state, PAS Member of Parliament Khalid Samad says non-Muslims have nothing to fear.

"We do not think Islam is all about cutting off hands and stoning adulterers," he says.

"That's a very minute aspect of the Islamic law. What's more important is the question of good governance."

In a move to show it can work with non-Muslims, the PAS is planning to open up membership to them.

"Nobody can say if we come to power, [that] we cannot govern a multi-religious and multi-racial nation," says Mr Khalid.

Cause for concern?

But a resurgence in Islam has many non-Muslims concerned.

Islamic officials in Selangor state entered a Methodist church without a warrant in early August, breaking up a fundraising dinner. They recorded the details of several Muslims who attended the function.

The Islamic authorities have said they acted on a tip-off, but have refused to reveal the nature of the complaint.

Religious officials are wary about Muslims attending church-organised events. There are fears these are attempts to convert Muslims to Christianity - something that is illegal in Malaysia.

"This action sets a dangerous precedent and makes a mockery of the sanctity and inviolability of all religious places in our beloved country," said the Malaysian Consultative Council of Buddhism, Christianity, Hindusim, Sikhism and Taoism in a statement.

Ongoing row

The fear of conversion has already strained relations between Muslims and the Christian minority, who make up around nine per cent of the country's population and are typically ethnic Chinese and Indians.

Over the last two years, churches have been firebombed and Bibles have been seized in an ongoing row between Christians and Muslims over the use of the word 'Allah'.

The religious minority insists that they have been using the term for centuries in the Malay language to refer to the Christian god.

But in 1986, the government banned non-Muslim from using the word 'Allah' in publications. This ban was not usually enforced until recently when the government began to act upon it at the behest of some Muslim groups.

In a move seen as a bid to win Malay-Muslim votes, the government argued that for non-Muslims, calling their gods 'Allah' would be confusing to the Muslim-majority and threaten national security.

As a result, Malay-language Bibles have been impounded by customs officials. Some Muslim activists fear that Christians are using the Bibles to convert Muslims.

Attacks on places of worship came after the High Court in Kuala Lumpur ruled in December 2009 that the word 'Allah' is not exclusive to Islam. The government has appealed against the decision but no hearing date has been set yet.

In the meantime the prime minister's department has made some concessions in recent months and released some 35,000 seized Bibles. The cabinet has also set up a committee for religious leaders from all faiths to resolve the "Allah" issue.

Reverend Dr Thomas Philips is one of the committee members. He says the meetings have been sporadic but he is optimistic they can reach an understanding.

"I'm convinced Malaysia is a moderate Muslim country," he says.

Norhayati Kaprawi agrees, but fears that the mainstream opinion has been silenced.

"People who hold more progressive or alternative views," she says, "don't dare to speak up in public."

 

DNA samples from Saiful’s anus ‘pristine’

Posted: 25 Aug 2011 05:40 PM PDT

There is absolutely no evidence that Saiful's DNA samples had degraded, according to Australian expert

McDonald said the sample – taken from the higher rectum which was predominantly from "Male Y", while another which was predominantly Saiful's – was inconclusive. However, the DNA expert said that all three had no evidence that degradation had occurred and were "pristine DNA".

Teoh El Sen, Free Malaysia Today

The DNA samples extracted from Mohd Saiful Bukhari Azlan's anus, which were supposed to have degraded, appeared to be in "pristine" condition, the High Court here heard today.

"There is absolutely no evidence of degradation… " said Australian consultant molecular geneticist, Dr Brian Leslie McDonald, at the Sodomy II trial.

McDonald agreed with defence counsel Ramkarpal Singh that the DNA test results were "inconsistent with the history (of the case)".

Yesterday, McDonald had testified that the DNA samples – which were extracted from Saiful's anus 56 hours after the alleged sodomy, and later kept in a drawer for 43 hours – would have degraded.

Australian forensic expert Dr David Lawrence Noel Wells, the head of forensic medicine at the Victoria Institute of Medicine, had also testified that the poorly kept samples were unlikely to have returned a positive result.

The defence team claimed the testimony today supports its argument that the evidence was tampered with.

"This is a very important issue. How could we have a new sample when the sample was supposed to have degraded with bacteria? Where did they get the sample from?" Anwar told reporters outside the court.

Earlier, Ramkarpal asked McDonald to give his opinion on the chemist report done on three DNA samples (B7, B8, B9) which were taken from Saiful's higher and lower rectum.

Mere guesswork

McDonald said the sample – taken from the higher rectum which was predominantly from "Male Y", while another which was predominantly Saiful's – was inconclusive.

However, the DNA expert said that all three had no evidence that degradation had occurred and were "pristine DNA".

McDonald also criticised the way government chemist Dr Seah Lay Hong had conducted the tests on the samples.

According to him, Seah did not identify where the swab samples were taken from and had merely labelled them as numbers in her chemist report.

"One is left not knowing – and have to assume – where the samples were swabbed from…" said McDonald.

During the prosecution's case, the DNA samples from Saiful's anus had been identified by chemists as that belonging to one "Male Y", which were matched to samples taken from several items in Anwar's lock-up.

Earlier, McDonald said Seah's conclusions in her chemistry report, which subsequently enabled the prosecution to allege that Anwar's sperm was found in Saiful's anus, were based on mere guesswork.

He said Seah's report was not "scientifically objective".

Yesterday, he said that in sexual assault cases, it was critical to be able identify that a DNA sample is derived from the sperm cells.

In order to conclusively say that a DNA profile comes from the sperm cells, as opposed to other types of cells, a chemist needs to separate sperm cells from the other types of cells by conducting a "differential extraction process".

"This process was not done properly (by Dr Seah)," McDonald told the court when questioned by Ramkarpal.

He said this was evident in her own "guess" that there were still other types of cells present after the separation process.

"If she maintained that the DNA (identified as belonging to Saiful) comes from epithelial cells (non-sperm cells), then she should have done the separation process again," he said.

READ MORE HERE

 

Against the tide

Posted: 25 Aug 2011 04:14 PM PDT

Faced with the menace of the internet, Asia's censors are not yet giving up the ghost.

The unwitting instrument of Mr Najib's epiphany was The Economist. An article in our July 16th issue covered the government's crackdown on a huge demonstration organised by civic groups calling for electoral reform. In the copies of The Economist that reached Malaysians, the article was disfigured by black ink.

By The Economist

TAKING arms against a sea of troubles, many governments in Asia have long resisted the tide of unfiltered news, rumour and comment washing over their citizens via the internet. On August 15th one prime minister, Najib Razak of Malaysia, appeared to admit defeat. "In today's borderless, interconnected world," he said, "censoring newspapers and magazines is increasingly outdated, ineffective and unjustifiable." Noting that the internet in Malaysia has always been uncensored, Mr Najib announced a "review" of print censorship laws. Yet what it comes up with is unlikely to be a free-for-all. Across Asia, governments find it hard to cede their power to control flows of information.

The unwitting instrument of Mr Najib's epiphany was The Economist. An article in our July 16th issue covered the government's crackdown on a huge demonstration organised by civic groups calling for electoral reform. In the copies of The Economist that reached Malaysians, the article was disfigured by black ink. Three passages—concerning the death of a man (from a heart attack), the banning of the protest march and "heavy-handed police tactics"—were censored. However, they could still be read on our website, or indeed on a number of Malaysian news sites and blogs. As Mr Najib noted, the act of censorship created far more of a fuss than the offending passages. Besides being "outdated, ineffective and unjustifiable", the censorship was also very bad public relations.

His general point is plainly true all over the world. Strict controls over "old" media, foreign and domestic, are increasingly anachronistic since ever more citizens have access to the bottomless shallows of the internet. In both Malaysia and Singapore, where mainstream media have been largely servile in their treatment of the powers-that-be, the internet has changed the political landscape. It was one reason why the opposition did better than ever in Malaysia's most recent parliamentary election, in March 2008. In Singapore, in the run-up to May's general election, candidates were for the first time allowed to campaign on social-networking sites; once again, the opposition did better than ever. Opposition politicians in both places also credit online competition with gingering up the mainstream press a bit.

Mr Najib said that, instead of censorship, Malaysia could use "legal means" in the event of defamatory coverage. That for a long time has also been Singapore's strategy. "Right-to-reply" rules oblige foreign publications that circulate in Singapore to carry government rebuttals. Settling contempt-of-court actions and defamation suits from leading politicians is costly. All of this deters critical foreign reporting.

Elsewhere in Asia, some governments still use the trusted old slash-and-blotch methods. The Chinese authorities simply rip out pages with articles they don't like; or, if there are too many of them, they block the issue altogether. India tolerates most of what is written about the country, perhaps believing, as a member of the present cabinet put it when in opposition, that "this is India. You can never be wrong." But officialdom draws the line, stamps the stamp, or confiscates the consignment when it comes to maps showing the India-Pakistan border as it is, rather than as it would be were all of Kashmir under Indian control.

In Sri Lanka, the government never "bans" The Economist. But customs officers spend a hell of a long time enjoying issues with Sri Lankan coverage. In Thailand, again, the government never issues a formal ban. But, in fear of the country's fierce lèse-majesté laws, no distributor will touch a publication carrying coverage that might be construed as remotely critical of the monarchy.

Online distributors, however, are less easy to cow. The logic of monarchism also compels Thailand's government to intervene directly on the internet. According to Freedom Against Censorship Thailand, an NGO, it has blocked hundreds of thousands of web pages. Thailand's efforts to curb unpalatable online material, however, are no more than a picket fence when compared with the great firewall of China. China has more users of the internet than any other country, yet its censors battle the medium, convinced that they can win. The foreign press is the easy part. There are ways around the blockage of websites that the censors do not like. But relatively few people have the will, time or money to bother finding them.

The domestic internet poses more of a challenge, however. Deleted postings on social-networking sites immediately pop up elsewhere; banned internet-search terms morph into bizarre homonyms; small incidents such as hit-and-run road accidents become national scandals. And national scandals, such as the high-speed train crash on July 23rd, news of which the authorities would have liked quietly to bury along with the wreckage, suddenly become enormous political problems.

Hoping to reboot the world

The battle between the Chinese Communist Party and the internet seems fairly evenly matched. When Urumqi, in the western region of Xinjiang, was racked by ethnic violence in 2009, the authorities simply switched the internet off in Xinjiang for ten months. A strange new phenomenon, the internet-café border town, sprang up along the railway line to the east to cater for Xinjiang residents who wanted to get online. China, further alarmed by the alleged role of social networks in the recent riots in Britain, might well counter renewed regional unrest with another local internet shutdown.

But this is hardly an option for China as a whole. Not only might Hong Kong struggle to cope with an influx of more than 450m Chinese internet users needing to check their e-mails; China cannot, in effect, resign from the global economy. Asian governments are stuck with the internet which, worryingly for the dictatorships among them, seems as integral to the future as black blotches on newsprint seem to the past.

 

‘Upholding Malay unity’ … or ‘deconstructing’ a tired cliché?

Posted: 25 Aug 2011 03:42 PM PDT

Specifically, the day is long overdue for all Malaysians to begin to differentiate, fastidiously and consistently, in all contexts — when they render into English the Malay word "bangsa", with its very broad range of meanings and denotations — between "race", on the one hand, and "people", "nation", "stock", "descent" and "kind", to note but a few of its various referents, on the other.

Clive Kessler, The Malaysian Insider 


The Mufti of Perak, Tan Sri Harussani Zakaria, is reported as insisting "that the Umno president must find a way to unite the Malays" ("Perak mufti says Malays must defend race", Syed Mu'az Syed Putra, The Malaysian Insider, 25 August 2011).

"We must defend our race and Najib must find a way to reunite Malays," Harussani is quoted as saying.

On this matter, it is timely to make four points.

First, it is more than time for political actors and commentators in Malaysia to be careful in their use of words, including technical terms.

Specifically, the day is long overdue for all Malaysians to begin to differentiate, fastidiously and consistently, in all contexts — when they render into English the Malay word "bangsa", with its very broad range of meanings and denotations — between "race", on the one hand, and "people", "nation", "stock", "descent" and "kind", to note but a few of its various referents, on the other.

Any inability to recognise the differences between these perhaps related yet quite distinct notions would be a routine cause of failure in the introductory social science courses (including anthropology, sociology and political science) in any internationally reputable university.

It remains an anomaly, and one about whose origins and persistence one may speculate, that — for all its great work in linguistic engineering and technical lexicographic innovation over half a century — the Dewan Bahasa and Pustaka has never focused its attention upon the clarification, in Malay usage, of the semantic overlap and confusion that characterize this one very general, all-purpose term "bangsa".  

Second, why must Malays, the entire Malay people of the peninsula and Malaysia as a whole, be "united"?

That they should be united, the idea that the unity of "the Malays" is a natural condition that has been disrupted and now needs to be restored, is the implicit underlying presupposition of the call recently made by the Tan Sri Harussani, and so often voiced by other leading political and public personalities on the national stage.

Is the call for "the Malays" to be united politically any more reasonable and acceptable, one must ask — and constructive, in the national interest — than a call for all Chinese or Indians or non-Malays generally to be united politically?  

Where does such an approach inescapably lead? That does not bear thinking about. Yet it is a matter that must be recognized and addressed, urgently.

It leads not to the formation of a united Malaysian nation but, headlong, to inter-ethnic antagonism and communalistic Armageddon.

Is that a desirable future, a scenario that is in the interest of either the vast majority of Malays and non-Malays alike?  
Third, why must people speak in these contexts of "the Malays"? Where does the word "the" come from here, and how is its use justified?

To use that word "the" (the so-called "definite article") is to suggest that what follows, whatever it is that this "the" refers to, is a unified and undifferentiated entity.

So its use here simply begs the entire question that has to be carefully considered. The very terms in which the question is posed, using this homogenising "the", presupposes a certain answer.

It smuggles its own conclusion into the posing of question. It "builds in" from the start the notion of Malay unity, as a normal and established fact, as a desirable and supposedly natural state of affairs.  

In this way "Malay unity" is normalised, and any departure from it is, by implication, rendered pathological, an undesirable departure from healthy normality.

Fourth, and most important, why are "the Malays" of Malaysia not united?  This is the situation that so troubles the mufti of Perak and those who think along similar lines.

The historic reason for the present lack of Malay unity is clear. The Malays of Malaysia are now irreversibly divided, as they never were in the past, by the NEP.

Not by current debates about the NEP — whether it is good or bad, whether it should be extended or phased out, whether it should give way to reward on the basis of merit and proven achievement — but by the long accumulating effects of the NEP over the last 40 years.

What the NEP sought to do, and succeeded triumphantly in doing, was to promote a rapid and far-reaching diversification of the Malay people of Malaysia: economically, socially, culturally and intellectually, in their orienting everyday attitudes and personalities.

READ MORE HERE

 

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