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AN
NU
AL
REPO
RT 2
015
ANN
UAL REPO
RT 2015U
TUSAN
MELAYU
(MALAYSIA) B
ERHAD
ANNUAL REPORT
www.u t u s a n g r o u p . c om .my
FRONT COVERBACK COVER
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1Utusan Melayu (Malaysia) Berhad Annual Report 2015
2 Notice of Annual General Meeting
5 Statement Accompanying Notice of Annual General Meeting of the Company
6 Five-Year Group Financial Highlights
10 ProfileoftheBoardofDirectors
15 Corporate Information
16 ManagementandHeadsofDepartments/ Subsidiaries
17 StatementofDirectors’Responsibilityin RelationtotheFinancialStatements
18 AuditCommitteeReport
22 StatementofRiskManagementand Internal Control
24 Statement on Corporate Governance
32 OtherInformationRequiredbyTheListing RequirementsofTheBursaMalaysia SecuritiesBerhad
34 Chairman’sStatement
36 CorporateResponsibilityStatement
40 CorporateCalendar
46 Financial Statements
47 Directors’Report
50 StatementbyDirectors
50 StatutoryDeclaration
51 IndependentAuditors’Report
53 ConsolidatedStatementofComprehensiveIncome
55 ConsolidatedStatementofFinancialPosition
57 ConsolidatedStatementofChangesinEquity
58 ConsolidatedStatementofCashFlows
61 Statement of Comprehensive Income
62 Statement of Financial Position
64 StatementofChangesinEquity
65 StatementofCashFlows
67 Notes to the Financial Statements
160 ListofProperties
163 AnalysisofShareholdings
165 ListofTopThirtyLargestShareholders
l Proxy Form
Contents
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2 Utusan Melayu (Malaysia) Berhad Annual Report 2015
Notice Of Annual General Meeting
NOTICE IS HEREBY GIVEN THATtheForty-EighthAnnualGeneralMeetingofUtusanMelayu(Malaysia)BerhadwillbeheldatDewanBesar,Level1,BangunanKorporatUtusanMelayu(Malaysia)Berhad,No.44,JalanUtusanOffJalanChanSowLin,55200KualaLumpuronWednesday,25May2016at11.00a.m.totransactthefollowingbusinesses:
AGENDA
AS ORDINARY BUSINESS
1. To receive theAudited Financial Statements for the financial year ended31December 2015 togetherwith theReportsoftheDirectorsandAuditorsthereon.
(SeeNote2)
2. Tore-electthefollowingDirectorswhoretirebyrotationinaccordancewithArticle97oftheCompany’sArticlesofAssociationandbeingeligibleofferthemselvesforre-election:i) DatukSeriTengkuSariffuddinTengkuAhmad (Ordinary Resolution 1)ii) MohdYusofAbuOthman
(Ordinary Resolution 2)
3. Tore-electDato’MohamadFatmiCheSallehwhoretiresinaccordancewithArticle102oftheCompany’sArticlesofAssociationandbeingeligible,offershimselfforre-election.
(Ordinary Resolution 3)
4. Tore-appointDatukSeriIsmailYusofwhoretiresinaccordancewithSection129(6)oftheCompaniesAct,1965toholdofficeuntiltheconclusionofthenextAnnualGeneralMeeting.
(Special Resolution 1)
5. ToapprovethepaymentofDirectors’feesofRM30,000perannumforeachoftheDirectorsforthefinancialyearended31December2015
(Ordinary Resolution 4)
6. Tore-appointMessrs.Ernst&YoungasAuditorsoftheCompany,toholdofficeuntiltheconclusionofthenextAnnualGeneralMeeting,ataremunerationtobedeterminedbytheDirectors.
(Ordinary Resolution 5)
AS SPECIAL BUSINESS
Toconsiderand,ifthoughtfit,topasswithorwithoutanymodifications,thefollowingResolutions:
ORDINARY RESOLUTION
7. AuthorityUnderSection132DoftheCompaniesAct,1965ForDirectorstoIssueShares “THATpursuanttoSection132DoftheCompaniesAct,1965,theBoardofDirectorsbeandareherebyauthorized
toissuesharesintheCompanyatanytimeuntiltheconclusionofthenextAnnualGeneralMeetinganduponsuchtermsandconditionsandforsuchpurposesastheBoardofDirectorsmay,intheirabsolutediscretion,deemfitprovidedthattheaggregatenumberofsharestobeissueddoesnotexceedtenpercentum(10%)oftheissuedsharecapitaloftheCompanyforthetimebeing,subjectalwaystotheapprovalofalltherelevantregulatorybodiesbeingobtainedforsuchallotmentandissue.”
(Ordinary Resolution 6)
8. Totransactanyotherordinarybusinessofwhichduenoticeshallhavebeengiven.
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3Utusan Melayu (Malaysia) Berhad Annual Report 2015
Notice Of Annual General Meeting
FURTHER NOTICE IS HEREBY GIVEN THATforthepurposeofdeterminingamemberwhoshallbeentitledtoattendthis48thAnnualGeneralMeeting,theCompanyshallberequestingBursaMalaysiaDepositorySdnBhdinaccordancewithArticle57(e)oftheCompany’sArticlesofAssociationandSection34(1)oftheSecuritiesIndustry(CentralDepositories)Act,1991toissueaGeneralMeetingRecordofDepositorsasat18May2016.OnlyadepositorwhosenameappearsontheRecordofDepositorsasat18May2016shallbeentitledtoattendthesaidmeetingorappointproxiestoattendand/orvoteonhis/herbehalf.
BYORDEROFTHEBOARD
SHIRADANUARLS0009472Company Secretary
KualaLumpur29April2016
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4 Utusan Melayu (Malaysia) Berhad Annual Report 2015
GENERAL NOTES:
1. Appointment of Proxyi) AmemberoftheCompanyentitledtoattendandvoteatthismeetingmayappointaproxy(orinacaseofa
corporationtoappointarepresentative)toattendandvoteinhisstead.AproxyneednotbeamemberoftheCompany.
ii) Amemberof theCompanyshallbeentitled toappointmore thanone (1)proxy toattendandvoteat thesamemeeting.Whereamemberappointsmorethanone(1)proxy,theappointmentshallbeinvalidunlesshespecifiestheproportionofhisholdingstoberepresentedbyeachproxy.
iii) Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororofhisattorneyor,iftheappointorisacorporation,eitherunderthecommonsealorunderthehandofanofficeronbehalfofthecorporationorattorney.
iv) Where amember of the Company is an exempt authorised nominee which holds ordinary shares in theCompanyformultiplebeneficialownersinoneomnibusaccount,theexemptauthorisednomineemayappointmultipleproxiesforeachomnibusaccountitholds.
v) TobevalidtheproxyformdulycompletedmustbedepositedattheRegistrar’sOffice,Unit32-01,Level32,TowerA,VerticalBusinessSuite,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpurduringnormalbusinesshoursfromMondaystoFridays(exceptpublicholidays)notlessthanforty-eight(48)hoursbeforethetimeforholdingtheMeetingoranyadjournmentthereof.
2. Audited Financial Statements for the Financial Year Ended 31 December 2015 ThisAgendaismeantfordiscussiononlyasanapprovalfromshareholdersisnotrequiredpursuanttotheprovision
ofSection169(1)oftheCompaniesAct,1965.Hence,thisAgendaisnotputforwardforvotingbyshareholdersoftheCompany.
3. Payment of Directors’ Fees TheCompany’sArticlesofAssociationprovidesthattheremunerationoftheDirectorsshallfromtimetotimebe
determinedbyanordinaryresolutionoftheCompanyingeneralmeeting.Suchfeescannotbeincreasedexceptpursuant to a resolution passed at the generalmeeting. Therefore, shareholders’ approval is required for thepaymentofDirectors’fees.Shareholders’approvalontheDirectors’feeswasobtainedatthe47thAnnualGeneralMeetingheldon3June2015andthereisnorevisiontothefees.
4. Appointment of Auditors TheBoardat itsmeetingheldon14April2016approved therecommendationby theAuditCommitteeon the
re-appointment ofMessrs. Ernst& Young as Auditors of the Company based on the criteria prescribed underParagraph15.21oftheListingRequirementsoftheBursaMalaysiaSecuritiesBerhad.
5. Statement Accompanying Notice of Annual General Meeting of the Company Additional informationrequiredunderAppendix8AoftheListingRequirementsoftheBursaMalaysiaSecurities
BerhadissetoutintheStatementAccompanyingNoticeofAnnualGeneralMeetingoftheCompany.
Notice Of Annual General Meeting
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5Utusan Melayu (Malaysia) Berhad Annual Report 2015
EXPLANATORY NOTES:
1. Ordinary Resolution 6 - Authority under Section 132D of the Companies Act, 1965 for Directors to Issue Shares
TheproposedOrdinaryResolution6isforthepurposeofgrantingarenewalGeneralMandate(‘GeneralMandate’),ifpassed,willempowertheDirectorstoissueandallotnewsharesintheCompanyuptoanamountnotexceedingintotaltenpercentum(10%)oftheissuedsharecapitaloftheCompanyforsuchpurposesastheDirectorsconsiderwouldbeintheinterestoftheCompany.TheGeneralMandate,unlessrevokedorvariedbytheCompanyingeneralmeeting,willexpireatthenextAnnualGeneralMeeting(‘AGM’)oftheCompany.
TheGeneralMandatewillprovideflexibilitytotheCompanyforanypossiblefundraisingactivities,includingbutnotlimitedtofurtherplacingofshares,forthepurposeoffundingfutureinvestmentproject(s),workingcapitaland/oracquisitions.
AsatthedateofthisNotice,nonewsharesintheCompanywereissuedpursuanttothemandategrantedtotheDirectorsattheForty-SeventhAnnualGeneralMeetingheldon3June2015andwhichwilllapseattheconclusionoftheForty-EighthAnnualGeneralMeeting.
Notice Of Annual General Meeting
Statement Accompanying Notice OfAnnualGeneralMeetingOfTheCompany
DIRECTORSwhoarestandingforre-electionattheForty-EighthAnnualGeneralMeetingoftheCompanyare:
i) DatukSeriTengkuSariffuddinTengkuAhmadii) MohdYusofAbuOthmaniii) Dato’MohamadFatmiCheSallehiv) DatukSeriIsmailYusof
Thedetailsofthefour(4)Directorsstandingforre-electionaresetoutintheirrespectiveprofileswhichappearintheProfileoftheBoardofDirectorsonpages10to13ofthisAnnualReport.ThedetailsoftheirinterestinthesecuritiesoftheCompanyaresetoutintheAnalysisofShareholdingswhichappearsonpage163ofthisAnnualReport.
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6 Utusan Melayu (Malaysia) Berhad Annual Report 2015
Five-Year Group Financial Highlights
GROUP REVENUE RM'000GROUP PROFIT/(LOSS)
BEFORE TAX RM'000BASIC EARNINGS
PER SHARE SEN
NET TANGIBLE ASSETPER SHARE RM
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT RM'000 TOTAL ASSETS RM'000
2.80
‘11
‘12
‘13
‘14
‘15
366,553
345,252
342,432
291,195
248,867
‘11
‘12
‘13
‘14
‘15
2.80
2.68
2.53
1.75
1.56
2.80‘11
‘12
‘13
‘14
‘15
310,534
296,649
279,837
193,921
172,655
2.80‘11
‘12
‘13
‘14
‘15
524,791
550,328
533,145
502,324
469,309
‘11
‘12
‘13
‘14
‘15
16,357
(16,162)
(20,394)
(83,650)
(17,351)
‘11
‘12
‘13
‘14
‘15
15.77
(14.23)
(14.64)
(74.03)
(18.94)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FINANCIAL YEAR ENDED 31 DECEMBERRM'000 2015 2014 2013 2012 2011GroupRevenue 248,867 291,195 342,432 345,252 366,553
Group(Loss)/ProfitBeforeTax (17,351) (83,650) (20,394) (16,162) 16,357
IncomeTax (3,885) 1,798 4,231 444 1,366
Zakat 261 (127) (50) (36) (261)
Group(Loss)/ProfitForTheYear (20,975) (81,979) (16,213) (15,754) 17,462
Attributableto: OwnersOfTheParent (20,975) (81,979) (16,213) (15,754) 17,462
EarningsPerShareAttributableTo
OwnersOfTheParent(sen):BasicAndDiluted,For(Loss)/ProfitForTheYear (18.94) (74.03) (14.64) (14.23) 15.77
GrossDividendPerShare(sen) - - - - -
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7Utusan Melayu (Malaysia) Berhad Annual Report 2015
Five-Year Group Financial Highlights
GROUP REVENUE RM'000GROUP PROFIT/(LOSS)
BEFORE TAX RM'000BASIC EARNINGS
PER SHARE SEN
NET TANGIBLE ASSETPER SHARE RM
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT RM'000 TOTAL ASSETS RM'000
2.80
‘11
‘12
‘13
‘14
‘15
366,553
345,252
342,432
291,195
248,867
‘11
‘12
‘13
‘14
‘15
2.80
2.68
2.53
1.75
1.56
2.80‘11
‘12
‘13
‘14
‘15
310,534
296,649
279,837
193,921
172,655
2.80‘11
‘12
‘13
‘14
‘15
524,791
550,328
533,145
502,324
469,309
‘11
‘12
‘13
‘14
‘15
16,357
(16,162)
(20,394)
(83,650)
(17,351)
‘11
‘12
‘13
‘14
‘15
15.77
(14.23)
(14.64)
(74.03)
(18.94)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBERRM'000 2015 2014 2013 2012 2011Share Capital 110,734 110,734 110,734 110,734 110,734
Reserves 61,921 83,187 169,103 185,915 199,800
EquityAttributableToOwnersOfTheParent 172,655 193,921 279,837 296,649 310,534
TotalEquity 172,655 193,921 279,837 296,649 310,534
Non-CurrentLiabilities 173,565 90,715 101,349 104,886 99,149
CurrentLiabilities 123,089 217,688 151,959 148,793 115,108
TotalLiabilities 296,654 308,403 253,308 253,679 214,257
TOTAL EQUITY AND LIABILITIES 469,309 502,324 533,145 550,328 524,791Non-Current Assets 306,354 340,428 358,724 350,825 325,246
Current Assets 159,350 161,896 174,421 199,503 199,545
Non-CurrentAssetClassifiedAsHeldForSale 3,605 - - - -
TOTAL ASSETS 469,309 502,324 533,145 550,328 524,791NetTangibleAssetPerShare(RM) 1.56 1.75 2.53 2.68 2.80
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Inlinewiththedevelopmentoftechnology,Utusanhastakenpro-activestepsbyintroducingadigitalnewspaper
ore-papersinceNovember2012tomakeitmoreinteractiveandeasytoaccesswhilemaintainingthe
existingprintandonlineversions.
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Boar
d O
f Dir
ecto
rs
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10 Utusan Melayu (Malaysia) Berhad Annual Report 2015
INDEPENDENT Non-Executive Chairman. Joined the Board of Utusan Melayu(Malaysia)Berhadon1December2015.Currently is theChairmanofLandandAssetDevelopmentCommitteeandamemberoftheBoardofUPM,UPMHoldingsSdnBhdandUPMEducation&TrainingSdnBhd.HeservedasPoliticalSecretarytoPrimeMinisterandDeputyPrimeMinister fornine (9)years.GraduatedwithaMastersDegreeinBusinessAdministration(MBA)fromTulaneUniversity,NewOrleans,Louisiana,UnitedStatesofAmericaandBachelorofScience(BSc)Marketing from Southern Illinois University, Carbondale, Illinois, UnitedStatesofAmerica.Doesnothaveanyotherdirectorshipsinotherpubliccompanies.
NON-INDEPENDENT Executive Director. Joined the Board of Utusan Melayu(Malaysia) Berhadon 5 June 2014. JoinedUtusanMelayu (Malaysia) Berhadon20 May 2014 as the Group Managing Director and also holds directorship insubsidiarycompanieswithinUtusanGroupnamelyUtusanKaryaSdnBhd,UtusanMediaSalesSdnBhd,UtusanPublications&DistributorsSdnBhd,UtusanLandSdnBhd,JuasaHoldingsSdnBhd,JobhouseSdnBhdandUtusanStudiosSdnBhd(formerlyknownasUtusanSight&SoundSdnBhd).Hehasextensiveexperienceindevelopmentbankingparticularlywithregardto internationalprojectfinanceandmanagement.He has served as Chief ExecutiveOfficer inMalaysia ExportCredit Insurance Berhad (MECIB) and Export-Import Bank of Malaysia Berhad (EXIMBank).HoldsaBachelorDegreeinAccountingandFinancefromSouthernIllinois University, United States of America and Masters Degree inManagement Science (Operations Research) from St. Louis University,UnitedStatesofAmerica.Doesnothaveanyotherdirectorshipsinotherpubliccompanies.
NON-INDEPENDENT Executive Director. Joined the Board of Utusan Melayu(Malaysia)Berhadon23November2009.HeheldthepostofActingGroupEditor-in-ChiefofUtusan’sGroupon20June2008beforebeingappointedtotheposton1December2008.JoinedUtusanMelayu(Malaysia)Berhadon1April1984andserved in variouscapacitiesprior tohispresentpostas theGroupEditor-in-Chief.HoldsaDegreeinStrategicandSecurityStudies,NationalUniversityofMalaysiaandattendedaJournalismFellowshipProgrammeinSecuritiesStudiesco-organisedbytheUniversityofNewYorkandEastWestCentreinHawaii.HoldsdirectorshipinsubsidiariesofUtusanGroupnamelyUtusanMediaSalesSdnBhdandUtusanKaryaSdnBhd.HeisalsoaMemberoftheBoardofGovernorsofBERNAMAsince16February2009.Doesnothaveanyotherdirectorshipsinotherpubliccompanies.
DATO’ MOHAMAD FATMI CHE SALLEH(Chairman, 59 years of age – Malaysian)
DATUK MOHD NOORDIN ABBAS(Group Managing Director,
56 years of age – Malaysian)
DATUK ABDUL AZIZ ISHAK(Group Editor-in-Chief,
52 years of age – Malaysian)
ProfileOfTheBoardOfDirectors
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11Utusan Melayu (Malaysia) Berhad Annual Report 2015
NON-INDEPENDENT Non-Executive Director. Joined the Board of UtusanMelayu(Malaysia)Berhadon15January2004.AmemberoftheAuditCommitteeandRemunerationCommitteeof theBoard.GraduatedwithaBachelorofArts(Honours), University of Malaya. Held several posts in the government sectorfrom 1967 to 1991. Currently amember of the Board of Trustees andis the Executive Vice-Chairman of the Albukhary Foundation. Currentdirectorships of public companies include South Malaysia IndustriesBerhad,MINHO(M)BerhadandBCBBerhad.
INDEPENDENT Non-Executive Director. Joined the Board of Utusan Melayu(Malaysia)Berhadon1March2012.ChairmanoftheInvestmentCommitteeanda member of the Audit Committee and Nomination Committee of the Board.GraduatedwithaBachelorofArts(Honours)inEconomicsfromUniversityofMalayain 1972. Obtained Masters Degree in International Economics Relations fromInternationalInstituteofPublicAdministration,FranceandMastersinInternationalEconomicsandFinancefromUniversityofParisI,Pantheon-Sorbonne,Francein1982andsubsequentlyearnedPhD(EconomicScience)inInternationalEconomicsandInternationalFinancefromUniversityofParisI,Pantheon-Sorbonne,Francein1986.Sheheldseveralpostsinthegovernmentsectorfrom1972toSeptember1988 and joined Esso Productions Malaysia Inc. from October 1988 to 1990.ShethenassumedthepositionofManagingDirectorwithaconsultingfirmthatprovidesfinancialandadvisorybeforeherappointmentasChiefRepresentativeofCreditLyonnaisBank,Malaysiafrom1991to1998.NorraesahwasalsoChairmanof Bank Kerjasama Rakyat Malaysia from 2000 to 2003. She is currently theExecutiveChairmanofMyE.G.ServicesBerhad.SheisalsoExecutiveDirectorofMalaysianGenomicsResourceCentreBerhad,amemberoftheBoardofAdventaBerhad,amemberoftheBoardofTrusteeoftheWorldIslamicEconomicForumFoundation(‘WIEF’),ChairmanoftheWIEFBusinesswomenNetworkandservesasamemberoftheWIEFInternationalAdvisoryPanel.
INDEPENDENT Non-Executive Director. Joined the Board of Utusan Melayu(Malaysia) Berhad on 23 November 2009. Amember of the Audit Committee,Nomination Committee and Remuneration Committee of the Board. Holds aDiploma in Mass Communications from MARA University of Technology andattendedtheFellowshipProgrammeattheUniversityofSeoul,Korea.HewasajournalistattheNewStraitsTimesPress(M)Berhadfrom1987till1997.Servesin the government services as the Press Secretary to the Prime Minister ofMalaysiafrom1997tillnow.HeisalsotheMediaDirectorofthePrimeMinister’sOffice. Does not have any other directorships in other publiccompanies.
DATUK SERI ISMAIL YUSOF(72 years of age – Malaysian)
DATO’ DR. NORRAESAH MOHAMAD (68 years of age – Malaysian)
DATUK SERI TENGKU SARIFFUDDIN TENGKU AHMAD
(53 years of age – Malaysian
ProfileOfTheBoardOfDirectors
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12 Utusan Melayu (Malaysia) Berhad Annual Report 2015
INDEPENDENT Non-Executive Director. Joined the Board of Utusan Melayu(Malaysia) Berhadon16 January 2014.He is aCharteredAccountant from theInstituteofCharteredAccountants inEnglandandWalesandamemberof theMalaysianInstituteofAccountants.ChairmanoftheAuditCommitteeandamemberoftheRemunerationCommitteeandInvestmentCommitteeoftheBoard.Hebeganhiscareerin1981asaProjectAccountantwithPernas-SimeDarbyHoldingsSdnBhd.Heldseveralveryseniorpostsinnumerouscompanies, includingSelangorState-owned andMalaysian Federal Government-owned companies, in varioussectorsfrom1982to2001;includingasGroupFinancialControllerinKumpulanPerangsangSelangorBhd,ChiefExecutiveOfficerinMalaysianKuwaitiInvestmentCoSdnBhd,SBDevelopmentSdnBhd,TabungAmanahSahamSelangorBhdandasVicePresident–RevenueDevelopmentinMIDFSismaSecuritiesSdnBhd;aswellasinseveralprivatelyownedcompanies.HebecamethefirstChiefExecutiveOfficerofBadanPegawasPemegangSahamMinoritiBerhad(MSWG)from2001to2004andservedasaChiefOperatingOfficerinMKLandHoldingsBhdfrom2008to2010.HeiscurrentlytheChairmanofMedicalFlexiblePackagingSdnBhd,aprivatelyownedcompanyinwhichheisalsoaminorityshareholder.HeisalsoanindependentconsultantofferingprofessionalservicesinCorporateStartupsandCorporateChangeManagement.Doesnothaveanyotherdirectorshipsinotherpubliccompanies.
MOHD YUSOF ABU OTHMAN (64 years of age – Malaysian)
INDEPENDENT Non-Executive Director. Joined the Board of Utusan Melayu(Malaysia)Berhadon25March2015.Amemberof theNominationCommitteeandRemunerationCommitteeoftheBoard.GraduatedwithaBachelorofSciencein Business Administration and minoring in Management Information System(Computer Science) fromUniversity ofWisconsin – Steven Point, United Statesof America in 1989. He was the Chairman of the National Film DevelopmentCorporationMalaysia (FINAS) in 2011 and was a commissionmember of theMalaysianCommunicationsandMultimediaCommissionin2009.HeiscurrentlytheManagingDirectorofRafflesiaCorporateHoldingsSdnBhd,whichhasachainofrestaurantsinMalaysiaandRaffCommSdnBhd,aninformationtechnologycompanyandonlineserviceprovider.Doesnothaveanyotherdirectorshipsinotherpubliccompanies.
DATUK MD AFENDI HAMDAN(54 years of age – Malaysian)
ProfileOfTheBoardOfDirectors
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13Utusan Melayu (Malaysia) Berhad Annual Report 2015
APPOINTED as the Company Secretary of Utusan Melayu (Malaysia) Berhadon9December2013. He isalso theSeniorManager for theCompany’sLegaldepartment.HeisaLicensedCompanySecretaryandanAffiliateofTheMalaysianInstitute of Chartered Secretaries and Administrators (MAICSA). He graduatedwitha LLB. (Hons) fromWolverhamptonPolytechnic in1989andwas called totheMalaysianBar in January1992.HehasalsoanMBA in IslamicBankingandFinance from International Islamic University Malaysia. He began his career intheJudicialandLegalServiceasaMagistrateon2January1992.Hewasalegaladvisorandalso involved incorporatefinanceandsecretarial inseveralpubliclistedcompaniessuchasFaberGroupBerhad,DRBHicomBerhadandLandmarksBerhad.Intotalhehasover20yearsofexperienceinthecorporatesector.
SHIRAD ANUAR(Company Secretary,
51 years of age – Malaysian)
ProfileOfTheBoardOfDirectors
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14 Utusan Melayu (Malaysia) Berhad Annual Report 2015
i) Family Relationship NoneoftheDirectorshaveanyfamilyrelationshipwitheachotherand/ormajorshareholdersoftheCompany.
ii) ConflictofInterest NoneoftheDirectorshaveanypersonalinterestinanybusinessarrangementwiththeCompany.
iii) ListofConvictionsforOffences NoneoftheDirectorshavebeenconvictedofanyoffences(otherthantrafficoffences)withinthepastten(10)years.
iv) Attendance of Directors at Board Meetings Therewereseven(7)BoardMeetingsheldduringthefinancialyearended31December2015.Detailsofattendance
oftheDirectorsatBoardMeetingsareasfollows:
DIRECTOR ATTENDANCEDatukMohdNoordinAbbas 6/7
DatukAbdulAzizIshak 6/7
DatukSeriIsmailYusof 6/7
DatukSeriTengkuSariffuddinTengkuAhmad 5/7
Dato’Dr.NorraesahMohamad 4/7
MohdYusofAbuOthman 7/7
DatukMdAfendiHamdan(Appointed w.e.f 25 March 2015)
5/6
Dato’MohamadFatmiCheSalleh(Appointed w.e.f 1 December 2015)
1/1
TanSriHajiHuseinAhmad(Resigned w.e.f 11 March 2015) 0/1
v) Securities Holdings in the Company and its Subsidiaries TheDirectors’shareholdings,etcaredisclosedonpage163ofthisAnnualReport.
OtherInformationOfDirectors
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15Utusan Melayu (Malaysia) Berhad Annual Report 2015
Corporate Information
BOARD OF DIRECTORSDATO’ MOHAMAD FATMI CHE SALLEHIndependent Non-Executive Chairman
DATUK MOHD NOORDIN ABBASGroup Managing Director
DATUK ABDUL AZIZ ISHAKGroup Editor-in-Chief
DATUK SERI ISMAIL YUSOFNon-Independent Non-Executive Director
DATUK SERI TENGKU SARIFFUDDIN TENGKU AHMADIndependent Non-Executive Director
DATO’ DR. NORRAESAH MOHAMADIndependent Non-Executive Director
DATUK MD AFENDI HAMDANIndependent Non-Executive Director
MOHD YUSOF ABU OTHMANIndependent Non-Executive Director
AUDIT COMMITTEEMOHD YUSOF ABU OTHMAN(Chairman)DATUK SERI ISMAIL YUSOFDATUK SERI TENGKU SARIFFUDDIN TENGKU AHMADDATO’ DR. NORRAESAH MOHAMAD
REMUNERATION COMMITTEEDATUK SERI ISMAIL YUSOFMOHD YUSOF ABU OTHMANDATUK SERI TENGKU SARIFFUDDIN TENGKU AHMAD(Appointed w.e.f 30 November 2015)DATUK MD AFENDI HAMDAN(Appointed w.e.f 30 November 2015)
NOMINATION COMMITTEEDATUK SERI TENGKU SARIFFUDDIN TENGKU AHMADDATO’ DR. NORRAESAH MOHAMADDATUK MD AFENDI HAMDAN(Appointed w.e.f 30 November 2015)
INVESTMENT COMMITTEEDATO’ DR. NORRAESAH MOHAMAD(Chairman)DATUK MOHD NOORDIN ABBASMOHD YUSOF ABU OTHMANW. NOR ASMAH W. ISMAILAHMAD RAZIF MOHAMED
COMPANY SECRETARYSHIRAD ANUAR
REGISTERED OFFICENo.44,JalanUtusanOffJalanChanSowLin55200KualaLumpurTel :03-92322600Fax :03-92210691Website :www.utusangroup.com.my
FOREIGN REPRESENTATIVE OFFICETheBellezaPermataHijau25-vs-6(VersaillesResidence)JalanArteri,PermataHijau12210JakartaSelatanJakarta,IndonesiaTel/Fax :021-25675848
SHARE REGISTRARTricorInvestor&IssuingHouseServicesSdnBhdUnit32-01,Aras32,TowerAVerticalBusinessSuiteAvenue3,BangsarSouthNo.8,JalanKerinchi59200KualaLumpurTel :03-27839299Fax :03-27839222
AUDITORSErnst&YoungLevel23A,MenaraMileniumJalanDamanlelaPusatBandarDamansaraDamansaraHeights50490KualaLumpur
PRINCIPAL BANKERSMalayanBankingBerhadBankMuamalatMalaysiaBerhadAffinIslamicBankBerhad
STOCK EXCHANGE LISTINGMainBoardoftheBursaMalaysiaSecuritiesBerhadStockName :UTUSANStockCode :5754ListingDate :16August1994
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16 Utusan Melayu (Malaysia) Berhad Annual Report 2015
ManagementAndHeadsOfDepartments
DATUK MOHD NOORDIN ABBASGroup Managing Director
DATUK ABDUL AZIZ ISHAKGroup Editor-In-Chief
DATUK OTHMAN MOHAMADDeputy Group Editor-In-Chief
W. NOR ASMAH W. ISMAILChief Financial Officer
MOHD NAZLAN OSMANGeneral Manager, Human Resource
ROSMAN ZULKIFLIGeneral Manager, Marketing/Circulation
AHMAD KHAIRUMUZAMIL ABD RAHMANGeneral Manager, Special Projectsat Group Managing Director’s Office
AZLAN NAIM ABDULLAHGeneral Manager at Group Managing Director’s Office
AHMAD RAZIF MOHAMEDGeneral Manager, Corporate Services & Risk Management
JAMAL AHMED ALI AHMADGeneral Manager, Corporate Communications
SHIRAD ANUARSenior Manager, Legal/Company Secretary
FARIDAH HASHIMSenior Manager, Internal Audit & Group Compliance
NORIDZAN KAMALSenior Manager, Information Centre
ZULKIFLI BASHARUDDINSenior Manager, Property Services
FAISAL MOKHTARSenior Manager, Procurement & Administration
FAROUQ AFFANDI MAMATSenior Manager, Production
SITI ROHAYA SYED HASSANActing Head, Information Technology
AINOL AMRIZ ISMAILManager, Editorial Department
ABDUL KADIR BACHOKPhoto Editor
MOHAMAD RIZAL MOHAMED NORHead, Graphic Unit
HeadsofSubsidiaries
DATO’ MOHD ZAMRI SULONGChief Executive OfficerUtusan Airtime Sdn Bhd
AHMAD RAZIF MOHAMEDDirectorJuasa Holdings Sdn Bhd
MOHD YAZID AHMADChief Executive Officer / Executive DirectorUtusan Media Sales Sdn Bhd / Karya Outdoor Sdn Bhd
ROZITA YUSOFFExecutive DirectorUtusan Publications & Distributors Sdn Bhd
SOBRI AHMADExecutive DirectorJobHouse Sdn Bhd
ZULKIFLI BASHARUDDINChief Executive OfficerUtusan Land Sdn Bhd
ARFFIN NORDINExecutive DirectorUtusan Karya Sdn Bhd
AZLAN NAIM ABDULLAHDirectorUtusan Studios Sdn Bhd(formerly known as Utusan Sight & Sound Sdn Bhd)
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17Utusan Melayu (Malaysia) Berhad Annual Report 2015
StatementOfDirectors’ResponsibilityInRelationtotheFinancialStatements
THISstatementispreparedasrequiredbytheListingRequirementsoftheBursaMalaysiaSecuritiesBerhad.
ThedirectorsarerequiredtopreparefinancialstatementswhichgiveatrueandfairviewofthestateofaffairsoftheGroupandtheCompanyasattheendofeachfinancialyearandoftheirresultsandtheircashflowsforthatyearthenended.
Thedirectorsconsiderthatinpreparingthefinancialstatements:
l theGroupandtheCompanyhaveusedappropriateaccountingpoliciesandareconsistentlyapplied;
l reasonableandprudentjudgementsandestimatesweremade;and
l allapplicableapprovedaccountingstandardsinMalaysiahavebeenfollowed.
ThedirectorsareresponsibleforensuringthattheCompanymaintainsaccountingrecordsthatdisclosewithreasonableaccuracy the financial positionof theGroupand theCompany, andwhich enable them to ensure that the financialstatementscomplywiththeCompaniesAct,1965.
ThedirectorshavegeneralresponsibilitiesfortakingsuchstepsthatarereasonablyavailabletothemtosafeguardtheassetsoftheGroup,andtopreventanddetectfraudandotherirregularities.
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18 Utusan Melayu (Malaysia) Berhad Annual Report 2015
AuditComitteeReport
1. MEMBERSHIP
The Audit Committee comprises three (3) Independent Non-Executive Directors and one (1) Non-Independent Non-ExecutiveDirectorasfollows:
MOHD YUSOF ABU OTHMAN – CHAIRMAN Independent Non-Executive Director (Appointed as Chairman w.e.f 7 April 2016)
DATUk SERI ISMAIL YUSOF Non-Independent Non-Executive Director
DATUk SERI TENGkU SARIFFUDDIN TENGkU AHMAD Independent Non-Executive Director
DATO’ DR. NORRAESAH MOHAMAD Independent Non-Executive Director (Resigned as Chairman w.e.f 7 April 2016)
2. MEETINGS AND ATTENDANCE
A total of seven (7)meetingswereheldduring the financial year ended31December2015. Thedetails of theattendanceofeachCommitteememberareasfollows:
MEMBERS ATTENDANCEDato’Dr.NorraesahMohamad 6/7
DatukSeriIsmailYusof 6/7
DatukSeriTengkuSariffuddinTengkuAhmad 6/7
MohdYusofAbuOthman 7/7
3. COMPOSITION AND TERMS OF REFERENCE
3.1 Composition Themembersof theCommitteeshallbeappointedby theBoardofDirectorsofUtusanMelayu (Malaysia)
Berhadfromamongstitsdirectorswhichfulfillsthefollowingrequirements:a. The Committee shall comprise not less than three (3) members, all of whom shall be non-executive
directors.ThemajorityoftheCommitteemembersshallbeIndependentDirectors.b. Atleastone(1)memberoftheCommittee:
i. mustbeamemberoftheMIA;orii. ifheisnotamemberoftheMIA,hemusthaveatleastthree(3)yearsworkingexperienceand:
l hemusthavepassedtheexaminationsspecifiedinPart1oftheFirstScheduleoftheAccountantsAct,1967;or
l hemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIoftheFirstScheduleoftheAccountantsAct,1967.
iii. fulfillssuchotherrequirementsasprescribedorapprovedbyBursaMalaysiaSecuritiesBerhad.c. ThemembersshallelectaChairmanfromamongstthemwhomshallbeanindependentdirector.
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19Utusan Melayu (Malaysia) Berhad Annual Report 2015
AuditComitteeReport
3.2 Procedure Of Meetingsa. Meetingsshallbeheldnotlessthanfour(4)timesayear.b. Aquorumshallbeatleasttwo(2)membersandthemajoritypresentmustbeindependentdirectors.c. TheChiefFinancialOfficerandtheheadofGroupInternalAuditshallnormallyattendthemeetingsto
assistindeliberationandresolutionofmattersraised.d. At least twice a year, the Committee shall meet with the external auditors without the presence of
Management.e. TheCompanySecretaryshallbeappointedastheSecretaryoftheCommittee.
3.3 Rights TheCommitteeisauthorisedbytheBoardofDirectorstohavethefollowingrights:
a. authoritytoinvestigateanyactivitywithinitstermsofreferenceandtheresourcestodoso.b. havefullandunrestrictedaccesstoanyinformationanddocumentspertainingtotheGroup.c. havedirectcommunicationchannelswiththeexternalandinternalauditors.d. obtainindependentprofessionaladviceandtosecuretheattendanceofoutsiderswithrelevantexperience
andexpertiseasitconsidersnecessary.e. convenemeetingswith theexternaland the internalauditorswithout theattendanceofManagement
wheneverdeemednecessary.
3.4 Responsibilities and Duties ThefollowingisasummaryofthemainresponsibilitiesanddutiesoftheCommitteeandthesamewouldbe
reviewedandreportedtotheBoard:a ExternalAudit
l todiscusstheauditplanandscopewhilstevaluatingtheGroup’ssystemofriskmanagementandinternalcontrolswiththeexternalauditors.
l toreviewtheauditreportsandtodiscussanyissuesarisingfromthestatutoryaudits.l toassesstheperformanceof theexternalauditorsandmakerecommendationsto theBoardon
theirappointmentandremoval.b. FinancialReporting
l toensurethatthefinancialreportpresentsatrueandfairviewoftheGroup’sfinancialpositionandperformanceincompliancewithregulatoryrequirements.
l toreviewthequarterlyresultsandyear-endfinancialstatements,beforesubmissiontotheBoard,focusingparticularlyon:- changesinorimplementationofnewaccountingpoliciesandpractices;- significantormaterialadjustmentswithfinancialimpactarisingfromtheaudit;- significantunusualeventsorexceptionalactivities;and- compliancewithapprovedaccountingstandardsandotherlegalandregulatoryrequirements.
c. InternalAuditl toreviewandapprovetheGroupInternalAudit(‘GIA’)Charter.l toreviewtheadequacyofthescope,functions,competencyandresourcesoftheGIA,andthatithas
thenecessaryauthoritytocarryoutitswork.l toreviewtheinternalauditplanandresultsoftheinternalauditprocesstoensurethatappropriate
andadequateremedialactionsaretakenbythemanagementonsignificantlapsesincontrolsandproceduresthatareidentified.
l toapprovetheappointment,replacementanddismissaloftheheadoftheGIA.d. RelatedPartyTransactions
l toreviewanyrelatedpartytransactionsandconflictofinterestssituationthatmayarisewithintheCompanyorGroupandanyothermajortransactionsoutsidethenormalcourseofbusinessoftheCompanyandGroup.
e. OtherMattersl to consider suchothermattersas theCommitteeconsidersappropriateorasauthorisedby the
Board.
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20 Utusan Melayu (Malaysia) Berhad Annual Report 2015
AuditComitteeReport
4. SUMMARY OF ACTIVITIES OF THE COMMITTEE ThefollowingactivitieswereperformedbytheAuditCommitteeduringthefinancialyearended31December2015:
4.1 External Audita. Reviewedwiththeexternalauditors:
l theirauditplan,strategyandscopeofthestatutoryauditsoftheGroupaccountsfortheyear;andl theresultandissuesarisingfromtheirauditoftheyear-endfinancialstatementsandtheirresolutions
ofsuchissueshighlightedintheirreporttotheCommittee.b. Reviewedtheperformanceandindependenceoftheexternalauditorsandmaderecommendationsto
theBoardontheirre-appointmentandremuneration.
4.2 Internal Audita. ReviewedwiththeGroupInternalAudit(‘GIA’)theannualauditplantoensurethescopeandcoverage
overtheactivitiesoftheGroupisadequateandcomprehensiveandtoensuretheprincipalriskareasareadequatelyidentifiedandcoveredintheplan.
b. Reviewedtheeffectivenessoftheauditprocessandresourcerequirementsfortheyear.c. Reviewed theGIA reports whichwere tabled during the year, the audit recommendationsmade and
Management’s response to these recommendations.Where appropriate, theCommittee has directedManagementtorectifyandimprovecontrolproceduresandworkflowprocessesbasedontheinternalauditors’recommendationsandsuggestionsforimprovement.
d. Monitoredthecorrectiveactionstakenontheoutstandingauditissuestoensurethatallthekeyrisksandcontrollapseshavebeenaddressed.
4.3 Financial Reportinga. ReviewedthequarterlyresultsandtheauditedfinancialstatementsoftheGroupwiththeChiefFinancial
OfficerandtheexternalauditorsbeforerecommendingtotheBoardforitsapprovalanditsannouncement.AnysignificantissuesresultingfromtheauditofthefinancialstatementsbytheexternalauditorswerenotedanddeliberatedbytheCommittee;and
b. TheCommittee,uponconclusionofeachmeeting,recommendedtotheManagementoftheGrouptoimproveontheinternalcontrols,proceduresandsystemoftheGroupwheredeemedappropriate.
5. INTERNAL AUDIT FUNCTION
Thein-houseGroupInternalAudit(‘GIA’)providesindependentandobjectiveassessmentontheadequacy,integrityandeffectivenessofthesystemofinternalcontrols,riskmanagementandgovernanceprocessesthroughouttheGroup.Thepurpose,authorityandresponsibilityoftheGIAarereflectedintheGIA’sCharter.GIAhasatotalof9staffasat31December2015.Thetotaloperationcostsofthedepartmentfor2015wasRM922,149(2014:RM951,969)comprisingmainlysalaries,staffwelfareandtravellingcosts.GIAreportsdirectlytotheAuditCommittee.
TheGIAadoptsarisk-basedauditapproachinformulatingtheAnnualAuditPlan.TheGIAalsomaintainsaflexibleauditapproachandadynamicauditplanthatappropriatelyaddressescurrentissuesandrisksaswellaspotentialriskexposuresoverkeybusinessprocesseswithintheGroup.Allhighriskactivitiesineachauditableunitareauditedannually.
During theyear, theGIAhascarriedoutauditson theGroup’soperatingunitsbasedon theAnnualAuditPlanwhichhadbeenapprovedbytheAuditCommitteeaswellasspecialad-hocandinvestigativereviews.TheGIAalsoconductedinformationsystemauditsontheGroup’skeycomputersystems.
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21Utusan Melayu (Malaysia) Berhad Annual Report 2015
AuditComitteeReport
Inperformingsuchreviews,recommendationsforimprovementandenhancementstotheexistingsystemofinternalcontrolsandworkprocessesaremade.TheresultingreportsofauditsundertakenwerepresentedtotheAuditCommitteeandforwardedto theManagement’sconcernedfor theirattentionandnecessarycorrectiveactions.TheManagementisresponsibleforensuringthatcorrectiveactionsonreportedweaknessesasrecommendedaretakenwithintherequiredtimeframe.
TheGIAcontinuouslymonitorstheimplementationofauditrecommendationsthroughperiodicfollowupreviewsandworkscloselywiththeexternalauditorstoresolveanycontrolissuesandassistsinensuringthatappropriateManagementactionsaretaken.TheGIAworkscollaborativelywiththeCorporateServicesandRiskManagementDepartmenttoreviewandassesstheriskmanagementprocessesthroughouttheGroupinrespectoftheiradequacyandeffectiveness.
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22 Utusan Melayu (Malaysia) Berhad Annual Report 2015
StatementOfRiskManagementAndInternalControl
BOARD’S RESPONSIBILITIES
TheBoardofDirectors(‘Board’)acknowledgesitsoverallresponsibilityfortheGroup’sriskmanagementandsystemofinternalcontrolandforreviewingitsadequacyandintegrityinordertosafeguardtheGroup’sassetsandshareholders’investments.
Theriskmanagementandsystemofinternalcontrolcomprisesriskmanagement,financial,operationalandcompliancecontrols.SuchasystemisdesignedtomanageratherthaneliminatetheriskoffailuretoachievethebusinessobjectivesoftheGroup.Itcanthereforeonlyprovidereasonableandnotabsoluteassuranceagainstmaterialmisstatementorloss.
THE FRAMEWORK OF THE GROUP’S INTERNAL CONTROL SYSTEM
l The Board oversees the conduct of the Group’s business and review the adequacy and integrity of the riskmanagementandinternalcontrolsystemandcompliancetoapplicablelawandregulations.TheAuditCommittee(‘AC’)andtheBoardalsoreviewtheoperationalandfinancialperformanceoftheGroupatAuditCommitteeandBoardmeetings.
l The GroupManaging Director provides the Board with quarterly financial information. These include amongstothers,themonitoringofresultsagainstbudgetwithmajorvariancesbeingfollowedupandmanagementactiontaken,wherenecessary.BusinessplanandbudgetarereviewedandapprovedbytheBoardonanannualbasis.Theseprocessesarealsopracticedateachsubsidiarylevel.
l TheAConbehalfof theBoard regularly reviews theeffectivenessof the riskmanagementand internal controlsystemreportedbytheGroupInternalAuditDepartment(‘GIAD’)andtheexternalauditors.TheACalsoreviewstheadequacyofscope,functionsandresourcesofGIAD.
l TheGroupManagingDirectorsupportedbyheadsofbusiness functions (‘TheManagement’)areentrustedwiththeresponsibilityofassistingtheBoardinoverseeingtheriskmanagementpracticesthroughouttheGroup.TheManagementreviewsandrecommendsoverallriskmanagementpoliciesandprocessesandmonitorssignificantrisksthroughreviewofrisksprofileanditsmitigationplans.
l TheInvestmentCommitteecomprisingtwo(2)Non-ExecutiveDirectors,theGroupManagingDirector,ChiefFinancialOfficerandGeneralManager,CorporateServices&RiskManagement, isprimarily responsible forassessingtheviabilityofanyinvestmentproposalfortheGroupbeforerecommendingthesamefortheBoard’sapproval.
l PoliciesandproceduresofkeybusinessprocessesaredocumentedintheOperatingManualsandimplementedthroughout theGroup. These policies and procedures are subject to regular reviews, updates and continuousimprovements.
l Clear limitsof authority are imposed in respectofday-to-dayoperationswhich sets the limit foroperatingandcapitalexpenditureforeachlevelofManagementwithintheGroup.
INTERNAL AUDIT FUNCTION
The Group has an Internal Audit Department which is independent of the activities or operations of the Group.GIAD conducts independent risk-based audits basedon an approved Internal Audit Plan to ensure that the systemof internalcontrols iseffectiveandoperatingsatisfactorily.GIADreportsdirectly toACwheresignificantfindingsandrecommendationsforimprovementarehighlightedonquarterlybasis.GIAD’spracticesandconductaregovernedbytheInternalAuditCharter.
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23Utusan Melayu (Malaysia) Berhad Annual Report 2015
StatementOfRiskManagementAndInternalControl
RISK MANAGEMENT FRAMEWORK
TheBoardrecognisesthatoneofthekeyelementsofasoundinternalcontrolisthemanagementofrisksassociatedwiththeGroup’sbusiness.TheGrouphasdevelopedariskmanagementframeworktoidentifythekeyrisksfacingtheGroup,thepotentialimpactandlikelihoodofthoserisksoccurring,thecontroleffectivenessandtheactionplansbeingtakentomanagetheriskstothedesiredlevel.
TheCorporateServices&RiskManagementDepartment(‘CSRMD’)hasbeenentrustedtoassisttheBoardinmanagingtheriskswithintheGroup.TheCSRMDreportsdirectlytotheGroupManagingDirectoranditsmajorrolespertainingtoriskmanagementareto:
l beacentralplatform,wherebyrisksthroughouttheGroupcanbeviewedonanenterprise-widebasis;
l standardisetheriskmeasurementmethodologyinordertoenablecomparability;
l actasacentralresourceforevaluatingriskstoassistmanagement,businessandoperatingunits;
l recommendmeanstocontrolorminimiserisks;and
l facilitateeachdepartmentandsubsidiarywithintheGroupintheprocessofidentifying,evaluating,managingandmonitoringrisks.
TheManagementconductsreviewofthestatusofriskmanagementfortheGrouponaperiodicalbasis.
TheBoardapprovedtheGroup’sRiskManagementPolicy.ThepolicyoutlinestheroleoftheBoard,themanagementandthestaffoftheGrouppertainingtoriskmanagement.
Basedontheriskmanagementandinternalcontrolsystemstatedabove,we,DatukMohdNoordinAbbasandDatukAbdulAzizIshakbeingtwooftheDirectorsofUtusanMelayu(Malaysia)Berhad(‘UMMB’)andW.NorAsmahW.Ismail,beingtheofficerprimarilyresponsibleforthefinancialmanagementofUMMBdoherebyassurethattheGroup’sriskmanagementandinternalcontrolsystemisoperatingadequatelyandeffectivelyinallmaterialaspects.
StatementmadeinaccordancewiththeresolutionoftheBoardofDirectorsdated14April2016.
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24 Utusan Melayu (Malaysia) Berhad Annual Report 2015
INTRODUCTION
The Board of Directors (‘the Board’) of UtusanMelayu (Malaysia) Berhad (‘Utusan’ or ‘the Company’) recognises theimportanceofadoptinghighstandardsofcorporategovernanceinordertoprotectshareholders’interestandtoenhanceshareholders’value.Inthiscontext,theBoardstrivestoensurethattherelevantprinciplesandrecommendationsoftheMalaysianCodeonCorporateGovernance2012(‘theCode’)areappliedthroughouttheCompanyanditssubsidiaries(‘theGroup’).
TheBoard ispleasedtopresentbelow,astatementontheapplicationof theprinciplesandtheextent towhichtheCompanyhascompliedwiththerecommendationsintheCodethroughoutthefinancialyearended31December2015(‘FY2015’).
1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES
1.1. Functions of the Board and Management The Board is responsible for corporate governance, strategic direction, establishing corporate goals and
monitoring theachievementsof thesegoals inorder to foster long termsuccessof theGroup.TheBoarddelegatestheresponsibilityofimplementingtheGroup’sstrategies,businessplans,policiesanddecisionstotheManagementwhichisledbytheGroupManagingDirector(‘GMD’).
1.2. Roles and Responsibilities of the Board TheBoardhasfullcontroloverthebusinessesandaffairsoftheCompanyandtheGroup.TheBoardassumes
thefollowingresponsibilities:l formulatingthebusinessdirectionandobjectivesoftheGroup;l reviewing,adoptingandapprovingtheGroup’sannualbudgets,strategicplans,keyoperationalinitiatives,
majorinvestmentsandfundingdecision;l overseeingtheconductofbusinessoftheGroup;l reviewingtheadequacyandintegrityofriskmanagementandinternalcontrolsystemsandmanagement
informationsystemtoensurecompliancewithrelevantlaws,rules,regulations,directivesandguidelines;and
l assumingitsresponsibilityinsuccessionplanningwithintheGroup.
TheBoardisalsoassistedbytheBoardCommitteesincarryingoutitsdutiesandresponsibilities.
1.3. Directors’ Code of Ethics UtusanhasestablishedaDirectors’CodeofEthicstoguidetheBoardindischargingitsoversightroleeffectively.
TheCodeofEthicsrequiresalldirectorstoobservehighethicalbusinessstandardsofhonestyandintegrityandtoapplythesevaluestoallaspectsofourbusinessandprofessionalpracticesandactingoodfaithinthebestinterestsoftheGroupanditsshareholders.
1.4. Sustainability Policy TheBoard acknowledges the importanceof sustainability and its increasing impact to thebusiness and is
committed to understanding and implementing sustainablepractices.Utusanwill takenecessary action toformaliseitsSustainabilityPolicyandsetlongtermandshorttermtargetsforitssustainabilityeffortsinordertoachievetherightbalancebetweentheneedsofthewidercommunity,therequirementsofshareholdersandstakeholdersandeconomicsuccess.
Statement On Corporate Governance
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25Utusan Melayu (Malaysia) Berhad Annual Report 2015
1.5. Supply of Information TheBoardissuppliedwithfullaccesstoallrelevant informationtodischargeitsdutyeffectively.TheBoard
is furnishedwith ad-hoc reports to ensure that they are appraisedon keybusiness, operational, financial,corporate, legal, regulatory and industry matters, as and when the need arises. All Directors have directaccesstotheadviceandservicesoftheCompanySecretaryinensuringtheeffectivefunctioningoftheBoard.DirectorsarealsoatlibertytoseekexternalindependentprofessionaladviceonanymatterconnectedwiththedischargeoftheirresponsibilitiesastheymaydeemnecessaryandappropriateattheCompany’sexpense.
TheBoardisnotifiedofanycorporateannouncementsreleasestoBursaMalaysiaSecuritiesBerhad.TheyarealsonotifiedoftheimpendingrestrictionsindealingwiththesecuritiesoftheCompanyatleastone(1)monthpriortothereleaseofthequarterlyfinancialresultsannouncement.
TheproceedingsandresolutionsreachedateachBoardmeetingarerecordedintheMinutesBookkeptatthecorporateoffice.BesidesBoardmeetings, theBoardalsoexercisescontrolonmattersthatrequires itsapprovalthroughthecirculationofDirectors’Resolutions.
1.6. Company Secretary TheCompanySecretaryprovidesacentralsourceofguidanceandadvicetotheBoard,onmattersofethics
and good corporate governance. The Company Secretary is required to provide the Directors, collectivelyand individually,withdetailedguidanceon theirdutiesandresponsibilities.TheCompanySecretaryassistsindeterminingtheannualBoardplanandBoardagendaand in formulatinggovernanceandBoard-relatedmatters. The Board has unrestricted access to the advice and services of the Company Secretary who isresponsibleforprovidingDirectorswiththeBoard’spapersandrelatedmatters.TheCompanySecretaryalsofacilitatesthecommunicationofkeydecisionsandpoliciesbetweentheBoard,BoardCommitteesandSeniorManagement.
1.7. Board Charter Aspartof thegovernanceprocess, theBoardhasformalizedandadoptedtheBoardCharterwhichserves
as a guide to the Board of Utusan. This Board Charter sets out the composition and balance, roles andresponsibilities, operationandprocessesof theBoardand is to ensure that all Boardmembers actingonbehalfoftheCompanyareawareoftheirdutiesandresponsibilitiesasBoardmembers.TheBoardCharterisavailableontheCompany’scorporatewebsite.
1.8. Whistleblowing Policy The Company has in place a whistleblowing policy to inculcate the culture of good business ethics and
governancewithin theGroup andprovide employeeswith an accessible avenue to disclose any improperconductoranyaction that is,or couldbeharmful to the reputationof theGroupand/orcompromise theinterestofstakeholders.
2. STRENGTHENING BOARD COMPOSITION
2.1. Composition of the Board TheBoardconsistsofeight(8)memberscomprising:
l One(1)IndependentNon-ExecutiveChairmanl Two(2)ExecutiveDirectorsl Four(4)IndependentNon-ExecutiveDirectorsl One(1)Non-IndependentNon-ExecutiveDirector
ThiscurrentcompositionofBoardcomprisesabalancedmixofskills,knowledgeandexperienceinthebusinessandmanagementfieldswhicharerelevanttoenabletheBoardtocarryoutitsresponsibilitiesinaneffectiveandefficientmanner.
Statement On Corporate Governance
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26 Utusan Melayu (Malaysia) Berhad Annual Report 2015
TheExecutiveDirectorsareresponsibleforimplementingthestrategiesanddecisionsoftheBoard,overseeingtheGroup’sday-to-dayoperationsandbusinesses.TheIndependentDirectors,withtheirdifferentbackgrounds,professionsandexperienceseffectivelycontributetoindependentviewandjudgementtofacilitatethedecisionmakingprocessoftheGroupwithregardstothevariousbusinessstrategiesandperformance.NoindividualorgroupofindividualsdominatestheBoard’sdecisionmakingprocess.
In discharging its duties, the Board is assisted by the Board Committees, namely the Audit Committee,Nomination Committee, Remuneration Committee and Investment Committee. Each committee operateswithinitsrespectiveTermsofReference(‘TOR’).
AbriefprofileofeachDirectorispresentedonpages10to13oftheAnnualReport.
2.2. Board Committees The following Board Committees have been established to assist the Directors in the execution of its
responsibilities:(a) Audit Committee Thecomposition,termsofreferenceandtheReportofAuditCommitteearesetoutseparatelyintheAudit
CommitteeReportaslaidoutonpages18to21ofthisAnnualReport.
(b) Nomination Committee(i) Composition ThemembersoftheNominationCommittee(‘NC’)compriseIndependentNon-ExecutiveDirectorsas
follows:l DatukSeriTengkuSariffuddinTengkuAhmadl Dato’Dr.NorraesahMohamadl DatukMdAfendiHamdan(Appointed w.e.f. 30 November 2015)l TanSriHajiHuseinAhmad(Resigned w.e.f 11 March 2015)
(ii) Responsibilities TheprimaryresponsibilitiesoftheNCareasfollows:
l TomakeproposalstotheBoardonsuitablecandidatesforappointmentasDirectors;l To ensure that the Board has an appropriate balance of skills, expertise, attributes and
competenciesfromitsmembers;l Toregularlyreviewprofilesoftherequiredskills,expertise,attributesandcorecompetenciesfor
membershipoftheBoard;l ToreviewsuccessionplansformembersoftheBoard;l TorecommendtotheBoardthenameofDirectorstofilltheseatsonBoardcommittees;andl To assess annually the effectiveness of the Board, the committees of the Board and the
contributionofeachindividualDirector.
(iii) Boardroom Diversity BoththeNCandBoardviewsdiversityintheBoardroomasanessentialfactorinensuringaneffective
andwell-functioningBoardandthatitscomposition:l iscurrentlycomprisedofDirectorsfromadiversebackground;l agerangesfrom50yearsto75years;l oneBoardmemberisofthefemalegender;andl drawn from different socio-economic background and is sufficiently diverse to ensure that
differentviewpointsareconsideredinthedecisionmakingprocess.
However,theNCwillcontinuetoimprovetheBoard’sapproachtowardsBoardroomdiversityfromtimetotime.
Statement On Corporate Governance
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27Utusan Melayu (Malaysia) Berhad Annual Report 2015
(iv) Appointment and Re-election to the Board TheNCwillmakerecommendationtotheBoardwhowillthereonassessthecandidateandarriveata
decisionontheappointmentoftheDirector.Thecandidatewillbeassessedbasedonthemixofskill,functional knowledge,expertise,experience,professionalism, integrityand/orothercommitmentsthatthecandidateshallbringtocomplementtheBoard.
During theFY2015,Dato’MohamadFatmiCheSalleh (IndependentNon-ExecutiveChairman)andDatukMdAfendiHamdan(IndependentNon-ExecutiveDirector)wereappointedtotheBoard.
InaccordancewiththeCompany’sArticlesofAssociation(‘Articles’),thoseDirectorswhoareappointedbytheBoardeithertofillacasualvacancyorasanadditiontotheexistingDirectorsaresubjecttore-electionbyshareholdersattheAnnualGeneralMeeting(‘AGM’)followingtheirappointments.TheArticlesalsoprovidethatone-third(1/3)oftheDirectorsforthetimebeingoriftheirnumberisnotthree(3)oramultipleofthree(3),thenthenumbernearesttoone-third(1/3),shallretirefromofficeprovidedalways thatallDirectorsshall retire fromofficeat leastonce ineach three (3) years.AllretiringDirectorsareeligibletoofferthemselvesforre-electionattheAGM.
Directorsovertheageof70arerequiredtoseekre-appointmentannuallyinaccordancewiththeCompaniesAct,1965.
(v) Activities AsummaryofkeyactivitiesundertakenbytheNCinthedischargeofitsdutiesfortheFY2015,areas
follows:l ReviewedandrecommendedtheappointmentofadditionalDirectorstotheBoardofDirectors
oftheCompany;l Reviewedand recommended theappointmentofmembersof theBoardCommitteesof the
Company;andl ReviewedandrecommendedtotheBoardforitsapproval,there-appointmentandre-election
ofDirectorsattheforthcomingAGM.
(c) Remuneration Committee TheRemunerationCommitteeassists theBoard in establishingand recommending the remuneration
packageandpolicyfortheExecutiveDirectorsandNon-ExecutiveDirectors.Thereviewscoverallaspectsofremuneration,includingbutnotlimitedtoDirector’sfees,salaries,bonuses,allowancesandbenefits-in-kindbasedontheperformancesoftheCompanyandindividualaswellasthelevelofresponsibilitiesundertakenbytheparticularDirectorconcerned.
ThemembersoftheRemunerationCommitteeareasfollows:l DatukSeriIsmailYusofl MohdYusofAbuOthmanl DatukSeriTengkuSariffuddinTengkuAhmad(Appointed w.e.f. 30 November 2015)l DatukMdAfendiHamdan(Appointed w.e.f. 30 November 2015)l TanSriHajiHuseinAhmad (Resigned w.e.f 11 March 2015)
Statement On Corporate Governance
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28 Utusan Melayu (Malaysia) Berhad Annual Report 2015
Statement On Corporate Governance
(d) Investment Committee TheInvestmentCommitteewasestablishedon24December2012toevaluateallinvestmentproposals
priortoapprovalbytheBoardfortheGroup’simplementation.TheCommitteeistoconsiderallinvestmentproposalsbaseduponthenecessarycriteriaforinvestment,returnoninvestmentandsourceoffunding.
TheCommitteereportstotheBoardandcomprisesthefollowingmembers:l Dato’Dr.NorraesahMohamad(Chairman)l DatukMohdNoordinAbbasl MohdYusofAbuOthmanl W.NorAsmahW.Ismaill AhmadRazifMohamed
2.3. Directors’ Remuneration TheaggregateDirectors’remunerationpaidorpayabletoallDirectorsoftheCompanyforthefinancialyear
ended31December2015areasfollows:
Non-ExecutiveChairman
RM
ExecutiveDirectors
RM
Non-ExecutiveDirectors
RMSalaries/Incentives - 1,003,662 -
Directors’Fees - 60,000 148,849
Allowances 20,000 - 65,500
Benefits-In-Kind - 24,300 -
Total 20,000 1,087,962 214,349
ThenumberofDirectorsof theCompanywhose total remuneration fallwithin the followingbands for thefinancialyearended31December2015areasfollows:
Number of DirectorsRange of Remuneration Executive Non-Executive
BelowRM50,000 - 7
RM400,001–RM450,000 1 -
RM650,001–RM700,000 1 -
TheobjectiveoftheCompany’spolicyonDirectors’remunerationistoattractandretainDirectorsneededtoruntheCompanysuccessfully.TheNon-ExecutiveDirectors’remunerationisdeterminedbytheBoard.Non-ExecutiveDirectorsarepaidannualfeeandattendanceallowancesforattendingBoard/Committeemeetings.
TheBoardinitsmeetingheldon24February2016hasapprovedthepaymentofamonthlyfixedallowanceofRM20,000toitsIndependentNon-ExecutiveChairmaneffectivefromthedateofhisappointment.TheBoardbelievesthatthisamountwasnecessaryforhimtoperformhistaskofensuringeffectivecommunicationwiththeshareholdersandrelevantstakeholders.Withtheapprovaloftheaboveallowance,noannualdirector’sfeeandmeetingallowanceispaidorpayabletotheIndependentNon-ExecutiveChairman.
TheBoardisoftheopinionthatthebanddisclosuremadeaboveisincompliancewithParagraph11(b)PartAofAppendix9CoftheListingRequirementsofBursaMalaysiaSecuritiesBerhad(‘BMLR’).
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29Utusan Melayu (Malaysia) Berhad Annual Report 2015
Statement On Corporate Governance
3. REINFORCE INDEPENDENCE
3.1. Independent Directors TheBoardadoptstheconceptofindependenceintandemwiththedefinitionof‘IndependentDirector’under
Paragraph1.01oftheBMLR.Thecurrentcompositionoffive(5)IndependentNon-ExecutiveDirectorsmeetsthecurrent1/3requirementforIndependentNon-ExecutiveDirectorsunderBMLR.TheBoardissatisfiedwiththelevelofindependencedemonstratedbythemandtheirabilitiestoactinthebestinterestoftheCompanyand/ortheGroup.
The tenure of the Independent Directors should not exceed a cumulative term of nine (9) years. Uponcompletionofthenine(9)years,anIndependentDirectormaycontinuetoserveontheBoardsubjecttotheDirectors’re-designationasaNon-IndependentDirector.TheBoardmayseekshareholders’approvaltoretainhimorherasIndependentDirectorinthenextAGMiftheBoardissatisfiedthatheorsheisabletobringindependentjudgmenttotheBoarddeliberations.
3.2. Distinct Roles Between the Chairman and the GMD ThereisadistinctandcleardivisionofresponsibilitybetweentheChairmanwhoisanIndependent,Non-Executive
DirectorandtheGMD.TheChairmanisresponsibleforensuringBoard’seffectivenessandconductwhilsttheGMDhasoverallresponsibilitiesovertheoperatingunits,organizationaleffectivenessandimplementationofBoard’spoliciesanddecisionsaswellasdevelopingandimplementingbusinessandcorporatestrategies.
TherolesandresponsibilitiesoftheBoard’sChairmanandGMDareprescribedintheBoardCharterwhichisavailableontheCompany’scorporatewebsite.
4. FOSTER COMMITMENT
TheBoardisawareoftheimportanceofdevotingsufficienttimeandefforttocarryouttheirresponsibilitiesandenhancetheirprofessionalskills.TheannualscheduleofBoardandBoardCommitteemeetingsandtheAGMaresetoutatthebeginningofeachfinancialyeartoenableDirectorstoplanahead.Additionalmeetingsarescheduledasandwhennecessary.
4.1. Board Meetings Duringthefinancialyearended31December2015,seven(7)Boardmeetingswereheld.TheBoardmembers
willreceiveinadvancedocumentsonmattersrequiringitsconsiderationwithdetailedmanagementreports,proposalpapersandsupportingdocumentsbefore theBoardmeetings.SeniormanagementandadviserswereinvitedtoattendBoardmeetings,wherenecessary,toprovideadditionalinformationandinsightsontherelevantagendaitemstabledatBoardmeetings.
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30 Utusan Melayu (Malaysia) Berhad Annual Report 2015
Asat31December2015,thedetailsofDirectorsontheBoardandtheirattendanceatmeetingsheldduringtheyearareasfollows:-
Directors AttendanceDatukMohdNoordinAbbas 6/7
DatukAbdulAzizIshak 6/7
DatukSeriIsmailYusof 6/7
DatukSeriTengkuSariffuddinTengkuAhmad 5/7
Dato’Dr.NorraesahMohamad 4/7
MohdYusofAbuOthman 7/7
DatukMdAfendiHamdan(Appointed w.e.f 25 March 2015) 5/6
Dato’MohamadFatmiCheSalleh(Appointed w.e.f 1 December 2015) 1/1
TanSriHajiHuseinAhmad(Resigned w.e.f 11 March 2015) 0/1
4.2. Director’s Training TheBoardfullysupportstheneedforitsmemberstocontinuouslyenhancetheirskillsandknowledgetokeep
abreastwiththelatestdevelopmentsintheindustryandmarketplace,toeffectivelycarryouttheirdutiesandresponsibilitiesasDirectorsincompliancewiththeBMLR.
AllDirectorsappointedduringthefinancialunderreviewhaveattendedtheMandatoryAccreditationProgrammeprescribedbyBursaMalaysiaSecuritiesBerhad.TheBoardwillcontinuetoevaluateanddeterminethetrainingneedsofitsDirectorsonanon-goingbasis.
Duringthefinancialyearunderreview,variousmembersoftheBoardhaveattendedthefollowingseminars:l SustainabilitySymposium;l NavigatingThePoliticalEconomyofGlobalBusiness:AMalaysianInsight;l PublishAsia2015;l DigitalMediaAsia2015;andl 11thWIEF2015:BuildingResilienceForEquitableGrowth
5. INTEGRITY IN FINANCIAL REPORTING
5.1. Financial Reporting TheannualfinancialstatementsandquarterlyresultsarereviewedbytheAuditCommitteeandapprovedbythe
BoardofDirectorspriortopublicrelease.AstatementbytheDirectorsexplainingtheBoard’sresponsibilitiesforpreparingtheannualfinancialstatementsissetoutonpage17ofthisAnnualReport.
5.2. External Auditors ThroughtheAuditCommittee,theCompanyhasestablishedaformalandtransparentrelationshipwiththe
externalauditors.Theexternalauditorsareinvitedtodiscusstheannualfinancialstatements,theirauditplan,auditfindingsandotherspecialmattersthatrequiretheBoard’sattention.
TheAuditCommitteemeetswiththeexternalauditorswithouttheManagementortheExecutiveDirectorspresenceatleasttwice(2)ayear.
Statement On Corporate Governance
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31Utusan Melayu (Malaysia) Berhad Annual Report 2015
6. RECOGNISE AND MANAGE RISKS
6.1. Risk Management Framework and Internal Control A Statement on Risk Management and Internal Control which provides an overview of the state of risk
managementandinternalcontrolwithintheGroupisdisclosedonpages22to23ofthisAnnualReport.
6.2. Internal Audit Function An adequately resourced Internal AuditDivision is in place to assist theBoard inmaintaining a systemof
internal control to safeguardshareholders’ investmentand theGroup’sassets.Anoverviewof the InternalAuditfunctionisdisclosedonpages20to21ofthisAnnualReport.
7. TIMELY AND QUALITY DISCLOSURE
TheBoardiscommittedtoprovideatimelyandaccurateinformationtotheshareholdersincompliancewiththedisclosurerequirementsassetoutintheBMLR.
TheGroupstrivestoensurethatshareholdersandthegeneralpublicwouldhaveaneasyandconvenientaccesstotheGroup’scorporateinformationviaitswebsitewww.utusangroup.com.my.
Theshareholdersandtheinvestorsarealsoabletoaccessthelatestcorporate,financialandmarketinformationoftheCompanyviatheBursaMalaysiaSecuritiesBerhadatwww.bursamalaysia.com.
8. RELATIONSHIP WITH THE SHAREHOLDERS
8.1. Annual General Meeting TheAGMistheprincipalforumfordialoguewithshareholdersandinvestors,wheretheymayseekclarifications
ontheGroup’sperformance,majordevelopmentsoftheGroupaswellasontheresolutionsbeingproposed.MembersoftheBoardaswellastheexternalauditorsarepresenttoanswerquestionsraised.
AspertheArticlesofAssociationof theCompany,shareholdershavetherighttocall forpollvotingduringgeneralmeetings.TheresultsofallresolutionstableandpassedattheAGMarereleasedtoBursaMalaysiaafterthemeetingtoenablethepublictoknowtheoutcomethereof.
8.2. Investor Relations ShareholdersandinvestorscanalsoconveytheirconcernsandqueriestoEncikMohdYusofAbuOthman,the
IndependentNon-ExecutiveDirectoroftheCompanyatfaxno.03-92210691orbymailtotheregisteredofficeoftheCompanyatNo.44,JalanUtusanOffJalanChanSowLin,55200KualaLumpur.
ThisStatementwasapprovedbytheBoardon14April2016.
Statement On Corporate Governance
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32 Utusan Melayu (Malaysia) Berhad Annual Report 2015
Other InformationRequiredbyTheListingRequirementsofTheBursaMalaysiaSecuritiesBerhad
SHARE BUYBACKSDuringthefinancialyear,theCompanydidnotenterintoanysharebuybacktransactions.
AMERICAN DEPOSITORY RECEIPT (‘ADR’) OR GLOBAL DEPOSITORY RECEIPT (‘GDR’) PROGRAMMEDuringthefinancialyear,theCompanydidnotsponsoranyADRorGDRprogramme.
IMPOSITION OF SANCTIONS AND PENALTIESTherewerenosanctionsorpenaltiesimposedontheCompanyanditssubsidiaries,directorsorManagementbytherelevantregulatorybodiesduringthefinancialyear.
NON-AUDIT FEESTheamountofnon-auditfeespaidtotheexternalauditorsbyboththeGroupandtheCompanyforthefinancialyearamountedtoRM14,500.
PROFIT GUARANTEEDuringthefinancialyear,therewerenoprofitguaranteesgivenbytheCompany.
INTERNAL AUDIT FUNCTIONSTheGrouphasanin-houseInternalAuditDepartmenttoundertaketheinternalauditfunctions.
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33Utusan Melayu (Malaysia) Berhad Annual Report 2015
TheGroup’scommitmenttoservethecommunitythroughcorporateresponsibilityandfeaturearticlesofthecommunitythatcoversawidespectrumoflifehasearnedtherecognitionofthevariouspartiesinthe
nationalandinternationallevels.