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A N N U A L R E P O R T 2 0 1 8 UTUSAN MELAYU (MALAYSIA) BERHAD

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OUR SUSTAINABILITY STATEMENT

UTUSAN strives to be a responsible organisation by giving full commitment to

maintain a high standard of governance in our operations to have a positive sustainable

impact on the business, environment, communities

and our people.

Utusan Melayu (Malaysia) Berhad ("Utusan") is pleased to present its second Sustainability Report. As mentioned in the previous report, Utusan will continue to strive to be a responsible organization in its commitment to maintain a high standard of operational governance to ensure a positive sustainability impact to the business, environment, communities and our people. We continue to hold our four strong pillars as follows:

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SUSTAINABILITY REPORT

A N N U A L R E P O R T 2 0 1 8UTUSAN MELAYU (MALAYSIA) BERHAD

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BUSINESS

The year 2018 was a very challenging one for Utusan. Changes in political landscape after the 14th General Election ("GE14") continue to affect Utusan's business. Being labelled as the mouthpiece of the previous government and UMNO, which was Utusan's largest shareholder, the Company now is committed to address this perception issue through its refreshed news content policies and new business direction post-election.

A drastic change in the Board of Directors' line-up after the GE14 reflects how serious Utusan is in its commitment to transform its business direction and content presentation. The Board reaffirms that the primary focus of Utusan remains on strengthening its core businesses of newspaper publishing and advertising as well as improving the quality of its digital platforms.

In August 2018, Utusan was classified as a PN17 company. This has obvioulsy sparked concerns among our stakeholders particurlarly regarding Utusan’s overall sustainability. Therefore, Utusan will continue to ensure high levels of stakeholders’ confidence.

KEY AREAS Of cONcERN OUR ENgAgEMENT

EMpLOYEES

• Healthy relationship between the management and the staff.

• Information on the implementation of VSS are provided in full so that staff could make the best decision.

• A safe and conducive working environment.

• Latest updates on the development and direction of Utusan.

• Promotion and succession planning.

• Town Hall session organised to bridge information gap between management and the staff.

• Provide special platform for staff to gain business skills and knowledge post VSS implementation.

• Continuous support to Badan Keluarga Utusan Melayu (BKUM) organised for the welfare of the staff.

• OSHA committee to monitor closely safety issue at the plants and work places.

UNIONS

• Open discussion between the management and representatives of the unions.

• Information on implementation of VSS to all members of the unions.

• Information on PN17 status and financial situation of the company.

• Joint Consultative Committee meeting for the management and representatives of the unions to discuss on any issues that may affect the welfare of the staff.

• Direct dissemination of information to all members of the unions during Town Hall.

cUSTOMERS

• Commitment to provide more balanced news contents but still remain critical.

• Accurate and timely news with stable digital platforms .

• Various media platforms for the advertisers to choose from.

• Offering various media platforms such as print newspapers, digital paper, online TV and also social media platforms.

• Promoting the use of the above platforms by offering attractive packages.

• Excellent quality control of our products and ensuring timely distribution of newspapers.



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SUppLIERS

• Ability to pay outstanding debts. • Impact of PN17 status on Utusan's

business continuity that may have an impact on the suppliers.

• Good relationship with the suppliers and continue to update them on latest development of Utusan.

• Fair and transparent procurement policies and tender process

• Regular meeting with major suppliers to update them on the latest development in Utusan especially after the announcement on PN17 status.

• Regular discussions with suppliers on outstanding debts regarding repayment schedules.

• Improvement in procurement policies and tender process.

AgENTS ANd vENdORS

• Effective and timely newspaper allocation management.

• Achieve 10% newspaper return with 35% commission as agreed with some agents and vendors.

• Continuous monitoring of the performance of vendors and agents especially for those who have agreed on the proposed 10% newspaper return and 35% commission arrangement.

ShAREhOLdERS

• Accurate and timely information for the shareholders and in accordance with requirements of relevant bodies.

• Adhere strictly to Bursa requirements by announcing quarterly results, Annual Reports and other announcements.

• Further information will be made availabe during Annual General Meeting and through response made to queries from Minority Shareholder Watchdog Group.

fINANcIAL INSTITUTIONS

• Loans restructuring plan to be agreed with all the bankers.

• Utusan has sought CDRC’s assistance to mediate with all the bankers in restructuring of all its outstanding loans.

cOMMUNITIES

• Activities organised with communities • Continue to uphold arts and cultures. • Participation of communities in sports. • Raise the importance of education and

learning system

• Giving contributions to students and.Rohingya communities

• Forum Rusia 2018 and Rentap Rusia 2018 organised especially for football fans in conjunction with World Cup 2018.

• Education programmes such as Simposium Merangkai Titik-titik and Program Pendidikan Utusan/Tutor.com were held as a continuous effort to increase the quality of education in the country.

AUThORITIES/REgULATORY BOdIES

• Comply with Bursa requirements especially those relating to PN17

• Comply with the policies and regulations of regulatory bodies such as the Royal Malaysian Customs Department and the Central Bank.

• Communicate directly with officers from Bursa or other regulatory bodies to obtain further explanations on their requirements.

• Ensure that all staff understand and comply with all relevant requirements/policies/standards.


KEY AREAS Of cONcERN OUR ENgAgEMENT


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YAYASAN KUMpULAN

UTUSAN

ARTS & cULTUREcOMMUNITIESEdUcATION

SpORTS

cOMMUNITIES

Yayasan Kumpulan Utusan

Throughout 2018, Yayasan Kumpulan Utusan conducted several charitable activities as part of its corporate social responsibility. Among them is the Rohingya assistance programme where the Rohingya ethnic school run by Madrasah Hashimiah in Batu Caves, Selangor received RM3,000 and school supplies to aid their outstanding students.

The same was held at two other locations, namely Rohingya Community School, Cheras Baru, Kuala Lumpur and Knowledge Garden Learning Center, KGLC, Seri Kembangan, Selangor on 25 January 2018 and 8 February 2018 respectively.

The contribution aims to ease the burden of learning centers and Rohingya ethnic community schools in the country. This programme is a series of fundraising programmes for Rohingya refugees under the Utusan - Tabung Haji Fund which was launched in 2017.



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Handover ceremony held at Knowledge Garden Learning Centre KGLC, Seri Kembangan, Selangor

Arts And culture

Bubur Lambuk Ramadan programmeThe Bubur Lambuk Ramadan Programme in collaboration with PLUS Malaysia Berhad (PLUS) was held at Masjid Jamek Kampung Baru on 25th May, 2018. About 9,000 packets of bubur lambuk were distributed to the public around the mosque and several PLUS's rest and relax stations (R&R) as early as 5.00 pm during this yearly programme.

#QuranhourUtusan Group also participated in the World #QuranHour (WQH) program which took place on 7th June, 2018 at Surau Al-Huda, Utusan Melayu (Malaysia) Berhad, Jalan Chan Sow Lin. The programme aimed at enhancing the interest in reading and understanding the contents of the Quran ran simultaneously around the world at noon.

Malaysia MpI-petronas 2018Utusan's journalist from KOSMO! bagged the coveted journalism prize - Hadiah Kajai at the Malaysian Press Institute (MPI)-Petronas Malaysian Journalism Awards 2018. Another 3 journalists from Utusan Malaysia also won prizes in the Columnist, Excellence News Reporting and Best Editorial Cartoon categories.



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Launch of the New Look of Utusan Malaysia and Mingguan MalaysiaFresh, dynamic and compact is the new look of Utusan Malaysia and Mingguan Malaysia newspapers. The launch of the new look was held on 16th September, 2018 at several locations around Kuala Lumpur. The highlight of the celebration took place at the famous Sogo shopping mall attended by nearly 3,000 readers.

Tamankan hatiTamankan Hati programme is organized monthly aimed at fostering solidarity and relationships among the employees of Kumpulan Utusan. This spiritual programme consists of a talk covering a vast range of topics by invited speakers followed by the congregation performing zohor prayers.

Readers were impressed with the new look.

Sports

forum Rusia 2018Utusan through its newspaper Utusan Malaysia held the Forum Rusia 2018 : Di mana Malaysia? on 4 June 2018 at the Dewan Utusan in conjunction with the 2018 World Cup. The forum featured several panel speakers such as football legends Dolah Salleh and Santokh Singh.

Rentap Rusia 2018Nearly 5,000 football fans gathered at Hakim Restaurant, Section 7, Shah Alam on 15 July 2018 in conjunction with the Rentap Rusia 2018 programme to watch the live broadcast of the 2018 World Cup final. This was the second consecutive collaboration between Kosmo! and Suria FM.



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Education

connecting the dots symposium

Connecting The Dots Symposium (Simposium Merangkai Titik-titik) as part of the Education Transformation Towards the Industrial Revolution 4.0 was held to transform the education plan towards the 21st century. The programme was a collaboration with the Ministry of Education Malaysia (KPM) and the Institut Pendidikan Guru (IPG), Kampus Ilmu Khas in line with the organizational objectives to provide exposure and clarification of a more meaningful and high-impact new strategy in learning and facilitating (PdPc).

pendidikan Utusan./ Tutor.com programme

Pendidikan Utusan/Tutor.com programmes were organized to assist students in their preparations for important exams such as UPSR, PT3 and SPM and were held at three selected locations namely Kota Belud, Sabah, Padang Terap and Baling, Kedah. The programmes were organized in cooperation with Members of Parliament in each selected location.

Connecting The Dots Symposium held on 26 February 2018 at Dewan Utusan, Jalan Chan Sow Lin



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ENvIRONMENT

Utusan has always ensured that all its main operations are economically, socially and environmentally sustainable whilst securing the interest of its stakeholders.

We implemented the following process improvements for a more sustainable newspaper printing plant processes that include the practice of 3R (reduce, reuse and recycle):

Material Management

• By rationalizing the number of pagination of our products and the method of printing since 2018, we were able to reduce the raw materials used for printing such as newsprint, printing plates, printing ink and chemicals by 14 % with savings up to RM3.68 million annually. For example, our weekly product, Mingguan Malaysia, is now being printed in slower collate run mode instead of the faster straight run mode. This collate run mode enable us to save half the number of plate usages and startups.

• Newsprint, the main raw material for newspapers and the highest material cost are procured from environmental- friendly newsprint suppliers and are from 100% recycled papers and compliant to ISO 12647-3 IFRA quality standards. Efforts are being done to reduce the daily newsprint wastage to 6% target and the waste papers such as returns, white waste, paper stripping, covers and collected by approved recycling contractors. To further increase the net usage of newsprint especially at the regional plant, we have standardised the size of newsprint rolls to 50 inches diameter for both plants, Bangi and Seberang Jaya.

• All aluminium printing plates are sourced from environmentally friendly company, and the used plates are collected by reliable contractors for recycling.

chEMIcAL EffLUENT

MANAgEMENT

MATERIAL MANAgEMENT

ENvIRONMENTpRESS hOLIdAYEvERgY ANd

cARBON MANAgEMENT



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Energy and carbon Management.

• By combining the daily and weekly early pre-prints such as Mega into main paper Utusan Malaysia dailies and Pancaindera into Mingguan Malaysia weeklies since 2017, we are able to print everything at night where the electricity bills are cheaper (daytime tariff at 35.5 sen/kW against night time tariff at 21.5 sen/kW), thus reducing the energy consumption and monthly electricity bills from RM180,000 per month to RM130,000 per month giving RM50,000 savings per month in Bangi printing plant. By optimizing the printing press lines i.e. only two press lines running at one time, the total kW usage for maximum demand tariff (usually charged at RM37/kW) has reduced by half.

chemical Effluent Management.

• The printing plant in Bangi is located near a natural water reservoir thus it is important that we ensure our waste water treatment produces a Standard a water quality. Utusan has so far taken comprehensive measures to preserve the environment by ensuring that all effluent waste water produced daily by our production processes undergo chemical treatment at our waste water treatment plant and samples of treated water are sent regularly to Department of Chemistry to meet the standard. As of today we have successfully maintained the good results.

• Our chemical waste water treatment plants are well-maintained. We use the services of the Department of Environment's (DOE) registered contractors for our two printing plants in Bangi and Seberang Jaya.

• All schedule wastes generated by our printing plants are carefully stored, labelled, and sent to a qualified company for proper disposal either by landfill or incineration.

• For maintenance and cleaning of machineries, we use only high quality recycled cotton rags. The rags are collected and chemically-treated by a DOE's licensed environmental services contractor. This is turn reduces disposal cost.

• In order to reduce the amount of effluent produced, the pre-press computer-to-plate system at all plants have replaced the normal violet aluminium printing plates to the latest technology using chemical-less type thus reducing the amount of chemical usage by half.

Additional print Shutdown day or press holiday.

• Utusan's newspapers are known to be available in the market for 364 days a year except on Hari Raya Puasa day where there will be a press shutdown. However we experienced a continuous decline in the circulations of printed newspapers and the advertisements secured particularly in urban areas during the main festive holidays namely Hari Raya Puasa, Chinese New Year, Deepavali and Christmas. Therefore, effective 2018, Utusan practiced press shutdowns during the four main festive holidays and indirectly reducing the operating costs and wasteful product returns.



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OUR pEOpLE

Training and human Resource development

The Company has always encouraged employees to attend internal and external training programmes to improve their skills and knowledge in their respective areas of work. Each month, the Company contributes a levy of 1% of the total monthly salary amounting to approximately RM54,000 to the Human Resources Development Fund (HRDF). This fund will be used to organize training programmes that suit the needs of all employees.

Simultaneously, Utusan has conducted the Training Needs Analysis (TNA) / Training Needs Identification (TNI) process to identify the most relevant training programmes for the staff especially on the hard skills. This is done by the Human Resources Department through distribution of questionnaires to all staff and discussions held with the head of departments.

In this era of globalization, online news dissemination is much faster and it is imperative for the Company to implement mobile journalism. For this our journalist are provided with the relevant tools such as Iphone and the appropriate software so that news can be delivered faster and more accurate to the readers. Utusan also organizes relevant courses to ensure the news can be delivered briefly, accurately and appealing. One such course was the 'Mobile Journalism' (MOJO) workshop.

Various external and internal training programmes involving soft skills and hard skills have been held throughout the year 2018 to ensure that staff receive training relevant to their tasks including:

TRAININg & dEvELOpMENT

INdUSTRIAL hARMONY

OUR pEOpLE

SAfETY & hEALTh

SUccESSION pLANNINg

WORK LIfE hARMONY

STAff TURNOvER



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NO TRAININg pROgRAMMES dATE

External programmes

1 MEF Workshop On Implementation Of Employment Insurance System (EIS) Act 2017 18 January 20182 Seminar Pematuhan Akta Kualiti Alam Sekeliling 1974 Bagi Projek Projek

Pembangunan24 July 2018

3 Kursus Literasi Maklumat Dan Media 15 August 2018

Internal programmes

1 Pemantapan Online KeMaTO 4 September 20182 Workshop - Street Photography 13 September 20193 Workshop - 100 Peratus Poketgrafi 7 November 2018

vSS preparatory programmes

The Human Resources Department in collaboration with Sibermedia Sdn Bhd has conducted several preparatory programmes for the staff who participated in VSS. This is to provide the staff with skills and knowledge for them to pursue careers elsewhere or to run a new business to help them earn their living after leaving Utusan.

Twenty-five programmes have been conducted at three main premises of the Company in Kuala Lumpur, Penang and Terengganu from 3 October 2018 to 13 November 2018. All these programmes received very good response from the staff.

Location date No programmes Title In collaboration with :

Kuala Lumpur 3/10/2018 1 Workshop – Making Money Vol 1 Perbadanan Nasional Berhad

2 Running Own Business Jab. Undang-Undang & Kesetiausahaan

3 Career Opportunities Great Eastern Life Assurance (Malaysia) Berhad

8/10/2018 4 Debt Management Talk Bank Islam Malaysia Berhad

5 Career Opportunities AIA Berhad

11/10/2018 6 Employment Insurance System SOCSO

7 Career Opportunities Labour Department : Jobsmalaysia

8 Career and Business Opportunities Malay Chamber of Commerce Malaysia

17/10/2018 9 Jom Tuai Rezeki Vol. 1 Food Entreprenuer

Pn Zanifah Md Noor

22/10/2018 10 Jom Tuai Rezeki Vol. 2 Handicraft Datin Che Ku Rozinah Ku Abas

8/11/2018 11 Business and Farming Opportunies Agricultural Department

9/11/2018 12 Career and Entrepreneurship Opportunities

Sasbadi Holdings Berhad

12/11/2018 13 Career and Entrepreneurship Opportunities

Suhan Movie & Trading Sdn Bhd :Datuk Rosyam Nor

13/11/2018 14 Workshop – Making Money Vol 2 Perbadanan Nasional Berhad

15 Mini Jobs Carnival Labour Department : Jobsmalaysia



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Location date No programmes Title In collaboration with :

Pulau Pinang 4/10/2018 16 Debt Management Talk Bank Islam Malaysia Berhad

17 Employment Insurance System SOCSO


19 Business and Entrepreneurship Opportunities

MARDI

20 Workshop – Making Money Vol 3 Perbadanan Nasional Berhad

Terengganu 8/10/2018 21 Career Opportunities Labour Department : Jobsmalaysia

22 Sistem Insurans Pekerjaan Perkeso


24 Business and Entrepreneurship Opportunities

MARDI

25 Workshop – Making Money Vol 4 Perbadanan Nasional Berhad

Safety & health

Utusan has always taken the safety and health of the employees at work issues very seriously by ensuring that working places are always safe. This is strictly monitored by the Occupational Safety and Health (OSH) Committee which is established to ensure compliance with regulatory requirements by Fire and Rescue Department and Department of Environment. The Main Committee will meet on a quarterly basis to discuss and identify any occupational health issues.

In addition, Utusan also provides Personal Protection Equipment (PPE) including ear plugs and safety boots to staff to ensure healthy and safe practices at workplace. Every safety rule must be adhered to so that injury and accident can be avoided or reduced and daily operation can run smoothly.

Throughout the year 2018, there was no accident or injury reported at the printing plants or offices.

Staff Turnover

Staff turnover rate increased from 6% in 2017 to 11% in 2018. Exit interviews are conducted by the Human Resources Department to determine the reasons for staff resignation. The exit interview is conducted either

i. Face-to-face by filling up a special form provided, or ii. By telephone contact.

From the feedbacks gathered during the exit interviews, the management will make appropriate improvements, if necessary, to minimize the turnover rate in the future.



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Industrial harmony

There are two union groups in Utusan namely National Union of Journalists (NUJ) and National Union of Newspapers Workers (NUNW). Joint Consultative Committee (JCC) meetings are often held with both groups from time to time. The meetings are aimed at creating a harmonious relationship between the employer and the union staff so that any internal issues or grievances can be resolved amicably.

The management continues to adopt an open door policy for any issues relating to staff welfare and benefits raised by the staff to be discussed in a more rational and professional manner.

Work Life harmony

Utusan continues to balance its commitment to promote harmonious work culture not only with the staff but also with their extended families. Various programmes in collaboration with Badan Keluarga Utusan Melayu (BKUM) and Kelab Veteran Utusan Melayu (KVUM) were organised in 2018 :

• Majlis Meraikan Anak Yatim Kumpulan Utusan dan Nuzul Al-Quran • Bubur Lambuk Kumpulan Utusan • Sambutan Hari Raya Aidilfitri Kumpulan Utusan • Syoknya Kenduri Keluarga Utusan 2018 • Majlis Korban & Akikah BKUM

Succession planning

The management acknowledges the importance of a good succession plan. The plan will help to ensure the continuity of daily operations without interruptions.

The management continuously identifies and trains staff who have good potential to succeed any particular position. The staff will then be exposed to the relevant skills and knowledge as a move to fill any vacancy in the future.



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CORPORATE GOVERNANCEOVERVIEW STATEMENT

This Corporate Governance Overview Statement sets out the principal features of Utusan Melayu (Malaysia) Berhad (‘Utusan’ or ‘the Company’) and its subsidiaries’ (collectively referred to as the Group), summary of corporate governance practices during the year as well as key focus areas and future priorities in relation to corporate governance. The Corporate Governance Overview Statement is made pursuant to Paragraph 15.25(1) of the Main Market Listing Requirements (‘MMLR’) of Bursa Malaysia Securities Berhad (‘Bursa Malaysia’) and guidance was drawn from Practice Note 9 of the MMLR and the Corporate Governance Guide (3rd edition) issued by Bursa Malaysia.

The Corporate Governance Overview Statement is augmented with a Corporate Governance Report, based on a prescribed format as enumerated in Paragraph 15.25(2) of the MMLR so as to provide a detailed articulation on the application of the Company’s corporate governance practices as set out in the Malaysian Code on Corporate Governance 2017 (‘MCCG’). The Corporate Governance Report is available on Utusan’s website, www.utusangroup.com.my as well as via an announcement on the website of Bursa Malaysia.

This Corporate Governance Overview Statement should also be read in tandem with the other statements in the Annual Report, namely Statement of Risk Management and Internal Control, Audit and Risk Management Committee Report and Sustainability Report.

cOMMITTEd TO ThE hIghEST STANdARdS Of cORpORATE gOvERNANcE

The Board of Directors of Utusan (‘the Board’) strongly believes that good corporate governance practices add value to the business of the Group and will help reinforce its sustainability. The Board sets the tone at the top and plays an active role in guiding the Management through its oversight role in steering the Group’s business direction and strategy.

In line with this commitment, the Management has, in April 2019, presented to the Board the practices and standards as set out in the MCCG and the Board is committed that the Company will take the necessary steps to improve its adherence to the practices outlined in MCCG.

A summary of the Group’s corporate governance practices with reference to MCCG are described below:

A. BOARd LEAdERShIp ANd EffEcTIvENESS

I. Board Responsibilities

The Board in overall responsible for corporate governance, strategic direction, establishing corporate goals and monitoring the achievements of these goals in order to foster long term success of the Group. The Board delegates the responsibility of implementing the Group’s strategies, business plans, policies and decisions to the Management which is led by the Group Executive Chairman (‘GEC’).

The Board has full control over the businesses and affairs of the Group. The Board assumes the following responsibilities :

• formulating the business direction and objectives of the Group; • reviewing, adopting and approving the Group’s annual budgets, strategic plans, key operational initiatives, major

investments and funding decision; • overseeing the conduct of business of the Group; and • reviewing the adequacy and integrity of risk management and internal control systems and management

information system to ensure compliance with relevant laws, rules, regulations, directives and guidelines.

Each Director brings with him vast experience and astute insights to enable the Board to function effectively in discharging its duties and responsibilities as required of them with due care and diligence.

The roles and responsibilities of the Independent Non-Executive Directors and Executive Director are clearly defined and adequately segregated. All the Independent Non-Executive Directors are independent of the Executive Directors, management and major shareholders of the Company and are free from any business or other relationship with the


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Group that could materially interfere with the exercise of their independent judgment. This offers a strong check and balance on the Board’s deliberations.

The Executive Director is responsible for the overall performance and operations as well as the corporate affairs and administrations of the Group. He is assisted by the senior management of the Group in managing the business activities of the Group in the manner that is consistent with the policies, standards, guidelines, procedures and/or practices of the Group and in accordance with the specific plans, instructions and directions set by the Board.

The Executive Director holds the principal obligations in focusing, guiding, addressing, supervising, regulating, managing and controlling as well as communicating the Company’s goals and objectives, as well as all significant corporate matters, corporate restructuring plans, business extension plans and proposals. The Executive Director, assisted by the senior management, is also responsible for proposing, developing and implementing applicable and relevant new policies and procedures.

The Independent Non-Executive Directors of the Company play a key role in providing unbiased and independent views, advice and contributing their knowledge and experience toward the formulation of policies and in the decision-making process. The Board structure ensures that no individual or group of individuals dominates the Board’s decision-making process. Although all the Directors have equal responsibilities for the Company and the Group’s operations, the role of the Independent Directors are particularly important in ensuring that the strategies proposed by the Executive Director is deliberated on and have taken into account the interest, not only of the Company, but also that of the shareholders, employees, customers, suppliers and the community.

II. Independent chairman

The MCCG recommends that the Board of Directors of a public listed company should be composed of a majority of independent directors when the chairman of the Board is not an independent director.

Currently, the Company has complied with the recommendation of MCCG whereby the Board was chaired by an Executive Director and majority of the Board consists of Independent Non-Executive Directors. The Chairman being an Executive Director, is involved on the day-to-day management of the Group’s business and the rest of the Board are Independent Non-Executive Directors who are responsible for the collective oversight of the management. The Board therefore is of the view that balance of power and authority exists within its current structure to sufficiently enable it to discharge its duties objectively.

III. Separation of Positions of the Chairman and Chief Executive Officer (‘CEO’)

The MCCG recommends that the positions of the Chairman and the CEO to be held by two different individuals whereby the Chairman is responsible for the leadership of the Board and ensures effectiveness of the Board while the CEO shall manage the day-to-day business and operations and also implements the Board’s directive, strategies and policies. The distinct and separate roles, with a clear division of responsibilities will ensure a balance of power and authority, so that no one individual has unfettered powers of decision-making.

In view that the current Chairman of the Board of the Company is an Executive Director, the Board is aware that the Company is not in compliance with the best practices of the MCCG on the separation of the roles of the Chairman and the CEO. However, the Board is satisfied with the role held by the GEC in view of his varied experience and knowledge of the businesses of the Group and the time he has spent in discharging his duties and fulfilling his responsibilities.

Further, the presence of the three Independent Non-Executive Directors from a total of four Board members are sufficient to provide the necessary checks and balances on the decision-making process of the Board. The contributions of the Independent Directors in the decision-making process is evidenced in their participation as members of the various committees of the Board.



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The GEC is responsible for instilling good corporate governance practices, ensuring Board effectiveness and conduct whilst the GEC has overall responsibilities over the operating units, organizational effectiveness and implementation of Board’s policies and decisions as well as developing and implementing business and corporate strategies.

The roles and responsibilities of the Board are prescribed in the Board Charter which is available on the Company’s corporate website at www.utusangroup.com.my.

Iv. Board committees

The Board is assisted by the Board Committees in carrying out its duties and responsibilities as summarised in the following diagram:

BoardResponsible for providing stewardship and oversight of the Group’s business affairs

Audit and Risk Management committee

(ARMC)

Nomination and Remuneration committee

(NRC)

Review of Financial Reporting,internal controls, related party

transactions and conflict of interest, internal audit

as well as external audit processes

Review candidates for appointment and

re-appointment of Board Members and annual evaluation of the Board and

Board Committees and Directors’ Processes

&Review and recommend matters

relating to Board and Senior Management remuneration

EXEcUTIvE chAIRMANResponsible for the overall business and the implementation of Board policies, decisions and power

within limits given for all matters except those delegated to the Committee

Corporate Services & Risk Management Department (CSRMD)

head of Internal Audit



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As depicted in the illustration above, Board Committees have been established to assist the Board in its oversight function with reference to specific responsibility areas. It should be noted that at all times, the Board retains collective oversight over the Board Committees. These Board Committees are engaged to ensure that the Group is in adherence with good corporate governance.

• Audit and Risk Management Committee (ARMC)The composition, terms of reference and the Report of the Audit and Risk Management Committee are set out separately in the Audit and Risk Management Committee Report as laid out on page 24 to 29 of the Annual Report.

• Nomination and Remuneration Committee (NRC)

The NRC comprises exclusively of Non-Executive Directors.

The primary responsibilities of the NRC are to review candidatures for Board appointment and re-appointment as well as annual assessment of the Board, Board Committees and Directors’ Processes and to review and recommend matters relating to the remuneration of the Board and Senior Management.

The NRC met once during the financial year 2018 which it recommended to the Board amongst others, approving the directors fees, allowances and benefits as well as the appointment of new Directors and re-election and re-appointment of Directors who retired at the 2018 Annual General Meeting. The NRC also carried out the assessment on the Board.

v. Qualified and Competent Company Secretary

In performing their duties, all Directors have access to the advice and services of a suitably qualified Company Secretary. The Company Secretary acts as a corporate governance counsel and ensures good information flow within the Board, Board Committees and Senior Management. The Company Secretary attends all meetings of the Board and Board Committees and advises the Directors on the requirements encapsulated in the Company’s Constitution and legislative promulgations such as the Companies Act 2016, Capital Markets And Services Act 2007 (Amendment 2012) and the MMLR.

vI. Information and Support for directors

Unless otherwise agreed, notice of each meeting confirming the venue, time, date and agenda of the meeting together with relevant Board papers will be forwarded to each director no later than five (5) working days before the date of the meeting. This is to ensure that Board papers comprising of due notice of issues to be discussed and supporting information and documentations were provided to the Board sufficiently in advance. Furthermore, Directors are given sufficient time to read the Board paper and seek for any clarification as and when they may need advice or further explanation from management and the Company Secretary. The deliberations of the Board in terms of the issues discussed during the meetings and the Board’s conclusions in discharging its duties and responsibilities are recorded in the minutes of meetings by the Company Secretary.

The Board has access to all information within the Company as a full Board to enable them to discharge their duties and responsibilities and is supplied on a timely basis with information and reports on financial, regulatory and audit matters by way of Board papers for informed decision making and meaningful discharge of its duties.

In addition, all Directors have direct access to the advice and services of the Company Secretary who is responsible for ensuring the Board’s meeting procedures are adhered to and that applicable rules and regulations are complied with. External advisers are invited to attend meetings to provide insights and professional views, advice and explanation on specific items on the meeting agenda, when required. The senior management team from different



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business units will also be invited to participate in the Board meetings to enable the Board members to have equal access to the latest updates and developments of business operations of the Group presented by the senior management team. The Chairman of the respective Board Committees will brief the Board on matters discussed as well as decisions taken at the meetings of their respective Board Committees meetings.

When necessary, Directors may whether as a full Board or in their individual capacity, seek independent professional advice, including the internal and external auditors, at the Company’s expense to enable the directors to discharge their duties with adequate knowledge on the matters being deliberated, subject to approval by the Chairman of the Board, and depending on the quantum of the fees involved.

vII. Board Meetings

The Board is aware of the importance of devoting sufficient time and effort to carry out their responsibilities and enhance their professional skills. The annual schedule of Board and Board Committee meetings and the Annual General Meeting (AGM) are set out at the beginning of each financial year to enable Directors to plan ahead. Board meetings are held at quarterly intervals with additional meetings convened for particular matters, when necessary. The Board members will receive in advance documents on matters requiring its consideration with detailed management reports, proposal papers and supporting documents before the Board meetings. Senior management and advisers were invited to attend Board meetings, where necessary, to provide additional information and insights on the relevant agenda items tabled at Board meetings. Upon conclusion of the meetings, the minutes are circulated in a timely manner.

During the year, the Board has deliberated on business strategies and critical issues concerning the Group, including business plan, annual budget, significant disposals as well as financial results. The attendance of individual Directors at Board meetings during the financial year ended 31 December 2018 is outlined below:



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directors Attendance

Tan Sri Mohamad Fatmi Che Salleh(Resigned w.e.f. 15/05/2018)

2/2

Datuk Mohd Noordin Abbas(Resigned w.e.f. 26/07/2018)

3/3

Datuk Abdul Aziz Ishak(Resigned w.e.f. 26/07/2018)

3/3

Tan Sri Datuk Seri Ismail Yusof(Resigned w.e.f. 21/06/2018)

3/3

Datuk Seri Tengku Sariffuddin Tengku Ahmad(Resigned w.e.f. 14/05/2018)

2/2

Encik Mohd Yusof Abu Othman(Resigned w.e.f. 12/05/2018)

2/2

Encik Jamalul Kiram Mohd Zakaria(Appointed w.e.f. 14/02/18 & Resigned w.e.f. 15/05/2018)

2/2

Datuk Md Afendi Hamdan(Resigned w.e.f. 18/05/2018)

0/2

Dato’ Abd Aziz Sheikh Fadzir(Appointed w.e.f. 7/06/2018 & Resigned w.e.f. 13/12/2018)

5/6

Datuk Dr. Ibrahim Yahaya(Appointed w.e.f 21/7/2018 & Resigned w.e.f. 21/12/2018)

3/6

Dato’ Mohd Azmi Othman(Appointed w.e.f. 17/07/2018)

6/6

Dato’ Ahmad Fauzi Zahari(Appointed w.e.f. 17/07/2018)

6/6

Dr. Badrul Hisham Mohd Yusoff(Appointed w.e.f. 26/07/2018)

5/6

Encik Wan Zalizan Wan Jusoh(Appointed w.e.f 17/07/2018 & Resigned w.e.f. 14/12/2018)

5/6

Dato’ Sri Dr. Irmohizam Ibrahim(Appointed w.e.f. 13/12/2018 & Resigned w.e.f. 24/12/2018)

0/0

vIII. continuing Education programs

The Board fully supports the need for its members to continuously enhance their skills and knowledge to keep abreast with the latest developments in the industry and market place, to effectively carry out their duties and responsibilities as Directors in compliance with the MMLR. All Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Malaysia Securities Berhad. The Board will continue to evaluate and determine the



51

training needs of its Directors on an on-going basis. The trainings attended by the Board are :-

1. High Impact Presentation Skills

2. Auditing the Business Continuity Management & System

3. Implementing the Companies Act, 2016 and Malaysian Code on Corporate Governance 2017

4. Intergrated Risk and Compliance Awareness and Education

IX. Board charter, code of conduct and Whistleblowing policy

As part of the governance process, the Board has formalized and adopted the Board Charter which serves as a guide to the Board of Utusan. This Board Charter, which will be reviewed periodically, sets out the composition and balance, roles and responsibilities, operation and processes of the Board and is to ensure that all Board members acting on behalf of the Company are aware of their duties and responsibilities as Board members. The Board Charter is available on the Company’s corporate website at www.utusangroup.com.my.

The Board has established a Directors’ Code of Conduct to guide the Board in discharging its oversight role effectively. The Code of Conduct requires all directors to observe high ethical business standards of honesty and integrity and to apply these values to all aspects of our business and professional practices and act in good faith in the best interests of the Group and its shareholders.

The Company has in place a Whistleblowing Policy to inculcate the culture of good business ethics and governance within the Group and provide employees with an accessible avenue to disclose any improper conduct or any action that is, or could be harmful to the reputation of the Group and/or compromise the interest of stakeholders.

The Code of Conduct and the Whistleblowing Policy will be reviewed periodically and are available on the Company’s corporate website at www.utusangroup.com.my



52

X. Board composition

The Board currently consists of four (4) members comprising:

• One (1) Executive Director

• Three (3) Independent Non-Executive Directors

This current composition of the Board is in line with Practice 4.1 of MCCG where at least half of the board comprises Independent Directors. The Board comprises a balanced mix of skills, knowledge and experience in the business and management fields which are relevant to enable the Board to discharge its roles and responsibilities in an effective and efficient manner. The profiles of all Board Members, comprising of their qualification, experience and calibre are disclosed on page 6 to 7 of this Annual Report.

Independent Non-Executive Director

Executive Chairman

Board of director

XI. Tenure of Independent directors

As recommended by MCCG, the tenure of the Independent Directors should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an Independent Director may continue to serve on the Board subject to the Directors’ re-designation as a Non-Independent Director. The Board may seek shareholders’ approval to retain him or her as Independent Director in the next Annual General Meeting if the Board is satisfied that he or she is able to bring independent judgment to the Board deliberations. If the Board continues to retain the Independent Director after the twelfth (12) years, the Board will seek annual shareholders’ approval through a two-tier voting process.

Currently, none of the Independent Directors had served the Company for more than nine (9) years.

XII. New candidates for Board Appointment

Appointments to the Board are made via a formal and transparent process and taking into account objective criteria such as qualifications, skills, experiences, professionalism, integrity and diversity needed on the Board in the context of the Group’s strategic direction. This process has been reviewed, approved and adopted by the Board. New appointees will be considered and evaluated by the NRC. The NRC will then recommend the candidates to be approved and appointed by the Board. The Company Secretary will ensure that all appointments are properly made,



53

and that legal and regulatory obligations are met.

In searching for suitable candidates for directors, the NRC may receive suggestions from existing Board members, Management and major shareholders. The NRC is also open to referrals from external sources available, such as industry and professional associations, as well as independent search firms.

XIII. Boardroom diversity

While the Board supports the philosophy of gender diversity and recognizes the benefits that it can bring, the Board believes that any new appointments should be based on merits and capability to effectively contribute to the highly challenging business in the media industry. As at todate, the Board has yet to appoint a female director.

The Company currently does not have a formalised Board gender diversity policy alongside targets and measures. However, the issue of gender diversity in the Boardroom is discussed and acknowledged by the Board. The Board will take steps towards formalising such policy, targets and measures to reflect the Company’s commitment towards gender diversity.

XIv. Time commitment and directorship in Other public Listed companies

The directorships in other public listed companies in Malaysia held by any Board member at any one time shall not exceed the maximum number as may be prescribed by the relevant authorities. In addition, at the time of appointment, the Board shall obtain the Director’s commitment to devote sufficient time to carry out his/her responsibilities. Directors are required to notify the Chairman before accepting any new directorship(s). Any Director is, while holding office, at liberty to accept other Board appointments in other companies so long as the appointment is not in conflict with the Company’s business and does not affect the discharge of his/her duty as a Director of the Company.

Each Board member is expected to achieve at least 50% attendance of total Board Meetings in any applicable financial year with appropriate leave of absence be notified to the Chairman and/or the Company Secretary, where applicable.

II. Remuneration

Utusan aims to set remuneration at levels which are sufficient to attract and retain high calibre Directors needed to run the business successfully, taking into consideration all relevant factors including the function, workload and responsibilities involved.

As for oversight on remuneration matters, the Board has established a specialised Committee, namely NRC which comprises exclusively Non-Executive Directors.



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The details of the remuneration of the Directors of the Company for the financial year ended 31 December 2018 are as follows:

Executive director SalaryRM

EpfRM

Annual feeRM

Meeting feeRM

AllowanceRM

BIKRM

Dato’ Abd Aziz Sheikh Fadzir(Appointed w.e.f 7/7/2018)(Resigned w.e.f. 13/12/2018)

- - - - - -

Datuk Mohd Noordin Abbas(Resigned w.e.f. 26/07/2018)

287,225.80 55,806.00 17,013.70 34,193.55 - 37,504.76

Datuk Abdul Aziz Ishak(Resigned w.e.f. 26/07/2018)

360,000.00 68,400.00 17,013.70 - - 5,250.00

Datuk Dr. Ibrahim Yahaya(Appointed w.e.f. 13/12/2018)(Resigned w.e.f 21/12/2018)

- - 13,808.22 7,500.00 - -

Non Executive director SalaryRM

EpfRM

AnnualfeeRM

Meeting fee AllowanceRM

BIKRM

Tan Sri Mohamad Fatmi Che Salleh(Resigned w.e.f. 15/05/2018)

- - - - 89,677.42 3,000.00

Tan Sri Datuk Seri Ismail Yusof(Resigned w.e.f. 21/06/2018)

- - 14,136.99 15,000.00 - -

Datuk Seri Tengku Sariffuddin Tengku Ahmad(Resigned w.e.f. 15/05/2018)

- - 11,095.89 12,500.00 - -

Datuk Md Afendi Hamdan(Resigned w.e.f. 15/05/2018)

- - 11,342.47 - - -

Mohd Yusof Abu Othman(Resigned w.e.f. 12/05/2018)

- - 10,849.32 12,500.00 -

Encik Jamalul Kiram Mohd Zakaria(Resigned w.e.f. 14/05/2018)

- - 7,397.26 7,500.00 - -

Datuk Dr. Ibrahim Yahaya(Appointed w.e.f 17/7/2018)(Resigned w.e.f 21/12/2018)

- - 13,808.22 7,500.00 - -

Dato’ Mohd Azmi Othman(Appointed w.e.f 17/7/2018)

- - 13,808.22 25,000.00 - -

Dato’ Ahmad Fauzi Zahari(Appointed w.e.f 17/7/2018)

- - 13,808.22 15,000.00 - -

Dr Badrul Hisham Mohd Yusoff(Appointed w.e.f 26/7/2018)

- - 13,068.49 22,500.00 - -

Encik Wan Zalizan Wan Jusoh(Appointed w.e.f 17/7/2018)(Resigned w.e.f. 13/12/2018)

- - 12,328.77 22,500.00 - -



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Dato’ Seri Irmohizam Ibrahim(Appointed w.e.f 13/12/2018)(Resigned w.e.f. 24/12/2018)

- - - - - -

The Directors did not receive remuneration at Group level.

B. EffEcTIvE AUdIT ANd RISK MANAgEMENT

I. Audit and Risk Management committee

The Audit and Risk Management Committee (‘ARMC’) is relied upon by the Board to, amongst others, provide advice in the areas of financial reporting, external audit, internal control environment and internal audit process, review of related party transactions as well as conflict of interest situations. The ARMC also undertakes to provide oversight on the risk management framework of the Group.

The annual financial statements and quarterly results are reviewed by the ARMC and approved by the Board prior to public release.

Through the ARMC, the Company has established a formal and transparent relationship with the external auditors. The external auditors are invited to discuss the annual financial statements, their audit plan, audit findings and other special matters that require the Board’s attention.

The ARMC meets with the external auditors without the Management or the Executive Chairman’s presence at least twice a year.

The ARMC is chaired by an Independent Director who is distinct from the Chairman of the Board. All members of the ARMC are financially literate. One of the ARMC members is a member of the Malaysian Institute of Accountants.

The ARMC has full access to both the internal and external auditors who, in turn, have access at all times to the Chairman of the ARMC. The role of the ARMC and the number of meetings held during the financial year as well as the attendance record of each member are set out in the Audit and Risk Management Committee Report of the Annual Report.

II. Risk Management And Internal control framework

The Group has established policies and framework for the oversight and management of material business risks and has adopted the Group’s Risk Management Policy. The Group, through the Corporate Services & Risk Management Department, maintains risk registers which are reviewed and updated on a periodical basis.

The internal audit function is carried out by an in-house Group Internal Audit Department (‘GIAD’). The GIAD’s function reports directly to the ARMC. GIAD’s authority, scope and responsibilities are governed by the Internal Audit Charter which is approved by the ARMC.

Further information on the Group’s risk management and internal control framework is made available on the Statement of Risk Management and Internal Control of the Annual Report.

c. INTEgRITY IN cORpORATE REpORTINg ANd MEANINgfUL RELATIONShIp WITh STAKEhOLdERS

I. communication With Stakeholders

The Group is fully committed to maintain a high standard for the dissemination of relevant and material information



56

on the development of the Group. The Group also places strong emphasis on the importance of timely and equitable dissemination of information to stakeholders. Key stakeholder communication modes include Annual Report, unaudited quarterly results, announcement to Bursa Malaysia, corporate website and investor relation activities such as Annual General Meetings.

Investor relation activities are aimed at developing and maintaining a positive relationship with all the stakeholders through active two-way communication. Stakeholders can also direct their queries to Dato’ Abd Aziz Sheikh Fadzir the Executive Chairman at fax number 03-92210691 or by mail to the registered office of the Company at No. 44, Jalan Utusan Off Jalan Chan Sow Lin, 55200 Kuala Lumpur.

II. conduct of general Meetings

The Group is of the view that General Meetings are important platforms to engage with its shareholders as well as to address their concerns. All Directors, including the Chairman of the respective Board Committees have attended and will continue to attend the AGM of the Company. In addition to the above, members of the senior management and external auditors of the Company have also attended and will continue to attend the AGM to respond to the shareholders’ queries including the responses in respect to the questions raised by the Minority Shareholders Watchdog Group (‘MSWG”), if any, prior to the AGM and/or during the AGM.

The Group encourage shareholders to attend and participate in the AGM by providing adequate advance notice and holding the AGM at a readily accessible location. As recommended by the MCCG, the notice of AGM will be despatched to shareholders at least twenty eight (28) days before the AGM, to allow shareholders to have additional time to go through the Annual Report and make the necessary attendance and voting arrangements. The Notice of AGM, which sets out the business to be transacted at the AGM, is also published in major local newspapers. The Board will ensure that each item of special business included in the notices of the AGM or extraordinary general meeting is accompanied by a full explanation of the effects of any proposed resolution.

Additionally, the number of foreign shareholders is of a percentage which does not warrant additional arrangements for participation in the AGM. For these shareholders, they have the channel through proxy voting to vote on resolutions on their behalf. This also applies to votes in absentia whereby the shareholders can appoint the Chairman as their proxies to attend and vote on their behalf at the forthcoming AGM by filling up the Proxy Form and send it to the Share Registrar of the Company within the stipulated time period.

Pursuant to Paragraph 8.29A of the MMLR, all resolutions tabled at General Meeting are to be voted by poll. For the past three years, Utusan has utilized electronic voting platform in the AGM to gain from more accurate and transparent voting results, shorter turnaround time for declarations of results, making voting more accessible and reduce administrative cost and paper work.

At the 50th AGM held on 6th June 2018, the Chairman informed the shareholders prior to the discussion of the resolutions on the casting of votes by electronic poll voting. An independent scrutineer was appointed to validate the votes casted at the AGM.

This Statement was approved by the Board of Directors on 22 April 2019.



57

OTHER INFORMATION REQUIRED BY THE LISTING REQUIREMENTS OF THE BURSA MALAYSIA SECURITIES BERHAD

1. AUdIT ANd NON-AUdIT fEES The details of the statutory audit and non-audit fees paid/payable to Messrs Ernst & Young for services rendered to

the Company and the Group for the financial year ended 31 December 2018, are as follows:

group (RM)

company (RM)

Statutory Audit Fees 215,500 93,000 Non-Audit Fees 28,000 28,000

2. INTERNAL AUdIT fUNcTIONS The Group has an in-house Internal Audit Department to undertake the internal audit functions.

3. MATERIAL cONTRAcTS There were no material contracts which had been entered into by the Group involving the interests of Directors and

major shareholders, either still subsisting at the end of the financial year ended 31 December 2018 or entered into since the end of the previous financial year.

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