utusan melayu (malaysia) berhad annual report … hadiah sastera kumpulan utusan and malam puisi....

UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017

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SUSTAINABILITY REPORT

BUSINESS

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

Over 80 years in the newspaper publishing industry, Utusan Group has weathered many challenges and intense competition. However, Utusan remains firm in its belief that it will successfully sail through all the obstacles and continuously fulfill the needs of loyal customers, suppliers, employees, shareholders and other stakeholders.

KEY AREAS OF CONCERN OUR ENGAGEMENT

EMPLOYEES

l A friendly and conducive working environment. Good inter-communication between the management team and the staff.

l To keep staff informed on the Company’s latest development and strategies.

l Possibilities of future career advancement. l Safe working conditions and educate

healthy lifestyle.l Solid training and succession planning.

l Utusan encourages an open door communication between the management team and staff.

l Utusan still believes in good reward system to those deserved to be rewarded despite financial challenges.

l Utusan always gives full support to our Badan Keluarga Utusan Melayu (BKUM), a body which is formed for the welfare of the staff.

l The formation of OSHA committee helps to ensure the operations, plants and offices are adhering to safety regulations

TRADE UNIONS

l To encourage open discussion between the members and the management.

l To update the members on Company’s financial performance and development.

l Any issues raised by the Union will be discussed in Joint Consultative Committee (JCC) between the management and representatives from the Union.

l The top management is adopting an open door concept for the Union representatives to discuss any matters of concern.

CUSTOMERS

l Provide up-to-date, balanced and reliable news.

l Provide stable digital platform so that news can be accessed on a real time basis.

l Provide multimedia platforms for advertisers.

l Offering customers with various platforms such as print newspaper, e-paper, online TV and social media.

l Ensure newspapers reach the market timely by closely monitoring all transporters.

Utusan Melayu (Malaysia) Berhad (“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 ourpeople.

OUR PEOPLE BUSINESS

ENVIRONMENT COMMUN

ITY

PEKERJA KAMI PERNIAGAAN

ALAM SEKITAR KOMUN

ITI

4 PILLARS OF SUSTAINABILITY

4 TUNJANG KEMAPAN

AN


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COMMUNITY

KEY AREAS OF CONCERN OUR ENGAGEMENT

HEALTHSCREENING

INDUSTRIALHARMONY

WORK & LIFEHARMONY

COMMUNITY

YAYASANKUMPULAN

UTUSAN

HUMANITARIANAID

CULTURE ANDLITERATURE EDUCATION

ENVIRONMENT

NEWSPRINT ENERGY SAVINGS WASTE CONTROL OTHER EFFORTS

OUR PEOPLE

TRAININGAND

DEVELOPMENT

STAFFTURNOVER

SUCCESSIONPLANNING

SAFETYAND HEALTH

YAYASAN KUMPULAN UTUSAN

Yayasan Kumpulan Utusan (“Yayasan”) through its corporate responsibility programme known as Utusan Prihatin reaches out to various levels of society. Among the individual aid channeled through this programme is a contribution of RM5,000 and basic necessities to one year old girl, Nur Medina Normazhad who suffers from liver failure and requires a liver transplant.

SUPPLIERS

l A standard and fair procurement policies and procedures in giving out tenders and projects.

l Good communication with suppliers and update any Company’s development that might affect them as suppliers.

l Utusan has formulated a standard procurement policies that ensure an ethical procurement processes are being practised.

l Regular meetings and communications are arranged with the suppliers to update them on any new development within Utusan.

AGENTS/VENDORS

l Products are efficiently placed in the market in an orderly and timely manner.

l Close monitoring of the performance of vendors and agents by the Marketing Department. Sales executives in every state are responsible to keep abreast with Utusan’s products’ development and communicate it to vendors/agents.

BUSINESS PARTNERS

l To keep on exploring business collaboration with strategic partners to help Utusan to diversify its business.

l The management is actively reaching out to potential strategic partners to collaborate in any business opportunities that can provide recurring income to Utusan.

SHAREHOLDERS l Dissemination of information on timely manner.

l Complying with Bursa Malaysia requirements by publishing quarterly results and Annual Reports.

l Information and explanations given at Annual General Meeting and responding to Minority Shareholder Watchdog Group’s concerns on the performance of Utusan .

COMMUNITIES

l To uphold the value of arts and culture.l Giving back to the people through charity

events.l Promoting importance of education.

l Various events to promote arts and culture such as Hadiah Sastera Kumpulan Utusan and Malam Puisi.

l Continuing our efforts to promote education using our products ie Utusan Pelajar, Tutor Guru as well as offering sponsorships for further studies.

GOVERNMENT / REGULATORS

l Complying with all regulations and policies formulated by the Government or other relevant bodies such as GST, accounting standards and income taxation rules.

l Promoting awareness among staff the importance of complying with existing laws and regulations.

l Communication with the regulators should there be any clarification on certain laws or regulations.


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HUMANITARIAN AID

Utusan has always played a role and supported initiatives in fulfilling every humanitarian aid mission to help victims of natural disasters and reaching out to those in need.

Doa Untukmu Rohingya and Konsert Munajat Untuk Rohingya: Sepasang Tangan Berdoa programmes that brings together artists and literary figures have managed to raise funds to be channeled to Tabung Rohingya Utusan-TH that was established last year through a joint venture between Utusan with Tabung Haji.

Meanwhile, the Tabung Kemanusiaan Aceh, which was also formed last year managed to raise donations of over RM1.0 million and were handed over to the communities at Pidie Jaya, Aceh, Indonesia. Both aids have become a platform to enhance the image and branding of Utusan as a responsible and caring institution championing universal issues.

In addition, Yayasan also organized a visit to the Pusat Pemulihan Dalam Komuniti (PDK) Cahaya Kasih, Subang Jaya, Selangor to celebrate the children with disabilities and channeled some donation to the centre as part of its initiatives in reaching the disabled.

Yayasan in collaboration with the Department of Social Welfare Subang Jaya continues its tradition of corporate responsibility by organizing Majlis Sentuhan Kasih Aidilfitri 2017 in the spirit of Aidilfitri. 200 special guests consisting of the disabled, the poor, the elderly and single mothers from various races were celebrated. Yayasan also handed over three wheelchairs to three disadvantaged recipients and five Orang Kurang Upaya (OKU) cards issued by JKM to five new recipients during the event.

A visit to Pusat Pengajian Tahfiz Lil Banin, Pendang, Kedah was organized to celebrate hari raya with students and citizens at the centre. During the event, Yayasan handed over a contribution of RM30,000 to cover the cost of repair works of the male dormitory at the centre.

Humanitarian aid at Pidie Jaya, Aceh, Indonesia.

CULTURE AND LITERATURE

Utusan continues to maintain its social responsibility in upholding the Malay language through literature competitions and poetry readings to ensure that the literary arena continues to have a special significance in the hearts of our people.

The 32nd Hadiah Sastera Kumpulan Utusan and Sayembara Novel Fiksyen Sains dan Teknologi UTM-Kumpulan Utusan which is in its fourth season remains as the main platform for Malaysian writers to showcase their best works to the country’s literary world.

Meanwhile, Malam Puisi Negaraku Sehati Sejiwa in conjunction with the celebration of National Day 2017 has successfully revived poetry as a cultural heritage, especially among young audiences. The event was jointly organized with Universiti Kebangsaan Malaysia and Malaysia Information Department.

Handover contribution to Pusat Pengajian Tahfiz Lil Banin, Pendang, Kedah.


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In the pursuit to produce a generation of hafiz Al-Quran, Utusan Malaysia Education Unit in collaboration with Darul Quran Jabatan Kemajuan Islam Malaysia (Jakim) organized the Kem Remaja Tutor Generasi Al-Quran aiming at improving the skills and quality of reading and memorizing the Quran among the adolescents.

Festival Hari Guru, the annual programme in conjunction with the National Teacher’s Day, organized for the 9th consecutive year has managed to strengthen the branding of Utusan in the field of education and successfully maintain cooperation with the Ministry of Education.

Forums such as Wacana Bahasa Melayu Wasiat ke-6 Raja-Raja Melayu, Forum Memperingati Sumbangan Tan Sri Just Faaland kepada Pembangunan Sosioekonomi Malaysia, Forum Jihad Memerangi Dadah and Program Inspirasiku TN50 & Masa Depan Generasi Muda Malaysia jointly organized with Majlis Perundingan Melayu (MPM) have given an effective impact to Utusan’s image as a media practitioner that brings aspirations towards the country’s development.

Program Bubur Lambuk Ramadan was organized in collaboration with Yayasan Pembangunan Ekonomi Islam Malaysia (YaPIEM) to distribute almost 7,000 packets of bubur lambuk to the public during Ramadan.

Utusan also plays a role in exposuring the public to financial literacy. The inaugural Simposium Saham Utusan 2017 attracted almost 1,000 participants interested in getting information on stock and investment management.

Forum Nombor 10 - Mengembalikan Kegemilangan Bola Sepak Malaysia.

Hadiah Sastera Kumpulan Utusan 2016.


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Utusan is also among media practitioners who upholds and elevates national sports in the country through its articles. The organization of Forum Nombor 10 – Mengembalikan Kegemilangan Bola Sepak Malaysia has given the young generation of football fans some insights into the quality and performance of the current football scene from the sports figures of the past.

Through its 8th year of competition, Kejohanan Sepak Takraw KFC-Utusan has maintained the interests of sepak takraw fans. In ensuring its sustainability, Utusan will continue to bring constant changes in the organization of the competition.

In line with our commitment in social services to Malaysians, Utusan’s publications continue to highlight community stories that encompass all walks of life in bringing changes to the society in this country.

Utusan plans to promote and increase civic awareness among the public, focusing mainly on the younger generation. Various programs will be designed in the future to educate the community, concentrating particularly on primary school children in our effort to create a harmonious society.

EDUCATION

Utusan Pelajar and Tutor (Tutor UPSR, Tutor PT3 and Tutor SPM) are the most preferred reference materials in schools to help students gain the latest information and stimulate their higher level thinking skills.

Apart from Utusan Pelajar and Tutor, an education community site, tutor.com.my is still maintained to ensure additional learning materials can be disseminated to students free of charge through online. Both of this education elements (newspaper and educational sites) were the most chosen because of the content that meets the current needs.

Through a project in which Government gave computer tablets to teachers, several briefing and review sessions have been organised to ensure the teachers understand how to use the Tutor Guru application. This application is aimed at helping teachers to provide a teaching framework for better teaching techniques in schools.

In addition, Biasiswa Kumpulan Utusan-Universiti Limkokwing, a collaboration with Limkokwing University of Creative Technology, continues to give more opportunities to the less fortunate to further their studies at tertiary level.

Kumpulan Utusan-Universiti Limkokwing Scholarship.


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ENVIRONMENT

NEWSPRINT

After more than eighty years in the newspaper publishing industry, Utusan has gone through various changes and developments in printing technology. With environmental concerns rising, the publishers started to move from the use of pulp production based newsprint to recycle newsprint. From 2006, Utusan has committed to use recycled newsprint at least 50% of our total annual newsprint consumption.

Another approach that has been implemented was the reduction in the paper grammages of newsprint used from 48.8 gsm to 42.0 gsm. This in turn reduces the total weight of the paper used for the same number of print order.

ENERGY SAVINGS

Utusan has 3 printing plants in Selangor, Penang and Terengganu. Average electricity consumption for the printing operation is 60% of the total electricity consumed by Utusan. Changing the size and lowering print order for our newspapers have allowed us to reschedule our printing operations to achieve better energy effciency. All insertions are printed at night to benefit from a lower rate of RM0.219 / kWh compared to RM0.355 / kWh during the day. This can be done in Penang and Terengganu due to low print order numbers.

Apart from that, we have also replaced some of halogen lights in our buildings to LED lights. It does not only contribute to energy savings but also provides higher level of brightness.

WASTE CONTROL

Utusan always ensures that the system for the disposal of solid waste from all our printing plants is managed in accordance with provisions laid down by the Environment Act 1972. All of the wastewater treatment plants are managed by competent staff. The wastewater treatment plant has been upgraded twice to ensure that it meets the standards set by the Department of Environment (DOE) and Department of Irrigation and Drainage (DID).

All the newspaper returns are properly collected and managed before being sold to third parties for recycling. Newsprint waste is controlled by setting the acceptable wastage rate of 5% in Bangi and Seberang Jaya while 10% is set for our factory in Gong Badak. This can be achieved by using only quality newsprint and maintaining printing machines periodically.

OTHER EFFORTS

Support for environmental conservation will always be highlighted through newspapers and other media platforms of Utusan. Continuous efforts are aimed at raising public awareness on the importance of sustaining the environment.

Internally, Utusan has always encouraged the staff to implement measures that can help to conserve the environment. For examples, waste materials from printing process will always be collected before being disposed systematically using environmentally friendly methods.

In addition, other practices such as recycling of paper, energy savings and centralized printing are among the measures that are being practiced in our daily operations.

HEALTHSCREENING

INDUSTRIALHARMONY

WORK & LIFEHARMONY

COMMUNITY

YAYASANKUMPULAN

UTUSAN

HUMANITARIANAID


ENVIRONMENT


OUR PEOPLE

TRAININGAND

DEVELOPMENT

STAFFTURNOVER

SUCCESSIONPLANNING

SAFETYAND HEALTH


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Utusan always places great importance on staff welfare, safety and health by providing a safe and secure work environment. Various programmes and activities have been organized as part of Utusan’s efforts in maintaining a good relationship between staff.

TRAINING AND HUMAN DEVELOPMENT

Utusan contributes 1% of its total staff basic salaries on monthly basis amounting to RM54,000 a month to the Human Resource Development Fund (HRDF). The fund will be utilised to organize training programmes to suit the needs of all employees.

In order to ensure that all staff receive training in accordance with their job scope, the Training Needs Analysis (TNA) / Training Needs Identification (TNI) process has been implemented by Human Resource Department. This is achieved by the distribution of questionnaires to all staff and meetings organised with the relevant Head of Department / Unit.

Our reporters are also equipped with the latest equipment such as Iphone mobile phone to apply the concept of Mobile Journalism (MOJO). News can now be released more timely and accurately to the readers.

Various internal and external training programmes involving both hard and soft skills had taken place through out the year 2017 to ensure that relevant trainings are given to staff that relates well to their job responsibilities, among others :

NO TRAINING PROGRAMMES DATE

TECHNICAL/FUNCTIONAL/HARD SKILLS

External Programmes

1 Best Practices in Identification of Building Defects & Maintenance 19 & 20 January 2017

2 New Expectations & Challenges of Companies Act 2016 1 March 2017

3 Workshop In Narrative Journalism 13 April 2017

Internal Programmes

1 Overhead Crane Safety 3 August 2017

2 Forklift Safety 24 August 2017

3 Inbase Data Science For Executive : Towards A Data Driven Organization 23 & 24 October 2017

OUR PEOPLE

HEALTHSCREENING

INDUSTRIALHARMONY

WORK & LIFEHARMONY

COMMUNITY

YAYASANKUMPULAN

UTUSAN

HUMANITARIANAID


ENVIRONMENT


OUR PEOPLE

TRAININGAND

DEVELOPMENT

STAFFTURNOVER

SUCCESSIONPLANNING

SAFETYAND HEALTH


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NO TRAINING PROGRAMMES DATE

SOFT SKILLS

External Programmes

1 The Launching of HRDF Human Capital Strategic Initiative 20 March 2017

2 Setiausaha Berkaliber, Dinamik & Setia 12 April 2017

3 Masterclass: Big Data: Starting with the basics 18 April 2017

Internal Programmes

1 Corporate Grooming & Business Etiquette 27 & 28 February 2017

2 Unleash The Leader: The Right Leadership style 21st 6 & 7 November 2017

3 Practical Leadership Achieving Peak Excellence 23 & 24 November 2017

In addition, a total of six series of teambuilding sessions were held in 2017 involving personnel of the Production Department ie Production Department Team Enhancement Programme (Blue Ocean Strategy). The program was held to increase motivation and teamwork spirit among employees as well as to create a harmonious network between staff in the department regardless of units and work location.

SAFETY & HEALTH

Utusan has never ignored the importance of safety in the workplace. The safety of our building and working environment are constantly monitored by the appointed OSH Committee in order to comply with the regulations by relevant authorities like Fire Department and Department of Environment. The committee will meet every quarter to discuss and identify any issues related to occupational health.

Utusan also provides Personal Protective Equipment (PPE) including ear plugs, safety boots and other safety protection equipments to ensure that staff are healthy and safe. All safety regulations must be followed to avoid injuries and accidents so that daily operations run smoothly.

In 2017, there is no accident or injury reported in any of our printing plants or offices.

HEALTH SCREENING

Utusan has collaborated with our panel hospitals in conducting medical examination for the staff. Health programmes entitled “You Sure You Healthy” and “Ice Cream For Eye Screen” were organised in collaboration with Pantai Hospital, Ampang.

The programmes provide free screenings for employees such as body mass index testing, blood glucose levels, blood pressure, eye examination and many others.

In addition to free medical examination for employees who have SOCSO’s vouchers, they are also encouraged to undergo a thorough medical examination every year to have an early detection of any disease.

STAFF TURNOVER

Staff turnover rate for 2017 is around 6%. The rate is considered acceptable compared to other companies. Human Resources Department has conducted exit interviews with some of employees who have tendered resignation to determine the reason why they decided to leave the Company. Exit interview is conducted via two ways: i. Face-to-face by filling up a special form provided.ii. Contacted by telephone.


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Utusan can make appropriate improvements while minimizing staff turnover rate each year through an exit interview.

Most of the employees are loyal and have unwavering support towards Utusan. Contractual bonus given annually to all eligible employees injects motivation among them to work diligently and prevents them from leaving the Company.

INDUSTRIAL HARMONY

Recognizing the importance of good relations between employer and employees, Joint Consultative Committee (JCC) meetings are often held with both union bodies ie National Union of Journalists (NUJ) and National Union of Newspapers Workers (NUNW) from time to time. Any internal problems or grievances among union members will be discussed in the meeting with the objective to find amicable solutions.

Utusan continues to adopt an open door policy whereby dissatisfactions about staff welfare and benefits and other matters are discussed in the JCC rationallly and professionally.

Other than NUJ and NUNW at the holding company level, there are also union bodies within the subsidiaries ie NUNW in Utusan Media Sales Sdn Bhd and NUJ in Utusan Karya Sdn Bhd. The same mechanism is being applied whereby two-way discussions are held from time to time to ensure harmonious industrial relations.

SUCCESSION PLANNING

Staff succession plan is one of the most important issues in an organization. It aims to ensure the Company’s daily operations will not be disrupted when employees resign abruptly especially when it involves the management level.

The Heads of Departments must identify and train potential employees to be appointed to succeed any particular position as an initial move to fill any vacancy in the future.

WORK & LIFE HARMONY

Efforts to promote a harmonious work culture is not just limited to the employees only. In fact various programmes and activities had been organized for family members of the employees in collaboration with Badan Keluarga Utusan Melayu (BKUM) and Kelab Veteran Utusan Melayu (KVUM) :l Majlis Meraikan Anak Yatim Kumpulan Utusan dan Nuzul Al-Quranl Bubur Lambuk Kumpulan Utusanl Hari Raya Aidilfitri Kumpulan Utusan - #inikanRayaUtusan2017l Syoknya Kenduri & Ceramah Perdana – Kerja Itu Ibadahl Majlis Korban & Akikah BKUMl School holiday programme – Trip to Kidzanial Tutor Sifir Seminarl Majlis Berkhatan Anak-Anak Kumpulan Utusan

Meanwhile, the children of employees who excel in Ujian Penilaian Sekolah Rendah (UPSR), Form 3 Assessment (PT3), Sijil Pelajaran Malaysia (SPM) and Sijil Tinggi Pelajaran Malaysia (STPM) continue to receive incentives from Utusan to motivate them to continue to try and excel in their studies.



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CORPORATE GOVERNANCE OVERVIEW 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 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 February 2018, 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 is 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 Managing Director (‘GMD’).

The Board has full control over the businesses and affairs of the Company and the Group. The Board assumes the following responsibilities :l formulating the business direction and objectives of the Group;l reviewing, adopting and approving the Group’s annual budgets, strategic plans, key operational initiatives,

major investments and funding decision;l overseeing the conduct of business of the Group; andl 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.

There is a distinct and clear division of responsibilities between the Chairman who is an Independent Non-Executive Director and the GMD. The GMD is the conduit between the Board and the Management in driving the success of the Group’s governance and management function.


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The Chairman is responsible for instilling good corporate governance practices, ensuring Board effectiveness and conduct whilst the GMD 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 Chairman and GMD are prescribed in the Board Charter which is available on the Company’s corporate website at www.utusangroup.com.my.

The Board is assisted by the Board Committees in carrying out its duties and responsibilities.

AUDITCOMMITTEE

(AC)

NOMINATION & REMUNERATION

COMMITTEE (NRC)

INVESTMENTCOMMITTEE

(IC)

Review of financial reporting, internal controls, related party

transactions and conflict of interest, internal audit as well

as external audit processes

Review candidatures for Board appointment and

re-appointment as well as annual assessment of the

Board, Board Committees and Directors’ Processes &

Review and recommend matters relating to the

remuneration of the Board and Senior Management

Review and evaluate all investment proposals based upon the necessary criteria

for investment prior to approval by the Board for the

Group’s implementation

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

BOARD

GROUP MANAGING DIRECTOR (GMD)

Responsible for overall business and implementation of Board policies, decisions and power within delegated limits for all matters except those delegated to Board 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.

l Audit Committee (AC) The composition, terms of reference and the Report of Audit Committee are set out separately in the Audit

Committee Report as laid out on page 28 to 31 of the Annual Report.

l Nomination & Remuneration Committee (NRC) The Board had, on 28 February 2018, approved the merger of the Nomination Committee and the

Remuneration Committee as a single committee known as the Nomination & 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.

l Activities of Nomination Committee in 2017 The Nomination Committee met twice during the financial year 2017 which it recommended to the

Board amongst others, the appointment of new Director and re-election and re-appointment of Directors who retired at the 2017 Annual General Meeting. The Nomination Committee also carried out the assessment on the Board.

l Investment Committee (IC) The IC was established on 24 December 2012 to evaluate all investment proposals prior to approval by the

Board for the Group’s implementation. The Committee is to consider all investment proposals based upon the necessary criteria for investment, return on investment and source of funding.

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. Management provides the Board with complete, adequate and timely information prior to meetings and on an ongoing basis to enable them to make informed decisions.

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.


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During the year, the Board has deliberated on business strategies and critical issues concerning Utusan 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 2017 is outlined below:

Directors Attendance

Tan Sri Mohamad Fatmi Che Salleh 6/6

Datuk Mohd Noordin Abbas 6/6

Datuk Abdul Aziz Ishak 5/6

Tan Sri Datuk Seri Ismail Yusof 5/6

Datuk Seri Tengku Sariffuddin Tengku Ahmad 6/6

Datuk Md Afendi Hamdan 3/6

Mohd Yusof Abu Othman 6/6

Dato’ Zakri Afandi Ismail (Retired w.e.f. 25/5/2017) 2/2

Dato’ Dr. Norraesah Mohamad (Resigned w.e.f. 7/2/2017) -

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 training needs of its Directors on an on-going basis. During the financial year under review, various members of the Board have attended the following seminars: l WAN-IFRA Conference 2017;l Harvard Business School Malaysia : Competing On Business Analytics and Big Data;l Digital Media Asia 2017;l Corporate Governance Breakfast Series;l The Companies Act 2016 : Embracing A New Era; andl Key Changes in the Companies Act 2016

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.


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II. Board Composition The Board currently consists of eight (8)

members comprising:l Two (2) Executive Directors l Five (5) Independent Non-Executive

Directors (inclusive the Chairman)l One (1) Non-Independent Non-Executive

Director

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 11 of this Annual Report.

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.

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.

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 new female director in place of Dato’ Dr. Norraesah Mohamad who has resigned on 7 February 2017.

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.

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.

The Company has on 14 February 2018 appointed Encik Jamalul Kiram Mohd Zakaria as an Independent Non-Executive Director.

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. The functions of NRC includes amongst other to review and recommend matters relating to the remuneration of the Board.

INDEPENDENTNON-EXECUTIVE DIRECTOR

NON-INDEPENDENTNON-EXECUTIVE DIRECTOR

EXECUTIVE DIRECTOR

PENGARAH BEBASBUKAN EKSEKUTIF

PENGARAH BUKAN BEBASBUKAN EKSEKUTIF

PENGARAH EKSEKUTIF


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The details for the remuneration of Directors for the financial year ended 31 December 2017 for the Company are as follows:

Executive Directors

SalariesRM

BonusesRM

EPFRM

FeesRM

AllowancesRM

Benefit-in-Kind

RM

Datuk Mohd Noordin Abbas 499,935 84,000 108,061 30,000 59,516 54,200

Datuk Abdul Aziz Ishak 360,000 60,000 76,429 30,000 - 17,100

Non-ExecutiveDirectors

SalariesRM

BonusesRM

EPFRM

FeesRM

AllowancesRM

Benefit-in-Kind

RM

Tan Sri Mohamad Fatmi Che Salleh - - - - 240,000 7,200

Tan Sri Datuk Seri Ismail Yusof - - - 30,000 22,500 -

Datuk Seri Tengku SariffuddinTengku Ahmad

- - - 30,000 27,500 -

Datuk Md Afendi Hamdan - - - 30,000 7,500 -

Mohd Yusof Abu Othman - - - 30,000 27,500 -

Dato’ Zakri Afandi Ismail(Retired w.e.f. 25/5/2017)

- - - - - -

Dato’ Dr. Norraesah Mohamad (Resigned w.e.f. 7/2/2017)

- - - 3,041 - -

No any other remuneration received by the Directors of Utusan Melayu (Malaysia) Berhad at the Group level.

B. EFFECTIVE AUDIT AND RISK MANAGEMENT

I. Audit Committee The Audit Committee (AC) 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 AC also undertakes to provide oversight on the risk management framework of the Group.

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

Through the AC, 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 AC meets with the external auditors without the Management or the Executive Directors’ presence at least twice a year.

The AC is chaired by an Independent Director who is distinct from the Chairman of the Board. All members of the AC are financially literate. One of the AC members is a member of the Malaysian Institute of Accountants. The AC has full access to both the internal and external auditors who, in turn, have access at all times to the Chairman of the AC. The role of the AC 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 Committee Report of the Annual Report.


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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 AC. GIAD’s authority, scope and responsibilities are governed by the Internal Audit Charter which is approved by the AC.

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

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 Encik Mohd Yusof Abu Othman, the Independent Non-Executive Director of the Company 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 MSWG 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.

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 two 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 49th AGM held on 25 May 2017, 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 17 April 2018.


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OTHER INFORMATIONREQUIRED BY THE LISTING REQUIREMENTSOF 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 2017, are as follows:

Group Company

RM RM

Statutory Audit Fees 219,125 93,000

Non-Audit Fees 19,000 19,000

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 2017 or entered into since the end of the previous financial year.


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CORPORATE CALENDAR 2017

1 JANUARY 2017

More than 1,000 art activists congregated at Laman Santai, Istana Budaya, Kuala Lumpur in conjunction with Doa Untukmu Rohingya programme to raise funds for Tabung Rohingya Utusan-TH.

23 FEBRUARY 2017

Handover ceremony of Tabung Kemanusiaan Aceh was officiated by the Minister at the Prime Minister’s Department, Datuk Seri Jamil Khir in Pidie Jaya, Aceh, Indonesia. The fund raised over RM1 million from public donations.


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9 MARCH 2017

Utusan Group was recognized as the winner of Malaysia Business Awards (MBA) organized by Malay Chamber of Commerce Malaysia (MCCM) Kuala Lumpur for playing its role in improving the economic and social standard of the society. The award was presented by the Acting President of the MCCM Kuala Lumpur, Najib Don Don Zwin to the Deputy Group Editor-in-Chief, Utusan Group, Datuk Othman Mohamad at Hotel Shangri-La Kuala Lumpur.

22 MARCH 2017

Signing of Memorandum of Understanding between Utusan Melayu (Malaysia) Berhad with three leading ICT companies based in India namely Krishna Industrial Corporation Limited (KIC), Coimbatore Institute of Technology (CIT) and Primainfo Technologies Sdn. Bhd. in the field of software development was held at Utusan Melayu headquarters in Kuala Lumpur.


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28 MARCH 2017

30 APRIL 2017

English teacher, Rosli Mohmad Ali came top after winning both first and second prize of Season 4 Sayembara Fiksyen Sains Dan Teknologi UTM- Kumpulan Utusan, taking home cash totaling RM25,000 to win first and second place. The prizes were presented by the Minister of Education, Dato ‘Seri Mahdzir Khalid at Utusan Melayu headquarters in Kuala Lumpur.

More than 300 people attended the Konsert Munajat Untuk Rohingya: Sepasang Tangan Berdoa held at Lambang Sari, Istana Budaya, jointly organized by Universiti Sains Islam Malaysia (USIM) and Utusan Group to raise funds for Tabung Rohingya Utusan-TH. The event was also supported by the Institut Terjemahan dan Buku Malaysia (ITBM), Istana Budaya and National Writers Association (Pena).


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12-16 MAY 2017

8 JUNE 2017

The largest education exhibition, Festival Hari Guru Peringkat Kebangsaan 2017 was held for the 9th year at Padang A, Angsana Johor Bahru Mall, Johor. A variety of educational activities succeeded in getting an overwhelming response from the local community as well as teachers and students from throughout the state.

54 Utusan Group orphans were celebrated during the Majlis Meraikan Anak Yatim Kumpulan Utusan dan Memperingati Nuzul Al-Quran in conjunction with Ramadan. The event was held at Utusan Melayu headquarters, Kuala Lumpur and sponsored by leading cooperative agency, ANGKASA and Bank Islam Malaysia Berhad (BIMB).


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20 JULY 2017

24 JULY 2017

Majlis Santunan Kasih was organized by Utusan Group and Yayasan Kumpulan Utusan to strengthen ties between its staff and the pupils of Pusat Pengajian Tahfiz Lil Banin Pendang, Kedah, held at the centre. Utusan also donated a sum of money for the repair works of the male students dormitory structure.

More than 200 guests consisting of the person with disabilities (OKU), the poor, the elderly and single mothers were celebrated during the Majlis Sentuhan Kasih Aidilfitri 2017 which was held at the Utusan Melayu headquarters, Kuala Lumpur.


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8 SEPTEMBER 2017

13 NOVEMBER 2017

Utusan Group in collaboration with Universiti Kebangsaan Malaysia (UKM) with the support of the Department of Information organized Malam Puisi Negaraku Sehati Sejiwa held at Dewan Tun Abdul Razak Chancellor (Dectar), UKM, Bandar Baru Bangi, Selangor. The event was held in celebration of the National Day 2017 with the theme ‘Negaraku Sehati Sejiwa’.

Hadiah Sastera Kumpulan Utusan 2016 (HSKU) was held for its 32nd year at Hotel Istana Kuala Lumpur. 35 winners were celebrated whereby prizes of the main category were presented by Her Royal Highness Tengku Permaisuri Norashikin, Tengku Permaisuri Selangor.


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STATEMENT OF DIRECTORS’ RESPONSIBILITYFOR PREPARATION OF FINANCIAL STATEMENTS

THIS statement is prepared as required by the Main Market Listing Requirements of the Bursa Malaysia Securities Berhad.

The Directors are required by the Companies Act 2016 to prepare the financial statements for each financial year which have been made out in accordance with the applicable Malaysian Financial Reporting Standards (MFRSs), the International Financial Reporting Standards (IFRSs) and the requirements of the Companies Act 2016 in Malaysia.

The Directors are responsible to ensure that the financial statements give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year, and of the results and cash flows of the Group and of the Company for the financial year.

In preparing the financial statements, the Directors have:

• Adopted appropriate accounting policies and applied them consistently;

• Made judgements and estimates that are reasonable and prudent; and

• Prepared the financial statements on a going concern basis.

The Directors are responsible to ensure that the Group and the Company keep accounting records which disclose the financial position of the Group and of the Company with reasonable accuracy and enabling them to ensure that the financial statements comply with the Companies Act 2016.

The Directors are responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and of the Company, and to detect and prevent fraud and other irregularities.

This statement has been approved by the Board of Directors on 17 April 2018.

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59 - 62 Directors’ Report63 Statement By Directors63 Statutory Declaration64 - 67 Independent Auditors’ Report68 - 69 Consolidated Statement Of

Comprehensive Income

70 - 71 Consolidated Statement Of Financial Position

72 Consolidated Statement Of ChangesIn Equity

73 - 75 Consolidated Statement Of Cash Flows76 Statement Of Comprehensive Income77 - 78 Statement Of Financial Position79 Statement Of Changes In Equity80 - 81 Statement Of Cash Flows82 - 170 Notes To The Financial Statements

CONTENTS

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The directors hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2017.

PRINCIPAL ACTIVITIES

The principal activities of the Company are the publication, printing and distribution of newspapers.

The principal activities of the subsidiaries are described in Note 14 to the financial statements.

RESULTS

GroupRM

CompanyRM

Loss for the year, attributable to owners of the parent (7,455,907) (21,316,857)

There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

The directors do not recommend any payment of dividend in respect of the financial year ended 31 December 2017.

DIRECTORS

The names of the directors of the Company in office since the beginning of the financial year to the date of this report are:

Tan Sri Mohamad Fatmi Bin Che SallehDatuk Mohd Noordin Bin Abbas *Datuk Abdul Aziz Bin Ishak *Tan Sri Datuk Seri Ismail Bin YusofDatuk Seri Tengku Sariffuddin Bin Tengku AhmadMohd Yusof Bin Abu OthmanDatuk Md Afendi Bin HamdanJamalul Kiram Bin Mohd Zakaria appointed on 14 February 2018Dato’ Zakri Afandi Bin Ismail appointed on 13 April 2017, retired on 25 May 2017Dato’ Dr. Norraesah Binti Mohamad resigned on 7 February 2017

*These directors are also directors of the Company’s subsidiaries.

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The names of the directors of the Company’s subsidiaries in office since the beginning of the financial year to the date of this report (not including those directors listed above) are:

Datuk Othman Bin MohamadAbd Wahid Bin IdrisAhmad Razif Bin MohamedAnuar Bin ShaariArffin Bin NordinAzlan Bin Abdul AzizAzlan Naim Bin AbdullahFaisal Bin MokhtarJamal Ahmed Bin Ali Ahmad @ Wali AhmatMohd Nazlan Bin OsmanMohd Yazid Bin AhmadNoridzan Binti KamalRozita Binti YusoffSalwa Anida Binti IsaZulkifli Bin BasharuddinSiti Rohaya Binti Syed Hassan appointed on 3 March 2017Ahmad Shukri Bin Rifaie appointed on 5 April 2017Marina Binti Mohamed appointed on 1 June 2017Mohamed Izzaham Bin Idris appointed on 9 August 2017Hanisah Binti Hamzah appointed on 8 December 2017Datuk Zulkefli Bin Hamzah appointed on 20 December 2017Datuk Indera Mohd Azwan Bin Abdul Malik appointed on 6 April 2018Dato’ Mohd Zamri Bin Sulong resigned on 23 March 2017Dato’ Sobri Bin Ahmad resigned on 29 May 2017W. Nor Asmah Binti W. Ismail resigned on 26 September 2017Badrul Azhar Bin Ab Rahman resigned on 6 October 2017Mohd Zin Bin Mahmud resigned on 27 November 2017

* The directors benefits for the directors of the Company’s subdiaries are disclosed in Note 30(b) as part of compensation of key management personnel.

DIRECTORS’ BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Group and Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Group and Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 6 to the financial statements or the fixed salary of a full-time employee of the Group and Company) by reason of a contract made by the Group and Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

DIRECTORS’ INTERESTS

None of the directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.

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DIRECTORS’ INDEMNITY

The Company maintains a management liability insurance for the directors and officers of the Group in respect of their liability for any act or omission in their capacity as directors or officers of the Group or in respect of costs incurred by them in defending or settling any claim or proceedings relating to any such liability for the financial year ended 31 December 2017. The total limit of liability insured under such insurance for the financial year amounted to RM10 million for covering all directors and officers of the Group.

OTHER STATUTORY INFORMATION

(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of

provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:(i) the amount written off for bad debts or the amount of the provision for doubtful debts inadequate to any

substantial extent; and(ii) the values attributed to the current assets in the financial statements of the Group and of the Company

misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) At the date of this report, there does not exist:(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year

which secures the liabilities of any other person; or(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year, other

than as dislosed in Note 29 to the financial statements.

(f) In the opinion of the directors:(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period

of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.

DIRECTORS’ REPORT

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DIRECTORS’ REPORT

SIGNIFICANT EVENTS

In addition to the significant events disclosed elsewhere in this report, other significant events are disclosed in Note 31 to the financial statements.

SUBSEQUENT EVENT

Details of subsequent event is disclosed in Note 32 to the financial statements.

AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Auditors’ remuneration is as follows:

GroupRM

CompanyRM

Ernst & Young 219,125 93,000

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young as part of terms of its audit engagement against claims by third parties arising from the audit (for an unspecified amount). No payment has been paid to indemnify Ernst & Young during or since the financial year.

Signed on behalf of the Board in accordance with a resolution of the directors dated 17 April 2018.

DATUK MOHD NOORDIN BIN ABBAS

DATUK ABDUL AZIZ BIN ISHAK

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We, Datuk Mohd Noordin Bin Abbas and Datuk Abdul Aziz Bin Ishak, being two of the directors of Utusan Melayu (Malaysia) Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 68 to 170 are drawn up in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2017 and of their financial performance and the cash flows for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 17 April 2018.

DATUK MOHD NOORDIN BIN ABBAS

DATUK ABDUL AZIZ BIN ISHAK

STATEMENT BY DIRECTORSPURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016

STATUTORY DECLARATIONPURSUANT TO SECTION 251(1) (B) OF THE COMPANIES ACT 2016

I, Abd Wahid Idris, being the officer primarily responsible for the financial management of Utusan Melayu (Malaysia) Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 68 to 170 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by theabovenamed Abd Wahid Idrisat Kuala Lumpur in Wilayah Persekutuanon 17 April 2018. ABD WAHID BIN IDRIS

Before me,Commissioner for Oaths

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REPORT ON THE FINANCIAL STATEMENTS

Opinion

We have audited the financial statements of Utusan Melayu (Malaysia) Berhad, which comprise the statements of financial position as at 31 December 2017 of the Group and of the Company, and statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 68 to 170.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2017, and of their financial performance and their cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence and other ethical responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current year. The key audit matters for the audit of the financial statements of the Group and of the Company as a whole are described below. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditors’ responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis of our opinion on the accompanying financial statements.

Impairment of plant and equipment (Refer to Note 11 to the financial statements)

As at 31 December 2017, included in the plant and equipment of the Group are printing machineries and waste water treatment equipment. The significant slowdown in the newspapers industry and the continued operating losses registered by the Group and the Company over the last five years are indications that the assets may be impaired. Management has performed an impairment assessment to estimate the value in use of these assets based on discounted future cash flows.

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF UTUSAN MELAYU (MALAYSIA) BERHAD(INCORPORATED IN MALAYSIA)

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Key audit matters (contd.)Impairment of plant and equipment (Refer to Note 11 to the financial statements) (contd.)

This area was important to our audit due to the significance of the carrying value of the plant and equipment as well as the significant judgment involved in formulating assumptions to the cash flow projections for value in use computations.

Our audit procedures included, amongst others:(a) Reviewing the underlying assumptions used to prepare the projections, such as the discount rate, revenue decline

rate and gross margin. We corroborated the key assumptions with management’s plans and existing contracts, where applicable;

(b) Reviewing the methodology of impairment assessment and assessed the discount factor used, and performed sensitivity analysis of the changes in key assumptions;

(c) For certain assets where the recoverable amounts were determined by fair value less cost to sell, based on professional independent valuations, evaluate whether these professional valuers could be considered independent and reliable, and their basis of valuation; and

(d Testing the adequacy of the disclosures on the assumptions and the outcome of the impairment test.

The Board of Directors’ conclusion on the impairment assessment and related disclosures are included in Note 2.4(h) to the financial statements.

Recoverability of trade receivables (Refer to Note 18 to the financial statements)

The Group is required to assess at the reporting date whether there is any objective evidence that the trade receivables is impaired. As at year end, the Group has RM76 million outstanding trade receivables and out of which, RM25 million are passed due but not impaired. The impairment assessment of trade receivables is significant to our audit as it involves judgement on the collectively of the amount. Specific factors considered include, the age of the balance, existence of disputes, historical payment patterns and information on the creditworthiness of counterparties. These information were used to determine whether an allowance for impairment is required either for specific transaction or for a customer’s overall balance.

Our audit procedures included, amongst others:(a) Verifying if payments had been received since the year-end;(b) Reviewing the historical payment patterns and any correspondence with customers on expected settlement dates;(c) Examining the underlying documents, such as acknowledged sales invoices, despatch and return forms; and(d) Testing the aged balances where no provision was recognized to check that there were no indicators of impairment.

Information other than the financial statements and auditors’ report thereon

The directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.


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Key audit matters (contd.)Information other than the financial statements and auditors’ report thereon (contd.)

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the financial statements

The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

l Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

l Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control.

l Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

l Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.


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Auditors’ responsibilities for the audit of the financial statements (contd.)

l Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

l Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on the other legal and regulatory requirements

In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiary of which we have not acted as auditors, is disclosed in Note 14 to the financial statements.

Other matters

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Ernst & Young Muhammad Affan Bin DaudAF: 0039 No. 03063/02/2020 JChartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia17 April 2018

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017

Note2017RM

2016RM

Revenue 3 244,980,086 227,418,579

Other income 4 13,156,568 12,308,767

Raw materials and consumables used (50,303,028) (67,508,484)

Vendors’ commissions (25,256,769) (25,929,529)

Transportation costs (9,413,250) (12,054,801)

Employee benefits expense 5 (116,830,007) (127,890,352)

Depreciation of property, plant and equipment 11 (17,799,193) (18,976,255)

Depreciation of investment properties 12 (908,859) (609,334)

Amortisation of intangible assets 13 (731,868) (903,604)

Other expenses (38,546,185) (43,405,837)

Finance costs 7 (8,356,668) (8,958,953)

Operating loss (10,009,173) (66,509,803)

Share of results of associates (246,695) (215,675)

Loss before tax 8 (10,255,868) (66,725,478)

Income tax benefit/(expense) 9 2,799,961 (1,704,790)

Loss from continuing operations (7,455,907) (68,430,268)

Discontinuing operation

Loss from discontinuing operation, net of tax 23 - (35,898)

Loss for the year, net of tax (7,455,907) (68,466,166)

Other comprehensive income

Other comprehensive income to be reclassified to profitor loss in subsequent periods: Net gain/(loss) on available-for-sale financial assets:

- Gain/(loss) on fair value changes 12,120 (65,988)

Foreign currency translation 29,629 (11,729)

Net other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods 41,749 (77,717)

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Note2017RM

2016RM

Other comprehensive income (contd.)

Other comprehensive income not to be reclassified toprofit or loss in subsequent periods: Actuarial losses on defined benefit obligations:

- Remeasurement of opening balance 22 (20,742) (15,241)

- Remeasurement of experience losses 22 (283,383) (592,924)

Net other comprehensive loss not to be reclassified to profit or loss in subsequent periods (304,125) (608,165)

Total other comprehensive loss for the year (262,376) (685,882)

Total comprehensive loss for the year (7,718,283) (69,152,048)

Loss attributable to:

Owners of the parent (7,455,907) (68,466,166)

Total comprehensive loss attributable to:

Owners of the parent (7,718,283) (69,152,048)

Loss per share attributable to owners of the parent (sen):

Basic and diluted, for loss for the year 10 (6.73) (61.83)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 (CONTD.)

The accompanying accounting policies and explanatory information form an integral part of the financial statements.

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Note2017RM

2016RM

AssetsNon-current assets

Property, plant and equipment 11 209,065,872 228,444,090

Investment properties 12 85,911,338 50,705,247

Intangible assets 13 691,265 1,423,133

Investments in associates 15 545,845 861,539

Investment securities 16 1,231,668 1,267,548

Deferred tax assets 17 3,242,607 222,457

Other receivables 18 2,194,892 1,928,039

Retirement benefit assets 22 3,830,329 3,776,618

306,713,816 288,628,671

Current assets

Inventories 20 14,610,618 15,380,274

Trade and other receivables 18 83,825,089 66,312,865

Tax recoverable 549,264 968,325

Investment securities 16 463,670 656,128

Cash and bank balances 21 17,788,024 32,858,744

117,236,665 116,176,336

Assets classified as held-for-sale 23 - 896,396

Total assets 423,950,481 405,701,403

Equity and liabilitiesEquity attributable to owners of the parent

Share capital 26 161,436,999 110,733,837

Share premium - 50,703,162

Other reserves 27 (85,315) (127,064)

Accumulated losses (65,566,786) (57,806,754)

Total equity 95,784,898 103,503,181

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2017

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Note2017RM

2016RM

Non-current liabilities

Loans and borrowings 24 93,025,171 123,222,557

Other payables 25 - 20,000,000

Deferred tax liabilities 17 - 137,058

93,025,171 143,359,615

Current liabilities


Trade and other payables 25 171,155,519 107,396,364

Tax payables - 536,861

235,140,412 158,637,232

Liabilities classified as held-for-sale 23 - 201,375

Total liabilities 328,165,583 302,198,222

Total equity and liabilities 423,950,481 405,701,403

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2017 (CONTD.)


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72

FINANCIAL

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161,

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2017RM

2016RM

Cash flows from operating activitiesLoss before taxation

From continuing operation (10,255,868) (66,725,478)

From discontinuing operation - (35,898)

(10,255,868) (66,761,376)

Adjustments for:

Impairment loss on trade and other receivables 2,669,562 2,890,627

Reversal of impairment loss on trade and other receivables (1,167,588) (1,251,325)

Impairment loss on investment in associates 109,000 -

Gain on disposal of held-for-trading investment (323,130) (83,510)

Net fair value loss on held-for-trading investment 183,318 289,795

Gain on disposal of a subsidiary (2,840,571) -

Loss on disposal of other investment - 7,992

Provision for retirement benefits 58,751 84,460

Share of results of associates 246,695 215,675

(Reversal of)/provision for litigations (735,000) 103,000

Reversal of provision for returns (27,956) (862,610)

Interest income (203,853) (300,184)

Interest expenses 8,356,668 8,958,953

Depreciation of property, plant and equipment

- from continuing operation 17,799,193 18,976,255

- from discontinuing operation - 1,575

Depreciation of investment properties 908,859 609,334

Amortisation of intangible assets 731,868 903,604

Inventories written off 2,477 15,119

Inventories written down 4,543,726 -

Creditors written off (728,707) (252,346)

(Gain)/loss on disposal of property, plant and equipment (30,128) 4,308

Gain on disposal of investment property (32,364,705) -

Gain on disposal of asset held-for-sale - (3,740,070)

Property, plant and equipment written off 29,400 76,132

Impairment loss on property, plant and equipment 1,001,752 2,319,059

Impairment loss on other investment 48,000 48,000

Dividend income (27,426) (29,148)

Operating loss before working capital changes (12,015,663) (37,776,681)

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017

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2017RM

2016RM

Cash flows from operating activities (contd.)

Operating loss before working capital changes (contd.) (12,015,663) (37,776,681)

(Increase)/decrease in receivables (18,382,927) 6,063,209

Increase in inventories (4,620,547) (1,181,994)

Increase in payables 47,986,087 20,107,256

Cash generated from/(used in) operations 12,966,950 (12,788,210)

Payment of retirement benefits (416,587) (718,793)

Interest paid (8,226,085) (8,907,705)

Taxes paid (979,405) (2,501,480)

Real property gain tax paid - (186,912)

Taxes refunded 504,358 299,690

Net cash generated from/(used in) operating activities 3,849,231 (24,803,410)

Cash flows from investing activities

Purchase of securities in held-for-trading investment (499,045) (1,117,750)

Purchase of other investment - (75,000)

Proceeds from disposal of held-for-trading investment 831,314 2,035,884

Proceeds from disposal of other investment - 43,002,008

Interest received 203,853 300,184

Purchase of property, plant and equipment (a) (777,887) (845,019)

Purchase of investment properties (b) (1,229,240) (504,442)

Proceeds from disposal of property, plant and equipment 30,683 4,561

Proceeds from disposal of non-current asset classified as held-for-sale - 7,344,810

Disposal of discontinued operation, net of cash and bank balances 19,486 -

Dividends received 27,426 29,148

Net cash (used in)/generated from investing activities (1,393,410) 50,174,384

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 (CONTD.)

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2017RM

2016RM

Cash flows from financing activities

Repayment of borrowings (17,553,523) (20,040,065)

Repayment of hire purchase payables (2,647) (20,042)

Withdrawal/(placement) of pledged fixed deposits 302,259 (521,032)

Net cash used in financing activities (17,253,911) (20,581,139)

Net (decrease)/increase in cash and cash equivalents (14,798,090) 4,789,835

Effects of foreign exchange rate changes 29,629 (11,729)

Cash and cash equivalents classified held-for-sale (Note 14) - (51,499)

Cash and cash equivalents at 1 January 30,811,535 26,084,928

Cash and cash equivalents at 31 December (Note 21) 16,043,074 30,811,535

Note:

(a) The additions in property, plant and equipment were acquired by way of:

2017RM

2016RM

Cash 777,887 845,019

Hire purchase payables (Note 24) 196,000 -

Additions (Note 11) 973,887 845,019

(b) The additions in investment properties were acquired by way of:

2017RM

2016RM

Cash 1,229,240 504,442

Loan and borrowing (Note 24) 443,670 3,774,605

Disposal of land in exchange for investment properties - (also known as “TRAX building”) (Note 31) 38,939,087 -

Additions (Note 12) 40,611,997 4,279,047

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 (CONTD.)


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Note2017RM

2016RM

Revenue 3 197,843,234 190,035,859

Other income 4 30,800,726 11,589,659

Raw materials and consumables used (45,012,984) (56,724,572)

Vendors’ commissions (23,644,448) (23,390,208)

Transportation costs (9,402,646) (12,029,601)

Employee benefits expense 5 (99,225,157) (103,729,297)

Depreciation of property, plant and equipment 11 (17,218,873) (18,183,474)

Depreciation of investment properties 12 (118,614) (54,241)

Amortisation of intangible assets 13 (648,866) (854,908)

Other expenses (46,846,306) (44,890,602)

Finance costs 7 (7,842,923) (9,078,777)

Loss before tax 8 (21,316,857) (67,310,162)

Income tax expense 9 - -

Loss for the year, net of tax (21,316,857) (67,310,162)

Other comprehensive income

Other comprehensive income to be reclassified to profitor loss in subsequent periods: Net gain/(loss) on available-for-sale financial assets:

- Gain/(loss) on fair value changes 5,964 (62,463)

Net other comprehensive income/(loss)to be reclassified to profit or loss in subsequent periods 5,964 (62,463)

Other comprehensive income not to be reclassified toprofit or loss in subsequent periods: Actuarial losses on defined benefit obligations:

- Remeasurement of opening balance 22 (20,742) (15,241)

- Remeasurement of experience losses 22 (283,383) (592,924)

Net other comprehensive loss not to be reclassified to profit or loss in subsequent periods (304,125) (608,165)

Total other comprehensive loss for the year (298,161) (670,628)

Total comprehensive loss for the year (21,615,018) (67,980,790)

STATEMENT OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017


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Note2017RM

2016RM

Re-stated

Assets

Non-current assets

Property, plant and equipment 11 206,118,757 224,888,724

Investment properties 12 3,277,470 1,874,879

Intangible assets 13 519,608 1,168,474

Investments in subsidiaries 14 3,230,002 4,230,000

Investments in associates 15 - 69,000

Investment securities 16 33,330 27,366

Retirement benefit assets 22 3,830,329 3,776,618

217,009,496 236,035,061

Current assets

Inventories 20 9,475,254 10,381,974

Trade and other receivables 18 98,531,616 58,202,382

Cash and bank balances 21 3,072,949 12,396,619

111,079,819 80,980,975

Total assets 328,089,315 317,016,036

Equity and liabilities

Equity attributable to owners of the parent

Share capital 26 161,436,999 110,733,837

Share premium - 50,703,162

Other reserves 27 (15,640) (21,604)

Accumulated losses (148,543,645) (126,922,663)

Total equity 12,877,714 34,492,732

STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2017

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STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2017 (CONTD.)

Note2017RM

2016RM

Re-stated

Non-current liabilities


Other payables 25 594,511 21,165,749

83,369,749 132,949,179

Current liabilities


Trade and other payables 25 175,474,380 105,545,649

231,841,852 149,574,125


Total equity and liabilities 328,089,315 317,016,036


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FINANCIAL

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32

FIN

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2017RM

2016RM

Cash flows from operating activities

Loss before taxation (21,316,857) (67,310,162)

Adjustments for:

Impairment loss on trade and other receivables 6,766,648 2,456,109

Reversal of impairment loss on trade and other receivables (600,427) (2,758,979)

Impairment loss on investment in a subsidiary 1,000,000 -

Impairment loss on investment in an associate 109,000 -

Provision for retirement benefits 58,751 84,460

(Reversal of)/provision for litigations (735,000) 103,000

Addition/(reversal of) provision for returns 212,363 (213,402)

Interest income (55,262) (175,239)

Interest expenses 7,842,923 9,078,777

Depreciation of property, plant and equipment 17,218,873 18,183,474

Depreciation of investment properties 118,614 54,241

Amortisation of intangible assets 648,866 854,908

Impairment loss on property, plant and equipment 1,001,752 2,315,991

Inventories written down 4,473,924 -

Gain on disposal of property, plant and equipment (29,425) (200)

Loss on disposal of other investment - 7,992

Dividend income (23,900,000) (4,000,000)

Operating loss before working capital changes (7,185,257) (41,319,030)

(Increase)/decrease in receivables (46,480,487) 9,781,022

Increase in inventories (3,567,204) (363,742)

Increase in payables 49,883,440 20,166,205

Cash used in operations (7,349,508) (11,735,545)

Payment of retirement benefits (416,587) (718,793)

Interest paid (7,841,223) (8,927,696)

Net cash used in operating activities (15,607,318) (21,382,034)

STATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017

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2017RM

2016RM

Cash flows from investing activities

Investment in a subsidiary (2) -

Investment in an associate (40,000) -

Proceeds from disposal of unquoted investment - 2,008

Interest received 9,817 113,423

Purchase of property, plant and equipment (a) (750,398) (770,361)

Proceeds from disposal of property, plant and equipment 29,427 200

Dividend received 23,900,000 47,000,000

Net cash generated from investing activities 23,148,844 46,345,270

Cash flows from financing activities

Repayment of borrowings (16,813,392) (18,425,064)

Repayment of hire purchase payables (51,804) (119,096)

Net cash used in financing activities (16,865,196) (18,544,160)

Net (decrease)/increase in cash and cash equivalents (9,323,670) 6,419,076

Cash and cash equivalents at 1 January 12,396,619 5,977,543

Cash and cash equivalents at 31 December (Note 21) 3,072,949 12,396,619

Note:

(a) The additions in property, plant and equipment were acquired by way of:

2017RM

2016RM

Cash 750,398 770,361

Hire purchase payables (Note 24) 196,000 -

Additions (Note 11) 946,398 770,361

STATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 (CONTD.)


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1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office and the principal place of business of the Company is located at 44 Jalan Utusan Off Jalan Chan Sow Lin, 55200 Kuala Lumpur.

The principal activities of the Company are the publication, printing and distribution of newspapers. The principal activities of the subsidiaries are described in Note 14 to the financial statements.

There have been no significant changes in the nature of the principal activities during the financial year.

The financial statements were authorised for issue by the Board of directors in accordance with a resolution of the directors on 17 April 2018.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation The financial statements of the Group and of the Company have been prepared in accordance with Malaysian

Financial Reporting Standards (“MFRS”) as issued by Malaysian Accounting Standards Board (“MASB”), International Financial Reporting Standards and the provisions of the Companies Act, 2016 in Malaysia.

The financial statements, other than for financial instruments and retirement benefit obligations, have been prepared on the historical cost basis. Certain financial instruments are carried at fair value in accordance with MFRS 139 Financial Instruments: Recognition and Measurement, and the retirement benefit obligations include actuarial gains and losses in accordance with MFRS 119 Employee Benefits.

The financial statements are presented in Ringgit Malaysia (RM).

As at 31 December 2017, the Group and the Company has net current liabilities of RM117,903,747 (2016: RM42,460,896) and RM120,762,033 (2016: RM68,593,150) respectively. The Group and the Company also incurred total comprehensive loss during the year of RM7,718,283 (2016: RM69,152,048) and RM21,615,018 (2016: RM67,980,790) respectively.

The Group is currently undergoing a business rationalisation exercise to determine its strategic direction following changes in the print media industry. This exercise includes venturing into new businesses and rationalisation of current operations. The Directors believe that the result of the business rationalisation exercise will ensure that the Group continues to operate as a going concern in the foreseeable future.

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017

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2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.)

2.2 Changes in accounting policies The accounting policies adopted are consistent with those of the previous financial year except as follows:

On 1 January 2017, the Group and the Company adopted the following new and amended MFRS mandatory for annual financial periods beginning on or after 1 January 2017.

MFRS and Amendments to MFRSs

Effective forannual periods

beginning onor after

MFRS 107 Disclosure Initiative (Amendments to MFRS 107) 1 January 2017

MFRS 112 Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to MFRS 112) 1 January 2017

Annual Improvements to MFRS Standards 2014–2016 Cycle - Amendments to MFRS 12 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in MFRS 12 1 January 2017

Adoption of the above new or amended standards did not have any effect on the financial performance or the position of the Group and of the Company.

MFRS 107 Disclosure Initiative (Amendments to MFRS 107)

The amendments to MFRS 107 Statement of Cash Flows requires an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non- cash changes. On initial application of these amendments, entities are not required to provide comparative information for preceding periods. The application of these amendments has had no impact on the Group.

MFRS 112 Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to MFRS 112)

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

The application of these amendments has had no impact on the Group as the Company already assess the sufficiency of future taxable profits in a way that is consistent with these amendments.

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2.3 MFRS and Amendments to MFRS issued but not yet effective The standards and interpretations that are issued but not yet effective up to the date of issuance of the Group’s

and the Company’s financial statements are disclosed below. The Group and the Company intend to adopt these standards, if applicable, when they become effective.

MFRS and Amendments to MFRSs

Effective forannual periods

beginning onor after

MFRS 2 Classification and Measurement of Share-based Payment Transactions (Amendments to MFRS 2) 1 January 2018

MFRS 9 Financial Instruments 1 January 2018

MFRS 15 Revenue from Contracts with Customers 1 January 2018

MFRS 140 Transfers of Investment Property (Amendments to MFRS 140) 1 January 2018

Annual Improvements to MFRS Standards 2014 – 2016 Cycle 1 January 2018

IC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018

MFRS 9 Prepayment Features with Negative Compensation (Amendments to MFRS 9) 1 January 2019

MFRS 16 Leases 1 January 2019

MFRS 128 Long-term Interests in Associates and Joint Ventures (Amendments to MFRS 128) 1 January 2019

Annual Improvements to MFRS Standards 2015–2017 Cycle 1 January 2019

MFRS 119 Plan Amendment, Curtailment or Settlement (Amendments to MFRS 119) 1 January 2019

IC Interpretation 23 Uncertainty over Income Tax Treatments 1 January 2019

MFRS 17 Insurance Contracts 1 January 2019

Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred

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2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.)2.3 MFRS and Amendments to MFRS issued but not yet effective (contd.)

The adoption of the above will have no material impact on the financial statements of the Group and of the Company in the period of initial application, except as discussed below:

MFRS 9 Financial Instruments

MFRS 9 introduces new requirements for classification and measurement, impairment and hedge accounting. MFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Retrospective application is required, but comparative information is not compulsory. The assessment is based on currently available information and may be subject to changes arising from further reasonable and supportable information being made available to the Group in 2018 when the Group adopts MFRS 9.

Based on the analysis of the Group’s financial assets and liabilities as at 31 December 2017 on the basis of facts and circumstances that exist at that date, the directors of the Group have assessed the impact of MFRS 9 to the Group’s financial statements as follows:

(i) Classification and measurement The Group does not expect a significant impact on its balance sheet or equity on applying the classification

and measurement requirements of MFRS 9. It expects to continue measuring at fair value all financial assets currently held at fair value.

Loans and receivables are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Company analysed the contractual cash flow characteristics of those instruments and concluded that they meet the criteria for amortised cost measurement under MFRS 9. Therefore, reclassification for these instruments is not required.

(ii) Impairment The Group will apply the simplified approach and record lifetime expected losses on all trade receivables.

MFRS 15 Revenue from Contracts with Customers

MFRS 15 establishes a new five-step model that will apply to revenue arising from contracts with customers. MFRS 15 will supersede the current revenue recognition guidance including MFRS 118 Revenue, MFRS 111 Construction Contracts and the related interpretations when it becomes effective.

The core principle of MFRS 15 is that an entity should recognise revenue which depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e when “control” of the goods or services underlying the particular performance obligation is transferred to the customer.

The Group plans to adopt the new standard on the required effective date using the full retrospective method. The directors have assessed the effects of applying the new standard on the Group’s financial statement and they will not have any material impact on the Group. The assessment is based on currently available information and may be subject to changes arising from further reasonable and supportable information being made available to the Group in 2018 when the Group adopts MFRS 15.

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2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.)2.3 MFRS and Amendments to MFRS issued but not yet effective (contd.)

MFRS 16 Leases

MFRS 16 will replace MFRS 117 Leases, IC Interpretation 4 Determining whether an Arrangement contains a Lease, IC Interpretation 115 Operating Lease-Incentives and IC Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. MFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on- balance sheet model similar to the accounting for finance leases under MFRS 117.

At the commencement date of a lease, a lessee will recognise a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. The right-of-use asset is initially measured at cost and subsequently measured at cost (subject to certain exceptions), less accumulated depreciation and impairment losses, adjusted for any remeasurement of the lease liability. The lease liability is initially measured at present value of the lease payments that are not paid at that date. Subsequently, the lease liability is adjusted for interest and lease payments, as well as the impact of lease modifications.

Classification of cash flows will also be affected as operating lease payments under MFRS 117 are presented as operating cash flows, whereas under MFRS 16, the lease payments will be split into a principal (which will be presented as financing cash flows) and an interest portion (which will be presented as operating cash flows).

Lessor accounting under MFRS 16 is substantially the same as the accounting under MFRS 117. Lessors will continue to classify all leases using the same classification principle as in MFRS 117 and distinguish between two types of leases: operating and finance leases. MFRS 16 also requires lessees and lessors to make more extensive disclosures than under MFRS 117.

MFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted but not before an entity applies MFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach.

MFRS 119 Plan Amendment, Curtailment or Settlement (Amendments to MFRS 119)

The amendments require entities to use the updated actuarial assumptions to determine current service cost and net interest for the remainder of the annual reporting period after a plan amendment, curtailment or settlement, which occurs during the reporting period. The amendments also clarify how the requirements for accounting for a plan amendment, curtailment or settlement affect the asset ceiling requirements.

The amendments should be applied prospectively to plan amendments, curtailments or settlements that occur on or after 1 January 2019, with earlier application permitted. These amendments will not have a significant impact on the Group’s and the Company’s financial statement.


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2.4 Summary of significant accounting policies

(a) Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its

subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied for like transactions and events in similar circumstances.

The Company controls an investee if and only if the Company has all the following:(i) Power over the investee (such as existing rights that give it the current ability to direct the relevant

activities of the investee);(ii) Exposure, or rights, to variable returns from its investment with the investee; and(iii) The ability to use its power over the investee to affect its returns.

When the Company has less than a majority of the voting rights of an investee, the Company considers the following in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power over the investee:(i) The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the

other vote holders;(ii) Potential voting rights held by the Company, other vote holders or other parties;(iii) Rights arising from other contractual arrangements; and(iv) Any additional facts and circumstances that indicate that the Company has, or does not have, the

current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra- group transactions are eliminated in full. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Losses within a subsidiary are attributed to the non-controlling interests even if that results in a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets and liabilities of the subsidiary and any non-controlling interest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has been recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss or where applicable, transferred directly to retained earnings. The fair value of any investment retained in the former subsidiary at the date control is lost is regarded as the cost on initial recognition of the investment.


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2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.)2.4 Summary of significant accounting policies (contd.)

(b) Business Combinations Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of an acquisition

is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. The Group elects on a transaction-by-transaction basis whether to measure the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Transaction costs incurred are expensed and included in administrative expenses.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with MFRS 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

(c) Subsidiaries A subsidiary is an entity over which the Group has all the following:

(i) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

(ii) Exposure, or rights, to variable returns from its investment with the investee; and(iii) The ability to use its power over the investee to affect its returns.

The Company’s investment in subsidiaries are stated at cost less impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.4(h). On disposal of such investment, the difference between net disposal proceeds and their carrying amounts is recognised in profit or loss.

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(d) Associates An associate is an entity in which the Group has significant influence. Significant influence is the power to

participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

On acquisition of an investment in associate, any excess of the cost of investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill and included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities of the investee over the cost of investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s or joint venture’s profit or loss for the period in which the investment is acquired.

An associate is equity accounted from the date on which the investee becomes an associate.

Under the equity method, on initial recognition the investment in an associate is recognised at cost, and the carrying amount is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate after the date of acquisition. When the Group’s share of losses in an associate equal or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group’s financial statements only to the extent of unrelated investors’ interests in the associate. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The financial statements of the associates are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

After application of the equity method, the Group applies MFRS 139 Financial Instruments: Recognition and Measurement to determine whether it is necessary to recognise any additional impairment loss with respect to its net investment in the associate or joint venture. When necessary, the entire carrying amount of the investment is tested for impairment in accordance with MFRS 136 Impairment of Assets as a single asset, by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss is recognised in profit or loss. Reversal of an impairment loss is recognised to the extent that the recoverable amount of the investment subsequently increases.

In the Company’s separate financial statements, investments in associates are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

(e) Intangible assets(i) Goodwill Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less

accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination.

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(e) Intangible assets (contd.)(i) Goodwill (contd.)

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

(ii) Other intangible assets Intangible assets acquired separately are measured initially at cost. The cost of intangible assets

acquired in a business combination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are measured at cost less any accumulated amortisation and accumulated impairment losses.

Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss.

Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more frequently if the events and circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.

l Computer software and licenses Computer software and licenses that do not form an integral part of the related hardware are

classified as intangible assets. Software and licenses, considered to have finite useful lives, are stated at cost less any impairment losses and are amortised using the straight-line basis over the commercial lives of the underlying products of 3 to 5 years. Impairment is assessed whenever there is an indication of impairment and amortisation period and method are also reviewed at least at each reporting date.


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(f) Property, plant and equipment(i) Recognition and measurement Items of property, plant and equipment are measured at cost less any accumulated depreciation and

any accumulated impairment losses.

Cost includes expenditures that are directly attributable to acquisition of the asset and any other costs directly attributable to bringing the assets to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self- constructed assets also includes the cost of materials and direct labour.

For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. Costs also may include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and is recognised net within “other income” and “other expenses” respectively in profit or loss.

(ii) Subsequent costs The cost of replacing a component of an item of property, plant and equipment is recognised in the

carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation Depreciation is based on the cost of an asset less its residual value. Significant components of

individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.


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(f) Property, plant and equipment (contd.)(iii) Depreciation (contd.)

The depreciation rates for the current and comparative periods are as follows:

Buildings 2%

Plant and machinery 7.5%

Waste water treatment 6.7%

Lift 6.7%

Motor vehicles 20%

Furniture, fixtures, fittings and office equipment 20%

Computer equipment 33%

Renovations 10%

Depreciation methods, useful lives and residual values are reviewed at end of the reporting period and adjusted as appropriate.

(g) Investment properties Investment properties are initially measured at cost, including transaction costs. Subsequent to initial

recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment losses.

A property interest under an operating lease is classified and accounted for as an investment property on a property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any such property interest under an operating lease classified as an investment property is carried at fair value.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal.

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for property, plant and equipment set out in Note 2.4(f) up to the date of change in use.

(h) Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If

any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash- generating units (“CGU”)).


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(h) Impairment of non-financial assets (contd.)

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.

(i) Financial assets Financial assets are recognised in the statements of financial position when, and only when, the Group and

the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include loans and receivables, available-for-sale financial assets and financial assets at fair value through profit or loss.

(i) Loans and receivables Financial assets with fixed or determinable payments that are not quoted in an active market are

classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

(ii) Available-for-sale financial assets Available-for-sale financial assets are financial assets that are designated as available-for-sale or are not

classified in any of the preceding categories.


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(i) Financial assets (contd.)(ii) Available-for-sale financial assets (contd.)

After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group and the Company’s right to receive payment is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss. Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

(iii) Financial assets at fair value through profit or loss Financial assets are classified as financial assets at fair value through profit or loss if they are held-

for-trading or are designated as such upon initial recognition. Financial assets held-for-trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

The Group’s investment in quoted securities is designated as fair value through profit or loss on initial recognition.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset.


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(j) Impairment of financial assets The Group and the Company assess at each reporting date whether there is any objective evidence that a

financial asset is impaired.

(i) Trade and other receivables and other financial assets carried at amortised cost To determine whether there is objective evidence that an impairment loss on financial assets has

been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics.

Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(ii) Unquoted equity securities carried at cost If there is objective evidence (such as significant adverse changes in the business environment where

the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

(iii) Available-for-sale financial assets Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer

or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.


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(j) Impairment of financial assets (contd.)(iii) Available-for-sale financial assets (contd.)

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.

(k) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly

liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.

(l) Inventories Inventories are stated at the lower of cost and net realisable value.

Cost is determined on the first-in, first-out method. The cost of raw materials comprises costs of purchase. The costs of finished goods and work-in-progress comprise costs of raw materials, direct labour, other direct costs and appropriate proportions of production overheads.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

(m) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a

past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(n) Financial liabilities Financial liabilities are classified according to the substance of the contractual arrangements entered into

and the definitions of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as other financial liabilities.


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(n) Financial liabilities (contd.)

Other financial liabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables and loans and borrowings. Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(o) Borrowing costs Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the

acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

(p) Employee benefits(i) Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the year

in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when the services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed

contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”).


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(p) Employee benefits (contd.)

(iii) Defined benefit plans The Company operates a funded, defined benefit Retirement Benefit Scheme (“the Scheme”) for its

eligible employees. The Group’s obligation under the Scheme, calculated using the Projected Unit Credit Method, is determined based on actuarial computations by independent actuaries, through which the amount of benefit that employees have earned in return for their service in the current and prior years is estimated.

The net defined benefit liability or asset is the aggregate of the present value of the defined benefit obligation (derived using a discount rate based on high quality corporate bonds) at the end of the reporting period reduced by the fair value of plan assets (if any), adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.

The cost of providing benefits under the defined benefit plans is determined separately for each plan using the projected unit credit method.

The defined benefit liability is the aggregate of the present value of the defined benefit obligation and actuarial gains and losses not recognised, reduced by past service cost not yet recognised and the fair value of plan assets out of which the obligations are to be settled directly. If such aggregate is negative, the asset is measured at the lower of such aggregate or the aggregate of cumulative unrecognised net actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan.

If the asset is measured at the aggregate of cumulative unrecognised net actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan:- Net actuarial losses of the current period and past service cost of the current period are recognised

immediately to the extent that they exceed any reduction in the present value of those economic benefits. If there is no change or an increase in the present value of the economic benefits, the entire net actuarial losses of the current period and past service cost of the current period are recognised immediately.

Defined benefit costs comprise the following:- Service cost- Net interest on the net defined benefit liability or asset- Remeasurements of net defined benefit liability or asset

Service costs which include current service costs, past service costs and gains or losses on non-routine settlements are recognised as expense in profit or loss. Past service costs are recognised when plan amendment or curtailment occurs.

Net interest on the net defined benefit liability or asset is the change during the period in the net defined benefit liability or asset that arises from the passage of time which is determined by applying the discount rate based on high quality corporate bonds to the net defined benefit liability or asset. Net interest on the net defined benefit liability or asset is recognised as expense or income in profit or loss.


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(p) Employee benefits (contd.)(iii) Defined benefit plans (contd.)

Remeasurements comprising actuarial gains and losses, return on plan assets and any change in the effect of the asset ceiling (excluding net interest on defined benefit liability) are recognised immediately in other comprehensive income in the period in which they arise. Remeasurements are recognised in retained earnings within equity and are not reclassified to profit or loss in subsequent periods.

Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance policies. Plan assets are not available to the creditors of the Group, nor can they be paid directly to the Group. Fair value of plan assets is based on market price information. When no market price is available, the fair value of plan assets is estimated by discounting expected future cash flows using a discount rate that reflects both the risk associated with the plan assets and the maturity or expected disposal date of those assets (or, if they have no maturity, the expected period until the settlement of the related obligations).

(iv) Termination benefits Termination benefits are payable when employment is terminated before the normal retirement date

or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits as a liability and an expense when it is demonstrably committed to either terminate the employment of current employees according to a detailed plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the measurement of termination benefits is based on the number of employees expected to accept the offer. Benefits falling due more than twelve months after balance sheet date are discounted to present value.

(q) Leases(i) As lessee Finance leases, which transfer to the Group substantially all the risks and rewards incidental to

ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(ii) As lessor Leases where the Group retains substantially all the risks and rewards of ownership of the asset are

classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.4(s)(iii).


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(r) Foreign currencies(i) Functional and presentation currency The individual financial statements of each entity in the Group are measured using the currency of

the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.

(ii) Foreign currency transactions Transactions in foreign currencies are measured in the respective functional currencies of the Company

and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(iii) Foreign operations The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling

at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income.

On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.


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(s) Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and

the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

(i) Sale of goods Revenue arising from publication, printing and distribution of newspapers and magazines is recognised

net of returns and service tax. Revenue relating to other sale of goods is recognised net of service taxes and discounts upon transfer of risks and rewards of ownership to the buyer.

Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(ii) Advertising revenue Revenue from services rendered is recognised net of service taxes and discounts as and when the

advertisements are published or displayed.

(iii) Rental income Rental income is recognised on an accrual basis in accordance with the substance of the relevant

agreements.

(iv) Interest income Interest income is recognised on an accrual basis using the effective interest method.

(v) Dividend income Dividend income is recognised when the Group’s right to receive payment is established.

(t) Income taxes(i) Current tax Current tax assets and liabilities are measured at the amount expected to be recovered from or paid

to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

(ii) Deferred tax Deferred tax is provided using the liability method on temporary differences at the reporting date

between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.


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(t) Income taxes (contd.)(ii) Deferred tax (contd.)

Deferred tax liabilities are recognised for all temporary differences, except:- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or

liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:- where the deferred tax asset relating to the deductible temporary difference arises from the

initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.


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(t) Income taxes (contd.)

(iii) Good and Services Tax (“GST”) Revenues, expenses and assets are recognised net of the amount of GST except:

- Where the GST incurred in a purchase of assets or services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

- Receivables and payables that are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statements of financial position.

(u) Segment reporting For management purposes, the Group is organised into operating segments based on their products and

services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 36, including the factors used to identify the reportable segments and the measurement basis of segment information.

(v) Contingencies A contingent liability or asset is a possible obligation or asset that arises from past events and whose

existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

Contingent liabilities and assets are not recognised in the statements of financial position of the Group.

(w) Discontinued operation and disposal group classified as held-for-sale A component of the Group is classified as a “discontinued operation” when the criteria to be classified as

held-for-sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations or is part of a single coordinated major line of business or geographical area of operations. A component is deemed to be held-for-sale if its carrying amounts will be recovered principally through a sale transaction rather than through continuing use.

Upon classification as held-for-sale, non-current assets and disposal groups are not depreciated and are measured at the lower of carrying amount and fair value less costs to sell. Any differences are recognised in profit or loss.

Further details on discontinued operation and non current assets classified as held-for-sale are disclosed on Note 23.


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(x) Share capital and share issuance expenses An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the

Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

(y) Fair value measurement The Group measures financial instruments at fair value at each reporting date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes places either:(i) in the principal market for the asset or liability; or(ii) in the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the Group.

The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole as described in Note 34.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset and liability and the level of the fair value hierarchy as explained above.


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2.5 Significant accounting judgements and estimates The preparation of the Company’s financial statements requires management to make judgements, estimates

and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

(a) Critical judgments made in applying accounting policies There were no significant judgments made by the management in the process of applying the Group’s

accounting policies which may have significant effects on the amounts recognised in the financial statements except for payment of premium for leasehold land extension, which is allocated to land cost and amortised over the lease term as disclosed in Note 2.4(q)(i).

(b) Key sources of estimation uncertainties In the process of preparing these financial statements, there were no key assumptions concerning the

future and other key sources of estimation uncertainty at the reporting date, that may have a significant risk of causing material adjustment to the carrying amounts of the assets and liabilities within the next financial year, except for:

(i) Income taxes Significant estimation is involved in determining the provision for income taxes. There are certain

transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognise liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. Information on income taxes is disclosed in Note 9.

(ii) Deferred tax assets Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to

the extent that it is probable that taxable profit will be available against which the losses and capital allowances can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying value of recognised tax losses and capital allowances of the Group and of the Company respectively and the unrecognised tax losses and capital allowances of the Group are as disclosed in Note 17.

(iii) Impairment of loans and receivables The Group assesses at each reporting date whether there is any objective evidence that a financial

asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtors and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivables at the reporting date is disclosed in Note 18.


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2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.)2.5 Significant accounting judgements and estimates (contd.)

(b) Key sources of estimation uncertainties (contd.)

(iv) Defined benefit plans The cost of the Retirement Benefit Scheme (“the Scheme”) and the present value of the defined benefit

obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, management considers values of AA rated corporate bond yields with 3 to 15 years of maturity and converts these bond yields rate to estimated spot rates. The spot rates are then used to value the projected future cash flows of the Scheme. An equivalent single discount rate is then sought such that the present value of projected cash flows discounted at this single discount rate is similar to the present value of the projected cash flows discounted at various spot rates. The resulting discount rate is 5.0% per annum.

Further details about the retirement benefit assets are given in Note 22.

(v) Impairment of plant and equipment The Group assesses whether there are any indicators of impairment for all non- financial assets at

each reporting date. Other non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable.

During the current financial year, the Group has recognised impairment losses in plant and equipment. The Group carried out the impairment test based on a variety of estimation including the value in use of cash-generating units (“CGU”) to which the plant and equipment are allocated. Estimating the value in use requires the Group to make an estimate of the expecting future cash flow from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flow. Further details of the impairment losses recognised for the plant and equipment are disclosed in Note 11 to the financial statements.


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3. REVENUE

Group Company

2017RM

2016RM

2017RM

2016RM

Publishing, distribution and advertisements 211,946,802 226,499,733 197,843,234 190,035,859

Investment holding, management services and others 33,033,284 918,846 - -

244,980,086 227,418,579 197,843,234 190,035,859

Included in investment holding revenue of the Group are:

2017 2016RM RM

Dividend income from available-for-sale financial assets: - Equity instruments (quoted) 27,426 29,148Net fair value loss on held-for-trading investment (183,318) (289,795)Interest income on deposits 13,284 8,625Interest income on advances given to employees 105,002 81,000Rental income 77,400 86,100

Gain on disposal of held-for-trading investments 323,130 83,510Gain on disposal of investment property (Note 31) 32,364,705 -

4. OTHER INCOME

Included in other income are the following:

Group Company2017RM

2016RM

2017RM

2016RM

Dividend income: - Subsidiaries - - 23,900,000 4,000,000Gain on disposal of scrap 4,110,446 4,619,167 3,988,109 4,501,961Commission income - - 195,276 517,363Gain on disposal of property, plant and equipment 30,128 - 29,425 200Gain on disposal of non-current asset classified as held-for-sale (Note 23) - 3,740,070 - -Gain on disposal of a subsidiary (Note 14) 2,840,571 - - -Creditors written off (728,707) (252,346) - -Building rental income 2,088,882 1,675,616 1,880,654 1,509,215Interest income charged to subsidiaries - - 45,445 61,817Interest income on deposits 70,803 88,010 - -Other interest income 14,764 122,549 9,817 113,422


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5. EMPLOYEE BENEFITS EXPENSE

Group Company

2017RM

2016RM

2017RM

2016RM

Wages and salaries 89,379,315 94,871,103 77,247,598 77,321,243

Social security costs 1,121,548 1,093,891 938,971 889,998

Short term accumulating compensated absences 27,061 - - -

Contribution to defined contribution plans 13,845,028 14,214,808 11,745,172 11,651,082

Increase in liability for defined benefit plans (Note 22) 58,751 84,460 58,751 84,460

Other staff related expenses 12,398,304 17,626,090 9,234,665 13,782,514

116,830,007 127,890,352 99,225,157 103,729,297

Included in staff costs of the Group and of the Company are executive directors’ remuneration amounting to RM1,307,941 (2016: RM1,230,655) as further disclosed in Note 6.

6. DIRECTORS’ REMUNERATION

The details of remuneration receivable by directors of the Group and of the Company during the year are as follows:

Group and Company

2017RM

2016RM

Executive directors’ remuneration (Note 5): - Salaries and other emoluments 1,063,452 996,000 - Fees 60,000 60,000 - Defined contribution plan 184,489 174,655

1,307,941 1,230,655

Non-executive directors’ remuneration (Note 8): - Fees 123,041 150,000 - Allowances 325,000 352,000

448,041 502,000

Total directors’ remuneration (Note 30(b)) 1,755,982 1,732,655

Estimated money value of benefits-in-kind 78,500 31,500

Total directors’ remuneration including benefits-in-kind 1,834,482 1,764,155


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6. DIRECTORS’ REMUNERATION (CONTD.) The number of directors of the Company whose total remuneration during the year fell within the following bands is

analysed below:

Number of directors

2017 2016

Executive directors

RM500,001 – RM550,000 1 1

RM700,001 – RM750,000 - 1

RM800,001 – RM850,000 1 -

Non-executive directors

RM200,001 – RM250,000 1 1

RM50,001 – RM100,000 3 4

Below RM50,000 2 1

7. FINANCE COSTS

Included in finance costs are the following:

Group Company2017RM

2016RM

2017RM

2016RM

Interest expense on: - Bank borrowings and overdrafts 8,356,668 8,958,399 7,254,144 8,433,422 - Inter company borrowings - - 588,779 645,355 - Leasing/hire purchase payables - 554 - -Total 8,356,668 8,958,953 7,842,923 9,078,777


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8. LOSS BEFORE TAX

The following amounts have been included in arriving at loss before taxation:

Group Company2017RM

2016RM

2017RM

2016RM

Non-executive directors’ remuneration (Note 6) 448,041 502,000 448,041 502,000Auditors’ remuneration: - Statutory audit 219,125 208,275 93,000 89,250 - Other services 19,000 14,500 19,000 14,500Office/warehouse rental expenses 429,781 615,463 377,941 376,519Equipment rental expenses 1,418,407 1,458,747 1,326,971 1,375,037Impairment loss on trade and other receivables 2,669,562 2,890,627 6,766,648 2,456,109Reversal of impairment loss on trade and other receivables (Note 18) (1,167,588) (1,251,325) (600,427) (2,758,979)Bad debts recovered (50,033) (122,787) (21,507) (4,418)Inventories written off 2,477 15,119 - -Inventories written down 4,543,726 - 4,473,924 -Impairment loss on other investment 48,000 48,000 - -Property, plant and equipment written off (Note 11) 29,400 76,132 - -Impairment loss on property plant and equipment (Note 11) 1,001,752 2,319,059 1,001,752 2,315,991(Reversal of)/provision for litigation (Note 25(d)) (735,000) 103,000 (735,000) 103,000(Reversal of)/provision for returns (Note 25(d)) (27,956) (862,610) 212,363 (213,402)Impairment loss on investment in a subsidiary (Note 14) - - 1,000,000 -Impairment loss on investment of associates (Note 15) 109,000 - 109,000 -Loss on disposal of other investment - 7,992 - 7,992Loss on disposal of property, plant and equipment - 4,308 - -

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9. INCOME TAXATION

The major components of income taxation for years ended 31 December 2017 and 2016 are:

Group Company2017RM

2016RM

2017RM

2016RM

Current income tax:Malaysian income tax expense 239,573 2,005,533 - -Under/(over) provision in prior years 117,674 (424,169) - -Real property gains tax - 186,912 - -

357,247 1,768,276 - -Deferred tax (Note 17):Relating to origination and reversal of temporary differences (3,129,354) (165,918) - -(Over)/underprovision in prior years (27,854) 102,432 - -

(3,157,208) (63,486) - -Income taxation (benefit)/expense recognised in profit or loss (2,799,961) 1,704,790 - -

The current income tax is calculated at the statutory tax rate of 24% (2016: 24%) of the estimated assessable profit for the year.

A reconciliation of income taxation applicable to loss before taxation at the statutory income tax rate to income taxation at the effective income tax rate of the Group and of the Company for the years ended 31 December 2017 and 2016 are as follows:

2017RM

2016RM

GroupLoss before taxation:

- from continuing operation (10,255,868) (66,725,478)- from discontinuing operation - (35,898)

(10,255,868) (66,761,376)

Taxation at Malaysian statutory tax rate of 24% (2016: 24%) (2,461,408) (16,022,730)Income not subject to tax (8,010,134) (2,228,891)Expenses not deductible for tax purposes 1,522,866 434,707Deferred tax assets recognised on previously unutilised tax losses and other temporary deductible diferrences (3,637,059) (1,803,926)Utilisation of previously unrecognised capital allowances (327,003) (608,533)Deferred tax assets not recognised in respect of current year’s tax losses and unabsorbed capital allowances 9,963,750 22,017,226Effect of share of result of associates 59,207 51,762Real property gains tax in current year - 186,912(Over)/under provision of deferred tax in prior years (27,854) 102,432Under/(over) provision of tax expense in prior years 117,674 (424,169)Income taxation (benefit)/expense (2,799,961) 1,704,790

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9. INCOME TAXATION (CONTD.) A reconciliation of income taxation applicable to loss before taxation at the statutory income tax rate to income

taxation at the effective income tax rate of the Group and of the Company for the years ended 31 December 2017 and 2016 are as follows: (contd.)

2017RM

2016RM

Group (contd.)

Tax savings recognised during the year arising from: Utilisation of current year tax losses 293,201 333,739 Utilisation of tax losses brought forward from previous years 531,953 794,343

CompanyLoss before taxation (21,316,857) (67,310,162)

Taxation at Malaysian statutory tax rate of 24% (2016: 24%) (5,116,046) (16,154,439)Income not subject to tax (5,736,000) (1,032,830)Expenses not deductible for tax purposes 2,284,360 96,798Deferred tax assets not recognised 8,567,686 17,090,471Income taxation expense - -

10. LOSS PER SHARE

Basic and diluted Basic and diluted loss per share amounts are calculated by dividing the loss for the year, net of tax, attributable to

owners of the parent by the weighted average number of ordinary shares in issue during the financial year.

Group

2017 2016

Loss attributable to owners of the parent (RM): (7,455,907) (68,466,166)

Weighted average number of ordinary shares in issue 110,733,837 110,733,837

Basic and diluted loss per share (sen) (6.73) (61.83)

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11. PROPERTY, PLANT AND EQUIPMENT

*Land andbuildings

RM

Capitalwork-in-progress

RM

Motorvehicles,plant and

machineryRM

** Otherassets

RMTotal

RM

GroupAt 31 December 2017Cost

At 1 January 2017 231,799,480 762,819 226,544,108 62,114,062 521,220,469

Additions 216,681 41,590 203,000 512,616 973,887

Disposals - - (145,832) (274,820) (420,652)

Written off - - - (2,039,586) (2,039,586)

Reclassification to investment properties (Note 12) (3,444,955) - - - (3,444,955)

Reclassification - (437,819) - 437,819 -

Exchange differences - - (17,438) (1,154) (18,592)

At 31 December 2017 228,571,206 366,590 226,583,838 60,748,937 516,270,571

Accumulated depreciation and impairment

At 1 January 2017 53,592,041 - 183,078,774 56,105,564 292,776,379

Depreciation charge for the year 4,408,067 - 10,626,297 2,764,829 17,799,193

Disposals - - (145,832) (274,265) (420,097)

Written off - - - (2,010,186) (2,010,186)


Impairment loss - - 1,016,700 (14,948) 1,001,752

Exchange differences - - (17,438) (1,154) (18,592)

At 31 December 2017 56,076,358 - 194,558,501 56,569,840 307,204,699

Net carrying amount 172,494,848 366,590 32,025,337 4,179,097 209,065,872

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11. PROPERTY, PLANT AND EQUIPMENT (CONTD.)

*Land andbuildings

RM


RM


machineryRM

** Otherassets

RMTotal

RMGroup (contd.)At 31 December 2016CostAt 1 January 2016 234,602,772 437,819 226,522,735 62,331,618 523,894,944

Additions 107,764 325,000 11,400 400,855 845,019

Disposals - - - (27,159) (27,159)

Written off - - - (119,579) (119,579)


Reclassification to intangible assets (Note 13) - - - (192,781) (192,781)

Attributable to discontinuing operation (Note 23) - - - (279,552) (279,552)

Exchange differences - - 9,973 660 10,633

At 31 December 2016 231,799,480 762,819 226,544,108 62,114,062 521,220,469

Accumulated depreciation and impairmentAt 1 January 2016 50,229,736 - 169,774,438 52,998,492 273,002,666


Disposals - - - (18,290) (18,290)

Written off - - - (43,447) (43,447)

Impairment loss - - 1,987,429 331,630 2,319,059


Reclassification to intangible assets (Note 13) - - - (5,580) (5,580)

Attributable to discontinuing operation (Note 23) - - - (278,655) (278,655)

Exchange differences - - 9,973 660 10,633

At 31 December 2016 53,592,041 - 183,078,774 56,105,564 292,776,379


** Other assets consist of furniture, fixtures and fittings, office equipment, waste water treatment equipment, lift, computer equipment and renovations.

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* Land and buildings of the Group:

Freeholdland and

buildingsRM

Leaseholdland and

buildingsRM

TotalRM

At 31 December 2017Cost

At 1 January 2017 10,757,698 221,041,782 231,799,480

Additions - 216,681 216,681

Reclassification to investment properties (Note 12) - (3,444,955) (3,444,955)

At 31 December 2017 10,757,698 217,813,508 228,571,206

Accumulated depreciation

At 1 January 2017 3,164,079 50,427,962 53,592,041

Depreciation charge for the year 223,443 4,184,624 4,408,067


At 31 December 2017 3,387,522 52,688,836 56,076,358

Net carrying amount 7,370,176 165,124,672 172,494,848

At 31 December 2016

Cost

At 1 January 2016 11,064,357 223,538,415 234,602,772

Additions - 107,764 107,764

Reclassification to investment properties (Note 12) (306,659) (2,604,397) (2,911,056)

At 31 December 2016 10,757,698 221,041,782 231,799,480


At 1 January 2016 3,131,331 47,098,405 50,229,736


Reclassification to investment properties (Note 12) (190,695) (997,142) (1,187,837)

At 31 December 2016 3,164,079 50,427,962 53,592,041


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*Land andbuildings

RM


RM


machineryRM

** Otherassets

RMTotal

RM

CompanyAt 31 December 2017Cost

At 1 January 2017 225,261,565 325,000 223,719,323 45,906,302 495,212,190

Additions 216,681 41,590 203,000 485,127 946,398

Transfer in - - - 25,467 25,467


Disposals - - (145,832) (267,514) (413,346)

At 31 December 2017 222,033,291 366,590 223,776,491 46,149,382 492,325,754

Accumulated depreciation and impairment

At 1 January 2017 49,967,478 - 180,431,633 39,924,355 270,323,466


Transfer in - - - - -


Disposals - - (145,832) (267,512) (413,344)

Impairment loss - - 1,016,700 (14,948) 1,001,752

At 31 December 2017 52,358,824 - 191,941,622 41,906,551 286,206,997


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*Land andbuildings

RM


RM


machineryRM

** Otherassets

RMTotal

RM

Company (contd.)At 31 December 2016Cost

At 1 January 2016 228,064,857 437,819 223,707,923 45,151,951 497,362,550

Additions 107,764 325,000 11,400 326,197 770,361

Disposals - - - (9,665) (9,665)


Reclassifications - (437,819) - 437,819 -

At 31 December 2016 225,261,565 325,000 223,719,323 45,906,302 495,212,190

Accumulated depreciationand impairment

At 1 January 2016 46,777,564 - 167,150,244 37,093,694 251,021,502


Disposals - - - (9,665) (9,665)


Impairment loss - - 1,987,429 328,563 2,315,992

At 31 December 2016 49,967,478 - 180,431,633 39,924,355 270,323,466


** Other assets consist of furniture, fixtures and fittings, office equipment, waste water treatment equipment, lift, computer equipment and renovations.

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* Land and buildings of the Company:

Freeholdland and

buildingsRM

Leaseholdland and

buildingsRM

TotalRM


At 1 January 2017 10,757,698 214,503,867 225,261,565

Additions - 216,681 216,681


At 31 December 2017 10,757,698 211,275,593 222,033,291


At 1 January 2017 2,946,806 47,020,672 49,967,478



At 31 December 2017 3,170,249 49,188,575 52,358,824



At 1 January 2016 11,064,357 217,000,500 228,064,857

Additions - 107,764 107,764

Reclassifications to investment properties (Note 12) (306,659) (2,604,397) (2,911,056)

At 31 December 2016 10,757,698 214,503,867 225,261,565


At 1 January 2016 3,131,316 43,646,248 46,777,564


Reclassifications to investment properties (Note 12) (190,695) (997,142) (1,187,837)

At 31 December 2016 2,946,806 47,020,672 49,967,478


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(a) During the year, the Group and the Company acquired property, plant and equipment with an aggregate cost of RM973,887 (2016:RM845,019) and RM946,398 (2016: RM770,361) respectively of which RM196,000 (2016: RMNil) and RM196,000 (2016: RMNil) respectively were acquired by means of loans and borrowings.

The net carrying amounts of property, plant and equipment held under hire purchase and leasing payable agreements are as follows:

Group Company

2017RM

2016RM

2017RM

2016RM

Motor vehicles 217,350 2,584 217,350 159,100

Details of the terms and conditions of the hire purchase arrangements are disclosed in Note 28(b).

(b) The net carrying amounts of property, plant and equipment pledged to financial institutions for bank borrowings as referred to in Note 24 are as follows:

Group Company

2017RM

2016RM

2017RM

2016RM

Land and buildings 130,276,357 106,089,910 103,903,624 106,089,910

Plant and machinery and others 16,367,767 23,870,857 16,367,767 23,870,857

146,644,124 129,960,767 120,271,391 129,960,767

(c) Included in property, plant and equipment of the Group and of the Company are fully depreciated assets which are still in use, costing RM134,624,370 (2016: RM128,434,377) and RM117,602,633 (2016: RM113,984,619) respectively.

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12. INVESTMENT PROPERTIES

Land andbuildings

RM

Investmentproperties

underconstruction

RMTotal

RM

GroupAt 31 December 2017Cost

At 1 January 2017 40,667,123 17,268,021 57,935,144

Addition 38,939,086 1,672,911 40,611,997

Reclassification 7,691,270 (7,691,270) -

Reclassification from property, plant and equipment (Note 11) 3,444,955 - 3,444,955

Disposal (6,800,000) - (6,800,000)

At 31 December 2017 83,942,434 11,249,662 95,192,096


At 1 January 2017 7,229,897 - 7,229,897

Depreciation charge for the year 908,859 - 908,859


Disposal (781,748) - (781,748)

At 31 December 2017 9,280,758 - 9,280,758


Fair value 150,798,809 N/A


At 1 January 2016 18,387,845 32,357,196 50,745,041

Addition 2,134,280 2,144,767 4,279,047


Reclassification 17,233,942 (17,233,942) -

At 31 December 2016 40,667,123 17,268,021 57,935,144

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12. INVESTMENT PROPERTIES (CONTD.)

Land andbuildings

RM

Investmentproperties

underconstruction

RMTotal

RM

Group (contd.)Accumulated depreciation

At 1 January 2016 5,432,726 - 5,432,726

Depreciation charge for the year 609,334 - 609,334

Reclassification from property, plant and equipment (Note11) 1,187,837 - 1,187,837

At 31 December 2016 7,229,897 - 7,229,897


Fair value 97,593,303 N/A

2017RM

2016RM

CompanyLand and buildingsCost

At1 January 4,542,724 1,631,668

Reclassification from property, plant and equipment (Note11) 3,444,955 2,911,056

At 31 December 7,987,679 4,542,724


At 1 January 2,667,845 1,425,767

Depreciation charge for the year 118,614 54,241

Reclassification from property, plant and equipment (Note11) 1,923,750 1,187,837

At 31 December 4,710,209 2,667,845

Net carrying amount 3,277,470 1,874,879

Fairv alue 56,309,723 30,302,640

Fair value of the investment properties was determined using significant observable inputs (Level 2 of fair value hierarchy) obtained via reference to the prices of similar properties within the market by the Directors.

During the year, the Group acquired investment property with an aggregate cost of RM40,611,997 (2016: RM4,279,047) of which RM443,670 (2016: RM3,774,605) and were acquired by means of loans and borrowings. The borrowing cost capitalised as cost of investment property of the Group amounted to RM11,788 (2016: RM323,340).

Included in investment properties of the Group and of the Company are fully depreciated assets which are still in use, costing RM1,958,477.

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12. INVESTMENT PROPERTIES (CONTD.)

The income and expenses arising from the Group’s and the Company’s investment properties for the financial year are shown below:

Group Company

2017RM

2016RM

2017RM

2016RM

Rental income derived from investment properties 1,324,582 1,329,662 571,049 507,800

Direct operating expenses generating rental income (included in other operating expenses) (282,180) (181,321) (84,702) (54,508)

Profit arising from investment properties 1,042,402 1,148,341 486,347 453,292

The Group has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

13. INTANGIBLE ASSETS

Software

Group Company2017RM

2016RM

2017RM

2016RM

CostAt 1 January 28,279,294 28,086,513 27,847,767 27,847,767Reclassification from property, plant and equipment (Note 11) - 192,781 - -At 31 December 28,279,294 28,279,294 27,847,767 27,847,767

Accumulated amortisationAt 1 January 26,856,161 25,946,977 26,679,293 25,824,385Amortisation for the year 731,868 903,604 648,866 854,908Reclassification from property, plant and equipment (Note 11) - 5,580 - -At 31 December 27,588,029 26,856,161 27,328,159 26,679,293Net carrying amount 691,265 1,423,133 519,608 1,168,474

Included in intangible assets of the Group and of the Company are fully amortised assets which are still in use, costing RM25,747,064 (2016: RM23,870,040) and RM25,724,422 (2016: RM23,853,522) respectively.

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14. INVESTMENTS IN SUBSIDIARIES

Company

2017RM

2016RM

Unquoted shares, at cost 9,266,001 14,039,395

Less: Accumulated impairment losses (6,035,999) (9,809,395)

3,230,002 4,230,000

Movement in allowance accounts:

At 1 January 9,809,395 5,135,999

Charge for the year 1,000,000 -

Discontinued operation - 4,673,396

Disposal of subsidiary (4,773,396) -

At 31 December 6,035,999 9,809,395

Details of the subsidiaries are as follows:

Name of subsidiariesCountry of

incorporation

Equity interestheld (%)

Principal activities2017 2016

Held by the Company:

Utusan Publications and Distributors Sdn. Bhd.

Malaysia 100 100 Publications and distributionof books

Utusan Karya Sdn. Bhd. Malaysia 100 100 Publication of magazines

Juasa Holdings Sdn. Bhd. Malaysia 100 100 Investment holding

Utusan Airtime Sdn. Bhd. Malaysia 100 100 Radio and TV advertising

Utusan Land Sdn. Bhd. Malaysia 100 100 Property development

U-Print Sdn. Bhd. Malaysia 100 100 Dormant

Utusan Technology Asia Sdn. Bhd. ** Malaysia 100 - Dormant

Utusan Teknologi Maklumat Sdn. Bhd. Malaysia 70 70 Dormant

Utusan Studios Sdn. Bhd. *** Malaysia - 100 Video post- production editing

Held by the Company and Juasa Holdings Sdn. Bhd.

PT. Sinar Media Advertising * Indonesia 100 100 Dormant

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14. INVESTMENTS IN SUBSIDIARIES (CONTD.) Details of the subsidiaries are as follows: (contd.)

Name of subsidiariesCountry of

incorporation


Principal activities2017 2016

Held through subsidiaries:Held via Juasa Holdings Sdn. Bhd.

Utusan Media Sales Sdn. Bhd. Malaysia 100 100 Advertising agent

Utusan Jobhouse Sdn. Bhd.(formerly known as Jobhouse Sdn. Bhd.)

Malaysia 100 100 Management services

Utusan Binders Sdn. Bhd. Malaysia 100 100 Dormant

Held via Utusan Media Sales Sdn. Bhd.

Karya Outdoor Sdn. Bhd. Malaysia 100 100 Outdoor advertising

Held via Karya Outdoor Sdn. Bhd.

Tintarona Publications Sdn. Bhd. Malaysia 100 100 Publications and distribution of books

* Audited by firms of auditors other than Ernst & Young.

Acquisition of Subsidiary **

On 23 August 2017 the Company had announced that it had acquired two ordinary shares of RM1.00 each for a cash consideration of RM2.00 in the capital of Utusan Technology Asia Sdn Bhd. Subsequent to the said acquisition, Utusan Technology Asia Sdn Bhd became a wholly-owned subsidiary of the Company.

The fair values of the identifiable assets and liabilities of Utusan Technology Asia Sdn Bhd as at the date of acquisition were:

Fair valueRM

Carrying amount

RMTrade and other receivables 2 2 Net identifiable assets 2 2

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14. INVESTMENTS IN SUBSIDIARIES (CONTD.) Acquisition of Subsidiary ** (contd.)

Total cost of business combination:RM

Cash paid 2

The effect of the acquisition on cash flows is as follow:RM

Total cost of business combination 2 Less: Cash and cash equivalents of subsidiary acquired -

Net cash outflow on acquisition 2

Disposal of a Subsidiary ***

On 19 September 2017 the Company had announced that it had entered into a Share Sale Agreement (‘the Agreement’) with Rawdah S&S Sdn Bhd for the disposal of 60,000 ordinary shares of RM1.00 each which represent 60% of the total issued and paid-up capital in its wholly-owned subsidiary, Utusan Studios Sdn Bhd for a consideration of RM60,000, upon such terms and subject to the conditions of the Agreement. The Agreement was fully completed on the same date.

Upon completion of the disposal, Utusan Studios Sdn Bhd ceased to be a subsidiary, but became an associate of the Company.

The remaining interest of 40% in Utusan Studios Sdn Bhd has been fully impaired during the year.

The disposal had the following effects on the financial position of the Group as at 31 December 2017.

RMProperty, plant & equipment 538Inventories 844,000Cash & bank balances 40,514Trade and other payables (3,665,623)Total net liabilities (2,780,571)

Total disposal proceed 60,000Net liabilities disposed (2,780,571)Gain on disposal to the Group 2,840,571

Cash inflow arising from the disposal:Cash consideration 60,000Cash and cash equivalent of subsidiary (40,514)Net cash inflow on disposal 19,486

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15. INVESTMENTS IN ASSOCIATES

Group Company2017RM

2016RM

2017RM

2016RM

Unquoted shares, at cost 2,922,306 2,882,306 2,789,000 2,749,000Share of post-acquisition reserves (2,376,461) (2,020,767) - -

545,845 861,539 2,789,000 2,749,000Less: Accumulated impairment losses - - (2,789,000) (2,680,000)

545,845 861,539 - 69,000Represented by:Share of net assets of the associates 545,845 861,539 - -

Details of the associates are as follows:

Name of associatesCountry of

incorporation


Principal activities2017 2016Held by the Company:Utusan Transport Sdn. Bhd. and its subsidiaries * Malaysia 30 30 TransportationUtusan Studio Sdn Bhd Malaysia 40 - Video post- production editingTitanium Compass Sdn Bhd * Malaysia 20 20 Investment holdingPT. Sinar Mitra Utama * Indonesia 40 40 DormantUtusan Printcorp Sdn. Bhd.* Malaysia 40 40 Dormant

* Audited by firms of auditors other than Ernst & Young.

Summarised financial information in respect of the Group’s material associate is set out below. The summarised financial information represents the amounts in the financial statements of the associate and not the Group’s share of those amounts.

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15. INVESTMENTS IN ASSOCIATES (CONTD.)

Utusan Transport Sdn Bhd

(i) Summarised statement of financial position:

2017RM

2016RM

As at 31 DecemberAssets and liabilities

Current assets 5,580,598 5,014,773

Non-current assets 2,981,384 3,194,489

Total assets 8,561,982 8,209,262

Current liabilities 6,252,953 4,877,351

Non-current liabilities 489,545 460,115


(ii) Summarised statement of comprehensive income:

2017RM

2016RM

Year ended 31 DecemberResults

Revenue 36,750 4,557,166

Loss for the year (1,052,312) (718,917)

(iii) Reconciliation of the summarised financial information presented above to the carrying amount of the Group’s interest in associate.

2017RM

2016RM

Net assets at 1 January 2,871,796 3,590,713

Loss for the year (1,052,312) (718,917)

Net assets at 31 December 1,819,484 2,871,796

Interest in associate 30% 30%

Carrying value of Group’s interest in associates 545,845 861,539

(iv) There are no financial information available for the associates that are not individually material as at 31 December 2017 and 2016. The Group and the Company have fully impaired the carrying amount for these associates in the financial statements.

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16. INVESTMENT SECURITIES

2017RM

2016RM

Carryingamount

Market valueof quoted

investmentsCarrying

amount

Market valueof quoted

investmentsGroupNon-currentAvailable-for-sale financial assetsEquity instruments - Quoted in Malaysia 1,156,668 1,156,668 1,144,548 1,144,548 - Unquoted in Malaysia, at cost - -

1,156,668 1,144,548Other investmentsPreference shares, unquoted in Malaysia 11,700,000 11,700,000 less: impairment (11,700,000) (11,700,000)

- -

Club membership, unquoted, at cost 123,000 171,000 less: impairment (48,000) (48,000)

75,000 123,000Total non-current 1,231,668 1,267,548

CurrentHeld-for-trading - Quoted in Malaysia 463,670 463,670 656,128 656,128Total investment securities 1,695,338 1,923,676

CompanyNon-currentAvailable-for-sale financial assetsEquity instruments - Quoted in Malaysia 33,330 33,330 27,366 27,366 - Unquoted in Malaysia, at cost - -

33,330 27,366Other investments

Preference shares, unquoted in Malaysia 11,700,000 11,700,000 less: impairment (11,700,000) (11,700,000)

- -Total investment securities 33,330 27,366

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17. DEFERRED TAX

Group Company

2017RM

2016RM

2017RM

2016RM

At 1 January 85,399 21,913 - -

Recognised in profit or loss (Note 9) 3,157,208 63,486 - -

At 31 December 3,242,607 85,399 - -

Presented as follows:

Deferred tax assets 3,242,607 222,457 - -

Deferred tax liabilities - (137,058) - -

3,242,607 85,399 - -

The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:

Deferred tax liabilities of the Group:

Accelerated capitalallowances

RM

At 1 January 2017 (18,027,415)

Recognised in profit or loss 4,284,941

(13,742,474)

Less: Set-off deferred tax assets 13,742,474

At 31 December 2017 -

At 1 January 2016 (21,831,749)


(18,027,415)


At 31 December 2016 (137,058)

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17. DEFERRED TAX (CONTD.)

Deferred tax assets of the Group:

Retirementbenefit

obligationsRM

Unutilisedtax losses

andunabsorbed

capitalallowances

RM

Provisionsand accruals

RMTotal

RM

At 1 January 2017 (65,315) 16,291,765 1,886,364 18,112,814

Recognised in profit or loss (4,987) (1,726,973) 604,227 (1,127,733)

(70,302) 14,564,792 2,490,591 16,985,081

Less: Set-off deferred tax liabilities (13,742,474)

At 31 December 2017 3,242,607

At 1 January 2016 (65,558) 19,908,408 2,010,812 21,853,662

Recognised in profit or loss 243 (3,616,643) (124,448) (3,740,848)

(65,315) 16,291,765 1,886,364 18,112,814


At 31 December 2016 222,457

Deferred tax liabilities of the Company:

Accelerated capitalallowances

RM

At 1 January 2017 (16,188,456)


(13,118,817)



At 1 January 2016 (20,120,648)


(16,188,456)



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17. DEFERRED TAX (CONTD.)

Deferred tax assets of the Company:

Unabsorbedcapital

allowancesRM

Provisionsand accruals

RMTotal

RM

At 1 January 2017 16,203,874 (15,418) 16,188,456

Recognised in profit or loss (3,085,057) 15,418 (3,069,639)

13,118,817 - 13,118,817



At 1 January 2016 20,120,648 - 20,120,648

Recognised in profit or loss (3,916,774) (15,418) (3,932,192)

16,203,874 (15,418) 16,188,456



Deferred tax assets have not been recognised in respect of the following items:

Group Company

2017RM

2016RM

2017RM

2016RM

Unutilised tax losses 208,711,146 188,025,883 162,066,111 136,004,368

Unabsorbed capital allowances 62,644,918 46,473,653 53,270,075 37,102,635

Others 6,079,343 17,937,169 4,020,479 10,550,970

277,435,407 252,436,705 219,356,665 183,657,973

The unutilised tax losses and unabsorbed capital allowances of the Group are available indefinitely for offsetting against future taxable profits of the respective entities within the Group, subject to no substantial change in shareholdings of those entities under the Income Tax Act, 1967 and guidelines issued by the tax authority.

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18. TRADE AND OTHER RECEIVABLES

Group Company

2017RM

2016RM

2017RM

2016RM

CurrentTrade receivables (a)

Third parties 75,744,429 66,239,486 48,309,224 23,826,662

Less: Allowance for impairment (12,387,419) (13,196,111) (3,362,312) (3,297,813)

Trade receivables, net 63,357,010 53,043,375 44,946,912 20,528,849

Other receivables (c)

Due from related parties (b):

- Subsidiaries - - 44,175,251 52,329,518

- Associates 17,497,198 14,008,034 17,242,254 13,725,602

Deposits 1,164,731 2,366,979 672,339 1,984,083

Prepayments 2,514,009 3,357,322 965,731 232,378

Advances to employees (Note 19) 1,267,993 1,108,831 - -

Dividend receivable - - 23,900,000 -

Sundry receivables 19,650,919 13,165,335 10,839,323 7,898,495

42,094,850 34,006,501 97,794,898 76,170,076

Less: Allowance for impairment:

- Subsidiaries - - (25,143,258) (20,409,707)

- Associates (13,725,602) (13,725,602) (13,725,602) (13,725,602)

- Other receivables (7,901,169) (7,011,409) (5,341,334) (4,361,234)

(21,626,771) (20,737,011) (44,210,194) (38,496,543)

Other receivables (current) 20,468,079 13,269,490 53,584,704 37,673,533

Trade and other receivables (current) 83,825,089 66,312,865 98,531,616 58,202,382

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18. TRADE AND OTHER RECEIVABLES (CONTD.)

Group Company

2017RM

2016RM

2017RM

2016RM

Non-currentOther receivables (c)

Loans to subsidiaries (b) - - 371,692 725,294

Loan to associate (b) 12,745,127 12,745,127 12,745,127 12,745,127

Other receivables - 980,100 - 980,100

Advances to employees (Note 19) 2,194,892 1,928,039 - -

14,940,019 15,653,266 13,116,819 14,450,521

Less: Allowance for impairment:

- Subsidiaries - - (371,692) (725,294)

- Associate (12,745,127) (12,745,127) (12,745,127) (12,745,127)

- Other receivables - (980,100) - (980,100)

Other receivables (non-current) 2,194,892 1,928,039 - -

Total trade and other receivables 86,019,981 68,240,904 98,531,616 58,202,382

Add: Cash and bank balances (Note 21) 17,788,024 32,858,744 3,072,949 12,396,619

Less: Prepayments (2,514,009) (3,357,322) (965,731) (232,378)

Less: Dividend receivable - - (23,900,000) -

Total loans and receivables 101,293,996 97,742,326 76,738,834 70,366,623

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(a) Trade receivables

Trade receivables are non-interest bearing and are generally on 30 to 120 days (2016: 30 to 120 days) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

The ageing analysis of the Group’s and of the Company’s trade receivables is as follows:

Group Company

2017RM

2016RM

2017RM

2016RM

Neither past due nor impaired 38,246,041 16,229,598 32,609,424 5,922,698

1 to 30 days past due not impaired 7,505,795 8,375,068 3,707,625 2,627,916


61 to 90 days past due not impaired 1,862,968 3,348,800 751,649 819,811


More than 120 days past due not impaired 9,643,099 13,696,625 5,278,792 5,811,213

25,110,969 36,813,777 12,337,488 14,606,151

Impaired 12,387,419 13,196,111 3,362,312 3,297,813

75,744,429 66,239,486 48,309,224 23,826,662

The Group and the Company have trade receivables amounting to RM25,110,969 (2016: RM36,813,777) and RM12,337,488 (2016: RM14,606,151) respectively that are past due at the reporting date but not impaired. The total amount that are past due but not impaired are unsecured in nature.

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group and the Company.

None of the Group’s and the Company’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

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18. TRADE AND OTHER RECEIVABLES (CONTD.)(a) Trade receivables (contd.)

Receivables that are impaired

The Group’s and the Company’s trade receivables that are impaired at the end of the financial year and the movement of the allowance accounts used to record the impairment are as follows:

Group Company

2017RM

2016RM

2017RM

2016RM

Trade receivables - nominal value 12,387,419 13,196,111 3,362,312 3,297,813

Less: Allowance for impairment (12,387,419) (13,196,111) (3,362,312) (3,297,813)

Nominal value - - - -

Movement in allowance accounts:

Group Company

2017RM

2016RM

2017RM

2016RM

At 1 January 13,196,111 23,062,672 3,297,813 2,688,229

Charge for the year (Note 8) 2,669,562 2,857,876 284,364 718,983

Reversal of impairment loss (Note 8) (1,156,572) (1,222,437) (219,865) (109,399)

Written off (1,945,182) (11,502,000) - -

Disposal of a subsidiary (376,500) - - -

At 31 December 12,387,419 13,196,111 3,362,312 3,297,813

Trade receivables that are individually determined to be impaired at end of the financial year relate to debtors that are in significant difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

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(b) Amounts due from related parties

Amounts due from subsidiaries are unsecured, non-interest bearing and are repayable upon demand. Part of related parties receivables are to be settled in cash after offsetting arrangements.

Amounts due from associates are unsecured, non-interest bearing and are repayable upon demand.

Loans to subsidiaries and associates are unsecured, bears interest at 5% (2016: 5% per annum), and have average maturity of 5 years (2016: 5 years).

(c) Other receivables

Other receivables that are impaired

At the reporting date, the Group and the Company have provided allowance of RM34,371,898 (2016: RM34,462,238) and RM57,327,013 (2016: RM52,947,064) respectively for impairment of the amount due from other debtors, associates and subsidiaries. These relates to companies that have been suffering significant financial losses or have defaulted on their payments.

The movements of the allowance accounts used to record the impairment are as follows:

Group Company

2017RM

2016RM

2017RM

2016RM

At 1 January 34,462,238 34,458,375 52,947,064 62,079,243

Charge for the year (Note 8) - 32,751 6,482,284 1,737,126

Reversal of impairment loss (Note 8) (11,016) (28,888) (380,562) (2,649,580)

Written off (79,324) - (1,721,773) (8,219,725)

At 31 December 34,371,898 34,462,238 57,327,013 52,947,064

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19. LONG-TERM RECEIVABLES

Group2017RM

2016RM

Advances to employeesMinimum receivables:Within and up to one year 1,528,540 1,345,146After one and up to two years 1,144,922 950,584After two and up to five years 1,328,295 1,228,265

4,001,757 3,523,995Less: Future finance income (538,872) (487,125)Present value of assets 3,462,885 3,036,870

Present value of assets:Within and up to one year 1,267,993 1,108,831After one and up to two years 990,750 821,094After two and up to five years 1,204,142 1,106,945

3,462,885 3,036,870

Analysed as:Receivables within twelve months (Note 18) 1,267,993 1,108,831Receivables after twelve months (Note 18) 2,194,892 1,928,039Total 3,462,885 3,036,870

The advances to employees relate to advances given to employees of the Group to purchase motorcycles and computers under the Staff Motorcycle Loan Scheme, Staff Computer and Electrical & Appliances Loan Scheme (“Loan Schemes”). The Loan Schemes bear interest at 6% (2016: 6%) per annum and are recovered through salary deductions.

20. INVENTORIES

Group Company2017RM

2016RM

2017RM

2016RM

Raw materials 8,524,584 4,653,438 8,524,584 4,653,438Spare parts and consumables 5,424,594 5,728,536 5,424,594 5,728,536Work-in-progress 51,908 77,008 - -Finished goods 6,162,880 5,933,387 - -Less: Impairment for obsolete stock (5,553,348) (1,012,095) (4,473,924) -

14,610,618 15,380,274 9,475,254 10,381,974

During the year, the amount of inventories recognised as an expense in cost of sales of the Group and the Company was RM45,605,481 (2016: RM60,975,923) and RM45,012,984 (2016: RM56,724,572).

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21. CASH AND BANK BALANCES

Group Company2017RM

2016RM

2017RM

2016RM

Cash on hand and at banks 14,567,333 30,799,362 3,072,949 12,396,619

Deposits with:

- Licensed banks 2,461,461 2,058,776 - -

- Money market institutions 759,230 606 - -

Cash and bank balances 17,788,024 32,858,744 3,072,949 12,396,619

Less: Pledged deposits (1,744,950) (2,047,209) - -

Cash and cash equivalents 16,043,074 30,811,535 3,072,949 12,396,619

Included in the deposits of the Group is an amount of RM1,744,950 (2016: RM2,047,209) which has been pledged to banks for facilities granted as referred to in Note 24.

The weighted average effective interest rates of deposits at the reporting date were as follows:

Group Company2017

%2016

%2017

%2016

%

Licensed banks 3.0 3.1 - -

Money market institutions 2.3 2.8 - -

The average maturities of deposits as at the end of the financial year were as follows:

Group Company2017

Days2016

Days2017

Days2016Days

Licensed banks 179 203 - -

Money market institutions 1 1 - -

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22. RETIREMENT BENEFIT ASSETS

The Company operates a funded, defined benefit Retirement Benefit Scheme (“the Scheme”) for its eligible employees. Contributions to the Scheme are to be made to a separately administered fund. Under the Scheme, eligible employees are entitled to retirement benefits based on final salary on attainment of the retirement age of 60.

The amounts recognised in the statement of financial position are determined as follows:

Group and Company

2017RM

2016RM

Present value of funded defined benefit obligations 8,512,189 8,648,980

Fair value of plan assets (7,667,484) (7,496,997)

Net liability arising from defined benefit obligations 844,705 1,151,983

Less: Advance contributions paid (4,675,034) (4,928,601)

Net retirement benefit assets (3,830,329) (3,776,618)

Note

Present value ofdefined benefit

obligationsRM

Fair valueof planassets

RMTotal

RM

At 1 January 2017 8,648,980 (7,496,997) 1,151,983

Less: Remeasurement opening balance - 20,742 20,742

8,648,980 (7,476,255) 1,172,725

Interest expense/(income) 5 431,393 (372,642) 58,751

9,080,373 (7,848,897) 1,231,476

Remeasurements:

- Experience losses 101,970 181,413 283,383

Settlement payments (670,154) - (670,154)

At 31 December 2017 8,512,189 (7,667,484) 844,705

Less: Advance contributions paid (4,675,034) - (4,675,034)

Net retirement benefit assets 3,837,155 (7,667,484) (3,830,329)

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22. RETIREMENT BENEFIT ASSETS (CONTD.)

Note

Present value ofdefined benefit

obligationsRM

Fair valueof planassets

RMTotal

RM

At 1 January 2016 8,890,075 (7,281,311) 1,608,764

Less: Remeasurement opening balance - 15,241 15,241

8,890,075 (7,266,070) 1,624,005

Interest expense/(income) 5 462,365 (377,905) 84,460

9,352,440 (7,643,975) 1,708,465

Remeasurements:

- Experience losses 445,946 146,978 592,924

Settlement payments (1,149,406) - (1,149,406)

At 31 December 2016 8,648,980 (7,496,997) 1,151,983

Less: Advance contributions paid (4,928,601) - (4,928,601)

Net retirement benefit assets 3,720,379 (7,496,997) (3,776,618)

The actual return on the plan assets of the Group and of the Company was a surplus of RM191,229 (2016: RM210,185).

Principal actuarial assumptions used:

2017%

2016%

Discount rate 5.00 5.10

As at this date, the valuations indicate that the provisions for retirement benefits are sufficient to achieve the value of the benefits determined by the actuaries.

The significant actuarial assumption for determination of the defined benefit obligations is the discount rate. The sensitivity analysis below has been determined based on the changes to individual assumptions, with all other assumptions held constant:

A 1% change in discount rate will (decrease)/increase the defined benefit obligations by the following amounts:

Group and Company

2017RM

2016RM

- Increase by 1% (437,293) (655,694)

- Decrease by 1% 477,142 411,861

The sensitivity analysis presented above may not be representative of the actual change in defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some assumptions may be correlated.

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23. NON-CURRENT ASSET CLASSIFIED AS HELD-FOR-SALE AND DISPOSAL GROUP

Included in the non-current asset classified as held-for-sale and disposal group as at 31 December 2016 was net liabilities of RM695,021 of a wholly-owned subsidiary, Utusan Studios Sdn Bhd. The Group completed the disposal of its 60% of its interest during the current financial year. Upon completion of the disposal, Utusan Studios Sdn Bhd ceased to be a subsidiary, but became an associate of the Company. Refer to Note 14 for details (disposal of a subsidiary).

24. LOANS AND BORROWINGS

Group Company

2017RM

2016RM

2017RM

2016RM

Current

Secured:

Commodity Murabahah Term Financing (CMTF 1) 1,763,100 1,763,100 1,763,100 1,763,100

Commodity Murabahah Term Financing (CMTF 2) 4,400,000 4,400,000 4,400,000 4,400,000

Bai Bithaman Ajil Affin 10,000,000 9,000,000 10,000,000 9,000,000

Term Loan Facilities (“TL 1 & TL 2”) 1,208,000 1,208,000 - -

Istisna’ Term Financing (“TF-i 1 to TF-i 8”) 6,130,189 3,841,650 - -

Revolving credits 1,000,000 1,000,000 1,000,000 1,000,000

Obligation under hire purchase and leasing payables (Note 28(b)) 22,286 2,647 43,054 53,766

24,523,575 21,215,397 17,206,154 16,216,866

Unsecured:

Bank Overdraft 8,074,774 - 8,074,774 -

Bankers acceptance 19,086,544 21,738,610 19,086,544 20,811,610

Revolving credits 12,300,000 7,750,000 12,000,000 7,000,000

39,461,318 29,488,610 39,161,318 27,811,610

Total (current) 63,984,893 50,704,007 56,367,472 44,028,476

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24. LOANS AND BORROWINGS (CONTD.)

Group Company2017RM

2016RM

2017RM

2016RM

Non-currentSecured:Commodity Murabahah Term Financing (CMTF 1) 608,970 2,372,070 608,970 2,372,070Commodity Murabahah Term Financing (CMTF 2) 9,309,392 13,709,392 9,309,392 13,709,392Bai Bithaman Ajil Affin 29,653,095 39,653,095 29,653,095 39,653,095Term Loan Facilities (“TL 1 & TL 2”) 10,280,000 11,488,000 - -Revolving credits 26,000,000 27,000,000 26,000,000 27,000,000Obligation under hire purchase and leasing payables (Note 28 (b)) 173,714 - 203,781 48,873

76,025,171 94,222,557 65,775,238 82,783,430

Unsecured:Revolving credits 17,000,000 29,000,000 17,000,000 29,000,000Total (non-current) 93,025,171 123,222,557 82,775,238 111,783,430

Total loans and borrowingsBank Overdraft 8,074,774 - 8,074,774 -Bankers acceptance 19,086,544 21,738,610 19,086,544 20,811,610Revolving credits 56,300,000 64,750,000 56,000,000 64,000,000Commodity Murabahah Term Financing (CMTF 1) (b) 2,372,070 4,135,170 2,372,070 4,135,170Commodity Murabahah Term Financing (CMTF 2) (c) 13,709,392 18,109,392 13,709,392 18,109,392Bai Bithaman Ajil Affin (d) 39,653,095 48,653,095 39,653,095 48,653,095Term Loan Facilities (“TL 1 & TL 2”) (e) 11,488,000 12,696,000 - -Istisna’ Term Financing (“TF-i 1 to TF-i 8”) (f) 6,130,189 3,841,650 - -Obligation under hire purchase and leasing payables (Note 28 (b)) 196,000 2,647 246,835 102,639

157,010,064 173,926,564 139,142,710 155,811,906

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The remaining maturities of the loans and borrowings as at 31 December 2017 and 2016 are as follows:

Group Company

2017RM

2016RM

2017RM

2016RM

Within and up to one year 63,984,893 50,704,007 56,367,472 44,028,476

After one and up to two years 26,241,165 30,371,100 25,057,436 29,183,870

After two and up to five years 35,270,529 54,779,457 31,652,325 53,599,560

More than five years 31,513,477 38,072,000 26,065,477 29,000,000

157,010,064 173,926,564 139,142,710 155,811,906

(a) Commodity Murabahah Term Financing (CMTF 1) The Company entered into an arrangement on 22 October 2010 to part-finance the purchase of pre-press

equipment, additional printing machines, as well as the infrastructure, mechanical and electrical, and utilities work costs for both the Company’s printing plants in Tebrau, Johor and Gong Badak, Terengganu under Commodity Murabahah Term Financing amounting up to RM17,631,000.

The Company has made a drawdown of RM13,391,445, with a maturity date of 9 May 2019.

Details of Commodity Murabahah Term Financing are as follows:

Amount: RM13,391,445

Tenure: 8 years

Profit rate: Cost of Fund + 1.25% per annum

Start date: 9 August 2012

Maturity date: 9 May 2019

The Commodity Murabahah Term Financing profit payments shall be made on a monthly basis until full settlement whilst principal repayment on a quarterly basis as prescribed in repayment schedule.

The securities of the above facility are as follows:

(i) 1st legal charge over the freehold land and building(s) erected and/or to be erected thereon at Tebrau plant;(ii) 1st legal charge over the leasehold land and building(s) erected and/or to be erected thereon at Gong Badak

plant; and(iii) A fresh fixed and floating debenture of the Company’s existing and future assets at Tebrau and Gong Badak

plants.

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(b) Commodity Murabahah Term Financing (CMTF 2) The Company entered into an arrangement on 22 October 2010 to refinance Al-Ijarah financing from Bank

Kerjasama Rakyat Malaysia Bhd. for the financing taken for Seberang Jaya plant under Commodity Murabahah Term Financing amounting up to RM44,000,000.

The Company has made a drawdown of RM40,109,392, with a maturity date of 13 January 2021.

Details of Commodity Murabahah Term Financing are as follows:


Tenure: 10 years


Start date: 13 October 2012

Maturity date: 13 January 2021

The Commodity Murabahah Term Financing profit payments shall be made on a monthly basis until full settlement whilst principal repayment on a quarterly basis as prescribed in repayment schedule.


(i) 1st legal charge over the leasehold land and building(s) erected and/or to be erected thereon at Seberang Jaya plant; and

(ii) A fresh fixed and floating debenture of the Company’s existing and future assets at Seberang Jaya plant.

(c) Bai Bithaman Ajil (“BBA”) Affin The Company entered into an arrangement on 31 March 2009 to finance 70% of the construction cost of

the Company’s new corporate office at Jalan Chan Sow Lin, Kuala Lumpur under Bai Bithamin Ajil Financing amounting up to RM66,760,000.

The Company only made a drawdown of RM59,653,095, with a maturity date of 01 April 2021.

Details of BBA Term Financing are as follows:


Tenure: 8 years


Start date: 1 July 2014

Maturity date: 1 April 2021

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24. LOANS AND BORROWINGS (CONTD.)(c) Bai Bithaman Ajil (“BBA”) Affin (contd.)

The BBA Term Financing profit payments shall be made on a monthly basis until full settlement whilst principal repayment on a quarterly basis as prescribed in repayment schedule.


(i) 1st party 1st legal charge over a parcel of land which is held under lot no: PT667 Section 92 at Jalan Chan Sow Lin, Kuala Lumpur (formerly known as Lots 234, 236, 238, 240, 433 & 545, Section 92, Town and District of Kuala Lumpur); and

(ii) Specific debenture over the above-stated parcel of land and building erected thereon at Jalan Chan Sow Lin, Kuala Lumpur.

(d) Term Loan Facilities (‘TL 1 & TL 2’) The Group through its subsidiary Juasa Holdings Sdn Bhd (“Juasa”) entered into an arrangement on 26 April

2013 to part-finance the purchase of 2 units of freehold intermediate 4-storey shop office known as Parcel No. 2 & 3, Kencana Square, Glenmarie Shah Alam for an aggregate amount up to RM13.3 million. The first drawdown was made on 23 April 2014.

The Group has made a full drawdown of RM13,300,000 as at reporting date, with a maturity date of 21 July 2027.

Details of Term Loan Facilities are as follows:


Tenure: 11 years

Profit rate: Base Lending Rate - 1.25% per annum

Start date: 21 July 2016

Maturity date: 21 July 2027

The Term Loan Facilities interest and principal payments shall be made on a quarterly basis until full settlement as prescribed in repayment schedule.

The securities of the above facilities are as follows:

(i) 1st party 1st legal charge over the above stated 4-storey shop offices. Pending issuance of individual title, loan agreement cum assignment over the same unit;

(ii) Debenture for RM13.3 million over present and future assets of the Juasa;(iii) Fresh assignment of rental proceeds over financed property within one (1) year after completion of property;

and(iv) Fixed charge over Designated Accounts.

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(e) Istisna’ Term Financing (“TF-i 1 to TF-i 8”) The Group, through its subsidiary, Utusan Land Sdn Bhd entered into an arrangement on 21 May 2014 to part-

finance the purchase of 1 unit of freehold intermediate 8-storey retail offices known as Parcel Unit C-07, Project Aeropod Phase 2a, located at Kota Kinabalu, Sabah for an aggregate amount up to RM6.2 million. The first drawdown was made on 1 July 2015.

The Group had made a full drawdown of RM6,149,263 as at reporting date.

Details of Term Loan Facilities are as follows:

Amount: RM6,149,263

Tenure: 15 years

Profit rate: Base Financing Rate - 1.00% per annum

Start date: 01 December 2017

Maturity date: 01 December 2033

The Istisna’ Term Financing profit and principal repayments shall be made on a monthly basis until full settlement as prescribed in repayment schedule.

The securities of the above facilities are as follows:

(i) Deed of assignment over the above stated 8-storey retail offices to the bank. The first party first legal charge will be registered upon the issuance of strata title of the said unit;

(ii) Pledged deposit totaling RM153,252;(iii) A charge and assigment over Escrow Account to capture the rental proceeds;(iv) Corporate Guarantee for RM15,653,599 by Utusan Melayu (Malaysia) Berhad.

The remaining loans and borrowings are secured by the following:

(a) negative pledges on the Company’s assets; and/or(b) first and second fixed charges on certain land and buildings, plant and machinery of the Company and of

respective subsidiaries; and/or(c) corporate guarantees of the Company and of respective subsidiaries; and/or(d) certain fixed deposits of the Group.

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The weighted average effective interest rates and profit rates as at reporting date for borrowings, excluding hire purchase and finance lease payables, were as follows:

Group Company

2017%

2016%

2017%

2016%

Bank overdrafts 7.9 - 7.9 -

Bankers acceptance 3.5 3.5 3.5 3.5

Revolving credits 5.5 5.5 5.5 5.5

Bai Bithaman Ajil MBB - 4.7 - 4.7

CMTF 1 4.9 4.8 4.9 4.8

CMTF 2 4.9 4.7 4.9 4.7

Bai Bithaman Ajil Affin 5.1 5.1 5.1 5.1

Term Loan Facilities (“TL 1 & TL 2”) 5.4 5.4 - -

Istisna’ Term Financing (“TF-i 1 to TF-i 8”) 5.9 5.6 - -

Reconciliation of liabilities arising from financing activities

Non-currentloans and

borrowingsRM

Currentloans and

borrowingsRM

TotalRM

Group

At 1 January 2017 123,222,557 50,704,007 173,926,564

Non-cash items:

Reclassification from non-current to current (13,997,353) 13,997,353 -

Financing for the acquisition of investment properties- term loan 443,670 - 443,670

Financing for the acquisition of investment properties- hire purchase payable 173,714 22,286 196,000

Cash outflows:

Repayment of borrowings (16,814,770) (738,753) (17,553,523)

Repayment of hire purchase payables (2,647) - (2,647)

At 31 December 2017 93,025,171 63,984,893 157,010,064

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24. LOANS AND BORROWINGS (CONTD.) Reconciliation of liabilities arising from financing activities (contd.)

Non-currentloans and

borrowingsRM

Currentloans and

borrowingsRM

TotalRM

Company

At 1 January 2017 111,783,430 44,028,476 155,811,906

Non-cash items:

Reclassification from non-current to current (13,967,002) 13,967,002 -

Financing for the acquisition of investment properties- hire purchase payable 173,714 22,286 196,000

Cash outflows:

Repayment of borrowings (15,163,100) (1,650,292) (16,813,392)

Repayment of hire purchase payables (51,804) - (51,804)

At 31 December 2017 82,775,238 56,367,472 139,142,710

25. TRADE AND OTHER PAYABLES

Group Company

2017RM

2016RM

2017RM

2016RM

CurrentTrade payables (a)

- Third parties 11,840,307 12,765,548 5,091,540 4,673,155

Other payables

Accrued operating expenses 21,579,790 29,128,016 16,448,279 20,553,875

Provisions (d) 2,834,342 3,777,298 2,278,294 2,980,931

Other payables (b) 111,416,338 31,081,682 104,214,988 25,514,878

Deposits 22,173,477 27,947,742 21,257,046 25,053,095

Due to related parties (c):

- Associates 1,311,265 2,696,078 995,900 2,346,709

- Subsidiaries - - 25,188,333 24,423,006

159,315,212 94,630,816 170,382,840 100,872,494

Total current 171,155,519 107,396,364 175,474,380 105,545,649

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25. TRADE AND OTHER PAYABLES (CONTD.)

Group Company

2017RM

2016RM

2017RM

2016RM

Non-current

Due to subsidiaries - - 594,511 1,165,749

Due to related entity (c) - 20,000,000 - 20,000,000

Total non-current - 20,000,000 594,511 21,165,749

Total trade and other payables 171,155,519 127,396,364 176,068,891 126,711,398

Add: Loans and borrowings (Note 24) 157,010,064 173,926,564 139,142,710 155,811,906

Less: Provisions (2,834,342) (3,777,298) (2,278,294) (2,980,931)

Total financial liabilities carried at amortised cost 325,331,241 297,545,630 312,933,307 279,542,373

(a) Trade payables The normal trade credit terms granted to the Group range from 30 to 90 days (2016: 30 to 90 days).

(b) Other payables These amounts are non-interest bearing. Other payables are normally settled on an average term of six months

(2016: average term of six months).

(c) Amounts due to related parties These amounts are unsecured, non-interest bearing and are repayable on demand.

(d) Provisions

Provision for litigation

The provision for litigation relates to legal claims against the Company from third parties. The Company has made provision based on the solicitor’s estimate of the settlement consideration and probable outcome assessed on a case-by-case basis.

Provision for returns

The provision for returns is an estimated amount based on historical and trend of individual product for newspaper and magazine.

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25. TRADE AND OTHER PAYABLES (CONTD.)

Movements of provision for litigation and returns during the year are as follows:

Provisionfor litigation

RM

Provisionfor returns

RMTotal

RMGroupAt 1 January 2017 2,155,000 1,622,298 3,777,298Additional provision (Note 8) - 1,594,342 1,594,342Reversal of provision (Note 8) (735,000) (1,622,298) (2,357,298)Utilisation of provision (180,000) - (180,000)At 31 December 2017 1,240,000 1,594,342 2,834,342

At 1 January 2016 2,660,000 2,484,908 5,144,908Additional provision (Note 8) 1,120,000 1,622,298 2,742,298Reversal of provision (Note 8) (1,017,000) (2,484,908) (3,501,908)Utilisation of provision (608,000) - (608,000)At 31 December 2016 2,155,000 1,622,298 3,777,298

CompanyAt 1 January 2017 2,155,000 825,931 2,980,931Additional provision (Note 8) - 1,038,294 1,038,294Reversal of provision (Note 8) (735,000) (825,931) (1,560,931)Utilisation of provision (180,000) - (180,000)At 31 December 2017 1,240,000 1,038,294 2,278,294

At 1 January 2016 2,660,000 1,039,333 3,699,333Additional provision (Note 8) 1,120,000 825,931 1,945,931Reversal of provision (Note 8) (1,017,000) (1,039,333) (2,056,333)Utilisation of provision (608,000) - (608,000)

At 31 December 2016 2,155,000 825,931 2,980,931

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26. SHARE CAPITAL

Number of ordinaryshares of RM1 each Amount2017 2016 2017 2016

RM RMAuthorised:At 1 January/31 December 500,000,000 500,000,000 500,000,000 500,000,000Effect of implementation of the Companies Act 2016* (500,000,000) - (500,000,000) -At 31 December 2017 - 500,000,000 - 500,000,000

Issued and fully paid:At 1 January/31 December 110,733,837 110,733,837 110,733,837 110,733,837Transferred pursuant to the Companies Act 2016* - - 50,703,162 -At 1 January/31 December 110,733,837 110,733,837 161,436,999 110,733,837

* The Companies Act 2016 (“New Act”) which was enacted to replace the Companies Act, 1965 and came into operation on 31 January 2017, abolished the concepts of authorised share capital and par value of share capital. In accordance with the New Act, the Group had transferred a total of RM50,703,162 from its share premium accounts to the contributed share capital.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

27. OTHER RESERVES

Fair valueadjustment

reserveRM

Foreigncurrency

translationreserve

RMTotal

RMGroupAt 1 January 2017 (410,424) 283,360 (127,064)Net loss on available-for-sale financial assets - Loss on fair value changes 12,120 - 12,120Foreign currency translation - 29,629 29,629At 31 December 2017 (398,304) 312,989 (85,315)

At 1 January 2016 (344,436) 295,089 (49,347)Net loss on available-for-sale financial assets - Gains on fair value changes (65,988) - (65,988)Foreign currency translation - (11,729) (11,729)At 31 December 2016 (410,424) 283,360 (127,064)

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27. OTHER RESERVES (CONTD.)

Fair valueadjustment

reserveRM

Company

At 1 January 2017 (21,604)

Net gain on available-for-sale financial assets

- Loss on fair value changes 5,964

At 31 December 2017 (15,640)

At 1 January 2016 40,859

Net loss on available-for-sale financial assets

- Gain on fair value changes (62,463)

At 31 December 2016 (21,604)

The nature and purpose of each category of reserve are as follows:

(a) Fair value adjustment reserve Fair value adjustment reserve represents the cumulative fair value changes, net of tax, of available-for-sale

financial assets until they are disposed off or impaired.

(b) Foreign currency translation reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of

the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

(c) Capital reserve The capital reserve arose from the capitalisation of bonus issues by an associate. The bonus issue created from

utilisation of the post-acquisition retained earnings has no impact on the net assets of the associate. Accordingly, the portion of reserve utilised is reflected at the Group level by a transfer from distributable consolidated retained earnings to the non-distributable consolidated capital reserve because it is a capital transaction.

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28. COMMITMENTS

(a) Capital commitments

Group Company

2017RM

2016RM

2017RM

2016RM

Approved and contracted for: Property, plant and equipment 15,068,659 16,810,787 - -

(b) Obligation under hire purchase and leasing payables

Group Company

2017RM

2016RM

2017RM

2016RM

Future minimum hire purchase and leasing payables:

Within and up to one year 34,776 2,663 60,269 58,666

After one and up to two years 34,776 - 58,308 23,532

After two and up to five years 173,782 - 179,643 29,389

243,334 2,663 298,220 111,587

Less: Future finance charges (47,334) (16) (51,385) (8,948)

Present value of finance liabilities 196,000 2,647 246,835 102,639

Present value of hire purchase and leasing payables:

Within and up to one year 22,286 2,647 43,054 53,766

After one and up to two years 24,195 - 48,466 20,770

After two and up to five years 149,519 - 155,315 28,103

196,000 2,647 246,835 102,639

Analysed as:

Due within twelve months (Note 24) 22,286 2,647 43,054 53,766

Due after twelve months (Note 24) 173,714 - 203,781 48,873

Total 196,000 2,647 246,835 102,639

The hire purchase and leasing payables bear interests at the reporting date at rates of between 3.45% to 4.0% (2016: 2.6% to 4.0%) per annum.

Included in the hire purchase payables of the Company is an amount due to a subsidiary of RM50,834 (2016: RM102,641).

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29. CONTINGENT LIABILITIES

Material litigation

The Group and the Company do not recognise a contingent liability but disclose its existence in a financial statement. A contingent liability is a possible obligation that arises from past events which existence will be confirmed by the occurrence and non-occurrence of one or more uncertain future events beyond the control of the Group and the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare circumstances where there is a liability that cannot be measured with sufficient reliability.

The Group and the Company have several material pending legal suits whereby the Group and the Company are defendants in 7 ongoing alleged defamation legal suits amounting approximately RM1.44 million.

Several suits for defamation were brought by various politicians against the Company for newspaper reports published in the Company’s newspapers. The Board of Directors have been advised and are of the considered view that the Company has an even chance of succeeding in defending the claims.

As the purveyor of news and information, the Group and the Company are faced with threats of legal suits which are inevitable and occurs on a daily and ongoing basis. Despite practicing the responsible journalism and reportage, the law does not prohibit anyone from initiating legal suit against the publisher regardless of motive, objective and quantum of claim, hence, the Group and the Company are unable to avoid the risk of receiving such legal suits. For this reason, having considered the various legal defences available to a media company, filing of a legal suit against it does not necessarily nor automatically translate into a liability for the Group and the Company, whether contingent or otherwise. Furthermore, it is noted that irrespective of amount claimed, the current trend of award for defamation suits once the liability has been established by the Courts is between the range of RM50,000 to RM300,000. The Board of Directors are of the opinion, after taking appropriate legal advice, that the outcome of such actions will not give rise to any significant loss.

The Group and the Company have in place an insurance coverage for damages in defamation legal suits, if in the event it is awarded against the Group and the Company.

Based on the above and after taking appropriate legal advice, the Board of Directors are of the considered view that most of the claims have no sustainable merit. Therefore, the Board of Directors do not expect the outcome of the legal suits against the Group and the Company to have a material impact on the financial position of the Group and the Company.

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30. SIGNIFICANT RELATED PARTY TRANSACTIONS

(a) Transactions with related parties In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had

the following transactions with related parties during the financial year:

2017RM

2016RM

Group

Services rendered by associates - 6,421,317

Advances received from related entity - 5,000,000

Company

Services rendered by subsidiaries 6,627,998 8,503,211

Rental income from subsidiaries 573,300 573,300

Interest income from subsidiaries 45,445 61,817

Commission income from subsidiaries 195,276 517,363

Advances received from related entity - 5,000,000

The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

(b) Compensation of key management personnel The remuneration of directors and other members of key management during the year are as follows:

Group Company

2017RM

2016RM

2017RM

2016RM

Short-term employee benefits 3,315,174 3,683,823 2,251,158 2,255,874

Post-employment benefits: - Defined contribution plan 483,674 527,244 309,832 298,254

3,798,848 4,211,067 2,560,990 2,554,128

Included in the above are the directors of the Company’s subdisidiaries remuneration. The directors of the Company’s subdiaries did not receive fees except for salaries and other emoluments.

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30. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTD.)(b) Compensation of key management personnel (contd.)

Included in the total key management personnel remuneration are:

Group and Company

2017RM

2016RM

Directors’ remuneration (Note 6) 1,755,982 1,732,655

(c) Government-related entities The Group is a government-related entity by virtue of the Company’s major shareholder, United Malays National

Organisation (“UMNO”), which is holding 49.77% of the Company’s equity. UMNO is one of the member parties under Barisan Nasional, Malaysia’s federal ruling political force.

The Group has transactions with government-related entities including, but not limited to, printing and publishing of newspapers and books as well as advertising. The transactions are conducted in the ordinary course of business on terms comparable to those with other entities that are not government-related.

(i) Individually significant transactions because of size of transactions The Company was awarded a contract for supplying, distributing, configuring, testing and commissioning of

tablets with Tutor Guru and e-paper application from the Ministry of Education. The aggregate net revenue recognised for the year ended 31 December 2017 amounted to RM34.3 million (2016: RM7.9 million).

(ii) Collective, but not individually significant transactions For the financial year ended 31 December 2017, the Group estimates that the total amount of significant

transactions with other government-related entities are at least 21% (2016: 22%) of total revenue out of which 100% (2016: 99%) are generated by the Publishing, Distribution and Advertisement segment.

(iii) Government-related financial institution For the financial year ended 31 December 2017, the Group estimates that the total amount of transactions

with government-related financial institutions are as follows:

Group Company

2017RM

2016RM

2017RM

2016RM

Interest income 84,087 96,635 - -

Interest expenses 8,356,668 8,958,953 7,254,144 8,433,422

Balance as at 31 December:

Cash and bank balances 17,788,024 32,858,744 3,072,949 12,396,619

Loans and borrowings 157,010,064 173,926,564 139,091,875 155,709,267

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31. SIGNIFICANT EVENTS

Memorandum of Understanding

On 23 March 2017 the Board of Directors of the Company had announced that the Company has on 23 March 2017 entered into a Memorandum of Understanding with Krishna Industrial Corporation Limited and Coimbatore Institute of Technology and Primainfo Technologies Sdn Bhd with the objective of venturing into the business of information technology in Malaysia.

Acquisition of Subsidiary

On 23 August 2017 the Company had announced that it had acquired two ordinary shares of RM1.00 each for a cash consideration of RM2.00 in the capital of Utusan Technology Asia Sdn Bhd. Subsequent to the said acquisition, Utusan Technology Asia Sdn Bhd became a wholly-owned subsidiary of the Company.

Disposal of a Subsidiary

On 19 September 2017 the Company had announced that it had entered into a Share Sale Agreement (‘the Agreement’) with Rawdah S&S Sdn Bhd for the disposal of 60,000 ordinary shares of RM1.00 each which represent 60% of the total issued and paid-up capital in its wholly-owned subsidiary, Utusan Studios Sdn Bhd for a consideration of RM60,000, upon such terms and subject to the conditions of the Agreement. The Agreement was fully completed on the same date.

Upon completion of the disposal, Utusan Studios Sdn Bhd ceased to be a subsidiary, but became an associate of the Company.

Disposal of an investment property

On 9 September 2011 Juasa Holdings Sdn Bhd (“Juasa”), a wholly-owned subsidiary of the Company had entered into a Joint Venture agreement with Insan Tiara Sdn Bhd. Based on the agreement, Insan Tiara would present as the developer to develop the building and infrastructure on Juasa’s land which is known as “Wisma 730” (also known as TRAX building). In return, Juasa received a certain percentage from the total net saleable area of Wisma 730.

32. SUBSEQUENT EVENT

Acquisition of Subsidiary

On 18 January 2018 the Company had announced that it had acquired two ordinary shares of RM1.00 each for a cash consideration of RM2.00 in Asian Environmental Engineering Sdn Bhd. Subsequent to the said acquisition, Asian Environmental Engineering Sdn Bhd became a wholly-owned subsidiary of the Company.

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33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its interest/profit rate risks (both fair value and cash flow), foreign currency risk, liquidity risk and credit risk. The Board reviews and agrees on policies for managing each of these risks and they are summarised below. It is, and has been throughout the year under review, the Group’s policy that no trading in derivative financial instruments shall be undertaken.

(a) Interest/profit rate risk Interest/profit rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s

financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest/profit rate arises primarily from their loans and borrowings and loans at floating rates given to related parties.

The Group’s policy is to manage interest cost using a mix of fixed and floating rate debts. The Group finances its operations through operating cash flows and borrowings. The Group’s policy is to derive the desired interest rate profile through a mix of fixed and floating rate banking facilities.

The following tables set out the carrying amounts, the weighted average effective interest/profit rates (“WAEIR”) and the remaining maturities of the Group’s financial asset/(liabilities) as at reporting date:

Note WAEIR

Within 1year

RM’000

1 - 2years

RM’000

2 - 5years

RM’000

Morethan 5years

RM’000Total

RM’000GroupAt 31 December 2017Fixed rate Hire purchase and finance lease payables 28(b) 3.5% (88) (108) - - (196)Deposits with: - Licensed banks 21 3.0% 2,461 - - - 2,461 - Money market institutions 21 2.3% 759 - - - 759

Floating rateCommodity Murabahah Term Financing (CMTF 1) 24 4.9% (1,763) (609) - - (2,372)Commodity Murabahah Term Financing (CMTF 2) 24 4.9% (4,400) (4,400) (4,909) - (13,709)Bai Bithaman Ajil Affin 24 5.1% (10,000) (12,000) (17,653) - (39,653)Term Loan Facilities (‘TL 1 & TL 2’) 24 5.4% (1,208) (1,208) (3,624) (5,448) (11,488)Istisna’ Term Financing (“TF-i 1 to TF-i 8”) 24 5.9% (6,130) - - - (6,130)Bank overdraft 24 7.9% (8,075) - - - (8,075)Bankers acceptance 24 3.5% (19,087) - - - (19,087)Revolving credits 24 5.5% (13,300) (8,000) (9,000) (26,000) (56,300)

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33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.)(a) Interest/profit rate risk (contd.) The following tables set out the carrying amounts, the weighted average effective interest/profit rates (“WAEIR”)

and the remaining maturities of the Group’s financial asset/(liabilities) as at reporting date (contd.):

Note WAEIR

Within 1year

RM’000

1 - 2years

RM’000

2 - 5years

RM’000

Morethan 5years

RM’000Total

RM’000Group (contd.)At 31 December 2016Fixed rate

Hire purchase and finance lease payables 28(b) 2.7% (3) - - - (3)

Deposits with: - Licensed banks 21 3.1% 2,059 - - - 2,059 - Money market institutions 21 2.8% 1 - - - 1

Floating rate

Commodity Murabahah Term Financing (CMTF 1) 24 4.8% (1,763) (1,763) (609) - (4,135)

Commodity Murabahah Term Financing (CMTF 2) 24 4.7% (4,400) (4,400) (9,309) - (18,109)

Bai Bithaman Ajil Affin 24 5.1% (9,000) (10,000) (29,653) - (48,653)

Term Loan Facilities (‘TL 1 & TL 2’) 24 5.4% (1,208) (1,208) (3,624) (6,656) (12,696)

Istisna’ Term Financing (“TF-i 1 to TF-i 8”) 24 5.6% (3,842) - - - (3,842)

Bankers acceptance 24 3.5% (21,739) - - - (21,739)

Revolving credits 24 5.5% (8,750) (13,000) (14,000) (29,000) (64,750)

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33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) (a) Interest/profit rate risk (contd.)

The following tables set out the carrying amounts, the weighted average effective interest/profit rates (“WAEIR”) and the remaining maturities of the Group’s financial asset/(liabilities) as at reporting date (contd.):

Note WAEIR

Within 1

yearRM’000

1 - 2years

RM’000

2 - 5years

RM’000

Morethan 5years

RM’000Total

RM’000

CompanyAt 31 December 2017Fixed rate

Hire purchase and finance lease payables 28(b) 3.6% (50) (88) (108) - (246)

Floating rate

Commodity Murabahah Term Financing (CMTF 1) 24 4.9% (1,763) (609) - - (2,372)



Bank overdraft 24 7.9% (8,075) - - - (8,075)



At 31 December 2016Fixed rate

Hire purchase and finance lease payables 28(b) 4.0% (54) (49) - - (103)

Floating rate

Commodity Murabahah Term Financing (CMTF 1) 24 4.8% (1,763) (1,763) (609) - (4,135)





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33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.)(a) Interest/profit rate risk (contd.)

Interests/profit rate on borrowings that are subject to floating rate are contractually repriced within a year. Interests on financial instruments at fixed rates are fixed until the maturity of the instruments. The other financial instruments of the Group and the Company that are not included in the above tables are not subject to interest rate risks.

Sensitivity analysis for interest/profit rate risk

At the reporting date, if interest/profit rates had been 10 basis points lower/higher, with all other variables held constant, the Group’s and the Company’s loss net of tax would have been RM113,042 (2016: RM130,443) and RM99,424 (2016: RM118,417) lower/higher respectively, arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on a prudent estimate of the current market environment.

(b) Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate

because of changes in foreign exchange rate. The Group mainly operates within Malaysia, thus exposure to foreign exchange risk is minimal.

(c) Liquidity risk Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations

due to shortage of funds. The Group’s and the Company’s exposures to liquidity arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient level of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities of a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from financial instituitions and prudently balances its portfolio with some short term funding so as to achieve overall cost effectiveness.


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33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.)(c) Liquidity risk (contd.)

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

------------------ 2017 ---------------------

On demandor withinone year

RM

More thanone year

RMTotal

RM

Group

Trade and other payables (excluding provisions) (Note 25) 168,321,177 - 168,321,177

Loans and borrowings 60,102,735 97,483,598 157,586,333

Total undiscounted financial liabilities 228,423,912 97,483,598 325,907,510

Company

Trade and other payables (excluding provisions) (Note 25) 173,196,086 594,511 173,790,597



-------------------- 2016 -------------------

On demandor withinone year

RM

More thanone year

RMTotal

RM

Group

Trade and other payables (excluding provisions) (Note 25) 103,619,066 20,000,000 123,619,066



Company

Trade and other payables (excluding provisions) (Note 25) 102,564,718 21,165,749 123,730,467



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33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.)

(d) Credit risk The Group’s credit risk is primarily attributable to trade receivables. The Group trades only with recognised

and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis via Group management reporting and credit control procedures. Since the Group trades only with recognised creditworthy third parties, there is no requirement for collateral.

The credit risk of the Group’s other financial assets, which comprise cash and bank balances, marketable securities and non-current investments, arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets.

The Group does not have any significant exposure to any individual customer or counterparty nor does it has any major concentration of credit risk related to any financial assets.

Financial assets that are neither past due not impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 18. Deposits with banks and other financial institutions and investment securities that are neither past due nor impaired are placed with or entered into reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 18.


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34. FAIR VALUES OF FINANCIAL INSTRUMENT

(a) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value

The carrying amounts of financial assets and liabilities of the Group and of the Company at the reporting date approximate their fair values except for the following:

Group Company

Note

Carryingamount

RMFair value

RM

Carryingamount

RMFair value

RM

At 31 December 2017Financial assetsNon-current

Club membership, unquoted at cost 16 75,000 * - *

Financial liabilitiesNon-current

Fixed rate loans and borrowingsHire purchase and finance lease payables 28 173,714 - 203,781 -

At 31 December 2016Financial assetsNon-current

Club membership, unquoted at cost 16 123,000 * - *

Financial liabilitiesNon-current

Fixed rate loans and borrowingsHire purchase and finance lease payables 28 - - 48,873 45,760

* It is not practicable to estimate the fair value of the Group’s non-current unquoted investments because of the lack of quoted market prices and the inability to estimate the fair value without incurring excessive costs. However, the Group believes that the carrying amounts represent the recoverable values.


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34. FAIR VALUES OF FINANCIAL INSTRUMENT (CONTD.)(a) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts

are not reasonable approximation of fair value (contd.)

Determination of fair value of fixed rate loans and borrowings

Fair value has been determined using discounted estimated cash flows. The discount rates used are the current market incremental lending rates for similar types of lending, borrowing and leasing arrangements.

(b) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of their fair value:

Note

Trade and other receivables (current and non-current) 18

Floating rate loan and borrowings (current and non-current) 24

Loans and Borrowings (current) 24

Trade and other payables (current) 25

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of loans and borrowings are reasonable approximation of fair values due to the insignificant impact of discounting.


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34. FAIR VALUES OF FINANCIAL INSTRUMENT (CONTD.)

(c) Fair value of financial instruments that are carried at fair value

The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy:

Note

Quoted prices in activemarkets for identical

instruments(Level 1)

2017RM

2016RM

Group

Available-for-sale financial assetsEquity instruments, quoted in Malaysia 16 1,156,668 1,144,548

Held-for-trading financial assetsInvestment securities, quoted in Malaysia 16 463,670 656,128

Company

Available-for-sale financial assetsEquity instruments, quoted in Malaysia 16 33,330 27,366

Fair value hierarchy

The Group uses the following hierarchy for determining the fair value of all financial instruments carried at fair value:• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

either directly (i.e., as prices) or indirectly (i.e., derived from prices); and• Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

There have been no transfers between the fair value hierarchy during the financial years ended 31 December 2017 and 2016.

Determination of fair value of quoted equity instrument

Fair value is determined by direct reference to their bid price quotations in an active market at the end of the reporting period.


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35. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that it maintains a healthy capital ratio in order to support its business and maximise shareholder value.

The Group manages its capital structure and would issue new shares to maintain desired capital ratios. No changes were made in the objectives, policies or processes during the years ended 31 December 2017 and 2016.

The Group monitors capital using a gearing ratio, which is based on loans and borrowings. In maintaining the policy to keep the gearing ratio within certain percentages, the Group is exploring fund raising proposals to address the capital requirements.

Note

Group Company

2017RM

2016RM

2017RM

2016RM

Loans and borrowings 24 157,010,064 173,926,564 139,142,710 155,811,906

less: Cash and bank balances 21 (17,788,024) (32,858,744) (3,072,949) (12,396,619)

139,222,040 141,067,820 136,069,761 143,415,287

Equity attributable to the owners of the parent 95,784,898 103,503,181 12,877,714 34,492,732

Gearing ratio 1.45 1.36 10.57 4.16

36. SEGMENT INFORMATION

(a) Reporting format The primary segment reporting format is determined to be business segments as the Group’s risks and rates

of return are affected predominantly by differences in the products and services produced. Information based on geographical segments was not prepared as the Group’s activities are focused primarily in Malaysia. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

(b) Business segments The Group comprises the following main business segments:

(i) Publishing, distribution and advertisements - Publishing and distribution of newspapers, magazines and books and print, online and outdoor advertising;

(ii) Others - Investment holding, management services, property development and others.

(c) Allocation basis and transfer pricing Segment results, assets and liabilities include items directly attributable to a segment as well as those that

can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities and expenses.

Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties. Segment revenue, expenses and results include transfers between business segments. These transfers are eliminated on consolidation.

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36. SEGMENT INFORMATION (CONTD.)

Publishing,distribution

andadvertisements

RMOthers

RM

Adjustmentsand

eliminationsRM Note

Perconsolidated

financialstatements

RMAt 31 December 2017RevenueExternal customers 211,946,802 33,033,284 - 244,980,086Inter-segment 6,117,327 266,330 (6,383,657) A -Total revenue 218,064,129 33,299,614 (6,383,657) 244,980,086

ResultsInterest income 515,121 322,956 (634,224) 203,853Dividend income 28,900,000 27,426 (28,900,000) 27,426Depreciation and amortisation (18,648,280) (811,640) 20,000 (19,439,920)Share of results of associates - - (246,695) (246,695)Other non-cash expenses 12,697,830 (190,577) (5,758,172) B 6,749,081Segment (loss)/profit (25,015,787) 30,395,246 (15,635,327) C (10,255,868)

Assets

Investment in associates - 1 545,844 D 545,845

Segment assets 402,690,707 99,345,052 (78,631,123) D 423,404,636

Liabilities

Segment liabilities 392,961,245 31,433,410 (96,229,072) E 328,165,583

At 31 December 2016Revenue

External customers 226,499,733 918,846 - 227,418,579

Inter-segment 7,950,590 462,015 (8,412,605) A -

Total revenue 234,450,323 1,380,861 (8,412,605) 227,418,579

Results

Interest income 643,043 364,314 (707,173) 300,184

Dividend income 4,000,000 29,148 (4,000,000) 29,148

Depreciation and amortisation (19,835,541) (673,652) 20,000 (20,489,193)

Share of results of associates - - (215,675) (215,675)

Other non-cash expenses 3,995,318 (86,601) (191,203) B 3,717,514

Segment (loss)/profit (62,863,426) 2,329,941 (6,191,993) C (66,725,478)

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Publishing,distribution

andadvertisements

RMOthers

RM

Adjustmentsand

eliminationsRM Note

Perconsolidated

financialstatements

RM

At 31 December 2016 (contd.)Assets

Investment in associates 69,000 - 792,539 D 861,539

Segment assets 404,427,126 67,963,606 (67,550,868) D 404,839,864

Liabilities

Segment liabilities 354,506,665 24,291,806 (76,600,249) E 302,198,222

A Inter-segment revenues are eliminated on consolidation.

B Other material non-cash expenses consist of the following items as presented in the respective notes to the financial statements:

2017RM

2016RM

Impairment loss on amount due from subsidiaries 4,758,172 191,203

Impairment loss on investment in a subsidiary 1,000,000 -

5,758,172 191,203

C The following items are added to/(deducted from) segment profit to arrive at “Loss before tax” presented in the consolidated statement of comprehensive income:

2017RM

2016RM

Share of results of associates (246,695) (215,675)

Elimination of dividend (28,900,000) (4,000,000)

Unallocated corporate expenses 13,511,368 (1,976,318)

(15,635,327) (6,191,993)


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D The following items are added to/(deducted from) segment assets to arrive at total assets reported in the consolidated statement of financial position:

2017RM

2016RM

Investment in associates 545,844 792,539Inter-segment assets (78,631,123) (67,550,868)

(78,085,279) (66,758,329)

E The following items are deducted from segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

2017RM

2016RM

Loans and borrowings (50,835) (102,639)Inter-segment liabilities (96,178,237) (76,497,610)

(96,229,072) (76,600,249)

37. COMPARATIVES

The comparative figures below have been reclassifed to conform with the current year’s presentation.

Statement of financial position as at 31 December 2016

2016(previously

stated)RM

ReclassificationRM

2016 (re-stated)

RMStatement of financial positionNon currentAmount due to subsidiaries - 1,165,749 1,165,749

CurrentAmount due to subsidiaries 25,588,755 (1,165,749) 24,423,006



171

KUALA LUMPUR

Lot PT 667, Section 92 No. 44, Jalan UtusanOff Jalan Chan Sow Lin Kuala Lumpur (D/P : 05.12.2011)

8 Storey Building

Headquarters of Utusan Melayu

(Malaysia) Berhad, Utusan Media Sales

Sdn Bhd, Juasa Holdings Sdn Bhd, Utusan Land Sdn

Bhd, Karya Outdoor Sdn Bhd and Utusan Technology Asia Sdn

Bhd

94,874 383,000 Lot 234 & 236Lot 238 & 240Lot 433 & 545

Leasehold(06.01.2109)

81,692,625

Wisma 730 (The Trax)Lot 184, Jalan Lima Off Jalan Chan Sow Lin Kuala Lumpur (D/P: 29.09.2011)

Part Of 14 Storey Of

Commercial Building

For Rental/Purchased

For Commercial Purpose

- 60,673 Leasehold (01.03.2115)

38,906,073

46M, Jalan Lima Off Jalan Chan Sow Lin Kuala Lumpur (D/P: 10.12.1959)

Office Building Rented Out 63,855 49,368 Lot 187 Leasehold

(02.06.2057) Lot 268

Leasehold (30.01.2062)

1,456,832

Lot 285, Section 92 Off Jalan Chan Sow Lin Kuala Lumpur (D/P: 13.01.2011)

3 StoreyBuilding

Rented Out 20,398 11,830 Leasehold (12.01.2071)

1,097,865

Lot 438, Jalan Dua Off Jalan Chan Sow Lin Kuala Lumpur (D/P: 06.01.1992)

FactoryBuilding

Rented Out 38,761 23,361 Leasehold *(14.10.2016)

970,779

Lot 783, Jalan TigaOff Jalan Chan Sow LinKuala Lumpur(D/P: 20.12.1979)

Factory and Office Building


196,174

1 & 3, Jalan 3/91A Taman Shamelin Perkasa Cheras, Kuala Lumpur (D/P : 13.01.1994)

3 ½ Storey Terrace Factory

UtusanPublications &

Distributors Sdn Bhd

13,552 12,015 Freehold 2,145,209

LIST OF PROPERTIESAS AT 31 DECEMBER 2017

Location Description Existing UseLand Area

(sq. ft)Built-Up

Area (sq. ft) Tenure

Carrying Value (RM)

31.12.2017


172


(sq. ft)Built-Up


Carrying Value (RM)

31.12.2017


PUTRAJAYA

No. 17A, B & C Jalan Diplomatik 2/2 Presint 15,Presint Diplomatik 62000 PutrajayaWilayah PersekutuanPutrajaya (D/P: 20.10.2010)

4 Storey Shophouse

Utusan’s Office/

Rented Out

- 5,025 Freehold 1,646,336

SELANGOR

Lot 6, Industrial Estate Section 10Bandar Baru BangiBangi, Selangor (D/P : 20.12.1995)

Factory Building

Utusan’s Printing Complex

683,278 197,651 Leasehold (19.08.2098)

60,627,918

Lot 2 & 3UOA Business ParkGlenmarie, Petaling JayaSelangor(D/P : 11.01.2013)

4 Storey Shop Office



- 19,653 Freehold 18,754,895

Lot B3A, C1, C2SqWhereSungai BulohSelangor(D/P : 03.04.2014)

Building Under Construction



- 27,585 Leasehold (20.12.2111)

11,249,664

11, Jalan 14/22 Petaling Jaya, Selangor (D/P : 10.03.1992)

5 Storey Shophouse

Rented Out 5,533 24,170 Leasehold(16.12.2086)

2,737,861

11A, Jalan 14/22Petaling Jaya, Selangor(D/P: 23.10.1989)

4 StoreyShophouse


408,919

D-05-2, Blok D Plaza Glomac No. 6, Jalan SS7/19 Kelana Jaya Petaling Jaya, Selangor (D/P: 01.05.2011)

2 Storey Shophouse

(Commercial Unit)


341,510


173


KEDAH

Lot 170, 170-A & 170-BKompleks Alor SetarJalan Kancut05100 Alor SetarKedah Darul Aman(D/P : 12.03.2013)

Office Shop Utusan’s Office 1,013 3,040 Leasehold(26.08.2083)

337,586

Lot 171, 171-A & 171-BKompleks Alor SetarJalan Kancut05100 Alor SetarKedah Darul Aman(D/P : 12.03.2013)

Office Shop Utusan’s Office 1,013 3,040 Leasehold(26.08.2083)

337,586

PENANG

Lot 3055, Lorong Jelawat 1Kawasan Perindustrian Seberang JayaPrai, Penang (D/P: 10.10.1977)

Factory Building

Utusan’s Printing Plant

174,177 69,888 Leasehold (12.12.2035)

14,546,389

34, Jalan Argyll Georgetown, Penang (D/P: 01.07.1976)

2 Storey Shophouse

Utusan’s Office 1,280 1,995 Leasehold (27.09.2049)

417,366

32, Jalan Argyll Georgetown, Penang (D/P: 28.08.1969)

2 Storey Shophouse


397,016

PERAK

208, Jalan Sultan Iskandar Ipoh, Perak (D/P : 08.09.1990)

2 Storey Shophouse

Utusan’s Office 1,740 2,720 Freehold 175,719

1, Jalan SM 1C/12Bandar Baru Sri ManjungSri ManjungSitiawan, Perak(D/P : 12.12.1980)

2 Storey Shophouse


42,900

MELAKA

358, Taman Melaka Raya Melaka (D/P : 26.02.1982)

3 Storey Shophouse


96,000


(sq. ft)Built-Up


Carrying Value (RM)

31.12.2017


174


JOHOR

Lot PTD 53920Jalan Firma 2/1Tebrau Industrial Estate Johor Bahru, Johor(D/P : 03.04.1991)

Factory Building

Vacant 170,311 21,410 Freehold 4,387,068

24, Jalan SerampangTaman PelangiJohor Bahru, Johor(D/P: 27.10.1980)

3 Storey Shophouse

Utusan’s Office 1,920 5,358 Freehold 369,687

19, Jalan Mengkudu Taman Makmur Batu Pahat, Johor (D/P : 02.10.1984)

2 Storey Shophouse

Rented Out 1,680 3,192 Freehold 103,594

PAHANG

18, Jalan Bukit Ubi Kuantan, Pahang (D/P : 28.07.1986)

3 Storey Shophouse

Ground Floor Utusan’s Office

2,000 4,900 Leasehold (14.08.2068)

137,663

C-321, Jalan Tengku Ismail Temerloh, Pahang (D/P : 26.11.1984)

2 Storey Shophouse


88,400

Jalan Hj Abdul Aziz Kuantan, Pahang (D/P : 15.07.1981)

Vacant Land Vacant 3,267 - Leasehold (17.09.2077)

90,371

TERENGGANU

Lot 15367, Gong BadakIndustrial Estate Kuala Terengganu Terengganu (D/P : 28.03.1991)

Factory Building

Utusan’s Printing Plant

130,684 22,000 Leasehold (27.03.2051)

3,581,888

No. 34, Pusat Niaga Paya Keladi Kuala Terengganu Terengganu (D/P : 05.05.2008)

2 Storey Shophouse


1,008,738


(sq. ft)Built-Up


Carrying Value (RM)

31.12.2017


175

SABAH

C-07-01 to C-08-07Block C, Aeropod Commercial SquareJalan Aeropod Off Jalan KepayanKota Kinabalu, Sabah(D/P : 16.07.2012)

8 Storey Office Building



- 12,092 Leasehold (15.07.2111)

7,617,838

INDONESIA

VS25-06 & LV23-01 The Bellezza Permata Hijau, Jalan Arteri, Permata Hijau 12210, Jakarta Selatan Jakarta, Indonesia (D/P : 27.06.2007)

Apartments Office/Residence

- 5,984 Freehold 2,437,718

Notes: 1) D/P – Date of Purchase2) * Lease extension is still in the process



(sq. ft)Built-Up


Carrying Value (RM)

31.12.2017


176

ANALYSIS OF SHAREHOLDINGSAS AT 30 MARCH 2018

Paid-up Share Capital - RM110,733,837

Class of Shares - Ordinary Shares of RM1.00 each

No. of Shareholders - 4,622

Voting Rights - One voting right for one Ordinary Share DISTRIBUTION OF SHAREHOLDINGS

Size of HoldingsNumber of

ShareholdersPercentage

(%)Number of

Shares Percentage

(%)

1 – 99 486 10.51 17,401 0.01

100 – 1,000 2,010 43.49 1,592,024 1.44

1,001 – 10,000 1,695 36.67 6,453,929 5.83

10,001 – 100,000 377 8.16 11,872,364 10.72

100,001 – 5,536,690 52 1.13 19,341,163 17.47

5,536,691 & above 2 0.04 71,456,956 64.53

TOTAL 4,622 100.00 110,733,837 100.00

DIRECT AND INDIRECT INTERESTS OF DIRECTORS AS AT 30 MARCH 2018

NamesDirect

ShareholdingsIndirect

ShareholdingsPercentage

(%)

Tan Sri Mohamad Fatmi Che Salleh - - -

Datuk Mohd Noordin Abbas - - -

Datuk Abdul Aziz Ishak - - -

Tan Sri Datuk Seri Ismail Yusof - - -

Datuk Seri Tengku SariffuddinTengku Ahmad - - -

Datuk Md Afendi Hamdan - - -

Mohd Yusof Abu Othman - - -

Jamalul Kiram Mohd Zakaria - - -

SUBSTANTIAL SHAREHOLDERS AS AT 30 MARCH 2018

Names of ShareholdersNumber of

Shares Percentage

(%)

RHB Nominees (Tempatan) Sdn Bhd(United Malays National Organisation or UMNO)

55,113,956 49.77

Nilam Setar (M) Sdn Bhd 16,343,000 14.76


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Names of ShareholdersNumber of

Shares Percentage

(%) RHB Nominees (Tempatan) Sdn Bhd(United Malays National Organisation or UMNO)

55,113,956 49.77

Nilam Setar (M) Sdn Bhd 16,343,000 14.76Aspirasi Sigma Sdn Bhd 3,500,000 3.16Fasa Mahsuri Sdn Bhd 2,000,000 1.81Tan Jin Tuan 1,044,000 0.94TA Nominees (Tempatan) Sdn Bhd(Pledged Securities Account for Chua Eng Ho Waa @ Chua Eng Wah)

879,900 0.79

Maybank Nominees (Tempatan) Sdn Bhd(Tay Ong Ngo @ Tay Boon Fang)

800,000 0.72

RHB Nominees (Tempatan) Sdn Bhd(Pledged Securities Account for Tan Gaik Suan)

621,400 0.56

Chin Kian Fong 509,400 0.46Yap Pow On 501,000 0.45Hussein Noordin Sdn Bhd 381,000 0.34Lee Kong Hian 374,600 0.34Lee Yeow Hian 374,000 0.34Tay Boon Teck 372,200 0.34Li Liong Bee 371,800 0.34Maybank Nominees (Tempatan) Sdn Bhd(Chua Eng Ho Wa’a @ Chua Eng Wah)

347,100 0.31

Cheah Yee Lin 314,500 0.28Rajalingam A/L RVR Singam 312,000 0.28Maybank Nominees (Tempatan) Sdn Bhd(Koo Tai Ping @ Koh Kian Tee)

311,500 0.28

Chin Sin Lin 292,300 0.26Senawang Land Sdn Bhd 289,000 0.26Maybank Nominees (Tempatan) Sdn Bhd(Pledged Securities Account for Felix Miller)

286,000 0.26

Affin Hwang Nominees (Tempatan) Sdn Bhd(Pledged Securities Account for Tay Boon Seng)

272,000 0.25

Alliancegroup Nominees (Tempatan) Sdn Bhd(Pledged Securities Account for Yayasan Pok Dan Kassim)

261,100 0.24

HLIB Nominees (Tempatan) Sdn Bhd(Hong Leong Bank Bhd for Goh Chai Hong)

252,600 0.23

Kenanga Nominees (Tempatan) Sdn Bhd(Pledged Securities Account for Chin Kiam Hsung)

252,300 0.23

TA Nominees (Tempatan) Sdn Bhd(Pledged Securities Account for Ng Kon Yew)

243,800 0.22

Ambank (M) Berhad(Pledged Securities Account for Rajalingam A/L RVR Singam)

235,700 0.21

Tay Ong Ngo @ Tay Boon Fang 202,600 0.18Kenanga Nominees (Tempatan) Sdn Bhd(Pledged Securities Account for Chan Khim Gee @ Chang Khim Gee)

200,000 0.18

LIST OF TOP THIRTY LARGEST SHAREHOLDERSAS AT 30 MARCH 2018


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NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the 50th Annual General Meeting of Utusan Melayu (Malaysia) Berhad will be held at Dewan Utusan Melayu (Malaysia) Berhad, No. 44, Jalan Utusan Off Jalan Chan Sow Lin, 55200 Kuala Lumpur on Wednesday, 6 June 2018 at 11.00 a.m. to transact the following businesses:

AGENDA

AS ORDINARY BUSINESS 1. To receive the Audited Financial Statements for the financial year ended 31 December 2017 together with the Reports

of the Directors and Auditors. (Please refer to Note 2)

2. To re-elect the following Directors who retire by rotation in accordance with Article 97 of the Company’s Constitution and being eligible, offer themselves for re-election:i) Tan Sri Mohamad Fatmi Che Salleh

(Ordinary Resolution 1)ii) Datuk Mohd Noordin Abbas

(Ordinary Resolution 2)

3. To re-elect Jamalul Kiram Mohd Zakaria who retires in accordance with Article 102 of the Company’s Constitution and being eligible, offers himself for re-election.


4. To approve the payment of Directors’ fees for a total sum of RM183,041 in respect of the financial year ended 31 December 2017.


5. To approve the payment of Directors’ remuneration (excluding Directors’ fee) to the Non-Executive Directors from 7 June 2018 until the conclusion of the next Annual General Meeting of the Company.


6. To re-appoint Messrs. Ernst & Young as Auditors of the Company and to hold office until the conclusion of the next Annual General Meeting, at a remuneration to be determined by the Directors.


AS SPECIAL BUSINESS

To consider and, if thought fit, to pass with or without any modifications, the following Ordinary Resolution:

7. AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 75 AND 76 OF THE COMPANIES ACT 2016 “THAT pursuant to Sections 75 and 76 of the Companies Act 2016 and subject to the approvals of the relevant

governmental/regulatory authorities, the Board of Directors be and are hereby empowered to issue shares in the capital of the Company from time to time and upon such terms and conditions and for such purposes as the Directors, may in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being and that the Directors be and are hereby also empowered to obtain approval from the Bursa Malaysia Securities Berhad for the listing and quotation of the additional shares so issued and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”



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8. To transact any other business of which due notice shall have been given in accordance with the Companies Act 2016 and the Company’s Constitution.

FURTHER NOTICE IS HEREBY GIVEN THAT for the purpose of determining a member who shall be entitled to attend this 50th Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd in accordance with Article 57(e) of the Company’s Constitution and Section 34(1) of the Securities Industry (Central Depositories) Act 1991 to issue a General Meeting Record of Depositors as at 31 May 2018. Only a depositor whose name appears on the Record of Depositors as at 31 May 2018 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his/her behalf.

BY ORDER OF THE BOARD

SHUHAILA YAAKOB MACS 01567Company Secretary

Kuala Lumpur30 April 2018


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NOTES: 1. Appointment Of Proxy

1.1. A member of the Company entitled to attend and vote at this meeting may appoint a proxy (or in a case of a corporation to appoint a representative) to attend and vote in his stead. A proxy need not be a member of the Company.

1.2. A member of the Company shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.

1.3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney or, if the appointor is a corporation, either under the common seal or under the hand of an officer on behalf of the corporation or attorney.

1.4. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one omnibus account, the exempt authorised nominee may appoint multiple proxies for each omnibus account it holds.

1.5. To be valid the proxy form duly completed must be deposited at the Registrar’s Office, Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur during normal business hours from Mondays to Fridays (except public holidays), no later than Tuesday, 5 June 2018 at 11.00 a.m.

1.6. Pursuant to Paragraph 8.29A of Bursa Malaysia Securities Berhad Main Market Listing Requirements, all resolutions set out in the Notice of the 50th AGM will be put to vote on a poll.

2. Audited Financial Statements For The Financial Year Ended 31 December 2017 The audited financial statements are laid in accordance with Section 340(1)(a) of the Companies Act 2016 for

discussion only under Agenda 1. They do not require shareholders’ approval and hence, will not be put for voting.

3. Ordinary Resolution 1, 2 And 3 - Proposed Re-Election Of Directors In Accordance With Article 97 And 102 Of The Company’s Constitution

Article 97 of the Company’s Constitution provides amongst others that at least one-third of the Directors who are subject to retirement by rotation or, if their number is not three (3) or multiple of three (3), the number nearest to one-third shall retire from office provided always that all Directors shall retire from office once at least in every three (3) years and shall be eligible for re-election.

Directors who are standing for re-election pursuant to Article 97 of the Company’s Constitution are as follows:i) Tan Sri Mohamad Fatmi Che Salleh ii) Datuk Mohd Noordin Abbas

Article 102 of the Company’s Constitution provides amongst others that any director so appointed shall hold office only until the next annual general meeting and shall then be eligible for re-election, but shall not be taken into account in determining the number of Directors who are to retire by rotation at such meeting.

Director who is standing for re-election pursuant to Article 102 of the Company’s Constitution is as follows:iii) Jamalul Kiram Mohd Zakaria

The Nomination & Remuneration Committee (‘NRC’) of the Company has assessed the criteria and contribution of Tan Sri Mohamad Fatmi Che Salleh, Datuk Mohd Noordin Abbas and Jamalul Kiram Mohd Zakaria and recommended for their re-election. The Board endorsed the NRC’s recommendation that Tan Sri Mohamad Fatmi Che Salleh, Datuk Mohd Noordin Abbas and Jamalul Kiram Mohd Zakaria be re-elected as Directors of the Company. The profiles of the Directors who are standing for re-election are set out on page 6 and 9 of the Annual Report; while details of their interests in securities are set out on page 176 of the Annual Report.


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4. Ordinary Resolution 4 And 5 - Directors’ Remuneration Section 230(1) of the Companies Act 2016 provides amongst others, that “the fees” of the directors and

“any benefits” payable to the directors of a listed company and its subsidiaries shall be approved at a general meeting. In this respect, the Board wishes to seek shareholders’ approval for the following payments to the Directors of Utusan Melayu (Malaysia) Berhad at the 50th Annual General Meeting in 2 separate resolutions as below:(a) Ordinary Resolution 4 on payment of Directors’ fees in respect of the preceding year 2017; and(b) Ordinary Resolution 5 seeks approval for payment of Directors’ remuneration (excluding Directors’ fee) to the

Non-Executive Directors of Utusan Melayu (Malaysia) Berhad from 7 June 2018 until the conclusion of the next Annual General Meeting of the Company comprises the following, with or without modifications:

Description Chairman Non-Executive Director

Monthly Fixed Allowance RM20,000 per month -

Benefit-In-Kind RM7,200 per year -

Meeting Allowance (per meeting)

• Board of Utusan Melayu - RM2,500

• Board Committees - RM2,500

5. Ordinary Resolution 6 - Appointment Of Auditors The Board and Audit Committee of the Company are satisfied with the quality of service, adequacy of resources

provided, communication, interaction skills and independence, objectivity and professionalism demonstrated by the External Auditors, Messrs. Ernst & Young in carrying out their functions. Being satisfied with the External Auditors’ performance, the Board recommends their re-appointment for shareholders’ approval at the 50th Annual General Meeting.

6. Statement Accompanying Notice Of Annual General Meeting Of The Company Additional information required under Appendix 8A of the Listing Requirements of the Bursa Malaysia Securities

Berhad is set out in the Statement Accompanying Notice of Annual General Meeting of the Company.

EXPLANATORY NOTES:

1. Ordinary Resolution 7 - Authority For Directors To Issue Shares The proposed Ordinary Resolution 7 is for the purpose of granting a renewal General Mandate (‘General Mandate’),

if passed, will empower the Directors to issue and allot new shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for such purposes as the Directors consider would be in the interest of the Company. The General Mandate, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

The General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for the purpose of funding future investment project(s), working capital and/or acquisitions.

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the 49th Annual General Meeting held on 25 May 2017 and which will lapse at the conclusion of the 50th Annual General Meeting.


182

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING OF THE COMPANY

DIRECTORS who are standing for re-election at the 50th Annual General Meeting of the Company are:

i) Tan Sri Mohamad Fatmi Che Sallehii) Datuk Mohd Noordin Abbasiii) Jamalul Kiram Mohd Zakaria

The details of the three (3) Directors standing for re-election are set out in their respective profiles which appear in the Profile of the Board of Directors on page 6 and 9 of this Annual Report. The details of their interest in the securities of the Company are set out in the Analysis of Shareholdings which appears on page 176 of this Annual Report.

PROXY FORMCDS Account No. of Authorised Nominee (i)

I/We, (full name in block capitals) ….……………………………………...........................................…..…………………………

NRIC No./Company No. ………………………………………………........................................…….….………………………....

of ………………......................................…………………………………………………………….…………………....………….

………………………………………………………….............................................................................…………………………

being a member/s of Utusan Melayu (Malaysia) Berhad hereby appoint ...…………...........................................…………….

NRIC No. ………………………………….……... of ..........…………………………………………………………………………..

.................................................................................................................................................................................……...….

……………………………………………………. and/or ……………………………………………………………………………….

NRIC No. ……………………………………… of ...................…….….………………….…..……………………………………...

.............................................................................................................................................................................…………….or failing him/her, *The Chairman of the Meeting as *my/our proxy to vote for *me/us on *my/our behalf at the 50th Annual General Meeting of the Company to be held at Dewan Utusan Melayu (Malaysia) Berhad, No. 44, Jalan Utusan Off Jalan Chan Sow Lin, 55200 Kuala Lumpur on Wednesday, 6 June 2018 at 11.00 a.m and at any adjournment thereof.

*My/Our proxy is to vote as indicated below:

RESOLUTIONS FOR AGAINST

Resolution 1AS ORDINARY BUSINESS – ORDINARY RESOLUTIONSRe-election of Tan Sri Mohamad Fatmi Che Salleh

Resolution 2 Re-election of Datuk Mohd Noordin Abbas

Resolution 3 Re-election of Jamalul Kiram Mohd Zakaria

Resolution 4 Approval of Directors’ Fee

Resolution 5 Approval of Directors’ Remuneration (excluding Directors’ Fee)

Resolution 6 Re-appointment of Messrs Ernst & Young as Auditors

Resolution 7AS SPECIAL BUSINESS – ORDINARY RESOLUTIONDirectors Authority Pursuant to the Section 75 & 76 of the Companies Act 2016

Please indicate with a tick (√) in the appropriate spaces how you wish your votes to be cast. If you do not indicate how you wish your proxy to vote on any resolution, the proxy will vote as he thinks fit at his discretion or abstain from voting.

(*strike out whichever is not desired)

____________________________________________________________Signature/Common Seal of CorporationNumber of Shares Held: ______________________________________Date: _______________________________________________________

For appointment of two or more proxies, percentage of shareholdings to be represented by the proxies

Number of Shares

Percentage

Proxy 1 %Proxy 2 %Total 100%

NOTE: Appointment of Proxy

i) A member of the Company entitled to attend and vote at this meeting may appoint a proxy (or in a case of a corporation to appoint a representative) to attend and vote in his stead. A proxy need not be a member of the Company.

ii) A member of the Company shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.

iii) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney or, if the appointor is a corporation, either under the

common seal or under the hand of an officer on behalf of the corporation or attorney.

iv) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one omnibus account, the exempt authorised nominee may appoint multiple proxies for each omnibus account it holds.

v) To be valid the proxy form duly completed must be deposited at the Registrar’s Office, Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur during normal business hours from Mondays to Fridays (except public holidays), no later than Tuesday, 5 June 2018 at 11.00 a.m.

3. Fold this flap for sealing

2. Then fold here

AFFIX STAMPRM0.80 HERE

1. Fold here

THE SHARE REGISTRARTRICOR INVESTOR & ISSUING HOUSE SERVICES SDN BHDUnit 32-01, Level 32, Tower AVertical Business SuiteAvenue 3, Bangsar SouthNo. 8, Jalan Kerinchi59200 Kuala Lumpur


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