Ummb Annual Report 2017

UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 SUSTAINABILITY REPORT

OUR SUSTAINABILITY Utusan Melayu (Malaysia) 4 PILLARS Berhad (“Utusan”) strives O STATEMENT F S to be a responsible U E S UTUSAN strives to be a organisation by giving OPL PE BU T full commitment S A responsible organisation by giving R I I to maintain a U N N E O full commitment to maintain a high standard of S A

S governance in B high standard of governance

our operations to I L

Y I

T in our operations to have a have a positive I T

Y sustainable impact E

N positive sustainable impact on

on the business, M

R M

O environment, O

C the business, environment, N

M E N communities and our T people. communities and our people

BUSINESS

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. 4 TUNJ AN G KEY AREAS OF CONCERNKE OUR ENGAGEMENT KAMI M l A friendlyA and conducive P working l Utusan encourages an open door communication J ER A ER N environment. Good inter-communicationP between the management team and staff. K IA E A G l betweenP the management team and the Utusan still believes in good reward system to those A N

staff. A deserved to be rewarded despite financial challenges. A l To keep staff informed on the Company’sN l Utusan always gives full support to our Badan EMPLOYEES N

latestI development and strategies. Keluarga Utusan Melayu (BKUM), a body which is

l Possibilities of future career advancement.A formed for the welfare of the staff.

l Safe working conditions and educateA l The formation of OSHA committee helps to ensure the

M M

K S

healthy lifestyle. operations, plants and offices are adhering to safety

I T A l Solid training andR succession planning. regulations l Any issues raised by the Union will be discussed in l To encourage open discussion between the Joint Consultative Committee (JCC) between the members and the management. management and representatives from the Union. TRADE UNIONS l To update the members on Company’s l The top management is adopting an open door financial performance and development. concept for the Union representatives to discuss any matters of concern. l Provide up-to-date, balanced and reliable news. l Offering customers with various platforms such as CUSTOMERS l Provide stable digital platform so that news print newspaper, e-paper, online TV and social media. can be accessed on a real time basis. l Ensure newspapers reach the market timely by closely l Provide multimedia platforms for monitoring all transporters. advertisers.

34 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 SUSTAINABILITY REPORT

KEY AREAS OF CONCERN OUR ENGAGEMENT l A standard and fair procurement policies l Utusan has formulated a standard procurement and procedures in giving out tenders and policies that ensure an ethical procurement processes projects. are being practised. SUPPLIERS l Good communication with suppliers and l Regular meetings and communications are arranged update any Company’s development that with the suppliers to update them on any new might affect them as suppliers. development within Utusan. l Close monitoring of the performance of vendors and l Products are efficiently placed in the market agents by the Marketing Department. Sales executives AGENTS/ in an orderly and timely manner. in every state are responsible to keep abreast with VENDORS Utusan’s products’ development and communicate it to vendors/agents. l The management is actively reaching out to potential l To keep on exploring business collaboration BUSINESS strategic partners to collaborate in any business with strategic partners to help Utusan to PARTNERS opportunities that can provide recurring income to diversify its business. Utusan. l Complying with Bursa Malaysia requirements by publishing quarterly results and Annual Reports. l Dissemination of information on timely SHAREHOLDERS l Information and explanations given at Annual General manner. Meeting and responding to Minority Shareholder Watchdog Group’s concerns on the performance of Utusan . l Various events to promote arts and culture such as l To uphold the value of arts and culture. Hadiah Sastera Kumpulan Utusan and Malam Puisi. l Giving back to the people through charity COMMUNITIES l Continuing our efforts to promote education using events. our products ie Utusan Pelajar, Tutor Guru as well as l Promoting importance of education. offering sponsorships for further studies. l Complying with all regulations and policies l Promoting awareness among staff the importance of GOVERNMENT / formulated by the Government or other complying with existing laws and regulations. REGULATORS relevant bodies such as GST, accounting l Communication with the regulators should there be standards and income taxation rules. any clarification on certain laws or regulations.

COMMUNITY

YAYASAN HUMANITARIAN CULTURE AND KUMPULAN EDUCATION AID LITERATURE UTUSAN

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. ENVIRONMENT 35

NEWSPRINT ENERGY SAVINGS WASTE CONTROL OTHER EFFORTS

OUR PEOPLE

TRAINING AND HEALTH INDUSTRIAL WORK & LIFE DEVELOPMENT SCREENING HARMONY HARMONY

SAFETY STAFF SUCCESSION AND HEALTH TURNOVER PLANNING UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 SUSTAINABILITY REPORT

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 Handover contribution to Pusat Pengajian guests consisting of the disabled, the poor, the elderly Tahfiz Lil Banin, Pendang, Kedah. 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

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 Humanitarian aid at Pidie Jaya, Aceh, Indonesia. issues.

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. 36 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 SUSTAINABILITY REPORT

Hadiah Sastera Kumpulan Utusan 2016.

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.

37 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 SUSTAINABILITY REPORT

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.

38 COMMUNITY

UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 YAYASAN HUMANITARIAN CULTURE AND KUMPULAN EDUCATION AID LITERATURE SUSTAINABILITYUTUSAN REPORT

ENVIRONMENT

NEWSPRINT ENERGY SAVINGS WASTE CONTROL OTHER EFFORTS

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 inOUR PEOPLE 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 TRAINING Utusan has 3AND printing plants in Selangor, PenangHEALTH and Terengganu. AverageINDUSTRIAL electricity consumption forWORK the printing & LIFE operation is 60%DEVELOPMENT of the total electricity consumedSCREENING by Utusan. Changing the sizeHARMONY and lowering print order for ourHARMONY 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 haveSAFETY also replaced some of halogen lightsSTAFF in our buildings to LEDSUCCESSION lights. It does not only contribute to energy savings but alsoAND provides HEALTH higher level of brightness.TURNOVER PLANNING

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. 39 COMMUNITY

YAYASAN HUMANITARIAN CULTURE AND KUMPULAN EDUCATION AID LITERATURE UTUSAN

ENVIRONMENT UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017

SUSTAINABILITYNEWSPRINT ENERGY REPORT SAVINGS WASTE CONTROL OTHER EFFORTS

OUR PEOPLE

TRAINING AND HEALTH INDUSTRIAL WORK & LIFE DEVELOPMENT SCREENING HARMONY HARMONY

SAFETY STAFF SUCCESSION AND HEALTH TURNOVER PLANNING

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 40 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 SUSTAINABILITY REPORT

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.

41 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 SUSTAINABILITY REPORT

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-Quran l Bubur Lambuk Kumpulan Utusan l Hari Raya Aidilfitri Kumpulan Utusan - #inikanRayaUtusan2017 l Syoknya Kenduri & Ceramah Perdana – Kerja Itu Ibadah l Majlis Korban & Akikah BKUM l School holiday programme – Trip to Kidzania l Tutor Sifir Seminar l 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.

42 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 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; and l 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.

43 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CORPORATE GOVERNANCE OVERVIEW STATEMENT

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.

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

AUDIT NOMINATION & INVESTMENT COMMITTEE REMUNERATION COMMITTEE (AC) COMMITTEE (NRC) (IC) Review of ﬁnancial reporting, Review candidatures for Review and evaluate all internal controls, related party Board appointment and investment proposals based transactions and conﬂict of re-appointment as well as upon the necessary criteria interest, internal audit as well annual assessment of the for investment prior to as external audit processes Board, Board Committees and approval by the Board for the Directors’ Processes & Group’s implementation Review and recommend matters relating to the remuneration of the Board and Senior Management

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

44 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CORPORATE GOVERNANCE OVERVIEW STATEMENT

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.

45 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CORPORATE GOVERNANCE OVERVIEW STATEMENT

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; and l 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.

46 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CORPORATE GOVERNANCE OVERVIEW STATEMENT

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. INDEPENDENT NON-INDEPENDENT EXECUTIVE DIRECTOR The Board comprises a balanced mix of skills, NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR 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.

PENGARAH BEBAS PENGARAH BUKAN BEBAS PENGARAH EKSEKUTIF While the Board supports the philosophy of gender diversityBUKAN andEKSEKUTIF recognizesBUKAN the EKSEKUTIF 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. 47 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CORPORATE GOVERNANCE OVERVIEW STATEMENT

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

Benefit Executive Salaries Bonuses EPF Fees Allowances -in-Kind Directors RM RM RM RM RM 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 Benefit Non-Executive Salaries Bonuses EPF Fees Allowances -in-Kind Directors RM RM RM RM RM RM Tan Sri Mohamad Fatmi Che Salleh - - - - 240,000 7,200 Tan Sri Datuk Seri Ismail Yusof - - - 30,000 22,500 - Datuk Seri Tengku Sariffuddin - - - 30,000 27,500 - Tengku Ahmad 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 - - - 3,041 - - (Resigned w.e.f. 7/2/2017)

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.

48 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CORPORATE GOVERNANCE OVERVIEW STATEMENT

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.

49 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 OTHER INFORMATION REQUIRED BY THE LISTING REQUIREMENTS OF THE BURSA MALAYSIA SECURITIES BERHAD

1. AUDIT AND NON-AUDIT FEES

The details of the statutory audit and non-audit fees paid/payable to Messrs Ernst & Young for services rendered to the Company and the Group for the financial year ended 31 December 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.

50 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 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. 51 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CORPORATE CALENDAR 2017

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. 52 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CORPORATE CALENDAR 2017

28 MARCH 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.

30 APRIL 2017 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). 53 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CORPORATE CALENDAR 2017

12-16 MAY 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.

8 JUNE 2017

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). 54 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CORPORATE CALENDAR 2017

20 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.

24 JULY 2017

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. 55 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CORPORATE CALENDAR 2017

8 SEPTEMBER 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’.

13 NOVEMBER 2017

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. 56 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 STATEMENT OF DIRECTORS’ RESPONSIBILITY FOR 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.

57 FINANCIAL 58 CONTENTS 70 -71 68 -69 64 -67 63 63 59 -62 Consolidated Statement OfFinancialPositionConsolidated Statement Comprehensive Income Of Consolidated Statement Independent Auditors’Report Declaration Statutory ByDirectors Statement Directors’ Report UTUSAN MELAYU (MALAYSIA) BERHAD 82 -170 80 -81 79 77 -78 76 73 -75 72 Notes To The Financial Statements Notes ToFinancial The OfCashFlowsStatement OfChangesInEquity Statement OfFinancialPositionStatement OfComprehensiveStatement Income OfCashFlowsConsolidated Statement In Equity OfChanges Consolidated Statement | ANNUAL REPORT2017 FINANCIAL RM 59 Company (21,316,857) RM Group resigned on 7 February 2017 (7,455,907) appointed on 14 February 2018 ANNUAL REPORT 2017 REPORT ANNUAL | appointed on 13 April 2017, retired on 25 May 2017 UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Loss for the year, attributable to owners of the parent Loss for the year, Tan Sri Mohamad Fatmi Bin Che Salleh Tan Datuk Mohd Noordin Bin Abbas * Datuk Abdul Aziz Bin Ishak * Sri Datuk Seri Ismail Bin Yusof Tan Ahmad Sariffuddin Bin Tengku Datuk Seri Tengku Bin Abu Othman Mohd Yusof Datuk Md Afendi Bin Hamdan Jamalul Kiram Bin Mohd Zakaria Dato’ Zakri Afandi Bin Ismail Norraesah Binti Mohamad Dato’ Dr. *These directors are also directors of the Company’s subsidiaries. are also directors of the Company’s directors *These The names of the directors of the Company in office since the beginning of the financial year to the date of this report are: year to the date of since the beginning of the financial in office names of the directors of the Company The DIRECTORS DIVIDENDS year ended 31 December 2017. of the financial of dividend in respect payment directors do not recommend any The In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were year during the financial of the operations of the Group and of the Company In the opinion of the directors, the results unusual nature. of a material and event item, transaction or any by not affected There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the in disclosed as than other year financial the during reservesfrom or to provisions or transfers material no were There financial statements. The principal activities of the subsidiaries are described in Note 14 to the financial statements. subsidiaries are described in Note 14 principal activities of the The RESULTS The principal activities of the Company are the publication, printing and distribution of newspapers. the publication, printing and distribution are Company principal activities of the The PRINCIPAL ACTIVITIES PRINCIPAL The directors hereby present their report together with the audited financial statements of the Group and of the Company together with the audited financial statements present their report Company of the Group and of the directors hereby The 2017. year ended 31 December the financial for DIRECTORS’ REPORT DIRECTORS’ FINANCIAL 60 corporations duringthefinancial year. None ofthedirectorsinoffice at theendoffinancial year had any interestinshares intheCompany oritsrelated DIRECTORS’ INTERESTS or withacompany inwhich financialinterest. hehasasubstantial contract made by the Group and Company or a related corporation with any director or with a firm of which he is a member, ofafull-timeemployee orthefixedNote 6tothefinancialstatements salary oftheGroupandCompany) byreason ofa benefits included intheaggregateamountofemolumentsreceived ordueandreceivable by the directorsasshown in Since theendofprevious financial year, nodirectorhasreceived orbecome entitledtoreceive abenefit (otherthan debentures oftheGroupandCompany orany otherbodycorporate. Group andCompany was aparty, whereby the directorsmightacquirebenefits by meansoftheacquisitionsharesinor Neither attheendoffinancial year, noratany timeduringthat year, didtheresubsistany arrangement towhich the DIRECTORS’ BENEFITS of key managementpersonnel. * The directorsbenefits for thedirectorsof Company’s subdiariesaredisclosedinNote30(b)aspartofcompensation Mohd ZinBinMahmud Badrul Azhar Bin Ab Rahman W. Nor Asmah Binti W. Ismail Dato’ SobriBin Ahmad Dato’ MohdZamriBinSulong Datuk InderaMohd Azwan Bin Abdul Malik Datuk Zulkefli BinHamzah Hanisah BintiHamzah Mohamed IzzahamBinIdris Marina BintiMohamed Ahmad ShukriBinRifaie Siti Rohaya BintiSyed Hassan Zulkifli Bin Basharuddin Salwa Anida BintiIsa Binti YusoffRozita Noridzan BintiKamal Ahmad Bin Mohd Yazid Mohd NazlanBinOsman @ Bin AliAhmad Jamal Ahmed Wali Ahmat Faisal BinMokhtar Azlan NaimBin Abdullah Bin AbdulAziz Azlan Arffin BinNordin Anuar BinShaari Ahmad Razif BinMohamed Abd Wahid BinIdris Datuk OthmanBinMohamad this report(notincludingthosedirectorslistedabove) are: The namesofthedirectors theCompany’s subsidiariesinoffice sincethebeginningoffinancial yeartothedateof DIRECTORS’ REPORT UTUSAN MELAYU (MALAYSIA) BERHAD appointed on20December2017 resigned on26September2017 | appointed on8December2017 resigned on27November 2017 ANNUAL REPORT2017 appointed on9 August 2017 resigned on6October2017 resigned on23March 2017 appointed on3March 2017 appointed on1June 2017 appointed on6 April 2018 appointed on5 April 2017 resigned on29May 2017 FINANCIAL 61 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN no contingent or other liability has become enforceable or is likely to become enforceable within the period within to become enforceable or is likely no contingent or other liability has become enforceable the ability of the Group or of the affect or may will year which the end of the financial months after of twelve due; and fall to meet their obligations when they Company has arisen in the interval between the end of the of a material and unusual nature no item, transaction or event substantially the results of the operations of the to affect is likely year and the date of this report which financial this report is made. year in which the financial for Group or of the Company any charge on the assets of the Group or of the Company which has arisen since the end of the financial year has arisen since the end of the financial which on the assets of the Group or of the Company charge any other person; or secures the liabilities of any which other year, the end of the financial has arisen since which liability contingent of the Group or of the Company any than as dislosed in Note 29 to the financial statements. the amount written off for bad debts or the amount of the provision for doubtful debts inadequate to any any to inadequate debts doubtful for provision the of amount the or debts bad for off written amount the substantial and extent; assets in the financial statements to the current of the Group and of the Company attributed the values misleading. to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of of bad debts to ascertainto the writing off taken in relation had been that proper action and that off bad debts had been written that all known themselves doubtful debts and satisfied for provision doubtful debts; and had been made for adequate provision accounting records in the as shown value their realise to unlikely were which assets current to ensure that any so to might be expected they to an amount which down in the ordinary of business had been written course realise.

In the opinion of the directors: (i) (ii) At the date of this report, the directors are not aware of any circumstances which have arisen which would render would arisen which have circumstancesany which of are not aware At the date of this report, the directors misleading or of the Company of the Group and of assets or liabilities method of valuation adherence to the existing inappropriate. circumstances not otherwise of any the directors are not aware At the date of this report, dealt with in this report amount stated would render any in the financial which or financial statementsGroup and of the Company of the statements misleading. At the date of this report, there does not exist: (i) (ii) At the date of this report, the directors are not aware of any circumstances which would render: would circumstances which of any are not aware At the date of this report, the directors (i) (ii) Before the statements of comprehensive income and statements the statements of financial position of the Group and of the of comprehensive Before made out, the directors took reasonable steps: were Company (i) (ii)

(f) (d) (e) (c) (b) OTHER STATUTORY INFORMATION STATUTORY OTHER (a)

DIRECTORS’ INDEMNITY DIRECTORS’ of their of the Group in respect maintains and officers the directors liability a management Company insurance for The them by incurred of the Group or in respect of costs their capacity act or omission in officers as directors or any liability for 31 December ended year financial the liability for such any to relating proceedings or claim any settling or defending in for covering million RM10 year amounted to the financial insurance for total liability limit of The insured under such 2017. of the Group. all directors and officers DIRECTORS’ REPORT DIRECTORS’ FINANCIAL 62 ISHAK DATUKBIN ABDULAZIZ DATUK MOHDNOORDINBIN ABBAS Signed onbehalfoftheBoard inaccordancewitharesolutionofthedirectorsdated17 April 2018. paid toindemnifyErnst& Young duringorsincethefinancial year. audit engagementagainstclaimsby thirdpartiesarisingfromtheaudit(for anunspecified amount).Nopayment hasbeen To theextent permitted by law, theCompany hasagreedtoindemnifyitsauditors,Ernst& Young aspartoftermsits Auditors’ remunerationisasfollows: The auditors,Ernst& Young, have expressed theirwillingnesstocontinueinoffice. AUDITORS ofsubsequenteventDetails isdisclosed inNote32tothefinancialstatements. SUBSEQUENT EVENT the financialstatements. In additiontothesignificant events disclosedelsewhere inthisreport,othersignificant events aredisclosedinNote31to SIGNIFICANT EVENTS DIRECTORS’ REPORT Ernst &Young UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 219,125 Group RM Company 93,000 RM FINANCIAL 63 ABD WAHID BIN IDRIS BIN WAHID ABD ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Subscribed and solemnly declared by the Subscribed and solemnly declared by abovenamed Abd Wahid Idris Persekutuan Wilayah in Lumpur at Kuala April 2018. on 17 me, Before Oaths Commissioner for I, Abd Wahid Idris, being the officer primarily responsible for the financial management of Utusan Melayu (Malaysia) (Malaysia) Utusan Melayu for the financial management of primarily responsible Idris, being the officer Wahid Abd I, in 170 are financial statements accompanying set out on pages 68 to do solemnly and sincerely declare that the Berhad, the of virtue by and true be to the same believing conscientiously declaration solemn this make and I correct, opinion my 1960. of the StatutoryAct, provisions Declarations PURSUANT TO SECTION 251(1) (B) OF THE COMPANIES ACT 2016 PURSUANT TO SECTION STATUTORY DECLARATION DATUK ABDUL AZIZ BIN DATUK ISHAK DATUK MOHD NOORDIN BIN ABBAS MOHD NOORDIN BIN DATUK Signed on behalf of the Board in accordance with a resolution of the directors dated 17 April 2018. dated 17 accordance with a resolution of the directors in the Board Signed on behalf of We, Datuk Mohd Noordin Bin Abbas and Datuk Abdul Aziz Bin Ishak, being two of the directors of Utusan Melayu (Malaysia) (Malaysia) Melayu of Utusan Aziz Bin Ishak, being two of the directors Abdul Abbas and Datuk Mohd Noordin Bin Datuk We, financial statements state out on pages set in the opinion of the directors, the accompanying do hereby that, Berhad, Standards, International Financial Reporting Financial Reporting up in accordance with the Malaysian drawn are 68 to 170 of the financial view and fair a true so as to give in Malaysia 2016 Act Standards and the requirements of the Companies flows and the cash financial performance and of their as at 31 December 2017 and of the Company position of the Group then ended. the year for STATEMENT BY DIRECTORS STATEMENT ACT 2016 OF THE COMPANIES 251(2) TO SECTION PURSUANT FINANCIAL 64 flows. has performed animpairmentassessmenttoestimatethe value inuseoftheseassets basedondiscountedfuture cash by theGroupandCompany over thelastfive years areindicationsthattheassets may beimpaired.Management treatment equipment. The significantslowdown andthecontinuedoperatinglosses registered inthenewspapers industry As at31December 2017, includedintheplantandequipmentofGroupareprintingmachineries andwaste water Impairment ofplantandequipment(Refer toNote11 tothefinancialstatements) on theaccompanying financialstatements. our auditprocedures,includingtheproceduresperformed toaddressthematters below, provide thebasisofouropinion ofthefinancialstatements.designed torespondourassessmentoftherisksmaterial misstatement The resultsof section ofourreport,includinginrelationtothesematters. Accordingly, ouraudit included theperformance ofprocedures We have fulfilledtheresponsibilitiesdescribedin Auditors’ responsibilities statements for theauditof financial our auditaddressedthematter isprovided inthat context. opinion thereon,andwe donotprovide aseparateopiniononthesematters. For each matter below, ourdescriptionofhow in thecontextofGroupandCompany ofourauditthefinancialstatements asawhole,andin forming our oftheGroupandCompanyfinancial statements asawholearedescribedbelow. These matters were addressed oftheGroupandCompanyfinancial statements for thecurrent year. The key auditmatters for theauditof Key auditmatters arethosematters that,inourprofessional judgement,were ofmostsignificanceinourauditthe Key auditmatters responsibilities inaccordancewiththeBy-Laws andtheIESBA Code. Accountants’ CodeofEthicsfor Professional Accountants (“IESBA Code”), andwe have fulfilledourotherethical and Practice) oftheMalaysian Institute of Accountants (“By-Laws”) Board andtheInternationalEthicsStandards for We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct Independence andotherethicalresponsibilities appropriate toprovide abasisfor ourauditopinion. sectionofourreport.of thefinancialstatements We believe thattheaudit evidence we have issufficient obtained and arefurtherdescribedinthe Auditing. Ourresponsibilitiesunderthosestandards Auditors’ responsibilitiesfor theaudit We conductedourauditinaccordancewithapproved onauditinginMalaysia standards on andInternationalStandards Basis for opinion requirements oftheCompanies Act 2016 inMalaysia. ended inaccordancewithMalaysian FinancialReportingInternationalandthe Standards, Standards and oftheCompany asat31 December2017, andoftheirfinancialperformance andtheircash flows forthe yearthen In ouropinion,theaccompanyinggive financialstatements atrue and fair view ofthefinancialpositionGroup set outonpages68to170. ofsignificantaccountingpolicies,as for theyear includingasummary thenended,andnotestothefinancialstatements, comprehensive ofchanges ofcashflows income,statements andstatements inequity oftheGroupandCompany financial positionasat31December2017 oftheGroupandCompany, ofprofit andstatements orlossandother We have ofUtusan auditedthefinancialstatements Melayu (Malaysia) Berhad, which of comprisethestatements Opinion REPORT ON THE FINANCIALSTATEMENTS (INCORPORATED INMALAYSIA) TO THEMEMBERSOFUTUSANMELAYU(MALAYSIA)BERHAD INDEPENDENT AUDITORS’REPORT UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 65 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Verifying if payments had been received since the year-end; had been received if payments Verifying dates; settlement with customers on expected correspondence and any patterns the historical payment Reviewing and forms; and return despatch sales invoices, as acknowledged Examining the underlying documents, such no indicators of impairment. that there were to check recognized was provision the aged balances where no Testing Reviewing the underlying assumptions used to prepare the projections, such as the discount rate, revenue decline as the discount rate, revenue prepare the projections, such the underlying assumptions used to Reviewing contracts, where plans and existing assumptions with management’s the key corroborated We rate and gross margin. applicable; and performed used, factor discount the assessed and assessment of impairment methodology the Reviewing assumptions; in key of the changes sensitivity analysis less cost to sell, based on professional value fair determined by amounts were certain assets where the recoverable For and reliable, could be considered independent valuers whether these professional evaluate independent valuations, and and their basis of valuation; of the impairment test. the adequacy of the disclosures on the assumptions and the outcome Testing

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read In connection with our audit of the financial statements of the Group and of the Company, with the financial is materially inconsistent and, in doing so, consider whether the other information the other information obtained audit or otherwisestatements or our knowledge in the of the Group and of the Company appears to be materially misstated. Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do and information the other not cover Our opinion on the financial statements does of the Group and of the Company conclusion thereon. of assurance form any not express The directors of the Company are responsible for the other information. The other information comprises the information the information comprises information other The other information. the for are responsible Company the directors of The and our included in the annual report, but does not include the financial statements of the Group and of the Company report thereon. auditors’ (b) (c) (d) report thereon other than the financial statements and auditors’ Information Our audit procedures included, amongst others: Our audit procedures included, amongst (a) The Group is required to assess at the reporting date whether there is any objective evidence that the trade receivables that the trade receivables evidence objective date whether there is any Group is required to assess at the reporting The RM25 million which, and out of outstanding million receivables trade RM76 Group has end, the at year As impaired. is as it involves is significant to our audit impairment assessment of trade receivables The are passed due but not impaired. existence of considered include, the age of the balance, factors of the amount. Specific judgement on the collectively were information These of counterparties. on the creditworthiness and information patterns disputes, historical payment for a customer’s transaction or specific for impairment is required either for an allowance used to determine whether balance. overall Recoverability of trade receivables (Refer to Note 18 to the financial statements) to Note 18 (Refer of trade receivables Recoverability Our audit procedures included, amongst others: Our audit procedures (a) (b) (c) (d disclosures are included in Note 2.4(h) to conclusion on the impairment assessment and related of Directors’ Board The the financial statements. This area was importantwell as of the carryingto the significance audit due to our was area as equipment and plant of the value This in use computations. value for projections flow to the cash formulating assumptions in involved the significant judgment Key audit matters (contd.) audit matters Key to the financial statements) (contd.) 11 to Note and equipment (Refer Impairment of plant INDEPENDENT AUDITORS’ REPORT AUDITORS’ INDEPENDENT BERHAD (MALAYSIA) MELAYU OF UTUSAN MEMBERS TO THE IN MALAYSIA) (INCORPORATED FINANCIAL 66 l l l l we exercise professional professional judgementandmaintain scepticismthroughouttheaudit. We also: As partofanauditinaccordancewithapproved onauditinginMalaysia standards on andInternationalStandards Auditing, the basisofthesefinancialstatements. individually orintheaggregate,they couldreasonablybeexpectedtaken toinfluencetheeconomicdecisionsofuserson whenitexists.canarisefromfraudorerror andareconsideredmaterialif,a materialmisstatement Misstatements in accordancewithapproved onauditinginMalaysia standards on andInternationalStandards Auditing willalways detect that includesouropinion.Reasonable assuranceisahighlevel ofassurance,butisnotaguaranteethatanauditconducted Company whetherduetofraudorerror, asawholearefreefrommaterialmisstatement, andtoissueanauditors’ report oftheGroupand Our objectivesreasonableassuranceaboutwhetherthefinancialstatements aretoobtain Auditors’ responsibilities for theauditoffinancial statements Company ortoceaseoperations,have norealisticalternative buttodoso. concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Group’s andtheCompany’s asapplicable,matters to continueasagoingconcern,disclosing, ability relatedtogoing oftheGroupandCompany,In preparingthefinancialstatements thedirectorsareresponsible for assessingthe Company whetherduetofraudorerror. thatarefreefrommaterialmisstatement, oftheGroupand toenablethepreparationoffinancialstatements control asthedirectorsdetermineisnecessary and therequirements of theCompanies Standards Act 2016 inMalaysia. The directors are also responsiblefor such internal that give atrue andfair view inaccordancewithMalaysian FinancialReportingInternational Standards, The directorsoftheCompany areresponsibleforoftheGroupandCompany thepreparationoffinancialstatements Responsibilities ofthedirectors for thefinancialstatements are requiredtoreportthatfact. We have nothingtoreportinthisregard. If, basedonthework we have performed, we ofthisotherinformation, concludethatthereisamaterialmisstatement we Information andauditors’ otherthanthefinancial statements reportthereon(contd.) Key auditmatters (contd.) (INCORPORATED INMALAYSIA) TO THEMEMBERSOFUTUSANMELAYU(MALAYSIA)BERHAD INDEPENDENT AUDITORS’REPORT

events orconditionsmay causetheGrouporCompany toceasecontinueasagoing concern. Our conclusionsare based ontheaudit evidence uptothedateofour auditors’ obtained report.However, future ofthe Group and ofthe Companyfinancial statements or, if such disclosuresare inadequate, to modifyour opinion. exists, wematerial uncertainty arerequiredtodraw attention inourauditors’ reporttotherelateddisclosures inthe significant doubtontheGroup’s ortheCompany’s tocontinueasagoingconcern.If ability we concludethata exists relatedtoeventsthe auditevidencewhetheramaterialuncertainty obtained, orconditionsthatmay cast Conclude ontheappropriatenessofdirectors’ useofthegoingconcernbasisaccountingand,based on disclosures madeby thedirectors. Evaluate theappropriatenessofaccountingpoliciesusedandreasonableness estimatesandrelated Company’s internalcontrol. butnotforin thecircumstances, thepurposeofexpressing anopinionontheeffectiveness oftheGroup’s andthe ofinternalcontrolrelevant anunderstanding Obtain totheaudit inordertodesignauditproceduresthatareappropriate ortheoverrideintentional omissions,misrepresentations, ofinternalcontrol. resultingfromfraud ishigherthanformisstatement oneresulting fromerror, asfraudmay involve collusion,forgery, evidence thatissufficient and appropriate toprovide abasis for ouropinion. The riskofnotdetectingamaterial whether duetofraudorerror, designandperform auditproceduresresponsive audit tothoserisks,andobtain oftheGroupandCompany, ofthefinancialstatements Identify andassesstherisksofmaterialmisstatement UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 67 ANNUAL REPORT 2017 REPORT ANNUAL Muhammad Affan Bin Daud Affan Muhammad 03063/02/2020 J No. Accountant Chartered | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities of the entities or business financial information evidence regarding the appropriate audit Obtain sufficient for the direction, responsible We are opinion on the financial statements an of the Group. express within the Group to our audit opinion. remain solely responsible for We supervision of the group audit. and performance Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, financial statements and content of the and of the Company, of the Group presentation, structure the overall Evaluate represent the and whether the financial statementsincluding the disclosures, the Company of the Group and of presentation. fair that achieves in a manner and events underlying transactions

Young & Ernst 0039 AF: Accountants Chartered Malaysia Lumpur, Kuala April 2018 17 Other matters Section 266 of the Companies in accordance with as a body, Company, report is made solely to the members of the This of the content do not assume responsibilityfor other person to any We no other purpose. and for in Malaysia 2016 Act this report. In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiary of which we we report that the subsidiary we of which in Malaysia, 2016 Act the Companies In accordance with the requirements of to the financial statements. not acted as auditors, is disclosed in Note 14 have Report on the other legal and regulatory requirements Report on the other legal and regulatory l l Auditors’ responsibilities for the audit of the financial statements (contd.) of the financial statements the audit for responsibilities Auditors’ INDEPENDENT AUDITORS’ REPORT AUDITORS’ INDEPENDENT BERHAD (MALAYSIA) MELAYU OF UTUSAN MEMBERS TO THE IN MALAYSIA) (INCORPORATED From the matters communicated with the directors, we determine those matters that were of most significance in the in significance most of were that matters those determine we directors, the with communicated matters the From audit key the year and are therefore for the current audit of the financial statements of the Group and of the Company the about disclosure public precludes regulation or law unless report auditors’ our in matters these describe We matters. in our report should not be communicated determine that a matter circumstances, rare we or when, in extremely matter of to outweigh the public interest benefits be expected reasonably would consequences of doing so because the adverse communication. such We also provide the directors with a statement that we have complied with relevant ethical requirements regarding complied with relevant have a statementwith the directors that we provide also We to bear reasonably be thought that may them all relationships and other matters independence, and to communicate with related safeguards. on our independence, and where applicable, We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and the planned scope and regarding, communicate with the directors among other matters, We we identify during our audit. deficiencies in internal control that any significant significant audit findings, including FINANCIAL 68 FOR THEFINANCIALYEARENDED31DECEMBER2017 CONSOLIDATED STATEMENTOF Transportation costs Vendors’ commissions used Raw materialsandconsumables Other income Revenue to Net othercomprehensiveincome/(loss)tobereclassified periods: or lossinsubsequent profit Other comprehensiveincometobereclassified income Other comprehensive Loss fortheyear,tax netof tax operation, netof Loss fromdiscontinuing Discontinuing operation operations Loss fromcontinuing Income taxbenefit/(expense) tax Loss before associates Share ofresults Operating loss Finance costs Other expenses assets Amortisation ofintangible properties Depreciation ofinvestment Depreciation ofproperty,equipment plantand benefits expense Employee profit or loss in subsequent periods profit orlossinsubsequent Foreign currencytranslation Net gain/(loss)onavailable-for-sale financial assets: COMPREHENSIVE INCOME - Gain/(loss) on fair value changes - Gain/(loss)onfairvalue UTUSAN MELAYU (MALAYSIA) BERHAD Note 23 13 12 11 4 3 9 8 7 5 (116,830,007) 244,980,086 (25,256,769) (50,303,028) (10,255,868) (10,009,173) (38,546,185) (17,799,193) 13,156,568 (9,413,250) (8,356,668) (7,455,907) (7,455,907) | 2,799,961 (246,695) (731,868) (908,859) ANNUAL REPORT2017 29,629 41,749 12,120 2017 RM - (127,890,352) 227,418,579 (25,929,529) (67,508,484) (12,054,801) (66,725,478) (66,509,803) (43,405,837) (68,466,166) (68,430,268) (18,976,255) 12,308,767 (8,958,953) (1,704,790) (215,675) (903,604) (609,334) (11,729) (35,898) (77,717) (65,988) 2016 RM FINANCIAL RM 2016 (61.83) 69 (15,241) (592,924) (608,165) (685,882) (69,152,048) (68,466,166) (69,152,048) RM 2017 (6.73) ANNUAL REPORT 2017 REPORT ANNUAL (20,742) (283,383) (304,125) (262,376) | (7,718,283) (7,455,907) (7,718,283) 10 22 22 Note UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

- Remeasurement of opening balance - Remeasurement of - Remeasurement of experience losses

COMPREHENSIVE INCOME COMPREHENSIVE Actuarial losses on defined benefit obligations: Actuarial losses on defined to profit or loss in subsequent periods Loss per share attributable to owners of the parent (sen): Basic and diluted, for loss for the year Total comprehensive loss attributable to: Total Owners of the parent Loss attributable to: Owners of the parent Other comprehensive income Other comprehensive (contd.) income not to be reclassifiedOther comprehensive to profit or loss in subsequent periods: Net other comprehensive loss not to be reclassified other comprehensive loss for the year Total comprehensive loss for the year Total The accompanying accounting policies and explanatory information form an integral part of the financial statements. form accounting policies and explanatory information accompanying The

DECEMBER 2017 (CONTD.) YEAR ENDED 31 FOR THE FINANCIAL CONSOLIDATED STATEMENT OF STATEMENT CONSOLIDATED FINANCIAL 70 AS AT31DECEMBER2017 CONSOLIDATED STATEMENTOF Intangible assets Investment properties Property,equipment plantand Non-current assets Assets Investment securities associates Investments in Total equity Accumulated losses Other reserves Share premium Share capital Equity attributabletoownersoftheparent and liabilities Equity Total assets Assets classifiedasheld-for-sale balances Cash andbank Investment securities Tax recoverable Trade andotherreceivables Inventories Current assets assets Retirement benefit Other receivables assets Deferred tax FINANCIAL POSITION

UTUSAN MELAYU (MALAYSIA) BERHAD Note 13 12 11 16 15 27 26 23 21 16 18 20 22 18 17 209,065,872 161,436,999 423,950,481 117,236,665 306,713,816 | (65,566,786) 85,911,338 95,784,898 17,788,024 83,825,089 14,610,618 1,231,668 3,830,329 2,194,892 3,242,607 ANNUAL REPORT2017 691,265 545,845 549,264 463,670 (85,315) 2017 RM - - 228,444,090 103,503,181 110,733,837 405,701,403 116,176,336 288,628,671 (57,806,754) 50,705,247 32,858,744 66,312,865 15,380,274 50,703,162 1,423,133 1,267,548 3,776,618 1,928,039 (127,064) 861,539 968,325 656,128 222,457 896,396 2016 RM FINANCIAL RM 71 2016 137,058 536,861 201,375 20,000,000 50,704,007 123,222,557 143,359,615 107,396,364 158,637,232 302,198,222 405,701,403 - - - - RM 2017 ANNUAL REPORT 2017 REPORT ANNUAL | 93,025,171 93,025,171 63,984,893 171,155,519 423,950,481 235,140,412 328,165,583 25 17 24 24 25 23 Note UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

FINANCIAL POSITION FINANCIAL Other payables Deferred tax liabilities Current liabilities Loans and borrowings Non-current liabilities Loans and borrowings and other payables Trade Tax payables Tax Liabilities classified as held-for-sale equity and liabilities Total Total liabilities Total The accompanying accounting policies and explanatory information form an integral part of the financial statements. form accounting policies and explanatory information accompanying The

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

UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017

------Attributable to owners of the parent ------Non-distributable ------Distributable ------Non-distributable ------Retained Foreign earnings/ Fair value currency Share Share (accumulated Other adjustment translation Total capital premium losses) reserves reserve reserve equity Note RM RM RM RM RM RM RM At 1 January 2017 110,733,837 50,703,162 (57,806,754) (127,064) (410,424) 283,360 103,503,181 Loss for the year - - (7,455,907) - - - (7,455,907) Other comprehensive loss - - (304,125) 41,749 12,120 29,629 (262,376) Transferred Pursuant to the Companies Act 2016 26 50,703,162 (50,703,162) - - - - - Total comprehensive loss 50,703,162 (50,703,162) (7,760,032) 41,749 12,120 29,629 (7,718,283) At 31 December 2017 161,436,999 - (65,566,786) (85,315) (398,304) 312,989 95,784,898

At 1 January 2016 110,733,837 50,703,162 11,267,577 (49,347) (344,436) 295,089 172,655,229 Loss for the year - - (68,466,166) - - - (68,466,166) Other comprehensive loss - - (608,165) (77,717) (65,988) (11,729) (685,882) Total comprehensive loss - - (69,074,331) (77,717) (65,988) (11,729) (69,152,048) At 31 December 2016 110,733,837 50,703,162 (57,806,754) (127,064) (410,424) 283,360 103,503,181

The accompanying accounting policies and explanatory information form an integral part of the financial statements. 72 FINANCIAL - - - - RM 2016 4,308 7,992 1,575 73 15,119 76,132 84,460 48,000 (35,898) (83,510) (29,148) 289,795 609,334 903,604 215,675 103,000 (862,610) (300,184) (252,346) 2,890,627 8,958,953 2,319,059 (1,251,325) (3,740,070) 18,976,255 (66,725,478) (66,761,376) (37,776,681) - - - - RM 2017 2,477 29,400 58,751 48,000 (30,128) (27,956) (27,426) 109,000 183,318 908,859 731,868 246,695 (323,130) (203,853) (728,707) (735,000) 2,669,562 8,356,668 4,543,726 1,001,752 (1,167,588) (2,840,571) 17,799,193 (10,255,868) (10,255,868) (32,364,705) (12,015,663) ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

From discontinuing operation Impairment loss on trade and other receivables From continuing operation Reversal of impairment loss on trade and other receivables Impairment loss on investment in associates investment Gain on disposal of held-for-trading investment Net fair value loss on held-for-trading Gain on disposal of a subsidiary Gain on disposal of asset held-for-sale plant and equipment written off Property, Gain on disposal of investment property Loss on disposal of other investment Provision for retirement benefits Interest income Interest expenses plant and equipment Depreciation of property, - from continuing operation - from discontinuing operation Depreciation of investment properties Amortisation of intangible assets Inventories written off Inventories written down Creditors written off plant and (Gain)/loss on disposal of property, equipment plant and equipment Impairment loss on property, Impairment loss on other investment Share of results of associates litigations (Reversal of)/provision for Reversal of provision for returns Dividend income Adjustments for: Cash flows from operating activities Loss before taxation

Operating loss before working capital changes

CONSOLIDATED STATEMENT OF CASH FLOWS OF CASH STATEMENT CONSOLIDATED 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 74 FOR THEFINANCIALYEARENDED31DECEMBER2017(CONTD.) CONSOLIDATED STATEMENTOFCASHFLOWS Net cash(usedin)/generatedfrominvestingactivities Dividends received Disposal ofdiscontinuedoperation,netcashandbankbalances Proceeds fromdisposalofnon-currentassetclassifiedasheld-for-sale Proceeds fromdisposalofproperty, plantandequipment Purchase ofinvestmentproperties(b) Purchase ofproperty, plantandequipment(a) Interest received Proceeds fromdisposalofotherinvestment Proceeds fromdisposalofheld-for-trading investment Purchase ofotherinvestment Purchase ofsecuritiesinheld-for-trading investment Cash flowsfrominvestingactivities Net cashgeneratedfrom/(usedin)operatingactivities Taxes refunded Real propertygaintaxpaid Taxes paid Interest paid Payment ofretirementbenefits Cash generatedfrom/(usedin)operations Increase inpayables Increase ininventories (Increase)/decrease inreceivables Operating lossbeforeworkingcapitalchanges(contd.) Cash flowsfromoperatingactivities(contd.) UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 (18,382,927) (12,015,663) 12,966,950 47,986,087 (1,393,410) (1,229,240) (8,226,085) (4,620,547) 3,849,231 (777,887) (499,045) (979,405) (416,587) 203,853 831,314 504,358 27,426 19,486 30,683 2017 RM - - - - (24,803,410) (12,788,210) (37,776,681) 50,174,384 43,002,008 20,107,256 (8,907,705) (1,181,994) (1,117,750) (2,501,480) 7,344,810 2,035,884 6,063,209 (504,442) (845,019) (718,793) (186,912) 300,184 299,690 (75,000) 29,148 4,561 2016 RM - FINANCIAL - - RM RM RM 2016 2016 2016 75 845,019 504,442 845,019 (51,499) (11,729) (20,042) (521,032) 4,279,047 3,774,605 4,789,835 30,811,535 26,084,928 (20,581,139) (20,040,065) - RM RM RM 2017 2017 2017 (2,647) 29,629 973,887 443,670 777,887 196,000 302,259 1,229,240 40,611,997 38,939,087 16,043,074 30,811,535 (14,798,090) (17,253,911) (17,553,523) ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

- (also known as “TRAX building”) (Note 31) Additions (Note 12) Disposal of land in exchange for investment properties Additions (Note 11) Loan and borrowing (Note 24) Cash Hire purchase payables (Note 24) Cash The additions in investment properties were acquired by way of: way acquired by properties were additions in investment The The additions in property, plant and equipment were acquired by way of: way acquired by plant and equipment were additions in property, The

Cash and cash equivalents at 31 December (Note 21) Cash and cash equivalents at 31 December Cash and cash equivalents at 1 January Effects of foreign exchange rate changes 14) (Note held-for-sale Cash and cash equivalents classified Net (decrease)/increase in cash and cash equivalents Net (decrease)/increase in cash and cash Repayment of hire purchase payables Repayment of hire purchase of pledged fixed deposits Withdrawal/(placement) activities Net cash used in financing Cash flows from financing activities Cash flows from financing Repayment of borrowings Note: The accompanying accounting policies and explanatory information form an integral part of the financial statements. form accounting policies and explanatory information accompanying The (b)

(a)

CONSOLIDATED STATEMENT OF CASH FLOWS OF CASH STATEMENT CONSOLIDATED (CONTD.) 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 76 The accompanying information accounting policiesandexplanatory form anintegralpartofthefinancialstatements. FOR THEFINANCIALYEARENDED31DECEMBER2017 STATEMENT OFCOMPREHENSIVEINCOME periods: or lossinsubsequent profit Other comprehensiveincometobereclassified income Other comprehensive Loss fortheyear,tax netof Income taxexpense tax Loss before Finance costs Other expenses assets Amortisation ofintangible properties Depreciation ofinvestment Depreciation ofproperty,equipment plantand benefits expense Employee Transportation costs Vendors’ commissions used Raw materialsandconsumables Other income Total comprehensivelossfortheyear be Net othercomprehensiveincome/(loss)to Revenue Totalyear othercomprehensivelossforthe be Net othercomprehensivelossnotto periods: profit orlossinsubsequent to Other comprehensiveincomenottobereclassified Net gain/(loss)onavailable-for-sale assets: financial reclassified to profit or loss in subsequentperiods reclassified toprofitorlossin reclassified to profit or loss in subsequentperiods reclassified toprofitorlossin Actuarial lossesondefinedbenefitobligations: - Gain/(loss) on fair value changes - Gain/(loss)onfairvalue - Remeasurementofexperiencelosses - Remeasurementofopeningbalance UTUSAN MELAYU (MALAYSIA) BERHAD Note 13 12 11 22 22 9 8 7 5 4 3 197,843,234 (21,316,857) (21,316,857) (46,846,306) (99,225,157) (23,644,448) (45,012,984) (17,218,873) (21,615,018) 30,800,726 (7,842,923) (9,402,646) | (283,383) (648,866) (118,614) (298,161) (304,125) (20,742) ANNUAL REPORT2017 5,964 5,964 2017 RM - (103,729,297) 190,035,859 (67,310,162) (67,310,162) (44,890,602) (23,390,208) (56,724,572) (12,029,601) (18,183,474) (67,980,790) 11,589,659 (9,078,777) (592,924) (854,908) (670,628) (608,165) (15,241) (54,241) (62,463) (62,463) 2016 RM - FINANCIAL RM 2016 77 69,000 27,366 (21,604) 1,874,879 1,168,474 4,230,000 3,776,618 Re-stated 34,492,732 12,396,619 80,980,975 50,703,162 58,202,382 10,381,974 317,016,036 110,733,837 224,888,724 236,035,061 (126,922,663) - - RM 2017 33,330 ANNUAL REPORT 2017 REPORT ANNUAL (15,640) 519,608 | 3,072,949 3,230,002 3,830,329 3,277,470 9,475,254 12,877,714 98,531,616 111,079,819 328,089,315 161,436,999 206,118,757 217,009,496 (148,543,645) 27 21 26 11 13 14 15 16 22 18 12 20 Note UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Total equity Total Total assets Total Other reserves Accumulated losses Cash and bank balances Equity and liabilities Equity attributable to owners of the parent Share capital Share premium Assets Non-current assets plant and equipment Property, Intangible assets Investments in subsidiaries Investments in associates Investment securities Retirement benefit assets and other receivables Trade

Investment properties Current assets Inventories

STATEMENT OF FINANCIAL POSITION OF FINANCIAL STATEMENT 2017 31 DECEMBER AS AT FINANCIAL 78 The accompanying information accounting policiesandexplanatory form anintegralpartofthefinancialstatements. AS AT31DECEMBER2017(CONTD.) STATEMENT OFFINANCIALPOSITION Totalliabilities equityand Total liabilities Tradepayables andother and borrowings Loans Current liabilities Other payables and borrowings Loans Non-current liabilities UTUSAN MELAYU (MALAYSIA) BERHAD Note 25 24 25 24 | ANNUAL REPORT2017 231,841,852 175,474,380 328,089,315 315,211,601 56,367,472 83,369,749 82,775,238 594,511 2017 RM 149,574,125 105,545,649 132,949,179 111,783,430 317,016,036 282,523,304 44,028,476 21,165,749 Re-stated 2016 RM FINANCIAL

UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017

------Non-distributable ------Distributable ---- - Non-distributable - Fair value Share Share Accumulated adjustment Total capital premium losses reserve equity Note RM RM RM RM RM At 1 January 2017 110,733,837 50,703,162 (126,922,663) (21,604) 34,492,732 Loss for the year - - (21,316,857) - (21,316,857) Other comprehensive loss - - (304,125) 5,964 (298,161) Transferred pursuant to the Companies Act 2016 26 50,703,162 (50,703,162) - - - Total comprehensive loss 50,703,162 (50,703,162) (21,620,982) 5,964 (21,615,018) At 31 December 2017 161,436,999 - (148,543,645) (15,640) 12,877,714

At 1 January 2016 110,733,837 50,703,162 (59,004,336) 40,859 102,473,522 Loss for the year - - (67,310,162) - (67,310,162) Other comprehensive loss - - (608,165) (62,463) (670,628) Total comprehensive loss - - (67,918,327) (62,463) (67,980,790) At 31 December 2016 110,733,837 50,703,162 (126,922,663) (21,604) 34,492,732

The accompanying accounting policies and explanatory information form an integral part of the financial statements. 79 FINANCIAL 80 FOR THEFINANCIALYEARENDED31DECEMBER2017 STATEMENT OFCASHFLOWS

Adjustments for: taxation Loss before activities Cash flowsfromoperating

Net cash used in operating activities Net cashusedinoperating Interest paid benefits Payment ofretirement Cash usedinoperations in payables Increase Increase ininventories receivables (Increase)/decrease in changes Operating lossbeforeworkingcapital Addition/(reversal of) provision for returns Addition/(reversal of)provisionfor (Reversal of)/provisionfor litigations Interest income benefits Provision forretirement associate Impairment lossoninvestmentinan subsidiary Impairment lossoninvestmentina receivables Reversal ofimpairmentlossontradeandother receivables Impairment lossontradeandother Gain on disposal of property, plant and equipment Gain ondisposalofproperty, plantand written down Inventories Impairment lossonproperty,equipment plantand assets Amortisation ofintangible properties Depreciation ofinvestment Depreciation ofproperty,equipment plantand Interest expenses Dividend income investment Loss ondisposalofother UTUSAN MELAYU (MALAYSIA) BERHAD UTUSAN MELAYU (MALAYSIA) BERHAD | | ANNUAL REPORT2017 ANNUAL REPORT2017 (21,316,857) (15,607,318) (46,480,487) (23,900,000) 17,218,873 49,883,440 (7,841,223) (7,349,508) (3,567,204) (7,185,257) 1,000,000 6,766,648 4,473,924 1,001,752 7,842,923 (735,000) (600,427) (416,587) 212,363 109,000 648,866 118,614 (55,262) (29,425) 58,751 2017 RM - (67,310,162) (11,735,545) (41,319,030) (21,382,034) 18,183,474 20,166,205 (2,758,979) (8,927,696) (4,000,000) 2,456,109 2,315,991 9,078,777 9,781,022 (213,402) (175,239) (363,742) (718,793) 103,000 854,908 84,460 54,241 7,992 (200) 2016 RM - - - FINANCIAL - - - 81 RM RM 200 2016 2016 2,008 770,361 770,361 113,423 (119,096) (770,361) 5,977,543 6,419,076 12,396,619 46,345,270 47,000,000 (18,544,160) (18,425,064) - (2) RM RM 2017 2017 9,817 29,427 946,398 750,398 196,000 (51,804) (40,000) (750,398) 3,072,949 (9,323,670) 12,396,619 23,148,844 23,900,000 (16,865,196) (16,813,392) ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Additions (Note 11) Cash Hire purchase payables (Note 24) The additions in property, plant and equipment were acquired by way of: way acquired by plant and equipment were additions in property, The

Cash and cash equivalents at 31 December (Note Cash and cash equivalents at 31 December 21) Cash and cash equivalents at 1 January Net (decrease)/increase in cash and cash Net (decrease)/increase in cash and cash equivalents Repayment of hire purchase payables Net cash used in financing activities Cash flows from financing activities Repayment of borrowings Net cash generated from investing activities Cash flows from investing activities Investment in a subsidiary Investment in an associate of unquoted Proceeds from disposal investment plant and Purchase of property, equipment (a) plant and Proceeds from disposal of property, equipment Dividend received Interest received Note: The accompanying accounting policies and explanatory information form an integral part of the financial statements. form accounting policies and explanatory information accompanying The

(a)

STATEMENT OF CASH FLOWS OF CASH STATEMENT (CONTD.) 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 82 2. 1. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANTPOLICIES ACCOUNTING CORPORATE INFORMATION 2.1 directors on17 April 2018. The financialstatements were authorised for issue by the Board ofdirectorsinaccordancewitharesolutionthe There have beennosignificant changes inthenature oftheprincipalactivitiesduringfinancial year. activities ofthesubsidiariesaredescribedinNote14 tothefinancialstatements. The principalactivitiesofthe Company arethepublication,printinganddistributionofnewspapers. The principal is locatedat44Jalan Utusan Off Jalan ChanSowKuala Lin,55200 Lumpur. Market ofBursaMalaysia SecuritiesBerhad. The registeredoffice andtheprincipalplaceofbusinessCompany The Company company, isapubliclimitedliability incorporatedanddomiciledinMalaysia, andislistedontheMain the Groupcontinuestooperateasagoingconcerninforeseeable future. current operations. The Directorsbelieve thattheresultofbusinessrationalisationexercise willensurethat changes intheprintmediaindustry. This exercise includes venturing intonew businessesandrationalisationof The Groupiscurrently undergoingabusiness rationalisationexercise todetermineitsstrategic directionfollowing (2016: RM67,980,790) respectively. comprehensivealso incurred total lossduringtheyear ofRM7,718,283 (2016: RM69,152,048) andRM21,615,018 (2016: RM42,460,896)andRM120,762,033 (2016: RM68,593,150) respectively. The Groupandthe Company As at 31 December 2017, the Group and the Company has net current liabilitiesof RM117,903,747 The arepresentedinRinggitMalaysia financialstatements (RM). actuarial gainsandlossesinaccordancewithMFRS 119 Employee Benefits. MFRS 139 FinancialInstruments: Recognition andMeasurement,theretirementbenefit obligationsinclude financialinstrumentsprepared onthehistoricalcostbasis.Certain arecarried at fair value inaccordancewith The otherthan financialstatements, forinstruments andretirementbenefit obligations, have been International FinancialReporting andtheprovisions Standards oftheCompanies Act, 2016 inMalaysia. Financial Reporting (“MFRS”) Standards asissuedby Malaysian Accounting Board Standards (“MASB”), The oftheGroupandCompany financialstatements have beenpreparedinaccordancewithMalaysian Basis ofpreparation UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 83 or after Effective for beginning on 1 January 2017 1 January 2017 1 January 2017 annual periods ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN Clarification of the scope of disclosure requirements in MFRSClarification of the scope of disclosure requirements 12

(Amendments to MFRS 112) in Other Amendments to MFRS 12 Disclosure of Interests Entities:

MFRS and Amendments to MFRSs MFRS and Amendments to 107) to MFRS MFRS 107 Disclosure Initiative (Amendments Assets for Unrealised Losses MFRS 112 Recognition of Deferred Tax Annual Improvements to MFRS Standards 2014–2016 Cycle - Cycle Annual Improvements to MFRS Standards 2014–2016 Adoption of the above new or amended standards did not have any effect on the financial performance or the on the financial performance effect any or amended standards new did not have of the above Adoption position of the Group and of the Company. 107) MFRS (Amendments to Initiative Disclosure 107 MFRS enable that disclosures entityan requires Statement provide to Flows Cash of 107 MFRS to amendments The both including activities, financing from arising liabilities changes in evaluate of financial statementsusers to are changes. On initial application of these amendments, entities cash and non- flows arising from cash changes application of these amendments has The preceding periods. for information comparative not required to provide had no impact on the Group. 112) MFRS Losses (Amendments to Unrealised Assets for Tax Recognition of Deferred 112 MFRS clarify that an entity amendments the sources of taxable needs to consider whether tax restricts The law profits Furthermore, of that deductible temporary deductions on the reversal difference. make it may against which the explain and taxable an entity profits should determine future guidance on how the amendments provide for more than their carrying include the recovery of some assets may taxable profit circumstances in which amount. assess the already of these amendments has had no impact on the Group as the Company application The these amendments. way that is consistent with in a taxable profits of future sufficiency Changes in accounting policies Changes follows: as except year financial are consistent with those of the previous accounting policies adopted The mandatory amended MFRS and for new the following adopted the Group and the Company On 1 January 2017, January 1 2017. beginning on or after annual financial periods

2.2 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 84 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.3 standards, ifapplicable,whentheystandards, becomeeffective. and theCompany’s aredisclosedbelow. financialstatements The GroupandtheCompany intendtoadoptthese that are issued but not yetThe and interpretations effective standards up to the date of issuance of the Group’s MFRS and Amendments to MFRS issuedbutnotyet effective Amendments toMFRS10and128Saleor Contribution Contracts MFRS 17Insurance IC Interpretation23UncertaintyoverIncomeTaxTreatments MFRS 119PlanAmendment,CurtailmentorSettlement Annual ImprovementstoMFRSStandards2015–2017 Cycle Ventures MFRS 128Long-termInterestsinAssociatesandJoint 16 Leases MFRS MFRS 9PrepaymentFeatureswithNegative Compensation IC Interpretation22ForeignCurrencyTransactionsand Advance Consideration Annual ImprovementstoMFRSStandards2014–2016 Cycle 140) MFRS 140TransfersProperty (AmendmentstoMFRS ofInvestment MFRS 15RevenuefromContractswith Customers MFRS 9Financial Instruments Payment MFRS 2ClassificationandMeasurementofShare-based MFRS andAmendmentsto MFRSs (Amendments toMFRS119) of Assets between an Investor and its Associate or Joint Venture of AssetsbetweenanInvestoranditsAssociateorJoint 128) (Amendments toMFRS 9) (Amendments toMFRS Transactions2) (AmendmentstoMFRS UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 annual periods 1 January2019 1 January2019 1 January2019 1 January2019 1 January2019 1 January2019 1 January2019 1 January2018 1 January2018 1 January2018 1 January2018 1 January2018 1 January2018 beginning on Effective for Deferred or after FINANCIAL 85 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN Classification and measurement sheet or equity a significant impact on its balance on applying the classification Group does not expect The all financial value to continue measuring at fair expects 9. It and measurement requirements of MFRS value. held at fair assets currently rise to cash expected to give and are cash flows are held to collect contractual and receivables Loans cash the contractual analysed The Company of principal and interest. representing solely payments flows amortised cost for meet the criteria and concluded that they characteristics of those instruments flow is not required. for these instruments reclassification Therefore, 9. measurement under MFRS on all trade receivables. expected losses lifetime and record approach Group will apply the simplified The

MFRS 15 Revenue from Contracts with Customers Contracts from 15 Revenue MFRS arising from contracts with customers. model that will apply to revenue establishes five-step a new 15 MFRS 111 MFRS Revenue, 118 recognition guidance including MFRS revenue will supersede the current 15 MFRS Contracts and the related interpretations when it becomes effective. Construction of promised depict the transfer which is that an entity should recognise revenue 15 of MFRS core principle The expects to the entity to which goods or services the consideration to customers in an amount that reflects when (or an entity recognises revenue those goods or services. for 15, Under MFRS be entitled in exchange services or the goods of “control” underlying the particular i.e when satisfied, is obligation a performance as) to the customer. obligation is transferred performance method. the full retrospective date using standard plans to adopt the new on the required effective Group The financial statement and standard of applying the new on the Group’s the effects assessed have directors The information available assessment is based on currently The material impact on the Group. any have will not they being made available arising from further reasonable and supportable information subject to changes be and may 15. when the Group adopts MFRS to the Group in 2018 MFRS and Amendments to MFRS issued but not yet effective (contd.) effective but not yet issued MFRS to Amendments and MFRS statements no material impact on the financial and of the of the Group will have adoption of the above The discussed below: as application, except in the period of initial Company 9 Financial Instruments MFRS hedge accounting. and impairment and measurement, classification for requirements new introduces 9 MFRS permitted. with early application 1 January 2018, periods beginning on or after annual for 9 is effective MFRS assessment is based The is not compulsory. information application is required, but comparative Retrospective arising from further reasonable and supportable be subject to changes and may information available on currently 9. when the Group adopts MFRS to the Group in 2018 being made available information facts on the basis of 2017 financial assets and liabilities as at 31 December of the Group’s on the analysis Based 9 to the assessed the impact of MFRS the directors of the Group have at that date, and circumstances that exist follows: financial statements as Group’s (i) (ii) Impairment

2.3 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 86 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.3 impact ontheGroup’s andtheCompany’s financialstatement. on orafter 2019, 1 January withearlierapplicationpermitted. These amendmentswillnothave asignificant The amendmentsshouldbeappliedprospectivelyor settlements toplanamendments,curtailments thatoccur orsettlementa planamendment,curtailment affect the asset ceilingrequirements. which occurs duringthereportingperiod. The amendmentsalsoclarifyhow therequirementsfor accountingfor net interest for the remainder of the annualreporting period after orsettlement, aplan amendment, curtailment The costand amendmentsrequireentitiestousetheupdatedactuarial assumptionstodeterminecurrent service MFRS 119 Plan Amendment, Curtailment orSettlement (Amendmentsto MFRS 119) or amodified retrospective approach. not before appliesMFRS anentity 15. A lesseecanchoose usingeitherafullretrospective toapplythestandard MFRS 16 iseffective for annualperiodsbeginningonorafter 2019. 1January Earlyapplicationispermitted but extensive disclosuresthanunderMFRS 117. ofleases:operatingandfinanceleases.MFRStwo types 16 alsorequires lesseesandlessorstomake more continue toclassifyallleasesusingthesameclassificationprincipleasinMFRS 117 anddistinguishbetween Lessor accountingunderMFRS 16 thesameasaccountingunderMFRS issubstantially 117. Lessors will presented asfinancingcash flows) andaninterestportion(which willbepresentedasoperatingcash flows). operating cash flows, whereas under MFRS 16, the lease payments will be split into a principal (which will be Classification ofcash flows willalsobe affected asoperatinglease payments underMFRS 117 arepresentedas for interestandleasepayments, aswell astheimpactofleasemodifications. at presentvalue oftheleasepayments thatarenotpaidatdate.Subsequently, isadjusted theleaseliability impairment losses,adjustedfor any remeasurementoftheleaseliability. The isinitiallymeasured leaseliability exceptions),at costandsubsequentlymeasured(subjecttocertain lessaccumulateddepreciationand representing therighttouseunderlyingassetduringleaseterm. The right-of-useasset isinitiallymeasured tomakeAt thecommencementdateofalease,lesseewillrecogniseliability leasepayments andanasset on- balancesheetmodelsimilartotheaccountingfor financeleasesunderMFRS 117. anddisclosureofleasesrequireslesseestoaccountformeasurement, presentation allleasesunderasingle of Transactions Involving the Legal Form of a Lease. MFRS 16 sets out the principles for the recognition, Lease, 115 ICInterpretation OperatingLease-Incentives 127 andICInterpretation Evaluating theSubstance MFRS 16 willreplaceMFRS 117 Leases,4Determiningwhetheran a ICInterpretation Arrangement contains MFRS 16Leases MFRS and Amendments to MFRS issuedbutnotyet effective (contd.) UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 87 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the to the size rights relative holding of voting of the Company’s size The holders; other vote holders or other parties; other vote the Company, rights held by voting Potential and arrangements; Rights arising from other contractual the has, or does not have, and circumstances that the Company additional facts that indicate Any activities at the time that decisions need to be made, including abilitycurrent to direct the relevant meetings. shareholders’ at previous patterns voting Power over the investee (such as existing rights that give it the current ability to direct the relevant ability current the it relevant the direct to give that rights existing as (such the investee over Power activities of the investee); and with the investee; from its investment returns Exposure, or rights, to variable its returns. to affect the investee over ability to use its power The Subsidiaries are consolidated when the Company obtains control over the subsidiary obtains Company control over and ceases when the Subsidiaries are consolidated when the and unrealised gains intra-group balances, income and expenses All of the subsidiary. loses control Company are eliminated in full. Unrealised losses are eliminated in and losses resulting from intra- group transactions of impairment. no evidence that there is as unrealised gains, but only to the extent the same way if that results in a deficit to the non-controlling interests even within a subsidiaryLosses attributed are balance. interests in subsidiaries that do not result in the Group losing control over ownership Changes in the Group’s interests and carryingThe Group’s of the amounts equityas transactions. for are accounted the subsidiaries the subsidiaries. interests in changes in their relative the the non-controlling interests are adjusted to reflect of the Company. to owners is recognised directly in equity and attributed difference resulting The (i) the between a gain or loss calculated as the difference When the Group loses control of a subsidiary, retained of any interest and (ii) value and the fair of the consideration received value aggregate of the fair carryingthe previous assets and liabilities of the subsidiary amount of the non-controlling interest, and any has been recognised in other which gain or loss cumulative The subsidiary’s or loss. is recognised in profit applicable, where or loss or profit to equityin accumulated and income reclassified are comprehensive retained subsidiary former in the investment of any value fair The directly to retained earnings. transferred at the date control is lost is regarded as the cost on initial recognition of the investment. When the Company has less than a majority of the voting rights of an investee, the Company considers the Company rights of an investee, has less than a majority of the voting When the Company to give are sufficient rights in an investee voting in assessing whether or not the Company’s the following the investee: over it power (i) (ii) (iii) (iv) (ii) (iii) Basis of consolidation statementsfinancial consolidated and its financial the comprise The Company the of statements financial statements subsidiaries used in the preparation of The of the reporting date. subsidiaries as at the Consistent same reporting date as the Company. statementsfor the the consolidated financial are prepared in similar circumstances. and events transactions like are applied for accounting policies has all the following: if and only if the Company controls an investee Company The (i)

Summary of significant accounting policies Summary of significant (a)

2.4 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 88 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.4 (c) Subsidiaries (b) Summary ofsignificantaccountingpolicies(contd.)

(iii) (ii) (i) over isanentity whichA subsidiary theGrouphas allthefollowing: the difference isrecognisedinprofit orloss. liabilities assumed.Ifthisconsiderationislower thanfairacquired, value ofthenetassetssubsidiary and theamountrecognisedfor non-controllinginterestsover thenetidentifiable assetsacquiredand Goodwill isinitiallymeasuredatcost,beingtheexcess oftheaggregateconsiderationtransferred interestintheacquireeisremeasuredtofairheld equity value attheacquisitiondatethroughprofit orloss. If thebusinesscombinationis achieved the acquisition date fair in stages, value of the acquirer’s previously contracts by theacquiree. pertinent conditionsasattheacquisitiondate. This includestheseparationofembeddedderivatives inhost classification anddesignationinaccordancewiththecontractual and terms,economiccircumstances When the Group acquires a business, it assesses the financial assetsand liabilities assumed for appropriate MFRS. consideration doesnotfall withinthescopeofMFRS 139, itismeasuredinaccordancewiththeappropriate be remeasured.Subsequentsettlement isaccountedfor withinequity. wherethe contingent Ininstances change toothercomprehensive income.Ifthecontingentconsiderationisclassified asequity, itwillnot to beanassetorliability, willberecognisedinaccordancewithMFRS 139 eitherinprofit orlossasa acquisition date.Subsequentchanges inthefair value ofthecontingentconsiderationwhich isdeemed Any contingentconsideration to be transferred by the acquirer will be recognised at fair value at the and includedinadministrative expenses. the proportionateshareofacquiree’s identifiable netassets. Transaction costsincurred are expensed transaction basiswhethertomeasurethenon-controllinginterestsinacquireeeitheratfair value orat and the amount of any non-controlling interests in the acquiree. The Group elects on a transaction-by- is measuredastheaggregateofconsiderationtransferred, measuredatacquisitiondatefair value Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of an acquisition Business Combinations profit orloss. investment, thedifferencein recognised amounts is carrying their betweennetdisposalproceeds and recognition andmeasurementofimpairmentlossesisinaccordance withNote2.4(h).Ondisposalofsuch The Company’s investment atcostlessimpairmentlosses. insubsidiariesarestated The policyfor the The touseitspower ability over theinvestee toaffect itsreturns. Exposure, orrights,tovariable returns fromitsinvestment withtheinvestee; and of theinvestee); Power over the investee (i.e.existing rightsthat give todirecttherelevant itthecurrent ability activities UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 89 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less measured at cost less is recognition, goodwill initial at cost. Following measured initially is Goodwill accumulated impairment losses. the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to For from the synergies of the to benefit cash-generating units that are expected of the Group’s each combination.

An associate is an entity in which the Group has significant influence. Significant influence is the power to influence is the the Group has significant influence. Significant An associate is an entity in which is not control or joint control but of the investee and operating policy decisions participate in the financial those policies. over share the Group’s over of investment of the cost excess any in associate, investment On acquisition of an and goodwill as recognised is investee the of liabilities and assets identifiable the of value fair net the of value fair the net of share Group’s the of excess Any carryingthe in included investment. the of amount from the excluded is the cost of investment over assets and liabilities of the investee of the identifiable of the Group’s and is instead included as income in the determination carrying amount of the investment is acquired. the investment for the period in which or loss profit or joint venture’s share of the associate’s becomes an associate. the investee An associate is equity from the date on which accounted in an associate is recognised at cost, and Under the equity initial recognition the investment method, on other and loss or profit the of share carryingthe Group’s the recognise to decreased or increased is amount share of losses in When the Group’s the date of acquisition. income of the associate after comprehensive the Group does not recognise further losses, its interest in the associate, an associate equal or exceeds on behalf of the associate. or made payments obligations legal or constructive unless it has incurred transactions between the Group and its upstream and downstream and losses resulting from Profits investors’ unrelated of extent statementsfinancial the to only Group’s the in recognised are associate of an evidence are eliminated unless the transaction provides interests in the associate. Unrealised losses impairment of the asset transferred. financial statements are prepared as of the same reporting date as the Company. The of the associates to bring the accounting policies in line with those of the Group. adjustments are made Where necessary, Recognition Financial Instruments: equity 139 application of the method, the Group applies MFRS After necessaryis it whether determine to Measurement and with loss impairment additional any recognise to the entire carrying amount When necessary, in the associate or joint venture. respect to its net investment as a single Assets Impairment of 136 impairment in accordance with MFRS is tested for of the investment less costs to sell) with value in use and fair amount (higher of value comparing its recoverable asset, by of an impairment loss is Reversal or loss. impairment loss is recognised in profit its carryingAny amount. subsequently increases. amount of the investment that the recoverable recognised to the extent for at cost less in associates are accounted statements, separate financial investments In the Company’s between net disposal proceeds and the difference investments, impairment losses. On disposal of such or loss. their carrying amounts is included in profit Intangible assets (i) Goodwill

Summary of significant accounting policies (contd.) Summary of significant (d) Associates (e)

2.4 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 90 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.4 (e) Summary ofsignificantaccountingpolicies(contd.) (ii) (i) Intangible assets(contd.) l or losswhentheassetisderecognised. amountoftheassetandarerecognisedinprofitbetween thenetdisposalproceedsandcarrying assetaremeasuredasthedifferenceGains orlossesarisingfromderecognitionofanintangible useful life fromindefinitetofiniteismadeonaprospective basis. to determinewhethertheusefullife Ifnot, thechange assessmentcontinuestobesupportable. in amortised. The usefullife assetwithanindefiniteusefullife ofanintangible isreviewed annually be impairedeitherindividuallyoratthecash-generatingunitlevel. Such assetsare not intangible annually, value ormorefrequentlyiftheevents may indicatethatthecarrying andcircumstances assetswithindefiniteusefullivesIntangible ornot yet available for usearetested for impairment lives isrecognisedinprofit orloss. treated aschanges inaccountingestimates. The amortisation expense assets withfinite onintangible in theassetisaccountedfor by changing theamortisationperiodormethod,asappropriate,andare expected usefullife ortheexpected pattern ofconsumptionfuture economicbenefits embodied period and the amortisation method are reviewed at least ateach financial year-end. Changes inthe impairment whenever assetmay beimpaired. thereisanindicationthattheintangible The amortisation assetswithfiniteusefullivesIntangible areamortised over theestimatedusefullives andassessed for impairment losses. assetsaremeasuredatcostlessanyacquisition, intangible accumulatedamortisationand acquired inabusinesscombinationistheirfair value asatthedateofacquisition.Following initial assets acquired separately are measured initially at cost. Intangible The assets cost of intangible Other intangibleassets operations disposedofandtheportioncash-generatingunitretained. ismeasuredbasedontherelativeGoodwill disposedofinthiscircumstance fair values ofthe amountoftheoperationwhendetermininggainorlossondisposaloperation. the carrying generating unitisdisposedof, thegoodwillassociatedwithoperationdisposedofisincludedin Where goodwillforms partofacash-generatingunitandtheoperationwithinthatcash- recognised for goodwillarenot reversed insubsequentperiods. amount,animpairmentlossisrecognisedintheprofitthan thecarrying orloss.Impairmentlosses amount of the cash-generating unit. Where the recoverable amount of the cash-generatingunit is less amount of the cash-generating unit, including the allocated goodwill, with the recoverablecarrying whenever thereisanindicationthatthecash-generatingunitmay beimpaired,by comparingthe The cash-generatingunitto which goodwillhasbeenallocatedistestedfor impairmentannuallyand Goodwill (contd.)

least ateach reportingdate. there isanindicationofimpairment andamortisationperiodmethodarealsoreviewed at commercial lives oftheunderlyingproducts3to5years. Impairmentisassessedwhenever at costless anystated impairment losses andare amortised using thestraight-linebasis over the classified assets.Software asintangible and licenses, consideredtohave finiteusefullives, are Computer software andlicensesthatdonotform anintegralpartoftherelatedhardware are Computer software and licenses UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 91 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN Recognition and measurement depreciation and accumulated any equipment are measured at cost less plant and Items of property, losses. accumulated impairment any other costs asset and any to acquisition of the that are directly attributable Cost includes expenditures of its intended use, and the costs condition for assets to working to bringing the directly attributable cost of self- The are located. they the site on which the items and restoring dismantling and removing assets also includes the cost of materials and direct labour. constructed costs are capitalised in accordance with the accounting policy on qualifying assets, borrowing For from equity gain or loss on qualifying cash of any include transfers Costs also may costs. borrowing plant and equipment. of property, purchases foreign currency hedges of flow are they useful lives, different plant and equipment have When significant parts of an item of property, plant and equipment. of property, as separate items (major components) accounted for comparing the and equipment is determined by plant gain or loss on disposal of an item of property, The equipment and is recognised plant and proceeds from disposal with the carrying amount of property, or loss. in profit respectively expenses” “other and income” “other net within Subsequent costs plant and equipment is recognised in the property, cost of replacing a component of an item of The embodied within the carrying economic benefits amount of the item if it is probable that the future The carrying of the amount reliably. to the Group, and its cost can be measured component will flow servicing of property, The costs of the day-to-day or loss. profit replaced component is derecognised to or loss as incurred. profit plant and equipment are recognised in of components Significant value. its residual an asset less on the cost of Depreciation is based from the remainder that is different individual assets are assessed, and if a component has a useful life of that asset, then that component is depreciated separately. of the estimated useful lives over or loss on a straight-line basis Depreciation is recognised in profit are depreciated over assets plant and equipment. Leased component of an item of property, each unless it is reasonably certain that the Group will the shorter of the lease term and their useful lives plant and land is not depreciated. Property, the end of the lease term. Freehold obtain by ownership their intended use. are not depreciated until the assets are ready for equipment under construction (ii) (iii) Depreciation Property, plant and equipment Property, (i)

Summary of significant accounting policies (contd.) Summary of significant (f)

2.4 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 92 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.4 (f) Summary ofsignificantaccountingpolicies(contd.) (h) (g)

(iii) Property, plantandequipment (contd.) separately identifiable cash flows (cash-generatingunits (“CGU”)). For thepurposeofassessing impairment,assetsaregroupedatthelowest levels for which thereare An asset’s recoverable amountisthehigher ofanasset’s fair value lesscoststosellanditsvalue inuse. makes anestimateoftheasset’s recoverable amount. any such indicationexists, orwhenanannualimpairmentassessment for anassetisrequired,the Group The Groupassessesateach reportingdate whetherthereisanindicationthatassetmay beimpaired.If Impairment ofnon-financialassets out inNote2.4(f)uptothedateofchange inuse. isaccountedforproperty inaccordancewiththeaccounting policyfor property, plantandequipmentset value atthedateofchange inuse. For atransfer fromowner-occupied toinvestment property property, the investment to owner-occupied property property, thedeemed cost for subsequentaccountingis the fair Transfers aremadetoorfrominvestment onlywhenthereisachange property in use. For atransfer from year ofretirementordisposal. Any gainorlossontheretirementdisposalofaninvestment isrecognisedinprofit property orlossinthe is permanently withdrawnproperty from use and no future economic benefit is expected from its disposal. Investment properties are derecognisedwheneitherthey have beendisposedoforwhentheinvestment such interestunderanoperating lease classified property asaninvestment iscarried at property fair value. a property-by-property orforappreciationboth. basiswhentheGroupholdsittoearnrentals capital Any interestunderanoperatingleaseisclassifiedA property andaccounted for asaninvestment on property impairment losses. recognition, investment properties are measured at cost less accumulated depreciation and accumulated Investment properties are initially measured at cost, including transaction costs. Subsequent to initial Investment properties adjusted asappropriate. Depreciation methods,usefullives andresidualvalues arereviewed atendofthereportingperiodand The depreciationratesfor thecurrent andcomparative periodsareasfollows: Depreciation (contd.) Renovations Computer equipment equipment Furniture, fixtures,fittingsandoffice Motor vehicles Lift treatment Waste water Plant andmachinery Buildings UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 6.7% 6.7% 7.5% 10% 33% 20% 20% 2% FINANCIAL 93 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN Loans and receivables are market that are not quoted in an active or determinable payments Financial assets with fixed as loans and receivables. classified are measured at amortised cost using the Subsequent to initial recognition, loans and receivables or loss when the loans and interest method. Gains and losses are recognised in profit effective are derecognised or impaired, and through the amortisation process. receivables dates later maturity for those having except assets, as current are classified receivables and Loans as non-current. are classified the reporting date which months after than 12 financial assets Available-for-sale or are not available-for-sale as financial assets are financial assets that are designated Available-for-sale categories. of the preceding in any classified (ii) Impairment of non-financial assets (contd.) of non-financial assets Impairment are by the asset expected to be generated cash flows estimated future in use, the In assessing value of assessments market current using a pre-tax that reflects discount rate value discounted to their present specific to the asset. and the risks of money the time value to its down is written amount, the asset its recoverable Where the carrying amount of an asset exceeds of CGUs are allocated recognised in respect of a CGU or groups amount. Impairment losses recoverable first to reduce the carrying of units and then, to allocated to those units or groups goodwill amount of any reduce the carrying of units on a pro-rata amount of the other assets in the unit or groups basis. the where revalued that are previously assets for except loss or profit in recognised are losses Impairment is also recognised in income. In this case the impairment taken to other comprehensive was revaluation revaluation. previous any income up to the amount of other comprehensive recognised indication that previously reporting date as to whether there is any An assessment is made at each recognised impairment loss A previously decreased. have or may no longer exist impairment losses may recoverable in the estimates used to determine the asset’s only if there has been a change is reversed If that is the case, the carrying recognised. amount since the last impairment loss was amount of the asset the carrying have amount that would cannot exceed increase That amount. recoverable its increased to is is reversal Such no impairment loss been recognised previously. been determined, net of depreciation, had is case the reversal amount, in which unless the asset is measured at revalued or loss recognised in profit in a subsequent period. is not reversed increase. Impairment loss on goodwill treated as a revaluation Financial assets Financial assets are recognised in the statements of financial position when, and only when, the Group and of the financial instrument. provisions become a party to the contractual the Company in the case of financial value, plus, fair at are measured they When financial assets are recognised initially, transaction costs. directly attributable or loss, through profit value assets not at fair and determine the classification of their financial assets at initial recognition, and the Company Group The fair financial assets at financial assets and available-for-sale the categories include loans and receivables, or loss. profit through value (i)

Summary of significant accounting policies (contd.) Summary of significant (h) (i)

2.4 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 94 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.4 (i) Summary ofsignificantaccountingpolicies(contd.)

(iii) (ii) Financial assets(contd.) that theGroupandCompany committopurchase orselltheasset. way purchases and sales of financial assets are recognised orderecognisedon thetradedate i.e.,the date bywithin theperiodgenerallyestablished regulationorconvention inthemarketplace concerned. All regular Regular way purchases orsalesarepurchases ofassets or salesoffinancialassetsthatrequiredelivery other comprehensive incomeisrecognisedinprofit orloss. and thesumofconsideration received andany cumulative gainorlossthathadbeenrecognised in expired. Onderecognitionofafinancialassetinitsentirety, thedifference amount betweenthecarrying A financialassetisderecognisedwhenthecontractual righttoreceive cash flows fromtheassethas recognition. The Group’s investment inquotedsecuritiesisdesignatedasfair value throughprofit orlossoninitial on thesettlement date. assets thatarenotheldprimarilyfor tradingpurposesarepresentedascurrent ornon-current based Financial assetsthatareheldprimarilyfor tradingpurposesarepresentedascurrent whereasfinancial Financial assetsatfair value throughprofit orlosscouldbepresentedascurrent ornon-current. other lossesorincome. financial assetsat fair value throughprofit orlossarerecognisedseparatelyinprofit orlossaspartof differences, interestanddividendincome.Exchange differences, interestanddividendincomeon gains ornetlossesonfinancialassetsat fair value throughprofit orlossdonotinclude exchange fair value. Any gainsorlossesarisingfromchanges infair value arerecognisedinprofit orloss.Net Subsequent toinitialrecognition,financialassetsat fair value throughprofit orlossaremeasuredat purpose ofsellinginthenearterm. derivatives (includingseparatedembeddedderivatives) orfinancialassetsacquiredprincipally for the for-trading oraredesignatedassuch uponinitialrecognition.Financialassetsheld-for-trading are Financial assetsareclassified asfinancialassetsat fair valuethroughprofit orlossif they areheld- Financial assetsatfair value through profit or loss are expected toberealisedwithin12 monthsafter thereporting date. less impairmentloss. Available-for-sale financialassetsareclassified asnon-current assetsunlessthey Investments instruments inequity whosefair value cannotbereliably measuredareatcost receive payment isestablished. for-sale instrument equity are recognised in profit or loss when the Group and the Company’s right to calculated usingtheeffective interestmethodisrecognisedinprofit orloss.Dividendsonan available- or lossasareclassificationadjustmentwhenthefinancialassetisderecognised.Interestincome gain orlosspreviously recognised inothercomprehensive incomeisreclassified toprofit fromequity interest calculatedusingtheeffective interestmethodarerecognisedinprofit orloss. The cumulative except thatimpairmentlosses,foreign exchange instruments and gainsandlossesonmonetary from changes infair value ofthefinancialassetsarerecognisedinothercomprehensive income, After initialrecognition,available-for-sale financialassetsaremeasuredat fair value. Any gainsorlosses Available-for-sale financialassets(contd.) UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 95 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN Trade and other receivables and other financial assets carried at amortised cost at amortised carried and other financial assets and other receivables Trade loss on financial assets has that an impairment evidence whether there is objective determine To or as the probabilityof insolvency such factors consider the Company the Group and been incurred, For certain payments. delay in default or significant of the debtor and significant financial difficulties assets that are assessed not to be impaired as trade receivables, categories of financial assets, such basis based on similar risk on a collective impairment for individually are subsequently assessed characteristics. and the could include the Group’s of receivables a portfolio of impairment for evidence Objective payments an increase in the number of delayed of collecting payments, past experience Company’s economic or local national in observableand period credit changes average the past the portfolio in on receivables. with default conditions that correlate between loss is measured as the difference the amount of impairment exists, evidence such If any discounted at the cash flows carrying of estimated future amount and the present value the asset’s or loss. The impairment loss is recognised in profit interest rate. original effective financial asset’s financial all for carrying directly loss impairment the by The reduced is asset financial the of amount where the carrying of trade receivables, the use amount is reduced through assets with the exception the against off it is written uncollectible, becomes trade receivable When a account. of an allowance account. allowance the impairment loss decreases and the decrease can be related If in a subsequent period, the amount of recognised recognised, the previously the impairment was after occurring to an event objectively its that the carrying to the extent amount of the asset does not exceed impairment loss is reversed or loss. in profit is recognised of reversal amount The date. amortised cost at the reversal at cost carried equity securities Unquoted where changes in the business environment as significant adverse (such evidence If there is objective that issuer) of the difficulties financial significant or probabilityoperates, issuer the insolvency of is the loss amount of the been incurred, at cost has assets carried on financial loss an impairment carrying of estimated amount and the present value between the asset’s measured as the difference for a similar financial asset. Such rate of return market discounted at the current cash flows future in subsequent periods. impairment losses are not reversed financial assets Available-for-sale difficulties of the issuer cost, significant financial value below fair Significant or prolonged decline in are considerations to determine whether trading market disappearance of an active and the or obligor, financial assets available-for-sale as securities classified that investment evidence there is objective are impaired. between its financial asset is impaired, an amount comprising the difference If an available-for-sale loss impairment less any value, fair and amortisation) and its current principal payment cost (net of any or loss. from equity to profit or loss, is transferred recognised in profit previously (ii) (iii) Impairment of financial assets Impairment that a evidence objective there is any reporting date whether each assess at Group and the Company The financial asset is impaired. (i)

Summary of significant accounting policies (contd.) Summary of significant (j)

2.4 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 96 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.4 (j) Summary ofsignificantaccountingpolicies(contd.) (n) (m) Provisions (l) Inventories (k) (iii) Impairment offinancialassets(contd.) financial instrument. Financialliabilitiesare classified asotherfinancialliabilities. when, and only when, the Group and the Company to the contractual become a party provisions of the Financial liabilities,withinthescopeofMFRS 139, offinancialposition arerecognisedinthestatement and thedefinitionsofafinancialliability. Financial liabilitiesareclassified ofthecontractual accordingtothesubstance arrangements enteredinto Financial liabilities used, theincreaseinprovision duetothepassageoftimeisrecognisedasafinancecost. ratethatreflects,a current pre-tax whereappropriate,therisksspecifictoliability. Whendiscountingis provision isreversed. Iftheeffect ofthetimevalue ofmoney ismaterial,provisions arediscountedusing no longerprobablethatanoutflow ofeconomicresourceswillberequiredtosettle theobligation, Provisions arereviewed ateach reportingdateandadjustedtoreflect thecurrent bestestimate.Ifitis the amountofobligationcanbeestimatedreliably. past event, itisprobablethatanoutflow ofeconomicresourceswill berequiredtosettle theobligationand Provisions are recognised when the Group has a present obligation(legalor constructive) as a resultof a tomake thesale. costs ofcompletionandtheestimatednecessary courseofbusinesslessthe estimated Net realisablevalue istheestimatedsellingpriceinordinary direct costsandappropriateproportionsofproductionoverheads. The costsoffinishedgoodsand work-in-progress comprisecostsofraw materials,directlabour, other Cost isdeterminedonthefirst-in,first-outmethod. Thecostof raw materialscomprisescostsofpurchase. Inventories atthelower arestated ofcostandnetrealisablevalue. Group’s cashmanagement. insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the liquid investments thatarereadilyconvertible toknown amountofcashandwhich aresubjecttoan Cash andcashequivalents comprisecashatbankandonhand,demanddeposits,short-term,highly Cash andcashequivalents an event occurring after therecognitionofimpairmentlossinprofit orloss. reversed inprofit orlossifanincreaseinthe fair value oftheinvestment canbeobjectively relatedto comprehensive income.For available-for-sale debtinvestments, impairmentlossesaresubsequently subsequent periods. Increase in fair value, if any, subsequentto impairment lossisrecognised in other Impairment lossesonavailable-for-sale investments equity arenotreversed inprofit orlossinthe Available-for-sale financialassets(contd.) UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 97 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN Short term benefits term Short year salaries, bonuses and social security in the contributions are recognised as an expense Wages, term accumulating compensated Short associated services the employees. rendered by are which in are recognised when the services employees as paid annual leave are rendered by absences such compensated absences. Short term non-accumulating that increase their entitlement to future absences occur. are recognised when the leave as sick compensated absences such plans Defined contribution fixed pays Group the which under plans benefit post-employment are plans contribution Defined obligation to pay no legal or constructive contributions into separate entities or funds and will have benefits all employee assets to pay of the funds do not hold sufficient further contributions if any contributions are servicesyears. Such and preceding financial relating to employee in the current in Malaysia companies by law, As required or loss as incurred. in the profit recognised as an expense (“EPF”). Fund Provident contributions to the Employees such make Financial liabilities (contd.) Financial liabilities Other financial liabilities and loans other payables include trade payables, other financial liabilities the Company’s and Group’s The directly attributable plus value at fair are recognised initially and other payables Trade and borrowings. method. interest cost using the effective subsequently measured at amortised transaction costs and and net of transaction costs incurred, value, are recognised initially at fair and borrowings Loans as classified are Borrowings interest method. effective using the amortised cost measured at subsequently liability at least of the for settlement liabilities unless the Group has an unconditional right to defer current the reporting date. months after 12 or loss when the liabilities are in profit other financial liabilities, gains and losses are recognised For process. derecognised, and through the amortisation existing an When liabilityfinancial A extinguished. liability the under obligation the when derecognised is is or the terms of terms, the same lender on substantiallyfinancial liabilityby another from is replaced different or modification is treated as a derecognition exchange an such liability are substantiallyan existing modified, carrying in the respective and the difference liability, of the original liability of a new and the recognition or loss. amounts is recognised in profit costs Borrowing to the are directly attributable costs are capitalised as part of the cost of a qualifying asset if they Borrowing costs commences when or production of that asset. Capitalisation of borrowing acquisition, construction and use or sale are in progress and the expenditures its intended the activities to prepare the asset for are capitalised costs until the assets are substantially completed Borrowing are incurred. costs borrowing their intended use or sale. for costs Borrowing are incurred. or loss in the period they costs are recognised in profit All other borrowing with the in connection incurred the Group and the Company consist of interest and other costs that of funds. borrowing benefits Employee (i) (ii)

Summary of significant accounting policies (contd.) Summary of significant (n) (o) (p)

2.4 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 98 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.4 (p) Summary ofsignificantaccountingpolicies(contd.) (iii) Employee benefits (contd.)

loss. Net interestonthenetdefined benefit orassetisrecognisedas liability expenseorincomeinprofit or corporatebondsto thenetdefinedbenefitthe discountratebasedonhigh quality orasset. liability defined benefit orassetthatarisesfromthepassageoftimewhich liability isdetermined byapplying Net interestonthenetdefinedbenefit orassetisthe liability changeduringtheperiodinnet occurs. when planamendmentorcurtailment routine settlements arerecognisedasexpense inprofit costsarerecognised orloss. Past service costsandgainsorlosses onnon- costswhich costs,pastservice Service includecurrent service Defined benefit costscomprisethe following: plan orreductionsinthefuture contributionstotheplan: costandthepresentvalue ofany economicbenefitsservice available inthe form ofrefundsfromthe If theassetismeasuredataggregateofcumulative unrecognisednetactuarial lossesandpast form ofrefundsfromtheplanorreductionsinfuture contributionstotheplan. costandthepresentvalueactuarial ofany lossesandpastservice economicbenefits available inthe the asset is measured at the lower of such aggregate or the aggregate of cumulative unrecognised net value ofplanassetsoutwhich theobligationsaretobesettled directly. Ifsuch aggregateisnegative, actuarial costnotyet gainsandlossesnotrecognised,reducedbyrecognisedthefair pastservice The definedbenefit istheaggregateofpresent liability valueofthedefinedbenefit obligationand using theprojectedunitcreditmethod. The costofproviding benefits underthedefinedbenefit plansisdetermined separately for each plan benefits available inthe form ofrefundsfromtheplanorreductionsinfuture contributionstotheplan. net definedbenefit assettotheceiling. Theassetceilingisthepresent valueof any economic reporting periodreducedby thefair value ofplanassets(ifany), adjustedfor any effect oflimitinga obligation (derivedcorporatebonds)attheendof usingadiscountratebasedonhighquality The net defined benefit or assetis the aggregate ofthepresent liability valueofthedefinedbenefit prior years isestimated. which theamountofbenefit thatemployees have earnedinreturn in thecurrent and for theirservice Credit Method,isdeterminedbasedonactuarial by computations independentactuaries, through eligible employees. The Group’s obligationundertheScheme, calculatedusingtheProjected Unit The Company operatesafunded,definedbenefit Retirement Benefit Scheme(“the Scheme”) forits Defined benefit plans - - - - Remeasurements ofnetdefinedbenefit orasset liability Net interestonthenetdefinedbenefit orasset liability cost Service recognised immediately. costofthecurrententire netactuarial periodare lossesofthecurrent periodandpastservice benefits. Ifthereisno change oranincreaseinthepresent value oftheeconomicbenefits, the immediately totheextent thatthey exceed any reductioninthepresentvalue ofthoseeconomic costofthecurrentNet actuarial periodarerecognised lossesofthecurrent periodandpastservice UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 99 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN As lessee incidental substantially to the Group to all the risks and rewards transfer Finance leases, which of the leased value of the leased item, are capitalised at the inception of the lease at the fair ownership direct costs are also initial Any of the minimum lease payments. at the present value if lower, asset or, charges and finance are apportioned between the payments amount capitalised.added to the Lease a constant rate of interest on the remaining balance reduction of the lease liability so as to achieve charged as are or loss. Contingent rents, if any, to profit are charged Finance charges of the liability. are incurred. they in the periods in which expenses if there is no of the asset. However, the estimated useful life are depreciated over assets Leased reasonable certainty the end of the lease term, the asset is that the Group will obtain by ownership and the lease term. the shorter of the estimated useful life depreciated over over or loss on a straight-line basis in profit are recognised as an expense Operating lease payments recognised as a reduction by the lessor is provided of incentives aggregate benefit The the lease term. the lease term on a straight-line basis. of rental over expense As lessor are of the asset the Group retains of ownership where Leases substantially all the risks and rewards in negotiating an operating lease are added as operating leases. Initial direct costs incurred classified the lease term on the same bases as to the carrying amount of the leased asset and recognised over rental accounting policy for income is set out in Note 2.4(s)(iii). The rental income. Defined benefit plans (contd.) Defined benefit in the change on plan assets and any gains and losses, return actuarial comprising Remeasurements liability)are recognised immediately benefit net interest on defined of the asset ceiling (excluding effect are recognised in Remeasurements arise. they in the period in which income in other comprehensive periods. or loss in subsequent to profit retained within equity earnings reclassified and are not fund or qualifying insurance benefit employee a long-term Plan assets are assets that are held by be paid directly to the Group, nor can they to the creditors of policies. Plan assets are not available is price When no market price information. of plan assets is based on market value the Group. Fair a using flows cash future expected discounting by estimated is assets plan of value fair the available, expected or plan assets and the maturity both the risk associated with the discount rate that reflects of settlement the until period expected the maturity, no have they if (or, assets those of date disposal the related obligations). benefits Termination date the normal retirement is terminated before when employment are payable benefits Termination The Group these benefits. for accepts voluntaryin exchange redundancy an employee or whenever to as a liabilityexpense when it is demonstrably committed and an recognises termination benefits according to a detailed plan without possibility employees of current either terminate the employment voluntary made to encourage a result of an offer as termination benefits or providing of withdrawal the measurement of made to encourage voluntary redundancy, In the case of an offer redundancy. Benefits expected to accept the offer. based on the number of employees is termination benefits sheet date are discounted to present value. balance months after due more than twelve falling (i) (ii) (iv) Employee benefits (contd.) benefits Employee (iii)

(q) Leases Summary of significant accounting policies (contd.) Summary of significant (p)

2.4 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 100 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.4 (r) Summary ofsignificantaccountingpolicies(contd.) (iii) (ii) (i) Foreign currencies operations andtranslatedattheclosingratereporting date. assets andliabilitiesoftheforeign operationsandarerecordedinthefunctionalcurrency oftheforeign Goodwill andfair value adjustmentsarisingontheacquisitionofforeign operationsaretreatedas operation isrecognisedintheprofit orloss. underforeign relatingtothatparticularforeignand accumulatedinequity currency translationreserve On disposalofaforeign operation,thecumulative amountrecognisedinothercomprehensive income comprehensive income. the transactions. The exchange differences arisingonthetranslationaretaken directlytoother at thereportingdateandincomeexpenses aretranslatedatexchange ratesatthedatesof The assetsandliabilitiesofforeign operationsaretranslatedintoRMattherateofexchange ruling Foreign operations itemsarealsorecogniseddirectlyinequity.arising fromsuch non-monetary items inrespectofwhich gainsandlossesarerecogniseddirectlyin equity. Exchange differences in profit orloss for theperiod except for thedifferences arisingonthetranslationofnon-monetary Exchange differences itemscarried atfair value areincluded arisingonthetranslation ofnon-monetary disposal oftheforeign operation. The foreign isreclassified currency translationreserve toprofit fromequity orlossoftheGroupon in othercomprehensive incomeandaccumulatedunderforeign inequity. currency translation reserve items that form part of the Group’s net investment in foreign operations, which are recognised initially the reportingdatearerecognisedinprofit orloss except for exchange differences arisingonmonetary Exchange differences itemsat itemsorontranslatingmonetary arisingonthesettlement ofmonetary value was determined. currencies measured atfair value aretranslatedusingtheexchange ratesatthe datewhenthefair exchange itemsdenominatedinforeign ratesasatthedatesofinitialtransactions.Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the in foreign currencies aretranslatedattherate ofexchange ruling atthereportingdate.Non-monetary assetsandliabilitiesdenominated rates approximating thoseruling atthetransactiondates.Monetary and itssubsidiariesarerecordedoninitialrecognition in thefunctionalcurrencies atexchange Transactions inforeign currencies aremeasuredintherespective functionalcurrencies oftheCompany Foreign currency transactions functional currency. arepresentedinRinggitMalaysiaconsolidated financialstatements (RM),which isalsotheCompany’s economicenvironment inwhichthe primary operates(“thefunctionalcurrency”). theentity The The ofeach individualfinancialstatements intheGrouparemeasuredusingcurrency of entity Functional andpresentation currency UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 101 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN Current tax Current from or paid tax to be recovered Current assets and liabilities are measured at the amount expected tax used to compute the amount are those that are The rates and tax laws to the taxation authorities. the reporting date. enacted or substantively enacted by extent that the to the tax relates to items except or loss taxes are recognised in profit Current directly in equity. income or or loss, either in other comprehensive recognised outside profit tax Deferred at the reporting date tax using the liability temporary method on is provided Deferred differences between the tax bases of assets and liabilities and their carrying financial reporting amounts for purposes. Sale of goods and magazines is recognised of newspapers arising from publication, printing and distribution Revenue and service is recognised net of service relating to other sale of goods net of returns tax. Revenue to the buyer. of ownership of risks and rewards taxes and discounts upon transfer uncertaintiessignificant are there where recovery regarding extent the to recognised not is Revenue of goods. or the possible return of the consideration due, associated costs revenue Advertising from servicesnet of service rendered is recognised Revenue taxes and discounts as and when the are published or displayed. advertisements Rental income the substance basis in accordance with of the relevant Rental income is recognised on an accrual agreements. income Interest interest method. basis using the effective Interest income is recognised on an accrual Dividend income is established. payment right to receive Group’s Dividend income is recognised when the Income taxes (i) (ii) (ii) (iii) (iv) (v) Revenue recognition Revenue Group and to the flow will the economic benefits that it is probable that is recognised to the extent Revenue must also be met before specific recognition criteria following The can be reliably measured. the revenue is recognised: revenue (i)

(t) Summary of significant accounting policies (contd.) Summary of significant (s)

2.4 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

2. NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 102 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.4 (t) Summary ofsignificantaccountingpolicies(contd.) (ii) Income taxes (contd.)

and the same taxation authority.and thesametaxation liabilities andthedeferred assetsagainstcurrent current tax tax entity taxesrelatetothesametaxable Deferred assetsanddeferred tax liabilitiesareoffset, tax ifalegallyenforceable rightexists tosetoff adjusted againstgoodwillonacquisition. comprehensive anddeferred incomeordirectlyinequity arisingfromabusinesscombinationis tax loss. Deferred itemsarerecognisedincorrelation totheunderlyingtransactioneitherinother tax Deferred relating to items recognised outside profit tax orloss is recognisedoutsideprofit or enacted orsubstantivelyatthereportingdate. issettled, lawswhen theassetisrealisedorliability ratesandtax thathave basedontax been Deferred ratesthatareexpected toapplytheyear assetsandliabilitiesaremeasured atthetax tax utilised. extent thatithasbecomeprobablefuture profit taxable willallow thedeferredtax assetstobe Unrecognised deferred assetsarereassessed ateach tax reportingdateandarerecognisedtothe the deferred assettobeutilised. tax extent thatitisnolongerprobablesufficienttaxable profit willbe available toallow allorpartof amountofdeferredThe carrying assetsisreviewed tax ateach reportingdateandreducedtothe lossescanbeutilisedexcept:unused tax against which differences, creditsand thedeductibletemporary ofunused tax forward andthecarry losses,totheextent profit creditsandunusedtax thatitisprobabletaxable tax willbe available Deferred differences, assetsarerecognisedfor tax alldeductibletemporary ofunused forward carry Deferred differences, liabilitiesarerecognisedfor tax alltemporary except: Deferred tax(contd.) - - - - profit willbe available againstwhich differences thetemporary canbeutilised. differencesthat itisprobablethetemporary willreverse in theforeseeable future andtaxable associates andinterestsinjointventures, deferred assetsarerecognisedonlytotheextent tax differencesin respectofdeductibletemporary associatedwithinvestments insubsidiaries, the timeoftransaction,affects neithertheaccountingprofittaxable profit nor orloss;and inatransactionthatisnotbusinesscombinationand, at initial recognitionofanassetorliability differencewhere the deferred assetrelating to thedeductible temporary tax arisesfromthe the foreseeable future. differences differences canbecontrolledanditisprobablethatthetemporary willnotreverse in associates andinterestsinjointventures, wherethetimingofreversal ofthetemporary differences temporary in respectoftaxable associatedwithinvestments insubsidiaries, affects neithertheaccountingprofittaxable profit nor orloss;and inatransactionthatisnotbusinesscombinationand,atthetimeoftransaction, liability where thedeferred arisesfromtheinitialrecognitionofgoodwilloranasset liability tax UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 103 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN Where the GST incurred in a purchase of assets or services is not recoverable from the taxation of assets or services is not recoverable in a purchase incurred Where the GST cost of acquisition of the asset or as is recognised as part of the case the GST in which authority, and item as applicable; part of the expense included. that are stated amount of GST with the and payables Receivables - - Good and Services Tax (“GST”) Tax Good and Services except: amount of GST and assets are recognised net of the expenses Revenues, to, the taxation authority from, or payable is included as part of recoverable net amount of GST The in the statements of financial position. or payables receivables Segment reporting segments based on their products and management purposes, the Group is organised into operating For the segment managers responsible for the respective are independently managed by services which the segment managers report directly to The segments under their charge. of the respective performance in order to allocate resources to the segment results who regularly review management of the Company of these segments disclosures on each Additional performance. the segments and to assess the segment used to identify the reportable segments and the measurement the factors in Note 36, including are shown basis of segment information. and whose A contingent liability is a possible obligation or asset that arises from past events or asset not event(s) of uncertain or non-occurrence future by the occurrence will be confirmed only existence wholly within the control of the Group. recognised in the statementsContingent liabilities and assets are not of financial position of the Group. as held-for-sale classified and disposal group Discontinued operation as when the criteria to be classified operation” “discontinued as a A component of the Group is classified major a component represents a separate been disposed of and such been met or it has have held-for-sale major line of business line of business or geographical area of operations or is part of a single coordinated if its carrying amounts will A component is deemed to be held-for-sale or geographical area of operations. principally through a sale transaction rather than through continuing use. be recovered assets and disposal groups are not depreciated and are non-current Upon classification as held-for-sale, are recognised differences Any less costs to sell. of carrying value amount and fair measured at the lower or loss. in profit are disclosed on as held-for-sale details assets classified on discontinued operation and non current Further Note 23.

Income taxes (contd.) Income taxes (iii)

(u) (v) Contingencies (w) Summary of significant accounting policies (contd.) Summary of significant (t)

2.4 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 104 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.4 (y) (x) Summary ofsignificantaccountingpolicies(contd.)

(ii) (i) on thepresumptionthattransactiontosellassetortransfer takesplaceseither: theliability transaction betweenmarket participantsatthemeasurementdate. The fair value measurementisbased Fair value isthepricethatwould bereceived tosellanassetorpaidtransfer inanorderly aliability The Groupmeasuresfinancialinstruments at fair value ateach reportingdate. Fair value measurement period inwhich they aredeclared. sharesareclassified inthe costs. Ordinary asequity. sharesarerecognised inequity Dividendsonordinary sharesarerecordedattheproceedsreceived, netofdirectlyattributable transaction Ordinary incremental Company instruments. after sharesareequity deductingallofitsliabilities.Ordinary instrumentAn equity isany contractthatevidences aresidualinterestintheassetsofGroupand Share capitalandshare issuanceexpenses explained above. of thenature, characteristics andthelevel andrisksoftheassetliability ofthefair value hierarchy as For the purpose of fair value disclosures, the Group determined classes ofassetsand liabilities on the basis each reporting period. (based onthelowest level inputthatissignificanttothe fair value measurementasawhole)attheendof determines whethertransfers have occurred betweenLevels inthehierarchy by re-assessingcategorisation For onarecurring basis,theGroup assetsandliabilitiesthatarerecognisedinthefinancialstatements measurement asawholedescribedinNote34. categorised withinthefair value hierarchy, basedonthelowest level inputthatis significanttothe fair value All assetsandliabilitiesfor which fair valueare ismeasuredordisclosedinthefinancialstatements inputs. use ofunobservable are available tomeasurefair value, maximisingtheuseofrelevant inputsandminimisingthe observable The Group uses valuation techniques and for that are appropriate in the circumstances which sufficient data participant thatwould usetheassetinitshighestandbestuse. generate economicbenefits by usingtheassetinitshighestandbestuseor by sellingittoanothermarket A fair valuetakes measurementofanon-financialasset intoaccountamarket participant’s to ability when pricingtheassetorliability, assumingthatmarket participantsactintheirbesteconomicinterest. The fair value ismeasuredusingtheassumptionsthatmarket ofanassetorliability participantswould use The principalorthemostadvantageousmarket mustbeaccessibletotheGroup. in theabsenceofaprincipalmarket, inthemostadvantageousmarket for theassetorliability. in theprincipalmarket for or theassetorliability; UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 105 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN Income taxes There are certain for income taxes. in determining the provision Significant estimation is involved the ultimate tax determination is uncertain during the transactions and computations which for tax expected issues recognise liabilities for Group and the Company The ordinary course of business. final the Where of these outcome tax due. be taxes will whether additional of on estimates based will impact the differences initially recognised, such from the amounts that were is different matters determination is made. Information such in the period in which tax provisions income tax and deferred on income taxes is disclosed in Note 9. tax assets Deferred to all unused tax tax are recognised for losses and unabsorbed capital assets allowances Deferred the losses and capital against which available will be that it is probable that taxable profit the extent can be utilised. Significant management judgment is required to determine the amount allowances taxable of future tax timing and level upon the likely assets that can be recognised, based of deferred totalThe carrying recognised of value losses tax strategies. planning tax future with together profits and the unrecognised tax respectively losses of the Group and of the Company and capital allowances of the Group are as disclosed in Note 17. and capital allowances of loans and receivables Impairment that a financial evidence objective there is any date whether reporting at each assesses Group The of impairment, the Group evidence determine whether there is objective To asset is impaired. of the debtors difficulties or significant financial as the probability of insolvency such considers factors in payments. or significant delay and default are cash flows of impairment, the amount and timing of future evidence Where there is objective The assets with similar credit risk characteristics. for estimated based on historical loss experience date is disclosed in Note 18. at the reporting loans and receivables carrying amount of the Group’s (ii) (iii) Critical judgments made in applying accounting policies judgments made in applying Critical in the process of applying the Group’s by the management no significant judgments made were There on the amounts recognised in the financial effects significant have may accounting policies which is allocated to land cost which leasehold land extension, of premium for payment for statements except the lease term as disclosed in Note 2.4(q)(i). and amortised over of estimation uncertainties sources Key assumptions concerning the key were no statements,In the process of preparing these financial there risk a significant sources of estimation uncertainty have that may at the reporting date, and other key future the carryingto adjustment material causing of financial next the within liabilities assets and the of amounts for: except year, (i)

Significant accounting judgements and estimates judgements Significant accounting estimates judgements, financial statements requires management to make preparation of the Company’s The the assets and liabilities, and expenses, amounts of revenues, the reported affect and assumptions that uncertainty assumptions and about these liabilities at the reporting date. However, disclosure of contingent adjustment to the carrying in outcomes that could require a material estimates could result amount of the asset in the future. or liability affected (a) (b)

2.5 SIGNIFICANT ACCOUNTING POLICIES (CONTD.) POLICIES ACCOUNTING SIGNIFICANT

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 106 2. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT ACCOUNTING POLICIES(CONTD.) 2.5 (b) Significant accountingjudgements andestimates (contd.) (v) (iv) Key sources ofestimationuncertainties (contd.) 11 tothefinancialstatements. Further oftheimpairmentlossesrecognisedfor details theplantandequipmentaredisclosedinNote and alsotochoose discountratein order tocalculatethepresentvalue asuitable of thosecashflow. value inuserequirestheGrouptomake anestimateoftheexpecting future cashflow fromtheCGU of cash-generatingunits(“CGU”)towhich theplantandequipment areallocated.Estimatingthe The Group carried out the impairment test basedon a varietyof estimation including the value inuse During thecurrent financial year, theGrouphasrecognisedimpairmentlossesinplantand equipment. amountsmay notberecoverable.that thecarrying each reporting date. Other non-financial assets are tested for impairment when there are indicators The Groupassesseswhetherthereareany indicatorsofimpairmentfor allnon-financialassetsat Impairment ofplantandequipment Further abouttheretirementbenefit details assetsaregiven inNote22. is 5.0%perannum. present value of the projected cashflows discountedat various spotrates. The resulting discountrate that thepresentvalue ofprojectedcashflows discountedatthissinglediscountrateissimilartothe the projected future cash flows of the Scheme. An equivalent single discount rateis then sought such and converts thesebondyieldsratetoestimatedspotrates. The spotratesarethenusedtovalue rate, managementconsidersvalues of AA ratedcorporatebondyieldswith3to15 years ofmaturity The parametermostsubjecttochange isthediscountrate.Indeterminingappropriate sensitive tochanges intheseassumptions. All assumptionsarereviewed ateach reportingdate. complexities involved inthevaluation anditslong-termnature, adefinedbenefit obligationishighly rates andfuture pensionincreases. Due tothe increases, mortality of the discount rate,future salary assumptions thatmay differ fromactual developments inthefuture. These includethedetermination obligation aredeterminedusingactuarial valuations. An actuarial valuation involves makingvarious The costoftheRetirement Benefit Scheme (“theScheme”) andthepresent value ofthedefinedbenefit Defined benefit plans UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL ------200 RM RM RM 2016 2016 2016 8,625 29,148 81,000 86,100 83,510 61,817 107 517,363 113,422 (289,795) 4,501,961 4,000,000 1,509,215 190,035,859 190,035,859 Company Company - - - - - RM RM RM 2017 2017 2017 9,817 29,425 27,426 13,284 77,400 45,445 195,276 105,002 323,130 (183,318) 3,988,109 1,880,654 23,900,000 32,364,705 197,843,234 197,843,234

ANNUAL REPORT 2017 REPORT ANNUAL - - - | - - RM RM 2016 2016 88,010 918,846 122,549 (252,346) 3,740,070 4,619,167 1,675,616 227,418,579 226,499,733 Group Group - - - - RM RM 2017 2017 30,128 14,764 70,803 (728,707) 4,110,446 2,088,882 2,840,571 33,033,284 244,980,086 211,946,802

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

as held-for-sale (Note 23) as held-for-sale - Subsidiaries - Equity instruments (quoted) Other interest income Interest income on deposits Interest income charged to subsidiaries Building rental income Creditors written off Gain on disposal of a subsidiary (Note 14) Gain on disposal of non-current asset classified Gain on disposal of property, plant and equipment Gain on disposal of property, Commission income Gain on disposal of scrap Investment holding, management services and others Publishing, distribution and advertisements Publishing, distribution Dividend income: Dividend income from available-for-sale financial assets: financial Dividend income from available-for-sale investment Net fair value loss on held-for-trading Interest income on deposits Interest income on advances given to employees Interest income on advances given to Rental income investments Gain on disposal of held-for-trading Gain on disposal of investment property (Note 31) Included in investment holding revenue of the Group are: holding revenue Included in investment OTHER INCOME OTHER Included in other income are the following:

3. REVENUE

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 108 6. 5. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS DIRECTORS’ REMUNERATION EMPLOYEE BENEFITSEXPENSE The ofremunerationreceivable details by directorsoftheGroupandCompany duringtheyear areasfollows: RM1,307,941 (2016: RM1,230,655)asfurtherdisclosedinNote 6. Included instaff costsoftheGroupandCompany areexecutive directors’ remunerationamountingto

Totalbenefits-in-kind directors’remunerationincluding benefits-in-kind Estimated moneyvalueof Total30(b)) directors’remuneration(Note 8): Non-executive directors’remuneration(Note Wages and salaries Wages and Executive directors’ remuneration (Note 5): Executive directors’remuneration(Note Social security costs Social Short term accumulating compensatedabsences Short term Contribution to defined Contribution benefit plans (Note 22) Increase inliabilityfor defined benefitplans(Note Other staff related expenses Other staffrelated - Allowances - Fees - Definedcontribution plan - Fees emoluments - Salariesandother contribution plans UTUSAN MELAYU (MALAYSIA) BERHAD

116,830,007 89,379,315 13,845,028 12,398,304 1,121,548 27,061 58,751 2017 RM Group 127,890,352 94,871,103 14,214,808 17,626,090 1,093,891

84,460 2016 RM | - ANNUAL REPORT2017 1,834,482 1,755,982 1,307,941 1,063,452

448,041 325,000 123,041 184,489 78,500 60,000 77,247,598 11,745,172 99,225,157 9,234,665 2017 RM 938,971 Group and Company Group and 58,751 2017 RM - Company 103,729,297 13,782,514 77,321,243 11,651,082 1,764,155 1,732,655 1,230,655 996,000 502,000 352,000 150,000 174,655 889,998 31,500 60,000 84,460 2016 2016 RM RM - FINANCIAL - RM 2016 645,355 109 - 1 4 1 1 1 9,078,777 8,433,422 2016 Company - RM 2017 588,779 7,842,923 7,254,144 - 2 3 1 1 1 Number of directors

2017 ANNUAL REPORT 2017 REPORT ANNUAL - | 554 RM 2016 8,958,953 8,958,399 Group - - RM 2017 8,356,668 8,356,668

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

- Bank borrowings and overdrafts - Inter company borrowings - Leasing/hire purchase payables Interest expense on: Below RM50,000 RM50,001 – RM100,000 RM700,001 – RM750,000 RM800,001 – RM850,000 Non-executive directors RM200,001 – RM250,000 Executive directors RM500,001 – RM550,000 Total

FINANCE COSTS Included in finance costs are the following: Included in finance costs are the The number of directors of the Company whose total remuneration during the year fell within the following bands is bands following within the fell whose totalduring the year Company remuneration number of directors of the The below: analysed DIRECTORS’ REMUNERATION (CONTD.) REMUNERATION DIRECTORS’

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 8. 110 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS OS BEFORETAX LOSS The following amountshave beenincludedinarriving atlossbefore taxation:

Reversal of impairment loss on tradeand Reversal ofimpairmentloss and other receivables Impairment lossontrade Equipment rentalexpenses rentalexpenses Office/warehouse Loss on disposal of property,equipment Loss ondisposalof plantand other investment Loss ondisposalof associates (Note15) Impairment lossoninvestmentof Impairment lossoninvestmentinasubsidiary(Note 14) 25(d)) returns (Note (Reversal of)/provisionfor (Reversal of)/provisionfor 25(d)) litigation (Note equipment (Note11) property plantand Impairment losson Property,11) off (Note and equipmentwritten plant investment on other Impairment loss written down Inventories written off Inventories recovered Bad debts Auditors’ remuneration: Non-executive 6) directors’ remuneration(Note - Other services - Other audit - Statutory other receivables (Note18) UTUSAN MELAYU (MALAYSIA) BERHAD

(1,167,588) 2,669,562 1,418,407 1,001,752 4,543,726 (735,000) 219,125 429,781 109,000 448,041 (27,956) (50,033) 19,000 29,400 48,000 2,477 2017 RM - - - Group (1,251,325) 2,890,627 1,458,747 2,319,059 (862,610) (122,787) 208,275 615,463 103,000 502,000 14,500 76,132 48,000 15,119 4,308 7,992 2016 RM - - - | ANNUAL REPORT2017

6,766,648 1,326,971 1,000,000 1,001,752 4,473,924 (600,427) (735,000) 377,941 109,000 212,363 448,041 (21,507) 93,000 19,000 2017 RM - - - - - Company (2,758,979) 2,456,109 1,375,037 2,315,991 (213,402) 376,519 502,000 103,000 89,250 14,500 (4,418) 7,992 2016 RM ------FINANCIAL ------111 RM RM 2016 2016 51,762 (35,898) 186,912 102,432 434,707 (424,169) (608,533) 1,704,790 (1,803,926) (2,228,891) 22,017,226 (66,725,478) (66,761,376) (16,022,730) Company ------RM - - 2017 RM 2017 59,207 (27,854) 117,674 (327,003)

9,963,750 1,522,866 (3,637,059) (2,799,961) (2,461,408) (8,010,134) (10,255,868) (10,255,868) ANNUAL REPORT 2017 REPORT ANNUAL RM 2016 | (63,486) 186,912 102,432 (424,169) (165,918) 2,005,533 1,768,276 1,704,790 Group - RM 2017 (27,854) 239,573 117,674 357,247 (3,129,354) (3,157,208) (2,799,961)

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

and other temporary deductible diferrences allowances tax losses and unabsorbed capital from discontinuing operation from continuing operation

Group Loss before taxation: - (Over)/under provision of deferred tax in prior years years Under/(over) provision of tax expense in prior Income taxation (benefit)/expense Utilisation of previously unrecognised capital allowances Utilisation of previously unrecognised capital Deferred tax assets not recognised in respect of current year’s Effect of share of result of associates Real property gains tax in current year Deferred tax assets recognised on previously unutilised tax losses - at Malaysian statutory tax rate of 24% (2016: 24%) Taxation Income not subject to tax Expenses not deductible for tax purposes

Current income tax: tax expense Malaysian income Under/(over) provision in prior years in prior Under/(over) provision Real property gains tax Deferred tax (Note 17): and reversal of Relating to origination temporary differences (Over)/underprovision in prior years Income taxation (benefit)/expense recognised in profit orIncome taxation (benefit)/expense recognised loss The current income tax is calculated at the statutory tax rate of 24% (2016: 24%) of the estimated assessable profit of the estimated assessable profit 24%) tax income current is calculated at the statutoryThe tax rate of 24% (2016: the year. for taxationA reconciliation of income taxation applicable to loss before at the statutory income taxto income rate ended 31 December 2017 the years income tax for rate of the Group and of the Company taxation at the effective are as follows: and 2016 The major components of income taxation for years ended 31 December 2017 and 2016 are: and 2016 ended 31 December 2017 taxation years major components of income for The INCOME TAXATION INCOME

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 9.

10. 112 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS INCOME TAXATION (CONTD.) and 2016 areasfollows: (contd.) attheeffectivetaxation rateoftheGroupandCompany incometax for theyears ended31December2017 ratetoincome incometax applicabletolossbeforeatthestatutory A reconciliationofincometaxation owners oftheparentby theweighted average sharesinissueduringthefinancial year. numberofordinary Basic anddilutedlosspershareamountsarecalculatedby dividingthelossfor theyear, attributable netoftax, to Basic anddiluted LOSS PERSHARE

Loss attributable to owners of the parent (RM): Loss attributabletoownersoftheparent Basic and diluted loss per share (sen) Basic anddilutedlosspershare issue Weighted averagenumberofordinarysharesin

Expenses not deductible for tax purposes Expenses notdeductiblefortax tax Income notsubjectto Taxation24%) atMalaysianstatutorytaxrateof24%(2016: taxation Loss before Company Income taxationexpense recognised Deferred taxassetsnot Taxfrom: savingsrecognisedduringtheyeararising Group (contd.) Utilisation of tax losses brought forward from previous years Utilisation oftaxlossesbroughtforwardfromprevious Utilisation ofcurrentyeartaxlosses UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017

110,733,837 (21,316,857) (7,455,907) (5,736,000) (5,116,046) 2,284,360 8,567,686 531,953 293,201 (6.73) 2017 2017 RM - Group 110,733,837 (68,466,166) (67,310,162) (16,154,439) 17,090,471 (1,032,830) 794,343 333,739 96,798 (61.83) 2016 2016 RM - FINANCIAL - RM 113 Total (18,592) (18,592) 973,887 (420,097) (420,652) 1,001,752 (1,923,750) (2,010,186) (3,444,955) (2,039,586) 17,799,193 209,065,872 307,204,699 292,776,379 516,270,571 521,220,469 - - RM (1,154) (1,154) assets (14,948) 437,819 512,616 ** Other (274,265) (274,820) 4,179,097 2,764,829 (2,010,186) (2,039,586) 56,569,840 56,105,564 60,748,937 62,114,062 ANNUAL REPORT 2017 REPORT ANNUAL | - - - - - RM Motor (17,438) (17,438) 203,000 (145,832) (145,832) vehicles, plant and 1,016,700 machinery 32,025,337 10,626,297 194,558,501 183,078,774 226,583,838 226,544,108 ------RM 41,590 Capital 366,590 366,590 762,819 (437,819) progress work-in------RM 216,681 buildings 4,408,067 (1,923,750) (3,444,955) *Land and 56,076,358 53,592,041 172,494,848 228,571,206 231,799,480 UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

(Note 12) and impairment (Note 12) Net carrying amount At 31 December 2017 At 31 December Exchange differences Impairment loss Reclassification to investment properties Written off Disposals Depreciation charge for the year charge for the Depreciation Accumulated depreciation 2017 At 1 January At 31 December 2017 At 31 December Exchange differences Reclassification Reclassification to investment properties Written off Disposals Additions Group 31 At December 2017 Cost 2017 At 1 January PROPERTY, PLANT AND EQUIPMENT PLANT PROPERTY,

11.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 114 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 11. PROPERTY, PLANT AND EQUIPMENT(CONTD.) ** At 1January 2016 Cost December 2016 At31 Group (contd.) Additions Disposals Written off Exchange differences Attributable to discontinuing operation Reclassification tointangible assets Reclassification toinvestment properties At 31December 2016 At 1January 2016 Accumulated depreciation Depreciation charge forthe year Disposals Written off Impairment loss Exchange differences Attributable to discontinuingoperation Reclassification to intangibleassets Reclassification to investmentproperties At 31December 2016 Net carrying amount Net (Note 23) (Note 13) (Note 12) and impairment (Note 23) (Note 13) (Note 12) computer equipmentandrenovations. Other assetsconsistoffurniture, fixtures and fittings, office equipment, waste water treatmentequipment, lift, UTUSAN MELAYU (MALAYSIA) BERHAD 234,602,772 231,799,480 178,207,439 50,229,736 53,592,041 *Land and (2,911,056) (1,187,837) 4,550,142 buildings 107,764 RM ------work-in- progress 437,819 325,000 762,819 762,819 Capital RM ------226,522,735 226,544,108 169,774,438 183,078,774 11,306,934 43,465,334 machinery 1,987,429 plant and vehicles, 11,400 Motor 9,973 9,973 RM ------| ANNUAL REPORT2017 62,331,618 62,114,062 52,998,492 56,105,564 3,120,754 6,008,498 (279,552) (192,781) (119,579) (278,655) ** Other 400,855 331,630 (27,159) (18,290) (43,447) assets (5,580) 660 660 RM - - 523,894,944 521,220,469 273,002,666 292,776,379 228,444,090 18,977,830 (2,911,056) (1,187,837) 2,319,059 (279,552) (192,781) (119,579) (278,655) 845,019 (27,159) (18,290) (43,447) 10,633 10,633 (5,580) Total RM FINANCIAL RM 115 Total 107,764 216,681 4,550,142 4,408,067 (2,911,056) (1,187,837) (3,444,955) (1,923,750) 50,229,736 53,592,041 53,592,041 56,076,358 231,799,480 178,207,439 228,571,206 172,494,848 234,602,772 231,799,480 RM 107,764 216,681 (997,142) land and buildings 4,326,699 4,184,624 (2,604,397) (3,444,955) (1,923,750) Leasehold 47,098,405 50,427,962 50,427,962 52,688,836 221,041,782 170,613,820 217,813,508 165,124,672 223,538,415 221,041,782 ANNUAL REPORT 2017 REPORT ANNUAL | - - - - RM 223,443 223,443 (306,659) (190,695) land and Freehold buildings 3,131,331 3,164,079 7,593,619 3,164,079 3,387,522 7,370,176 10,757,698 10,757,698 11,064,357 10,757,698 UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Reclassification to investment properties (Note 12) At 31 December 2016 Accumulated depreciation At 1 January 2016 Depreciation charge for the year Reclassification to investment properties (Note 12) At 31 December 2016 Net carrying amount Reclassification to investment properties (Note 12) properties (Note investment Reclassification to At 31 December 2017 Accumulated depreciation At 1 January 2017 Depreciation charge for the year Reclassification to investment properties (Note 12) properties (Note investment Reclassification to At 31 December 2017 Net amount carrying At 31 December At 2016 Cost At 1 January 2016 Additions At 31 December At 2017 Cost At 1 January 2017 Additions * Land and buildings of the Group: * Land and buildings PROPERTY, PLANT AND EQUIPMENT (CONTD.) PLANT PROPERTY,

11.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 116 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 11. PROPERTY, PLANT AND EQUIPMENT(CONTD.) At 1January 2017 Cost December 2017 At31 Company Additions Transfer in Disposals Reclassification toinvestmentproperties At 31December 2017 At 1January 2017 Accumulated depreciation Depreciation charge forthe year Transfer in Disposals Reclassification toinvestmentproperties Impairment loss At 31December 2017 Net carrying amount Net (Note 12) and impairment (Note 12) UTUSAN MELAYU (MALAYSIA) BERHAD 225,261,565 222,033,291 169,674,467 49,967,478 52,358,824 (3,444,955) (1,923,750) *Land and 4,315,096 buildings 216,681 RM - - - - - work-in- progress 325,000 366,590 366,590 Capital 41,590 RM ------223,719,323 223,776,491 180,431,633 191,941,622 machinery 10,639,121 31,834,869 1,016,700 plant and vehicles, (145,832) (145,832) 203,000 Motor RM | - - - - ANNUAL REPORT2017 45,906,302 46,149,382 39,924,355 41,906,551 2,264,656 4,242,831 (267,514) (267,512) ** Other 485,127 (14,948) 25,467 assets RM - - - 495,212,190 492,325,754 270,323,466 286,206,997 206,118,757 17,218,873 (3,444,955) (1,923,750) 1,001,752 (413,346) (413,344) 946,398 25,467 Total RM - FINANCIAL - RM 117 Total (9,665) (9,665) 770,361 2,315,992 (1,187,837) (2,911,056) 18,183,474 224,888,724 270,323,466 251,021,502 495,212,190 497,362,550 - - RM (9,665) (9,665) assets 328,563 437,819 326,197 ** Other 5,981,947 2,511,763 39,924,355 37,093,694 45,906,302 45,151,951 ANNUAL REPORT 2017 REPORT ANNUAL | - - - - - RM Motor 11,400 vehicles, plant and 1,987,429 43,287,690 11,293,960 machinery 180,431,633 167,150,244 223,719,323 223,707,923 ------RM Capital 325,000 325,000 325,000 437,819 (437,819) progress work-in- - - - - RM 107,764 buildings 4,377,751 (1,187,837) (2,911,056) *Land and 49,967,478 46,777,564 175,294,087 225,261,565 228,064,857 UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

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

(Note 12) (Note 12) Net carrying amount At 31 December 2016 At 31 December Reclassification to investment properties investment Reclassification to Impairment loss Disposals Depreciation charge for the year charge for the Depreciation Accumulated depreciation and impairment 2016 At 1 January At 31 December 2016 At 31 December Reclassification to investment properties Reclassification to investment Reclassifications Disposals Additions Company (contd.) 31 At December 2016 Cost 2016 At 1 January ** PROPERTY, PLANT AND EQUIPMENT (CONTD.) PLANT PROPERTY,

11.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 118 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 11. PROPERTY, PLANT AND EQUIPMENT(CONTD.) * LandandbuildingsoftheCompany: Net carrying amount Net 2017 At 31December 2017 At 31December Net carrying amount Net 2016 At 31December 12) investmentproperties(Note Reclassifications to year Depreciation chargeforthe 2016 At 1January Accumulated depreciation 2016 At 31December 12) investmentproperties(Note Reclassifications to Additions 2016 At 1January Cost 2016 AtDecember 31 Reclassification to investmentproperties(Note 12) year Depreciation chargeforthe 2017 At 1January Accumulated depreciation Reclassification to investmentproperties(Note 12) Additions 2017 At 1January Cost 2017 AtDecember 31 UTUSAN MELAYU (MALAYSIA) BERHAD 10,757,698 10,757,698 11,064,357 10,757,698 7,587,449 3,170,249 7,810,892 2,946,806 3,131,316 2,946,806 buildings Freehold land and (190,695) (306,659) 223,443 6,185 RM - - - - | ANNUAL REPORT2017 162,087,018 211,275,593 167,483,195 214,503,867 217,000,500 214,503,867 49,188,575 47,020,672 43,646,248 47,020,672 Leasehold (1,923,750) (3,444,955) (2,604,397) 4,371,566 4,091,653 buildings land and (997,142) 107,764 216,681 RM 169,674,467 222,033,291 175,294,087 225,261,565 228,064,857 225,261,565 52,358,824 49,967,478 46,777,564 49,967,478 (1,923,750) (3,444,955) (1,187,837) (2,911,056) 4,377,751 4,315,096 107,764 216,681 Total RM FINANCIAL RM RM 119 2016 2016 159,100 23,870,857 129,960,767 106,089,910 Company Company RM RM 2017 2017 217,350 16,367,767 120,271,391 103,903,624

ANNUAL REPORT 2017 REPORT ANNUAL | RM RM 2016 2016 2,584 23,870,857 129,960,767 106,089,910 Group Group RM RM 2017 2017 217,350 16,367,767 146,644,124 130,276,357

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Plant and machinery and others Motor vehicles Land and buildings Included in property, plant and equipment of the Group and of the Company are fully depreciated assets which are fully depreciated assets which Group and of the Company plant and equipment of the Included in property, RM113,984,619) (2016: and RM117,602,633 RM128,434,377) (2016: are still in use, costing RM134,624,370 respectively. Details of the terms and conditions of the hire purchase arrangements are disclosed in Note 28(b). arrangements Details of the hire purchase of the terms and conditions for bank borrowings institutions plant and equipment pledged to financial net carryingThe amounts of property, are as follows: to in Note 24 as referred During the year, the Group and the Company acquired property, plant and equipment with an aggregate cost aggregate an with equipment and plant property, acquired Company the and Group the year, the During (2016: RM196,000 of which RM770,361) respectively and RM946,398 (2016: of RM973,887 (2016:RM845,019) means of loans and borrowings. acquired by were RMNil) respectively (2016: RMNil) and RM196,000 and leasing payable held under hire purchase plant and equipment net carryingThe amounts of property, agreements are as follows:

11.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 12. 120 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS INVESTMENT PROPERTIES At 1 January 2017 At 1January Cost 2017 AtDecember 31 Group At 31 December 2016 At 31December Reclassification property, 11) Reclassification from plantandequipment(Note Addition 2016 At 1January Cost At 31December2016 Fair value Net carryingamount 2017 At 31December Disposal property, 11) Reclassification from plantandequipment(Note year Depreciation chargeforthe 2017 At 1January Accumulated depreciation 2017 At 31December Disposal property, 11) Reclassification from plantandequipment(Note Reclassification Addition UTUSAN MELAYU (MALAYSIA) BERHAD 150,798,809 40,667,123 40,667,123 17,233,942 18,387,845 74,661,676 83,942,434 38,939,086 (6,800,000) 2,911,056 2,134,280 9,280,758 1,923,750 7,229,897 3,444,955 7,691,270 buildings Land and (781,748) 908,859 RM | ANNUAL REPORT2017 construction (17,233,942) Investment 17,268,021 17,268,021 32,357,196 11,249,662 11,249,662 properties (7,691,270) 2,144,767 1,672,911 under N/A RM ------57,935,144 57,935,144 50,745,041 85,911,338 95,192,096 40,611,997 (6,800,000) 2,911,056 4,279,047 9,280,758 1,923,750 7,229,897 3,444,955 (781,748) 908,859 Total RM - - FINANCIAL RM RM 2016 121 Total 54,241 609,334 1,631,668 2,911,056 4,542,724 1,425,767 1,187,837 2,667,845 1,874,879 1,187,837 7,229,897 5,432,726 30,302,640 50,705,247 - - - - RM RM N/A 2017 under 118,614 ANNUAL REPORT 2017 REPORT ANNUAL 1,923,750 4,542,724 3,444,955 7,987,679 2,667,845 4,710,209 3,277,470 56,309,723 17,268,021 properties | Investment construction RM 609,334 Land and buildings 1,187,837 7,229,897 5,432,726 33,437,226 97,593,303 UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Reclassification from property, plant and equipment (Note11) Reclassification from property, Company Land and buildings Cost At1 January plant and equipment (Note11) Reclassification from property, At 31 December Accumulated depreciation At 1 January Depreciation charge for the year At 31 December Net carrying amount Fairv alue Reclassification from property, plant and equipment (Note11) Reclassification from property, At 31 December 2016 Net carrying amount Group (contd.) Accumulated depreciation At 1 January 2016 Depreciation charge for the year Fair value Fair value of the investment properties was determined using significant observable inputs (Level 2 of fair value fair 2 of using significant observable determined properties was inputs (Level of the investment value Fair the Directors. by to the prices of similar properties within the market obtained via reference hierarchy) RM4,279,047) (2016: property with an aggregate cost of RM40,611,997 the Group acquired investment During the year, cost borrowing The means of loans and borrowings. acquired by and were RM3,774,605) RM443,670 (2016: of which RM323,340). (2016: property of the Group amounted to RM11,788 capitalised as cost of investment are still in use, are fully depreciated assets which properties of the Group and of the Company Included in investment costing RM1,958,477. INVESTMENT PROPERTIES (CONTD.) INVESTMENT

12.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 122 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS Software 13. 12.

INTANGIBLE ASSETS INVESTMENT PROPERTIES(CONTD.) purchase, construct ordevelop investment propertiesorfor repairs,maintenance andenhancements. The ofitsinvestment Grouphasnorestrictionsontherealisability propertiesandnocontractual obligationsto are shown below: The incomeandexpenses arisingfromtheGroup’s andtheCompany’s investment propertiesfor thefinancial year costing RM25,747,064 (2016: RM23,870,040)andRM25,724,422(2016: RM23,853,522)respectively. assetsofthe GroupandoftheCompanyIncluded inintangible arefullyamortisedassetswhich arestillinuse,

At 31 December At 31 December At 31 Profit arising from investmentproperties Profit arisingfrom income Direct operating expenses generatingrental properties Rental incomederived from investment At 1 January At 1 Cost Net carrying amount Net January At 1 Accumulated amortisation Reclassification from property,Reclassification from plantandequipment Amortisation for the year Amortisation forthe Reclassification from property,Reclassification from plantandequipment (Note 11) (Note 11) (included inother operating expenses) UTUSAN MELAYU (MALAYSIA) BERHAD

27,588,029 28,279,294 28,279,294 26,856,161 1,042,402 1,324,582 (282,180) 691,265 731,868 2017 2017 RM RM - - Group Group 26,856,161 28,279,294 28,086,513 25,946,977 1,148,341 1,329,662 1,423,133 (181,321) 192,781 903,604 5,580 2016 2016 RM RM | ANNUAL REPORT2017

27,328,159 27,847,767 27,847,767 26,679,293 486,347 571,049 (84,702) 519,608 648,866 2017 2017 RM RM - - Company Company 26,679,293 27,847,767 27,847,767 25,824,385 1,168,474 453,292 507,800 (54,508) 854,908 2016 2016 RM RM - - FINANCIAL - - RM 2016 123 4,230,000 5,135,999 4,673,396 9,809,395 (9,809,395) 14,039,395 Company - RM 2017 9,266,001 3,230,002 9,809,395 1,000,000 6,035,999 (6,035,999) (4,773,396)

ANNUAL REPORT 2017 REPORT ANNUAL Video post- production editing Dormant Dormant Dormant Property development Radio and TV advertising Investment holding Publication of magazines Publications and distribution of books Dormant Principal activities | - 70 100 100 100 100 100 100 100 2016 100 held (%) - 70 100 100 100 100 100 100 100 100 2017 Equity interest Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Indonesia Country of incorporation UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Juasa Holdings Sdn. Bhd. Distributors Sdn. Bhd. Held by the Company and Utusan Studios Sdn. Bhd. *** Utusan Teknologi Maklumat Sdn. Bhd. Utusan Teknologi Utusan Technology Asia Sdn. Bhd. Asia Sdn. ** Utusan Technology U-Print Sdn. Bhd. Utusan Land Sdn. Bhd. Utusan Airtime Sdn. Bhd. Juasa Holdings Sdn. Bhd. Held by the Company: Held by the Utusan Publications and Unquoted shares, at cost Less: Accumulated impairment losses accounts: Movement in allowance At 1 January Charge for the year Discontinued operation Disposal of subsidiary At 31 December PT. Sinar Media Advertising * PT. Utusan Karya Sdn. Bhd.

Name of subsidiaries Details as follows: of the subsidiaries are INVESTMENTS IN SUBSIDIARIES INVESTMENTS

14.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 124 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 14.

INVESTMENTS INSUBSIDIARIES(CONTD.) Details ofthesubsidiariesareasfollows:Details (contd.) were: The fair values oftheidentifiable assetsandliabilitiesofUtusan Technology Asia SdnBhdasatthedateofacquisition Utusan Technology Asia SdnBhdbecameawholly-owned oftheCompany. subsidiary ofUtusan inthecapital cash considerationofRM2.00 Technology Asia SdnBhd.Subsequenttothesaidacquisition, On 23 August 2017 sharesofRM1.00 theCompany hadannouncedthatitacquiredtwo ordinary each for a ** Acquisition ofSubsidiary * Audited by firmsofauditorsotherthanErnst& Young. Name of subsidiaries Name of Net identifiableassets Trade andotherreceivables Utusan Media Bhd. Sales Sdn. Held viaJuasaHoldingsSdn.Bhd. Held throughsubsidiaries: (formerly known as Jobhouse Sdn. Bhd.) (formerly knownasJobhouseSdn. Bhd. Utusan JobhouseSdn. Utusan Binders Sdn. Bhd. Bhd. Utusan BindersSdn. Karya OutdoorSdn.Bhd. Held viaUtusanMediaSalesSdn. Bhd. Tintarona PublicationsSdn.Bhd. Held viaKaryaOutdoorSdn.Bhd. UTUSAN MELAYU (MALAYSIA) BERHAD incorporation Country of Malaysia Malaysia Malaysia Malaysia Malaysia Equity interest 2017 100 100 100 100 100 held (%) 2016 100 100 100 100 100 |

Principal activities Advertising agent Management services Dormant Outdoor advertising Publications anddistribution ANNUAL REPORT2017 of books Fair value RM 2 2 Carrying amount RM 2 2 FINANCIAL - 2 2 2 RM RM RM 538 40,514 60,000 60,000 19,486 (40,514) 125 844,000 2,840,571 (3,665,623) (2,780,571) (2,780,571) ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Cash paid Total cost of business combination: Total Net cash outflow on acquisition The effect of the acquisition on cash flows is as follow: The effect of the acquisition Total cost of business combination Total acquired Less: Cash and cash equivalents of subsidiary Inventories Cash & bank balances and other payables Trade net liabilities Total disposal proceed Total Net liabilities disposed Gain on disposal to the Group Cash inflow arising from the disposal: Cash consideration Cash and cash equivalent of subsidiary disposal Net cash inflow on Property, plant & equipment Property, Acquisition of SubsidiaryAcquisition ** (contd.) Disposal of a Subsidiary *** Agreement’) (‘the Agreement announced that it had entered into a Share Sale had the Company September 2017 On 19 represent 60% of which each the disposal of 60,000 Bhd for S&S Sdn ordinarywith Rawdah of RM1.00 shares of a consideration Sdn Bhd for Studios Utusan subsidiary, the total issued and paid-up capital in its wholly-owned completed on fully was Agreement The Agreement. terms and subject to the conditions of the RM60,000, upon such the same date. associate of the but became an Sdn Bhd ceased to be a subsidiary, Studios Upon completion of the disposal, Utusan Company. Sdn Bhd has been fully impaired during the year. Studios remaining interest of 40% in Utusan The position of the Group as at 31 December 2017. on the financial effects disposal had the following The INVESTMENTS IN SUBSIDIARIES (CONTD.) IN SUBSIDIARIES INVESTMENTS

14.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 126 15. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS

INVESTMENTS IN ASSOCIATESINVESTMENTS of thoseamounts. financial informationstatementsoftheassociateandnotGroup’s representstheamountsinfinancial share Summarised financialinformation inrespectoftheGroup’s materialassociateissetoutbelow. The summarised * Audited by firmsofauditorsotherthanErnst& Young. Details oftheassociatesareasfollows:Details Name of associates Name of Unquoted shares, at cost Unquoted shares,at Utusan Transport Sdn.Bhd.anditssubsidiaries* Held bythe Company: Share of post-acquisition reserves Share of Utusan StudioSdnBhd Titanium* CompassSdnBhd Less: Accumulated impairment losses Accumulated Less: PT. SinarMitraUtama* Share of net assets of the associates Share ofnetassets Represented by: Utusan Printcorp Sdn. Bhd.* Utusan PrintcorpSdn. UTUSAN MELAYU (MALAYSIA) BERHAD incorporation Country of Indonesia Malaysia Malaysia Malaysia Malaysia

(2,376,461) 2,922,306 545,845 545,845 545,845 2017 RM - Equity interest 2017 30 40 20 40 40 Group held (%) (2,020,767) 2,882,306 861,539 861,539 861,539 2016 30 20 40 40 2016 - RM - | ANNUAL REPORT2017 Principal activities Transportation Video post-productionediting Investment holding Dormant Dormant

(2,789,000) 2,789,000 2,789,000 2017 RM - - - Company (2,680,000) 2,749,000 2,749,000 69,000 2016 RM - - FINANCIAL RM RM RM 2016 2016 2016 30% 460,115 127 861,539 (718,917) (718,917) 5,014,773 3,194,489 8,209,262 4,877,351 5,337,466 3,590,713 2,871,796 4,557,166 RM RM RM 2017 2017 2017 30% 36,750 489,545 545,845 5,580,598 2,981,384 8,561,982 6,252,953 6,742,498 2,871,796 1,819,484 (1,052,312) (1,052,312) ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Carrying value of Group’s interest in associates Carrying value of Group’s Year ended 31 December ended Year Results Revenue Loss for the year As at 31 As December Assets and liabilities Current assets Non-current assets assets Total Current liabilities Non-current liabilities liabilities Total Net assets at 1 January Loss for the year Net assets at 31 December Interest in associate Summarised statement of financial position: There are no financial information available for the associates that are not individually material as at 31 December for the available no financial information are There fully impaired the carrying these associates in the amount for have Group and the Company The 2016. and 2017 financial statements. Reconciliation of the summarised financial information presented above to the carrying amount of the Group’s the carrying to the Group’s amount of above presented of the summarised financial information Reconciliation interest in associate. Summarised statement of comprehensive income: Summarised statement of comprehensive

Utusan Transport Sdn Bhd Transport Utusan (i) (iv) (iii) (ii) INVESTMENTS IN ASSOCIATES (CONTD.) ASSOCIATES IN INVESTMENTS

15. NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 128 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 16. INVESTMENT SECURITIES Total investment securities Preference shares,unquotedinMalaysia Other investments Equity instruments Available-for-sale financialassets Non-current Company Total investmentsecurities Held-for-trading Current Total non-current Club membership,unquoted,atcost Preference shares,unquotedinMalaysia Other investments Equity instruments Available-for-sale financialassets Non-current Group less: impairment - UnquotedinMalaysia,atcost - QuotedinMalaysia - QuotedinMalaysia less: impairment less: impairment - UnquotedinMalaysia,atcost - QuotedinMalaysia UTUSAN MELAYU (MALAYSIA) BERHAD (11,700,000) (11,700,000) 11,700,000 11,700,000 1,695,338 1,231,668 1,156,668 1,156,668 Carrying 463,670 123,000 amount (48,000) 33,330 33,330 33,330 75,000 - - - - 2017 RM Market value investments 1,156,668 of quoted 463,670 33,330 | (11,700,000) (11,700,000) ANNUAL REPORT2017 11,700,000 11,700,000 1,923,676 1,267,548 1,144,548 1,144,548 Carrying 656,128 123,000 171,000 amount (48,000) 27,366 27,366 27,366 - - - - 2016 RM Market value investments 1,144,548 of quoted 656,128 27,366 FINANCIAL ------RM RM 2016 129 (137,058) 3,804,334 4,284,941 17,890,357 13,742,474 (21,831,749) (18,027,415) (18,027,415) (13,742,474) allowances Company ------RM 2017 Accelerated capital

ANNUAL REPORT 2017 REPORT ANNUAL | RM 2016 85,399 21,913 63,486 85,399 222,457 (137,058) Group - RM 2017 85,399 3,242,607 3,157,208 3,242,607 3,242,607

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

At 1 January Recognised in profit or loss (Note 9) At 31 December Presented as follows: Deferred tax assets Deferred tax liabilities At 1 January 2016 Recognised in profit or loss Less: Set-off deferred tax assets At 31 December 2016 At 1 January 2017 Recognised in profit or loss Less: Set-off deferred tax assets At 31 2017 December The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are year prior to offsetting tax liabilities and assets during the financial of deferred components and movements The as follows: tax liabilities of the Group: Deferred DEFERRED TAX

17.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 130 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 17.

EERDTX (CONTD.) DEFERRED TAX Deferred taxassetsoftheGroup: Deferred taxliabilitiesoftheCompany: At 31 December 2016 December At 31 assets tax Less: Set-offdeferred loss or Recognised inprofit 2016 January At 1 2017 December At 31 assets tax Less: Set-offdeferred loss or Recognised inprofit 2017 January At 1 At 1 January 2017 At 1January Recognised in profit or loss Recognised inprofitor At 1 January 2016 At 1January 2017 At 31December tax liabilities Less: Set-offdeferred Recognised in profit or loss Recognised inprofitor At 31 December 2016 December At 31 tax liabilities Less: Set-offdeferred UTUSAN MELAYU (MALAYSIA) BERHAD obligations Retirement (65,315) (70,302) (65,558) (65,315) benefit (4,987) 243 RM allowances unabsorbed 16,291,765 14,564,792 19,908,408 16,291,765 Unutilised tax losses (1,726,973) (3,616,643) capital and RM | and accruals ANNUAL REPORT2017 Provisions 1,886,364 2,490,591 2,010,812 1,886,364 (124,448) 604,227 RM Accelerated capital allowances (16,188,456) (13,118,817) (20,120,648) (16,188,456) (13,742,474) (17,890,357) 16,188,456 13,118,817 18,112,814 16,985,081 21,853,662 18,112,814 (1,127,733) (3,740,848) 3,932,192 3,069,639 3,242,607 222,457 Total RM RM - - FINANCIAL - - RM RM 2016 131 Total (3,932,192) (3,069,639) 10,550,970 37,102,635 16,188,456 20,120,648 13,118,817 16,188,456 (16,188,456) (13,118,817) 183,657,973 136,004,368 Company RM 2017 - - RM 4,020,479 15,418 (15,418) (15,418) (15,418) 53,270,075 219,356,665 162,066,111

ANNUAL REPORT 2017 REPORT ANNUAL Provisions | and accruals RM 2016 RM 46,473,653 17,937,169 252,436,705 188,025,883 Group capital (3,916,774) (3,085,057) 16,203,874 20,120,648 13,118,817 16,203,874 allowances Unabsorbed RM 2017 6,079,343 62,644,918 277,435,407 208,711,146

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Less: Set-off deferred tax liabilities At 31 December 2016 Recognised in profit or loss At 1 January 2016 Less: Set-off deferred tax liabilities At 31 December 2017 Recognised in profit or loss At 1 January 2017 Unutilised tax losses Unabsorbed capital allowances Others The unutilised tax losses and unabsorbed capital allowances of the Group are available indefinitely for offsetting against for offsetting indefinitely tax of the Group are available unutilised The losses and unabsorbed capital allowances change in shareholdings of entities within the Group, subject to no substantial of the respective taxable profits future the tax and guidelines issued by authority. 1967 Act, Tax those entities under the Income Deferred tax assets have not been recognised in respect of the following items: recognised in respect of the following not been tax have assets Deferred Deferred tax assets of the Company: Deferred DEFERRED TAX DEFERRED TAX (CONTD.)

17. NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 132 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 18. TRADE AND OTHER RECEIVABLES Advances to employees (Note19) Prepayments Deposits (b): Due fromrelatedparties (c) Other receivables Tradereceivables, net Less: Allowanceforimpairment Third parties Trade receivables(a) Current Dividend receivable Sundry receivables Less: Allowancefor impairment: Tradeother receivables (current) and Other receivables(current) - Associates - Subsidiaries - Other receivables - - Associates - Subsidiaries UTUSAN MELAYU (MALAYSIA) BERHAD

(12,387,419) (13,725,602) (21,626,771) 17,497,198 63,357,010 75,744,429 19,650,919 42,094,850 83,825,089 20,468,079 (7,901,169) 1,267,993 2,514,009 1,164,731 2017 RM - - - Group (13,725,602) (20,737,011) (13,196,111) 14,008,034 53,043,375 66,239,486 13,165,335 34,006,501 66,312,865 13,269,490 (7,011,409) 1,108,831 3,357,322 2,366,979 2016 RM | - - - ANNUAL REPORT2017

(13,725,602) (25,143,258) (44,210,194) 17,242,254 44,175,251 44,946,912 48,309,224 23,900,000 10,839,323 97,794,898 98,531,616 53,584,704 (3,362,312) (5,341,334) 965,731 672,339 2017 RM - Company (13,725,602) (20,409,707) (38,496,543) 13,725,602 52,329,518 20,528,849 23,826,662 76,170,076 58,202,382 37,673,533 (3,297,813) (4,361,234) 1,984,083 7,898,495 232,378 2016 RM - - FINANCIAL - - - RM 2016 133 725,294 980,100 (232,378) (725,294) (980,100) 70,366,623 58,202,382 12,396,619 14,450,521 12,745,127 (12,745,127) Company - - - - RM 2017 371,692 (965,731) (371,692) 3,072,949 76,738,834 98,531,616 13,116,819 12,745,127 (23,900,000) (12,745,127)

ANNUAL REPORT 2017 REPORT ANNUAL | - - - RM 2016 980,100 (980,100) 1,928,039 1,928,039 (3,357,322) 97,742,326 68,240,904 32,858,744 15,653,266 12,745,127 (12,745,127) Group - - - - - RM 2017 2,194,892 2,194,892 (2,514,009) 86,019,981 17,788,024 14,940,019 12,745,127 (12,745,127) 101,293,996

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

- Associate - Subsidiaries - Other receivables Total loans and receivables Total Total trade and other receivables Total Add: Cash and bank balances (Note 21) Less: Prepayments Less: receivable Dividend

Less: Allowance for impairment: Less: Allowance for Other receivables (non-current) Advances to employees (Note 19) Advances to Non-current Other receivables (c) Loans to subsidiaries (b) Loan to associate (b) Other receivables TRADE AND OTHER RECEIVABLES (CONTD.) RECEIVABLES AND OTHER TRADE

18.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 134 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 18. TRADE AND OTHER RECEIVABLES (CONTD.) (a) renegotiated duringthefinancial year. None oftheGroup’s andtheCompany’s tradereceivables thatareneitherpastduenorimpairedhave been with theGroupandCompany. Trade receivables thatareneitherpastduenorimpairedcreditworthy debtorswithgoodpayment records Receivables thatareneitherpastduenorimpaired amountthatarepastduebutnotimpairedunsecuredinnature.total RM12,337,488 (2016: RM14,606,151) respectively thatarepastdueatthereportingdatebutnotimpaired. The The GroupandtheCompany have tradereceivables amountingtoRM25,110,969 (2016: RM36,813,777) and The ageinganalysis oftheGroup’s andoftheCompany’s tradereceivables isasfollows: are recognisedattheiroriginalinvoice amountswhich representtheirfair values oninitialrecognition. Trade receivables are non-interest bearing and are generally on 30 to 120 days (2016: 30 to 120 days) terms. They Trade receivables 61 to90dayspastduenotimpaired 31 to60dayspastduenotimpaired 1 to30dayspastduenotimpaired Neither pastduenorimpaired 91 to120dayspastduenotimpaired More than120dayspastduenotimpaired Impaired UTUSAN MELAYU (MALAYSIA) BERHAD

38,246,041 12,387,419 25,110,969 75,744,429 1,862,968 3,669,272 7,505,795 2,429,835 9,643,099 2017 RM Group 16,229,598 13,696,625 13,196,111 36,813,777 66,239,486 3,348,800 8,315,265 8,375,068 3,078,019 2016 RM | ANNUAL REPORT2017

32,609,424 12,337,488 48,309,224 1,340,046 3,707,625 1,259,376 5,278,792 3,362,312 751,649 2017 RM Company 14,606,151 23,826,662 5,922,698 3,946,949 2,627,916 1,400,262 5,811,213 3,297,813 819,811 2016 RM FINANCIAL - - - RM RM 2016 2016 135 718,983 (109,399) 3,297,813 2,688,229 3,297,813 (3,297,813) Company Company - - - RM RM 2017 2017 284,364 (219,865) 3,362,312 3,297,813 3,362,312 (3,362,312)

ANNUAL REPORT 2017 REPORT ANNUAL | - - RM RM 2016 2016 2,857,876 (1,222,437) 13,196,111 23,062,672 13,196,111 (11,502,000) (13,196,111) Group Group - RM RM 2017 2017 (376,500) 2,669,562 (1,156,572) (1,945,182) 12,387,419 13,196,111 12,387,419 (12,387,419)

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

At 31 December Disposal of a subsidiary At 1 January Charge for the year (Note 8) Reversal of impairment loss (Note 8) Written off Trade receivables - nominal value receivables - nominal Trade Less: Allowance for impairment Nominal value Trade receivables that are individually determined to be impaired at end of the financial year relate to debtors that that are individually determined to be impaired at end of the financial receivables Trade any collateral by are not secured These receivables payments. on defaulted have and are in significant difficulties or credit enhancements. Trade receivables (contd.) receivables Trade that are impaired Receivables year and the impaired at the end of the financial that are trade receivables the Company’s and Group’s The impairment are as follows: accounts used to record the of the allowance movement Movement in allowance accounts: in allowance Movement

(a) TRADE AND OTHER RECEIVABLES (CONTD.) RECEIVABLES AND OTHER TRADE

18.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 136 18. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS TRADE AND OTHER RECEIVABLES (CONTD.) (c) (b) The movements oftheallowance accountsusedtorecordtheimpairmentareasfollows: financial lossesorhave defaulted ontheirpayments. other debtors,associatesandsubsidiaries. These relatestocompaniesthathave beensuffering significant RM34,462,238) and RM57,327,013 (2016: RM52,947,064) respectively for impairment of the amount due from At thereportingdate,GroupandCompany have provided allowance ofRM34,371,898(2016: Other receivables thatareimpaired Other receivables average maturity of5years (2016: 5years). Loans tosubsidiariesandassociates areunsecured,bearsinterestat5%(2016: 5%perannum),andhave Amounts duefromassociatesareunsecured,non-interestbearingandrepayable upondemand. related partiesreceivables aretobe settled incashafter offsetting arrangements. Amounts duefromsubsidiariesareunsecured,non-interestbearingandrepayable upondemand.Part of Amounts duefrom related parties At 1 January At 1 Charge for the year (Note8) Charge forthe Reversal ofimpairmentloss(Note8) Written off At 31 December At 31 UTUSAN MELAYU (MALAYSIA) BERHAD

34,462,238 34,371,898 (11,016) (79,324) 2017 RM - Group 34,458,375 34,462,238 (28,888) 32,751 2016 RM - | ANNUAL REPORT2017

52,947,064 57,327,013 (1,721,773) 6,482,284 (380,562) 2017 RM Company 62,079,243 52,947,064 (2,649,580) (8,219,725) 1,737,126 2016 RM FINANCIAL - - - RM RM 2016 2016 137 821,094 950,584 (487,125) 4,653,438 5,728,536 1,345,146 1,228,265 3,523,995 3,036,870 1,108,831 1,106,945 3,036,870 1,108,831 1,928,039 3,036,870 10,381,974 Group Company - - RM RM 2017 2017 990,750 (538,872) 9,475,254 8,524,584 5,424,594 1,528,540 4,001,757 1,144,922 1,328,295 3,462,885 3,462,885 1,267,993 1,204,142 1,267,993 2,194,892 3,462,885 (4,473,924)

ANNUAL REPORT 2017 REPORT ANNUAL | RM 2016 77,008 4,653,438 5,728,536 5,933,387 (1,012,095) 15,380,274 Group RM 2017 51,908 8,524,584 5,424,594 6,162,880 (5,553,348) 14,610,618

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Raw materials Spare parts and consumables Work-in-progress Finished goods Less: Impairment for obsolete stock Advances employees to Minimum receivables: Within and up to one year After one and up to two years After two and up to five years Less: Future finance income Present value of assets Present value of assets: Within and up to one year After one and up to two years After two and up to five years Analysed as: 18) Receivables within twelve months (Note 18) Receivables after twelve months (Note Total During the year, the amount of inventories recognised as an expense in cost of sales of the Group and the Company in cost of sales of the Group and the Company recognised as an expense the amount of inventories During the year, RM56,724,572). (2016: RM60,975,923) and RM45,012,984 (2016: RM45,605,481 was The advances to employees relate to advances given to employees of the Group to purchase motorcycles and motorcycles of the Group to purchase to employees given relate to advances to employees advances The Scheme Appliances Loan Computer and Electrical & Staff Scheme, Loan Motorcycle computers under the Staff salary through recovered 6%) per annum and are at 6% (2016: bear interest Schemes Loan The Schemes”). (“Loan deductions. LONG-TERM RECEIVABLES LONG-TERM

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE

20. INVENTORIES

19. FINANCIAL 138 21. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS

CASH AND BANK BALANCES The average maturities ofdepositsasattheendfinancial year were as follows: The weighted average effective interestratesofdepositsatthereportingdatewere asfollows: banks for facilities grantedasreferred toinNote24. Included inthedepositsofGroupisanamountRM1,744,950 (2016: RM2,047,209) which hasbeenpledgedto Cash on hand and at banks Cash onhandandat Licensed banks Licensed banks Deposits with: Money marketinstitutions Money marketinstitutions

Cash and bank balances Cash andbank Less: Pledged deposits Less: Cash andcash equivalents - Licensed banks - Licensed - Money market institutions - Moneymarket UTUSAN MELAYU (MALAYSIA) BERHAD

14,567,333 17,788,024 16,043,074 (1,744,950) 2,461,461 759,230 Days 2017 2017 2017 RM 179 3.0 2.3 % 1 Group Group Group 30,799,362 32,858,744 30,811,535 (2,047,209) 2,058,776 Days 2016 2016 2016 606 RM 203 3.1 2.8 % 1 | ANNUAL REPORT2017

3,072,949 3,072,949 3,072,949 Days 2017 2017 2017 RM % ------Company Company Company 12,396,619 12,396,619 12,396,619 Days 2016 2016 2016 RM % ------FINANCIAL RM RM 2016 Total 58,751 20,742 139 283,383 844,705 (670,154) 1,151,983 1,172,725 1,231,476 8,648,980 1,151,983 (3,830,329) (4,675,034) (7,496,997) (4,928,601) (3,776,618) Group and Company - - RM RM 2017 assets 20,742 of plan ANNUAL REPORT 2017 REPORT ANNUAL 844,705 181,413 (372,642) 8,512,189 | Fair value (7,667,484) (4,675,034) (3,830,329) (7,496,997) (7,476,255) (7,848,897) (7,667,484) (7,667,484)

- RM 431,393 101,970 (670,154) 8,648,980 8,648,980 9,080,373 8,512,189 3,837,155 (4,675,034) obligations defined benefit Present value of 5 Note UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

- Experience losses Present value of funded defined benefit obligations Fair value of plan assets Net liability arising from defined benefit obligations Less: Advance contributions paid Less: Advance contributions Net retirement benefit assets At 1 January 2017 Less: Remeasurement opening balance Interest expense/(income) Remeasurements: Settlement payments At 31 December 2017 paid Less: Advance contributions Net retirement benefit assets The Company operates a funded, defined benefit Retirement Benefit Scheme (“the Scheme”) for its eligible Scheme”) Scheme (“the Benefit Retirement benefit operates a funded, defined Company The the Scheme, a separately administered fund. Under are to be made to Contributions to the Scheme employees. attainmenton final salary based age of 60. of the retirement on benefits are entitled to retirement eligible employees follows: statement amounts recognised in the are determined as of financial position The RETIREMENT ASSETS BENEFIT

22.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL

140 22. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS RETIREMENT BENEFIT ASSETS (CONTD.) correlated. as it is unlikely that the change in assumptions would occur in isolation of one another as some assumptions may be The analysis sensitivity presentedabove may notberepresentative oftheactual change indefinedbenefit obligation A 1%change indiscountratewill(decrease)/increasethedefinedbenefit obligations bythe following amounts: assumptions heldconstant: analysissensitivity below hasbeendeterminedbasedonthechanges toindividualassumptions,withallother The significantactuarial assumption for determinationofthedefinedbenefit obligationsisthediscount rate. The the benefits determined by theactuaries. As atthisdate,thevaluations indicatethattheprovisions for retirementbenefits aresufficient to achieve the valueof Principal actuarial assumptionsused: The actual return on the plan assets of the Group and of the Company was a surplus of RM191,229 (2016: RM210,185). Net retirement benefit assets Net retirementbenefit Less: Advancecontributions paid 2016 At 31December Settlement payments - Experiencelosses Remeasurements: Interest expense/(income) balance Less: Remeasurementopening 2016 At 1January - Decrease by 1% - Decreaseby 1% - Increaseby Discount rate UTUSAN MELAYU (MALAYSIA) BERHAD Note 5 Present value of Present value defined benefit obligations (4,928,601) (1,149,406) 3,720,379 8,648,980 9,352,440 8,890,075 8,890,075 445,946 462,365 RM - (7,496,997) (7,496,997) (7,643,975) (7,266,070) (7,281,311) Fair value | (377,905) 146,978 ANNUAL REPORT2017 of plan 15,241 assets RM 2017 (437,293) 5.00 477,142 - - % Group and Company Group and 2017 RM (4,928,601) (1,149,406) (3,776,618) 1,151,983 1,708,465 1,624,005 1,608,764 2016 (655,694) 5.10 592,924 411,861 % 84,460 15,241 Total 2016 RM RM FINANCIAL - - - RM 2016 141 53,766 7,000,000 1,000,000 9,000,000 4,400,000 1,763,100 27,811,610 20,811,610 16,216,866 44,028,476 Company - - RM 2017 43,054 8,074,774 1,000,000 4,400,000 1,763,100 56,367,472 39,161,318 12,000,000 19,086,544 17,206,154 10,000,000

ANNUAL REPORT 2017 REPORT ANNUAL - | RM 2016 2,647 7,750,000 1,000,000 3,841,650 1,208,000 9,000,000 4,400,000 1,763,100 50,704,007 29,488,610 21,738,610 21,215,397 Group RM 2017 22,286 8,074,774 1,000,000 6,130,189 1,208,000 4,400,000 1,763,100 63,984,893 39,461,318 12,300,000 19,086,544 24,523,575 10,000,000

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

(Note 28(b)) Total (current) Total Revolving credits Bankers acceptance Unsecured: Bank Overdraft Obligation under hire purchase and leasing payables Obligation under hire purchase and leasing Revolving credits Istisna’ Term Financing (“TF-i 1 to TF-i 8”) Istisna’ Term Term Loan Facilities (“TL 1 & TL Loan 2”) Term Bai Bithaman Ajil Affin Commodity Murabahah Term Financing (CMTF 2) Term Commodity Murabahah Current Secured: Financing (CMTF 1) Term Commodity Murabahah Included in the non-current asset classified as held-for-sale and disposal group as at 31 December 2016 was net 2016 and disposal group as at 31 December as held-for-sale asset classified Included in the non-current Group completed the disposal The Sdn Bhd. Studios Utusan subsidiary, of a wholly-owned liabilities of RM695,021 Sdn Studios Utusan Upon completion of the disposal, year. financial during the current of its 60% of its interest detailsfor (disposal of a to Note 14 Refer of the Company. but became an associate subsidiary, Bhd ceased to be a subsidiary). LOANS AND LOANS BORROWINGS NON-CURRENT ASSET CLASSIFIED AS HELD-FOR-SALE AND DISPOSAL GROUP AND DISPOSAL HELD-FOR-SALE AS CLASSIFIED ASSET NON-CURRENT

24.

23.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 24. 142 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS LOANS AND BORROWINGS (CONTD.) Commodity Murabahah Term Financing(CMTF1) Secured: Non-current Commodity Murabahah Term Financing(CMTF2) Bai Bithaman Ajil Affin Bai BithamanAjil Term2”) Loan Facilities (“TL1&TL Revolving credits and leasingpayables Obligation underhirepurchase Revolving credits Unsecured: Total (non-current) Bank Overdraft Totalborrowings loansand Bankers acceptance Revolving credits Commodity Murabahah Term Financing(CMTF1) (b) Commodity Murabahah Term Financing(CMTF2) (c) Bai Bithaman Ajil Affin (d) Bai BithamanAjilAffin Term(e) Loan Facilities (“TL1&TL2”) Istisna’ Term Financing (“TF-i 1 to TF-i 8”) (f) Istisna’ TermFinancing (“TF-i1toTF-i8”) and leasing payables Obligation underhirepurchase (Note 28 (b)) (Note (Note 28 (b)) (Note UTUSAN MELAYU (MALAYSIA) BERHAD

157,010,064 29,653,095 10,280,000 26,000,000 76,025,171 17,000,000 93,025,171 19,086,544 56,300,000 13,709,392 39,653,095 11,488,000 9,309,392 8,074,774 2,372,070 6,130,189 608,970 173,714 196,000 2017 RM Group 123,222,557 173,926,564 13,709,392 39,653,095 11,488,000 27,000,000 94,222,557 29,000,000 21,738,610 64,750,000 18,109,392 48,653,095 12,696,000 2,372,070 4,135,170 3,841,650 2,647 2016 RM | - - ANNUAL REPORT2017

139,142,710 29,653,095 26,000,000 65,775,238 17,000,000 82,775,238 19,086,544 56,000,000 13,709,392 39,653,095 9,309,392 8,074,774 2,372,070 608,970 203,781 246,835 2017 RM - - - Company 111,783,430 155,811,906 13,709,392 39,653,095 27,000,000 82,783,430 29,000,000 20,811,610 64,000,000 18,109,392 48,653,095 2,372,070 4,135,170 102,639 48,873 2016 RM - - - - FINANCIAL RM 2016 143 44,028,476 29,183,870 53,599,560 29,000,000 155,811,906 Company RM 2017 56,367,472 25,057,436 31,652,325 26,065,477 139,142,710

ANNUAL REPORT 2017 REPORT ANNUAL | RM 2016 50,704,007 30,371,100 54,779,457 38,072,000 173,926,564 Group RM 2017 63,984,893 26,241,165 35,270,529 31,513,477 157,010,064

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN RM13,391,445 8 years Cost of Fund + 1.25% per annum 9 August 2012 9 May 2019 1st legal charge over the freehold land and building(s) erected and/or to be erected thereon at Tebrau plant; Tebrau the freehold land and building(s) erected and/or to be erected thereon at over 1st legal charge the leasehold land and building(s) erected and/or to be erected thereon at Gong Badak over 1st legal charge plant; and Badak Tebrau and Gong assets at existing and future of the Company’s floating debenture and A fresh fixed plants.

Tenure: Profit rate: Start date: Maturity date: Amount: The Commodity Murabahah Term Financing profit payments shall be made on a monthly basis until full settlement monthly basis until full settlement shall be made on a payments Financing profit Term CommodityThe Murabahah schedule. on a quarterly basis as prescribed in repayment whilst principal repayment are as follows: facility of the above securities The (i) (ii) (iii) Commodity Murabahah Term Financing (CMTF 1) Term Commodity Murabahah pre-press of purchase the part-finance to October 2010 22 on arrangement an into entered Company The electrical, and utilities work and mechanical as the infrastructure, as well equipment, additional printing machines, under Commodity Terengganu and Gong Badak, Johor Tebrau, printing plants in both the Company’s costs for Financing amounting up to RM17,631,000. Term Murabahah 2019. date of 9 May with a maturity of RM13,391,445, has made a drawdown Company The Financing are as follows: Term Details of Commodity Murabahah

Within and up to one year After one and up to two years After two and up to five years More than five years More than five The remaining maturities of the loans and borrowings as at 31 December 2017 and 2016 are as follows: 2016 and 2017 as at 31 December of the loans and borrowings remaining maturities The

(a) LOANS AND BORROWINGS (CONTD.) AND BORROWINGS LOANS

24.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 144 24. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS LOANS AND BORROWINGS (CONTD.) (b) (c) (ii) (i) The securitiesoftheabove facility areasfollows: whilst principalrepayment onaquarterlybasisasprescribedinrepayment schedule. The Murabahah Commodity Term Financingprofit payments shallbemadeonamonthlybasisuntilfullsettlement Murabahah ofCommodity Details Term Financingareasfollows: The Company hasmadeadrawdown ofRM40,109,392, withamaturity dateof13 2021. January Term FinancingamountinguptoRM44,000,000. Kerjasama Rakyat Malaysia Bhd.fortaken thefinancing for Seberang Jaya Murabahah plantunderCommodity The Company enteredintoanarrangement on22October2010 torefinance Al-Ijarahfinancingfrom Bank Commodity Murabahah Term Financing(CMTF2) Details ofBBADetails Term Financingareasfollows: The Company onlymadeadrawdown ofRM59,653,095,withamaturity dateof01 April 2021. amounting uptoRM66,760,000. the Company’s new corporateoffice at Jalan ChanSow Lin, Kuala Lumpurunder Bai Bithamin AjilFinancing The Company enteredintoanarrangement on31March tofinance70%oftheconstruction 2009 costof Bai Bithaman Ajil (“BBA”) Affin Maturity date: Start date: Profit rate: Tenure: Amount: Maturity date: Start date: Profit rate: Tenure: Amount: A freshfixed and floating debenture oftheCompany’s existingandfuture assetsatSeberang Jaya plant. Jaya plant;and 1st legalcharge over theleaseholdlandandbuilding(s)erectedand/ortobethereonatSeberang 1 April 2021 1 April July 2014 1 annum Cost ofFund+0.75%per 8 years RM59,653,095 13 January2021 2012 13 October annum Cost ofFund+1.25%per 10 years RM40,109,392 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL 145 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN RM13,300,000 11 years Base Lending Rate - 1.25% per annum 21 July 2016 21 July 2027 1st party 1st legal charge over the above stated 4-storey shop offices. Pending issuance of individual title, stated shop offices. 4-storey the above over 1st party 1st legal charge the same unit; loan agreement cum assignment over assets of the Juasa; present and future million over RM13.3 for Debenture completion of property; year after financed property within one (1) assignment of rental proceeds over Fresh and Accounts. Designated over charge Fixed 1st party 1st legal charge over a parcel of land which is held under lot no: PT667 Section 92 at Jalan Chan Section 92 at Jalan is held under lot no: PT667 a parcel of land which over 1st party legal charge 1st and Town 240, 433 & 545, Section 92, 234, 236, 238, as Lots known Lumpur (formerly Lin, Kuala Sow Lumpur); and District of Kuala Lin, Jalan Chan Sow parcel of land and building erected thereon at the above-stated over Specific debenture Lumpur. Kuala

Tenure: Profit rate: Start date: Maturity date: Amount: Term Loan Facilities (‘TL 1 & TL 2’) (‘TL 1 & Facilities Loan Term April on 26 entered into an arrangement Group through its subsidiary Holdings Sdn Bhd (“Juasa”) The Juasa 2 No. Parcel as known office shop 4-storey intermediate freehold of units 2 of purchase the part-finance to 2013 first drawdown The million. an aggregate amount up to RM13.3 Alam for Square, Glenmarie Shah & 3, Kencana April 2014. made on 23 was 2027. of RM13,300,000 date of 21 July as at reporting date, with a maturity Group has made a full drawdown The are as follows: Facilities Loan Term Details of The Term Loan Facilities interest and principal payments shall be made on a quarterly basis until full settlement settlement full until basis a quarterly on made be shall payments principal and interest Facilities Loan Term The schedule. as prescribed in repayment are as follows: facilities of the above securities The (i) (ii) (iii) (iv) Bai Bithaman Ajil (“BBA”) Affin (contd.) Affin (“BBA”) Ajil Bai Bithaman whilst principal basis until full settlement shall be made on a monthly payments Financing profit Term BBA The schedule. as prescribed in repayment on a quarterly basis repayment are as follows: facility securities of the above The (i) (ii)

(d)

24.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 146 24. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS

LOANS AND BORROWINGS (CONTD.) (e) (d) (c) (b) (a) The remainingloansandborrowings aresecuredby thefollowing: (iv) (iii) (ii) (i) The securitiesoftheabove facilities areasfollows: as prescribedinrepayment schedule. The Istisna’ Term Financingprofit andprincipalrepayments shallbemadeonamonthlybasisuntilfullsettlement of Details Term Loan Facilities areasfollows: The Grouphadmadeafulldrawdown ofRM6,149,263 asatreporting date. drawdown was madeon1July 2015. Aeropod Phase2a,locatedatKotaKinabalu,Sabahfor anaggregateamountup to RM6.2million. The first finance thepurchase of1unitfreeholdintermediate8-storeyoffices retail known as ParcelUnitC-07, Project The Group,throughitssubsidiary, Utusan LandSdnBhdenteredintoanarrangement on21May 2014 topart- Istisna’ Term Financing(“TF-i 1to TF-i 8”) certain fixedcertain depositsoftheGroup. corporate guaranteesoftheCompany andofrespective subsidiaries;and/or respective subsidiaries;and/or first andsecondfixed landandbuildings, plantandmachinery oftheCompany chargesoncertain andof negative pledgesontheCompany’s assets;and/or Maturity date: Start date: Profit rate: Tenure: Amount: Corporate Guaranteefor RM15,653,599 by Utusan Melayu (Malaysia) Berhad. A charge andassigmentover Escrow Account tocapture proceeds; therental RM153,252;Pledged deposittotaling titleofthesaidunit; will beregisteredupontheissuanceofstrata Deed ofassignmentover theabove 8-storeyoffices stated retail tothebank. firstlegalThe firstparty charge 01 December 2033 01 December 2017 01 December annum Base FinancingRate-1.00%per 15 years RM6,149,263 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL -

RM Total (2,647) - - - % 147 5.1 4.7 4.8 4.7 5.5 3.5 443,670 196,000 2016 (17,553,523) 173,926,564 157,010,064 - -

RM Company - - - 22,286 % Current 5.1 4.9 4.9 5.5 3.5 7.9 (738,753) 2017 loans and 50,704,007 13,997,353 63,984,893 borrowings

ANNUAL REPORT 2017 REPORT ANNUAL |

RM (2,647) - % 5.6 5.4 5.1 4.7 4.8 4.7 5.5 3.5 443,670 173,714 2016 loans and 93,025,171 (13,997,353) (16,814,770) borrowings 123,222,557 Non-current

Group - % 5.9 5.4 5.1 4.9 4.9 5.5 3.5 7.9 2017

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

properties- term loan properties- hire purchase payable Istisna’ Term Financing (“TF-i 1 to TF-i 8”) Istisna’ Term Term Loan Facilities (“TL 1 & TL Loan 2”) Term Bai Bithaman Ajil Affin CMTF 2 CMTF 1 Bai Bithaman Ajil MBB Bai Bithaman Ajil Revolving credits Bankers acceptance Bank overdrafts Group Non-cash items: Financing for the acquisition of investment At 1 January 2017 Reclassification from non-current to current Financing for the acquisition of investment Cash outflows: Repayment of hire purchase payables Repayment of borrowings At 31 December 2017

Reconciliation of liabilities arising from financing activities of liabilities arising from financing Reconciliation The weighted average effective interest rates and profit rates as at reporting date for borrowings, excluding hire excluding borrowings, for date reporting at as rates profit and rates interest effective average weighted The follows: were as and finance lease payables, purchase LOANS AND BORROWINGS (CONTD.) AND BORROWINGS LOANS

24.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 148 24. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 25. LOANS AND BORROWINGS (CONTD.) Reconciliation ofliabilitiesarising fromfinancingactivities(contd.) TRADE AND OTHER PAYABLES

At 31December2017 Repayment ofhirepurchasepayables Repayment ofborrowings Cash outflows: Financing fortheacquisitionofinvestment Reclassification fromnon-currenttocurrent Non-cash items: At 1January2017 Company Accrued operating expenses Accrued operating Other payables Tradepayables (a) Current Provisions (d) Other payables (b) Other Deposits (c): Due torelatedparties Total current properties- hirepurchasepayable - Third parties - Third - Subsidiaries - Associates UTUSAN MELAYU (MALAYSIA) BERHAD

111,416,338 159,315,212 171,155,519 11,840,307 21,579,790 22,173,477 2,834,342 1,311,265 2017 RM -

Group Non-current 107,396,364 111,783,430 borrowings (15,163,100) (13,967,002) 12,765,548 29,128,016 31,081,682 27,947,742 94,630,816 82,775,238 loans and 3,777,298 2,696,078 173,714 (51,804) 2016 RM RM

- | ANNUAL REPORT2017

104,214,988 170,382,840 175,474,380 borrowings 16,448,279 25,188,333 21,257,046 56,367,472 44,028,476 13,967,002 (1,650,292) loans and 5,091,540 2,278,294 995,900 Current 22,286 2017 RM RM

- Company 100,872,494 105,545,649 139,142,710 155,811,906 (16,813,392) 20,553,875 25,514,878 24,423,006 25,053,095 4,673,155 2,980,931 2,346,709 196,000 (51,804) Total 2016 RM RM

- FINANCIAL RM 2016 149 1,165,749 (2,980,931) 21,165,749 20,000,000 279,542,373 155,811,906 126,711,398 Company - RM 2017 594,511 594,511 (2,278,294) 312,933,307 139,142,710 176,068,891

ANNUAL REPORT 2017 REPORT ANNUAL | - RM 2016 (3,777,298) 20,000,000 20,000,000 297,545,630 173,926,564 127,396,364 Group - - - RM 2017 (2,834,342) 325,331,241 157,010,064 171,155,519

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN The provision for litigation relates to legal claims against the Company from third parties. The Company has made Company The from third parties. to legal claims against the Company litigation relates for provision The and probable outcome assessed on consideration estimate of the settlement based on the solicitor’s provision basis. a case-by-case returns for Provision newspaper individual product for and trend of an estimated amount based on historical is returns for provision The and magazine. Trade payables Trade 30 to 90 days). (2016: range from 30 to 90 days normal trade credit terms granted to the Group The Other payables term of six months on an average are normally settled amounts are non-interest bearing. Other payables These term of six months). average (2016: parties related Amounts due to on demand. and are repayable amounts are unsecured, non-interest bearing These

Provision for litigation for Provision Total financial liabilities carried at amortised cost Total Less: Provisions Add: Loans and borrowings (Note 24) Total trade and other payables Total Total non-current Total Due to related entity (c) Due to related entity Non-current Due to subsidiaries (d) Provisions (a) (b) (c) TRADE AND OTHER PAYABLES (CONTD.) PAYABLES AND OTHER TRADE

25.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 150 25. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS TRADE AND OTHER PAYABLES (CONTD.)

Movements ofprovision for litigationandreturns duringtheyear areasfollows: At 1 January 2017 AtJanuary 1 Group Additional provision(Note 8) Reversal ofprovision(Note8) Utilisation of provision Utilisation At 31 December 2017 AtDecember 31 At 1 January 2016 AtJanuary 1 Additional provision(Note 8) Reversal ofprovision(Note8) Utilisation of provision Utilisation At 31 December 2016 AtDecember 31 At 1 January 2017 AtJanuary 1 Company Additional provision(Note 8) Reversal ofprovision(Note8) Utilisation of provision Utilisation At 31 December 2017 AtDecember 31 At 1 January 2016 AtJanuary 1 Additional provision(Note 8) Reversal ofprovision(Note8) Utilisation of provision Utilisation At 31 December 2016 AtDecember 31 UTUSAN MELAYU (MALAYSIA) BERHAD for litigation (1,017,000) (1,017,000) 2,155,000 1,240,000 2,660,000 1,120,000 2,155,000 2,155,000 1,240,000 2,660,000 1,120,000 2,155,000 Provision (180,000) (735,000) (608,000) (735,000) (180,000) (608,000) RM - - | ANNUAL REPORT2017 for returns (1,622,298) (2,484,908) (1,039,333) 1,622,298 1,594,342 1,594,342 2,484,908 1,622,298 1,622,298 1,038,294 1,038,294 1,039,333 Provision (825,931) 825,931 825,931 825,931 RM - - - - (2,357,298) (3,501,908) (1,560,931) (2,056,333) 3,777,298 1,594,342 2,834,342 5,144,908 2,742,298 3,777,298 2,980,931 1,038,294 2,278,294 3,699,333 1,945,931 2,980,931 (180,000) (608,000) (180,000) (608,000) Total RM FINANCIAL - - RM RM 2016 151 Total 29,629 12,120 (11,729) (85,315) (65,988) (49,347) (127,064) (127,064) 110,733,837 110,733,837 500,000,000 500,000,000 Amount - - - RM RM 2017 29,629 (11,729) reserve Foreign 283,360 295,089 312,989 283,360 currency 50,703,162 translation 161,436,999 110,733,837 500,000,000 (500,000,000)

ANNUAL REPORT 2017 REPORT ANNUAL | - - - - RM 2016 12,120 (65,988) reserve (410,424) (344,436) (398,304) (410,424) Fair value adjustment 110,733,837 110,733,837 500,000,000 500,000,000 - - 2017 Number of ordinary shares of RM1 each 110,733,837 110,733,837 500,000,000 (500,000,000) UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN The Companies Act 2016 (“New Act”) which was enacted to replace the Companies Act, 1965 and came into 1965 Act, replace the Companies enacted to was which Act”) (“New 2016 Act Companies The capital.share of capitalshare authorised of the concepts abolished par value and 31 Januaryon operation 2017, from its share premium a total of RM50,703,162 the Group had transferred Act, In accordance with the New accounts to the contributed share capital.

- Gains on fair value changes - Loss on fair value changes At 31 December At 2016 Foreign currency translation Net loss on available-for-sale financial assets available-for-sale Net loss on At 1 January/31 December Transferred pursuant to the Companies Act 2016* Transferred At 1 January At 2016 Issued and fully paid: At 1 January/31 December At 31 December 2017 At 31 December At 2017 Effect of implementation of the Companies Act 2016* Foreign currency translation Authorised: At 1 January/31 December Group 1 January At 2017 financial assets available-for-sale Net loss on The holders of ordinary dividends as declared from time to time and are entitled to one The to receive are entitled shares residual All ordinary regard to the Company’s shares rank equally with per share at meetings of the Company. vote assets. * OTHER RESERVES OTHER

27.

26. SHARE CAPITAL

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 152 27. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS OTHER RESERVES(CONTD.) (c) (b) (a) The nature areasfollows: andpurposeofeach ofreserve category At 31 December 2016 AtDecember 31 Net lossonavailable-for-sale financial assets 2016 AtJanuary 1 2017 AtDecember 31 Net gainonavailable-for-sale financialassets 2017 AtJanuary 1 Company - Gain on fair value changes - Gainonfairvalue changes - Lossonfairvalue earnings to the non-distributable consolidated capital reserve because it is a capital transaction. becauseitisacapital reserve consolidated capital earnings tothenon-distributable utilisedis reflectedthe portionofreserve attheGrouplevel by atransfer consolidatedretained fromdistributable earningshasnoimpactonthenetassetsofassociate. utilisation ofthepost-acquisitionretained Accordingly, ofbonusissuesby arosefromthecapitalisation anassociate. The reserve capital The bonusissuecreatedfrom Capital reserve ortheforeignthe functionalcurrency ofthereportingentity operation. form partoftheGroup’s netinvestment itemisdenominatedineither in foreign operations,wherethe monetary currency.presentation Itisalsoused torecordtheexchange differences itemswhich arisingfrommonetary of the financialstatements foreignoperationswhosefunctionalcurrencies aredifferent fromthatoftheGroup’s The foreign is usedtorecordexchange currency translationreserve differences arisingfromthetranslationof Foreign currency translation reserve financial assetsuntilthey aredisposedoff orimpaired. Fair valuerepresentsthecumulative adjustmentreserve fair value changes, ofavailable-for-sale netoftax, Fair value adjustmentreserve UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 adjustment Fair value reserve (21,604) (62,463) (15,640) (21,604) 40,859 5,964 RM FINANCIAL - RM RM 2016 2016 (8,948) 48,873 53,766 28,103 20,770 53,766 29,389 23,532 58,666 153 102,639 102,639 102,639 111,587 Company Company - RM RM 2017 2017 43,054 48,466 43,054 58,308 60,269 (51,385) 246,835 203,781 246,835 155,315 246,835 298,220 179,643

ANNUAL REPORT 2017 REPORT ANNUAL | - - - - - (16) RM RM 2016 2016 2,647 2,647 2,647 2,647 2,647 2,663 2,663 16,810,787 Group Group RM RM 2017 2017 22,286 24,195 22,286 34,776 34,776 (47,334) 196,000 173,714 196,000 149,519 196,000 243,334 173,782 15,068,659

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

and leasing payables: and leasing payables: Property, plant and equipment Property, Total Due after twelve months (Note 24) Due after twelve Analysed as: months (Note 24) Due within twelve After two and up to five years After one and up to two years Present value of hire purchase Within and up to one year Present value of finance liabilities Less: Future finance charges After two and up to five years After one and up to two years Approved and contracted Approved and contracted for: Future minimum hire purchase Within and up to one year

The hire purchase and leasing payables bear interests at the reporting date at rates of between 3.45% to 4.0% bear interests at the reporting date at rates of between and leasing payables hire purchase The 2.6% to 4.0%) per annum. (2016: subsidiarya to due amount an is Company the of (2016: RM50,834 of payables purchase hire the in Included RM102,641). Obligation under hire purchase and leasing payables and leasing purchase under hire Obligation Capital commitments

(b) (a)

28. COMMITMENTS

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 154 29. CONTINGENTLIABILITIES FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS the Company. legal suitsagainsttheGroupandCompany tohave amaterialimpactonthefinancialpositionofGroupand most oftheclaimshave merit. nosustainable Therefore, theBoard ofDirectorsdonotexpect theoutcomeof Based ontheabove andafter appropriatelegaladvice,theBoard taking ofDirectorsaretheconsideredview that it isawarded againsttheGroupandCompany. The GroupandtheCompany have inplaceaninsurancecoverage for damages indefamation legalsuits, ifintheevent give risetoany significantloss. Board ofDirectorsaretheopinion,after appropriatelegaladvice, thattheoutcomeofsuch taking actionswillnot toRM300,000. by hasbeenestablished theCourtsisbetweenrangeofRM50,000 suits oncetheliability The Furthermore,or otherwise. itisnotedthatirrespective ofamountclaimed,thecurrent trendofaward for defamation forit doesnotnecessarilynorautomaticallytranslateintoaliability theGroupandCompany, whethercontingent this reason,having consideredthevarious legaldefences available toamediacompany, filingofalegalsuit against quantum ofclaim,hence,theGroupandCompany areunabletoavoid theriskofreceivingsuch legalsuits.For the law doesnotprohibitanyone frominitiatinglegalsuitagainstthepublisherregardlessofmotive, objective and are inevitable andoccursonadailyongoingbasis.Despitepracticingtheresponsiblejournalismreportage, As the purveyor ofnews and information, the Groupand the Company arefaced with threats oflegalsuits which Company hasaneven chance ofsucceedingindefending theclaims. in the Company’s newspapers. The Board of Directors have been advised and are of the considered view that the Several suitsfor defamation were broughtby various politiciansagainsttheCompany for newspaper reportspublished defendants in7ongoingallegeddefamation legalsuitsamountingapproximately RM1.44 million. The GroupandtheCompany have several materialpendinglegalsuitswhereby theGroupandCompany are thatcannotbemeasuredwithsufficienta liability reliability. required tosettle theobligation. alsoarisesintheextremelywherethereis A contingent liability rarecircumstances Company orapresentobligation thatisnotrecognisedbecauseitprobableanoutflow ofresourceswillbe occurrence future andnon-occurrence ofoneormoreuncertain events beyond thecontrolofGroupand isapossibleobligationthatarisesfrompasteventsA contingentliability which existence willbeconfirmed by the The GroupandtheCompany butdiscloseitsexistence donotrecogniseacontingentliability infinancialstatement. Material litigation UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT2017 FINANCIAL RM RM 2016 2016 61,817 298,254 573,300 517,363 155 2,554,128 2,255,874 5,000,000 8,503,211 5,000,000 6,421,317 Company - - - RM RM 2017 2017 45,445 309,832 573,300 195,276 2,560,990 2,251,158 6,627,998

ANNUAL REPORT 2017 REPORT ANNUAL | RM 2016 527,244 4,211,067 3,683,823 Group RM 2017 483,674 3,798,848 3,315,174

UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

- Defined contribution plan - Defined Short-term employee benefits Post-employment benefits: Company subsidiaries Services rendered by Rental income from subsidiaries Advances received from related entity Interest income from subsidiaries Commission income from subsidiaries Advances received from related entity Group associates Services rendered by

Included in the above are the directors of the Company’s subdisidiaries remuneration. The directors of the The subdisidiaries remuneration. are the directors of the Company’s Included in the above salaries and other emoluments. for except fees subdiaries did not receive Company’s The directors are of the opinion that all the transactions above have been entered into in the normal course been entered into in the have above directors are of the opinion that all the transactions The those from been established and conditions that are not materially different on terms of business and have obtainable unrelated parties. in transactions with personnel management Compensation of key are as follows: during the year management of key remuneration of directors and other members The parties with related Transactions had statements, detailed in the financial In addition to the transactions and the Company the Group elsewhere year: parties during the financial transactions with related the following

(b) (a) SIGNIFICANT RELATED PARTY TRANSACTIONS PARTY RELATED SIGNIFICANT

30.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 156 30. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTD.) (b) (c) Included in the total keyIncluded inthetotal management personnelremunerationare: Compensation ofkey management personnel(contd.) (iii) (ii) (i) business ontermscomparabletothosewithotherentitiesthatarenotgovernment-related. of newspapers andbooksaswell asadvertising. courseof The transactionsareconductedintheordinary The Grouphastransactionswithgovernment-related butnotlimitedto,printingandpublishing entitiesincluding, under Barisan Nasional,Malaysia’s federal ruling politicalforce. Organisation (“UMNO”), which is holding 49.77% of the Company’s equity. UMNO is one of the member parties The Groupisagovernment-related by entity virtue oftheCompany’s majorshareholder, UnitedMalays National Government-related entities Directors’ remuneration (Note 6) Directors’ remuneration(Note with government-related financialinstitutions areas follows: For the financial year ended 31 December 2017, amount of transactions the Group estimates that the total Government-related financialinstitution which 100% (2016: 99%)aregeneratedby thePublishing, Distributionand Advertisement segment. transactions withothergovernment-related entities are atleast21%(2016: revenue 22%)oftotal outof For thefinancial year ended31December2017, amountofsignificant theGroupestimatesthattotal Collective, butnotindividuallysignificanttransactions recognised for theyear ended31December2017 amountedtoRM34.3million(2016: RM7.9 million). with tablets Tutor ofEducation. Guru ande-paperapplicationfromtheMinistry The aggregatenetrevenue The Company was awarded testing and commissioning of configuring, a contract for distributing, supplying, Individually significanttransactions becauseofsize oftransactions Interest income Interest expenses Cash and bank balances Cash and December: Balance asat31 Loans and borrowings Loans UTUSAN MELAYU (MALAYSIA) BERHAD

157,010,064 17,788,024 8,356,668 84,087 2017 RM Group 173,926,564 32,858,744 8,958,953 96,635 2016 RM | ANNUAL REPORT2017

139,091,875 1,755,982 7,254,144 3,072,949 Group and Company Group and 2017 2017 RM RM - Company 155,709,267 12,396,619 1,732,655 8,433,422 2016 2016 RM RM - FINANCIAL 157 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Acquisition of SubsidiaryAcquisition a cash for each had announced that it had acquired two ordinary the Company shares of RM1.00 January 2018 On 18 Asian the said acquisition, Subsequent to Sdn Bhd. Engineering Environmental Asian of RM2.00consideration in subsidiary of the Company. Environmental Engineering Sdn Bhd became a wholly-owned Memorandum of Understanding 2017 has on 23 March that the Company had announced of Directors of the Company the Board 2017 On 23 March of Understandingentered into a Memorandum Institute Industrial Corporation Limited and Coimbatore with Krishna information the business of into of venturing objective the with Bhd Sdn Technologies Primainfo and Technology of in Malaysia. technology of SubsidiaryAcquisition a for each ordinary that it had acquired two had announced the Company shares of RM1.00 2017 August On 23 Subsequent to the said acquisition, Sdn Bhd. Asia Technology cash consideration of RM2.00 the capital in of Utusan subsidiary of the Company. Sdn Bhd became a wholly-owned Asia Technology Utusan Disposal of a Subsidiary Agreement’) (‘the Agreement that it had entered into a Share Sale had announced the Company September 2017 On 19 represent 60% of which each the disposal of 60,000 Bhd for S&S Sdn ordinarywith Rawdah of RM1.00 shares of a consideration Sdn Bhd for Studios Utusan subsidiary, the total issued and paid-up capital in its wholly-owned on fully completed was Agreement The Agreement. terms and subject to the conditions of the RM60,000, upon such the same date. associate of the but became an Sdn Bhd ceased to be a subsidiary, Studios Upon completion of the disposal, Utusan Company. property Disposal of an investment subsidiary had entered a wholly-owned of the Company Holdings Sdn Bhd (“Juasa”), Juasa On 9 September 2011 present as the Tiara would on the agreement, Insan Tiara Sdn Bhd. Based Insan agreement with Venture into a Joint “Wisma as 730” (also known as is known land which on Juasa’s the building and infrastructure to develop developer Wisma a certain 730. received percentage Juasa from the total net saleable area of TRAX building). In return, SIGNIFICANT EVENTS SIGNIFICANT

32. SUBSEQUENT EVENT

31.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 158 33. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS FINANCIAL RISKMANAGEMENT OBJECTIVES AND POLICIES (a) that notradinginderivative financialinstruments shallbeundertaken. these risksandthey aresummarised below. Itis,andhasbeenthroughouttheyear underreview, theGroup’s policy foreign riskandcreditrisk. currency risk,liquidity The Board reviews andagreesonpoliciesfor managingeach of development oftheGroup’s businesseswhilstmanagingitsinterest/profit raterisks (both fair value andcash flow), The Group’s financialriskmanagementpolicyseekstoensurethatadequateresourcesare available forthe and theremainingmaturities oftheGroup’s financialasset/(liabilities) asatreportingdate: The amounts,theweighted following average setoutthecarrying tables effective interest/profit rates(“WAEIR”) profile throughamixoffixed and floatingratebanking facilities. operations throughoperatingcashflows andborrowings. The Group’s policyistoderive thedesiredinterestrate The Group’s policyistomanageinterestcostusingamixoffixed and floating ratedebts. TheGroupfinancesits and loansatfloating ratesgiven torelatedparties. The Group’s andtheCompany’s exposure tointerest/profit ratearises primarilyfromtheirloansandborrowings financial instruments willfluctuate becauseof changesinmarket interestrates. Interest/profit rateriskisthethat fair value orfuture cash flows oftheGroup’s andtheCompany’s Interest/profit rate risk Deposits with: leasepayables Hire purchaseandfinance Fixed rate 2017 AtDecember 31 Group Commodity Murabahah TermCommodity Murabahah Financing Floating rate Commodity Murabahah TermCommodity Murabahah Financing

Bai Bithaman Ajil Affin Bai BithamanAjil Term2’) Loan Facilities (‘TL1&TL Istisna’ TermIstisna’ 8”) Financing(“TF-i1toTF-i Bank overdraft Bankers acceptance Revolving credits (CMTF 2) (CMTF 1) market institutions - Money banks - Licensed UTUSAN MELAYU (MALAYSIA) BERHAD Note 28(b) 24 24 21 21 24 24 24 24 24 24 WAEIR 3.5% 4.9% 4.9% 2.3% 3.0% 5.1% 5.4% 5.9% 7.9% 3.5% 5.5% Within 1 (10,000) (19,087) (13,300) RM’000 (4,400) (1,763) (1,208) (6,130) (8,075) 2,461 year 759 (88) (12,000) RM’000 (4,400) (1,208) (8,000) years (108) (609) 1 - 2 1 -

- - - - - | ANNUAL REPORT2017 (17,653) RM’000 (4,909) (3,624) (9,000) years 2 - 5 2 ------(26,000) RM’000 (5,448) than 5 years More ------(13,709) (39,653) (11,488) (19,087) (56,300) RM’000 (2,372) (6,130) (8,075) 2,461 Total (196) 759 FINANCIAL 1 (3) Total 2,059 (3,842) (4,135) RM’000 159 (64,750) (21,739) (12,696) (48,653) (18,109) ------More years than 5 (6,656) RM’000 (29,000) - - - - - 2 - 5 (609) years (3,624) (9,309) RM’000 (14,000) (29,653) ANNUAL REPORT 2017 REPORT ANNUAL | - - - - - 1 - 2 years (1,208) (1,763) (4,400) RM’000 (13,000) (10,000) 1 (3) year 2,059 (8,750) (3,842) (1,208) (9,000) (1,763) (4,400) RM’000 (21,739) Within 1 5.5% 3.5% 5.6% 5.4% 5.1% 3.1% 2.8% 4.8% 4.7% 2.7% WAEIR 24 24 24 24 24 21 21 24 24 28(b) Note UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

(CMTF 1) (CMTF 2) - Licensed banks - Money market institutions Revolving credits Bankers acceptance Istisna’ Term Financing (“TF-i 1 to TF-i 8”) Istisna’ Term Term Loan Facilities (‘TL 1 & TL Loan 2’) Term Bai Bithaman Ajil Affin Commodity Murabahah Term Financing Commodity Murabahah Term Floating rate Financing Commodity Murabahah Term Deposits with:

Group (contd.) 31 December At 2016 Fixed rate Hire purchase and finance lease payables Interest/profit rate risk (contd.) risk rate Interest/profit rates (“WAEIR”) interest/profit effective tables set out the carrying average following amounts, the weighted The date (contd.): financial asset/(liabilities) as at reporting of the Group’s and the remaining maturities

(a) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) AND OBJECTIVES MANAGEMENT FINANCIAL RISK

33.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 160 33. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS FINANCIAL RISKMANAGEMENT OBJECTIVES AND POLICIES(CONTD.) (a) Interest/profit rate risk (contd.) and theremainingmaturities oftheGroup’s financialasset/(liabilities)asatreportingdate(contd.): The amounts,theweighted following average setoutthecarrying tables effective interest/profit rates(“WAEIR”) Hire purchase and finance leasepayables Hire purchaseandfinance Fixed rate 2017 AtDecember 31 Company

Commodity Murabahah TermCommodity Murabahah Financing Floating rate Commodity Murabahah TermCommodity Murabahah Financing TermCommodity Murabahah Financing Bai Bithaman Ajil Affin Bai BithamanAjil Bank overdraft Affin Bai BithamanAjil Bankers acceptance Bankers acceptance Revolving credits Revolving credits Hire purchase and finance leasepayables Hire purchaseandfinance Fixed rate 2016 AtDecember 31 Commodity Murabahah TermCommodity Murabahah Financing Floating rate (CMTF 2) (CMTF 1) (CMTF 2) (CMTF 1) UTUSAN MELAYU (MALAYSIA) BERHAD 28(b) 28(b) Note 24 24 24 24 24 24 24 24 24 24 24 WAEIR 3.6% 4.7% 4.8% 4.9% 4.9% 5.1% 7.9% 5.1% 3.5% 3.5% 5.5% 5.5% 4.0% (10,000) (20,812) (19,087) (13,000) RM’000 Within (4,400) (1,763) (4,400) (1,763) (9,000) (8,075) (8,000) year (50) (54) 1 (10,000) (13,000) (12,000) RM’000 (4,400) (1,763) (4,400) (8,000) years (609) 1 - 2 1 - (88) (49) - - - | ANNUAL REPORT2017 (17,653) (29,653) (14,000) RM’000 (9,309) (4,909) (9,000) years (609) (108) 2 - 5 2 ------(26,000) (29,000) RM’000 than 5 years More ------(18,109) (39,653) (13,709) (48,653) (20,812) (19,087) (56,000) (64,000) RM’000 (4,135) (2,372) (8,075) Total (246) (103) FINANCIAL 161 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Interest/profit rate risk (contd.) risk rate Interest/profit year. within a repriced rate are contractually floating that are subject to rate on borrowings Interests/profit The other financial maturity of the instruments. fixed until the rates are at fixed instruments Interests on financial tables are not subject to interest in the above that are not included of the Group and the Company instruments rate risks. rate risk interest/profit for Sensitivity analysis variables held with all other 10 basis points lower/higher, rates had been At the reporting date, if interest/profit RM130,443) (2016: been RM113,042 have loss net of tax would and the Company’s constant, the Group’s interest arising mainly as a result of lower/higher respectively, lower/higher RM118,417) and RM99,424 (2016: for interest rate sensitivity in basis points The assumed movement rate loans and borrowings. on floating expense environment. market estimate of the current is based on a prudent analysis risk currency Foreign will fluctuate of a financial instrument cash flows or future value the risk that the fair risk is currency Foreign to thus exposure Group mainly operates within Malaysia, The rate. exchange foreign in because of changes risk is minimal. exchange foreign Liquidity risk in meeting financial obligations will encounter difficulty LiquidityGroup or the Company risk is the risk that the liquidity to mismatches from primarily arises exposures Company’s and the Group’s The to shortagedue funds. of is to maintain a objective and the Company’s The Group’s of financial assets and liabilities. of the maturities facilities. through the use of stand-by credit balance between continuity and flexibility of funding availability so of funding and the flows profile, operating cash manages its debt maturity Group actively The liquidity prudent overall As part of its and funding needs are met. as to ensure that all refinancing, repayment working to meet its investments of cash or cash convertible level management, the Group maintains sufficient of a reasonable level banking facilities to maintaincapital the Group strives available requirements. In addition, and from financial instituitions funding as possible, the Group raises committed far As debt position. to its overall cost effectiveness. overall with some short term funding so as to achieve balances its portfolio prudently

(a) (b) (c) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) AND OBJECTIVES MANAGEMENT FINANCIAL RISK

33.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 162 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 33. FINANCIAL RISKMANAGEMENT OBJECTIVES AND POLICIES(CONTD.) (c) date basedoncontractual undiscountedrepayment obligations. The below table summarisesthe maturity profileoftheGroup’s andtheCompany’s liabilitiesatthereporting Analysis offinancialinstruments by remainingcontractual maturities Liquidity risk (contd.) Tradepayables (excludingprovisions) (Note andother 25) Group Tradepayables (excludingprovisions)(Note andother 25) Group Loans andborrowings Loans andborrowings Total undiscountedfinancial liabilities Total undiscountedfinancial liabilities Tradepayables (excludingprovisions) (Note andother 25) Company Tradepayables (excludingprovisions)(Note andother 25) Company Loans andborrowings Loans andborrowings Total undiscountedfinancial liabilities Total undiscountedfinancial liabilities UTUSAN MELAYU (MALAYSIA) BERHAD 103,619,066 168,321,177 102,564,718 173,196,086 157,128,852 228,423,912 151,757,801 224,721,503 On demand On demand ------2017 ------2017 ------2016 ------2016 53,509,786 60,102,735 49,193,083 51,525,417 or within or within one year one year RM RM | ANNUAL REPORT2017 134,264,991 154,264,991 116,260,362 137,426,111 20,000,000 21,165,749 97,483,598 97,483,598 84,910,893 85,505,404 More than More than one year one year 594,511 RM RM - 123,619,066 168,321,177 123,730,467 173,790,597 289,183,912 187,774,777 157,586,333 311,393,843 325,907,510 165,453,445 136,436,310 310,226,907 Total Total RM RM FINANCIAL 163 ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Credit risk Credit Group trades only with recognised The to trade receivables. risk is primarily attributable credit Group’s The credit terms are that all customers who wish to trade on policy It is the Group’s third parties. and creditworthy monitored on an ongoing basis balances are procedures. In addition, receivable subject to credit verification recognised Since the Group trades only with reporting and credit control procedures. via Group management collateral. is no requirement for third parties, there creditworthy and bank balances, marketable comprise cash which other financial assets, credit risk of the Group’s The exposure a maximum with counterparty, the of default from arises investments, non-current and securities equal to the carrying amount of these financial assets. individual customer or counterparty nor does it has any exposure to any significant any Group does not have The assets. financial to any major concentration of credit risk related not impaired Financial assets that are neither past due neither past due nor impaired is disclosed in Note that are regarding trade and other receivables Information are neither past due nor securities that and investment institutions Deposits with banks and other financial 18. or companies with high credit ratings and reputableimpaired are placed with or entered into financial institutions no history of default. or impaired Financial assets that are either past due 18. past due or impaired is disclosed in Note regarding financial assets that are either Information

(d) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) AND OBJECTIVES MANAGEMENT FINANCIAL RISK

33.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 164 FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 34. FAIR VALUES OFFINANCIALINSTRUMENT (a) * approximate theirfair values except for thefollowing: amounts of financial assets and liabilities of the Group and of the CompanyThe at the reportingdate carrying are notreasonable approximation offair value Fair value offinancialinstruments by classesthatare notcarried at fair value andwhosecarrying amounts Club membership, unquoted at cost Club membership,unquotedat Non-current Financial assets 2017 AtDecember 31 Hire purchase and finance leasepayables Hire purchaseandfinance and borrowings Fixed rateloans Non-current Financial liabilities Club membership, unquoted at cost Club membership,unquotedat Non-current Financial assets 2016 AtDecember 31 Hire purchase and finance leasepayables Hire purchaseandfinance and borrowings Fixed rateloans Non-current Financial liabilities costs. However, theGroupbelieves amountsrepresenttherecoverable that thecarrying values. of thelack of quotedmarket toestimatethefair pricesand theinability value withoutincurring excessive It isnotpracticabletoestimatethefair value oftheGroup’s non-current unquotedinvestments because UTUSAN MELAYU (MALAYSIA) BERHAD Note 16 28 16 28

Carrying amount 173,714 123,000 75,000 RM - Group Fair value RM | * * - - ANNUAL REPORT2017

Carrying amount 203,781 48,873 RM - - Company Fair value 45,760 RM * * - FINANCIAL 18 24 24 25 165 Note ANNUAL REPORT 2017 REPORT ANNUAL | UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Trade and other receivables (current and non-current) Trade Floating rate loan and borrowings (current and non-current) Loans and Borrowings (current) and other payables (current) Trade The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either values, fair carrying of The approximation amounts of these financial assets and liabilities are reasonable interest rates market re-priced to that are rate instruments are floating or that they nature their short-term due to on or near the reporting date. values of fair are reasonable approximation carrying of loans and borrowings portion The amounts of the current due to the insignificant impact of discounting. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts amounts carrying value and whose fair at carried not that are by classes instruments of financial value Fair (contd.) value of fair approximation not reasonable are borrowings rate loans and of fixed value Determination of fair discount rates used are the current The estimated cash flows. has been determined using discounted value Fair similar types incremental and leasing arrangements. of lending, rates for lending market borrowing amounts carrying value and whose fair at carried not that are by classes instruments of financial value Fair value of fair approximation reasonable are and whose carryingvalue fair amounts at that are not carried are classes of financial instruments following The value: of their fair are reasonable approximation

(a) (b) FAIR VALUES OF FINANCIAL INSTRUMENT (CONTD.) OF FINANCIAL INSTRUMENT VALUES FAIR

34.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 166 34. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS FAIR VALUES OFFINANCIALINSTRUMENT (CONTD.) (c)

• • • value: The Groupusesthefollowing hierarchy for determiningthefair value ofallfinancialinstruments carried at fair Fair value hierarchy The following shows table ananalysis offinancialinstruments carried at fair value by level of fair value hierarchy: Fair value offinancialinstruments thatare carried at fair value reporting period. Fair value isdeterminedby directreference inanactive totheirbidpricequotations market attheendof the Determination offair value instrument ofquotedequity 2017 and2016. There have beennotransfers betweenthefair value hierarchy duringthefinancial years ended31December Equity instruments,quotedin Malaysia Available-for-salefinancial assets Company Investment securities,quotedin Malaysia Held-for-tradingfinancial assets Equity instruments,quotedin Malaysia Available-for-salefinancial assets Group Level inputs). market(unobservable 3–Inputsfor thatarenotbasedonobservable data theassetorliability either directly(i.e.,asprices)orindirectlyderived fromprices);and Level 2–InputsotherthanquotedpricesincludedwithinLevel for 1thatareobservable theassetorliability, Level 1–Quotedprices(unadjusted)inactive markets for identicalassetsorliabilities; UTUSAN MELAYU (MALAYSIA) BERHAD Note 16 16 16 | ANNUAL REPORT2017 Quoted prices in active Quoted pricesin markets for identical markets for 1,156,668 463,670 33,330 instruments 2017 RM (Level 1) 1,144,548 656,128 27,366 2016 RM FINANCIAL RM 2016 4.16 167 34,492,732 (12,396,619) 143,415,287 155,811,906 Company RM 2017 10.57 (3,072,949) 12,877,714 136,069,761 139,142,710

ANNUAL REPORT 2017 REPORT ANNUAL | RM 2016 1.36 (32,858,744) 103,503,181 141,067,820 173,926,564 Group RM 2017 1.45 95,784,898 (17,788,024) 139,222,040 157,010,064

21 24 Note UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN Publishing, distribution and advertisements - Publishing and distribution of newspapers, magazines and and distribution of newspapers, - Publishing distribution and advertisements Publishing, books and print, online and outdoor advertising; holding, management services,others. and Others - Investment property development Allocation basis and transfer pricing Allocation basis and transfer as those that to a segment as well Segment results, assets and liabilities include items directly attributable corporate assets, liabilities and can be allocated on a reasonable basis. Unallocated items comprise mainly expenses. in a manner similar to transactions length basis on an arm’s prices between business segments are set Transfer These between business segments. and results include transfers expenses with third parties. Segment revenue, are eliminated on consolidation. transfers Reporting format Reporting rates risks and primaryGroup’s as the be business segments to is determined The format reporting segment in the products and services based produced. Information differences predominantly by are affected of return The in Malaysia. primarily activities are focused not prepared as the Group’s segments was on geographical of the products and managed separately according to the nature operating businesses are organised and and products different offers that unit business strategic a representing segment serviceseach with provided, markets. serves different Business segments main business segments: comprises the following Group The (i) (ii)

Gearing ratio Equity attributable to the owners of the parent less: Cash and bank balances Loans and borrowings (c) The primary objective of the Group’s capital maintains capital management is to ensure that it in order a healthy ratio primary of the Group’s The objective and maximise shareholder value. to support its business shares to maintain desired capitalissue new ratios. No changes would and Group manages its capital structure The 2016. and 2017 ended 31 December processes during the years policies or made in the objectives, were In maintaining the policy to is based on loans and borrowings. Group monitors capital using a gearing ratio, which The certainwithin ratio gearing the capitalthe address to proposals raising fund percentages, keep exploring is Group the requirements. (a) (b)

36. SEGMENT INFORMATION

CAPITAL MANAGEMENT 35. CAPITAL

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 168 36. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS SEGMENT INFORMATION (CONTD.) Inter-segment External customers Revenue 2017 AtDecember 31 Total revenue Interest income Results Dividend income Depreciation and amortisation Depreciation and Share of results of associates Share ofresults Other non-cash expenses Other non-cash Segment (loss)/profit Investment in associates Investment in Assets Segment assets Segment liabilities Liabilities External customers Revenue 2016 AtDecember 31 Inter-segment Total revenue Interest income Results Dividend income Depreciation and amortisation Depreciation and Share of results of associates Share ofresults Other non-cash expenses Other non-cash Segment (loss)/profit advertisements UTUSAN MELAYU (MALAYSIA) BERHAD 211,946,802 218,064,129 402,690,707 392,961,245 226,499,733 234,450,323 distribution Publishing, (18,648,280) (25,015,787) (19,835,541) (62,863,426) 28,900,000 12,697,830 6,117,327 7,950,590 4,000,000 3,995,318 515,121 643,043 and RM - - - 33,033,284 33,299,614 30,395,246 99,345,052 31,433,410 1,380,861 2,329,941 (811,640) (190,577) (673,652) 266,330 322,956 918,846 462,015 364,314 (86,601) 27,426 29,148 Others RM 1 - - eliminations Adjustments (28,900,000) (15,635,327) (78,631,123) (96,229,072) (6,383,657) (6,383,657) (5,758,172) (8,412,605) (8,412,605) (4,000,000) (6,191,993) (634,224) (246,695) (707,173) (215,675) (191,203) 545,844 20,000 20,000 and RM - - | ANNUAL REPORT2017 Note A D D A B C B C E consolidated 244,980,086 244,980,086 423,404,636 328,165,583 227,418,579 227,418,579 (19,439,920) (10,255,868) (20,489,193) (66,725,478) statements 6,749,081 3,717,514 financial (246,695) (215,675) 203,853 545,845 300,184 27,426 29,148 RM Per - - FINANCIAL - Per RM RM RM 2016 2016 191,203 191,203 169 861,539 (215,675) financial (1,976,318) (6,191,993) (4,000,000) statements 302,198,222 404,839,864 consolidated RM RM 2017 2017 E D D Note (246,695) 4,758,172 1,000,000 5,758,172 13,511,368 (15,635,327) (28,900,000) RM ANNUAL REPORT 2017 REPORT ANNUAL and | 792,539 (76,600,249) (67,550,868) Adjustments eliminations - RM Others 24,291,806 67,963,606 RM and 69,000 Publishing, distribution 354,506,665 404,427,126 advertisements UTUSAN MELAYU (MALAYSIA) BERHAD (MALAYSIA) MELAYU UTUSAN

Unallocated expenses corporate Elimination of dividend Share of results of associates Impairment loss on amount due from subsidiaries Impairment loss on investment in a subsidiary The following items are added to/(deducted from) segment profit to arrive at “Loss before in the before tax” presented “Loss at to arrive items are added to/(deducted from) segment profit following The income: consolidated statement of comprehensive Inter-segment revenues are eliminated on consolidation. are revenues Inter-segment the to notes respective the in as presented items following the of consist expenses non-cash material Other financial statements:

Liabilities Segment liabilities Segment assets At 31 December 2016 31 December 2016 (contd.) At Assets Investment in associates C A B SEGMENT INFORMATION (CONTD.) SEGMENT INFORMATION

36.

NOTES TO THE FINANCIAL STATEMENTS FINANCIAL TO THE NOTES 2017 31 DECEMBER YEAR ENDED FINANCIAL FOR THE FINANCIAL 170 36. FOR THEFINANCIALYEARENDED31DECEMBER2017 NOTES TOTHEFINANCIALSTATEMENTS 37. COMPARATIVES SEGMENT INFORMATION (CONTD.) E D Statement offinancialpositionasat31December2016 The comparative figuresbelow have beenreclassifed toconform withthecurrent year’s presentation. Amount duetosubsidiaries Current Amount duetosubsidiaries Non current Statement offinancialposition statement offinancialposition: statement The following itemsaredeductedfromsegmentliabilitiestoarrive liabilitiesreportedinthe consolidated attotal offinancialposition: consolidated statement The following itemsareaddedto/(deductedfrom)segmentassetstoarrive assetsreportedinthe attotal Inter-segment liabilities and borrowings Loans Inter-segment assets Investment in associates Investment in UTUSAN MELAYU (MALAYSIA) BERHAD (previously 25,588,755 stated) 2016 RM - Reclassification | (1,165,749) 1,165,749 ANNUAL REPORT2017 (96,229,072) (96,178,237) (78,085,279) (78,631,123) 545,844 RM (50,835) 2017 2017 RM RM (76,600,249) (76,497,610) (66,758,329) (67,550,868) 24,423,006 (re-stated) 1,165,749 (102,639) 792,539 2016 2016 2016 RM RM RM UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 LIST OF PROPERTIES AS AT 31 DECEMBER 2017

Carrying Land Area Built-Up Value (RM) Location Description Existing Use (sq. ft) Area (sq. ft) Tenure 31.12.2017 KUALA LUMPUR Lot PT 667, Section 92 8 Storey Headquarters of 94,874 383,000 Lot 234 & 236 81,692,625 No. 44, Jalan Utusan Building Utusan Melayu Lot 238 & 240 Off Jalan Chan Sow Lin (Malaysia) Berhad, Lot 433 & 545 Kuala Lumpur Utusan Media Sales Leasehold (D/P : 05.12.2011) Sdn Bhd, Juasa (06.01.2109) Holdings Sdn Bhd, Utusan Land Sdn Bhd, Karya Outdoor Sdn Bhd and Utusan Technology Asia Sdn Bhd Wisma 730 (The Trax) Part Of 14 For Rental/ - 60,673 Leasehold 38,906,073 Lot 184, Jalan Lima Storey Of Purchased (01.03.2115) Off Jalan Chan Sow Lin Commercial For Commercial Kuala Lumpur Building Purpose (D/P: 29.09.2011) 46M, Jalan Lima Office Building Rented Out 63,855 49,368 Lot 187 1,456,832 Off Jalan Chan Sow Lin Leasehold Kuala Lumpur (02.06.2057) (D/P: 10.12.1959) Lot 268 Leasehold (30.01.2062) Lot 285, Section 92 3 Storey Rented Out 20,398 11,830 Leasehold 1,097,865 Off Jalan Chan Sow Lin Building (12.01.2071) Kuala Lumpur (D/P: 13.01.2011) Lot 438, Jalan Dua Factory Rented Out 38,761 23,361 Leasehold 970,779 Off Jalan Chan Sow Lin Building *(14.10.2016) Kuala Lumpur (D/P: 06.01.1992) Lot 783, Jalan Tiga Factory and Rented Out 50,774 28,601 Leasehold 196,174 Off Jalan Chan Sow Lin Office Building (11.05.2068) Kuala Lumpur (D/P: 20.12.1979) 1 & 3, Jalan 3/91A 3 ½ Storey Utusan 13,552 12,015 Freehold 2,145,209 Taman Shamelin Perkasa Terrace Factory Publications & Cheras, Kuala Lumpur Distributors Sdn Bhd (D/P : 13.01.1994)

171 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 LIST OF PROPERTIES AS AT 31 DECEMBER 2017

Carrying Land Area Built-Up Value (RM) Location Description Existing Use (sq. ft) Area (sq. ft) Tenure 31.12.2017 PUTRAJAYA No. 17A, B & C 4 Storey Utusan’s - 5,025 Freehold 1,646,336 Jalan Diplomatik 2/2 Shophouse Office/ Presint 15, Rented Out Presint Diplomatik 62000 Putrajaya Wilayah Persekutuan Putrajaya (D/P: 20.10.2010) SELANGOR Lot 6, Industrial Estate Factory Utusan’s Printing 683,278 197,651 Leasehold 60,627,918 Section 10 Building Complex (19.08.2098) Bandar Baru Bangi Bangi, Selangor (D/P : 20.12.1995) Lot 2 & 3 4 Storey Shop For Rental/ - 19,653 Freehold 18,754,895 UOA Business Park Office Purchased Glenmarie, Petaling Jaya For Commercial Selangor Purpose (D/P : 11.01.2013) Lot B3A, C1, C2 Building Under For Rental/ - 27,585 Leasehold 11,249,664 SqWhere Construction Purchased (20.12.2111) Sungai Buloh For Commercial Selangor Purpose (D/P : 03.04.2014) 11, Jalan 14/22 5 Storey Rented Out 5,533 24,170 Leasehold 2,737,861 Petaling Jaya, Selangor Shophouse (16.12.2086) (D/P : 10.03.1992) 11A, Jalan 14/22 4 Storey Rented Out 1,539 5,830 Leasehold 408,919 Petaling Jaya, Selangor Shophouse (16.12.2086) (D/P: 23.10.1989) D-05-2, Blok D 2 Storey Rented Out 1,292 1,292 Leasehold 341,510 Plaza Glomac Shophouse (26.03.2109) No. 6, Jalan SS7/19 (Commercial Kelana Jaya Unit) Petaling Jaya, Selangor (D/P: 01.05.2011)

172 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 LIST OF PROPERTIES AS AT 31 DECEMBER 2017

Carrying Land Area Built-Up Value (RM) Location Description Existing Use (sq. ft) Area (sq. ft) Tenure 31.12.2017 KEDAH Lot 170, 170-A & 170-B Office Shop Utusan’s Office 1,013 3,040 Leasehold 337,586 Kompleks Alor Setar (26.08.2083) Jalan Kancut 05100 Alor Setar Kedah Darul Aman (D/P : 12.03.2013) Lot 171, 171-A & 171-B Office Shop Utusan’s Office 1,013 3,040 Leasehold 337,586 Kompleks Alor Setar (26.08.2083) Jalan Kancut 05100 Alor Setar Kedah Darul Aman (D/P : 12.03.2013) PENANG Lot 3055, Lorong Jelawat 1 Factory Utusan’s Printing 174,177 69,888 Leasehold 14,546,389 Kawasan Perindustrian Building Plant (12.12.2035) Seberang Jaya Prai, Penang (D/P: 10.10.1977) 34, Jalan Argyll 2 Storey Utusan’s Office 1,280 1,995 Leasehold 417,366 Georgetown, Penang Shophouse (27.09.2049) (D/P: 01.07.1976) 32, Jalan Argyll 2 Storey Rented Out 1,280 1,995 Leasehold 397,016 Georgetown, Penang Shophouse (26.09.2049) (D/P: 28.08.1969) PERAK 208, Jalan Sultan Iskandar 2 Storey Utusan’s Office 1,740 2,720 Freehold 175,719 Ipoh, Perak Shophouse (D/P : 08.09.1990) 1, Jalan SM 1C/12 2 Storey Rented Out 2,288 3,980 Leasehold 42,900 Bandar Baru Sri Manjung Shophouse (01.08.2079) Sri Manjung Sitiawan, Perak (D/P : 12.12.1980) MELAKA 358, Taman Melaka Raya 3 Storey Utusan’s Office 1,400 4,160 Leasehold 96,000 Melaka Shophouse (04.10.2082) (D/P : 26.02.1982)

173 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 LIST OF PROPERTIES AS AT 31 DECEMBER 2017

Carrying Land Area Built-Up Value (RM) Location Description Existing Use (sq. ft) Area (sq. ft) Tenure 31.12.2017 JOHOR Lot PTD 53920 Factory Vacant 170,311 21,410 Freehold 4,387,068 Jalan Firma 2/1 Building Tebrau Industrial Estate Johor Bahru, Johor (D/P : 03.04.1991) 24, Jalan Serampang 3 Storey Utusan’s Office 1,920 5,358 Freehold 369,687 Taman Pelangi Shophouse Johor Bahru, Johor (D/P: 27.10.1980) 19, Jalan Mengkudu 2 Storey Rented Out 1,680 3,192 Freehold 103,594 Taman Makmur Shophouse Batu Pahat, Johor (D/P : 02.10.1984) PAHANG 18, Jalan Bukit Ubi 3 Storey Ground Floor Utusan’s 2,000 4,900 Leasehold 137,663 Kuantan, Pahang Shophouse Office (14.08.2068) (D/P : 28.07.1986) C-321, Jalan Tengku Ismail 2 Storey Utusan’s Office 1,600 2,480 Leasehold 88,400 Temerloh, Pahang Shophouse (29.03.2083) (D/P : 26.11.1984) Jalan Hj Abdul Aziz Vacant Land Vacant 3,267 - Leasehold 90,371 Kuantan, Pahang (17.09.2077) (D/P : 15.07.1981) TERENGGANU Lot 15367, Gong Badak Factory Utusan’s Printing 130,684 22,000 Leasehold 3,581,888 Industrial Estate Building Plant (27.03.2051) Kuala Terengganu Terengganu (D/P : 28.03.1991) No. 34, Pusat Niaga 2 Storey Utusan’s Office 1,431 2,500 Leasehold 1,008,738 Paya Keladi Shophouse (10.12.2104) Kuala Terengganu Terengganu (D/P : 05.05.2008)

174 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 LIST OF PROPERTIES AS AT 31 DECEMBER 2017

Carrying Land Area Built-Up Value (RM) Location Description Existing Use (sq. ft) Area (sq. ft) Tenure 31.12.2017 SABAH C-07-01 to C-08-07 8 Storey Office For Rental/ - 12,092 Leasehold 7,617,838 Block C, Aeropod Building Purchased (15.07.2111) Commercial Square For Commercial Jalan Aeropod Purpose Off Jalan Kepayan Kota Kinabalu, Sabah (D/P : 16.07.2012) INDONESIA VS25-06 & LV23-01 Apartments Office/ - 5,984 Freehold 2,437,718 The Bellezza Permata Residence Hijau, Jalan Arteri, Permata Hijau 12210, Jakarta Selatan Jakarta, Indonesia (D/P : 27.06.2007)

Notes: 1) D/P – Date of Purchase 2) * Lease extension is still in the process

175 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 ANALYSIS OF SHAREHOLDINGS AS 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

Number of Percentage Number of Percentage Size of Holdings Shareholders (%) Shares (%) 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

Direct Indirect Percentage Names Shareholdings Shareholdings (%) 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

Number of Percentage Names of Shareholders Shares (%) RHB Nominees (Tempatan) Sdn Bhd 55,113,956 49.77 (United Malays National Organisation or UMNO) Nilam Setar (M) Sdn Bhd 16,343,000 14.76

176 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 LIST OF TOP THIRTY LARGEST SHAREHOLDERS AS AT 30 MARCH 2018

Number of Percentage Names of Shareholders Shares (%) RHB Nominees (Tempatan) Sdn Bhd 55,113,956 49.77 (United Malays National Organisation or UMNO) Nilam Setar (M) Sdn Bhd 16,343,000 14.76 Aspirasi Sigma Sdn Bhd 3,500,000 3.16 Fasa Mahsuri Sdn Bhd 2,000,000 1.81 Tan Jin Tuan 1,044,000 0.94 TA Nominees (Tempatan) Sdn Bhd 879,900 0.79 (Pledged Securities Account for Chua Eng Ho Waa @ Chua Eng Wah) Maybank Nominees (Tempatan) Sdn Bhd 800,000 0.72 (Tay Ong Ngo @ Tay Boon Fang) RHB Nominees (Tempatan) Sdn Bhd 621,400 0.56 (Pledged Securities Account for Tan Gaik Suan) Chin Kian Fong 509,400 0.46 Yap Pow On 501,000 0.45 Hussein Noordin Sdn Bhd 381,000 0.34 Lee Kong Hian 374,600 0.34 Lee Yeow Hian 374,000 0.34 Tay Boon Teck 372,200 0.34 Li Liong Bee 371,800 0.34 Maybank Nominees (Tempatan) Sdn Bhd 347,100 0.31 (Chua Eng Ho Wa’a @ Chua Eng Wah) Cheah Yee Lin 314,500 0.28 Rajalingam A/L RVR Singam 312,000 0.28 Maybank Nominees (Tempatan) Sdn Bhd 311,500 0.28 (Koo Tai Ping @ Koh Kian Tee) Chin Sin Lin 292,300 0.26 Senawang Land Sdn Bhd 289,000 0.26 Maybank Nominees (Tempatan) Sdn Bhd 286,000 0.26 (Pledged Securities Account for Felix Miller) Affin Hwang Nominees (Tempatan) Sdn Bhd 272,000 0.25 (Pledged Securities Account for Tay Boon Seng) Alliancegroup Nominees (Tempatan) Sdn Bhd 261,100 0.24 (Pledged Securities Account for Yayasan Pok Dan Kassim) HLIB Nominees (Tempatan) Sdn Bhd 252,600 0.23 (Hong Leong Bank Bhd for Goh Chai Hong) Kenanga Nominees (Tempatan) Sdn Bhd 252,300 0.23 (Pledged Securities Account for Chin Kiam Hsung) TA Nominees (Tempatan) Sdn Bhd 243,800 0.22 (Pledged Securities Account for Ng Kon Yew) Ambank (M) Berhad 235,700 0.21 (Pledged Securities Account for Rajalingam A/L RVR Singam) Tay Ong Ngo @ Tay Boon Fang 202,600 0.18 Kenanga Nominees (Tempatan) Sdn Bhd 200,000 0.18 (Pledged Securities Account for Chan Khim Gee @ Chang Khim Gee) 177 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 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. (Ordinary Resolution 3)

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. (Ordinary Resolution 4)

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. (Ordinary Resolution 5)

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. (Ordinary Resolution 6)

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.” (Ordinary Resolution 7)

178 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 NOTICE OF ANNUAL GENERAL MEETING

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 01567 Company Secretary

Kuala Lumpur 30 April 2018

179 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 NOTICE OF ANNUAL GENERAL MEETING

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.

180 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 NOTICE OF ANNUAL GENERAL MEETING

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.

181 UTUSAN MELAYU (MALAYSIA) BERHAD | ANNUAL REPORT 2017 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 Salleh ii) Datuk Mohd Noordin Abbas iii) 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.

182 PROXY FORM CDS 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 AS ORDINARY BUSINESS – ORDINARY RESOLUTIONS Resolution 1 Re-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 AS SPECIAL BUSINESS – ORDINARY RESOLUTION Resolution 7 Directors 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) For appointment of two or more proxies, percentage of shareholdings to be represented by the proxies Number of Percentage Shares ______Proxy 1 % Signature/Common Seal of Corporation Proxy 2 % Number of Shares Held: ______Total 100% Date: ______

NOTE: Appointment of Proxy common seal or under the hand of an officer on behalf of the corporation or attorney. i) A member of the Company entitled to attend and vote at this meeting may iv) Where a member of the Company is an exempt authorised nominee which holds appoint a proxy (or in a case of a corporation to appoint a representative) to ordinary shares in the Company for multiple beneficial owners in one omnibus attend and vote in his stead. A proxy need not be a member of the Company. account, the exempt authorised nominee may appoint multiple proxies for each ii) A member of the Company shall be entitled to appoint more than one (1) proxy omnibus account it holds. to attend and vote at the same meeting. Where a member appoints more than v) To be valid the proxy form duly completed must be deposited at the Registrar’s one (1) proxy, the appointment shall be invalid unless he specifies the proportion Office, Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar of his holdings to be represented by each proxy. South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur during normal business hours iii) The instrument appointing a proxy shall be in writing under the hand of the from Mondays to Fridays (except public holidays), no later than Tuesday, 5 June appointor or of his attorney or, if the appointor is a corporation, either under the 2018 at 11.00 a.m. 3. Fold this flap for sealing

2. Then fold here

AFFIX STAMP RM0.80 HERE

THE SHARE REGISTRAR TRICOR INVESTOR & ISSUING HOUSE SERVICES SDN BHD Unit 32-01, Level 32, Tower A Vertical Business Suite Avenue 3, Bangsar South No. 8, Jalan Kerinchi 59200 Kuala Lumpur

1. Fold here

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