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AN

NU

AL

REPO

RT 2

015

ANN

UAL REPO

RT 2015U

TUSAN

MELAYU

(MALAYSIA) B

ERHAD

ANNUAL REPORT

www.u t u s a n g r o u p . c om .my

FRONT COVERBACK COVER

1Utusan Melayu (Malaysia) Berhad Annual Report 2015

2 Notice of Annual General Meeting

5 Statement Accompanying Notice of Annual General Meeting of the Company

6 Five-Year Group Financial Highlights

10 ProfileoftheBoardofDirectors

15 Corporate Information

16 ManagementandHeadsofDepartments/ Subsidiaries

17 StatementofDirectors’Responsibilityin RelationtotheFinancialStatements

18 AuditCommitteeReport

22 StatementofRiskManagementand Internal Control

24 Statement on Corporate Governance

32 OtherInformationRequiredbyTheListing RequirementsofTheBursaMalaysia SecuritiesBerhad

34 Chairman’sStatement

36 CorporateResponsibilityStatement

40 CorporateCalendar

46 Financial Statements

47 Directors’Report

50 StatementbyDirectors

50 StatutoryDeclaration

51 IndependentAuditors’Report

53 ConsolidatedStatementofComprehensiveIncome

55 ConsolidatedStatementofFinancialPosition

57 ConsolidatedStatementofChangesinEquity

58 ConsolidatedStatementofCashFlows

61 Statement of Comprehensive Income

62 Statement of Financial Position

64 StatementofChangesinEquity

65 StatementofCashFlows

67 Notes to the Financial Statements

160 ListofProperties

163 AnalysisofShareholdings

165 ListofTopThirtyLargestShareholders

l Proxy Form

Contents

2 Utusan Melayu (Malaysia) Berhad Annual Report 2015

Notice Of Annual General Meeting

NOTICE IS HEREBY GIVEN THATtheForty-EighthAnnualGeneralMeetingofUtusanMelayu(Malaysia)BerhadwillbeheldatDewanBesar,Level1,BangunanKorporatUtusanMelayu(Malaysia)Berhad,No.44,JalanUtusanOffJalanChanSowLin,55200KualaLumpuronWednesday,25May2016at11.00a.m.totransactthefollowingbusinesses:

AGENDA

AS ORDINARY BUSINESS

1. To receive theAudited Financial Statements for the financial year ended31December 2015 togetherwith theReportsoftheDirectorsandAuditorsthereon.

(SeeNote2)

2. Tore-electthefollowingDirectorswhoretirebyrotationinaccordancewithArticle97oftheCompany’sArticlesofAssociationandbeingeligibleofferthemselvesforre-election:i) DatukSeriTengkuSariffuddinTengkuAhmad (Ordinary Resolution 1)ii) MohdYusofAbuOthman

(Ordinary Resolution 2)

3. Tore-electDato’MohamadFatmiCheSallehwhoretiresinaccordancewithArticle102oftheCompany’sArticlesofAssociationandbeingeligible,offershimselfforre-election.


4. Tore-appointDatukSeriIsmailYusofwhoretiresinaccordancewithSection129(6)oftheCompaniesAct,1965toholdofficeuntiltheconclusionofthenextAnnualGeneralMeeting.

(Special Resolution 1)

5. ToapprovethepaymentofDirectors’feesofRM30,000perannumforeachoftheDirectorsforthefinancialyearended31December2015


6. Tore-appointMessrs.Ernst&YoungasAuditorsoftheCompany,toholdofficeuntiltheconclusionofthenextAnnualGeneralMeeting,ataremunerationtobedeterminedbytheDirectors.


AS SPECIAL BUSINESS

Toconsiderand,ifthoughtfit,topasswithorwithoutanymodifications,thefollowingResolutions:

ORDINARY RESOLUTION

7. AuthorityUnderSection132DoftheCompaniesAct,1965ForDirectorstoIssueShares “THATpursuanttoSection132DoftheCompaniesAct,1965,theBoardofDirectorsbeandareherebyauthorized

toissuesharesintheCompanyatanytimeuntiltheconclusionofthenextAnnualGeneralMeetinganduponsuchtermsandconditionsandforsuchpurposesastheBoardofDirectorsmay,intheirabsolutediscretion,deemfitprovidedthattheaggregatenumberofsharestobeissueddoesnotexceedtenpercentum(10%)oftheissuedsharecapitaloftheCompanyforthetimebeing,subjectalwaystotheapprovalofalltherelevantregulatorybodiesbeingobtainedforsuchallotmentandissue.”


8. Totransactanyotherordinarybusinessofwhichduenoticeshallhavebeengiven.



FURTHER NOTICE IS HEREBY GIVEN THATforthepurposeofdeterminingamemberwhoshallbeentitledtoattendthis48thAnnualGeneralMeeting,theCompanyshallberequestingBursaMalaysiaDepositorySdnBhdinaccordancewithArticle57(e)oftheCompany’sArticlesofAssociationandSection34(1)oftheSecuritiesIndustry(CentralDepositories)Act,1991toissueaGeneralMeetingRecordofDepositorsasat18May2016.OnlyadepositorwhosenameappearsontheRecordofDepositorsasat18May2016shallbeentitledtoattendthesaidmeetingorappointproxiestoattendand/orvoteonhis/herbehalf.

BYORDEROFTHEBOARD

SHIRADANUARLS0009472Company Secretary

KualaLumpur29April2016


GENERAL NOTES:

1. Appointment of Proxyi) AmemberoftheCompanyentitledtoattendandvoteatthismeetingmayappointaproxy(orinacaseofa

corporationtoappointarepresentative)toattendandvoteinhisstead.AproxyneednotbeamemberoftheCompany.

ii) Amemberof theCompanyshallbeentitled toappointmore thanone (1)proxy toattendandvoteat thesamemeeting.Whereamemberappointsmorethanone(1)proxy,theappointmentshallbeinvalidunlesshespecifiestheproportionofhisholdingstoberepresentedbyeachproxy.

iii) Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororofhisattorneyor,iftheappointorisacorporation,eitherunderthecommonsealorunderthehandofanofficeronbehalfofthecorporationorattorney.

iv) Where amember of the Company is an exempt authorised nominee which holds ordinary shares in theCompanyformultiplebeneficialownersinoneomnibusaccount,theexemptauthorisednomineemayappointmultipleproxiesforeachomnibusaccountitholds.

v) TobevalidtheproxyformdulycompletedmustbedepositedattheRegistrar’sOffice,Unit32-01,Level32,TowerA,VerticalBusinessSuite,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpurduringnormalbusinesshoursfromMondaystoFridays(exceptpublicholidays)notlessthanforty-eight(48)hoursbeforethetimeforholdingtheMeetingoranyadjournmentthereof.

2. Audited Financial Statements for the Financial Year Ended 31 December 2015 ThisAgendaismeantfordiscussiononlyasanapprovalfromshareholdersisnotrequiredpursuanttotheprovision

ofSection169(1)oftheCompaniesAct,1965.Hence,thisAgendaisnotputforwardforvotingbyshareholdersoftheCompany.

3. Payment of Directors’ Fees TheCompany’sArticlesofAssociationprovidesthattheremunerationoftheDirectorsshallfromtimetotimebe

determinedbyanordinaryresolutionoftheCompanyingeneralmeeting.Suchfeescannotbeincreasedexceptpursuant to a resolution passed at the generalmeeting. Therefore, shareholders’ approval is required for thepaymentofDirectors’fees.Shareholders’approvalontheDirectors’feeswasobtainedatthe47thAnnualGeneralMeetingheldon3June2015andthereisnorevisiontothefees.

4. Appointment of Auditors TheBoardat itsmeetingheldon14April2016approved therecommendationby theAuditCommitteeon the

re-appointment ofMessrs. Ernst& Young as Auditors of the Company based on the criteria prescribed underParagraph15.21oftheListingRequirementsoftheBursaMalaysiaSecuritiesBerhad.

5. Statement Accompanying Notice of Annual General Meeting of the Company Additional informationrequiredunderAppendix8AoftheListingRequirementsoftheBursaMalaysiaSecurities

BerhadissetoutintheStatementAccompanyingNoticeofAnnualGeneralMeetingoftheCompany.



EXPLANATORY NOTES:

1. Ordinary Resolution 6 - Authority under Section 132D of the Companies Act, 1965 for Directors to Issue Shares

TheproposedOrdinaryResolution6isforthepurposeofgrantingarenewalGeneralMandate(‘GeneralMandate’),ifpassed,willempowertheDirectorstoissueandallotnewsharesintheCompanyuptoanamountnotexceedingintotaltenpercentum(10%)oftheissuedsharecapitaloftheCompanyforsuchpurposesastheDirectorsconsiderwouldbeintheinterestoftheCompany.TheGeneralMandate,unlessrevokedorvariedbytheCompanyingeneralmeeting,willexpireatthenextAnnualGeneralMeeting(‘AGM’)oftheCompany.

TheGeneralMandatewillprovideflexibilitytotheCompanyforanypossiblefundraisingactivities,includingbutnotlimitedtofurtherplacingofshares,forthepurposeoffundingfutureinvestmentproject(s),workingcapitaland/oracquisitions.

AsatthedateofthisNotice,nonewsharesintheCompanywereissuedpursuanttothemandategrantedtotheDirectorsattheForty-SeventhAnnualGeneralMeetingheldon3June2015andwhichwilllapseattheconclusionoftheForty-EighthAnnualGeneralMeeting.


Statement Accompanying Notice OfAnnualGeneralMeetingOfTheCompany

DIRECTORSwhoarestandingforre-electionattheForty-EighthAnnualGeneralMeetingoftheCompanyare:

i) DatukSeriTengkuSariffuddinTengkuAhmadii) MohdYusofAbuOthmaniii) Dato’MohamadFatmiCheSallehiv) DatukSeriIsmailYusof

Thedetailsofthefour(4)Directorsstandingforre-electionaresetoutintheirrespectiveprofileswhichappearintheProfileoftheBoardofDirectorsonpages10to13ofthisAnnualReport.ThedetailsoftheirinterestinthesecuritiesoftheCompanyaresetoutintheAnalysisofShareholdingswhichappearsonpage163ofthisAnnualReport.


Five-Year Group Financial Highlights

GROUP REVENUE RM'000GROUP PROFIT/(LOSS)

BEFORE TAX RM'000BASIC EARNINGS

PER SHARE SEN

NET TANGIBLE ASSETPER SHARE RM

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT RM'000 TOTAL ASSETS RM'000

2.80

‘11

‘12

‘13

‘14

‘15

366,553

345,252

342,432

291,195

248,867

‘11

‘12

‘13

‘14

‘15

2.80

2.68

2.53

1.75

1.56

2.80‘11

‘12

‘13

‘14

‘15

310,534

296,649

279,837

193,921

172,655

2.80‘11

‘12

‘13

‘14

‘15

524,791

550,328

533,145

502,324

469,309

‘11

‘12

‘13

‘14

‘15

16,357

(16,162)

(20,394)

(83,650)

(17,351)

‘11

‘12

‘13

‘14

‘15

15.77

(14.23)

(14.64)

(74.03)

(18.94)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FINANCIAL YEAR ENDED 31 DECEMBERRM'000 2015 2014 2013 2012 2011GroupRevenue 248,867 291,195 342,432 345,252 366,553

Group(Loss)/ProfitBeforeTax (17,351) (83,650) (20,394) (16,162) 16,357

IncomeTax (3,885) 1,798 4,231 444 1,366

Zakat 261 (127) (50) (36) (261)

Group(Loss)/ProfitForTheYear (20,975) (81,979) (16,213) (15,754) 17,462

Attributableto: OwnersOfTheParent (20,975) (81,979) (16,213) (15,754) 17,462

EarningsPerShareAttributableTo

OwnersOfTheParent(sen):BasicAndDiluted,For(Loss)/ProfitForTheYear (18.94) (74.03) (14.64) (14.23) 15.77

GrossDividendPerShare(sen) - - - - -


Five-Year Group Financial Highlights

GROUP REVENUE RM'000GROUP PROFIT/(LOSS)

BEFORE TAX RM'000BASIC EARNINGS

PER SHARE SEN

NET TANGIBLE ASSETPER SHARE RM

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT RM'000 TOTAL ASSETS RM'000

2.80

‘11

‘12

‘13

‘14

‘15

366,553

345,252

342,432

291,195

248,867

‘11

‘12

‘13

‘14

‘15

2.80

2.68

2.53

1.75

1.56

2.80‘11

‘12

‘13

‘14

‘15

310,534

296,649

279,837

193,921

172,655

2.80‘11

‘12

‘13

‘14

‘15

524,791

550,328

533,145

502,324

469,309

‘11

‘12

‘13

‘14

‘15

16,357

(16,162)

(20,394)

(83,650)

(17,351)

‘11

‘12

‘13

‘14

‘15

15.77

(14.23)

(14.64)

(74.03)

(18.94)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBERRM'000 2015 2014 2013 2012 2011Share Capital 110,734 110,734 110,734 110,734 110,734

Reserves 61,921 83,187 169,103 185,915 199,800

EquityAttributableToOwnersOfTheParent 172,655 193,921 279,837 296,649 310,534

TotalEquity 172,655 193,921 279,837 296,649 310,534

Non-CurrentLiabilities 173,565 90,715 101,349 104,886 99,149

CurrentLiabilities 123,089 217,688 151,959 148,793 115,108

TotalLiabilities 296,654 308,403 253,308 253,679 214,257

TOTAL EQUITY AND LIABILITIES 469,309 502,324 533,145 550,328 524,791Non-Current Assets 306,354 340,428 358,724 350,825 325,246

Current Assets 159,350 161,896 174,421 199,503 199,545

Non-CurrentAssetClassifiedAsHeldForSale 3,605 - - - -

TOTAL ASSETS 469,309 502,324 533,145 550,328 524,791NetTangibleAssetPerShare(RM) 1.56 1.75 2.53 2.68 2.80

Inlinewiththedevelopmentoftechnology,Utusanhastakenpro-activestepsbyintroducingadigitalnewspaper

ore-papersinceNovember2012tomakeitmoreinteractiveandeasytoaccesswhilemaintainingthe

existingprintandonlineversions.

Boar

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INDEPENDENT Non-Executive Chairman. Joined the Board of Utusan Melayu(Malaysia)Berhadon1December2015.Currently is theChairmanofLandandAssetDevelopmentCommitteeandamemberoftheBoardofUPM,UPMHoldingsSdnBhdandUPMEducation&TrainingSdnBhd.HeservedasPoliticalSecretarytoPrimeMinisterandDeputyPrimeMinister fornine (9)years.GraduatedwithaMastersDegreeinBusinessAdministration(MBA)fromTulaneUniversity,NewOrleans,Louisiana,UnitedStatesofAmericaandBachelorofScience(BSc)Marketing from Southern Illinois University, Carbondale, Illinois, UnitedStatesofAmerica.Doesnothaveanyotherdirectorshipsinotherpubliccompanies.

NON-INDEPENDENT Executive Director. Joined the Board of Utusan Melayu(Malaysia) Berhadon 5 June 2014. JoinedUtusanMelayu (Malaysia) Berhadon20 May 2014 as the Group Managing Director and also holds directorship insubsidiarycompanieswithinUtusanGroupnamelyUtusanKaryaSdnBhd,UtusanMediaSalesSdnBhd,UtusanPublications&DistributorsSdnBhd,UtusanLandSdnBhd,JuasaHoldingsSdnBhd,JobhouseSdnBhdandUtusanStudiosSdnBhd(formerlyknownasUtusanSight&SoundSdnBhd).Hehasextensiveexperienceindevelopmentbankingparticularlywithregardto internationalprojectfinanceandmanagement.He has served as Chief ExecutiveOfficer inMalaysia ExportCredit Insurance Berhad (MECIB) and Export-Import Bank of Malaysia Berhad (EXIMBank).HoldsaBachelorDegreeinAccountingandFinancefromSouthernIllinois University, United States of America and Masters Degree inManagement Science (Operations Research) from St. Louis University,UnitedStatesofAmerica.Doesnothaveanyotherdirectorshipsinotherpubliccompanies.

NON-INDEPENDENT Executive Director. Joined the Board of Utusan Melayu(Malaysia)Berhadon23November2009.HeheldthepostofActingGroupEditor-in-ChiefofUtusan’sGroupon20June2008beforebeingappointedtotheposton1December2008.JoinedUtusanMelayu(Malaysia)Berhadon1April1984andserved in variouscapacitiesprior tohispresentpostas theGroupEditor-in-Chief.HoldsaDegreeinStrategicandSecurityStudies,NationalUniversityofMalaysiaandattendedaJournalismFellowshipProgrammeinSecuritiesStudiesco-organisedbytheUniversityofNewYorkandEastWestCentreinHawaii.HoldsdirectorshipinsubsidiariesofUtusanGroupnamelyUtusanMediaSalesSdnBhdandUtusanKaryaSdnBhd.HeisalsoaMemberoftheBoardofGovernorsofBERNAMAsince16February2009.Doesnothaveanyotherdirectorshipsinotherpubliccompanies.

DATO’ MOHAMAD FATMI CHE SALLEH(Chairman, 59 years of age – Malaysian)

DATUK MOHD NOORDIN ABBAS(Group Managing Director,

56 years of age – Malaysian)

DATUK ABDUL AZIZ ISHAK(Group Editor-in-Chief,


ProfileOfTheBoardOfDirectors


NON-INDEPENDENT Non-Executive Director. Joined the Board of UtusanMelayu(Malaysia)Berhadon15January2004.AmemberoftheAuditCommitteeandRemunerationCommitteeof theBoard.GraduatedwithaBachelorofArts(Honours), University of Malaya. Held several posts in the government sectorfrom 1967 to 1991. Currently amember of the Board of Trustees andis the Executive Vice-Chairman of the Albukhary Foundation. Currentdirectorships of public companies include South Malaysia IndustriesBerhad,MINHO(M)BerhadandBCBBerhad.

INDEPENDENT Non-Executive Director. Joined the Board of Utusan Melayu(Malaysia)Berhadon1March2012.ChairmanoftheInvestmentCommitteeanda member of the Audit Committee and Nomination Committee of the Board.GraduatedwithaBachelorofArts(Honours)inEconomicsfromUniversityofMalayain 1972. Obtained Masters Degree in International Economics Relations fromInternationalInstituteofPublicAdministration,FranceandMastersinInternationalEconomicsandFinancefromUniversityofParisI,Pantheon-Sorbonne,Francein1982andsubsequentlyearnedPhD(EconomicScience)inInternationalEconomicsandInternationalFinancefromUniversityofParisI,Pantheon-Sorbonne,Francein1986.Sheheldseveralpostsinthegovernmentsectorfrom1972toSeptember1988 and joined Esso Productions Malaysia Inc. from October 1988 to 1990.ShethenassumedthepositionofManagingDirectorwithaconsultingfirmthatprovidesfinancialandadvisorybeforeherappointmentasChiefRepresentativeofCreditLyonnaisBank,Malaysiafrom1991to1998.NorraesahwasalsoChairmanof Bank Kerjasama Rakyat Malaysia from 2000 to 2003. She is currently theExecutiveChairmanofMyE.G.ServicesBerhad.SheisalsoExecutiveDirectorofMalaysianGenomicsResourceCentreBerhad,amemberoftheBoardofAdventaBerhad,amemberoftheBoardofTrusteeoftheWorldIslamicEconomicForumFoundation(‘WIEF’),ChairmanoftheWIEFBusinesswomenNetworkandservesasamemberoftheWIEFInternationalAdvisoryPanel.

INDEPENDENT Non-Executive Director. Joined the Board of Utusan Melayu(Malaysia) Berhad on 23 November 2009. Amember of the Audit Committee,Nomination Committee and Remuneration Committee of the Board. Holds aDiploma in Mass Communications from MARA University of Technology andattendedtheFellowshipProgrammeattheUniversityofSeoul,Korea.HewasajournalistattheNewStraitsTimesPress(M)Berhadfrom1987till1997.Servesin the government services as the Press Secretary to the Prime Minister ofMalaysiafrom1997tillnow.HeisalsotheMediaDirectorofthePrimeMinister’sOffice. Does not have any other directorships in other publiccompanies.

DATUK SERI ISMAIL YUSOF(72 years of age – Malaysian)

DATO’ DR. NORRAESAH MOHAMAD (68 years of age – Malaysian)

DATUK SERI TENGKU SARIFFUDDIN TENGKU AHMAD

(53 years of age – Malaysian



INDEPENDENT Non-Executive Director. Joined the Board of Utusan Melayu(Malaysia) Berhadon16 January 2014.He is aCharteredAccountant from theInstituteofCharteredAccountants inEnglandandWalesandamemberof theMalaysianInstituteofAccountants.ChairmanoftheAuditCommitteeandamemberoftheRemunerationCommitteeandInvestmentCommitteeoftheBoard.Hebeganhiscareerin1981asaProjectAccountantwithPernas-SimeDarbyHoldingsSdnBhd.Heldseveralveryseniorpostsinnumerouscompanies, includingSelangorState-owned andMalaysian Federal Government-owned companies, in varioussectorsfrom1982to2001;includingasGroupFinancialControllerinKumpulanPerangsangSelangorBhd,ChiefExecutiveOfficerinMalaysianKuwaitiInvestmentCoSdnBhd,SBDevelopmentSdnBhd,TabungAmanahSahamSelangorBhdandasVicePresident–RevenueDevelopmentinMIDFSismaSecuritiesSdnBhd;aswellasinseveralprivatelyownedcompanies.HebecamethefirstChiefExecutiveOfficerofBadanPegawasPemegangSahamMinoritiBerhad(MSWG)from2001to2004andservedasaChiefOperatingOfficerinMKLandHoldingsBhdfrom2008to2010.HeiscurrentlytheChairmanofMedicalFlexiblePackagingSdnBhd,aprivatelyownedcompanyinwhichheisalsoaminorityshareholder.HeisalsoanindependentconsultantofferingprofessionalservicesinCorporateStartupsandCorporateChangeManagement.Doesnothaveanyotherdirectorshipsinotherpubliccompanies.

MOHD YUSOF ABU OTHMAN (64 years of age – Malaysian)

INDEPENDENT Non-Executive Director. Joined the Board of Utusan Melayu(Malaysia)Berhadon25March2015.Amemberof theNominationCommitteeandRemunerationCommitteeoftheBoard.GraduatedwithaBachelorofSciencein Business Administration and minoring in Management Information System(Computer Science) fromUniversity ofWisconsin – Steven Point, United Statesof America in 1989. He was the Chairman of the National Film DevelopmentCorporationMalaysia (FINAS) in 2011 and was a commissionmember of theMalaysianCommunicationsandMultimediaCommissionin2009.HeiscurrentlytheManagingDirectorofRafflesiaCorporateHoldingsSdnBhd,whichhasachainofrestaurantsinMalaysiaandRaffCommSdnBhd,aninformationtechnologycompanyandonlineserviceprovider.Doesnothaveanyotherdirectorshipsinotherpubliccompanies.

DATUK MD AFENDI HAMDAN(54 years of age – Malaysian)



APPOINTED as the Company Secretary of Utusan Melayu (Malaysia) Berhadon9December2013. He isalso theSeniorManager for theCompany’sLegaldepartment.HeisaLicensedCompanySecretaryandanAffiliateofTheMalaysianInstitute of Chartered Secretaries and Administrators (MAICSA). He graduatedwitha LLB. (Hons) fromWolverhamptonPolytechnic in1989andwas called totheMalaysianBar in January1992.HehasalsoanMBA in IslamicBankingandFinance from International Islamic University Malaysia. He began his career intheJudicialandLegalServiceasaMagistrateon2January1992.Hewasalegaladvisorandalso involved incorporatefinanceandsecretarial inseveralpubliclistedcompaniessuchasFaberGroupBerhad,DRBHicomBerhadandLandmarksBerhad.Intotalhehasover20yearsofexperienceinthecorporatesector.

SHIRAD ANUAR(Company Secretary,




i) Family Relationship NoneoftheDirectorshaveanyfamilyrelationshipwitheachotherand/ormajorshareholdersoftheCompany.

ii) ConflictofInterest NoneoftheDirectorshaveanypersonalinterestinanybusinessarrangementwiththeCompany.

iii) ListofConvictionsforOffences NoneoftheDirectorshavebeenconvictedofanyoffences(otherthantrafficoffences)withinthepastten(10)years.

iv) Attendance of Directors at Board Meetings Therewereseven(7)BoardMeetingsheldduringthefinancialyearended31December2015.Detailsofattendance

oftheDirectorsatBoardMeetingsareasfollows:

DIRECTOR ATTENDANCEDatukMohdNoordinAbbas 6/7

DatukAbdulAzizIshak 6/7

DatukSeriIsmailYusof 6/7

DatukSeriTengkuSariffuddinTengkuAhmad 5/7

Dato’Dr.NorraesahMohamad 4/7

MohdYusofAbuOthman 7/7

DatukMdAfendiHamdan(Appointed w.e.f 25 March 2015)

5/6

Dato’MohamadFatmiCheSalleh(Appointed w.e.f 1 December 2015)

1/1

TanSriHajiHuseinAhmad(Resigned w.e.f 11 March 2015) 0/1

v) Securities Holdings in the Company and its Subsidiaries TheDirectors’shareholdings,etcaredisclosedonpage163ofthisAnnualReport.

OtherInformationOfDirectors


Corporate Information

BOARD OF DIRECTORSDATO’ MOHAMAD FATMI CHE SALLEHIndependent Non-Executive Chairman

DATUK MOHD NOORDIN ABBASGroup Managing Director

DATUK ABDUL AZIZ ISHAKGroup Editor-in-Chief

DATUK SERI ISMAIL YUSOFNon-Independent Non-Executive Director

DATUK SERI TENGKU SARIFFUDDIN TENGKU AHMADIndependent Non-Executive Director

DATO’ DR. NORRAESAH MOHAMADIndependent Non-Executive Director

DATUK MD AFENDI HAMDANIndependent Non-Executive Director

MOHD YUSOF ABU OTHMANIndependent Non-Executive Director

AUDIT COMMITTEEMOHD YUSOF ABU OTHMAN(Chairman)DATUK SERI ISMAIL YUSOFDATUK SERI TENGKU SARIFFUDDIN TENGKU AHMADDATO’ DR. NORRAESAH MOHAMAD

REMUNERATION COMMITTEEDATUK SERI ISMAIL YUSOFMOHD YUSOF ABU OTHMANDATUK SERI TENGKU SARIFFUDDIN TENGKU AHMAD(Appointed w.e.f 30 November 2015)DATUK MD AFENDI HAMDAN(Appointed w.e.f 30 November 2015)

NOMINATION COMMITTEEDATUK SERI TENGKU SARIFFUDDIN TENGKU AHMADDATO’ DR. NORRAESAH MOHAMADDATUK MD AFENDI HAMDAN(Appointed w.e.f 30 November 2015)

INVESTMENT COMMITTEEDATO’ DR. NORRAESAH MOHAMAD(Chairman)DATUK MOHD NOORDIN ABBASMOHD YUSOF ABU OTHMANW. NOR ASMAH W. ISMAILAHMAD RAZIF MOHAMED

COMPANY SECRETARYSHIRAD ANUAR

REGISTERED OFFICENo.44,JalanUtusanOffJalanChanSowLin55200KualaLumpurTel :03-92322600Fax :03-92210691Website :www.utusangroup.com.my

FOREIGN REPRESENTATIVE OFFICETheBellezaPermataHijau25-vs-6(VersaillesResidence)JalanArteri,PermataHijau12210JakartaSelatanJakarta,IndonesiaTel/Fax :021-25675848

SHARE REGISTRARTricorInvestor&IssuingHouseServicesSdnBhdUnit32-01,Aras32,TowerAVerticalBusinessSuiteAvenue3,BangsarSouthNo.8,JalanKerinchi59200KualaLumpurTel :03-27839299Fax :03-27839222

AUDITORSErnst&YoungLevel23A,MenaraMileniumJalanDamanlelaPusatBandarDamansaraDamansaraHeights50490KualaLumpur

PRINCIPAL BANKERSMalayanBankingBerhadBankMuamalatMalaysiaBerhadAffinIslamicBankBerhad

STOCK EXCHANGE LISTINGMainBoardoftheBursaMalaysiaSecuritiesBerhadStockName :UTUSANStockCode :5754ListingDate :16August1994


ManagementAndHeadsOfDepartments

DATUK MOHD NOORDIN ABBASGroup Managing Director

DATUK ABDUL AZIZ ISHAKGroup Editor-In-Chief

DATUK OTHMAN MOHAMADDeputy Group Editor-In-Chief

W. NOR ASMAH W. ISMAILChief Financial Officer

MOHD NAZLAN OSMANGeneral Manager, Human Resource

ROSMAN ZULKIFLIGeneral Manager, Marketing/Circulation

AHMAD KHAIRUMUZAMIL ABD RAHMANGeneral Manager, Special Projectsat Group Managing Director’s Office

AZLAN NAIM ABDULLAHGeneral Manager at Group Managing Director’s Office

AHMAD RAZIF MOHAMEDGeneral Manager, Corporate Services & Risk Management

JAMAL AHMED ALI AHMADGeneral Manager, Corporate Communications

SHIRAD ANUARSenior Manager, Legal/Company Secretary

FARIDAH HASHIMSenior Manager, Internal Audit & Group Compliance

NORIDZAN KAMALSenior Manager, Information Centre

ZULKIFLI BASHARUDDINSenior Manager, Property Services

FAISAL MOKHTARSenior Manager, Procurement & Administration

FAROUQ AFFANDI MAMATSenior Manager, Production

SITI ROHAYA SYED HASSANActing Head, Information Technology

AINOL AMRIZ ISMAILManager, Editorial Department

ABDUL KADIR BACHOKPhoto Editor

MOHAMAD RIZAL MOHAMED NORHead, Graphic Unit

HeadsofSubsidiaries

DATO’ MOHD ZAMRI SULONGChief Executive OfficerUtusan Airtime Sdn Bhd

AHMAD RAZIF MOHAMEDDirectorJuasa Holdings Sdn Bhd

MOHD YAZID AHMADChief Executive Officer / Executive DirectorUtusan Media Sales Sdn Bhd / Karya Outdoor Sdn Bhd

ROZITA YUSOFFExecutive DirectorUtusan Publications & Distributors Sdn Bhd

SOBRI AHMADExecutive DirectorJobHouse Sdn Bhd

ZULKIFLI BASHARUDDINChief Executive OfficerUtusan Land Sdn Bhd

ARFFIN NORDINExecutive DirectorUtusan Karya Sdn Bhd

AZLAN NAIM ABDULLAHDirectorUtusan Studios Sdn Bhd(formerly known as Utusan Sight & Sound Sdn Bhd)


StatementOfDirectors’ResponsibilityInRelationtotheFinancialStatements

THISstatementispreparedasrequiredbytheListingRequirementsoftheBursaMalaysiaSecuritiesBerhad.

ThedirectorsarerequiredtopreparefinancialstatementswhichgiveatrueandfairviewofthestateofaffairsoftheGroupandtheCompanyasattheendofeachfinancialyearandoftheirresultsandtheircashflowsforthatyearthenended.

Thedirectorsconsiderthatinpreparingthefinancialstatements:

l theGroupandtheCompanyhaveusedappropriateaccountingpoliciesandareconsistentlyapplied;

l reasonableandprudentjudgementsandestimatesweremade;and

l allapplicableapprovedaccountingstandardsinMalaysiahavebeenfollowed.

ThedirectorsareresponsibleforensuringthattheCompanymaintainsaccountingrecordsthatdisclosewithreasonableaccuracy the financial positionof theGroupand theCompany, andwhich enable them to ensure that the financialstatementscomplywiththeCompaniesAct,1965.

ThedirectorshavegeneralresponsibilitiesfortakingsuchstepsthatarereasonablyavailabletothemtosafeguardtheassetsoftheGroup,andtopreventanddetectfraudandotherirregularities.


AuditComitteeReport

1. MEMBERSHIP

The Audit Committee comprises three (3) Independent Non-Executive Directors and one (1) Non-Independent Non-ExecutiveDirectorasfollows:

MOHD YUSOF ABU OTHMAN – CHAIRMAN Independent Non-Executive Director (Appointed as Chairman w.e.f 7 April 2016)

DATUk SERI ISMAIL YUSOF Non-Independent Non-Executive Director

DATUk SERI TENGkU SARIFFUDDIN TENGkU AHMAD Independent Non-Executive Director

DATO’ DR. NORRAESAH MOHAMAD Independent Non-Executive Director (Resigned as Chairman w.e.f 7 April 2016)

2. MEETINGS AND ATTENDANCE

A total of seven (7)meetingswereheldduring the financial year ended31December2015. Thedetails of theattendanceofeachCommitteememberareasfollows:

MEMBERS ATTENDANCEDato’Dr.NorraesahMohamad 6/7




3. COMPOSITION AND TERMS OF REFERENCE

3.1 Composition Themembersof theCommitteeshallbeappointedby theBoardofDirectorsofUtusanMelayu (Malaysia)

Berhadfromamongstitsdirectorswhichfulfillsthefollowingrequirements:a. The Committee shall comprise not less than three (3) members, all of whom shall be non-executive

directors.ThemajorityoftheCommitteemembersshallbeIndependentDirectors.b. Atleastone(1)memberoftheCommittee:

i. mustbeamemberoftheMIA;orii. ifheisnotamemberoftheMIA,hemusthaveatleastthree(3)yearsworkingexperienceand:

l hemusthavepassedtheexaminationsspecifiedinPart1oftheFirstScheduleoftheAccountantsAct,1967;or

l hemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIoftheFirstScheduleoftheAccountantsAct,1967.

iii. fulfillssuchotherrequirementsasprescribedorapprovedbyBursaMalaysiaSecuritiesBerhad.c. ThemembersshallelectaChairmanfromamongstthemwhomshallbeanindependentdirector.


AuditComitteeReport

3.2 Procedure Of Meetingsa. Meetingsshallbeheldnotlessthanfour(4)timesayear.b. Aquorumshallbeatleasttwo(2)membersandthemajoritypresentmustbeindependentdirectors.c. TheChiefFinancialOfficerandtheheadofGroupInternalAuditshallnormallyattendthemeetingsto

assistindeliberationandresolutionofmattersraised.d. At least twice a year, the Committee shall meet with the external auditors without the presence of

Management.e. TheCompanySecretaryshallbeappointedastheSecretaryoftheCommittee.

3.3 Rights TheCommitteeisauthorisedbytheBoardofDirectorstohavethefollowingrights:

a. authoritytoinvestigateanyactivitywithinitstermsofreferenceandtheresourcestodoso.b. havefullandunrestrictedaccesstoanyinformationanddocumentspertainingtotheGroup.c. havedirectcommunicationchannelswiththeexternalandinternalauditors.d. obtainindependentprofessionaladviceandtosecuretheattendanceofoutsiderswithrelevantexperience

andexpertiseasitconsidersnecessary.e. convenemeetingswith theexternaland the internalauditorswithout theattendanceofManagement

wheneverdeemednecessary.

3.4 Responsibilities and Duties ThefollowingisasummaryofthemainresponsibilitiesanddutiesoftheCommitteeandthesamewouldbe

reviewedandreportedtotheBoard:a ExternalAudit

l todiscusstheauditplanandscopewhilstevaluatingtheGroup’ssystemofriskmanagementandinternalcontrolswiththeexternalauditors.

l toreviewtheauditreportsandtodiscussanyissuesarisingfromthestatutoryaudits.l toassesstheperformanceof theexternalauditorsandmakerecommendationsto theBoardon

theirappointmentandremoval.b. FinancialReporting

l toensurethatthefinancialreportpresentsatrueandfairviewoftheGroup’sfinancialpositionandperformanceincompliancewithregulatoryrequirements.

l toreviewthequarterlyresultsandyear-endfinancialstatements,beforesubmissiontotheBoard,focusingparticularlyon:- changesinorimplementationofnewaccountingpoliciesandpractices;- significantormaterialadjustmentswithfinancialimpactarisingfromtheaudit;- significantunusualeventsorexceptionalactivities;and- compliancewithapprovedaccountingstandardsandotherlegalandregulatoryrequirements.

c. InternalAuditl toreviewandapprovetheGroupInternalAudit(‘GIA’)Charter.l toreviewtheadequacyofthescope,functions,competencyandresourcesoftheGIA,andthatithas

thenecessaryauthoritytocarryoutitswork.l toreviewtheinternalauditplanandresultsoftheinternalauditprocesstoensurethatappropriate

andadequateremedialactionsaretakenbythemanagementonsignificantlapsesincontrolsandproceduresthatareidentified.

l toapprovetheappointment,replacementanddismissaloftheheadoftheGIA.d. RelatedPartyTransactions

l toreviewanyrelatedpartytransactionsandconflictofinterestssituationthatmayarisewithintheCompanyorGroupandanyothermajortransactionsoutsidethenormalcourseofbusinessoftheCompanyandGroup.

e. OtherMattersl to consider suchothermattersas theCommitteeconsidersappropriateorasauthorisedby the

Board.


AuditComitteeReport

4. SUMMARY OF ACTIVITIES OF THE COMMITTEE ThefollowingactivitieswereperformedbytheAuditCommitteeduringthefinancialyearended31December2015:

4.1 External Audita. Reviewedwiththeexternalauditors:

l theirauditplan,strategyandscopeofthestatutoryauditsoftheGroupaccountsfortheyear;andl theresultandissuesarisingfromtheirauditoftheyear-endfinancialstatementsandtheirresolutions

ofsuchissueshighlightedintheirreporttotheCommittee.b. Reviewedtheperformanceandindependenceoftheexternalauditorsandmaderecommendationsto

theBoardontheirre-appointmentandremuneration.

4.2 Internal Audita. ReviewedwiththeGroupInternalAudit(‘GIA’)theannualauditplantoensurethescopeandcoverage

overtheactivitiesoftheGroupisadequateandcomprehensiveandtoensuretheprincipalriskareasareadequatelyidentifiedandcoveredintheplan.

b. Reviewedtheeffectivenessoftheauditprocessandresourcerequirementsfortheyear.c. Reviewed theGIA reports whichwere tabled during the year, the audit recommendationsmade and

Management’s response to these recommendations.Where appropriate, theCommittee has directedManagementtorectifyandimprovecontrolproceduresandworkflowprocessesbasedontheinternalauditors’recommendationsandsuggestionsforimprovement.

d. Monitoredthecorrectiveactionstakenontheoutstandingauditissuestoensurethatallthekeyrisksandcontrollapseshavebeenaddressed.

4.3 Financial Reportinga. ReviewedthequarterlyresultsandtheauditedfinancialstatementsoftheGroupwiththeChiefFinancial

OfficerandtheexternalauditorsbeforerecommendingtotheBoardforitsapprovalanditsannouncement.AnysignificantissuesresultingfromtheauditofthefinancialstatementsbytheexternalauditorswerenotedanddeliberatedbytheCommittee;and

b. TheCommittee,uponconclusionofeachmeeting,recommendedtotheManagementoftheGrouptoimproveontheinternalcontrols,proceduresandsystemoftheGroupwheredeemedappropriate.

5. INTERNAL AUDIT FUNCTION

Thein-houseGroupInternalAudit(‘GIA’)providesindependentandobjectiveassessmentontheadequacy,integrityandeffectivenessofthesystemofinternalcontrols,riskmanagementandgovernanceprocessesthroughouttheGroup.Thepurpose,authorityandresponsibilityoftheGIAarereflectedintheGIA’sCharter.GIAhasatotalof9staffasat31December2015.Thetotaloperationcostsofthedepartmentfor2015wasRM922,149(2014:RM951,969)comprisingmainlysalaries,staffwelfareandtravellingcosts.GIAreportsdirectlytotheAuditCommittee.

TheGIAadoptsarisk-basedauditapproachinformulatingtheAnnualAuditPlan.TheGIAalsomaintainsaflexibleauditapproachandadynamicauditplanthatappropriatelyaddressescurrentissuesandrisksaswellaspotentialriskexposuresoverkeybusinessprocesseswithintheGroup.Allhighriskactivitiesineachauditableunitareauditedannually.

During theyear, theGIAhascarriedoutauditson theGroup’soperatingunitsbasedon theAnnualAuditPlanwhichhadbeenapprovedbytheAuditCommitteeaswellasspecialad-hocandinvestigativereviews.TheGIAalsoconductedinformationsystemauditsontheGroup’skeycomputersystems.


AuditComitteeReport

Inperformingsuchreviews,recommendationsforimprovementandenhancementstotheexistingsystemofinternalcontrolsandworkprocessesaremade.TheresultingreportsofauditsundertakenwerepresentedtotheAuditCommitteeandforwardedto theManagement’sconcernedfor theirattentionandnecessarycorrectiveactions.TheManagementisresponsibleforensuringthatcorrectiveactionsonreportedweaknessesasrecommendedaretakenwithintherequiredtimeframe.

TheGIAcontinuouslymonitorstheimplementationofauditrecommendationsthroughperiodicfollowupreviewsandworkscloselywiththeexternalauditorstoresolveanycontrolissuesandassistsinensuringthatappropriateManagementactionsaretaken.TheGIAworkscollaborativelywiththeCorporateServicesandRiskManagementDepartmenttoreviewandassesstheriskmanagementprocessesthroughouttheGroupinrespectoftheiradequacyandeffectiveness.


StatementOfRiskManagementAndInternalControl

BOARD’S RESPONSIBILITIES

TheBoardofDirectors(‘Board’)acknowledgesitsoverallresponsibilityfortheGroup’sriskmanagementandsystemofinternalcontrolandforreviewingitsadequacyandintegrityinordertosafeguardtheGroup’sassetsandshareholders’investments.

Theriskmanagementandsystemofinternalcontrolcomprisesriskmanagement,financial,operationalandcompliancecontrols.SuchasystemisdesignedtomanageratherthaneliminatetheriskoffailuretoachievethebusinessobjectivesoftheGroup.Itcanthereforeonlyprovidereasonableandnotabsoluteassuranceagainstmaterialmisstatementorloss.

THE FRAMEWORK OF THE GROUP’S INTERNAL CONTROL SYSTEM

l The Board oversees the conduct of the Group’s business and review the adequacy and integrity of the riskmanagementandinternalcontrolsystemandcompliancetoapplicablelawandregulations.TheAuditCommittee(‘AC’)andtheBoardalsoreviewtheoperationalandfinancialperformanceoftheGroupatAuditCommitteeandBoardmeetings.

l The GroupManaging Director provides the Board with quarterly financial information. These include amongstothers,themonitoringofresultsagainstbudgetwithmajorvariancesbeingfollowedupandmanagementactiontaken,wherenecessary.BusinessplanandbudgetarereviewedandapprovedbytheBoardonanannualbasis.Theseprocessesarealsopracticedateachsubsidiarylevel.

l TheAConbehalfof theBoard regularly reviews theeffectivenessof the riskmanagementand internal controlsystemreportedbytheGroupInternalAuditDepartment(‘GIAD’)andtheexternalauditors.TheACalsoreviewstheadequacyofscope,functionsandresourcesofGIAD.

l TheGroupManagingDirectorsupportedbyheadsofbusiness functions (‘TheManagement’)areentrustedwiththeresponsibilityofassistingtheBoardinoverseeingtheriskmanagementpracticesthroughouttheGroup.TheManagementreviewsandrecommendsoverallriskmanagementpoliciesandprocessesandmonitorssignificantrisksthroughreviewofrisksprofileanditsmitigationplans.

l TheInvestmentCommitteecomprisingtwo(2)Non-ExecutiveDirectors,theGroupManagingDirector,ChiefFinancialOfficerandGeneralManager,CorporateServices&RiskManagement, isprimarily responsible forassessingtheviabilityofanyinvestmentproposalfortheGroupbeforerecommendingthesamefortheBoard’sapproval.

l PoliciesandproceduresofkeybusinessprocessesaredocumentedintheOperatingManualsandimplementedthroughout theGroup. These policies and procedures are subject to regular reviews, updates and continuousimprovements.

l Clear limitsof authority are imposed in respectofday-to-dayoperationswhich sets the limit foroperatingandcapitalexpenditureforeachlevelofManagementwithintheGroup.

INTERNAL AUDIT FUNCTION

The Group has an Internal Audit Department which is independent of the activities or operations of the Group.GIAD conducts independent risk-based audits basedon an approved Internal Audit Plan to ensure that the systemof internalcontrols iseffectiveandoperatingsatisfactorily.GIADreportsdirectly toACwheresignificantfindingsandrecommendationsforimprovementarehighlightedonquarterlybasis.GIAD’spracticesandconductaregovernedbytheInternalAuditCharter.


StatementOfRiskManagementAndInternalControl

RISK MANAGEMENT FRAMEWORK

TheBoardrecognisesthatoneofthekeyelementsofasoundinternalcontrolisthemanagementofrisksassociatedwiththeGroup’sbusiness.TheGrouphasdevelopedariskmanagementframeworktoidentifythekeyrisksfacingtheGroup,thepotentialimpactandlikelihoodofthoserisksoccurring,thecontroleffectivenessandtheactionplansbeingtakentomanagetheriskstothedesiredlevel.

TheCorporateServices&RiskManagementDepartment(‘CSRMD’)hasbeenentrustedtoassisttheBoardinmanagingtheriskswithintheGroup.TheCSRMDreportsdirectlytotheGroupManagingDirectoranditsmajorrolespertainingtoriskmanagementareto:

l beacentralplatform,wherebyrisksthroughouttheGroupcanbeviewedonanenterprise-widebasis;

l standardisetheriskmeasurementmethodologyinordertoenablecomparability;

l actasacentralresourceforevaluatingriskstoassistmanagement,businessandoperatingunits;

l recommendmeanstocontrolorminimiserisks;and

l facilitateeachdepartmentandsubsidiarywithintheGroupintheprocessofidentifying,evaluating,managingandmonitoringrisks.

TheManagementconductsreviewofthestatusofriskmanagementfortheGrouponaperiodicalbasis.

TheBoardapprovedtheGroup’sRiskManagementPolicy.ThepolicyoutlinestheroleoftheBoard,themanagementandthestaffoftheGrouppertainingtoriskmanagement.

Basedontheriskmanagementandinternalcontrolsystemstatedabove,we,DatukMohdNoordinAbbasandDatukAbdulAzizIshakbeingtwooftheDirectorsofUtusanMelayu(Malaysia)Berhad(‘UMMB’)andW.NorAsmahW.Ismail,beingtheofficerprimarilyresponsibleforthefinancialmanagementofUMMBdoherebyassurethattheGroup’sriskmanagementandinternalcontrolsystemisoperatingadequatelyandeffectivelyinallmaterialaspects.

StatementmadeinaccordancewiththeresolutionoftheBoardofDirectorsdated14April2016.


INTRODUCTION

The Board of Directors (‘the Board’) of UtusanMelayu (Malaysia) Berhad (‘Utusan’ or ‘the Company’) recognises theimportanceofadoptinghighstandardsofcorporategovernanceinordertoprotectshareholders’interestandtoenhanceshareholders’value.Inthiscontext,theBoardstrivestoensurethattherelevantprinciplesandrecommendationsoftheMalaysianCodeonCorporateGovernance2012(‘theCode’)areappliedthroughouttheCompanyanditssubsidiaries(‘theGroup’).

TheBoard ispleasedtopresentbelow,astatementontheapplicationof theprinciplesandtheextent towhichtheCompanyhascompliedwiththerecommendationsintheCodethroughoutthefinancialyearended31December2015(‘FY2015’).

1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

1.1. Functions of the Board and Management The Board is responsible for corporate governance, strategic direction, establishing corporate goals and

monitoring theachievementsof thesegoals inorder to foster long termsuccessof theGroup.TheBoarddelegatestheresponsibilityofimplementingtheGroup’sstrategies,businessplans,policiesanddecisionstotheManagementwhichisledbytheGroupManagingDirector(‘GMD’).

1.2. Roles and Responsibilities of the Board TheBoardhasfullcontroloverthebusinessesandaffairsoftheCompanyandtheGroup.TheBoardassumes

thefollowingresponsibilities:l formulatingthebusinessdirectionandobjectivesoftheGroup;l reviewing,adoptingandapprovingtheGroup’sannualbudgets,strategicplans,keyoperationalinitiatives,

majorinvestmentsandfundingdecision;l overseeingtheconductofbusinessoftheGroup;l reviewingtheadequacyandintegrityofriskmanagementandinternalcontrolsystemsandmanagement

informationsystemtoensurecompliancewithrelevantlaws,rules,regulations,directivesandguidelines;and

l assumingitsresponsibilityinsuccessionplanningwithintheGroup.

TheBoardisalsoassistedbytheBoardCommitteesincarryingoutitsdutiesandresponsibilities.

1.3. Directors’ Code of Ethics UtusanhasestablishedaDirectors’CodeofEthicstoguidetheBoardindischargingitsoversightroleeffectively.

TheCodeofEthicsrequiresalldirectorstoobservehighethicalbusinessstandardsofhonestyandintegrityandtoapplythesevaluestoallaspectsofourbusinessandprofessionalpracticesandactingoodfaithinthebestinterestsoftheGroupanditsshareholders.

1.4. Sustainability Policy TheBoard acknowledges the importanceof sustainability and its increasing impact to thebusiness and is

committed to understanding and implementing sustainablepractices.Utusanwill takenecessary action toformaliseitsSustainabilityPolicyandsetlongtermandshorttermtargetsforitssustainabilityeffortsinordertoachievetherightbalancebetweentheneedsofthewidercommunity,therequirementsofshareholdersandstakeholdersandeconomicsuccess.

Statement On Corporate Governance


1.5. Supply of Information TheBoardissuppliedwithfullaccesstoallrelevant informationtodischargeitsdutyeffectively.TheBoard

is furnishedwith ad-hoc reports to ensure that they are appraisedon keybusiness, operational, financial,corporate, legal, regulatory and industry matters, as and when the need arises. All Directors have directaccesstotheadviceandservicesoftheCompanySecretaryinensuringtheeffectivefunctioningoftheBoard.DirectorsarealsoatlibertytoseekexternalindependentprofessionaladviceonanymatterconnectedwiththedischargeoftheirresponsibilitiesastheymaydeemnecessaryandappropriateattheCompany’sexpense.

TheBoardisnotifiedofanycorporateannouncementsreleasestoBursaMalaysiaSecuritiesBerhad.TheyarealsonotifiedoftheimpendingrestrictionsindealingwiththesecuritiesoftheCompanyatleastone(1)monthpriortothereleaseofthequarterlyfinancialresultsannouncement.

TheproceedingsandresolutionsreachedateachBoardmeetingarerecordedintheMinutesBookkeptatthecorporateoffice.BesidesBoardmeetings, theBoardalsoexercisescontrolonmattersthatrequires itsapprovalthroughthecirculationofDirectors’Resolutions.

1.6. Company Secretary TheCompanySecretaryprovidesacentralsourceofguidanceandadvicetotheBoard,onmattersofethics

and good corporate governance. The Company Secretary is required to provide the Directors, collectivelyand individually,withdetailedguidanceon theirdutiesandresponsibilities.TheCompanySecretaryassistsindeterminingtheannualBoardplanandBoardagendaand in formulatinggovernanceandBoard-relatedmatters. The Board has unrestricted access to the advice and services of the Company Secretary who isresponsibleforprovidingDirectorswiththeBoard’spapersandrelatedmatters.TheCompanySecretaryalsofacilitatesthecommunicationofkeydecisionsandpoliciesbetweentheBoard,BoardCommitteesandSeniorManagement.

1.7. Board Charter Aspartof thegovernanceprocess, theBoardhasformalizedandadoptedtheBoardCharterwhichserves

as a guide to the Board of Utusan. This Board Charter sets out the composition and balance, roles andresponsibilities, operationandprocessesof theBoardand is to ensure that all Boardmembers actingonbehalfoftheCompanyareawareoftheirdutiesandresponsibilitiesasBoardmembers.TheBoardCharterisavailableontheCompany’scorporatewebsite.

1.8. Whistleblowing Policy The Company has in place a whistleblowing policy to inculcate the culture of good business ethics and

governancewithin theGroup andprovide employeeswith an accessible avenue to disclose any improperconductoranyaction that is,or couldbeharmful to the reputationof theGroupand/orcompromise theinterestofstakeholders.

2. STRENGTHENING BOARD COMPOSITION

2.1. Composition of the Board TheBoardconsistsofeight(8)memberscomprising:

l One(1)IndependentNon-ExecutiveChairmanl Two(2)ExecutiveDirectorsl Four(4)IndependentNon-ExecutiveDirectorsl One(1)Non-IndependentNon-ExecutiveDirector

ThiscurrentcompositionofBoardcomprisesabalancedmixofskills,knowledgeandexperienceinthebusinessandmanagementfieldswhicharerelevanttoenabletheBoardtocarryoutitsresponsibilitiesinaneffectiveandefficientmanner.



TheExecutiveDirectorsareresponsibleforimplementingthestrategiesanddecisionsoftheBoard,overseeingtheGroup’sday-to-dayoperationsandbusinesses.TheIndependentDirectors,withtheirdifferentbackgrounds,professionsandexperienceseffectivelycontributetoindependentviewandjudgementtofacilitatethedecisionmakingprocessoftheGroupwithregardstothevariousbusinessstrategiesandperformance.NoindividualorgroupofindividualsdominatestheBoard’sdecisionmakingprocess.

In discharging its duties, the Board is assisted by the Board Committees, namely the Audit Committee,Nomination Committee, Remuneration Committee and Investment Committee. Each committee operateswithinitsrespectiveTermsofReference(‘TOR’).

AbriefprofileofeachDirectorispresentedonpages10to13oftheAnnualReport.

2.2. Board Committees The following Board Committees have been established to assist the Directors in the execution of its

responsibilities:(a) Audit Committee Thecomposition,termsofreferenceandtheReportofAuditCommitteearesetoutseparatelyintheAudit

CommitteeReportaslaidoutonpages18to21ofthisAnnualReport.

(b) Nomination Committee(i) Composition ThemembersoftheNominationCommittee(‘NC’)compriseIndependentNon-ExecutiveDirectorsas

follows:l DatukSeriTengkuSariffuddinTengkuAhmadl Dato’Dr.NorraesahMohamadl DatukMdAfendiHamdan(Appointed w.e.f. 30 November 2015)l TanSriHajiHuseinAhmad(Resigned w.e.f 11 March 2015)

(ii) Responsibilities TheprimaryresponsibilitiesoftheNCareasfollows:

l TomakeproposalstotheBoardonsuitablecandidatesforappointmentasDirectors;l To ensure that the Board has an appropriate balance of skills, expertise, attributes and

competenciesfromitsmembers;l Toregularlyreviewprofilesoftherequiredskills,expertise,attributesandcorecompetenciesfor

membershipoftheBoard;l ToreviewsuccessionplansformembersoftheBoard;l TorecommendtotheBoardthenameofDirectorstofilltheseatsonBoardcommittees;andl To assess annually the effectiveness of the Board, the committees of the Board and the

contributionofeachindividualDirector.

(iii) Boardroom Diversity BoththeNCandBoardviewsdiversityintheBoardroomasanessentialfactorinensuringaneffective

andwell-functioningBoardandthatitscomposition:l iscurrentlycomprisedofDirectorsfromadiversebackground;l agerangesfrom50yearsto75years;l oneBoardmemberisofthefemalegender;andl drawn from different socio-economic background and is sufficiently diverse to ensure that

differentviewpointsareconsideredinthedecisionmakingprocess.

However,theNCwillcontinuetoimprovetheBoard’sapproachtowardsBoardroomdiversityfromtimetotime.



(iv) Appointment and Re-election to the Board TheNCwillmakerecommendationtotheBoardwhowillthereonassessthecandidateandarriveata

decisionontheappointmentoftheDirector.Thecandidatewillbeassessedbasedonthemixofskill,functional knowledge,expertise,experience,professionalism, integrityand/orothercommitmentsthatthecandidateshallbringtocomplementtheBoard.

During theFY2015,Dato’MohamadFatmiCheSalleh (IndependentNon-ExecutiveChairman)andDatukMdAfendiHamdan(IndependentNon-ExecutiveDirector)wereappointedtotheBoard.

InaccordancewiththeCompany’sArticlesofAssociation(‘Articles’),thoseDirectorswhoareappointedbytheBoardeithertofillacasualvacancyorasanadditiontotheexistingDirectorsaresubjecttore-electionbyshareholdersattheAnnualGeneralMeeting(‘AGM’)followingtheirappointments.TheArticlesalsoprovidethatone-third(1/3)oftheDirectorsforthetimebeingoriftheirnumberisnotthree(3)oramultipleofthree(3),thenthenumbernearesttoone-third(1/3),shallretirefromofficeprovidedalways thatallDirectorsshall retire fromofficeat leastonce ineach three (3) years.AllretiringDirectorsareeligibletoofferthemselvesforre-electionattheAGM.

Directorsovertheageof70arerequiredtoseekre-appointmentannuallyinaccordancewiththeCompaniesAct,1965.

(v) Activities AsummaryofkeyactivitiesundertakenbytheNCinthedischargeofitsdutiesfortheFY2015,areas

follows:l ReviewedandrecommendedtheappointmentofadditionalDirectorstotheBoardofDirectors

oftheCompany;l Reviewedand recommended theappointmentofmembersof theBoardCommitteesof the

Company;andl ReviewedandrecommendedtotheBoardforitsapproval,there-appointmentandre-election

ofDirectorsattheforthcomingAGM.

(c) Remuneration Committee TheRemunerationCommitteeassists theBoard in establishingand recommending the remuneration

packageandpolicyfortheExecutiveDirectorsandNon-ExecutiveDirectors.Thereviewscoverallaspectsofremuneration,includingbutnotlimitedtoDirector’sfees,salaries,bonuses,allowancesandbenefits-in-kindbasedontheperformancesoftheCompanyandindividualaswellasthelevelofresponsibilitiesundertakenbytheparticularDirectorconcerned.

ThemembersoftheRemunerationCommitteeareasfollows:l DatukSeriIsmailYusofl MohdYusofAbuOthmanl DatukSeriTengkuSariffuddinTengkuAhmad(Appointed w.e.f. 30 November 2015)l DatukMdAfendiHamdan(Appointed w.e.f. 30 November 2015)l TanSriHajiHuseinAhmad (Resigned w.e.f 11 March 2015)




(d) Investment Committee TheInvestmentCommitteewasestablishedon24December2012toevaluateallinvestmentproposals

priortoapprovalbytheBoardfortheGroup’simplementation.TheCommitteeistoconsiderallinvestmentproposalsbaseduponthenecessarycriteriaforinvestment,returnoninvestmentandsourceoffunding.

TheCommitteereportstotheBoardandcomprisesthefollowingmembers:l Dato’Dr.NorraesahMohamad(Chairman)l DatukMohdNoordinAbbasl MohdYusofAbuOthmanl W.NorAsmahW.Ismaill AhmadRazifMohamed

2.3. Directors’ Remuneration TheaggregateDirectors’remunerationpaidorpayabletoallDirectorsoftheCompanyforthefinancialyear

ended31December2015areasfollows:

Non-ExecutiveChairman

RM

ExecutiveDirectors

RM

Non-ExecutiveDirectors

RMSalaries/Incentives - 1,003,662 -

Directors’Fees - 60,000 148,849

Allowances 20,000 - 65,500

Benefits-In-Kind - 24,300 -

Total 20,000 1,087,962 214,349

ThenumberofDirectorsof theCompanywhose total remuneration fallwithin the followingbands for thefinancialyearended31December2015areasfollows:

Number of DirectorsRange of Remuneration Executive Non-Executive

BelowRM50,000 - 7

RM400,001–RM450,000 1 -

RM650,001–RM700,000 1 -

TheobjectiveoftheCompany’spolicyonDirectors’remunerationistoattractandretainDirectorsneededtoruntheCompanysuccessfully.TheNon-ExecutiveDirectors’remunerationisdeterminedbytheBoard.Non-ExecutiveDirectorsarepaidannualfeeandattendanceallowancesforattendingBoard/Committeemeetings.

TheBoardinitsmeetingheldon24February2016hasapprovedthepaymentofamonthlyfixedallowanceofRM20,000toitsIndependentNon-ExecutiveChairmaneffectivefromthedateofhisappointment.TheBoardbelievesthatthisamountwasnecessaryforhimtoperformhistaskofensuringeffectivecommunicationwiththeshareholdersandrelevantstakeholders.Withtheapprovaloftheaboveallowance,noannualdirector’sfeeandmeetingallowanceispaidorpayabletotheIndependentNon-ExecutiveChairman.

TheBoardisoftheopinionthatthebanddisclosuremadeaboveisincompliancewithParagraph11(b)PartAofAppendix9CoftheListingRequirementsofBursaMalaysiaSecuritiesBerhad(‘BMLR’).



3. REINFORCE INDEPENDENCE

3.1. Independent Directors TheBoardadoptstheconceptofindependenceintandemwiththedefinitionof‘IndependentDirector’under

Paragraph1.01oftheBMLR.Thecurrentcompositionoffive(5)IndependentNon-ExecutiveDirectorsmeetsthecurrent1/3requirementforIndependentNon-ExecutiveDirectorsunderBMLR.TheBoardissatisfiedwiththelevelofindependencedemonstratedbythemandtheirabilitiestoactinthebestinterestoftheCompanyand/ortheGroup.

The tenure of the Independent Directors should not exceed a cumulative term of nine (9) years. Uponcompletionofthenine(9)years,anIndependentDirectormaycontinuetoserveontheBoardsubjecttotheDirectors’re-designationasaNon-IndependentDirector.TheBoardmayseekshareholders’approvaltoretainhimorherasIndependentDirectorinthenextAGMiftheBoardissatisfiedthatheorsheisabletobringindependentjudgmenttotheBoarddeliberations.

3.2. Distinct Roles Between the Chairman and the GMD ThereisadistinctandcleardivisionofresponsibilitybetweentheChairmanwhoisanIndependent,Non-Executive

DirectorandtheGMD.TheChairmanisresponsibleforensuringBoard’seffectivenessandconductwhilsttheGMDhasoverallresponsibilitiesovertheoperatingunits,organizationaleffectivenessandimplementationofBoard’spoliciesanddecisionsaswellasdevelopingandimplementingbusinessandcorporatestrategies.

TherolesandresponsibilitiesoftheBoard’sChairmanandGMDareprescribedintheBoardCharterwhichisavailableontheCompany’scorporatewebsite.

4. FOSTER COMMITMENT

TheBoardisawareoftheimportanceofdevotingsufficienttimeandefforttocarryouttheirresponsibilitiesandenhancetheirprofessionalskills.TheannualscheduleofBoardandBoardCommitteemeetingsandtheAGMaresetoutatthebeginningofeachfinancialyeartoenableDirectorstoplanahead.Additionalmeetingsarescheduledasandwhennecessary.

4.1. Board Meetings Duringthefinancialyearended31December2015,seven(7)Boardmeetingswereheld.TheBoardmembers

willreceiveinadvancedocumentsonmattersrequiringitsconsiderationwithdetailedmanagementreports,proposalpapersandsupportingdocumentsbefore theBoardmeetings.SeniormanagementandadviserswereinvitedtoattendBoardmeetings,wherenecessary,toprovideadditionalinformationandinsightsontherelevantagendaitemstabledatBoardmeetings.


Asat31December2015,thedetailsofDirectorsontheBoardandtheirattendanceatmeetingsheldduringtheyearareasfollows:-

Directors AttendanceDatukMohdNoordinAbbas 6/7

DatukAbdulAzizIshak 6/7



Dato’Dr.NorraesahMohamad 4/7


DatukMdAfendiHamdan(Appointed w.e.f 25 March 2015) 5/6

Dato’MohamadFatmiCheSalleh(Appointed w.e.f 1 December 2015) 1/1

TanSriHajiHuseinAhmad(Resigned w.e.f 11 March 2015) 0/1

4.2. Director’s Training TheBoardfullysupportstheneedforitsmemberstocontinuouslyenhancetheirskillsandknowledgetokeep

abreastwiththelatestdevelopmentsintheindustryandmarketplace,toeffectivelycarryouttheirdutiesandresponsibilitiesasDirectorsincompliancewiththeBMLR.

AllDirectorsappointedduringthefinancialunderreviewhaveattendedtheMandatoryAccreditationProgrammeprescribedbyBursaMalaysiaSecuritiesBerhad.TheBoardwillcontinuetoevaluateanddeterminethetrainingneedsofitsDirectorsonanon-goingbasis.

Duringthefinancialyearunderreview,variousmembersoftheBoardhaveattendedthefollowingseminars:l SustainabilitySymposium;l NavigatingThePoliticalEconomyofGlobalBusiness:AMalaysianInsight;l PublishAsia2015;l DigitalMediaAsia2015;andl 11thWIEF2015:BuildingResilienceForEquitableGrowth

5. INTEGRITY IN FINANCIAL REPORTING

5.1. Financial Reporting TheannualfinancialstatementsandquarterlyresultsarereviewedbytheAuditCommitteeandapprovedbythe

BoardofDirectorspriortopublicrelease.AstatementbytheDirectorsexplainingtheBoard’sresponsibilitiesforpreparingtheannualfinancialstatementsissetoutonpage17ofthisAnnualReport.

5.2. External Auditors ThroughtheAuditCommittee,theCompanyhasestablishedaformalandtransparentrelationshipwiththe

externalauditors.Theexternalauditorsareinvitedtodiscusstheannualfinancialstatements,theirauditplan,auditfindingsandotherspecialmattersthatrequiretheBoard’sattention.

TheAuditCommitteemeetswiththeexternalauditorswithouttheManagementortheExecutiveDirectorspresenceatleasttwice(2)ayear.



6. RECOGNISE AND MANAGE RISKS

6.1. Risk Management Framework and Internal Control A Statement on Risk Management and Internal Control which provides an overview of the state of risk

managementandinternalcontrolwithintheGroupisdisclosedonpages22to23ofthisAnnualReport.

6.2. Internal Audit Function An adequately resourced Internal AuditDivision is in place to assist theBoard inmaintaining a systemof

internal control to safeguardshareholders’ investmentand theGroup’sassets.Anoverviewof the InternalAuditfunctionisdisclosedonpages20to21ofthisAnnualReport.

7. TIMELY AND QUALITY DISCLOSURE

TheBoardiscommittedtoprovideatimelyandaccurateinformationtotheshareholdersincompliancewiththedisclosurerequirementsassetoutintheBMLR.

TheGroupstrivestoensurethatshareholdersandthegeneralpublicwouldhaveaneasyandconvenientaccesstotheGroup’scorporateinformationviaitswebsitewww.utusangroup.com.my.

Theshareholdersandtheinvestorsarealsoabletoaccessthelatestcorporate,financialandmarketinformationoftheCompanyviatheBursaMalaysiaSecuritiesBerhadatwww.bursamalaysia.com.

8. RELATIONSHIP WITH THE SHAREHOLDERS

8.1. Annual General Meeting TheAGMistheprincipalforumfordialoguewithshareholdersandinvestors,wheretheymayseekclarifications

ontheGroup’sperformance,majordevelopmentsoftheGroupaswellasontheresolutionsbeingproposed.MembersoftheBoardaswellastheexternalauditorsarepresenttoanswerquestionsraised.

AspertheArticlesofAssociationof theCompany,shareholdershavetherighttocall forpollvotingduringgeneralmeetings.TheresultsofallresolutionstableandpassedattheAGMarereleasedtoBursaMalaysiaafterthemeetingtoenablethepublictoknowtheoutcomethereof.

8.2. Investor Relations ShareholdersandinvestorscanalsoconveytheirconcernsandqueriestoEncikMohdYusofAbuOthman,the

IndependentNon-ExecutiveDirectoroftheCompanyatfaxno.03-92210691orbymailtotheregisteredofficeoftheCompanyatNo.44,JalanUtusanOffJalanChanSowLin,55200KualaLumpur.

ThisStatementwasapprovedbytheBoardon14April2016.



Other InformationRequiredbyTheListingRequirementsofTheBursaMalaysiaSecuritiesBerhad

SHARE BUYBACKSDuringthefinancialyear,theCompanydidnotenterintoanysharebuybacktransactions.

AMERICAN DEPOSITORY RECEIPT (‘ADR’) OR GLOBAL DEPOSITORY RECEIPT (‘GDR’) PROGRAMMEDuringthefinancialyear,theCompanydidnotsponsoranyADRorGDRprogramme.

IMPOSITION OF SANCTIONS AND PENALTIESTherewerenosanctionsorpenaltiesimposedontheCompanyanditssubsidiaries,directorsorManagementbytherelevantregulatorybodiesduringthefinancialyear.

NON-AUDIT FEESTheamountofnon-auditfeespaidtotheexternalauditorsbyboththeGroupandtheCompanyforthefinancialyearamountedtoRM14,500.

PROFIT GUARANTEEDuringthefinancialyear,therewerenoprofitguaranteesgivenbytheCompany.

INTERNAL AUDIT FUNCTIONSTheGrouphasanin-houseInternalAuditDepartmenttoundertaketheinternalauditfunctions.


TheGroup’scommitmenttoservethecommunitythroughcorporateresponsibilityandfeaturearticlesofthecommunitythatcoversawidespectrumoflifehasearnedtherecognitionofthevariouspartiesinthe

nationalandinternationallevels.

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