CONTENTS Notice of Annual General Meeting 2 Statement Accompanying Notice of Annual General Meeting of the Company 5 Five Year Group Financial Highlights 6 Profile of the Board of Directors 10 Corporate Information 16 Management and Heads of Department 17 Statement of Directors’ Responsibility in Relation to the Financial Statements 18 Audit Committee Report 19 Statement of Internal Control 22 Statement on Corporate Governance 24 Other Information Required by the Listing Requirements of the Bursa Malaysia Securities Berhad 29 Chairman’s Statement 32 Corporate Calendar 39 Financial Statements 44 Directors’ Report 45 Statement by Directors & Statutory Declaration 49 Report of the Auditors 50 Consolidated Income Statement 51 Consolidated Balance Sheet 52 Consolidated Statement of Changes in Equity 53 Consolidated Cash Flow Statement 54 Income Statement 56 Balance Sheet 57 Statement of Changes in Equity 58 Cash Flow Statement 59 Notes to the Financial Statements 61 List of Properties 108 Analysis of Shareholdings 112 List of Top Thirty Largest Shareholders 113 Proxy Form
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CONTENTS
Notice of Annual General Meeting 2
Statement Accompanying Notice of Annual General Meeting
of the Company 5
Five Year Group Financial Highlights 6
Profile of the Board of Directors 10
Corporate Information 16
Management and Heads of Department 17
Statement of Directors’ Responsibility in
Relation to the Financial Statements 18
Audit Committee Report 19
Statement of Internal Control 22
Statement on Corporate Governance 24
Other Information Required by the Listing Requirements
of the Bursa Malaysia Securities Berhad 29
Chairman’s Statement 32
Corporate Calendar 39
Financial Statements 44
Directors’ Report 45
Statement by Directors & Statutory Declaration 49
Report of the Auditors 50
Consolidated Income Statement 51
Consolidated Balance Sheet 52
Consolidated Statement of Changes in Equity 53
Consolidated Cash Flow Statement 54
Income Statement 56
Balance Sheet 57
Statement of Changes in Equity 58
Cash Flow Statement 59
Notes to the Financial Statements 61
List of Properties 108
Analysis of Shareholdings 112
List of Top Thirty Largest Shareholders 113
Proxy Form
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NOTICE OFANNUAL GENERALMEETING
NOTICE IS HEREBY GIVENNOTICE IS HEREBY GIVENNOTICE IS HEREBY GIVENNOTICE IS HEREBY GIVENNOTICE IS HEREBY GIVEN that the Thirty Eighth Annual General Meeting of Utusan Melayu(Malaysia) Berhad will be held at Dewan Besar, Level 1, Bangunan Tabung Haji, 201, Jalan TunRazak, 50400 Kuala Lumpur on Wednesday, 31 May 2006 at 11.00 a.m. to transact the followingbusinesses:
AGENDAAGENDAAGENDAAGENDAAGENDA
AS ORDINARY BUSINESSAS ORDINARY BUSINESSAS ORDINARY BUSINESSAS ORDINARY BUSINESSAS ORDINARY BUSINESS
1. To receive and adopt the audited Financial Statements for the financial year ended 31 December 2005 and the reports of the
2. To declare a first and final dividend for the year ended 31 December 2005. (Ordinary Resolution 2)(Ordinary Resolution 2)(Ordinary Resolution 2)(Ordinary Resolution 2)(Ordinary Resolution 2)
3. To re-elect the following Directors pursuant to:
a) Article 98 of the Company’s Articles of Association pertaining to Directors retiring by rotation:
i) Tan Sri Mohamed Hashim Ahmad Makaruddin (Ordinary Resolution 3)(Ordinary Resolution 3)(Ordinary Resolution 3)(Ordinary Resolution 3)(Ordinary Resolution 3)
ii) Dato’ Dr. Firdaus Haji Abdullah (Ordinary Resolution 4)(Ordinary Resolution 4)(Ordinary Resolution 4)(Ordinary Resolution 4)(Ordinary Resolution 4)
b) Section 129(6) of the Companies Act, 1965 pertaining to Directors of or over the age of seventy years:
i) Tan Sri Haji Husein Ahmad (Ordinary Resolution 5)(Ordinary Resolution 5)(Ordinary Resolution 5)(Ordinary Resolution 5)(Ordinary Resolution 5)
4. To approve the payment of Directors’ fees for the year ended 31 December 2005.
5. To re-appoint Messrs. Ernst & Young as Auditors of the Company, to hold office until the conclusion of the next Annual General
Meeting, at a remuneration to be determined by the Directors. (Ordinary Resolution 7)(Ordinary Resolution 7)(Ordinary Resolution 7)(Ordinary Resolution 7)(Ordinary Resolution 7)
AS SPECIAL BUSINESSAS SPECIAL BUSINESSAS SPECIAL BUSINESSAS SPECIAL BUSINESSAS SPECIAL BUSINESS
To consider and, if thought fit, to pass with or without any modifications, the following Resolutions:
Acquisition and Disposal of AssetsAcquisition and Disposal of AssetsAcquisition and Disposal of AssetsAcquisition and Disposal of AssetsAcquisition and Disposal of Assets
6. “THAT, pursuant to Section 132C of the Companies Act, 1965, and subject always to the approval of all the relevant regulatory
bodies being obtained, the Board of Directors be and are hereby authorised to acquire or dispose of assets on behalf of the
Company upon such terms and conditions and for such purposes as the Board of Directors may deem fit until the conclusion
of the next Annual General Meeting.” (Ordinary Resolution 8)(Ordinary Resolution 8)(Ordinary Resolution 8)(Ordinary Resolution 8)(Ordinary Resolution 8)
New Issue of SharesNew Issue of SharesNew Issue of SharesNew Issue of SharesNew Issue of Shares
7. “THAT, pursuant to Section 132D of the Companies Act, 1965, the Board of Directors be and are hereby authorised to issue
shares in the Company at any time until conclusion of the next Annual General Meeting and upon such terms and conditions
and for such purposes as the Board of Directors may, in their absolute discretion, deem fit provided that the aggregate
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number of shares to be issued does not exceed ten per centum (10%) of the issued share capital of the Company for the time
being, subject always to the approval of all the relevant regulatory bodies being obtained for such allotment and issue.”
SPECIAL RESOLUTIONSPECIAL RESOLUTIONSPECIAL RESOLUTIONSPECIAL RESOLUTIONSPECIAL RESOLUTION
Proposed Amendments to the Articles of AssociationProposed Amendments to the Articles of AssociationProposed Amendments to the Articles of AssociationProposed Amendments to the Articles of AssociationProposed Amendments to the Articles of Association
8. “THAT the following amendments to the existing Articles of Association of the Company be and are hereby approved:
Central Depository Bursa Malaysia Depository Sdn Bhd (165570-W) including any further change to its name;
Depositor A Holder of Securities Account as defined in the Central Depositories Act;
The Directors The Directors for the time being of the Company and includes Alternate Director;
Records of Depositors A record provided by Central Depository to the Company under Chapter 24.0 of the Rules;
The Stock Exchange Bursa Malaysia Securities Berhad (635998-W) including any further change to its name or any
other stock exchanges on which the shares of the Company are listed;
AND THAT all the references to the above definitions throughout the Articles of Association of the Company be changed
accordingly.”
9. To transact any other ordinary business of which due notice shall have been given.
FURTHER NOTICE IS HEREBY GIVEN THATFURTHER NOTICE IS HEREBY GIVEN THATFURTHER NOTICE IS HEREBY GIVEN THATFURTHER NOTICE IS HEREBY GIVEN THATFURTHER NOTICE IS HEREBY GIVEN THAT for the purpose of determining a member who shall be entitled to attend this 38th
Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd in accordance with Article 58(e) of
the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a
General Meeting Record of Depositors as at 23 May 2006. Only a depositor whose name appears on the Record of Depositors as
at 23 May 2006 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his/her behalf.
GENERAL NOTES:GENERAL NOTES:GENERAL NOTES:GENERAL NOTES:GENERAL NOTES:
1.1.1.1.1. Appointment of ProxyAppointment of ProxyAppointment of ProxyAppointment of ProxyAppointment of Proxy
i) A member of the Company entitled to attend and vote at this meeting may appoint a proxy (or in a case of a corporation
to appoint a representative) to attend and vote in his stead. A proxy need not be a member of the Company.
ii) A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. Where a member
appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be
represented by each proxy.
iii) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in
writing or, if the appointor is a corporation, either under the common seal or under the hand of an officer or attorney duly
authorised.
iv) Where a member is an authorised nominee as defined under the Central Depositories Act, 1991, it may appoint at least
one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of
the said Securities Account.
v) To be valid the proxy form duly completed must be deposited at the Registrar’s Office, 20th Floor, Plaza Permata, Jalan
Kampar Off Jalan Tun Razak, 50400 Kuala Lumpur not less than forty eight (48) hours before the time for holding the
Meeting or any adjournment thereof.
2.2.2.2.2. Statement Accompanying Notice of Annual General Meeting of the CompanyStatement Accompanying Notice of Annual General Meeting of the CompanyStatement Accompanying Notice of Annual General Meeting of the CompanyStatement Accompanying Notice of Annual General Meeting of the CompanyStatement 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.
The proposed Special Resolution 1, if passed, the existing Articles of Association of the Company will be updated to ensure
consistency with the provisions of the Listing Requirements of Bursa Malaysia Securities Berhad and other relevant statutory
and regulatory requirements, and are in line with the current practices.
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1. Names of Individuals who are standing for re-election at the Thirty Eighth Annual General Meeting of the Company are asNames of Individuals who are standing for re-election at the Thirty Eighth Annual General Meeting of the Company are asNames of Individuals who are standing for re-election at the Thirty Eighth Annual General Meeting of the Company are asNames of Individuals who are standing for re-election at the Thirty Eighth Annual General Meeting of the Company are asNames of Individuals who are standing for re-election at the Thirty Eighth Annual General Meeting of the Company are as
follows:follows:follows:follows:follows:
Pursuant to Article 89 of the Company’s Articles of Association
i) Tan Sri Mohamed Hashim Ahmad Makaruddin
ii) Dato’ Dr. Firdaus Haji Abdullah
Pursuant to Section 129(6) of the Companies Act, 1965
i) Tan Sri Haji Husein Ahmad
2. Details of attendance of Directors at Board MeetingsDetails of attendance of Directors at Board MeetingsDetails of attendance of Directors at Board MeetingsDetails of attendance of Directors at Board MeetingsDetails of attendance of Directors at Board Meetings
There were six (6) Board Meetings held during the financial year ended 31 December 2005. Details of attendance of Directors
are set out in the Statement on Corporate Governance appearing on page 24 to 28 of the Annual Report.
3. Place, Date and Time of the Board MeetingsPlace, Date and Time of the Board MeetingsPlace, Date and Time of the Board MeetingsPlace, Date and Time of the Board MeetingsPlace, Date and Time of the Board Meetings
All Board Meetings during the financial year ended 31 December 2005 were held at the Board Room, 46M, Jalan Lima Off
Jalan Chan Sow Lin, 55200 Kuala Lumpur.
TYPE OF MEETINGTYPE OF MEETINGTYPE OF MEETINGTYPE OF MEETINGTYPE OF MEETING DATEDATEDATEDATEDATE TIMETIMETIMETIMETIME
191stBoard of Directors Meeting 23 February 2005 11.00 a.m
192nd Board of Directors Meeting 18 May 2005 11.00 a.m
193rd Board of Directors Meeting 17 August 2005 11.00 a.m
194th Board of Directors Meeting 30 November 2005 11.00 a.m
Special Board of Directors Meeting 1/2005 13 April 2005 11.00 a.m
Special Board of Directors Meeting 2/2005 28 September 2005 10.00 a.m
4. Details of Directors who are standing for re-election are set out on pages 10 to 15 of this Annual Report.
STATEMENT ACCOMPANYINGNOTICE OF ANNUAL GENERALMEETING OF THE COMPANY(Pursuant to Paragraph 8.28(2) of the Listing Requirements of the Bursa Malaysia Securities Berhad)
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CONSOLIDATED INCOME STATEMENT
YEAR ENDED 31 DECEMBERYEAR ENDED 31 DECEMBERYEAR ENDED 31 DECEMBERYEAR ENDED 31 DECEMBERYEAR ENDED 31 DECEMBER
Tan Sri Mohamed Hashim Ahmad Makaruddin(Executive Chairman)
(56 years of age – Malaysian)
Non-Independent Executive Director. He was appointed to the Board and assumed the
position of the Executive Chairman of Utusan Melayu (Malaysia) Berhad with effect
from 1 January 2004. Graduated with a Bachelor of Humanities (Mass Communications),
University of Science, Malaysia and a Certificate in Journalism, Wellington Polytechnic,
New Zealand. Formerly was the Editor-in-Chief of the Malaysian National News Agency
(BERNAMA) and has held various positions in the government sector such as the Adviser
to the National Economic Action Council Communication Team, Press Secretary to the
Minister of Finance and as the Special Assistant to the then Prime Minister of Malaysia.
Encik Mohd Nasir Ali(Group Executive Director)
(47 years of age – Malaysian)
Non-Independent Executive Director. Joined the Board of Utusan Melayu (Malaysia)
Berhad on 2 October 2000 and is a member of the Audit Committee. Holds a Bachelor
of Economics (Honours) from the University of Malaya and Masters of Science (Finance)
from the University of Strathclyde, United Kingdom. Holds directorship in subsidiaries
and associate companies of Kumpulan Utusan namely Utusan Media Sales Sdn Bhd,
Utusan Karya Sdn Bhd, Utusan Publications & Distributors Sdn Bhd, UPD Sdn Bhd and
Swan Malaysia Sdn Bhd and a public listed company, Kuala Lumpur City Corporation
Berhad.
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Datuk Mohd Khalid Mohd(Group Editor-in-Chief)
(52 years of age – Malaysian)
Non-Independent Executive Director. Appointed to the Board of Utusan Melayu
(Malaysia) Berhad on 5 September 2001. Has been the Group Editor-in-Chief of
Utusan Melayu (Malaysia) Berhad since July 1998. Joined Utusan Melayu (Malaysia)
Berhad in 1976 and served in various capacities prior to his present post. Holds a
Bachelor of Science (Honours) in Political Science/Journalism, Boston University and
attended a Journalism Fellowship Programme at the University of Michigan in Ann
Arbor, U.S.A in 1988. Does not have any other directorships of public companies.
Tan Sri Haji Husein Ahmad
(71 years of age – Malaysian)
Senior Independent Non-Executive Director. Appointed to the Board of Utusan Melayu
(Malaysia) Berhad on 16 August 1993. Was the Deputy Chief Minister of Kelantan
and the Deputy Minister of Housing Ministry. Previously served as Chairman of Syarikat
Kenderaan Melayu Kelantan. Chairman of the Nomination Committee and a member
of the Remuneration Committee of the Board. Current directorship of public companies
includes Astral Asia Berhad.
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PROFILE OFTHE BOARDOF DIRECTORS
Datuk Ruhanie Haji Ahmad
(58 years of age – Malaysian)
Independent Non-Executive Director. Appointed to the Board of Utusan Melayu
(Malaysia) Berhad on 28 August 1989. Holds a Diploma in Public Administration from
University Technology MARA and underwent a two-year journalism course in the United
Kingdom. Chairman of the Remuneration Committee and a member of the Nomination
Committee of the Board. Current directorships of public companies include Concrete
Engineering Products Berhad.
Dato’ Dr. Firdaus Haji Abdullah
(62 years of age – Malaysian)
Independent Non-Executive Director. Joined the Board of Utusan Melayu (Malaysia)
Berhad on 1 August 2001. Appointed the Director-General of Dewan Bahasa and Pustaka
with effect from 3 May 2005. Graduated with a B.A. in Political Science and Journalism,
Northern Illinois University, M.A. in International Affairs and Communication, Ohio
University and Ph.D. in Comparative Politics, Columbia University, United States of
America. Formerly was a Deputy Vice Chancellor (Student Affairs), University of Malaya
and Dean, Faculty of Economics and Administration, University of Malaya. Does not
have any other directorships of public companies.
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Dato’ Ab Halim Mohyiddin
(59 years of age – Malaysian)
Independent Non-Executive Director. Appointed to the Board of Utusan Melayu
(Malaysia) Berhad on 3 October 2001. Graduated with a Bachelor of Economics
(Accounting), University of Malaya in 1971 and a Masters in Business Administration,
University of Alberta, Canada in 1973. Was a Faculty Member of the Faculty of
Economics, National University of Malaysia from 1973 to 1977. A Partner of KPMG
Malaysia from 1985 until his retirement in 2001. Chairman of the Audit Committee
and a member of the Remuneration Committee of the Board. Current directorships of
public companies include HeiTech Padu Berhad, Arab-Malaysian Corporation Berhad,
Idris Hydraulic (Malaysia) Berhad, Amway (Malaysia) Holdings Berhad, KNM Group
Berhad, Idaman Unggul Berhad and Digi.Com Berhad.
Dato’ Ismail Yusof
(61 years of age – Malaysian)
Non-Independent Non-Executive Director. Joined the Board of Utusan Melayu
(Malaysia) Berhad on 15 January 2004. Graduated with a Bachelor of Arts (Honours),
University of Malaya. Held several posts in the government sector from 1967 to 1991.
Currently a member of the Board of Trustees and is the Executive Vice-Chairman
cum Chief Executive Officer of the Albukhary Foundation. Current directorship of
public companies include South Malaysia Industries Berhad, MINHO (M) Berhad,
Mercury Industries Berhad and BCB Berhad.
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PROFILE OFTHE BOARDOF DIRECTORS
Encik Kamal Khalid
(35 years of age – Malaysian)
Independent Non-Executive Director. Joined the Board of Utusan Melayu (Malaysia)
Berhad on 16 June 2004. Graduated with a Bachelor of Laws (Honours), University of
Nottingham, United Kingdom. Formerly was the Special Assistant to the then Deputy
Prime Minister and held various positions in the corporate sector such as International
Affairs Manager, Bursa Malaysia Berhad and Assistant Manager, Group Finance,
Southern Bank Berhad. Currently is the Head of Communications Unit of the Prime
Minister’s Office. Does not have any other directorships of public companies.
Cik Sharina SaidonCompany Secretary
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Other Information of Directorsi)i)i)i)i) Family RelationshipFamily RelationshipFamily RelationshipFamily RelationshipFamily Relationship
None of the Directors have any family relationship with each other and/or major shareholders of the Company.
ii)ii)ii)ii)ii) Conflict of InterestConflict of InterestConflict of InterestConflict of InterestConflict of Interest
None of the Directors have any personal interest in any business arrangement with the Company.
iii)iii)iii)iii)iii) List of Convictions for OffencesList of Convictions for OffencesList of Convictions for OffencesList of Convictions for OffencesList of Convictions for Offences
None of the Directors have been convicted for any offences (other than traffic offences) within the past ten (10) years.
iv)iv)iv)iv)iv) Attendance of Directors at Board MeetingsAttendance of Directors at Board MeetingsAttendance of Directors at Board MeetingsAttendance of Directors at Board MeetingsAttendance of Directors at Board Meetings
There were six (6) Board Meetings held during the financial year ended 31 December 2005. Details of attendance of the
v)v)v)v)v) Securities Holdings in the Company and its SubsidiariesSecurities Holdings in the Company and its SubsidiariesSecurities Holdings in the Company and its SubsidiariesSecurities Holdings in the Company and its SubsidiariesSecurities Holdings in the Company and its Subsidiaries
The Directors’ shareholdings, etc are disclosed on page 112 of this Annual Report.
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BOARD OF DIRECTORSTAN SRI MOHAMED HASHIM AHMAD MAKARUDDIN
STOCK EXCHANGE LISTINGMain Board of the Bursa Malaysia Securities Berhad
(16 August 1994)
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MANAGEMENT ANDHEADS OF DEPARTMENT
Tan Sri Mohamed Hashim Ahmad MakaruddinExecutive ChairmanExecutive ChairmanExecutive ChairmanExecutive ChairmanExecutive Chairman
Encik Mohd Nasir AliGroup Executive DirectorGroup Executive DirectorGroup Executive DirectorGroup Executive DirectorGroup Executive Director
Datuk Mohd Khalid MohdGroup Editor-in-ChiefGroup Editor-in-ChiefGroup Editor-in-ChiefGroup Editor-in-ChiefGroup Editor-in-Chief
Tuan Haji Hamzah Md SidekDeputy Group Editor-in-ChiefDeputy Group Editor-in-ChiefDeputy Group Editor-in-ChiefDeputy Group Editor-in-ChiefDeputy Group Editor-in-Chief
Cik W. Nor Asmah W. IsmailChief Financial OfficerChief Financial OfficerChief Financial OfficerChief Financial OfficerChief Financial Officer
Dr. Ahmad Hairi Abu BakarChief Technology OfficerChief Technology OfficerChief Technology OfficerChief Technology OfficerChief Technology Officer
Encik Mohd Nazlan OsmanSenior Manager, Human ResourceSenior Manager, Human ResourceSenior Manager, Human ResourceSenior Manager, Human ResourceSenior Manager, Human Resource
Encik Abdul Kadir MansuriManager, Credit ControlManager, Credit ControlManager, Credit ControlManager, Credit ControlManager, Credit Control
Puan Maimunah Abd RashidManager, Editorial DepartmentManager, Editorial DepartmentManager, Editorial DepartmentManager, Editorial DepartmentManager, Editorial Department
Puan Sabrina YonManager, CorporateManager, CorporateManager, CorporateManager, CorporateManager, CorporateCommunicationsCommunicationsCommunicationsCommunicationsCommunications
Standing from leftStanding from leftStanding from leftStanding from leftStanding from left: Encik Zulkafli Bakar, Encik Mohd Nazlan Osman, Encik Adi Satria Ahmad, Cik Roselina Johari, Dr. Ahmad HairiAbu Bakar, Encik Che Mat Abd Ghani, Encik Jamal Khail Mohd Isa, Ir. Ahmad Hilmi Hashim
Seated from leftSeated from leftSeated from leftSeated from leftSeated from left: Cik W. Nor Asmah W. Ismail, Encik Mohd Nasir Ali, Tan Sri Mohamed Hashim Ahmad Makaruddin, Tuan HajiHamzah Md Sidek, Cik Sharina Saidon
Not in the picture:Not in the picture:Not in the picture:Not in the picture:Not in the picture: Datuk Mohd Khalid Mohd
SENIOR MANAGEMENT
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This statement is prepared as required by the Listing Requirements of the Bursa Malaysia Securities Berhad.
The directors are required to prepare financial statements which give a true and fair view of the state of affairs of the Group and the
Company as at the end of each financial year and of their results and their cash flows for that year then ended.
The directors consider that in preparing the financial statements:
• the Group and the Company have used appropriate accounting policies and are consistently applied;
• reasonable and prudent judgements and estimates were made; and
• all applicable approved accounting standards in Malaysia have been followed.
The directors are responsible for ensuring that the Company maintains accounting records that disclose with reasonable accuracy
the financial position of the Group and the Company, and which enable them to ensure that the financial statements comply with
the Companies Act, 1965.
The directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of
the Group, and to prevent and detect fraud and other irregularities.
STATEMENT OFDIRECTORS’RESPONSIBILITYin Relation to the Financial Statements
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OBJECTIVESThe Audit Committee (‘Committee’) has been formed with the
following objectives in view:
a) ensure openness, integrity and accountability in the Group’s
activities so as to safeguard the rights and interest of the
shareholders.
b) provide assistance to the Board in fulfilling its fiduciary
responsibilities as they relate to the Group’s management
and internal controls, accounting policies and financial
reporting.
c) improve the Group’s business efficiency, the quality of the
accounting and audit functions and strengthening the
public’s confidence in the Group’s reported results.
d) provide by way of regular meetings, a direct line of
communication between the Board and the External and
Internal Auditors.
e) enhance the independence of the external and internal audit
functions.
f) create a climate of discipline and control that will reduce
the opportunity for fraud.
MEMBERSHIPThe members of the Committee shall be appointed by the Board
of Directors of Utusan Melayu (Malaysia) Berhad from amongst
their number and shall comprise not less than three (3) members
of whom a majority shall not be:
a) Executive Directors of Utusan Melayu (Malaysia) Berhad,
or any related corporation.
b) a spouse, parent, brother, sister, son, adopted son or
daughter of an Executive Director of Utusan Melayu
(Malaysia) Berhad or any related corporation.
c) a person having a relationship that in the opinion of the
Board of Directors, would interfere with the exercise of
independent judgement of the Committee.
and at least one of whom shall be a member of the Malaysian
Inst i tute of Accountants or one of the associat ions of
accountants as specified in Part II of the 1st Schedule of the
Accountants Act, 1967.
The Chairman of the Committee shall be appointed by the
Committee from amongst them who is not an Executive Director
or employee of Utusan Melayu (Malaysia) Berhad or any related
corporation.
AUTHORITYThe Committee is authorised by the Board of Directors to:
a) investigate any activity within its terms of reference.
b) seek any information it requires from any employee and all
employees are directed to co-operate with any request made
by the Committee.
c) obtain external legal or other independent professional
advice and to secure the attendance of outsiders with
relevant experience and expertise if it deems fit.
MEMBERSDato’ Ab Halim Mohyiddin Dato’ Ab Halim Mohyiddin Dato’ Ab Halim Mohyiddin Dato’ Ab Halim Mohyiddin Dato’ Ab Halim Mohyiddin ----- Chairman Chairman Chairman Chairman Chairman
Independent Non-Executive Director and a
member of the Malaysian Institute of Accountants
Encik Mohd Nasir AliEncik Mohd Nasir AliEncik Mohd Nasir AliEncik Mohd Nasir AliEncik Mohd Nasir Ali
Non-Independent Executive Director
Encik Kamal KhalidEncik Kamal KhalidEncik Kamal KhalidEncik Kamal KhalidEncik Kamal Khalid
Independent Non-Executive Director
AUDITCOMMITTEEREPORT
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AUDITCOMMITTEEREPORT
FUNCTIONS AND DUTIESThe duties of the Committee shall be:
a) to consider and recommend the appointment of the External
Auditors, the audit fee, and any questions of resignation or
dismissal.
b) to discuss with the External Auditors before the audit
commences, the nature and scope of the audit, and ensure
co-ordination where more than one audit firm is involved.
c) to review the quarterly and annual financial statements
before submission to the Board, focusing particularly on:
- any changes in accounting policies and practices
- major judgemental areas
- significant adjustments resulting from the audit
- the going concern assumption
- compliance with stock exchange and legal requirements
d) to discuss problems and reservations arising from the
statutory audits, and any matters the Auditor may wish to
discuss (in the absence of Management or Group Executive
Director where/when necessary).
e) to keep under review the effectiveness of internal control
systems and in particular review the External Auditors’
Management Letter and Management’s response.
f) to review the adequacy of the scope, functions and
resources of the internal audit function, and that it has the
necessary authority to carry out its work.
g) to review the internal audit programme and results of the
internal audit process and where necessary ensure that
appropriate action is taken on the recommendations of the
internal audit function.
h) to approve the appointment of the head of the Internal Audit
Department.
i) to review any appraisal or assessment of the performance
of members of the internal audit function.
j) to approve any appointment or termination of senior staff
members of the internal audit function.
k) to inform itself of resignations of internal audit staff members
and provide the resigning staff member an opportunity to
submit his reason for resigning.
l) to review any related party transactions within the Company
or Group and any other major transactions outside the
normal course of business of the Company and Group.
m) to approve the Group Internal Audit Charter and ensure that
the internal audit function is adequately resourced and has
appropriate standing in the Group.
n) to review and ensure the co-ordination of audit approach
between the External and Internal Auditors.
o) to consider other topics as deemed fit.
MEETINGSa) Meetings shall be held not less than four (4) times a year,
with due notice of issues to be discussed and should record
its conclusion in discharging its duties and responsibilities.
b) The quorum for a meeting of the Committee shall be two
(2) members. In the absence of the Chairman, the members
present shall elect a Chairman for the meeting from amongst
the members present.
c) The meetings of the Committee shall be governed by the
provisions contained in the Memorandum and Articles of
Association of Utusan Melayu (Malaysia) Berhad for
regulating the meetings and proceedings of Directors.
d) Directors of the Board who are not members of the
Committee may also attend the meetings of the Committee,
but they shall not have any voting rights.
e) In addition to the Committee members, the Chief Financial
Officer and Head of Internal Audit are invited for attendance
at each meeting. The Head of departments/subsidiaries of
the Group and their Management team will attend when
audit reports on their departments/subsidiaries of the Group
are tabled for discussion.
f) The Committee shall meet the External Auditors at least twice
a year. At least once a year the Committee shall meet the
External Auditors without the Management or the Executive
Directors present.
g) The Company Secretary shall be appointed as the Secretary
of the Committee who shall circulate the minutes of meeting
of the Committee to all members of the Board.
ATTENDANCE AT MEETINGSA total of seven (7) meetings were held during the financial
year ended 31 December 2005. The details of attendance of
the Committee members are as follows:
NAMENAMENAMENAMENAME ATTENDANCE OF MEETINGSATTENDANCE OF MEETINGSATTENDANCE OF MEETINGSATTENDANCE OF MEETINGSATTENDANCE OF MEETINGS
Dato’ Ab Halim Mohyiddin 7/7
Encik Mohd Nasir Ali 7/7
Encik Kamal Khalid 4/7
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SUMMARY OF ACTIVITIES OF THE COMMITTEEThe following activities were performed by the Audit Committee
during the financial year ended 31 December 2005:
a) Reviewed with the External Auditors their audit plan, strategy
and scope of the statutory audits of the Group accounts for
the financial year ended 31 December 2005;
b) Reviewed with the External Auditors the result and issues
arising from their audit of the year-end financial statements
and their resolutions of such issues highlighted in their report
to the Committee;
c) Reviewed the performance and independence of the
External Auditors before recommending to the Board their
re-appointment and remuneration;
d) Reviewed with the Internal Audit their audit plan for the
financial year ended 31 December 2005 and ensuring the
principal risk areas (identified by the Risk Management
framework) are adequately identified and covered in the
plan;
e) Reviewed the various Internal Audit reports and appraised
the adequacy and effectiveness of Management responses
thereto and ensuring significant findings are adequately
addressed by Management on a timely basis;
f) Reviewed the quarterly results and the audited financial
statements of the Group with the Chief Financial Officer
and the External Auditors before recommending to the Board
for their approval and its announcement. Any significant
issues resulting from the audit of the financial statements
by the External Auditors were noted and deliberated by the
Committee;
g) The Committee, upon conclusion of each meeting,
recommended to the Management of the Group to improve
on the internal controls, procedures and system of the Group
where deemed appropriate.
GROUP INTERNAL AUDIT DEPARTMENTThe Group Internal Audit Department is responsible to undertake
regular and systematic review of the systems of controls so as
to provide reasonable assurance that such systems continue to
operate satisfactorily and effectively in the Company and the
Group. The Department is also responsible for the conduct of
regular and systematic reviews of environmental, safety and
health issues in the Company and the Group.
Throughout the financial year under review, the Group Internal
Audit Department conducted operational and information
system audit assignments and fo llow up audit on the
departments and subsidiaries of the Group in accordance to
the Annual Audit Plan or as special ad-hoc audi t at
Management’s request.
The resulting reports of audits undertaken were presented to
the Audit Committee and forwarded to the Management’s
concerned for their attention and necessary actions on reported
weaknesses and lapses.
The Management is responsible for ensuring that corrective
actions on reported weaknesses/deficiencies as recommended
are taken within the required time frame. The Management is
also responsible for ensuring that a written report on action
planned or completed is sent to the Chairman of the Audit
Committee and the Head of Internal Audit.
The Group Internal Audit Department has progressively reviewed
the audit manuals and programmes, the Corporate Manuals and
the Statement of Internal Control for the respective departments
and subsidiaries of the Group as well as participating in new
and/or enhancement of the Group’s system computerization
projects.
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Board’s ResponsibilitiesThe Board of Directors (‘Board’) acknowledges its overall responsibility for the Group’s system of internal control and for reviewing
its adequacy and integrity in order to safeguard the Group’s assets and shareholders’ investments.
The system is designed to manage rather than eliminate the risk of failure to achieve the business objectives of the Group.
It can therefore only provide reasonable and not absolute assurance against material misstatement or loss.
The Board and Audit Committee are informed of all issues pertaining to internal controls and regulatory compliance.
The effectiveness of the internal control system is reviewed regularly by the Board and the Audit Committee, which receive reports
of reviews undertaken by the Group Internal Audit Department.
The independent Internal Audit function provides assurance to the Audit Committee through the execution of internal audit exercises
based on an approved risk-based internal audit plan. Findings arising from these exercises are presented, together with
Management’s response and proposed action plans to the Audit Committee for its review.
Risk Management FrameworkThe Board recognises that one of the key elements of a sound internal control is the management of risks associated with the
Group’s business. The Corporate Services & Risk Management Department (‘CSRMD’) has been entrusted to assist the Board in
managing the risks within the Group. The CSRMD reports directly to the Group Executive Director and its major roles pertaining to
risk management are to:
• be a central platform, whereby risks throughout the Group can be viewed on an enterprise-wide basis;
• standardise the risk measurement methodology in order to enable comparability;
• act as a central resource for evaluating risks to assist management, business and operating units;
• recommend means to control or minimise risks; and
• facilitate each department and subsidiary within the Group in the process of identifying, evaluating, managing and monitoring
risks.
One of the key elements of the Group’s risk management framework is the establishment of a Risk Management Committee
headed by the Executive Chairman and comprising key management personnel from the relevant business and support functions.
The committee is entrusted with the responsibility of assisting the Board in overseeing the company’s risk management practices
throughout the Group. The Committee review and recommend overall risk management policies and processes and monitor
significant risks through review of risks profile and its mitigation plans.
The Board approved the Group’s Risk Management Policy. The policy outlines the role of the Board, the management and the
staff of the Group pertaining to risk management.
STATEMENT OFINTERNAL CONTROL
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The Group Internal Audit Department conducts independent risk-based audits to ensure that the system of internal controls
established to mitigate the risks is effective and operating satisfactorily.
Other Key Elements of the Group’s Internal Control SystemApart from the management of risks, the other key elements of the Group’s internal control system are:
• each of the department and subsidiary of the Group is required to have its own Corporate Manual that clearly spells out among
others; operational structure with defined lines of responsibility and delegation of authority, financial limits and approving authority
of various transactions. The Internal Audit Department also performs an independent review on the adequacy of internal controls
established in the Corporate Manual;
• formation of various committees at the management level to review and make business decisions regarding major expenditure
areas;
• there is an annual budgeting process for each area of business and approval of the annual budget by the Board; and
• the Executive Directors provide the Board with quarterly financial information. These include amongst others, the monitoring of
results against budget, with major variances being followed up and management action taken, where necessary.
Statement made in accordance with the resolution of the Board of Directors dated 12 April 2006.
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IntroductionThe Board is pleased to disclose the manner in which the Group has applied the Principles and Best Practices of good governance
as set out in the Malaysian Code on Corporate Governance (‘the Code’) throughout the twelve (12) months ended 31 December
2005.
1. The Board of Directors1.11.11.11.11.1 CompositionCompositionCompositionCompositionComposition
The Board comprises nine (9) members, of whom three (3) Executive Directors (including the Chairman), four (4)
Independent Non-Executive Directors, one (1) Senior Independent Non-Executive Director and one (1) Non-Independent
Non-Executive Director. The Board considers the current number of Directors and the mix of experience and expertise
of the present members are sufficient to provide direction and guidance to the management of the Company.
The presence of a majority Independent Non-Executive Directors, who are qualified and experienced, would contribute
effectively towards achieving the main tasks of the Board. They will also provide the necessary checks and balances to
ensure that the interests of minority shareholders and general public are given due consideration in the decision-making
process. Tan Sri Haji Husein Ahmad is the Senior Independent Non-Executive Director to whom the concerns may be
conveyed.
Notwithstanding the Chairman of the Board holds an executive position as the Group Executive Director (‘GED’), the
Board is of the opinion that the independence and the balance of power between the top management of the Company
is still appropriately preserved. This is because the power and authority of the Chairman and the GED are subject to the
control and scrutiny of the Board, the majority of whom are Non-Executive Directors.
1.21.21.21.21.2 Duties and ResponsibilitiesDuties and ResponsibilitiesDuties and ResponsibilitiesDuties and ResponsibilitiesDuties and Responsibilities
While delegating the day-to-day conduct of the Company’s business to the full time employees of the Company, the
Board is ultimately responsible for the overall performance of the Company.
The principal duties and responsibilities of the Board are:
• formulating the business direction and objectives of the Group;
• reviewing, adopting and approving the Group’s annual budgets, strategic plans, key operational initiatives, major
investments and funding decision;
• overseeing the conduct of business of the Group;
• reviewing the adequacy and integrity of internal control systems and management information system to ensure
compliance with relevant laws, rules, regulations, directives and guidelines;
• assuming its responsibility in succession planning within the Group.
The Board met six (6) times for the financial year ended 31 December 2005. The Board members receive documents
on matters requiring its consideration prior to and in advance with detailed management reports, proposal papers and
supporting documents for Board meetings. Senior management and advisers are invited to attend Board meetings,
where necessary, to provide additional information and insights on the relevant agenda items tabled at Board meetings.
Details of each Director’s attendance for the financial year ended 31 December 2005 are as follows:
NAME OF DIRECTORNAME OF DIRECTORNAME OF DIRECTORNAME OF DIRECTORNAME OF DIRECTOR ATTENDANCEATTENDANCEATTENDANCEATTENDANCEATTENDANCE
Tan Sri Mohamed Hashim Ahmad Makaruddin 6/6
Encik Mohd Nasir Ali 6/6
Datuk Mohd Khalid Mohd 6/6
Tan Sri Haji Husein Ahmad 6/6
Datuk Ruhanie Haji Ahmad 6/6
Dato’ Dr. Firdaus Haji Abdullah 6/6
Dato’ Ab Halim Mohyiddin 6/6
Dato’ Ismail Yusof 6/6
Encik Kamal Khalid 4/6
1.41.41.41.41.4 Access to InformationAccess to InformationAccess to InformationAccess to InformationAccess to Information
The Directors have full access to information pertaining to the Group’s business and affairs from all levels of senior
executive within the Group except certain information which are restricted by law. Every Director has unrestricted
access to the advice and services of the Company Secretary, whose role includes ensuring that Board procedures,
applicable rules and regulations are complied with.
Directors are also encouraged to seek external independent professional advice where necessary, to assist them in
making well-informed decision whether as a full Board or in their individual capacity, at the Company’s expense.
1.51.51.51.51.5 Appointment and Re-election of DirectorsAppointment and Re-election of DirectorsAppointment and Re-election of DirectorsAppointment and Re-election of DirectorsAppointment and Re-election of Directors
Appointment of new Board members are recommended by the Nomination Committee for the Board’s approval.
On appointment, Directors are advised of their legal and statutory responsibilities. They are regularly being updated on
any changes of such responsibilities and constantly reminded of their obligations.
In accordance with Article 98 of the Articles of Association of the Company, one-third or nearest to one-third of the
Directors shall retire from office at each Annual General Meeting (“AGM”) and be eligible to offer themselves for re-
election. This means that every Director will stand for re-election at least once in every three (3) years. Directors who
are appointed by the Board of Directors during the year are subject to retirement and re-election at the next AGM held
following their appointment.
Details of the Directors seeking re-election at the forthcoming AGM of the Company are disclosed in the Statement
Accompanying Notice of AGM on page 5 of this Annual Report.
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STATEMENT ONCORPORATEGOVERNANCE
1.61.61.61.61.6 Directors’ TrainingDirectors’ TrainingDirectors’ TrainingDirectors’ TrainingDirectors’ Training
Directors undergo continuous training as prescribed by Bursa Malaysia to equip themselves to effectively discharge their
duties as Directors. For the financial year ended 31 December 2005, six (6) out of seven (7) Directors have fulfilled their
Continuing Education Programmes (‘CEP’) points requirements whilst the other two (2) Directors were exempted. All
Directors have attended the Mandatory Accreditation Programme.
The Directors and management attended the following CEP training programme conducted by Bursatra Sdn Bhd:
The Nomination Committee reviewed the existing mix of skills and experience of the Board and recommended to
the Board for the appointments of new Directors, assess and review the effectiveness of each existing Director, the
Board as a whole and the committees of the Board on an on-going basis.
The members of this Committee comprises Independent Non-Executive Directors and the details of the meeting
held during the financial year ended 31 December 2005 are as follows:
MEMBERSMEMBERSMEMBERSMEMBERSMEMBERS NUMBER OF MEETING (ATTENDED/HELD)NUMBER OF MEETING (ATTENDED/HELD)NUMBER OF MEETING (ATTENDED/HELD)NUMBER OF MEETING (ATTENDED/HELD)NUMBER OF MEETING (ATTENDED/HELD)
The Remuneration Committee reviewed and considered the policy on remuneration of Executive Directors and
remuneration policy for Non-Executive Directors before tabling the same to the Board for decisions.
The Committee reviewed and made recommendations on the remuneration package of the Executive Directors
and Non-Executive Directors. The reviews cover all aspects of remuneration, including but not limited to Directors’
fees, salaries, bonuses, allowances and benefits-in-kind based on the performances of the Company and the
individual as well as the level of responsibilities undertaken by the particular Director concerned.
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The members of this Committee comprises Independent Non-Executive Directors and the details of the meetings held
during the twelve (12) months ended 31 December 2005 are as follows:
MEMBERSMEMBERSMEMBERSMEMBERSMEMBERS NUMBNUMBNUMBNUMBNUMBER OF MEETINGS (ATTENDED/HELD)ER OF MEETINGS (ATTENDED/HELD)ER OF MEETINGS (ATTENDED/HELD)ER OF MEETINGS (ATTENDED/HELD)ER OF MEETINGS (ATTENDED/HELD)
The number of Directors of the Company whose total remuneration fall within the following bands for the financial
year ended 31 December 2005 are as follows:
NUMBER OF DIRECTORSNUMBER OF DIRECTORSNUMBER OF DIRECTORSNUMBER OF DIRECTORSNUMBER OF DIRECTORS
RANGE OF REMUNERATIONRANGE OF REMUNERATIONRANGE OF REMUNERATIONRANGE OF REMUNERATIONRANGE OF REMUNERATION EXECUTIVEEXECUTIVEEXECUTIVEEXECUTIVEEXECUTIVE NON-EXECUTIVENON-EXECUTIVENON-EXECUTIVENON-EXECUTIVENON-EXECUTIVE
Below RM50,000 - 6
RM450,001 to RM500,000 - -
RM500,001 to RM550,000 1 -
RM550,001 to RM600,000 - -
RM600,001 to RM650,000 - -
RM650,001 to RM700,000 2 -
Non-Executive Directors are paid annual fees and attendance allowances for attending Board/Committee meetings.
Although the Code (Principles B III) requires that each Director’s remuneration be disclosed in detail, the Board is of
the opinion that the transparency and accountability aspects of this requirement are still appropriately served. The
band disclosure made above is in compliance with Paragraph 10(b) Part A of Appendix 9C of the Listing Requirements
of the Bursa Malaysia Securities Berhad.
The objective of the Company’s policy on Directors’ remuneration is to attract and retain Directors needed to run the
Company successfully. The Non-Executive Directors’s remuneration is determined by the Board.
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STATEMENT ONCORPORATEGOVERNANCE
2. Accountability and Audit2.12.12.12.12.1 Financial ReportingFinancial ReportingFinancial ReportingFinancial ReportingFinancial Reporting
The annual financial statements and quarterly results are reviewed by the Audit Committee and approved by the Board
of Directors prior to public release. A statement by the Directors explaining the Board’s responsibilities for preparing the
annual financial statements is set out on page 18 of this Annual Report.
2.22.22.22.22.2 Risk Management Framework and Internal ControlRisk Management Framework and Internal ControlRisk Management Framework and Internal ControlRisk Management Framework and Internal ControlRisk Management Framework and Internal Control
A Statement on Internal Control which provides an overview of the state of internal control within the Group is disclosed
on pages 22 to 23 of this Annual Report.
2.32.32.32.32.3 Relationship with the AuditorsRelationship with the AuditorsRelationship with the AuditorsRelationship with the AuditorsRelationship with the Auditors
Through the Audit Committee, the Company has established a formal and transparent relationship with the auditors,
both internal and external. 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 Audit Committee meets with the external auditors without the Management or the Executive Directors presence at
least once a year.
3. Investors Relation and Shareholders CommunicationThe Company endeavours to maintain constant and effective communication with shareholders through timely and
comprehensive announcements. The Board regards the AGM as an opportunity to communicate directly with shareholders
and encourages attendance and participation in dialogue. The Executive Chairman and the Group Executive Director are
available to respond to shareholders’ queries during the meeting. The notice of AGM is despatched to shareholders, together
with explanatory notes or circular on items of special business, at least twenty-one (21) days prior to the meeting date.
Shareholders and investors can also convey their concerns and queries to Tan Sri Haji Husein Ahmad, the Senior Independent
Non-Executive Director of the Company at fax no. 03-92229784 or by mail to the registered office of the Company at 46M,
Jalan Lima Off Jalan Chan Sow Lin, 55200 Kuala Lumpur.
Statement made in accordance with the resolution of the Board passed on 12 April 2006.
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Share BuybacksDuring the financial year, the Company did not enter into any share buyback transactions.
American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) ProgrammeDuring the financial year, the Company did not sponsor any ADR or GDR programme.
Imposition of Sanctions and PenaltiesThere were no sanctions or penalties imposed on the Company and its subsidiaries, directors or Management by the relevant
regulatory bodies during the financial year.
Non-Audit FeesThe amount of non-audit fees paid to the external auditors by both the Group and the Company for the financial year amounted to
RM3,000.00.
Profit GuaranteeDuring the financial year, there were no profit guarantees given by the Company.
OTHERINFORMATIONRequired By The Listing Requirements Of The Bursa Malaysia Securities Berhad
32
CHAIRMAN’SSTATEMENT
Dear Shareholders,
It gives me great pleasure to present, on behalf of the Board of Directors, the Annual Report and audited Financial Statements of
Utusan Melayu (Malaysia) Berhad (‘the Company’) and the Group for the financial year ended 31 December 2005.
PERFORMANCE REVIEWI am pleased to report yet another year of satisfactory results: the Group recorded a 2.1 % growth in revenue to RM372.2 million,
compared with the previous year’s figure of RM364.6 million. Pre-tax profit for the Group was RM29.2 million, 49.0% higher
compared with RM19.6 million a year ago. The improved profit was mainly contributed by the core businesses of publishing,
advertising and printing. Basic earnings per share improved to 19.52 sen as compared with 11.44 sen in the previous year.
At the Company level, revenue increased by 9.0% from RM268.1 million in 2004 to RM292.1 million in 2005, contributed mainly
by the increase in cover prices of Utusan Malaysia and Mingguan Malaysia since January 2005. These, coupled with internal cost
control measures have resulted in higher pre-tax profit for the Company by 15.9% from RM15.7 million in 2004 to RM18.2 million
in 2005.
33
DIVIDENDAfter taking into account the financial results of the Company,
the Board is pleased to recommend a first and final dividend
of 2.5 sen per ordinary share, less 28% income tax, for the
financial year ended 31 December 2005 for the approval of
shareholders at the forthcoming 38th Annual General Meeting
to be held on 31 May 2006.
OPERATIONAL PERFORMANCEThe Malaysian economy recorded a lower GDP growth of 5.3%
in 2005 as against 7.1% in 2004. During the year, most sectors
of the economy registered lower growth than a year before
whilst the construction sector continued to register a negative
growth for the second year consecutively. The slower growth
was largely due to higher oil prices and downturn in the global
electronic cycle during the first half of the year.
The advertising expenditure (‘Adex’) for the entire media in
2005 increased at a lower rate of 3.0% as against 16.8% in
2004. The Adex for newspaper also expanded at a slower
rate of 4.0%, lower than 12.9% in 2004. The absence of major
events during the year was the main reason for the slower
Adex in 2005. Bahasa and Chinese Adex newspapers grew
by 7.4% and 6.7% respectively whilst the English newspapers
managed a growth of only 0.6%.
34
The publishing, distribution and advertising segment continued
to be the main contributor to the Group’s revenue in 2005. This
segment recorded a growth of 3.6% in revenue during the year
under review at RM359.5 million as compared with RM347.1
million in 2004. In the newspaper publishing sector, average daily
circulation of Utusan Malaysia and Mingguan Malaysia, as verified
by the Audit Bureau of Circulations (‘ABC’) for July 2004 to June
2005 were 228,802 copies and 529,176 copies respectively. In
terms of readership, Utusan Malaysia and Mingguan Malaysia
recorded an average net daily readership of 1.277 million and
1.994 million respectively. Mingguan Malaysia retained its no. 1
position in both circulation and readership.
Performance of the subsidiaries were mixed. Utusan Karya Sdn
Bhd (‘UKSB’), which publishes magazines, registered an improved
pre-tax profit of 13.3% from RM1.5 million in 2004 to RM1.7 million
in 2005, on the back of RM41.5 million revenue.
Utusan Publications & Distributors Sdn Bhd (‘UP&D’), which is in
the book publishing and distribution business, registered an
improved performance with a pre-tax profit of RM0.9 million
(RM0.7 million in 2004) on the back of RM15.3 million revenue.
The commercial printing subsidiary, Utusan Printcorp Sdn Bhd
(‘UPSB’) recorded a higher pre-tax profit of RM1.5 million in 2005
as compared with RM0.5 million in 2004. Its revenue improved
from RM17.8 million in 2004 to RM20.5 million in 2005.
CHAIRMAN’SSTATEMENT
35
In the advertising segment, the Company’s wholly owned subsidiary, Utusan Media Sales Sdn Bhd (‘UMES’), registered a 17%
improvement in profit to RM2.7 million from RM2.3 million registered in 2004. The Company’s outdoor media subsidiary, UPD Sdn
Bhd, however, registered a loss of RM3.2 million. Measures have been taken to improve the performance of this subsidiary.
CORPORATE DEVELOPMENTSDuring the year, the Company continued to undertake measures to strengthen its business operations and subsidiaries and to
further enhance its core activities. Efforts were focused on increasing market penetration of its new products, boosting circulation
and advertisement revenue, and controlling costs.
During the year, our newly launched compact newspaper, Kosmo!, was expanded to Penang and nearby areas in September 2005.
In February 2006, it was made available to residents of Johor. The response has been encouraging and the newspaper will be
distributed to other regions within peninsular Malaysia before the end of 2006.
36
CHAIRMAN’SSTATEMENT
As part of the plan to modernize the printing plants, the
Company undertook the construction of its new printing plant
in Prai, Penang. This will enable the Company to print full colour
for all pages, increase pagination and complete printing at a
faster time. The plant is expected to be operational in the middle
of 2006.
CORPORATE GOVERNANCE & INTERNAL CONTROLThe Board is committed in ensuring that high standards of corporate
governance are adhered to in the conduct of the activities of the Group in
accordance with the Malaysian Code on Corporate Governance.
37
RELATED PARTY TRANSACTIONSThere were no material contracts of the Group involving Directors’ and major shareholders’ interest except for those incurred in
the normal course of business as disclosed in the financial statements.
FUTURE OUTLOOKDespite a higher GDP forecast of 6.0% for 2006 by Bank Negara Malaysia, the year will yet be another challenging year for the
Group given the continued increase in newsprint prices and intense competition for circulation, readership and Adex in the
Bahasa Melayu newspaper segment. High oil prices may also have impact on transportation and utilities cost for the Group.
Measures are being taken to mitigate the impact of these increases in prices.
The Group is confident of improving its newspaper circulation and readership numbers with Kosmo! being distributed nationwide
by the year end and the positive responses to the new look for Utusan Malaysia and Mingguan Malaysia launched in 2006. At the
same time, the Group will continue to explore new business opportunities aimed at increasing revenue and profitability. Hence,
barring unforeseen circumstances, the Group is confident of remaining profitable in 2006.
38
APPRECIATIONOn behalf of the Board, I would like to record my thanks and
appreciation for the dedication of our management and
employees at all levels, and also to the Board members for their continued support and
co-operation.
I also wish to express my sincere thanks to our shareholders, readers, vendors and agents, advertisers and advertising agencies,
financiers, Bursa Malaysia Securities Berhad, Securities Commission and all our business associates for their continued and
valuable support to the Group.
In closing we reaffirm our commitment to our shareholders of further enhancing the value of their investment in the Company.
TAN SRI MOHAMED HASHIM AHMAD MAKARUDDIN
Executive Chairman
39
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CORPORATECALENDAR
3 February 2005UP&D launched the Buku Masakan Tradisi Johor by Halimah Shuib.
The event was officiated by the Minister of Youth and Sports, Datuk
Azalina Othman Said at Putra World Trade Centre, Kuala Lumpur.
1 March 2005The Utusan Group, in collaboration with Expomal International Sdn
Bhd organised the International Food and Beverage Expo (‘MIFB’)
themed ‘Bringing The Multi-million Ringgit Market to You’ (‘Membawa
Pasaran Berbilion Ringgit Kepada Anda’). The pre-launch ceremony
was officiated by the Deputy Minister for International Trade and
Industry, YB Datuk Ahmad Husni Mohamad Hanadzlah.
19 April 2005The Utusan Group won the Silver Award for the Best in Sports
Photography category through Utusan lensman, Aswad Yahya at the
Asia Media Awards 2005 in Bangkok, Thailand.
21 May 2005More than 10 thousand participants took part in the Yayasan-Utusan
Charity Run organised by Yayasan Orang Kurang Upaya Kelantan
(‘YOKUK’) and Utusan Group in Kota Bharu, Kelantan. This
programme aimed to raise funds in support of the rehabilitation and
skills programme for the physically handicapped in Kelantan.
8 June 2005The Utusan Group’s subsidiary in Indonesia, PT Sinar Media
Advertising (‘SMART’) opened its new office in Kebayoran Baru,
Jakarta Selatan. The launch event was attended by the Deputy
Minister of Tourism, YB Datuk Ahmad Zahid Hamidi, Malaysia’s Grand
Ambassador in Indonesia, Datuk Hamidon Ali and the senior
management team of the Utusan Group.
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CORPORATECALENDAR
15 June 2005The Utusan Group Literary Award celebrated its 20th anniversary.
Awards were presented by Malaysia’s former Prime Minister, Yang Amat
Berbahagia Tun Dr. Mahathir Mohamad at the Palace of the Golden
Horses Hotel, Seri Kembangan, Selangor.
1 - 30 July 2005The Utusan Group, in collaboration with Tourism Malaysia, organised
Kuala Lumpur Fashion Week 2005 (KLFW 2005) at major locations in
the capital like KL Sentral, Suria KLCC, Taman Warisan Pertanian
Putrajaya, Low Yat Plaza, Nikko Hotel and Putra World Trade Centre.
1 and 2 August 2005The Utusan Group, together with the Communication School of
Universiti Sains Malaysia, organised the Media Planner & Vision 2020
seminar at Vistana Hotel, Bukit Jambul, Pulau Pinang. The Seminar
was officiated by the Minister of Domestic Trade and Consumer Affairs,
Datuk Mohd. Shafie Apdal.
28 August 2005The closing ceremony of the 2005 Inter-Departmental Sports Fest at
the Sports Complex Bandar Baru Bangi, Selangor. The Production
Department emerged as the overall champion.
10 September 2005KOSMO! launched in Penang. The compact newspaper KOSMO!
spreads its wings to the north with the introduction of the Penang
KOSMO! edition.
41
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26 September 2005The Wanita-Avon Face Search 2005 event organised by WANITA
magazine was graced by the Royal Guest of Honour, the Queen of
Terengganu, Queen Nur Zahirah at Renaissance Hotel, Kuala Lumpur.
30 September 2005The Launch Event for KAWAN magazine’s new look by Utusan Karya
Sdn Bhd (‘UKSB’) was officiated by the Director School Division,
Ministry of Education Malaysia, Encik Salleh Mohd Hussein at Sekolah
Kebangsaan Taman Setiawangsa, Kuala Lumpur.
28 November 2005Excellence...Utusan journalists receiving numerous awards at the MPI-
Petronas Malaysian Journalism Awards Night. KOSMO! journalist, Mohd
Faizal Zakaria won the most prestigious award, the Kajai Award.
3 & 4 December 2005Utusan Karya Sdn Bhd (‘UKSB’) organised the inaugural Karnival Utusan
Karya Jom Fiesta! at Taman Tasik Permaisuri, Bandar Tun Razak,
Cheras, Kuala Lumpur.
21 December 2005The Utusan Group signed a collaborative scholarship agreement with
Institute Advertising Communication Training (‘IACT’) at IACT’s office
in Damansara Utama, Petaling Jaya, Selangor.
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FINANCIAL STATEMENTS
Directors’ Report 45
Statement by Directors 49
Statutory Declaration 49
Report of the Auditors 50
Consolidated Income Statement 51
Consolidated Balance Sheet 52
Consolidated Statement of Changes in Equity 53
Consolidated Cash Flow Statement 54
Income Statement 56
Balance Sheet 57
Statement of Changes in Equity 58
Cash Flow Statement 59
Notes to the Financial Statements 61
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DIRECTORS’ REPORT
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the
Company for the financial year ended 31 December 2005.
PRINCIPAL ACTIVITIESPRINCIPAL ACTIVITIESPRINCIPAL ACTIVITIESPRINCIPAL ACTIVITIESPRINCIPAL ACTIVITIES
The principal activities of the Company are the publication, printing and distribution of newspapers.
The principal activities of the subsidiaries are described in Note 13 to the financial statements.
There have been no significant changes in the nature of the principal activities during the financial year.
According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares and
options over shares in the Company and its related corporations during the financial year were as follows:
Number of Ordinary Shares of RM1 EachNumber of Ordinary Shares of RM1 EachNumber of Ordinary Shares of RM1 EachNumber of Ordinary Shares of RM1 EachNumber of Ordinary Shares of RM1 Each
1 January1 January1 January1 January1 January AcquiredAcquiredAcquiredAcquiredAcquired SoldSoldSoldSoldSold 31 December31 December31 December31 December31 December
2005 2005 2005 2005 2005 20052005200520052005
THE COMPANYTHE COMPANYTHE COMPANYTHE COMPANYTHE COMPANY
Direct InterestDirect InterestDirect InterestDirect InterestDirect Interest
Encik Mohd Nasir Ali 10,000 - - 10,000
Datuk Mohd Khalid Mohd 8,000 - - 8,000
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None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related
The Utusan Melayu (Malaysia) Berhad Executives' Share Option Scheme ("ESOS") is governed by the by-laws and was approved by
the shareholders at an Extraordinary General Meeting held on 27 May 2003. The ESOS was implemented on 7 July 2003 and is to
be in force for a period of five years from the date of implementation.
The salient features and other terms of the ESOS are as disclosed in Note 28 to the financial statements.
OTHER STATUTORY INFORMATIONOTHER STATUTORY INFORMATIONOTHER STATUTORY INFORMATIONOTHER STATUTORY INFORMATIONOTHER STATUTORY INFORMATION
(a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors took
reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for
doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had
been made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the
ordinary course of business had been written down to an amount which they might be expected so to realise.
(b) At the date of this report, the directors are not aware of any circumstances which would render:
(i) the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the
Group and of the Company inadequate to any substantial extent; and
(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.
(c) At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the
existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial
statements of the Group and of the Company which would render any amount stated in the financial statements misleading.
Number of Options Over Ordinary Shares of RM1 EachNumber of Options Over Ordinary Shares of RM1 EachNumber of Options Over Ordinary Shares of RM1 EachNumber of Options Over Ordinary Shares of RM1 EachNumber of Options Over Ordinary Shares of RM1 Each
1 January1 January1 January1 January1 January GrantedGrantedGrantedGrantedGranted ExercisedExercisedExercisedExercisedExercised CancelledCancelledCancelledCancelledCancelled 31 December31 December31 December31 December31 December
2005 2005 2005 2005 2005 20052005200520052005
Encik Mohd Nasir Ali 500,000 500,000 - (500,000) 500,000
Datuk Mohd Khalid Mohd 500,000 500,000 - (500,000) 500,000
The significant events during the financial year is as disclosed in Note 34 to the financial statements.
AUDITORSAUDITORSAUDITORSAUDITORSAUDITORS
The auditors, Ernst & Young, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors
TAN SRI MOHAMED HASHIM AHMAD MAKARUDDINTAN SRI MOHAMED HASHIM AHMAD MAKARUDDINTAN SRI MOHAMED HASHIM AHMAD MAKARUDDINTAN SRI MOHAMED HASHIM AHMAD MAKARUDDINTAN SRI MOHAMED HASHIM AHMAD MAKARUDDIN
MOHD NASIR ALIMOHD NASIR ALIMOHD NASIR ALIMOHD NASIR ALIMOHD NASIR ALI
Kuala Lumpur, Malaysia
12 April 2006
OTHER STATUTORY INFORMATION (CONT’D)OTHER STATUTORY INFORMATION (CONT’D)OTHER STATUTORY INFORMATION (CONT’D)OTHER STATUTORY INFORMATION (CONT’D)OTHER STATUTORY INFORMATION (CONT’D)
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STATEMENT BY DIRECTORSPursuant to Section 169(15) of the Companies Act, 1965
We, Tan Sri Mohamed Hashim Ahmad Makaruddin and Mohd Nasir Ali, being two of the directors of Utusan Melayu (Malaysia)
Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 51 to 107 are
drawn up in accordance with applicable MASB Approved Accounting Standards in Malaysia and the provisions of the Companies
Act, 1965 so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2005 and
of the results and the cash flows of the Group and of the Company for the year then ended.
Signed on behalf of the Board in accordance with a resolution of the directors
TAN SRI MOHAMED HASHIM AHMAD MAKARUDDINTAN SRI MOHAMED HASHIM AHMAD MAKARUDDINTAN SRI MOHAMED HASHIM AHMAD MAKARUDDINTAN SRI MOHAMED HASHIM AHMAD MAKARUDDINTAN SRI MOHAMED HASHIM AHMAD MAKARUDDIN
MOHD NASIR ALIMOHD NASIR ALIMOHD NASIR ALIMOHD NASIR ALIMOHD NASIR ALI
Kuala Lumpur, Malaysia
12 April 2006
STATUTORY DECLARATIONPursuant to Section 169(16) of the Companies Act, 1965
I, W. Nor Asmah W. Ismail, being the officer primarily responsible for the financial management of Utusan Melayu (Malaysia)
Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 51 to 107 are in my opinion,
correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the
Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the
the abovenamed W. Nor Asmah W. Ismail
at Kuala Lumpur in Wilayah Persekutuan
on 12 April 2006 W. NOR ASMAH W. ISMAIL W. NOR ASMAH W. ISMAIL W. NOR ASMAH W. ISMAIL W. NOR ASMAH W. ISMAIL W. NOR ASMAH W. ISMAIL
Before me,
Commissioner for Oaths
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REPORT OF THE AUDITORSto the Members of Utusan Melayu (Malaysia) Berhad(Incorporated in Malaysia)
We have audited the financial statements set out on pages 51 to 107. These financial statements are the responsibility of the
Company's directors.
It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to
you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility
to any other person for the content of this report.
We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the
overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion:
(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and
applicable MASB Approved Accounting Standards in Malaysia so as to give a true and fair view of:
(i) the financial position of the Group and of the Company as at 31 December 2005 and of the results and the cash flows of
the Group and of the Company for the year then ended; and
(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements and consolidated
financial statements; and
(b) the accounting and other records and the registers required by the Act to be kept by the Company and by its subsidiaries of
which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
We have considered the financial statements and the auditors’ reports thereon of the subsidiaries of which we have not acted as
auditors, as indicated in Note 13 to the financial statements, being financial statements that have been included in the consolidated
financial statements.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the
Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements
and we have received satisfactory information and explanations required by us for those purposes.
The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material to the consolidated
financial statements and in respect of subsidiaries incorporated in Malaysia, did not include any comment required to be made
under Section 174(3) of the Act.
ERNST & YOUNGERNST & YOUNGERNST & YOUNGERNST & YOUNGERNST & YOUNG NIK RAHMAT KAMARULZAMAN NIK AB. RAHMANNIK RAHMAT KAMARULZAMAN NIK AB. RAHMANNIK RAHMAT KAMARULZAMAN NIK AB. RAHMANNIK RAHMAT KAMARULZAMAN NIK AB. RAHMANNIK RAHMAT KAMARULZAMAN NIK AB. RAHMAN
AF: 0039 No. 1759/02/08(J)
Chartered Accountants Partner
Kuala Lumpur, Malaysia
12 April 2006
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CONSOLIDATED INCOME STATEMENTFor the year ended 31 December 2005
NET CURRENT ASSETSNET CURRENT ASSETSNET CURRENT ASSETSNET CURRENT ASSETSNET CURRENT ASSETS 111,176,431111,176,431111,176,431111,176,431111,176,431 59,580,115
Net profit for the year - - - 12,496,274 12,496,274
Dividend - - - (1,572,830) (1,572,830)
At 31 December 2004At 31 December 2004At 31 December 2004At 31 December 2004At 31 December 2004 109,224,337 50,640,397 6,455,429 39,990,314 206,310,477
At 1 January 2005At 1 January 2005At 1 January 2005At 1 January 2005At 1 January 2005 109,224,337 50,640,397 6,455,429 39,990,314 206,310,477
Net profit for the year - - - 21,325,872 21,325,872
Dividend - - - (1,966,038) (1,966,038)
At 31 December 2005At 31 December 2005At 31 December 2005At 31 December 2005At 31 December 2005 109,224,337 50,640,397 6,995,715 59,350,148 226,210,597
The accompanying notes form an integral part of the financial statements.
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CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 December 2005
20052005200520052005 20042004200420042004
RMRMRMRMRM RMRMRMRMRM
CASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 29,195,3414141414129,195,34129,195,34129,195,34129,195,34129,195,341 19,576,406
Adjustments for:
Allowance for doubtful debts 4,762,0014,762,0014,762,0014,762,0014,762,001 5,308,938
Write back of allowance for doubtful debts (7,904,772(7,904,772(7,904,772(7,904,772(7,904,772))))) (7,957,554)
Bad debts written off 6,796,7556,796,7556,796,7556,796,7556,796,755 7,805,916
Impairment of investments 815,677815,677815,677815,677815,677 22,597
Write back of impairment of investments ----- (183,509)
Provision for retirement benefits ----- 1,778,800
Write back of provision for retirement benefits (4,108,177(4,108,177(4,108,177(4,108,177(4,108,177))))) -
Gain on disposal of other investments ----- (30,742)
Share of results of associates (2,940,079(2,940,079(2,940,079(2,940,079(2,940,079))))) (2,234,946)
Interest income (642,212(642,212(642,212(642,212(642,212))))) (675,347)
Net cash generated from/ (used in) operating activities 14,935,63414,935,63414,935,63414,935,63414,935,634 (9,150,804)
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20052005200520052005 20042004200420042004
RMRMRMRMRM RMRMRMRMRM
CASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIES
Purchase of marketable securities (3,420,000(3,420,000(3,420,000(3,420,000(3,420,000))))) (95,998)
Proceeds from sale of other investments ----- 3,780,739
Interest received 642,212642,212642,212642,212642,212 675,347
Purchase of property, plant and equipment (18,816,030(18,816,030(18,816,030(18,816,030(18,816,030))))) (12,140,222)
Proceeds from disposal of property, plant and equipment 579,094579,094579,094579,094579,094 1,584,705
Dividend received 341,430341,430341,430341,430341,430 162,496
Withdrawal of fixed deposits 1,190,3311,190,3311,190,3311,190,3311,190,331 97,464
Net cash used in investing activities (19,482,963(19,482,963(19,482,963(19,482,963(19,482,963))))) (5,935,469)
CASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIES
(Repayment)/drawdown of short term borrowings (21,666,300(21,666,300(21,666,300(21,666,300(21,666,300))))) 41,279,467
Repayment of hire purchase and lease (4,943,340(4,943,340(4,943,340(4,943,340(4,943,340))))) (1,938,768)
Drawdown/(repayment) of long term borrowings 33,266,35433,266,35433,266,35433,266,35433,266,354 (14,315,257)
Payment of retirement benefits (1,755,014(1,755,014(1,755,014(1,755,014(1,755,014))))) (4,349,642)
Proceeds from restricted issuance of shares ----- 14,365
Expenses in relation to prior year issuance of ordinary shares ----- (44,000)
Net cash generated from financing activities 2,935,6622,935,6622,935,6622,935,6622,935,662 19,073,335
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTSNET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTSNET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTSNET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTSNET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (1,611,667(1,611,667(1,611,667(1,611,667(1,611,667))))) 3,987,062
EFFECT OF EXCHANGE RATE CHANGESEFFECT OF EXCHANGE RATE CHANGESEFFECT OF EXCHANGE RATE CHANGESEFFECT OF EXCHANGE RATE CHANGESEFFECT OF EXCHANGE RATE CHANGES 560,351560,351560,351560,351560,351 116,738
CASH AND CASH EQUIVALENTS AT 1 JANUARYCASH AND CASH EQUIVALENTS AT 1 JANUARYCASH AND CASH EQUIVALENTS AT 1 JANUARYCASH AND CASH EQUIVALENTS AT 1 JANUARYCASH AND CASH EQUIVALENTS AT 1 JANUARY 30,844,82530,844,82530,844,82530,844,82530,844,825 26,741,025
CASH AND CASH EQUIVALENTS AT 31 DECEMBERCASH AND CASH EQUIVALENTS AT 31 DECEMBERCASH AND CASH EQUIVALENTS AT 31 DECEMBERCASH AND CASH EQUIVALENTS AT 31 DECEMBERCASH AND CASH EQUIVALENTS AT 31 DECEMBER (NOTE 22)(NOTE 22)(NOTE 22)(NOTE 22)(NOTE 22) 29,793,50929,793,50929,793,50929,793,50929,793,509 30,844,825
The accompanying notes form an integral part of the financial statements.
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INCOME STATEMENTFor the year ended 31 December 2005
NET CURRENT ASSETSNET CURRENT ASSETSNET CURRENT ASSETSNET CURRENT ASSETSNET CURRENT ASSETS 98,109,67098,109,67098,109,67098,109,67098,109,670 58,469,581
At 1 January 2004At 1 January 2004At 1 January 2004At 1 January 2004At 1 January 2004 109,215,837 50,678,532 5,147,995 14,644,450 179,686,814
Issue of share capital pursuant
to ESOS 8,500 5,865 - - 14,365
Expenses in relation to prior year
issuance of ordinary shares - (44,000) - - (44,000)
Net profit for the year - - - 10,839,785 10,839,785
Dividend - - - (1,572,830) (1,572,830)
At 31 December 2004At 31 December 2004At 31 December 2004At 31 December 2004At 31 December 2004 109,224,337 50,640,397 5,147,995 23,911,405 188,924,134
At 1 January 2005At 1 January 2005At 1 January 2005At 1 January 2005At 1 January 2005 109,224,337 50,640,397 5,147,995 23,911,405 188,924,134
Net profit for the year - - - 12,488,777 12,488,777
Dividend - - - (1,966,038) (1,966,038)
At 31 December 2005At 31 December 2005At 31 December 2005At 31 December 2005At 31 December 2005 109,224,337 50,640,397 5,147,995 34,434,144 199,446,873
The accompanying notes form an integral part of the financial statements.
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CASH FLOW STATEMENTFor the year ended 31 December 2005
20052005200520052005 20042004200420042004
RMRMRMRMRM RMRMRMRMRM
CASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 18,235,31218,235,31218,235,31218,235,31218,235,312 15,689,033
Adjustment for:
Provision for retirement benefits ----- 1,564,994
Write back of provision for retirement benefits (3,153,112(3,153,112(3,153,112(3,153,112(3,153,112))))) -
Impairment of Investment 30,42030,42030,42030,42030,420 22,597
Bad debts written off 6,775,4026,775,4026,775,4026,775,4026,775,402 7,796,491
Allowance for doubtful debts 9,997,4869,997,4869,997,4869,997,4869,997,486 4,808,097
Write back of allowance for doubtful debts (7,420,048(7,420,048(7,420,048(7,420,048(7,420,048))))) (7,783,662)
Write back of provision for obsolete inventories (615,571(615,571(615,571(615,571(615,571))))) -
Net cash generated from/(used in)operating activities 8,057,98,057,9998,057,9998,057,9998,057,9998,057,999 (21,580,868)
CASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of a subsidiary (360,998(360,998(360,998(360,998(360,998))))) -
Dividends received 485,939485,939485,939485,939485,939 262,526
Interest received 156,441156,441156,441156,441156,441 200,467
Purchase of property, plant and equipment (16,486,771(16,486,771(16,486,771(16,486,771(16,486,771))))) (9,415,716)
Proceeds from disposal of property, plant and equipment 139,000139,000139,000139,000139,000 83,737
Withdrawal/(placement) of fixed deposits 1,190,3311,190,3311,190,3311,190,3311,190,331 (79,331)
Net cash used in investing activities (14,876,058(14,876,058(14,876,058(14,876,058(14,876,058))))) (8,948,317)
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20052005200520052005 20042004200420042004
RMRMRMRMRM RMRMRMRMRM
CASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIES
(Repayment)/drawdown of short term borrowings (20,372,433(20,372,433(20,372,433(20,372,433(20,372,433))))) 39,677,200
Repayment of hire purchase and lease (3,806,571(3,806,571(3,806,571(3,806,571(3,806,571))))) (797,217)
Drawdown/(repayment) of long term borrowings 33,873,74033,873,74033,873,74033,873,74033,873,740 (12,000,000)
Payment of retirement benefits (1,561,050(1,561,050(1,561,050(1,561,050(1,561,050))))) (3,927,959)
Proceeds from issuance of ordinary shares ----- 14,365
Expenses in relation to prior year issuance of ordinary shares ----- (44,000)
Net cash generated from financing activities 6,167,6486,167,6486,167,6486,167,6486,167,648 21,349,559
NET DECREASE IN CASH AND CASH EQUIVALENTSNET DECREASE IN CASH AND CASH EQUIVALENTSNET DECREASE IN CASH AND CASH EQUIVALENTSNET DECREASE IN CASH AND CASH EQUIVALENTSNET DECREASE IN CASH AND CASH EQUIVALENTS (650,411(650,411(650,411(650,411(650,411))))) (9,179,626)
CASH AND CASH EQUIVALENTS AT 1 JANUARICASH AND CASH EQUIVALENTS AT 1 JANUARICASH AND CASH EQUIVALENTS AT 1 JANUARICASH AND CASH EQUIVALENTS AT 1 JANUARICASH AND CASH EQUIVALENTS AT 1 JANUARI (3,139,039) (3,139,039) (3,139,039) (3,139,039) (3,139,039) 6,040,587
CASH AND CASH EQUIVALENTS AT 31 DECEMBER (NOTE 22)CASH AND CASH EQUIVALENTS AT 31 DECEMBER (NOTE 22)CASH AND CASH EQUIVALENTS AT 31 DECEMBER (NOTE 22)CASH AND CASH EQUIVALENTS AT 31 DECEMBER (NOTE 22)CASH AND CASH EQUIVALENTS AT 31 DECEMBER (NOTE 22) (3,789,450(3,789,450(3,789,450(3,789,450(3,789,450))))) (3,139,039)
The accompanying notes form an integral part of the financial statements.
CASH FLOW STATEMENTFor the year ended 31 December 2005
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NOTES TO THE FINANCIAL STATEMENTS31 December 2005
1.1.1.1.1. CORPORATE INFORMATIONCORPORATE INFORMATIONCORPORATE INFORMATIONCORPORATE INFORMATIONCORPORATE INFORMATION
The principal activities of the Company are the publication, printing and distribution of newspapers. The principal activities of
the subsidiaries are described in Note 13. There have been no significant changes in the nature of the principal activities during
the financial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Board of
Bursa Malaysia Securities Berhad (“BMSB”). The principal place of business of the Company is located at Lot 7.01, Aras 7,
Menara PGRM, No. 8, Jalan Pudu Ulu, 56100 Cheras, Kuala Lumpur.
The number of employees in the Group and in the Company at the end of the financial year were 1,841 (2004: 1,816) and 1,344
(2004: 1,271) respectively.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on
Goodwill represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets
and liabilities of a subsidiary or associate at the date of acquisition.
Goodwill or reserve on consolidation is expensed off or credited to the income statement in the year of acquisition.
(d)(d)(d)(d)(d) Investments in Subsidiaries and AssociatesInvestments in Subsidiaries and AssociatesInvestments in Subsidiaries and AssociatesInvestments in Subsidiaries and AssociatesInvestments in Subsidiaries and Associates
The Company's investments in subsidiaries and associates are stated at cost less impairment losses. The policy for the
recognition and measurement of impairment losses is in accordance with Note 2(n).
On disposal of investments, the difference between net disposal proceeds and their carrying amounts is recognised in the
income statement.
(e)(e)(e)(e)(e) Property, Plant and Equipment and DepreciationProperty, Plant and Equipment and DepreciationProperty, Plant and Equipment and DepreciationProperty, Plant and Equipment and DepreciationProperty, Plant and Equipment and Depreciation
Property, plant and equipment are stated at cost or valuation less accumulated depreciation and impairment losses. The
policy for the recognition and measurement of impairment losses is in accordance with Note 2(n).
The land, building, plant and equipment have not been revalued since they were first revalued in 1986. The directors have
not adopted a policy of regular revaluation of such assets. As permitted under the transitional provisions of IAS 16 (Revised)
: Property, Plant and Equipment adopted by the Malaysian Accounting Standards Board, these assets continue to be
stated at their 1986 valuation less accumulated depreciation. Any revaluation increase is credited to equity as a revaluation
(b)(b)(b)(b)(b) Basis of Consolidation (cont’d)Basis of Consolidation (cont’d)Basis of Consolidation (cont’d)Basis of Consolidation (cont’d)Basis of Consolidation (cont’d)
(e)(e)(e)(e)(e) Property, Plant and Equipment and Depreciation (cont’d)Property, Plant and Equipment and Depreciation (cont’d)Property, Plant and Equipment and Depreciation (cont’d)Property, Plant and Equipment and Depreciation (cont’d)Property, Plant and Equipment and Depreciation (cont’d)
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(h)(h)(h)(h)(h) LeasesLeasesLeasesLeasesLeases
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incident to
ownership. All other leases are classified as operating leases.
Publishing, distribution and advertisements 358,653,175358,653,175358,653,175358,653,175358,653,175 347,125,451 292,144,082292,144,082292,144,082292,144,082292,144,082 268,137,746
Allowance for doubtful debts 4,762,0014,762,0014,762,0014,762,0014,762,001 5,308,938 9,997,4869,997,4869,997,4869,997,4869,997,486 4,808,097
Write back of allowance for doubtful debts (7,904,772(7,904,772(7,904,772(7,904,772(7,904,772))))) (7,957,554) (7,420,048(7,420,048(7,420,048(7,420,048(7,420,048))))) (7,783,662)
Bad debts written off 6,796,7556,796,7556,796,7556,796,7556,796,755 7,805,916 6,775,4026,775,4026,775,4026,775,4026,775,402 7,796,491
Bad debts recovered (93,081(93,081(93,081(93,081(93,081))))) (428,627) (15,856(15,856(15,856(15,856(15,856))))) -
Allowance for inventories obsolescence 26,84726,84726,84726,84726,847 361,278 - -
Write back of allowance for obsolete inventories (569,778 (569,778 (569,778 (569,778 (569,778))))) (275,230) (615,571(615,571(615,571(615,571(615,571))))) -
Property, plant and equipment written off 754,261754,261754,261754,261754,261 341,243 233,459233,459233,459233,459233,459 527
Impairment of investments 815,677815,677815,677815,677815,677 22,597 30,42030,42030,42030,42030,420 22,597
Write back of impairment of investments ----- (183,509) ----- -
Interest expense on borrowings and overdrafts 6,490,7116,490,7116,490,7116,490,7116,490,711 5,981,975 6,108,0106,108,0106,108,0106,108,0106,108,010 5,285,683
Interest expense on hire purchase
and finance lease 605,576605,576605,576605,576605,576 401,652 459,143459,143459,143459,143459,143 114,192
7.7.7.7.7. PROFIT FROM OPERATIONSPROFIT FROM OPERATIONSPROFIT FROM OPERATIONSPROFIT FROM OPERATIONSPROFIT FROM OPERATIONS
For the purpose of calculating diluted earnings per share, the net profit for the year and the weighted average number of
ordinary shares in issue during the financial year have been adjusted for the dilutive effects of all potential ordinary shares,
i.e. share options granted to executives.
10. EARNINGS PER SHARE (CONT’D)10. EARNINGS PER SHARE (CONT’D)10. EARNINGS PER SHARE (CONT’D)10. EARNINGS PER SHARE (CONT’D)10. EARNINGS PER SHARE (CONT’D)
GROUPGROUPGROUPGROUPGROUP
20052005200520052005 20042004200420042004
Net profit for the year (RM) 21,325,87221,325,87221,325,87221,325,87221,325,872 12,496,274
Weighted average number of ordinary shares in issue 109,224,337109,224,337109,224,337109,224,337109,224,337 109,222,247
Weighted average number of ordinary shares which would
be issued for assumed exercise of ESOS 294,752294,752294,752294,752294,752 -
Adjusted weighted average number of ordinary shares in
issued and issuable 109,519,089109,519,089109,519,089109,519,089109,519,089 109,222,247
Diluted earnings per share (sen) 19.4719.4719.4719.4719.47 11.44
There was no dilution of earnings per share for the previous financial year since the effect of ESOS was anti-dilutive.
At the forthcoming Annual General Meeting, a first and final dividend in respect of the current financial year ended 31 December
2005, of 2.5% less of 28% taxation on 109,224,337 ordinary shares, amounting to a dividend payable of RM1,966,038 (1.80
sen net per ordinary share) will be proposed for shareholders' approval. The financial statements for the current financial year
do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in shareholders'
equity as an appropriation of retained profits in the next financial year ending 31 December 2006.
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12. PROPERTY, PLANT AND EQUIPMENT12. PROPERTY, PLANT AND EQUIPMENT12. PROPERTY, PLANT AND EQUIPMENT12. PROPERTY, PLANT AND EQUIPMENT12. PROPERTY, PLANT AND EQUIPMENT
Land andLand andLand andLand andLand and work-in-work-in-work-in-work-in-work-in- plant andplant andplant andplant andplant and OtherOtherOtherOtherOther
Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004 3,471,579 - 11,413,285 9,073,835 23,958,699
12. PROPERTY, PLANT AND EQUIPMENT (12. PROPERTY, PLANT AND EQUIPMENT (12. PROPERTY, PLANT AND EQUIPMENT (12. PROPERTY, PLANT AND EQUIPMENT (12. PROPERTY, PLANT AND EQUIPMENT (CONT’DCONT’DCONT’DCONT’DCONT’D)))))
Land andLand andLand andLand andLand and work-in-work-in-work-in-work-in-work-in- plant andplant andplant andplant andplant and OtherOtherOtherOtherOther
12.12.12.12.12. PROPERTY, PLANT AND EQUIPMENT (PROPERTY, PLANT AND EQUIPMENT (PROPERTY, PLANT AND EQUIPMENT (PROPERTY, PLANT AND EQUIPMENT (PROPERTY, PLANT AND EQUIPMENT (CONT’DCONT’DCONT’DCONT’DCONT’D)))))
* LAND AND BUILDINGS* LAND AND BUILDINGS* LAND AND BUILDINGS* LAND AND BUILDINGS* LAND AND BUILDINGS
Long termLong termLong termLong termLong term Short termShort termShort termShort termShort term
Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004 365,112 2,496,407 610,060 3,471,579
Land andLand andLand andLand andLand and work-in-work-in-work-in-work-in-work-in- plant andplant andplant andplant andplant and OtherOtherOtherOtherOther
Land andLand andLand andLand andLand and work-in-work-in-work-in-work-in-work-in- plant andplant andplant andplant andplant and OtherOtherOtherOtherOther
Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004 2,798,682 - 9,545,519 5,140,509 17,484,710
* LAND AND BUILDINGS* LAND AND BUILDINGS* LAND AND BUILDINGS* LAND AND BUILDINGS* LAND AND BUILDINGS
Long termLong termLong termLong termLong term Short termShort termShort termShort termShort term
Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004Depreciation charge for 2004 119,819 2,081,163 597,700 2,798,682
** Other assets consist of furniture, fixtures and fittings, office equipment, computer system and computer equipment, billboards,
light box display and renovations.
(a) During the year, the Group and the Company acquired property, plant and equipment with an aggregate cost of RM38,957,063
(2004: RM12,186,722) and RM36,836,321 (2004: RM9,865,716) respectively of which RM20,141,033 (2004: RM46,500)
and RM20,349,550 (2004: RM450,000) respectively were acquired by means of term loans, hire purchase and lease
arrangements.
12. PROPERTY, PLANT AND EQUIPMENT (12. PROPERTY, PLANT AND EQUIPMENT (12. PROPERTY, PLANT AND EQUIPMENT (12. PROPERTY, PLANT AND EQUIPMENT (12. PROPERTY, PLANT AND EQUIPMENT (CONT’DCONT’DCONT’DCONT’DCONT’D)))))
NOTES TO THE FINANCIAL STATEMENTS31 December 2005
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Net book value of property, plant and equipment held under hire purchase and finance lease agreements are as follows:
Long term leasehold land and buildings 83,295,50283,295,50283,295,50283,295,50283,295,502 73,167,445 80,520,23080,520,23080,520,23080,520,23080,520,230 71,308,449
Plant and machinery 56,769,29856,769,29856,769,29856,769,29856,769,298 53,973,737 56,544,54156,544,54156,544,54156,544,54156,544,541 53,287,489
Country ofCountry ofCountry ofCountry ofCountry of Held (%)Held (%)Held (%)Held (%)Held (%) PrincipalPrincipalPrincipalPrincipalPrincipal
Name of SubsidiariesName of SubsidiariesName of SubsidiariesName of SubsidiariesName of Subsidiaries IncorporationIncorporationIncorporationIncorporationIncorporation 20052005200520052005 20042004200420042004 ActivitiesActivitiesActivitiesActivitiesActivities
Utusan Publications and
Distributors Sdn Bhd Malaysia 100 100 Publications and distribution of books
Utusan Printcorp Sdn Bhd Malaysia 100 100 Commercial printing
Utusan Karya Sdn Bhd Malaysia 100 100 Publication of magazines
Juasa Holdings Sdn Bhd Malaysia 100 100 Investment holding
Utusan Media Sales Sdn Bhd Malaysia 100 100 Print and radio advertising
UPD Sdn Bhd Malaysia 100 100 Outdoor advertising
Utusan Sinar Media Sdn Bhd Malaysia 100 100 Outdoor advertising
PT. Sinar Media Advertising* Indonesia 100 100 Outdoor advertising
PT. MitraCipta InterNusa* Indonesia - 80 Outdoor advertising
Advance Screen Sdn Bhd** Malaysia 51 51 Printing of silkscreen posters
Perfisio Solutions Sdn Bhd Malaysia 100 100 Information technology and multimedia
Utusan Sight & Sound Sdn Bhd Malaysia 100 100 Video post-production editing
VNR Media Technologies Sdn Bhd Malaysia 100 100 Provision of virtual newsroom
infrastructure
Utusan Binders Sdn Bhd Malaysia 100 100 Binding of books and publications
Utusan Events Management Sdn Bhd Malaysia 100 100 Exhibition and exposition organiser
Net Space Learning Sdn Bhd Malaysia 100 100 Information technology and multimedia
U-Print Sdn Bhd Malaysia 100 100 Printing of security documents
Net Space Production Sdn Bhd Malaysia 100 100 Dormant
Utusan Audio Sdn Bhd Malaysia 100 100 Dormant
Utusan Colourscan Sdn Bhd Malaysia 100 100 Dormant
Juasa Properties Sdn Bhd Malaysia 100 100 Dormant
KL Recorder Sdn Bhd Malaysia 100 100 Dormant
Utusan Digital Sdn Bhd Malaysia 100 100 Dormant
Tintarona Publications Sdn Bhd Malaysia 100 100 Publications and distribution of books
Advance Web Print Sdn Bhd Malaysia 100 100 Dormant
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13.13.13.13.13. INVESTMENT IN SUBSIDIARIES (CONT’D)INVESTMENT IN SUBSIDIARIES (CONT’D)INVESTMENT IN SUBSIDIARIES (CONT’D)INVESTMENT IN SUBSIDIARIES (CONT’D)INVESTMENT IN SUBSIDIARIES (CONT’D)
Country ofCountry ofCountry ofCountry ofCountry of Held (%)Held (%)Held (%)Held (%)Held (%) PrincipalPrincipalPrincipalPrincipalPrincipal
Name of SubsidiariesName of SubsidiariesName of SubsidiariesName of SubsidiariesName of Subsidiaries IncorporationIncorporationIncorporationIncorporationIncorporation 20052005200520052005 20042004200420042004 ActivitiesActivitiesActivitiesActivitiesActivities
Utustar (Malaysia) Sdn Bhd Malaysia 100100100100100 100 Dormant
At 1 January (7,347,126(7,347,126(7,347,126(7,347,126(7,347,126))))) (3,240,604) (9,014,341(9,014,341(9,014,341(9,014,341(9,014,341))))) (5,093,093)
Recognised in the income statement (Note 9) (4,055,514(4,055,514(4,055,514(4,055,514(4,055,514))))) (4,106,522) (4,141,692) (4,141,692) (4,141,692) (4,141,692) (4,141,692) (3,921,248)
At 31 December (11,402,640(11,402,640(11,402,640(11,402,640(11,402,640))))) (7,347,126) (13,156,033(13,156,033(13,156,033(13,156,033(13,156,033))))) (9,014,341)
Country ofCountry ofCountry ofCountry ofCountry of Held (%)Held (%)Held (%)Held (%)Held (%) PrincipalPrincipalPrincipalPrincipalPrincipal
Name of AssociatesName of AssociatesName of AssociatesName of AssociatesName of Associates IncorporationIncorporationIncorporationIncorporationIncorporation 20052005200520052005 20042004200420042004 ActivitiesActivitiesActivitiesActivitiesActivities
14.14.14.14.14. INVESTMENT IN ASSOCIATES (CONT’D)INVESTMENT IN ASSOCIATES (CONT’D)INVESTMENT IN ASSOCIATES (CONT’D)INVESTMENT IN ASSOCIATES (CONT’D)INVESTMENT IN ASSOCIATES (CONT’D)
Details of associates are as follows:
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The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:
Deferred Tax Liabilities of the Group:Deferred Tax Liabilities of the Group:Deferred Tax Liabilities of the Group:Deferred Tax Liabilities of the Group:Deferred Tax Liabilities of the Group:
At 1 January 2005 (18,262,574) 1,557,216 (16,705,358)
Recognised in the income statement (2,390,914) (1,120,285) (3,511,199)
At 31 December 2005 (20,653,488) 436,931 (20,216,557)
At 1 January 2004 (17,415,120) 2,927,402 (14,487,718)
Recognised in the income statement (847,454) (1,370,186) (2,217,640)
At 31 December 2004 (18,262,574) 1,557,216 (16,705,358)
Deferred Tax Assets of the Group:Deferred Tax Assets of the Group:Deferred Tax Assets of the Group:Deferred Tax Assets of the Group:Deferred Tax Assets of the Group:
Deferred Tax Liabilities of the Company:Deferred Tax Liabilities of the Company:Deferred Tax Liabilities of the Company:Deferred Tax Liabilities of the Company:Deferred Tax Liabilities of the Company:
At 1 January 2005 (17,510,515) 1,557,216 (15,953,299)
Recognised in the income statement (2,717,702) (1,095,159) (3,812,861)
At 31 December 2005 (20,228,217) 462,057 (19,766,160)
At 1 January 2004 (16,124,203) 2,927,402 (13,196,801)
Recognised in the income statement (1,386,312) (1,370,186) (2,756,498)
At 31 December 2004 (17,510,515) 1,557,216 (15,953,299)
Deferred Tax Assets of the Company:Deferred Tax Assets of the Company:Deferred Tax Assets of the Company:Deferred Tax Assets of the Company:Deferred Tax Assets of the Company:
Present value of funded defined benefit obligations 20,671,78520,671,78520,671,78520,671,78520,671,785 27,092,446 20,671,78520,671,78520,671,78520,671,78520,671,785 27,092,446
Fair value of plan assets (3,895,966(3,895,966(3,895,966(3,895,966(3,895,966))))) (3,348,622) (3,895,966(3,895,966(3,895,966(3,895,966(3,895,966))))) (3,348,622)
22.22.22.22.22. CASH AND CASH EQUIVALENTS (CONT’D)CASH AND CASH EQUIVALENTS (CONT’D)CASH AND CASH EQUIVALENTS (CONT’D)CASH AND CASH EQUIVALENTS (CONT’D)CASH AND CASH EQUIVALENTS (CONT’D)
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The amounts recognised in the income statement are as follows:
At 1 January 24,981,31724,981,31724,981,31724,981,31724,981,317 27,402,453 21,362,47121,362,47121,362,47121,362,47121,362,471 23,736,698
Amounts recognised in the income statement (4,108,177(4,108,177(4,108,177(4,108,177(4,108,177))))) 1,778,800 (3,153,112(3,153,112(3,153,112(3,153,112(3,153,112))))) 1,564,994
Within and up to one year 87,365,54687,365,54687,365,54687,365,54687,365,546 112,301,621 84,151,07984,151,07984,151,07984,151,07984,151,079 105,565,191
After one and up to two years 12,182,82512,182,82512,182,82512,182,82512,182,825 46, 866,465 11,957,59411,957,59411,957,59411,957,59411,957,594 46,000,000
After two and up to five years 33,366,66033,366,66033,366,66033,366,66033,366,660 644,461 32,748,92232,748,92232,748,92232,748,92232,748,922 -
Above five years 51,544,09451,544,09451,544,09451,544,09451,544,094 2,783,482 51,291,73351,291,73351,291,73351,291,73351,291,733 2,605,200
25. HIRE PURCHASE AND FINANCE LEASE PAYABLES25. HIRE PURCHASE AND FINANCE LEASE PAYABLES25. HIRE PURCHASE AND FINANCE LEASE PAYABLES25. HIRE PURCHASE AND FINANCE LEASE PAYABLES25. HIRE PURCHASE AND FINANCE LEASE PAYABLES
At 1 January/31 December 500,000,000500,000,000500,000,000500,000,000500,000,000 500,000,000 500,000,000500,000,000500,000,000500,000,000500,000,000 500,000,000
Issued and fully paid:Issued and fully paid:Issued and fully paid:Issued and fully paid:Issued and fully paid:
At 1 January 109,224,337109,224,337109,224,337109,224,337109,224,337 109,215,837 109,224,337109,224,337109,224,337109,224,337109,224,337 109,215,837
Issued for cash ----- - ----- -
Pursuant to ESOS ----- 8,500 ----- 8,500
At 31 December 109,224,337109,224,337109,224,337109,224,337109,224,337 109,224,337 109,224,337109,224,337109,224,337109,224,337109,224,337 109,224,337
The Company implemented an ESOS which is governed by the by-laws and was approved by the shareholders at an Extraordinary
General Meeting held on 27 May 2003.
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The salient features of the ESOS are as follows:
(i) The ESOS shall be in force for a period of five years from the date of the receipt of the last of the requisite approvals.
(ii) Eligible executives are employees of the Company who have been confirmed in the employment of the Company and have
served for at least one year as at the date of the offer. They shall not be participants of or have not been offered option(s)
under any other employee's share option scheme implemented by any other company within the Group, which is in force
for the time being. In terms of eligible directors, the directors must be involved in the daily operations and have been
confirmed in the employment of the Company. The eligibility of participation in the ESOS shall be at the discretion of the
Options Committee appointed by the Board of Directors.
(iii) The total number of shares to be issued under the ESOS shall not exceed in aggregate 10% of the total issued share capital
of the Company at any one time at the point of granting of the option during the tenure of the ESOS.
(iv) The option price for each share shall be the average of the mean market quotation of the shares of the Company in the
daily official list issued by the BMSB for the five trading days preceding the date of offer, at a discount of not more than
10%, or the par value of the shares of the Company of RM1, whichever is higher.
(v) Not more than 50% of the new shares available under the Scheme should be allocated, in aggregate to eligible directors
and senior management, and not more than 10% of the new shares available under the Scheme should be allocated to any
individual eligible director or eligible executive who, either singly or collectively through his/her associates, holds 20% or
more of the issued and paid-up share capital of the Company.
(vi) An option granted under the ESOS shall be capable of being exercised by the grantee by notice in writing to the Company
commencing from the date of the offer but before the expiry of five years from the date of the receipt of the last of the
requisite approvals.
(vii) All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all respects
with the existing ordinary shares of the Company.
28.28.28.28.28. SHARE CAPITAL (CONT’D)SHARE CAPITAL (CONT’D)SHARE CAPITAL (CONT’D)SHARE CAPITAL (CONT’D)SHARE CAPITAL (CONT’D)
<––––––––––––––––––––––––––<––––––––––––––––––––––––––<––––––––––––––––––––––––––<––––––––––––––––––––––––––<–––––––––––––––––––––––––––––– Number of Share Options ––––––––––––––––––––––––>–––– Number of Share Options ––––––––––––––––––––––––>–––– Number of Share Options ––––––––––––––––––––––––>–––– Number of Share Options ––––––––––––––––––––––––>–––– Number of Share Options ––––––––––––––––––––––––>
Grant Grant Grant Grant Grant ExpiryExpiryExpiryExpiryExpiry ExerciseExerciseExerciseExerciseExercise AtAtAtAtAt GrantedGrantedGrantedGrantedGranted ExercisedExercisedExercisedExercisedExercised LapsedLapsedLapsedLapsedLapsed CancelledCancelledCancelledCancelledCancelled AtAtAtAtAt
Date Date Date Date Date DateDateDateDateDate PricePricePricePricePrice 1 January1 January1 January1 January1 January 31 December31 December31 December31 December31 December
28.28.28.28.28. SHARE CAPITAL (CONT’D)SHARE CAPITAL (CONT’D)SHARE CAPITAL (CONT’D)SHARE CAPITAL (CONT’D)SHARE CAPITAL (CONT’D)
The terms of share options outstanding as at the end of the financial year are as follows:
Details of share options exercised during the previous year and the fair value, at exercise date, of ordinary shares issued are as
follows:
ExerciseExerciseExerciseExerciseExercise Fair value ofFair value ofFair value ofFair value ofFair value of NumberNumberNumberNumberNumber ConsiderationsConsiderationsConsiderationsConsiderationsConsiderations
Approved and contracted for 10,589,30910,589,30910,589,30910,589,30910,589,309 73,517,941 10,589,30910,589,30910,589,30910,589,30910,589,309 73,517,941
The Company has given unsecured corporate guarantees to financial institutions amounting to RM12,088,640 (2004: RM33,093,400) for
banking facilities extended to subsidiaries.
There are several libel suits which involve claims against the Company of which the outcome and compensation, if any, is currently
indeterminable. No provision has been made in the financial statements as at 31 December 2005 as the directors, based on legal advice,
are of the opinion that the probability of the liabilities crystallising is remote.
33.33.33.33.33. SIGNIFICANT RELATED PARTY TRANSACTIONSSIGNIFICANT RELATED PARTY TRANSACTIONSSIGNIFICANT RELATED PARTY TRANSACTIONSSIGNIFICANT RELATED PARTY TRANSACTIONSSIGNIFICANT RELATED PARTY TRANSACTIONS
20052005200520052005 20042004200420042004
RMRMRMRMRM RMRMRMRMRM
GROUPGROUPGROUPGROUPGROUP
Services rendered by Utusan Transport Sdn Bhd and Group, an associated company 7,015,5727,015,5727,015,5727,015,5727,015,572 7,031,358
COMPANYCOMPANYCOMPANYCOMPANYCOMPANY
Services rendered by subsidiaries 16,281,36116,281,36116,281,36116,281,36116,281,361 16,777,415
Rental receivable from subsidiaries 2,772,0002,772,0002,772,0002,772,0002,772,000 2,974,848
Interest receivable from subsidiaries 1,655,6191,655,6191,655,6191,655,6191,655,619 2,048,487
Commission receivables from subsidiaries 4,449,1864,449,1864,449,1864,449,1864,449,186 4,415,904
The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been
established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.
At 31 December 2005At 31 December 2005At 31 December 2005At 31 December 2005At 31 December 2005
Contingent liabilities 32 - - 12,088,640 ***
At 31 December 2004At 31 December 2004At 31 December 2004At 31 December 2004At 31 December 2004
Contingent liabilities 32 - - 33,093,400 ***
***It is not practicable to estimate the fair value of contingent liabilites reliably due to the uncertainties of timing, costs and eventual
outcome.
The following methods and assumptions are used to estimate the fair values of the following classes of financial instruments:
(i)(i)(i)(i)(i) Cash and cash equivalents, trade and other receivables/payables and short term borrowingsCash and cash equivalents, trade and other receivables/payables and short term borrowingsCash and cash equivalents, trade and other receivables/payables and short term borrowingsCash and cash equivalents, trade and other receivables/payables and short term borrowingsCash and cash equivalents, trade and other receivables/payables and short term borrowings
The carrying amounts approximate fair values due to the relatively short term maturity of these financial instruments.
37. SEGMENTAL INFORMATION (CONT’D)37. SEGMENTAL INFORMATION (CONT’D)37. SEGMENTAL INFORMATION (CONT’D)37. SEGMENTAL INFORMATION (CONT’D)37. SEGMENTAL INFORMATION (CONT’D)
37. SEGMENTAL INFORMATION (CONT'D)37. SEGMENTAL INFORMATION (CONT'D)37. SEGMENTAL INFORMATION (CONT'D)37. SEGMENTAL INFORMATION (CONT'D)37. SEGMENTAL INFORMATION (CONT'D)
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LIST OFPROPERTIESAs at 31 December 2005
LandLandLandLandLand Built-upBuilt-upBuilt-upBuilt-upBuilt-up Net BookNet BookNet BookNet BookNet BookAreaAreaAreaAreaArea Area Area Area Area Area ValueValueValueValueValue
Lot 314, Tingkat Factory Utusan’s Printing 69,054 40,805 Leasehold 2,709,824Perusahaan Tiga Building Plant (01.04.2041)Prai IndustrialEstate, Penang(D/P : 02.04.1982)
Lot 6, Jalan P/10 Industrial Bangi Printing 683,260 273,601 Leasehold 70,101,201Bangi Industrial Land Complex (99 years)Estate, Section 10Bandar Baru BangiBangi, Selangor(D/P : 20.12.1995)
Lot 26920 Vacant Land Vacant 407,629 - Leasehold 5,220,793Section 10 (24.03.2083)Wangsa MajuKuala Lumpur(D/P : 13.07.1992)
Lot 351, Jalan Tiga Factory and Vacant 47,244 28,601 Leasehold 767,052Off Jalan Chan Office Building (17.12.2009)Sow LinKuala Lumpur(D/P : 20.12.1979)
46M, Jalan Lima Office Building Company’s HQ 63,855 49,368 Lot 187 2,108,706Off Jalan Chan and Editorial LeaseholdSow Lin Department (02.06.2057)Kuala Lumpur Lot 268(D/P : 10.12.1959) Leasehold
(30.01.2062)
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LIST OFPROPERTIESAs at 31 December 2005
LandLandLandLandLand Built-upBuilt-upBuilt-upBuilt-upBuilt-up Net BookNet BookNet BookNet BookNet BookAreaAreaAreaAreaArea AreaAreaAreaAreaArea ValueValueValueValueValue
17, Jalan Kukoh Factory Building Vacant 115,434 39,200 Leasehold 1,324,637Johor Baru, Johor (06.10.2034)(D/P : 07.10.1974)
Lot PTD 53920 Factory Utusan’s Printing 170,311 21,410 Freehold 4,226,493Jalan Firma 2/1 Building PlantTebrau IndustrialEstate, Johor BaruJohor(D/P : 03.04.1991)
LandLandLandLandLand Built-upBuilt-upBuilt-upBuilt-upBuilt-up Net BookNet BookNet BookNet BookNet BookAreaAreaAreaAreaArea Area Area Area Area Area ValueValueValueValueValue
Lot 438, Jalan Dua Factory Vacant 38,761 23,361 Leasehold 2,602,364Off Jalan Chan Building (14.10.2016)Sow Lin, Kuala Lumpur(D/P : 06.01.1992)
Lot 184, Jalan Lima Factory Newsprint Store 51,972 41,670 Leasehold 168,645Off Jalan Chan Building And Utusan’s (14.12.2063)Sow Lin, Kuala Lumpur Training Centre(D/P : 30.11.1977)
11, Jalan 14/22 Five Storey Utusan Media 5,533 24,170 Leasehold 3,756,475Petaling Jaya Shophouse Sales Sdn Bhd’s (16.12.2086)Selangor Office(D/P : 10.03.1992)
11A, Jalan 14/22 Four Storey Utusan Media 1,539 5,830 Leasehold 585,750Petaling Jaya Shophouse Sales Sdn Bhd’s (16.12.2086)Selangor Office(D/P : 23.10.1989)
12, Jalan SS 22/25 Four Storey UPD Sdn Bhd’s 1,650 5,142 Freehold 495,969Damansara Jaya Shophouse OfficePetaling JayaSelangor(D/P : 28.09.1990)
14, Jalan SS 22/25 Four Storey UPD Sdn Bhd’s 1,650 5,142 Freehold 495,969Damansara Jaya Shophouse OfficePetaling JayaSelangor(D/P : 28.09.1990)
9-2B, Jalan Desa 9/4 Shophouse Vacant - - - 46,812Bandar Country HomesRawang, Selangor(D/P : 31.07.1999)
1 & 3, Jalan 3/91A 3 1/2 Storey Utusan 13,552 12,015 - 3,135,412Taman Shamelin Terrace Publications &Perkasa, Cheras Factory DistributorsKuala Lumpur Sdn Bhd’s Office(D/P : 13.01.1994)
18, Jalan 6/91 1 1/2 Storey Utusan Karya 11,040 - - 729,985Taman Shamelin Terrace Sdn Bhd’s OfficePerkasa, Cheras FactoryKuala Lumpur(D/P : 02.08.1990)
Lot 20 & 22 Single Storey Advance Screen 49,148 13,239 Leasehold 1,783,333Jalan 7, Cheras Jaya Terrace Factory Sdn Bhd’s FactoryBalakong, Selangor and Office(D/P : 19.11.1999)
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ANALYSIS OFSHAREHOLDINGSas at 31 March 2006
Authorised Share Capital - RM500,000,000
Issued and Fully Paid-up Share Capital - RM109,224,337
Class of Shares - Ordinary Shares of RM1.00 each
No. of Shareholders - 6,343
Voting Rights - One voting right for one Ordinary Share
DISTRIBUTION OF SHAREHOLDINGS
Size of HoldingsSize of HoldingsSize of HoldingsSize of HoldingsSize of Holdings Number ofNumber ofNumber ofNumber ofNumber of % of% of% of% of% of Number ofNumber ofNumber ofNumber ofNumber of % of Issued% of Issued% of Issued% of Issued% of Issued
ShareholdersShareholdersShareholdersShareholdersShareholders ShareholdersShareholdersShareholdersShareholdersShareholders Shares HeldShares HeldShares HeldShares HeldShares Held CapitalCapitalCapitalCapitalCapital
DIRECT AND INDIRECT INTERESTS OF DIRECTORSas at 31 March 2006
NamesNamesNamesNamesNames DirectDirectDirectDirectDirect IndirectIndirectIndirectIndirectIndirect % of Issued Capital% of Issued Capital% of Issued Capital% of Issued Capital% of Issued Capital
Names of ShareholdersNames of ShareholdersNames of ShareholdersNames of ShareholdersNames of Shareholders Number of Shares HeldNumber of Shares HeldNumber of Shares HeldNumber of Shares HeldNumber of Shares Held % of Issued Capital% of Issued Capital% of Issued Capital% of Issued Capital% of Issued Capital
1. RHB Nominees (Tempatan) Sdn Bhd
(United Malays National Organisation (UMNO)) 55,113,956 50.46
2. OSK Nominees (Tempatan) Sdn Bhd
Nilam Setar (M) Sdn Bhd 10,900,000 9.98
3. Minister of Finance Malaysia 7,547,459 6.91
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LIST OF TOP THIRTYLARGEST SHAREHOLDERSas at 31 March 2006
Names of ShareholdersNames of ShareholdersNames of ShareholdersNames of ShareholdersNames of Shareholders Number ofNumber ofNumber ofNumber ofNumber of % of Issued% of Issued% of Issued% of Issued% of Issued
Shares HeldShares HeldShares HeldShares HeldShares Held CapitalCapitalCapitalCapitalCapital
1. RHB Nominees (Tempatan) Sdn Bhd
(United Malays National Organisation (UMNO)) 55,113,956 50.46
2. OSK Nominees (Tempatan) Sdn Bhd
(Nilam Setar (M) Sdn Bhd) 10,900,000 9.98
3. Minister of Finance Malaysia 7,547,459 6.91
4. Nilam Setar (M) Sdn Bhd 5,443,000 4.98
5. Aspirasi Sigma Sdn Bhd 3,500,000 3.20
6. Fasa Mahsuri Sdn Bhd 2,000,000 1.83
7. Employees Provident Fund Board 750,200 0.69
8. Lembaga Tabung Haji 679,000 0.62
9. Syarikat Gunung Benum Sdn Bhd 557,000 0.51
10. Hussein Noordin Sdn Bhd 381,000 0.35
11. Senawang Land Sdn Bhd 289,000 0.26
12. Cheah Khee Lin 262,000 0.24
13. HSBC Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for
Siow Wong Yen @ Siow Kwang Hwa) 220,000 0.20
14. Tan Jin Tuan 195,000 0.18
15. HDM Nominees (Asing) Sdn Bhd
(DBS Vickers Secs (S) Pte Ltd for Ishwar Dass) 166,200 0.15
16. Mayban Nominess (Tempatan) Sdn Bhd
(Pledged Securities Account for Lee Keng Hong) 150,000 0.14
17. Lee Choon Hooi 149,000 0.14
18. Ang Hioh 140,000 0.13
19. OSK Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for Koo Yew Chai) 139,000 0.13
20. Koo Yuen Kim 136,000 0.12
21. Loh & Loh Corporation Berhad 133,000 0.12
22. Amsec Nominees (Asing) Sdn Bhd
(Fraser Securities Pte Ltd for Chu Chok Kim @ Chu Tso Chuan) 130,000 0.12
23. Syarikat Jeragan (Holdings) Sdn Bhd 126,563 0.12
24. HSBC Nominees (Tempatan) Sdn Bhd
(HSBC (M) Trustee Bhd for Amnew Frontier) 124,300 0.11
25. Ang Hioh 123,100 0.11
26. Public Nominees (Tempatan) Sdn Bhd
(Pledged Securities Account for Chan Kai Liang) 115,000 0.11
being a member/members of Utusan Melayu (Malaysia) BerhadUtusan Melayu (Malaysia) BerhadUtusan Melayu (Malaysia) BerhadUtusan Melayu (Malaysia) BerhadUtusan Melayu (Malaysia) Berhad hereby appoint
NRIC No. of
or failing him/her,*the Chairman of the Meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the Thirty EighthThirty EighthThirty EighthThirty EighthThirty Eighth Annual
General Meeting of the Company to be held at Dewan Besar, Level 1, Bangunan Tabung Haji, 201, Jalan Tun Razak, 50400 Kuala
Lumpur on WednesdayWednesdayWednesdayWednesdayWednesday, 31 May 200631 May 200631 May 200631 May 200631 May 2006 at 11.00 a.m.11.00 a.m.11.00 a.m.11.00 a.m.11.00 a.m. and at any adjournment thereof.
*My/Our proxy is to vote as indicated below:*My/Our proxy is to vote as indicated below:*My/Our proxy is to vote as indicated below:*My/Our proxy is to vote as indicated below:*My/Our proxy is to vote as indicated below:
No. 1 •To receive and adopt the Financial Statements
No. 2 •To declare a first and final dividend
To re-elect the following Directors under Article 98To re-elect the following Directors under Article 98To re-elect the following Directors under Article 98To re-elect the following Directors under Article 98To re-elect the following Directors under Article 98No. 3 •Tan Sri Mohamed Hashim Ahmad MakaruddinNo. 4 •Dato’ Dr. Firdaus Haji Abdullah
To-reappoint the following Director pursuant toTo-reappoint the following Director pursuant toTo-reappoint the following Director pursuant toTo-reappoint the following Director pursuant toTo-reappoint the following Director pursuant toSection 129(6) of the Companies Act, 1965Section 129(6) of the Companies Act, 1965Section 129(6) of the Companies Act, 1965Section 129(6) of the Companies Act, 1965Section 129(6) of the Companies Act, 1965
No. 5 •Tan Sri Haji Husein Ahmad
No. 6 •To approve the Directors’ fees
No. 7 •To re-appoint Auditors
As Special Business - Ordinary ResolutionsAs Special Business - Ordinary ResolutionsAs Special Business - Ordinary ResolutionsAs Special Business - Ordinary ResolutionsAs Special Business - Ordinary ResolutionsNo. 8 •Directors’ authority pursuant to Section 132C
No. 9 •Directors’ authority pursuant to Section 132D
As Special Business - Special ResolutionAs Special Business - Special ResolutionAs Special Business - Special ResolutionAs Special Business - Special ResolutionAs Special Business - Special ResolutionSpecial 1 •Amendments to the Articles of Association
Please indicate with a tick (x) in the appropriate spaces how you wish your votes to be cast. If you do not indicate how you wish your proxy to vote on any resolution, the proxy
will vote as he thinks fit at his discretion or abstain from voting.
(*Strike out whichever is not desired)
Signature/Common seal of Corporation
Number of Shares Held:
Date:
CDS Account No. of authorised nominee (i)
Number of SharesNumber of SharesNumber of SharesNumber of SharesNumber of Shares PercentagePercentagePercentagePercentagePercentage
Proxy 1 %
Proxy 2 %
Total 100%
For appointment of two proxies, percentage of shareholdingsto be represented by the proxies
NOTE : Appointment of ProxyNOTE : Appointment of ProxyNOTE : Appointment of ProxyNOTE : Appointment of ProxyNOTE : Appointment of Proxyi) Applicable to shares held through a nominee account.ii) 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 andvote in his stead. A proxy need not be a member of the Company.
iii) A member shall be entitled to appoint more than one (1) proxy to attend and voteat the same meeting. Where a member appoints more than one (1) proxy, theappointment shall be invalid unless he specifies the proportion of his holdings tobe represented by each proxy.
iv) The instrument appointing a proxy shall be in writing under the hand of the appointoror of his attorney duly authorised in writing or, if the appointor is a corporation,
either under the common seal or under the hand of an officer or attorney dulyauthorised.
v) Where a member is an authorised nominee as defined under the Central DepositoriesAct, 1991, it may appoint at least one (1) proxy in respect of each Securities Accountit holds with ordinary shares of the Company standing to the credit of the saidSecurities Account.
vi) To be valid the proxy form duly completed must be deposited at the Registrar’sOffice, 20th Floor, Plaza Permata, Jalan Kampar Off Jalan Tun Razak, 50400 KualaLumpur not less than forty eight (48) hours before the time for holding the Meetingor any adjournment thereof.