Beruflich Dokumente
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NOTICE 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 Tun
Razak, 50400 Kuala Lumpur on Wednesday, 31 May 2006 at 11.00 a.m. to transact the following
businesses:
AGENDA
AS ORDINARY BUSINESS
1. To receive and adopt the audited Financial Statements for the financial year ended 31 December 2005 and the reports of the
Directors and Auditors thereon. (Ordinary Resolution 1)
2. To declare a first and final dividend for the year ended 31 December 2005. (Ordinary Resolution 2)
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)
4. To approve the payment of Directors’ fees for the year ended 31 December 2005.
(Ordinary Resolution 6)
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)
2
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
AS SPECIAL BUSINESS
To consider and, if thought fit, to pass with or without any modifications, the following Resolutions:
ORDINARY RESOLUTIONS
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)
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
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.”
(Ordinary Resolution 9)
SPECIAL RESOLUTION
8. “THAT the following amendments to the existing Articles of Association of the Company be and are hereby approved:
(Special Resolution 1)
Article 2
The existing Article 2 be amended by deleting the definitions for ‘Central Depository’, ‘Depositor’, ‘the Directors’, ‘Record of
Depositors’ and ‘Stock Exchange’ and substituting in their place the following new definitions:
Words Meanings
Central Depository Bursa Malaysia Depository Sdn Bhd (165570-W) including any further change to its name;
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.” 3
FURTHER 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.
SHARINA SAIDON
(LS 006127)
Company Secretary
Kuala Lumpur
8 May 2006
GENERAL NOTES:
1. Appointment of Proxy
i) A member of the Company entitled to attend and vote at this meeting may appoint a proxy (or in a case of a corporation
to appoint a representative) to attend and vote in his stead. A proxy need not be a member of the Company.
ii) A member 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.
EXPLANATORY NOTES:
1. Ordinary Resolution 9
4 The proposed Ordinary Resolution 9, if passed, will empower the Directors of the Company to issue and allot shares in the
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
Company from time to time and for such purposes as the Directors consider would be in the best interest of the Company.
This authority will, unless revoked by the Company in general meeting, expire on the next Annual General Meeting of the
Company.
2. Special Resolution 1
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.
STATEMENT ACCOMPANYING
NOTICE OF ANNUAL GENERAL
MEETING OF THE COMPANY
(Pursuant to Paragraph 8.28(2) of the Listing Requirements of the Bursa Malaysia Securities Berhad)
1. Names of Individuals who are standing for re-election at the Thirty Eighth Annual General Meeting of the Company are as
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
03 03 03
347,518 13,054 9.03
04 04 04
364,633 19,576 11.44
05 05 05
372,172 29,195 19.52
01 01 01
1.42 109,959 397,041
02 02 02
1.54 119,486 401,840
03 03 03
1.79 195,358 424,546
04 04 04
1.89 206,310 474,929
05 05 05
2.07 226,210 508,706
AS AT 31 DECEMBER
RM’000 2005 2004 2003 2002 2001
Net Tangible Asset Per Share (RM) 2.07 1.89 1.79 1.54 1.42
PROFILE OF
THE BOARD
OF DIRECTORS
12 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
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
14
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
Other Information of Directors
i) Family Relationship
None of the Directors have any family relationship with each other and/or major shareholders of the Company.
DIRECTOR ATTENDANCE
Tan Sri Mohamed Hashim Ahmad Makaruddin Encik Che Mat Abd Ghani Encik Abdul Kadir Mansuri
Executive Chairman Group Manager, Procurement and Manager, Credit Control
Administration
Encik Mohd Nasir Ali Puan Maimunah Abd Rashid
Group Executive Director Cik Sharina Saidon Manager, Editorial Department
Company Secretary/Senior
Datuk Mohd Khalid Mohd Manager, Legal Puan Sabrina Yon
Group Editor-in-Chief Manager, Corporate
Encik Jamal Khail Mohd Isa Communications
Tuan Haji Hamzah Md Sidek General Manager, Production
Deputy Group Editor-in-Chief Puan Faridah Hashim
Encik Zulkafli Bakar Manager, Internal Audit
Cik W. Nor Asmah W. Ismail General Manager, Marketing/Circulation
Chief Financial Officer Puan Fouziah Abd Rahim
Ir. Ahmad Hilmi Hashim Head, Information Centre
Dr. Ahmad Hairi Abu Bakar General Manager, Property Services
Chief Technology Officer Tuan Syed Agil Syed Jaafar
Encik Mohd Nazlan Osman Head, Photography Unit
Cik Roselina Johari Senior Manager, Human Resource
Group Manager, Publishing
Encik Fareed Abdul Ghani
Encik Adi Satria Ahmad Senior Manager, Corporate Services
Group Manager, Advertising and Risk Management
SENIOR MANAGEMENT
17
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 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.
18
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
AUDIT
COMMITTEE
REPORT
MEMBERS
Dato’ Ab Halim Mohyiddin - Chairman
Independent Non-Executive Director and a
member of the Malaysian Institute of Accountants
FUNCTIONS AND DUTIES n) to review and ensure the co-ordination of audit approach
The duties of the Committee shall be: between the External and Internal Auditors.
a) to consider and recommend the appointment of the External o) to consider other topics as deemed fit.
Auditors, the audit fee, and any questions of resignation or
dismissal. MEETINGS
b) to discuss with the External Auditors before the audit a) Meetings shall be held not less than four (4) times a year,
commences, the nature and scope of the audit, and ensure with due notice of issues to be discussed and should record
co-ordination where more than one audit firm is involved. its conclusion in discharging its duties and responsibilities.
c) to review the quarterly and annual financial statements b) The quorum for a meeting of the Committee shall be two
before submission to the Board, focusing particularly on: (2) members. In the absence of the Chairman, the members
- any changes in accounting policies and practices present shall elect a Chairman for the meeting from amongst
- major judgemental areas the members present.
- significant adjustments resulting from the audit c) The meetings of the Committee shall be governed by the
- the going concern assumption provisions contained in the Memorandum and Articles of
- compliance with stock exchange and legal requirements Association of Utusan Melayu (Malaysia) Berhad for
d) to discuss problems and reservations arising from the regulating the meetings and proceedings of Directors.
statutory audits, and any matters the Auditor may wish to d) Directors of the Board who are not members of the
discuss (in the absence of Management or Group Executive Committee may also attend the meetings of the Committee,
Director where/when necessary). but they shall not have any voting rights.
e) to keep under review the effectiveness of internal control e) In addition to the Committee members, the Chief Financial
systems and in particular review the External Auditors’ Officer and Head of Internal Audit are invited for attendance
Management Letter and Management’s response. at each meeting. The Head of departments/subsidiaries of
f) to review the adequacy of the scope, functions and the Group and their Management team will attend when
resources of the internal audit function, and that it has the audit reports on their departments/subsidiaries of the Group
necessary authority to carry out its work. are tabled for discussion.
20 g) to review the internal audit programme and results of the f) The Committee shall meet the External Auditors at least twice
internal audit process and where necessary ensure that a year. At least once a year the Committee shall meet the
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
appropriate action is taken on the recommendations of the External Auditors without the Management or the Executive
internal audit function. Directors present.
h) to approve the appointment of the head of the Internal Audit g) The Company Secretary shall be appointed as the Secretary
Department. of the Committee who shall circulate the minutes of meeting
i) to review any appraisal or assessment of the performance of the Committee to all members of the Board.
of members of the internal audit function.
j) to approve any appointment or termination of senior staff ATTENDANCE AT MEETINGS
members of the internal audit function. A total of seven (7) meetings were held during the financial
k) to inform itself of resignations of internal audit staff members year ended 31 December 2005. The details of attendance of
and provide the resigning staff member an opportunity to the Committee members are as follows:
submit his reason for resigning. NAME ATTENDANCE OF MEETINGS
l) to review any related party transactions within the Company
Dato’ Ab Halim Mohyiddin 7/7
or Group and any other major transactions outside the
Encik Mohd Nasir Ali 7/7
normal course of business of the Company and Group.
Encik Kamal Khalid 4/7
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.
SUMMARY OF ACTIVITIES OF THE COMMITTEE GROUP INTERNAL AUDIT DEPARTMENT
The following activities were performed by the Audit Committee The Group Internal Audit Department is responsible to undertake
during the financial year ended 31 December 2005: regular and systematic review of the systems of controls so as
a) Reviewed with the External Auditors their audit plan, strategy to provide reasonable assurance that such systems continue to
and scope of the statutory audits of the Group accounts for operate satisfactorily and effectively in the Company and the
the financial year ended 31 December 2005; Group. The Department is also responsible for the conduct of
b) Reviewed with the External Auditors the result and issues regular and systematic reviews of environmental, safety and
arising from their audit of the year-end financial statements health issues in the Company and the Group.
and their resolutions of such issues highlighted in their report
to the Committee; Throughout the financial year under review, the Group Internal
c) Reviewed the performance and independence of the Audit Department conducted operational and information
External Auditors before recommending to the Board their system audit assignments and follow up audit on the
re-appointment and remuneration; departments and subsidiaries of the Group in accordance to
d) Reviewed with the Internal Audit their audit plan for the the Annual Audit Plan or as special ad-hoc audit at
financial year ended 31 December 2005 and ensuring the Management’s request.
principal risk areas (identified by the Risk Management
framework) are adequately identified and covered in the The resulting reports of audits undertaken were presented to
plan; the Audit Committee and forwarded to the Management’s
e) Reviewed the various Internal Audit reports and appraised concerned for their attention and necessary actions on reported
the adequacy and effectiveness of Management responses weaknesses and lapses.
thereto and ensuring significant findings are adequately
addressed by Management on a timely basis; The Management is responsible for ensuring that corrective
f) Reviewed the quarterly results and the audited financial actions on reported weaknesses/deficiencies as recommended
statements of the Group with the Chief Financial Officer are taken within the required time frame. The Management is
and the External Auditors before recommending to the Board also responsible for ensuring that a written report on action
for their approval and its announcement. Any significant planned or completed is sent to the Chairman of the Audit 21
issues resulting from the audit of the financial statements Committee and the Head of Internal Audit.
Board’s Responsibilities
The 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.
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.
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.
Statement made in accordance with the resolution of the Board of Directors dated 12 April 2006.
23
Introduction
The 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.
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.
Details of each Director’s attendance for the financial year ended 31 December 2005 are as follows:
Directors are also encouraged to seek external independent professional advice where necessary, to assist them in 25
making well-informed decision whether as a full Board or in their individual capacity, at the Company’s expense.
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.
STATEMENT ON
CORPORATE
GOVERNANCE
The Directors and management attended the following CEP training programme conducted by Bursatra Sdn Bhd:
• Adopting Risk Management System Framework.
• Understanding Key Performance Indicators.
• Management Succession Planning.
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:
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.
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:
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 DIRECTORS
RANGE OF REMUNERATION EXECUTIVE NON-EXECUTIVE
Below RM50,000 - 6
RM450,001 to RM500,000 - -
RM500,001 to RM550,000 1 -
RM550,001 to RM600,000 - - 27
RM600,001 to RM650,000 - -
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.
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.
STATEMENT ON
CORPORATE
GOVERNANCE
The Audit Committee meets with the external auditors without the Management or the Executive Directors presence at
least once a year.
28 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,
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
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.
OTHER
INFORMATION
Required By The Listing Requirements Of The Bursa Malaysia Securities Berhad
Share Buybacks
During the financial year, the Company did not enter into any share buyback transactions.
Non-Audit Fees
The 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 Guarantee
During the financial year, there were no profit guarantees given by the Company.
29
Dear Shareholders,
32
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 REVIEW
I 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.
DIVIDEND
After 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 38 th Annual General Meeting
to be held on 31 May 2006.
OPERATIONAL PERFORMANCE
The Malaysian economy recorded a lower GDP growth of 5.3%
in 2005 as against 7.1% in 2004. During the year, most sectors 33
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.
CORPORATE DEVELOPMENTS
During 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 35
distributed to other regions within peninsular Malaysia before the end of 2006.
CHAIRMAN’S
STATEMENT
36
RELATED PARTY TRANSACTIONS
There 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 OUTLOOK
Despite 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.
37
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.
APPRECIATION
On 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.
38
3 February 2005
UP&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 2005
The 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 2005
The 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.
39
39
8 June 2005
The 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.
CORPORATE
CALENDAR
15 June 2005
The 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 2005
The 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.
28 August 2005
The 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 2005
KOSMO! launched in Penang. The compact newspaper KOSMO!
spreads its wings to the north with the introduction of the Penang
KOSMO! edition.
26 September 2005
The 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 2005
The 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 2005
Excellence...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.
41
41
3 & 4 December 2005 UTUSAN MELAYU (MALAYSIA) BERHAD • LAPORAN TAHUNAN 2005
Utusan Karya Sdn Bhd (‘UKSB’) organised the inaugural Karnival Utusan
Karya Jom Fiesta! at Taman Tasik Permaisuri, Bandar Tun Razak,
Cheras, Kuala Lumpur.
21 December 2005
The Utusan Group signed a collaborative scholarship agreement with
Institute Advertising Communication Training (‘IACT’) at IACT’s office
in Damansara Utama, Petaling Jaya, Selangor.
FINANCIAL STATEMENTS
Directors’ Report 45
Statement by Directors 49
Statutory Declaration 49
44 Income Statement 56
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
Balance Sheet 57
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 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.
RESULTS
GROUP COMPANY
RM RM
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the statement
of changes in equity.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not
substantially affected by any item, transaction or event of a material and unusual nature.
45
DIVIDENDS
In respect of the financial year ended 31 December 2004 as reported in the directors' report of that year:
First and final dividend of 2.5% less 28% taxation, on 109,224,337 ordinary shares declared on 7 June 2005
and paid on 5 August 2005 1,966,038
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 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.
DIRECTORS’ REPORT
DIRECTORS
The names of the directors of the Company in office since the date of the last report and at the date of this report are:
DIRECTORS' BENEFITS
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company
was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or
any other body corporate, other than those arising from the share options granted under Executives’ Share Options Scheme.
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits
included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 6 to the financial
statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related
corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial
interest.
46
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
DIRECTORS' INTERESTS
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:
THE COMPANY
Direct Interest
Encik Mohd Nasir Ali 10,000 - - 10,000
Datuk Mohd Khalid Mohd 8,000 - - 8,000
DIRECTORS' INTERESTS ((CONT’D
CONT’D
CONT’D))
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
corporations during the financial year.
The salient features and other terms of the ESOS are as disclosed in Note 28 to the financial statements.
(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
47
(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the
(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.
DIRECTORS’ REPORT
(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which
secures the liabilities of any other person; or
(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.
(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve
months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their
obligations when they fall due; and
(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial
year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the
Company for the financial year in which this report is made.
SIGNIFICANT EVENTS
The significant events during the financial year is as disclosed in Note 34 to the financial statements.
AUDITORS
The auditors, Ernst & Young, have expressed their willingness to continue in office.
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.
STATUTORY DECLARATION
Pursuant 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, 49
Before me,
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
50 financial statements.
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
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.
2005 2004
Note RM RM
2005 2004
Note RM RM
NON-CURRENT ASSETS
Property, plant and equipment 12 225,158,703 212,351,473
Investment in associates 14 11,815,879 9,992,935
Other investments 15 2,819,637 2,819,637
Deferred tax assets 16 1,753,392 1,835,610
Long term receivables 17 402,423 280,813
241,950,034 227,280,468
CURRENT ASSETS
Inventories 18 103,536,159 109,943,677
Trade receivables 19 57,175,642 68,654,607
Other receivables 20 59,408,622 22,624,753
Marketable securities 21 5,107,480 2,503,157
Cash and bank balances 22 41,528,094 43,922,982
266,755,997 247,649,176
CURRENT LIABILITIES
Retirement benefit obligations 23 1,044,171 1,091,705
Short term borrowings 24 92,212,740 113,990,721
Trade payables 26 14,459,414 23,804,624
Other payables 27 46,191,095 47,312,848
Taxation 1,672,146 1,869,163
155,579,566 188,069,061
52
NET CURRENT ASSETS 111,176,431 59,580,115
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
353,126,465 286,860,583
FINANCED BY:
Share capital 28 109,224,337 109,224,337
Reserves 116,986,260 97,086,140
227,561,222 207,875,466
353,126,465 286,860,583
53
2005 2004
RM RM
Net cash generated from/ (used in) operating activities 14,935,634 (9,150,804)
2005 2004
RM RM
2005 2004
Note RM RM
56
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
2005 2004
Note RM RM
NON-CURRENT ASSETS
Property, plant and equipment 12 193,167,925 172,820,659
Investment in subsidiaries 13 30,714,960 30,353,962
Investment in associates 14 189,000 189,000
Other investments 15 240,300 240,300
224,312,185 203,603,921
CURRENT ASSETS
Inventories 18 96,135,581 102,327,181
Trade receivables 19 10,558,768 7,473,627
Other receivables 20 131,301,397 104,270,306
Marketable securities 21 56,722 87,142
Cash and bank balances 22 7,273,088 7,052,483
245,325,556 221,210,739
CURRENT LIABILITIES
Retirement benefit obligations 23 907,441 914,994
Short term borrowings 24 87,812,628 106,097,526
Trade payables 26 1,712,532 3,370,622
Other payables 27 56,165,467 51,740,198
Taxation 617,818 617,818
147,215,886 162,741,158 57
322,421,855 262,073,502
FINANCED BY:
Share capital 28 109,224,337 109,224,337
Reserves 90,222,536 79,699,797
322,421,855 262,073,502
58
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
2005 2004
RM RM
2005 2004
RM RM
60
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
1. CORPORATE 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
12 April 2006.
The financial statements comply with the provisions of the Companies Act, 1965 and applicable MASB Approved Accounting
Standards.
Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated
financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs
cannot be recovered.
The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group’s share of
its net assets together with any unamortised balance of goodwill and exchange differences.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
(ii) Associates
Associates are those entities in which the Group exercises significant influence but not control, through participation
in the financial and operating policy decisions of the entities.
Investments in associates are accounted for in the consolidated financial statements by the equity method of accounting
based on the audited or management financial statements of the associates. Under the equity method of accounting,
the Group’s share of profits less losses of associates during the financial year is included in the consolidated income
statement. The Group's interest in associates is carried in the consolidated balance sheet at cost plus the Group's
share of post-acquisition retained profits or accumulated losses and other reserves.
Unrealised gains on transactions between the Group and the associates are eliminated to the extent of the Group's
interest in the associates. Unrealised losses are eliminated unless cost cannot be recovered.
(c) Goodwill
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.
On disposal of investments, the difference between net disposal proceeds and their carrying amounts is recognised in the
income statement.
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
2. SIGNIFICANT ACCOUNTING POLICIES ((CONT’D
CONT’D
CONT’D))
(e) Property, Plant and Equipment and Depreciation (cont’d)
surplus, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an
expense, in which case the increase is recognised in the income statement to the extent of the decrease previously
recognised. A revaluation decrease is first offset against unutilised previously recognised revaluation surplus in respect of
the same asset and the balance is thereafter recognised as an expense. Upon the disposal of revalued assets, the attributable
revaluation surplus remaining in the revaluation reserve is transferred to retained profits.
Freehold land and capital work-in-progress are not depreciated. Leasehold land is depreciated over the period of the
respective leases.
Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the cost of each
asset to its residual value over the estimated useful life at the following annual rates:
Buildings 2%
Plant and machinery 7.5%
Motor vehicles 20%
Furniture, fixtures, fittings and office equipment 20%
Computer system and computer equipment 20% - 33.3%
Billboards 16.7% - 25%
Light box display 10%
Renovations 10%
Upon the disposal of an item of property, plant and equipment, the difference between the net disposal proceeds and the
net carrying amount is recognised in the income statement and the unutilised portion of the revaluation surplus on that
item is taken directly to retained profits.
63
Cost is determined on the first-in, first-out method. The cost of raw materials comprises costs of purchase. The costs of
finished goods and work-in-progress comprise raw materials, direct labour, other direct costs and appropriate proportions
of production overheads.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance
costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired,
are recognised as an expense in the income statement over the term of the relevant lease so as to produce a constant
periodic rate of charge on the remaining balance of the obligations for each accounting period.
The depreciation policy for leased assets is consistent with that for depreciable property, plant and equipment as
described in Note 2(e).
estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the
expenditure expected to be required to settle the obligation.
Provision for restructuring costs is recognised in the period in which the Group becomes legally or contructively committed
to payment.
Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are
recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary
differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax
2. SIGNIFICANT ACCOUNTING POLICIES ((CONT’D
CONT’D
CONT’D))
(j) Income Tax (cont’d)
is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an
asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither
accounting profit nor taxable profit.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability
is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is
recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in
which case the deferred tax is also recognised directly in equity, or when it arises from a business combination that is an
acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.
The amount recognised in the balance sheet represents the present value of the defined benefit obligations adjusted
for unrecognised actuarial gains and losses and unrecognised past service cost, and reduced by the fair value of plan
assets. Any asset resulting from this calculation is limited to the net total of any unrecognised actuarial losses and
past service cost, and the present value of any economic benefits in the form of refunds or reductions in future
contributions to the plan.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are expensed off as described in Note
2(c).
The principal exchange rates used for each respective unit of foreign currency ruling at the balance sheet date are as
follows:
2005 2004
RM RM
An impairment loss is recognised as an expense in the income statement immediately, unless the asset is carried at
revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of any unutilised
previously recognised revaluation surplus for the same asset.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement.
Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as expense or
income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial
instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or
to realise the asset and settle the liability simultaneously.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as
part of the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. The
amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate which is the
weighted average of the borrowing costs applicable to the Group’s borrowings that are outstanding during the financial
68
year, other than borrowings made specifically for the purpose of acquiring another qualifying assets. For borrowings
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
made specifically for the purpose of acquiring qualifying assets, the amount of borrowing costs eligible for capitalisation
is the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary
investment of funds drawndown from that borrowing facility.
All other borrowing costs are recognised as an expense in the income statement in the period in which they are
incurred.
The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity
transaction costs comprise only those incremental external costs directly attributable to the equity transaction which
would otherwise have been avoided.
3. REVENUE
Revenue of the Group and of the Company consist of the following:
GROUP COMPANY
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Dividend
- quoted shares in Malaysia 379,628 225,689 1,770 1,536
- subsidiary - - 273,000 273,000
- associates - - 291,250 60,000
Gain on disposal of property, plant
and equipment 480,379 387,926 139,000 53,112
69
Building rental 370,157 747,120 2,962,157 3,541,968
5 . STAFF COSTS
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Included in staff costs of the Group and of the Company are executive directors' remuneration amounting to RM2,747,135
(2004: RM2,914,560) and RM1,665,794 (2004: RM1,477,840) respectively as further disclosed in Note 6.
6. DIRECTORS' REMUNERATION
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Non-Executive:
Fees 240,000 222,253 240,000 222,253
Other Directors
Executive:
Salaries and other emoluments 733,530 892,780 - -
Bonus - current year's provisions 115,096 116,875 - -
Defined contribution plans 187,915 141,673 - -
Retrenchment benefits - 229,392 - -
Benefits-in-kind 52,767 24,902 - -
1,089,308 1,405,622 - -
6. DIRECTORS' REMUNERATION (CONT’D)
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Non-Executive:
Fees - 17,167 - -
The number of directors of the Company whose total remuneration during the year fell within the following bands is analysed
below:
NUMBER OF DIRECTORS
2005 2004
Executive directors:
RM450,001 – RM500,000 - 1
RM500,001 – RM550,000 1 -
RM550,001 – RM600,000 - 2
RM600,001 – RM650,000 - -
RM650,001 – RM700,000 2 -
71
GROUP COMPANY
8. FINANCE COSTS
Included in finance costs are the following:
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
GROUP COMPANY
Domestic income tax is calculated at the Malaysian statutory tax rate of 28% (2004: 28%) of the estimated assessable profit for
the year. Certain subsidiaries with issued and paid-up capital of RM2,500,000 and below are eligible for the following tax rate:
A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense
at the effective income tax rate of the Group and the Company is as follows:
2005 2004
RM RM
GROUP
Profit before taxation 29,195,341 19,576,406
Taxation at Malaysian statutory tax rate of 28% (2004: 28%) 8,174,695 5,481,394
Effect of tax rate of 20% (81,016) (86,944)
Income not subject to tax (637,221
(637,221)) (1,306,083)
Expenses not deductible for tax purposes 2,928,279 1,989,305
Utilisation of reinvestment allowances (2,682,044
(2,682,044)) (1,418,288)
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
9. TAXATION ((CONT’D
CONT’D
CONT’D))
2005 2004
RM RM
Utilisation of previously unrecognised tax losses and unabsorbed capital allowances (351,448
(351,448)) (198,093)
Deferred tax assets not recognised in respect of current year's tax losses and
unabsorbed capital allowances 954,368 1,473,158
(Over)/under provision of deferred tax in prior years (98,633
(98,633)) 1,063,821
(Over)/under provision of tax expense in prior years (388,147) 17,110
COMPANY
Profit before taxation 18,235,312 15,689,033
Taxation at Malaysian statutory tax rate of 28% (2004: 28%) 5,105,887 4,392,929
Income not subject to tax (561,865) (812,493)
Expenses not deductible for tax purposes 3,672,884 1,713,538
Utilisation of reinvestment allowances (2,682,044) (1,418,288)
(Over)/under provision of deferred tax in prior years (89,170) 773,562
Underprovision of tax expense in prior years 35,843 -
GROUP
2005 2004
74 RM RM
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
GROUP
2005 2004
(b) Diluted
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.
GROUP
2005 2004
There was no dilution of earnings per share for the previous financial year since the effect of ESOS was anti-dilutive.
11. DIVIDENDS
NET DIVIDEND
75
AMOUNT PER ORDINARY SHARE
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.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
Motor
Capital vehicles,
Land and work-in- plant and Other
buildings* progress machinery assets** Total
RM RM RM RM RM
GROUP
Cost/Valuation
At 1 January 2005 141,278,412 494,916 174,966,578 118,706,902 435,446,808
Additions 334,131 20,221,107 12,649,526 5,752,299 38,957,063
Disposals - - (1,729,521) (2,022,056) (3,751,577)
Written off - - (6,284,600) (33,217,154) (39,501,754)
Reclassifications 105,194 (2,918,844) (9,500) 2,823,150 -
Exchange differences - - (35,357) (3,641) (38,998)
Representing:
Cost 129,430,037 17,797,179 170,259,276 91,982,126 409,468,618
Valuation 12,287,700 - 9,297,850 57,374 21,642,924
Accumulated Depreciation
and Impairment
At 1 January 2005
76 Accumulated depreciation 27,607,564 - 97,665,308 97,373,584 222,646,456
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
GROUP (CONT’D)
Analysed as:
Accumulated depreciation 30,397,169 - 101,148,205 72,034,563 203,579,937
Accumulated impairment 22,921 - 372,127 1,977,854 2,372,902
At 31 December 2004:
At cost 106,622,582 494,916 76,951,591 21,257,039 205,326,128
At valuation 7,025,345 - - - 7,025,345
GROUP (CONT’D)
Cost/Valuation
At 1 January 2005 15,187,269 119,530,864 6,560,279 141,278,412
Addition - 334,131 - 334,131
Reclassification - 6,665,473 (6,560,279) 105,194
Representing:
Cost 14,747,269 114,682,768 - 129,430,037
Valuation 440,000 11,847,700 - 12,287,700
Accumulated Depreciation
and Impairment
78 At 1 January 2005
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
Analysed as:
At 31 December 2004:
At cost 10,403,602 95,764,069 454,911 106,622,582
At valuation 314,400 4,635,248 2,075,697 7,025,345
Motor
Capital vehicles,
Land and work-in- plant and Other
buildings* progress machinery assets** Total
RM RM RM RM RM
COMPANY
Cost/Valuation
At 1 January 2005 116,423,618 494,916 147,894,221 40,496,342 305,309,097
Additions 332,166 20,171,607 12,133,942 4,198,606 36,836,321
Disposals - - (491,598) - (491,598)
Written off - - (6,056,140) (15,125,250) (21,181,390)
Reclassifications 105,194 (2,918,844) (9,500) 2,823,150 -
Transfers - - 129,047 22,364 151,411
Representing:
Cost 104,573,278 17,747,679 145,395,972 32,415,212 300,132,141
Valuation 12,287,700 - 8,204,000 - 20,491,700
80 Accumulated Depreciation
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
and Impairment
At 1 January 2005 20,686,254 - 80,983,764 30,818,420 132,488,438
Charge for the year 2,282,656 - 9,506,071 4,496,462 16,285,189
Disposals - - (491,598) - (491,598)
Written off - - (5,932,883) (15,015,048) (20,947,931)
Reclassifications - - (1,069) 1,069 -
Transfers - - 103,265 18,553 121,818
Motor
Capital vehicles,
Land and work-in- plant and Other
buildings* progress machinery assets** Total
RM RM RM RM RM
COMPANY (CONT’D)
At 31 December 2004:
At cost 88,712,019 494,916 66,910,457 9,677,922 165,795,314
At valuation 7,025,345 - - - 7,025,345
COMPANY
Cost/Valuation
At 1 January 2005 7,254,973 103,148,506 6,020,139 116,423,618
Additions - 332,166 - 332,166
Reclassification - 6,125,333 (6,020,139) 105,194
Representing:
Cost 6,814,973 97,758,305 - 104,573,278
Valuation 440,000 11,847,700 - 12,287,700
COMPANY (CONT’D)
Accumulated Depreciation
and Impairment
At 1 January 2005 1,277,854 15,740,239 3,668,161 20,686,254
Charge for the year 199,255 1,965,713 117,688 2,282,656
Reclassification - 3,785,849 (3,785,849)
At 31 December 2004:
At cost 5,662,719 82,773,019 276,281 88,712,019
82
At valuation 314,400 4,635,248 2,075,697 7,025,345
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
** 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 ((CONT’D
CONT’D
CONT’D))
Net book value of property, plant and equipment held under hire purchase and finance lease agreements are as follows:
GROUP COMPANY
(b) The net book value of property, plant and equipment pledged to financial institutions for bank borrowings as referred to in
Note 24 are as follows:
GROUP COMPANY
Long term leasehold land and buildings 83,295,502 73,167,445 80,520,230 71,308,449
Plant and machinery 56,769,298 53,973,737 56,544,541 53,287,489
(c) Included in property, plant and equipment of the Group and of the Company are fully depreciated assets which are still in
use costing RM58,267,504 (2004: RM71,735,340) and RM36,821,510 (2004: RM52,822,119) respectively.
(d) The land and buildings and plant and machinery stated at valuation were revalued on 22 July 1986 by the directors based 83
Due to the absence of historical records some years ago, the net book value of the land and buildings that is required to be
included in the financial statements of the Group and of the Company as at 31 December 2005 at historical cost less
accumulated depreciation, is not disclosed.
(e) Interest expense capitalised during the financial year under work-in-progress of the Group and of the Company amounted
to RM1,702,360 (2004:Nil)
(f) On 7 July 2005, the Company had entered into a Sale and Purchase Agreement (”SPA”) with Stabilite Properties Sdn Bhd.
for the disposal of a piece of land for a cash consideration of RM12,636,507, as disclosed in Note 34. The gain or loss on
the sale of the property will only be recognised upon completion of the agreement.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
COMPANY
2005 2004
RM RM
30,714,960 30,353,962
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
13. INVESTMENT IN SUBSIDIARIES (CONT’D)
Equity Interest
Country of Held (%) Principal
Name of Subsidiaries Incorporation 2005 2004 Activities
** As disclosed in Note 34, Advance Screen Sdn Bhd. (”ASSB”) had on 29 August 2005 entered into a Sale and Purchase of Shares
Agreement with Classic Billboards (M) Sdn. Bhd. (”CBMSB”) for the disposal of 510,000 units of ordinary shares of RM1.00 each
(representing 51% of the issued and paid-up share capital) of ASSB for the purchase consideration of RM1,020,000 (Ringgit Malaysia
One Million and Twenty Thousand only). The agreement will only become effective upon completion of the receipt of sale proceeds in
April 2006.
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
In Malaysia:
Unquoted shares, at cost 189,000 508,999 189,000 508,999
Less: Accumulated impairment - (319,999) - (319,999) 85
GROUP
2005 2004
RM RM
11,815,879 9,992,935
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
Equity Interest
Country of Held (%) Principal
Name of Associates Incorporation 2005 2004 Activities
GROUP COMPANY
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
At 1 January (7,347,126
(7,347,126)) (3,240,604) (9,014,341
(9,014,341)) (5,093,093)
86
Recognised in the income statement (Note 9) (4,055,514
(4,055,514)) (4,106,522) (4,141,692) (3,921,248)
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
At 31 December (11,402,640
(11,402,640)) (7,347,126) (13,156,033
(13,156,033)) (9,014,341)
(11,402,640
(11,402,640)) (7,347,126) (13,156,033
(13,156,033)) (9,014,341)
16. DEFERRED TAXATION (CONT’D)
The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:
Accelerated
Capital
Allowances Others Total
RM RM RM
Retirement Unabsorbed
Benefit Capital
Obligations Allowances Others Total
RM RM RM RM
Deferred tax assets have not been recognised in respect of the following items:
GROUP
2005 2004
RM RM
48,074,636 85,109,631
The availability of the unused tax losses and unabsorbed capital allowances for offsetting against future taxable profits of the respective
subsidiaries are subject to no substantial changes in shareholdings of the respective subsidiaries under Section 44(5A) & (5B) of Income
Tax Act, 1967.
17. LONG TERM RECEIVABLES
GROUP
2005 2004
RM RM
Advances to employees
Minimum receivables:
Within and up to one year 440,921 186,061
After one and up to two years 434,572 339,358
875,493 525,419
Less: Future finance charges (107,638
(107,638)) (90,669)
767,855 434,750
Analysed as:
Receivable within twelve months (Note 20) 365,432 153,937
Receivable after twelve months 402,423 280,813
18. INVENTORIES
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Cost
Raw materials 97,002,085 102,972,128 96,135,581 102,327,181
Work-in-progress 309,610 661,356 - -
Finished goods 6,224,464 6,310,193 - -
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
The Group's normal trade credit term ranges from 1 to 30 days (2004 : 1 to 30 days). Other credit terms are assessed and approved on a
case-by-case basis.
The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or to groups of debtors.
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
90 - - 79,853,258 88,636,748
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
The amounts due from subsidiaries are unsecured, bear an average interest of 6.6% (2004: 6.6%) per annum and have no fixed terms of
repayment.
The amounts due from associates are unsecured, interest free and have no fixed terms of repayment.
The Group has no significant concentration of credit risk that may arise from exposures to a single debtor or to group of debtors.
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Included in the above deposits of the Group and of the Company are amounts of RM275,000 (2004: RM1,465,331) and RM Nil (2004:
RM1,190,331) respectively which are pledged to banks for facilities granted as referred to in Note 24.
The weighted average effective interest rates of deposits at the balance sheet date were as follows:
GROUP COMPANY
2005 2004 2005 2004
% % % %
The average maturities of deposits as at the end of the financial year were as follows:
GROUP COMPANY
2005 2004 2005 2004
Days Days Days Days
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Present value of funded defined benefit obligations 20,671,785 27,092,446 20,671,785 27,092,446
Fair value of plan assets (3,895,966
(3,895,966)) (3,348,622) (3,895,966
(3,895,966)) (3,348,622)
Analysed as:
Current 1,044,171 1,091,705 907,441 914,994
Non-current:
After one and up to two years 775,875 1,447,205 674,277 1,447,205
After two and up to five years 2,096,258 3,717,337 1,821,761 2,763,970
Above five years 15,387,236 18,725,070 13,372,340 16,236,302
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
The actual return on the plan assets of the Group and of the Company was RM93,816 (2004: RM40,143).
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Analysed as follows:
Current 1,044,171 1,091,705 907,441 914,994
Non-current 11,678,517 17,494,174 10,168,234 14,874,843
The latest actuarial valuation undertaken for the Group was at 31 December 2005 by an independent firm of actuary. As at this dates, the
valuations indicate that the provisions for retirement benefits are sufficient to achieve the value of the benefits determined by the actuary.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
24. BORROWINGS
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Unsecured:
Bank overdrafts (Note 22) 11,459,585 11,612,826 11,062,538 9,001,191
Trust receipts 94,576 288,443 - -
Bankers acceptance 25,891,567 73,464,000 24,191,567 71,664,000
Revolving credits 40,300,000 14,200,000 40,000,000 12,900,000
Total Borrowings
Trust receipts 94,576 288,443 - -
Bank overdrafts (Note 22) 11,459,585 11,612,826 11,062,538 9,001,191
Bankers acceptance 25,891,567 73,464,000 24,191,567 71,664,000
Revolving credits 40,300,000 14,200,000 40,000,000 12,900,000
Revolving Underwriting Facility* - 58,000,000 - 58,000,000
Term loans 1,818,174 2,425,560 - -
Islamic term loan 52,000,000 - 52,000,000 -
Al-Ijarah 7,655,935 - 7,655,935 -
Al-Istisna 45,239,288 445,4545 45,239,288
2,605,200445,4545 5,239,288 2,605,200
45,239,2885,239,288
Hire purchase and finance lease payables (Note 25) 8,484,309 3,702,899 7,314,015 1,187,319
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
The weighted average effective interest rates and profit rates during the financial year for borrowings, excluding hire purchase and finance
lease payables, were as follows:
GROUP COMPANY
2005 2004 2005 2004
% % % %
• The Revolving Underwriting Facility has been refinanced with a new Serial Islamic Term Loan Facility of RM52 million during the financial
year.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Minimum payments
Within and up to one year 5,152,544 1,921,261 3,913,393 602,946
After one and up to two years 3,696,365 1,727,546 3,627,724 403,292
After two and up to five years 23,804 405,852 115,758 294,867
Analysed as:
Due within twelve months (Note 24) 4,847,194 1,689,100 3,661,549 532,335
Due after twelve months (Note 24) 3,637,115 2,013,799 3,652,466 654,984
The hire purchase and finance lease bear interest at the balance sheet date at rates between 2.20% to 9.15% (2004: 3.30% to 9.24%)
per annum.
Included in the hire purchase payables of the Company is an amount due to a subsidiary of RM481,383 (2004: RM357,154).
Included in the amount due to subsidiaries are amounts which are related to trade transactions of RM11,291,576 (2004 : RM5,210,369).
The amounts due to subsidiaries and associates are unsecured, interest-free and have no fixed terms of repayment.
Number of Ordinary
Shares of RM1 each Amount
2005 2004 2005 2004
RM RM
Authorised:
97
At 1 January/31 December 500,000,000 500,000,000 500,000,000 500,000,000
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.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
(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
98 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
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
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. SHARE CAPITAL (CONT’D)
The terms of share options outstanding as at the end of the financial year are as follows:
2005
7.7.03 6.7.08 2.13 7,315,000 - - (91,800) (6,162,500) 1,060,700
21.10.03 6.7.08 1.69 3,345,500 - - (75,800) (2,815,500) 454,200
9.9.05 6.7.08 1.00 - 8,978,000 - - - 8,978,000
2004
7.7.03 6.7.08 2.13 7,442,600 - - (127,600) - 7,315,000
21.10.03 6.7.08 1.69 3,412,100 - (8,500) (58,100) - 3,345,500
Details of share options exercised during the previous year and the fair value, at exercise date, of ordinary shares issued are as
follows:
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Revaluation Reserve
Balance at 1 January/ 31 December 5,380,919 5,380,919 5,147,995 5,147,995
Other Reserves
Balance at 1 January/ 31 December 1,664,800 1,664,800 - -
The Company has sufficient tax credit under Section 108 of the Income Tax Act 1967 and the balance in the tax exempt income
account to frank the payment of dividends out of its entire retained profits as at 31 December 2005.
31. COMMITMENTS
GROUP COMPANY
2005 2004 2005 2004
RM RM RM RM
Capital expenditure:
Approved and contracted for 10,589,309 73,517,941 10,589,309 73,517,941
32. CONTINGENT LIABILITIES
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.
2005 2004
RM RM
GROUP
Services rendered by Utusan Transport Sdn Bhd and Group, an associated company 7,015,572 7,031,358
COMPANY
Services rendered by subsidiaries 16,281,361 16,777,415
Rental receivable from subsidiaries 2,772,000 2,974,848
Interest receivable from subsidiaries 1,655,619 2,048,487
Commission receivables from subsidiaries 4,449,186 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.
(ii) On 5 December 2005, the Company had announced to BMSB that its wholly-owned subsidiary, PT Sinar Media Advertising
(“PT SMART”), had on 1 December 2005, entered into a Joint Venture Agreement with PT Trimitra Mulia Kencana (“PT
TRIMITRA”). The proposed joint venture vehicle is PT Sinar Mitra Utama (“JV Company”). The JV Company is to undertake the
business of the advertisement management consultancy, providing advertisement media services and other business/activities
related thereto in the Republic of Indonesia. PT SMART and PT TRIMITRA will hold 40% and 60% equity interest respectively in
the JV Company.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
(ii) On 23 September 2005, the Company (‘UMMB’) announced to BMSB that its subsidiary, Advance Screen Sdn Bhd (‘ASSB’) had
on 29 August 2005 entered into a Sale and Purchase of Shares Agreement with Classic Billboards (M) Sdn Bhd (‘CBMSB’) for the
disposal of 510,000 units of ordinary shares of RM1.00 each (representing 51% of the issued and paid-up share capital) of ASSB
for the sale consideration of RM1,020,000 (Ringgit Malaysia One Million and Twenty Thousand only). The agreement will only
become effective upon completion of the receipt of sale proceeds in April 2006.
35. COMPARATIVES
Certain comparative amounts as at 31 December 2004 have been reclassified to conform with current year’s presentation:
As
As Previously
Restated Adjustments Stated
RM RM RM
GROUP
Other investments 2,819,637 2,503,157 5,322,794
102 Marketable securities 2,503,157 (2,503,157) -
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
COMPANY
Other investments 240,300 87,142 327,442
Marketable securities 87,142 (87,142) -
Short term borrowings 106,097,526 2,605,200 108,702,726
Long term borrowings 49,260,184 (2,605,200) 46,654,984
36. FINANCIAL INSTRUMENTS
(a) Financial Risk Management Objectives and Policies
The Group's financial risk management policy seeks to ensure that adequate financial resources are available for the development
of the Group's businesses whilst managing its interest rate, foreign exchange, liquidity and credit risks. The Group operates
within clearly defined guidelines that are approved by the Board and the Group's policy is not to engage in speculative transactions.
The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings. The Group reviews its
debt portfolio, taking into account the investment holding period and nature of its assets. This strategy allows it to capitalise on
cheaper funding in a low interest rate environment and achieve a certain level of protection against rate hikes.
The information on maturity dates and effective interest rates of financial assets and liabilities are disclosed in their respective
notes.
The Group does not have any significant exposure to any individual customer or counterparty nor does it have any major
concentration of credit risk related to any financial instruments.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
GROUP COMPANY
Carrying Carrying
Amount Fair Value Amount Fair Value
Note RM RM RM RM
Financial Assets
At 31 December 2005:
Non-current unquoted other investments 15 2,819,637 * 240,300 *
Due from subsidiaries 20 - - 79,853,258 **
Due from associates 20 86,071 ** 86,071 **
At 31 December 2004:
Non-current unquoted other investments 15 2,819,637 * 240,300 *
Due from subsidiaries 20 - - 88,636,748 **
Due from associates 20 11,872 ** 11,872 **
Financial Liabilities
At 31 December 2005:
Due to subsidiaries 27 - - 24,213,882 **
Term loans 24 1,818,174 1,537,424 - -
Islamic term loan 24 52,000,000 39,979,663 52,000,000 39,979,663
Al-Ijarah 24 7,655,935 5,747,300 7,655,935 5,747,300
104
Al-Istisna 24 45,239,288 27,270,777 45,239,288 27,270,777
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
At 31 December 2004:
Due to subsidiaries 27 - - 19,815,125 **
Due to associates 27 326,526 ** 326,526 **
Term loans 24 2,425,560 2,301,776 - -
Al-Istisna 24 2,605,200 2,440,554 2,605,200 2,440,554
Revolving underwriting facilities 24 58,000,000 50,299,730 58,000,000 50,299,730
Hire purchase and finance lease 25 3,702,899 3,300,598 1,187,319 1,030,782
* It is not practicable to estimate the fair value of the Group's non-current unquoted investments because of the lack of
quoted market prices and the inability to estimate the fair value without incurring excessive costs. However, the Group
believes that the carrying amounts represent the recoverable values.
** It is also not practicable to estimate the fair value of amounts due to/from subsidiaries and associates due principally to lack
of fixed repayment term entered by the parties involved and without incurring excessive costs. However, the Group does not
anticipate the carrying amounts recorded at the balance sheet date to be significantly different from the values that would
eventually be received or settled.
36. FINANCIAL INSTRUMENTS (CONT’D)
The nominal/notional amount and net fair value of financial instruments not recognised in the balance sheets of the Group and of the
Company as at the end of the financial year are:
GROUP COMPANY
Nominal/ Nominal/
Notional Net Fair Notional Net Fair
Amount Value Amount Value
Note RM RM RM RM
At 31 December 2005
Contingent liabilities 32 - - 12,088,640 ***
At 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) Cash 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.
(i) Publishing, distribution and advertisements - publishing and distribution of newspapers, magazines and books and also
print and outdoor advertising;
(ii) Printing - printing of magazines and books;
(iii) Information technology and multimedia; and
(iv) Investment holding, management services and others.
Information based on geographical segments was not prepared as the Group's activities are focused in Malaysia.
The directors are of the opinion that all inter-segment transactions 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.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2005
Result
Segment results 30,717,328 2,082,129 113,256 426,010 1,468,656 34,807,379
Finance costs (8,552,117)
Share of results of
associates - - - 2,940,079 - 2,940,079
Taxation (7,818,833)
Zakat (265,000)
OTHER INFORMATION
Capital expenditure 38,618,897 164,455 164,864 8,847 - 38,957,063
Depreciation 21,414,842 1,684,231 237,839 15,857 - 23,352,769
Impairment 1,898,965 25,065 - - - 1,924,030
Non-cash expenses
other than depreciation,
amortisation and
impairment 9,224,347 (722,576) 95,162 771,283 (4,962,802) 4,405,414
37. SEGMENTAL INFORMATION (CONT'D)
Investment
Publishing, Information holding,
distribution technology management
and and services
2004 advertisements Printing multimedia and others Eliminations Consolidated
RM RM RM RM RM RM
Result
Segment results 29,813,442 (486,512) 163,859 1,419,817 (4,712,146) 26,198,460
Finance costs (8,857,000)
Share of results of
associates - - - 2,234,946 - 2,234,946
Taxation (7,015,380)
Zakat (200,000)
OTHER INFORMATION
Capital expenditure 11,459,479 393,486 271,505 62,252 - 12,186,722
Depreciation 21,513,287 2,163,436 272,286 9,690 - 23,958,699
Impairment - 794,648 - - - 794,648
Non-cash expenses
other than depreciation,
amortisation and
impairment 3,512,915 944,630 17,553 (302,124) (2,139,326) 6,312,300
LIST OF
PROPERTIES
As at 31 December 2005
32, Argyll Road Double Storey Utusan’s Office 1,280 1,995 Leasehold 150,778
Georgetown, Penang Shophouse (26.09.2049)
(D/P : 28.08.1969)
34, Argyll Road Double Storey Utusan’s Office 1,280 1,995 Leasehold 191,832
Georgetown, Penang Shophouse (27.09.2049)
(D/P : 01.07.1976)
Lot 314, Tingkat Factory Utusan’s Printing 69,054 40,805 Leasehold 2,709,824
Perusahaan Tiga Building Plant (01.04.2041)
Prai Industrial
Estate, Penang
(D/P : 02.04.1982)
1, Jalan SM 1C/12 Double Storey Utusan’s Office 2,288 3,980 Leasehold 82,500
Bandar Baru Shophouse (01.08.2079)
Sri Manjung
Sitiawan, Perak
(D/P : 12.12.1980)
3270, Jalan Sungai Double Storey Utusan’s Office 1,760 2,932 Freehold 105,177
Nibong, Teluk Intan Shophouse
Perak
108
(D/P : 19.09.1984)
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
208, Jalan Sultan Double Storey Utusan’s Office 1,740 2,720 Freehold 268,747
Iskandar, Ipoh, Perak Shophouse
(D/P : 08.09.1990)
76-C, Wisma Ali Long Double Storey Utusan’s Office - 1,832 Freehold 126,980
Jalan Air Jernih Shophouse
Kuala Terengganu
Terengganu
(D/P : 25.09.1991)
C-321, Jalan Tengku Double Storey Ground Floor 1,600 2,480 Leasehold 150,800
Ismail, Temerloh Shophouse Utusan’s Office (29.03.2083)
Pahang
(D/P : 26.11.1984)
18, Jalan Bukit Ubi Three Storey Ground Floor 2,000 4,900 Leasehold 210,348
Kuantan, Pahang Shophouse Utusan’s Office (14.08.2068)
(D/P : 28.07.1986)
Jalan Hj. Abd Aziz Vacant Land Vacant 3,267 - Leasehold 108,546
Kuantan,Pahang (17.09.2077)
(D/P : 15.07.1981)
Lot 6, Jalan P/10 Industrial Bangi Printing 683,260 273,601 Leasehold 70,101,201
Bangi Industrial Land Complex (99 years)
Estate, Section 10
Bandar Baru Bangi
Bangi, Selangor
(D/P : 20.12.1995)
Lot 351, Jalan Tiga Factory and Vacant 47,244 28,601 Leasehold 767,052
Off Jalan Chan Office Building (17.12.2009)
Sow Lin
Kuala Lumpur
(D/P : 20.12.1979)
46M, Jalan Lima Office Building Company’s HQ 63,855 49,368 Lot 187 2,108,706
Off Jalan Chan and Editorial Leasehold
Sow Lin Department (02.06.2057)
Kuala Lumpur Lot 268
(D/P : 10.12.1959) Leasehold
(30.01.2062)
LIST OF
PROPERTIES
As at 31 December 2005
Jalan Enam Vacant Land Store 60,205 10,000 Lot 234 674,322
Off Jalan Chan & Warehouse & 236
Sow Lin Leasehold
(D/P : 07.02.1991) (23.05.2021)
Lot 238
& 240
Leasehold
(01.07.2016)
Lot 242
& 244
Leasehold
(01.06.2012)
Lot 272, Seksyen 92 Vacant Land Car Park 40,520 - Leasehold 143,520
Kuala Lumpur (06.01.2065)
(D/P : 20.04.1963)
358, Taman Melaka Three Storey Utusan’s 1,400 4,160 Leasehold 168,000
Raya, Melaka Shophouse Office (04.10.2082)
(D/P : 26.02.1982)
24, Jalan Serampang Three Storey Utusan’s 1,920 5,358 Freehold 291,862
Taman Pelangi Shophouse Office
Johor Baru,Johor
(D/P : 27.10.1980)
19, Jalan Mengkudu Double Storey Utusan’s 1,680 3,192 Freehold 177,811
Taman Makmur Shophouse Office
Batu Pahat, Johor
110
(D/P : 02.10.1984)
UTUSAN MELAYU (MALAYSIA) BERHAD • ANNUAL REPORT 2005
17, Jalan Kukoh Factory Building Vacant 115,434 39,200 Leasehold 1,324,637
Johor Baru, Johor (06.10.2034)
(D/P : 07.10.1974)
Lot PTD 53920 Factory Utusan’s Printing 170,311 21,410 Freehold 4,226,493
Jalan Firma 2/1 Building Plant
Tebrau Industrial
Estate, Johor Baru
Johor
(D/P : 03.04.1991)
Lot 438, Jalan Dua Factory Vacant 38,761 23,361 Leasehold 2,602,364
Off 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 168,645
Off 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 3,756,475
Petaling 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 585,750
Petaling 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 495,969
Damansara Jaya Shophouse Office
Petaling Jaya
Selangor
(D/P : 28.09.1990)
14, Jalan SS 22/25 Four Storey UPD Sdn Bhd’s 1,650 5,142 Freehold 495,969
Damansara Jaya Shophouse Office
Petaling Jaya
Selangor 111
(D/P : 28.09.1990)
Lot 20 & 22 Single Storey Advance Screen 49,148 13,239 Leasehold 1,783,333
Jalan 7, Cheras Jaya Terrace Factory Sdn Bhd’s Factory
Balakong, Selangor and Office
(D/P : 19.11.1999)
ANALYSIS OF
SHAREHOLDINGS
as at 31 March 2006
DISTRIBUTION OF SHAREHOLDINGS
SUBSTANTIAL SHAREHOLDERS
as at 31 March 2006
114
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PROXY
FORM CDS Account No. of authorised nominee (i)
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 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 Wednesday
Wednesday, 31 May 2006 at 11.00 a.m. and at any adjournment thereof.
(*Strike out whichever is not desired) For appointment of two proxies, percentage of shareholdings
to be represented by the proxies
Number of Shares Percentage
Signature/Common seal of Corporation
Proxy 1 %