UBG Annual Report 2009

THERIGHTSTUFF

AN

NU

AL R

EP

OR

T 2009

Go or Weiqi is a game of strategy that originated in China three millennia ago,

and is played all over the world today.

This ancient game is played on a wooden board marked out in a grid, with

181 black stones and 180 white ones. The primary objective of this ancient

game is to gain control of the board by using the stones to mark out territory.

A player can also capture his opponent’s stones to gain advantage.

So simple yet as the game progresses, it becomes complicated because of the

opponent’s moves and rules of the game. Success or failure depends on how

the player reads the game and employs the necessary strategies and tactics to

gain winning positions.

UBG views the business landscape that it operates in, in a similar manner,

and continues to employ strategies necessary to position its Group on better

footing to increase shareholders’ value.

TH

E G

O O

R W

EIQ

I BO

AR

D G

AM

E

04CORPORATE

STRUCTURE

05CORPORATE

INFORMATION

06BOARD OF

DIRECTORS

12CHAIRMAN’S

STATEMENT

16OPERATIONS

REVIEW

26GROUP FINANCIAL

HIGHLIGHTS

27GROUP CORPORATE

HIGHLIGHTS

28STATEMENT OF

CORPORATE

GOVERNANCE

45ADDITIONAL

COMPLIANCE

INFORMATION

47AUDIT COMMITTEE

REPORT

53STATEMENT OF

DIRECTORS’

RESPONSIBILITY

54STATEMENT OF

INTERNAL CONTROL

58CORPORATE SOCIAL

RESPONSIBILITY

FINANCIAL STATEMENTS

67 Directors’ Report72 Statement by

Directors72 Statutory

Declaration73 Independent

Auditors’ Report75 Income Statements76 Balance Sheets78 Statements of

Changes In Equity81 Cash Flow

Statements84 Notes to the

Financial Statements

OTHER INFORMATION

158 Analysis ofShareholdings

162 List of Properties166 Notice of Annual

General Meeting167 Statement

Accompanying the Notice of AnnualGeneral Meeting

169FORM OF PROXY

I CONTENTS

2009 WILL BE REMEMBERED AS A VERY

CHALLENGING YEAR FOR BUSINESS.

THE GLOBAL FINANCIAL CRISIS SPARKED BY THE

US SUB-PRIME MORTGAGE CRISIS THAT BEGAN

IN 2007, CONTINUED TO BE DETRIMENTAL TO

THE INVESTMENT CLIMATE TWO YEARS LATER

AND WE FORESEE THAT ITS EFFECTS WILL STILL

BE APPARENT IN THE COMING MONTHS.

HOWEVER, LEVERAGING ON THE RIGHT TIME,

RIGHT PLACE AND RIGHT PEOPLE, UBG HAD A

VERY SUCCESSFUL YEAR AS WE STRENGTHENED

OUR POSITION AS A STRATEGIC INVESTMENT

GROUP, CONSOLIDATED OUR BUSINESSES

TO MAXIMISE SYNERGY AND TURNED IN AN

OUTSTANDING FINANCIAL PERFORMANCE.

4 CORPORATE STRUCTURE

WATER

INFRASTRUCTURE

CONSTRUCTION

OIL & GAS

NON-CORE

NON-CORE

NON-CORE

UBG PETROLEUM

(THAILAND) LIMITED#

100%

UNITY CAPITAL

(MALAYSIA) SDN BHD

100% (DORMANT)

UNITY CAPITAL

MANAGEMENT

(SINGAPORE) PTE LTD

100% (CEASED OPERATION)

LOH & LOH

CORPORATION BERHAD*

80.32%

PUTRAJAYA PERDANA

BERHAD*

85.85%

UBG ENERGY LIMITED

100%

UNITY CAPITAL

INTERNATIONAL

(CAYMAN) LTD

51%

UNITY CAPITAL

PARTNERS

(CAYMAN) LTD

25%

UBG ENTERPRISE

BERHAD

100% (DORMANT)

UBG PETRO-G1

(THAILAND) LIMITED

100%

UBG PETRO-G3/G6

(THAILAND) LIMITED

100%

UBG PETRO-G2-G10

(THAILAND) LIMITED

100%

UBG PETRO-G11

(THAILAND) LIMITED

100%

UBG BERHAD

I CORPORATESTRUCTURE

* Listed on the Main Market of Bursa Malaysia Securities Berhad.

# UBG Petroleum (Thailand) Limited and its 4 subsidiaries were acquired on 2 September 2009, but have subsequently been disposed of on 26 April 2010.

CORPORATE INFORMATION 5

BOARD OF DIRECTORS

Y Bhg Dato Sri Haji MahmudAbu Bekir TaibChairman

Y Bhg Datuk Syed Ahmad Alwee AlsreeDeputy Chairman

Y Bhg Dato Sri Liang Kim Bang

Mr. Krishnan a/l C K Menon

Mr. Shaher Moh’d Ali Awartani

Mr. Low Taek Jho

Mr. Tan Vern TactAlternate Director

COMPANY SECRETARIES

Jasmine Loo Ai Swan

Cecilia Liew Siaw Lin

REGISTERED OFFICE

Level 70, Tower 2Petronas Twin TowersKuala Lumpur City Centre50088 Kuala Lumpur Malaysia

Tel +(603) 2332 0222Fax +(603) 2332 0333

REGISTRAR

Securities Services (Holdings) Sdn Bhd Level 7, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala Lumpur Malaysia

Tel +(603) 2084 9000Fax +(603) 2094 9940

LISTING

Main Market of Bursa MalaysiaSecurities Berhad

AUDITORS

Ernst & YoungChartered AccountantsLevel 23A, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala Lumpur Malaysia

INVESTOR RELATIONS

To convey queries and concerns regarding UBG Berhad, please contact:

Y Bhg Dato Sri Liang Kim BangSenior IndependentNon-Executive Director

Tel +(603) 2332 0222Fax +(603) 2332 0333

I CORPORATEINFORMATION

6 BOARD OF DIRECTORS

LEFT TO RIGHT

Y BHG DATO SRI HAJI MAHMUD

ABU BEKIR TAIB

Y BHG DATUK SYED AHMAD

ALWEE ALSREE

I BOARD OFDIRECTORS

BOARD OF DIRECTORS 7

Y Bhg Dato Sri Haji MahmudAbu Bekir Taib Chairman,Non-Independent Non-Executive Director

Dato Sri Haji Mahmud Abu Bekir Taib, a Malaysian aged 46, was appointed to the Board of UBG Berhad (UBG) on 3 August 2006 and redesignated as Chairman on1 January 2008.

He was also appointed as the Chairman of the Remuneration Committee on 21 October 2008. He also served as a member of the Leadership and Group Strategic Advisory Council (LGSAC) and Risk and Investment Committee (RIC)upon his appointment to these committees on 19 September 2008.Both the LGSAC and RIC have sincebeen dissolved on 23 November 2009and 23 February 2010, respectively.

Having pursued his tertiary education in USA and Canada, Dato Sri Haji Mahmud has extensive experience in the stock-broking and corporate sectors. He was a founding member of Sarawak Securities Sdn Bhd, Sarawak’s fi rst stock-broking company which is now merged with K & N Kenanga Holdings Berhad.

Dato Sri Haji Mahmud is currently Deputy Group Chairman of Cahya Mata Sarawak Berhad (CMS), a major indirect shareholder of UBG with 28.29% and 8.92% equity interests in UBG through Concordance Holdings Sdn Bhd and PPES Works (Sarawak) Sdn Bhd, respectively, and a

director of various subsidiaries of CMSin the areas of construction, construction materials, fi nancial services and property development. Dato Sri Haji Mahmud is also the Deputy Chairman of Putrajaya Perdana Berhad, a director of Sarawak Cable Berhad and a director of several other private companies.

Dato Sri Haji Mahmud has attended all 5 board meetings held during the fi nancial year ended 31 December 2009.

He is a major shareholder of CMS and a representative of CMS. He is a brother-in-law of Datuk Syed Ahmad Alwee Alsree, the Deputy Chairman of UBG. He has no confl ict of interest with UBG and has had no convictions for any offences within the past 10 years.

Y Bhg Datuk Syed Ahmad Alwee AlsreeDeputy Chairman,Non-Independent Non-Executive Director

Datuk Syed Ahmad Alwee Alsree, a Singaporean aged 44, was appointedto the Board of UBG Berhad (UBG) on4 December 2007 as a representativeof Cahya Mata Sarawak Berhad (CMS)and redesignated as Deputy Chairmanon 1 January 2008.

Datuk Syed Ahmad graduated with a Bachelor of Law (LL.B.) from the National University of Singapore and practisedlaw in Singapore for over 10 years priorto joining CMS Group.

He was also appointed as a member of the Leadership and Group Strategic Advisory Council (LGSAC) and Risk and Investment Committee (RIC) on 19 September 2008. Both the LGSAC and RIC have since been dissolved on 23 November 2009 and 23 February 2010, respectively. He serves as a member of the Audit Committee following his appointment on 21 October 2008.

Datuk Syed Ahmad is Chairman of CMS Trust Management Berhad, Group Executive Director of CMS and Deputy Chairman of Loh & Loh Corporation Berhad. He is also a Non-Independent Non-Executive Director of KKB Engineering Berhad, K & N Kenanga Holdings Berhad and Kenanga Investment Bank Berhad.

He also sits on the boards of several CMS subsidiaries in the areas of fi nancial services, construction, property development, technology and education.

Datuk Syed Ahmad has attended all 5 board meetings held during the fi nancial year ended 31 December 2009. He is a brother-in-law of Dato Sri Haji Mahmud Abu Bekir Taib, the Chairman of UBG. He has no confl ict of interest with UBG and has had no convictions for any offences within the past 10 years.


Y Bhg Dato Sri Liang Kim BangSenior Independent Non-Executive Director

Dato Sri Liang Kim Bang, a Malaysianaged 73, was appointed to the Boardof UBG Berhad (UBG) on 3 August 2006. He was also appointed as the Chairmanof the Nomination Committee and a member of the Audit Committee on19 September 2008.

He studied at the University of Malaya, Singapore, graduating with Bachelor of Arts (B.A.) and B.A. (Hons) degrees there in 1961 and later at Trinity College, University of Cambridge, England inPublic Administration.

He joined the Sarawak civil service in1961, and served in various capacities, including as Chairman and Director of several Statutory Bodies and Government-linked companies (both public listed and non-listed companies). He retired in 1994 from his post as the Sarawak State Financial Secretary, a position he held from 1984 to 1994.

At present, he is the Non-Executive Chairman of CMS Cement Sdn Bhd and CMS Clinker Sdn Bhd, and an Independent Non-Executive Director of PPB Group Berhad, Cahya Mata Sarawak Berhad and CMS Trust Management Berhad.

Dato Sri Liang has attended 4 out of 5 board meetings held during the fi nancial year ended 31 December 2009.

He does not have any family relationship with any Director and/or major shareholder of UBG, nor any confl ict of interest with UBG. He has had no convictions for any offences within the past 10 years.

Mr. Krishnan a/l C K MenonIndependent Non-Executive Director

Mr. Krishnan a/l C K Menon, a Malaysian aged 60, was appointed to the Board of UBG Berhad (UBG) on 19 September2008. He was also appointed as the Chairman of the Audit Committee and asa member of the Nomination Committee on 19 September 2008.

Mr. Menon is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of both the Malaysian Institute of Accountants and the Malaysian Institute of Certifi ed Public Accountants.

He spent 13 years in public practice with Hanafi ah Raslan & Mohamed, of which 7 years was as a partner. He joined Public Bank Berhad as General Manager and was subsequently promoted to Executive Vice President. Thereafter he served at two public listed companies before joining Putrajaya Holdings Sdn Bhd (PJH) as their Chief Operating Offi cer, a position he held from 1997 to 2000.

He is presently the Chairman of Putrajaya Perdana Berhad, M3 Technologies (Asia) Berhad and SCICOM (MSC) Berhad. He is also a Non-Executive Director of MISC Berhad, SPK-Sentosa Corporation Berhad and Petroliam Nasional Berhad.

He has attended all 5 board meetings held during the fi nancial year ended 31 December 2009.



LEFT TO RIGHT

Y BHG DATO SRI LIANG KIM BANG

MR KRISHNAN A/L C K MENON


LEFT TO RIGHT

MR SHAHER MOH’D ALI AWARTANI

MR TAN VERN TACT


Mr. Shaher Moh’d Ali AwartaniNon-Independent Non-Executive Director

Mr. Shaher Moh’d Ali Awartani, a Jordanian aged 47, was appointed to the Board of UBG Berhad (UBG) on 19 September 2008 as an Alternate Director to His Excellency Yousif Mana Saeed Alotaiba (His Excellency Yousif). He resigned as an Alternate Director on 23 November 2009 following the resignation of His Excellency Yousif andwas subsequently, appointed as a Director of the Company on the same date.

Mr. Shaher holds a Bachelor of Arts(B.A.) in Business Administration from the University of Toledo, Ohio, with emphasis on Human Resource Management.

Mr. Shaher founded and currently presides over Silver Coast Construction & Boring L.L.C., specialising in civil as well as infrastructure construction which currently has a staff strength of more than 2,000 workers. Previously he held numerous senior advisory positions, and was employed as the Assistant Vice President in Transammonia Inc in Zurich, Switzerland.

Mr. Shaher has attended 3 out of 5 meetings held during the fi nancial year ended 31 December 2009 as alternate to His Excellency Yousif. There were no further board meetings held during the remainder of the fi nancial year after his appointment as a Director on 23 November 2009.

He does not have any family relationship with any Director and/or major shareholder of UBG, nor any confl ict of interest with

UBG. He has had no convictions for any offences within the past 10 years.

Mr. Low Taek JhoGroup Advisor,Non-Independent Non-Executive Director

Mr. Low Taek Jho, a Malaysian aged 28,was appointed to the Board of UBG Berhad (UBG) on 19 September 2008 and was simultaneously appointed as the Group Advisor.

He serves as a member of the Remuneration Committee and the Leadership and Group Strategic Advisory Council (LGSAC). He also served as the Chairman of the Risk and Investment Committee (RIC) following his appointment to the Board on 19 September 2008. Both the LGSAC and RIC have since been dissolved on 23 November 2009 and 23 February 2010, respectively.

Mr. Low graduated with a Bachelor of Science in Economics with a concentration in Finance from The Wharton School, University of Pennsylvania, United Statesof America.

He currently serves as group advisor to several international corporations andis involved in global private equity, mergers and acquisitions and buyouts, amongst others.

He has attended all 5 board meetings held during the fi nancial year ended 31 December 2009.

He is a representative from Majestic Masterpiece Sdn Bhd and Abu Dhabi-Kuwait-Malaysia Investment Corporation,a major shareholder of UBG.


Mr. Tan Vern TactNon-Independent Non-Executive Alternate Director

Mr. Tan Vern Tact, a Malaysian aged 33, was appointed to the Board of UBG Berhad (UBG) as an Alternate Director to Mr. Low Taek Jho on 19 September 2008.

Mr. Tan graduated with a Bachelor of Arts (B.A.) and a Master of Engineering (M.Eng.) in Electrical and Information Sciences from Trinity College, Universityof Cambridge, United Kingdom.

He currently sits on the Board of Loh & Loh Corporation Berhad and Putrajaya Perdana Berhad as their Non-Independent Non-Executive Director where he is a representative director of UBG.

He is also a representative of Majestic Masterpiece Sdn Bhd and Abu Dhabi-Kuwait-Malaysia Investment Corporation,a major shareholder of UBG.


12 CHAIRMAN’S STATEMENT

HAVING TRANSFORMED OURSELVES BY

FURTHER IMPROVING OUR PROFESSIONAL

MANAGEMENT CAPABILITIES, FINETUNING

OUR OPERATIONAL EFFICIENCIES, RAISING

OUR CORPORATE IMAGE AND STRENGTHENING

OUR BUSINESS POSITION, UBG IS MOVING IN

THE RIGHT DIRECTION AS A FULL-FLEDGED

STRATEGIC INVESTMENT VEHICLE.

WE ARE READY TO TAKE ON NEW CHALLENGES

THAT THE NEXT FINANCIAL YEAR WILL BRING.

I CHAIRMAN’SSTATEMENT

CHAIRMAN’S STATEMENT 13

14 CHAIRMAN’S STATEMENT

DEAR SHAREHOLDER,

I am pleased to be able to present the Annual Report and Audited Financial Statements for the fi nancial year 2009.

2009 represents our company’s fi rst full fi nancial year since the major shift in business direction reported in the last annual report. I am confi dent that our performance over the year will set thetone for future fi nancial years.

STRENGTHENING OUR CORE

The priority when we started the year was to further consolidate our core businesses, namely, construction and water infrastructure, as part of our strategy to transform the Group into a signifi cant player in the Middle East and South East Asia (MESEA).

Operationally, in 2009, UBG grew into a full-fl edged strategic investment vehicle having undergone a transformation process that resulted in overall improvements in the areas of professional management, operational effi ciencies and even our corporate image.

UBG offi cially relocated to the Petronas Twin Towers in June 2009 in a move that was at once symbolic and pragmatic. Our new offi ce at a prestigious, internationally recognised address provides the space required to accommodate an expanded staff force. At the same time, it signifi esour new business confi dence.

In order to improve Group synergy, we undertook an internal restructuring exercise that involved selling CMS Roads Sdn Bhd (CMSR) and CMS Pavement Tech Sdn Bhd

(CMSP) to Putrajaya Perdana Berhad (PPB). I am very pleased to report that this has been mutually benefi cial for both UBG and PPB as CMSR and CMSP are performing better than ever under PPB’s stewardship.

PPB and LLCB continued to perform well in 2009. Even at the height of the global economic crisis, both companies succeeded in securing new jobs and delivering good earnings numbers. In fact, I am extremely proud to note that LLCB saw a record year of profi t in 2009.

In the second half of 2009, UBG ventured into the energy business with its maiden investment in upstream oil & gas activities in the Gulf of Thailand. The acquisition of Pearl Thailand (Holdings) Limited (PTH), which was subsequently renamed as UBG Petroleum (Thailand) Limited (UBGPT), for RM61.81 million (USD19.21 million) was intended to be our maiden foray into the oil and gas industry. While the exploration activities carried out have met with varying degrees of success, the commercial risks of such upstream activities continued to be high. In view of the increasing risk exposure, UBG Energy Limited disposed of UBGPT in April 2010. The proceeds from the disposal allow us to refocus our strategy and redeploy the capital in other investments with more favourable risk-reward profi le.

READY FOR NEW CHALLENGES

Looking ahead to the next fi nancial year and beyond, we expect our construction and water infrastructure business will continue

CHAIRMAN’S STATEMENT 15

to do well. Factors that favour this include our track record, strong management, a healthy balance sheet and competitiveness. Furthermore, with the recently announced New Economic Model (NEM), we expect that this sector will benefi t from greater government spending on infrastructure projects. We are also very optimistic that the NEM will help spur economic recovery by encouraging private sector investment to complement government spending.

In the new fi nancial year, our core focus will continue to be the construction and water infrastructure sectors. Hence, we are always on the look out for value-enhancing investments in these areas. However, we remain open-minded about investing in other sectors if opportunities, which are economically and strategically advantageous, present themselves. We will make investment decisions purely based on whether these opportunities fi t our risk appetite.

CHANGE OF SHAREHOLDER

UBG is currently in the midst of a takeover exercise initiated by PetroSaudi International Limited (PSI) where PSI has offered to acquire the shares of UBG from the current major shareholders. We also understand that PSI intends to acquire the remaining shares of UBG with a view of taking the company private. While the offer is still conditional, I see this as a positive development for UBG as it is a recognition

of the Group’s expertise, ability, value and future prospects.

At this point, I am pleased to report that despite a challenging year in light of the global economic crisis, the Group registered a turnover of RM1.13 billion and profi t before tax of RM50.87 million for fi nancial year ended 31 December 2009. Our fi nancial position remains strong, which will stand us in good stead as we weather the prevailing challenging economic climate. I am confi dent that UBG will emerge even stronger and more capable of leveraging on the period of sustained economic recovery and growth that awaits.

IN APPRECIATION

Before I conclude, I would like to express my appreciation to our shareholders, members of the board, management, employees and stakeholders of UBG, for their contributions, commitment and service over the past year. Without your support, we would not have had such a rewarding year. Thank you very much and I look forward to an equally successful year ahead.

DATO SRI HAJI MAHMUD ABU BEKIR TAIB

Chairman

16 OPERATIONS REVIEW

I OPERATIONSREVIEW

OPERATIONS REVIEW 17


The fi nancial year in review saw UBG Berhad (UBG) further establishing itself in its core businesses, that is, concession, construction and infrastructure. We implemented an internal restructuring exercise with the disposal by UBG to Putrajaya Perdana Berhad (PPB) of CMS Roads Sdn Bhd and CMS Pavement Tech Sdn Bhd, thus consolidating our construction and infrastructure capabilities for greater synergy.

PPB continued to perform well in 2009. Apart from being the contractor of choice for many leading property developers in Malaysia, it succeeded in winning a number of sizeable tenders. PPB also continued to establish itself in the green building segment having completed a number of landmark buildings.

Loh & Loh Corporation Berhad (LLCB) achieved a record-breaking fi nancial year in terms of profi tability despite the challenging economic climate. It is making its name as the water infrastructure specialist. In addition, the property development division of LLCB achievedits fi rst milestone, successfully deliveringits fi rst project on schedule.

YEAR IN REVIEW


IN 2009, WE MADE THE RIGHT MOVES TO

STRENGTHEN OUR POSITION IN OUR CORE

BUSINESSES OF CONCESSION, CONSTRUCTION

AND INFRASTRUCTURE.

WE CONSOLIDATED OUR CONSTRUCTION

AND INFRASTRUCTURE CAPABILITIES FOR

GREATER SYNERGY; AND RAISED OUR PROFILE

AS PROPERTY DEVELOPERS’ CONTRACTOR

OF CHOICE.


UBG ENERGY LIMITED

In January 2009, UBG was invited by Mubadala Development Company PJSC (Mubadala) to explore a joint investment in six oil and gas exploration concession blocks located in the Gulf of Thailand and operated by Pearl Energy Limited (Pearl), a wholly-owned subsidiary of Mubadala. Subsequently, on 2 September 2009, UBG entered into a Sale and Purchase Agreement with Pearl for the acquisition by UBG Energy Limited (UBG Energy), of Pearl Thailand (Holdings) Limited (PTH). The acquisition was completed immediately after the signing of the Sale and Purchase Agreement, and PTH was renamed UBG Petroleum (Thailand) Limited (UBGPT).

UBGPT had four wholly-owned subsidiaries with participating interests in offshore petroleum concessions covering six prospective blocks in the Gulf of Thailand, namely:

UBG Petro-G1 (Thailand) Limited (formerly known as Pearl Energy (G1) Ltd) holding 20% participating interest in Block G1/48.

UBG Petro G3/G6 (Thailand) Limited (formerly known as Pearl Energy (G3) Ltd) holding a 20% participating interest in Block G3/48 and Block G6/48.

UBG Petro-G2-G10 (Thailand) Limited (formerly known as Pearl Energy (Thailand) Limited) holding a 25% participating interest in Block G10/48, and pending approval from the Minister Of Energy, a 20% participating interest in Block G2/48

UBG Petro-G11 (Thailand) Limited (formerly known as Pearl Energy (Siam) Limited) holding a 25% participating interest in Block G11/48.

As at 31 December 2009, UBG has injectedUSD28.4 million into UBG Energy via subscription of shares which were mainlyto fund the acquisition as well as oil and gas exploration activities.

While the exploration activities carried out so far have met with varying degrees of success, the commercial risks continue to remain high.

After considering the demanding exploration programme and the increasing risk exposure of exploration activities in Thailand, in April 2010, the Company disposed of UBGPT and aims to refocus its strategy and redeploy its capital in other investments with more favourable risk-reward profi le.


THE ACQUISITION OF SIX OIL AND GAS

EXPLORATION CONCESSION BLOCKS LOCATED

IN THE GULF OF THAILAND LED TO THE

FORMATION OF UBG ENERGY. ALTHOUGH,

THESE CONCESSION BLOCKS WERE DISPOSED

OF SHORTLY THEREAFTER, IT GAVE US THE

RIGHT START IN THE OIL AND GAS INDUSTRY.


PUTRAJAYA PERDANA BERHAD

During the year, Putrajaya Perdana Berhad (PPB) turned in a strong performance amidst an economy on the pathway to recovery with its group reporting an increased profi t before tax of RM69.6 million in 2009, an increase of 76.7% from RM39.4 million in 2008.

In May 2009, PPB acquired CMS Roads Sdn Bhd and CMS Pavement Tech Sdn Bhd, which marked the Group’s formal entry into the road maintenance and pavement construction businesses. The former is responsible for maintaining over 4,700 km of roads throughout Sarawak under a 15-year concession agreement with the Sarawak State Government. The latter is a specialist provider of construction, maintenance and rehabilitation technology for road pavements. The integration of these two companies under PPB’s portfolio has boosted the Group’s earnings, contributing 32% to PPB’s profi ts and strengthened the Group’s position as an integrated building and construction solutions provider.

Putra Perdana Construction Sdn Bhd (PPC), the construction arm of PPB, successfully brought several projects to full completion. These included retrofi tting works for the facade of the Bangsar Shopping Centre (Phase 2); construction works for boththe ICT Data Centre and Package 4C11 projects in Putrajaya; the six-block, 229-unit

One Menerung high-end condominium project in Bangsar for Bandar Raya Developments Berhad; the Wharf 11 & 12 project in Johor for Pelabuhan Tanjung Pelepas; and the Diamond Building project in Putrajaya for the Energy Commission.

PPC’s ongoing projects at the time of writing include retrofi tting works for the fi nal phase of the Bangsar Shopping Centre, together with the construction of offi ce blocks and an annexe to the shopping mall; construction of several phases of Universiti Teknikal Malaysia Melaka’s campus in Melaka; and construction of the 50-storey high Wisma Felda in Platinum Park near the Kuala Lumpur City Centre.

The Group also secured several sizable jobs including Package 1 and 2 of the infrastructure development works project for the Tanjung Agas gas supply base and marine services in Taman Industri Minyak & Gas dan Maritime, Pekan, Pahang.

PPB continued making strong inroads in the green building segment, which received a boost when the Government announced a tax exemption for green building owners in its 2010 Budget. The group is well-placed to leverage on an impressive track record that includes landmark projects like the Low Energy Offi ce (LEO) for the Ministry of Energy, Green Technology and Water, the Green Energy Offi ce (GEO) for the National Green Energy Centre and the Diamond Building for the Energy Commission.

Ongoing green building construction projects include the Sarawak Energy Berhad headquarters in Kuching, which is currently being considered for upgrading from an energy effi cient building to a full-fl edged green building; and a RM181.8 million green commercial building on Lot 2C2 in Putrajaya.

Going forward into 2010, PPB is determined to intensify its business development activities, seeking new opportunities to bolster the Group’s position as an integrated building and construction solutions provider. PPB is confi dent of securing a total order book exceeding RM2 billion in FY2010, in addition to the recurring revenue from its road and pavement construction and management operations.


WITH THE RIGHT CAPABILITIES, PPB IS NOT JUST

WELL PLACED AS AN INTEGRATED BUILDING

AND CONSTRUCTION SOLUTIONS PROVIDER

BUT A PIONEER IN THE GREEN BUILDING

INDUSTRY.

FROM LEFT

CMS PAVEMENT TECH CONDUCTING

CEMENT STABILISATION WORK

NEWLY COMPLETED 4C11

COMMERCIAL BUILDING IN

PRECINCT 4, PUTRAJAYA

ENERGY COMMISSION’S DIAMOND

BUILDING, PRECINCT 2, PUTRAJAYA


LOH & LOH CORPORATION BERHAD

Despite the economic uncertainties of 2009, Loh & Loh Corporation Berhad’s (LLCB) profi t before tax for the fi nancial year increased by 22.4% to RM39.6 million from RM32.3 million in the previous year. The main fi nancial contributions came from the construction and property development division, namely, Loh & Loh Constructions Sdn Bhd (LLCSB), Water Engineering Technology Sdn Bhd(WETSB) and Loh & Loh DevelopmentSdn Bhd (LLDSB).

LLCSB, which undertakes the civil and structural engineering activities for the Group, completed two major projects: Phase 2 of the Sandakan Water Supply Project and Phase 2 of the Sewage Treatment Plants (Package 2 – Kota Setar Centralised Sludge Treatment Facility, Alor Setar, Kedah and Kangar Sewage Treatment Plant, Kangar, Perlis).

Ongoing major construction projects include the Electrifi ed Double Tracking Project between Seremban and Gemas. LLCSB was also awarded the contractfor the Construction and Completionof Infrastructure Works for Medini Development, Iskandar Johor, which is being undertaken in collaboration with WETSB.

WETSB, which undertakes mechanical and electrical engineering and related activities, successfully completed two major contracts: the Putrajaya Wastewater

Development (Package WW20) in Putrajaya and the mechanical works for the Kuala Sawah Sewage Treatment Plant in Negeri Sembilan.

In addition to the Medini Development contract, WETSB secured a number of new projects including the upgrading of Module 4, Lambir Water Treatment Plant in Miri, Sarawak; and the electro-mechanical works for Bakun Hydroelectric Project in Sarawak. WET O&M was incorporated in October 2009 as a wholly-owned subsidiary of WETSB to undertake the Operation & Maintenance Contract for Segaliud River Intake, Dam & Treatment Works, Sandakan.

With its maiden development, RiverView Kemensah in Taman Melawati, deliveredon schedule with full Certifi cate of Completion and Compliance (CCC) in October 2009, LLDSB, the property development arm of LLCB, has grownto become a signifi cant core subsidiary. Approvals have been obtained for twonew development projects. The fi rst project, Idaman Hills, located in Selayang, is expected to be launched in the fi rst half of 2010, while the second project, The Peak, Sri Damansara, is expected to be launched in the latter half of 2010.

The Group is actively identifying and acquiring suitable land to increase its landbank based on a strategy of developing real estate with exceptional value.

Looking ahead, LLCB remains preparedto face both opportunities and challengesthat may come its way. LLCB is encouraged by the announcement of new water and other major infrastructure projects – the Pahang-Selangor Water Supply Scheme, Sarawak Hydro Dams, and the integration of the Light Rail Transit systems – that will enable the Group to leverage on its core competencies and proven track record.


LLCB HAS THE RIGHT SPECIALISATION

TO BECOME A LEADER IN THE WATER

AND INFRASTRUCTURE SECTOR, WHILE

SIMULTANEOUSLY ESTABLISHING ITSELF

AS A PROPERTY DEVELOPER OF NOTE.

CLOCKWISE FROM TOP LEFT

RIVERVIEW KEMENSAH, TAMAN

MELAWATI.

ONGOING SEREMBAN-GEMAS

ELECTRIFIED DOUBLE TRACKING

PROJECT.

OPERATION & MAINTENANCE FOR

SEGALIUD RIVER INTAKE, DAM &

TREATMENT WORKS, SANDAKAN.

58 CORPORATE SOCIAL RESPONSIBILITY

I CORPORATE SOCIALRESPONSIBILITY

CORPORATE SOCIAL RESPONSIBILITY 59


UBG and its subsidiaries adhere to a Corporate Social Responsibility (CSR) Charter that is wide-ranging in its purview, as it covers our business activities, the workplace, the community and the environment.

This year saw our subsidiaries, in particular, Putrajaya Perdana Berhad (PPB) and Loh & Loh Corporation Berhad (LLCB), taking the lead in fulfi lling their CSR obligations with generosity, compassion and resourcefulness.

At the holding company level, UBG focused on providing fi nancial assistance to a few worthy causes. These included:

The Songket Ball in aid of the Yayasan Tuanku Nur Zahirah. UBG, PPB and LLCB sponsored three tables with a donation of RM150,000 at this event which was held in July 2009, to raise funds for the foundation founded by the Raja Permaisuri Agung Tuanku Nur Zahirah. The Yayasan Tuanku Nur Zahirah is dedicated to preserving Malaysia’s cultural heritage while providing succour to impoverished artists and craftsmen.

The Edge-Bursa Malaysia KL Rat Race 2009. UBG donated RM15,000 and entered a team in this 4.5km run around Kuala Lumpur’s Golden Triangle. This annual corporate event is one of the main fund-raising platforms for Yayasan Bursa Malaysia, the foundation arm of Bursa Malaysia, and its proceeds benefi ted various social and charitable organisations.

Majlis Pelancaran Album Ahli Dewan Negara Sempena Jubli Emas Ke-50Tahun Ahli Dewan Negara Malaysia.UBG donated RM40,000 to this launch.

Publishing of the coffee table book by Yayasan Harapan Kanak-Kanak Malaysia. UBG donated RM10,000 to help fund the publication of this book.

FROM TOP LEFT

THE UBG TEAM IN THE EDGE-BURSA

MALAYSIA KL RAT RACE 2009.

THE SONGKET BALL IN AID OF

YAYASAN TUANKU NUR ZAHIRAH.


OUR HEART IS IN THE RIGHT PLACE AT

THE CORE OF OUR CORPORATE SOCIAL

RESPONSIBILITY CHARTER, WHICH GUIDES

OUR ENDEAVOUR TO BE A RESPONSIBLE

AND COMPASSIONATE BUSINESS ENTITY,

EMPLOYER AND CORPORATE CITIZEN.


PUTRAJAYA PERDANA BERHAD

Whilst PPB’s CSR activities are governed by the Corporate Social Responsibility Charter, the company’s main commitments and focus are to its employees as well as the environment.

In line with Group policy, PPB prioritises the health and safety of its employees and co-workers above all others. 2009 saw the company continuing to improve site safety for both employees as well as co-workers attached to onsite sub-contractors. As a result of the stringent health and safety standards and practices as well as the many proactive initiatives implemented over the course of the year, PPB recorded zero fatalities in 2009.

PPB also introduced a number of activities for its employees through the company’s sports club, Kelab Sukan Putrajaya Perdana Berhad (KSPPB). These activities, ranging from community works and donations to sports, environmental and health care, helped to promote better ties and a sense of belonging amongst employees.

Employees have also been very proactive in raising environmental awareness within the company by supporting initiatives such as Earth Hour 2009 as well as recycling campaigns. Their commitment complements PPB’s environmental policies in line with the targets set for its ISO18001:2007 accreditation. PPB also became one of the fi rst few corporate members of the newly established Malaysia Green Building Confederation (MGBC) in 2009.

The company mooted and launched the Green Lecture Tour in late 2008, which it continued in 2009, with six events in both public and private universities. Following positive feedback from these institutions, PPB hopes to inspire other organisations in the corporate world to conduct similar sustainable development awareness campaigns and elevate green building standards in Malaysia.

PPB FOCUSSED ON TAKING THE RIGHT STEPS

TO ENSURE THE HEALTH, SAFETY

AND DEVELOPMENT OF ITS STAFF WHILE

SPREADING THE WORD ON GREEN INITIATIVES

TO THE NEXT GENERATION OF MALAYSIANS.


TOP TO BOTTOM

A MONTHLY RECYCLING CAMPAIGN.

PARTICIPANTS DONATING

GENEROUSLY TO THE KSPPB-

ORGANISED ANNUAL BLOOD

AND ORGAN DONATION

CAMPAIGN.

SHARING IN THE JOY OF

PROVIDING FOR 31 ORANG ASLI

HOMES AT KAMPUNG SEKUKUH,

PEKAN, PAHANG.


LLCB MERGED CSR AND BUSINESS ACTIVITIES

TO MAKE THE RIGHT DIFFERENCE IN THE

ENVIRONMENT AND COMMUNITIES IT

OPERATES IN – FROM RESTORING A LONG-

NEGLECTED RIVER TO AIDING THOSE STRICKEN

BY DISASTER.


LOH & LOH CORPORATION BERHAD

LLCB’s CSR strategy, in line with the Corporate Social Responsibility Charter, is to merge CSR initiatives with its business activities while encouraging and inspiring employees to contribute to the environment and communities that the company operates in.

In October 2009, LLCB, through its development arm, handed over to purchasers its maiden development project, RiverView Kemensah. As part of a CSR environmental initiative, LLCB spent RM2 million to restore and beautify the 650m long stretch of river next to the development. The river banks were landscaped and walkways and shelters built to turn the river into a community park. LLCB has made a similar commitment for its next development project, Idaman Hills, Selayang.

In the workplace, LLCB emphasised health and safety, as well as staff development and welfare. The aim is to ensure that all project sites and offi ces are safe and conducive not just for employees but everyone who enters the premises. One of the initiatives was the safety campaign at the Gemas Electrifi ed Double Track Project which was held to mark the 1 millionth hour of ‘no loss of man hours’.

In 2009, LLCB also donated extensivelyto such worthy causes as victims of natural disasters and charitable institutions. The company also encouraged its staff to volunteer for community work by organising charities such as blood donation drives and visits to charitable institutions.

As part of its contributions to the community, the Group makes donationsto homes and charitable institutions.

CLOCKWISE FROM TOP

FIRE SAFETY CAMPAIGN.

TEAM BUILDING AT A LOCAL

RESORT IN PORT DICKSON.

BLOOD DONATION AT

PUSAT DARAH NEGARA,

KUALA LUMPUR.

66 UBG BERHAD ANNUAL REPORT 2009

67

DIRECTORS’ REPORT

72

STATEMENT BY DIRECTORS

72

STATUTORY DECLARATION

73

INDEPENDENT AUDITORS’

REPORT

75

INCOME STATEMENTS

76

BALANCE SHEETS

78

STATEMENTS OF CHANGES

IN EQUITY

81

CASH FLOW STATEMENTS

84

NOTES TO THE

FINANCIAL STATEMENTS

Financial Statements

UBG BERHAD ANNUAL REPORT 2009 169

I/We (full name)...........................................................................................................................................................................................................

NRIC/Passport/Company No................................................................of (full address)...........................................................................................

.......................................................................................................................................................................................................................................

being a member/members of UBG Berhad hereby appoint.................................................................................................................................

NRIC/Passport No.................................................................................of..................................................................................................................

.......................................................................................................................................................................................................................................

and/or..................................................................................................NRIC/Passport No..................................................................................

of..........................................................................................................................................................................................................................,

or failing either of them, the Chairman of the Meeting as my/our proxy to attend and vote for me/us and on my/our behalf at the Eighteenth Annual General Meeting of the Company to be held at Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Friday, 25 June 2010 at 10:00 a.m. and at any adjournment thereof.

NO. RESOLUTIONS FOR* AGAINST*

1. Receive the Audited Financial Statements and Reports of the Directors and Auditors thereon

2. Re-election of Y Bhg Datuk Syed Ahmad Alwee Alsree as Director

3. Re-election of Mr. Shaher Moh’d Ali Awartani as Director

4. Approval of Directors’ fees for the year ended 31 December 2009

5. Re-appointment of Messrs. Ernst & Young as Auditors of the Company

6. Re-appointment of Y Bhg Dato Sri Liang Kim Bang as Director

* Please indicate with an ‘X’ on how you wish your vote to be cast. If no specifi c direction as to voting is given, the proxy will vote or abstain at his/her discretion.

.............................................. .............................................. ........................................................................

NO. OF SHARES HELD DATE SIGNATURE OF MEMBER(S)

NOTES

1. A member of the Company entitled to attend and vote at this Meeting is entitled to appoint a proxy or proxies to attend and vote on his behalf. 2. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.3. Where a member of the Company appoints more than one proxy, the appointment shall be invalid unless the member specifi es the proportion of his shareholding

to be represented by each proxy.4. Where a member of the Company is an authorised nominee as defi ned under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy

in respect of each securities account it holds. 5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or, if the appointer is a corporation,

either under seal or under the hand of an offi cer or attorney duly authorised. 6. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certifi ed true copy of the power or

authority shall be deposited at the offi ce of the Share Registrar, Securities Services (Holdings) Sdn Bhd, Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the Meeting or any adjourned Meeting.

I UBG Berhad 240931-X

Form of ProxyCDS ACCOUNT NO

.............................................

UBG Berhad 240931-X

c/o Securities Services (Holdings) Sdn BhdLevel 7, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurMalaysia

2ND FOLD

1ST FOLD

Affi xstamphere

UBG BERHAD240931-X

CORPORATE & REGISTERED OFFICE

LEVEL 70, TOWER 2

PETRONAS TWIN TOWERS

KUALA LUMPUR CITY CENTRE

50088 KUALA LUMPUR

MALAYSIA

TEL +(603) 2332 0222

FAX +(603) 2332 0333

[email protected]

www.ubg.com.my

UBG Annual Report 2009

Documents

Transcript of UBG Annual Report 2009