CORPORATE SOCIAL RESPONSIBILITY

Transcription

1 CORPORATE SOCIAL RESPONSIBILITY For UOA Development Bhd (the Group ), Corporate Social Responsibility (CSR) plays an integral part of the company s core culture in building excellence. In 2011, the Group focused its CSR initiatives in the areas of education and community activities. 1 The Star Step Up Sponsorship Programme 1 EDUCATION Recognising the predominance and importance of English to our future generation, the Group worked in close collaboration with The Star newspaper, Malaysia s leading English daily, to nurture and encourage the learning of English language amongst vernacular school students. In line with its aspiration to help students to improve their proficiency in the international language, the Group sponsored RM50,000 for Step Up, The Star s education pullout a segment dedicated to helping students in Years Four, Five and Six to effectively improve their English language skills through interesting language strengthening exercises and fun syllabus-based contents. The pullout is intended to inspire and cultivate a genuine interest in the English language amongst today s youth, thus laying down the solid groundwork for their future success. COMMUNITY ACTIVITIES The Group also supports socially responsible initiatives undertaken by Suria Bangsar South, a community centre operated by Soroptimist International Club of Bangsar (SICB) and sponsored by the Group. Suria Bangsar South - a joint initiative of SICB and the Group - offers educational support and skill development programmes for women and young girls living in the low cost flats. The community centre runs in tandem with four programme focus goals namely equity and equality for women and girls, living in safe and healthy environments, access to education, and development of leadership and practical skills. The Group introduced an ongoing community programme, Caring For The Young by Suria Bangsar South, held in support of the Ministry of Health s (MOH) effort to educate the public about the potential danger of Bisphenol-A (BPA), which is used in polycarbonate to make infant milk bottles. 12 UOA DEVELOPMENT BHD Annual Report 2011

2 Corporate Social Responsibilities (Cont d) The programme was initiated to promote awareness on children s well being through educational talks and activities for mothers with young children. A total of 150 children, aged 2 and below, received hampers comprising BPA-free infant milk bottles and baby toiletries courtesy of the Group. In support of the community initiative, families of the recipients also brought in their old baby bottles in exchange for the safe-to-use new ones. In conjunction with the Hari Raya festive celebration, an annual Majlis Hari Raya at Bangsar South was held to add some cheer to 120 single mothers and their children from the neighbouring community in the true spirit of sharing and giving. The event also served as an ideal platform to introduce various new skill development programmes including sewing, cooking and beading classes offered by Suria Bangsar South to the single mothers and encourage their participation for the betterment of their livelihood. A book collection drive was organised in support of the Suria Bangsar South Mini Library project to promote education as part of the skill development programme. More than 200 children s books in Malay and English pre-school, primary and secondary school books, picture dictionaries, encyclopedias, how-to books as well as fictional story books were collected from the staff for the campaign. All the collected books were placed at the Suria Bangsar South library for the children s perusal. In the near future, SICB intends to conduct story telling sessions, arts and crafts classes to benefit children from low income families in the neighbourhood. Suria Bangsar South conducted a Personal Safety Workshop for children below 13 years old. The children were taught the Five Golden Rules of Personal Safety to recognise possible danger signs and unsafe situations. The workshop was held with the objective to provide practical advice on keeping children safe from harm, whether it is at home, in school, or in the surrounding neighbourhoods. The Group supports the importance of such engaging initiatives as they form the basis of a caring community with the aim to improve the society and environment within the Kampung Kerinchi vicinity Caring For The Young Programme 3 & 4 Majlis Hari Raya UOA DEVELOPMENT BHD Annual Report

3 CORPORATE INFORMATION BOARD OF DIRECTORS Tan Sri Dato Alwi bin Jantan (Chairman/Independent Non-Executive Director) Kong Chong Chi Suim (Managing Director/ Non-Independent Director) Kong Pak Lim (Executive Director/ Non-Independent Director) Tan Chok Kian Alphonsus (Independent Non-Executive Director) Alan Charles Winduss (Non-Independent Non-Executive Director) AUDIT COMMITTEE Tan Chok Kian Alphonsus (Chairman, Independent Non-Executive Director) Tan Sri Dato Alwi bin Jantan (Independent Non-Executive Director) (Resigned on 28 March 2012) Alan Charles Winduss (Non-Independent Non-Executive Director) NOMINATION AND REMUNERATION COMMITTEE Tan Chok Kian Alphonsus (Chairman, Independent Non-Executive Director) Tan Sri Dato Alwi bin Jantan (Independent Non-Executive Direcctor) Alan Charles Winduss (Non-Independent Non-Executive Director) SECRETARIES Yap Kai Weng (MAICSA No: 74580) Wong Yoke Leng (MAICSA No: ) REGISTERED OFFICE No. 9, Jalan Indah 16 Taman Cheras Indah Kuala Lumpur Tel No: Fax No: SHARE REGISTRAR Symphony Share Registrars Sdn Bhd Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/ Petaling Jaya Selangor Tel No: Fax No: PRINCIPAL PLACE OF BUSINESS Wisma UOA Bangsar South Tower 1, Avenue 3 The Horizon, Bangsar South No. 8, Jalan Kerinchi Kuala Lumpur Tel No: Fax No: AUDITORS Mazars (AF: 1954) Wisma Selangor Dredging 7th Floor, South Block 142-A, Jalan Ampang, Kuala Lumpur Tel No: Fax No: PRINCIPAL BANKERS AmBank Berhad HSBC Bank Malaysia Berhad RHB Bank Berhad United Overseas Bank (M) Bhd STOCK EXCHANGE LISTING Bursa Malaysia Securities Berhad STOCK CODE 5200 WEBSITE INVESTOR RELATIONS uoacare@uoa.com.my Tel No: UOA DEVELOPMENT BHD Annual Report 2011

4 FINANCIAL CALENDAR FINANCIAL YEAR 1 January to 31 December 2011 LISTED ON BURSA MALAYSIA 8 June 2011 ANNOUNCEMENT OF QUARTERLY RESULTS 23 August 2011 announcement of unaudited consolidated result for the second quarter ended 30 June November 2011 announcement of unaudited consolidated result for the third quarter ended 30 September February 2012 announcement of unaudited consolidated result for the fourth quarter ended 31 December 2011 ANNUAL REPORT & ANNUAL GENERAL MEETING 7 May 2012 date of notice of 8th Annual General Meeting and date of issuance of Annual Report May 2012 date of 8th Annual General Meeting DIVIDEND To be approved at the 8th Annual General Meeting UOA DEVELOPMENT BHD Annual Report

5 CORPORATE STRUCTURE UOA Development Bhd Kumpulan Sejahtera Sdn Bhd 100% 100% Windsor Triumph Sdn Bhd Tiarawoods Sdn Bhd 100% 100% Saujanis Sdn Bhd Magna Tiara Development Sdn Bhd 100% 60% Everise Tiara (M) Sdn Bhd IDP Industrial Development Sdn Bhd 100% 100% Paramount Hills Sdn Bhd Sunny Uptown Sdn Bhd 100% 100% Sagaharta Sdn Bhd Peninsular Home Sdn Bhd 60% 100% Paramount Properties Sdn Bhd Magna Kelana Development Sdn Bhd 70% 85% Seri Tiara Development Sdn Bhd Scenic Point Development Sdn Bhd 60% 100% UOA Properties Sdn Bhd Ceylon Hills Sdn Bhd 54% 100% Dynasty Portfolio Sdn Bhd URC Engineering Sdn Bhd 100% 100% Lencana Harapan Sdn Bhd Allied Engineering Construction Sdn Bhd 100% 100% 100% Bangsar South City Sdn Bhd Nasib Unggul Sdn Bhd UOA Hospitality Sdn Bhd 100% 85% Enchant Heritage Sdn Bhd Everise Project Sdn Bhd 39% 100% Tunjang Idaman Sdn Bhd Legend: Subsidiary Associate Company 16 UOA DEVELOPMENT BHD Annual Report 2011

6 BOARD OF DIRECTORS from right to left Kong Chong Chi Suim (Managing Director/Non-Independent Director) Alan Charles Winduss (Non-Independent Non-Executive Director) Tan Chok Kian Alphonsus (Independent Non-Executive Director) Tan Sri Dato Alwi bin Jantan (Chairman/Independent Non-Executive Director) Kong Pak Lim (Executive Director/Non-Independent Director) UOA DEVELOPMENT BHD Annual Report

7 PROFILE OF BOARD OF DIRECTORS TAN SRI DATO ALWI BIN JANTAN (Chairman/Independent Non-Executive Director) Tan Sri Dato Alwi bin Jantan, Malaysian, aged 76, is the Chairman and Independent Non-Executive Director. He was appointed on 24 January 2011 and is also a member of the Nomination and Remuneration Committee. He has had a distinguished career in public service in Malaysia culminating as the Director General of Public Service, a position he held for over three years until his retirement in April His other notable appointments were as Secretary General, Ministry of Agriculture ( ), Deputy Secretary General, Prime Minister s Department ( ), Secretary General, Ministry of Health ( ), Secretary General, Ministry of Local Government and Federal Territory ( ), State Secretary, Selangor ( ) and Director General of National Archives and Library ( ). He concurrently served as Private Secretary to His Royal Highness the Timbalan Yang di Pertuan Agong between 1961 and 1962 and in Upon his retirement after 32 years in the public service, he joined Genting Malaysia Berhad (formerly known as Resorts World Bhd) as an Executive Vice President Public Affairs and Human Resources in He was redesignated as Executive Director in 2007 and is currently a Non- Independent Non-Executive Director. He also sits on the board of Hiap Teck Venture Bhd, a company listed on the Main Market of Bursa Securities. Tan Sri Dato Alwi bin Jantan graduated from University Malaya with a Bachelor of Arts (Honours) degree in While in the public service, he also obtained a diploma from the State Technique International d Archives, Paris and an honorary degree from the University of Rome in 1966 and 1979 respectively. In 1980, he attended the Advanced Management Programme at the Harvard Graduate School of Business. Tan Sri Dato Alwi bin Jantan was a UNESCO Fellow as well as a former President of the Harvard Business School Alumni Club of Malaysia. He does not have any family relationship with any Director and/or major shareholder, nor any conflict of interest with the Company. He has no convictions for any offences over the past 10 years. Kong Chong Chi Suim (Managing Director/ Non-Independent Director) Kong Chong Chi Suim, Malaysian, aged 70, was appointed Director of UOA on 27 May He is responsible for the overall group management and strategy development. He has over 30 years experience in the construction and property development industries, both in Singapore and Malaysia. He played a key role as Project Advisor to the Harapan group of companies where he was instrumental in overseeing the successful construction of three internationallyrated hotels in Singapore, namely the Hotel Meridien, the Glass Hotel and the Changi Meridien Hotel, valued in excess of SGD866.0 million, during the 1970s and 1980s. In 1987, he co-founded UOA and spearheaded our Parent Group s rapid growth in Malaysia. Over the last 21 years, our Parent Group together with our Group has successfully completed numerous residential, industrial and commercial developments in various parts of Kuala Lumpur. He has in the past served in various capacities in several public-listed companies both in Malaysia and Singapore which included Raleigh Bhd, Town and City Properties Ltd and Tuan Sing Holdings Ltd. He graduated with an Associateship in Civil Engineering from the then Perth Technical College (now known as Curtin University) in 1964 and is a member of the Chartered Engineers of Australia. He does not have any family relationship with any Director and/ or major shareholder, nor any conflict of interest with the Company. He has no convictions for any offences over the past 10 years. 18 UOA DEVELOPMENT BHD Annual Report 2011

8 Profile of Board of Directors (Cont d) Kong Pak Lim (Executive Director/ Non-Independent Director) Kong Pak Lim, Malaysian, aged 59, was appointed Director of UOA on 27 May He oversees the planning and designs of our commercial and residential projects and is also responsible for the identification and negotiations of all new land acquisitions. He has over 20 years of experience in the construction, mining and property development industries in both Malaysia and Australia. He has worked extensively in various capacities in Australia, among them as a Project Engineer in Davis Wemco in charge of mining design and construction and material handling and as a Director of Ferro Engineering Pty Ltd responsible for structural and mechanical fabrication of oil and gas and mining equipment. He co-founded UOA with Mr Kong Chong Chi Suim and played an integral part in spearheading the Parent Group s and the Group s rapid growth over the years. He graduated with a Bachelor of Engineering degree with Honours from the University of Western Australia in He is a member of the Institute of Engineers Australia, the Australian Institute of Management, the Institute of Engineers Malaysia and the Association of Professional Engineers Malaysia. He does not have any family relationship with any Director and/or major shareholder, nor any conflict of interest with the Company. He has no convictions for any offences over the past 10 years. Tan Chok Kian Alphonsus (Independent Non-Executive Director) Tan Chok Kian Alphonsus, a Singaporean, aged 80, is the Independent Non-Executive Director and was appointed as Director on 24 January He is also the Chairman of both the Audit Committee and Nomination and Remuneration Committee. He has held various senior appointments in the Singapore civil service from 1956 until his retirement in 1986 including the positions of Permanent Secretary in the Ministry of Finance, the Ministry of Social Affairs and the Ministry of National Development. He was Chairman of the Central Provident Fund Board and was appointed to the positions of Acting Vice-Chancellor / Director General, Nanyang University and Chairman of the Post Office Savings Bank of Singapore. Following his retirement from the civil service, he was appointed Executive Chairman of the Stock Exchange of Singapore Limited between 1987 and 1989 and served as Singapore s trade representative to Taipei between 1988 and Mr Tan presently sits as Non-Executive Chairman of Tat Hong Holdings Ltd, a company listed on the Main Board of the SGX-ST which specialises in the international supply of heavy machinery and equipment as well as Asia Pacific Investment Company Ltd, a property investment company associated with the Lend Lease Group of Australia. He was appointed the non-executive Chairman of the Securities Investors Association of Singapore in He graduated with a Bachelor of Arts degree with Honours from the University of Malaya in He does not have any family relationship with any Director and/or major shareholder, nor any conflict of interest with the Company. He has no convictions for any offences over the past 10 years. Alan Charles Winduss (Non-Independent Non-Executive Director) Alan Charles Winduss, Australian, aged 70, was appointed Director of UOA on 24 January 2011 and member of Audit Committee and Nomination and Remuneration Committee of UOA. He is a Director of Winduss & Associates Pty Ltd. He has been involved in the professional accounting public practice for over 25 years, specialising in matters relating to corporate management, restructuring, corporate finance and company secretarial matters including the Australian Securities Exchange ( ASX ) and the Australian Securities Exchange and Investments Commission compliance. The accounting practice of Winduss & Associates Pty Ltd lists among its field of expertise matters relating to property development, management and ownership. He sits on the Board of four companies listed on the ASX including as Non-Executive Chairman of Quest Minerals Limited and serves on the Board of Australian incorporated private listed companies. Mr Winduss graduated from Perth Technical College (now known as Curtin University) with a Diploma in Accounting in He is a member of various professional bodies including the Institute of Chartered Accountants in Australia and the Certified Public Accountants Australia. In addition, he is an Associate Fellow of the Australian Institute of Management, a Fellow of the Taxation Institute of Australia, a Fellow of the Australian Institute of Company Directors and is a registered Australian Company Auditor. He does not have any family relationship with any Director and/ or major shareholder, nor any conflict of interest with the Company. He has no convictions for any offences over the past 10 years. UOA DEVELOPMENT BHD Annual Report

9 KEY MANAGEMENT TEAM The key management team is responsible for the day-to-day management and operations. The key management team consists of experienced personnel in charge of matters related to construction, human resource, corporate affairs, risk management, legal and corporate secretariat, finance and administration. The members of the key management team, as at 31 December 2011, are as follows: Name Nationality Age Designation Kong Chong Chi Suim Malaysian 70 Managing Director Kong Pak Lim Malaysian 59 Executive Director Cecelia Chan Singaporean 57 Property Director Tong Ee Ping Malaysian 53 Chief Operating Officer (Construction) Khor Soo Beng Malaysian 48 Chief Operating Officer (Development) Ang Kheng Im Malaysian 46 Chief Financial Officer Cecelia Chan (Property Director) Cecelia Chan, aged 57, was appointed as Property Director of UOA Holdings Sdn Bhd since 1989, a position she held until the establishment of UOA Real Estate Investment Trust (UOA REIT) in 2005 where she was then appointed as Chief Executive Officer of UOA Asset Management Sdn Bhd (Asset Manager for UOA REIT) in 2005, a position she held until her resignation on 14 January Whilst at UOA Asset Management Sdn Bhd, she oversaw the property leasing and building management activities of UOA REIT. Prior to this, she held the position of Property Director at UOA Holdings Sdn Bhd between 1989 and 2004 and was responsible for leading and formulating its marketing and sales strategies. Following the Reorganisation, she was transferred to our Company and redesignated as our Property Director. Before joining our Parent Group, she held various positions in a number of private property development companies in Singapore. She graduated from YMCA in 1974 with a Diploma in Marketing Management. Tong Ee Ping (Chief Operating Officer - Construction) Tong Ee Ping, aged 53, who is our Chief Operating Officer (Construction) has been with our Parent Group since 1988 and has been responsible for overseeing our Parent Group s construction activities undertaken through Allied Engineering Construction Sdn Bhd and URC Engineering Sdn Bhd. Following the Reorganisation, he was transferred to our Company. Prior to joining our Parent Group and our Group, he was Senior Site Foreman at Progressive Builders Pte Ltd between 1985 and 1988 where he supervised building works. He holds a Bachelor of Science in BioChemistry degree with Honours from Punjab Agricultural University where he graduated in UOA DEVELOPMENT BHD Annual Report 2011

10 Key Management Team (Cont d) Khor Soo Beng (Chief Operating Officer - Development) Khor Soo Beng, aged 48, who is our Chief Operating Officer (Development) has been with the Parent Group since 1994 and has been responsible for project planning and development and overseeing our Parent Group s contracts, M&E technical, facilities management and security departments. Following the Reorganisation, he was transferred to our Company. Prior to joining our Parent Group, he was a Project Manager at HC Project Management Consultants between 1993 and Prior to that, between 1990 and 1993, he was a Project Manager and Project Quantity Surveyor for MCB Management Services Sdn Bhd. Currently, he is also a director of UOA Asset Management Sdn Bhd, the Asset Manager of UOA REIT. He graduated with a Bachelor of Science in Building degree with Honours from the University of Ulster, UK in He is also an incorporated member (ICIOB) of the Chartered Institute of Building, UK. Ang Kheng Im (Chief Financial Officer) Ang Kheng Im, aged 46, has been the Finance Director and Chief Financial Officer of our Parent Group since She is not only responsible for our finance and accounts departments but also oversees the internal control function, company secretarial compliance, tax compliance, management information system and legal matters. Following the Reorganisation, she was transferred to our Company. Prior to this, she spent four years as a Senior Auditor at Khoo Wong and Chan. She completed the final year of professional education at Emile Woolf College, London, UK in 1992 and obtained her professional qualification from the Association of Chartered Certified Accountants in London, UK in the same year. She is a Chartered Accountant of Malaysia and is a member of the Malaysian Institute of Accountants. UOA DEVELOPMENT BHD Annual Report

11 CORPORATE GOVERNANCE STATEMENT The Board of Directors ( the Board ) of UOA Development Berhad fully appreciates the importance of adopting the principles and best practices of the Malaysian Code on Corporate Governance ( the Code ). The Board undertakes full accountability and transparency of actions towards creation of wealth in achieving the short term and long term shareholders value. As such, the Board strives to adopt the substance behind corporate governance prescriptions and not merely the form. The Board is pleased to provide a narrative statement on the application of the Principles and the extent of compliance with the Best Practices as set out in Parts 1 and 2 of the Code as well as the relevant provisions in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( Listing Requirements ). A. BOARD OF DIRECTORS Board Responsibilities The Board is responsible for the overall corporate governance of the Group, including its strategic direction, overseeing the proper conduct of the Group s business, identifying principal risks and ensuring the implementation of systems to manage risks, succession planning, developing an investor relations program, reviewing the adequacy and integrity of the Group s internal control systems and management information systems, establishing goals for management and monitoring the achievement of these goals. Supply of Information The Board recognises that the decision making process is highly dependent on the quality of information furnished. As such, the Board has unrestricted access to any information pertaining to the Company. Updates on operational, financial, corporate issues and strategic matters as well as current development of the Group which require the Board members attention are disseminated without delay. All Directors have access to the advice and services of the Company Secretary in ensuring the effective functioning of the Board, management representatives and, if deemed necessary, other independent professionals at the expense of the Company in the discharge of their duties. Board Balance The Board at the date of this statement comprising five (5) members comprising two (2) Executive Directors and three (3) Non-Executive Directors. Two (2) out of three (3) Non-Executive Directors are independent which fulfills the prescribed requirement for at least 2 Directors or 1/3 of the Board are independent as stated in Paragraph of the Bursa Securities Listing requirements. There is a clear segregation of responsibilities between the Chairman and the Managing Director to ensure balance of power and authority. The Chairman is responsible for conducting meetings of the Board and shareholders and ensuring all Directors are properly briefed during Board discussion and shareholders are informed of the subject matters requiring their approval. The Managing Director is responsible for the management and operations of the Company. The Board under the leadership of the Chairman and the Managing Director has the overall responsibility for the strategic direction of the Company. 22 UOA DEVELOPMENT BHD Annual Report 2011

12 Corporate Governance Statement (Cont d) Meetings The Board meets at least once every quarter and additional meetings are convened as and when necessary. The Board is provided in advance with the Agenda together with reports and supporting documents for the Board Meetings. All proceedings of the Board Meetings are duly minuted and signed by the Chairman of the meeting. During the financial year under review and subsequent to the listing of the Company on the Main Board of Bursa Malaysia on 8 June 2011, the Board met two (2) times and the attendance record for each Director is as follows:- Name of Director Total Meetings Attended Percentage of Attendance (%) Tan Sri Dato Alwi bin Jantan 1/2 50 Kong Chong Chi Suim 2/2 100 Kong Pak Lim 2/2 100 Tan Chok Kian Alphonsus 2/2 100 Alan Charles Winduss 2/2 100 All the directors have complied with the minimum 50% attendance requirement in respect of Board meetings as stipulated by the Listing Requirements. Board Committees The Board delegates specific responsibilities to various committees such as Audit Committee, Nomination and Remuneration Committee to assist in discharging their duties. All committees have written terms of reference and the Board receives reports of their proceedings and deliberations, where appropriate. The Chairman of the various committees will report to the Board the outcome of the committee meetings and the minutes of meetings are circulated to the Board. These committees are formed in order to enhance business and operational efficiency as well as efficacy. The Nomination and Remuneration Committee was established on 25 January 2011 and comprises entirely Non-Executive Directors, majority of whom are independent. The Nomination and Remuneration Committee is empowered by the Board and its terms of reference are to bring to the Board recommendations as to the appointments of new Directors. The Committee also keeps under review the Board Structure, size and composition. The Nomination and Remuneration Committee systematically assesses the effectiveness of the Board, the committees of the Board and the contribution of each individual Director on an annual basis. All assessments and evaluations carried out by the Nomination and Remuneration Committee in the discharge of all its functions are documented. The Nomination and Remuneration Committee held two (2) meetings during the financial year ended 31 December UOA DEVELOPMENT BHD Annual Report

13 Corporate Governance Statement (Cont d) A. BOARD OF DIRECTORS (Cont d) Appointment and Re-election to the Board The Nomination and Remuneration Committee has been given the responsibilities to recommend new appointments to the Board. In accordance with the Company s Articles of Association, all Directors who are appointed by the Board are subject to retirement and re-election by shareholders at the next annual general meeting subsequent to their appointments. The Articles of Association also provide that one-third (1/3) of the Directors shall subject to retirement by rotation and be eligible for re-election at each annual general meeting provided that all Directors shall retire from office, once at least in every three years. A retiring Director shall retain office until the close of the meeting at which he retires. Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, Directors Training All Directors have completed the Mandatory Accreditation Programme as prescribed by the Listing Requirements. During the financial year, Directors and Senior Management attended the following training programmes and seminars to further broaden their skills, knowledge and perspective and keep them abreast with new and relevant developments pertaining to changes in legislation and regulations: Training Proposed changes to code of Corporate Governance and Listing Rules Sustainability Programme for Corporate Malaysia by Bursa Malaysia Navigating a Changing Anti-Corruption Landscape (UK Bribery Act) by Norton Rose Attended by Tan Chok Kian Alphonsus Tan Sri Dato Alwi bin Jantan Tan Sri Dato Alwi bin Jantan B. DIRECTORS REMUNERATION The Nomination and Remuneration Committee which comprises entirely Non-Executive Directors, majority of whom are independent, recommends to the Board the remuneration package for the Executive Directors, The remuneration package for Executive Directors is structured on the basis of linking rewards to corporate and individual performance. Performance is measured against the result achieved by the Group and individual achievement against targets set. It is the ultimate responsibility of the entire Board to approve the remuneration of these Directors with the Executive Directors concerned abstaining from deliberations on their own remuneration. 24 UOA DEVELOPMENT BHD Annual Report 2011

14 Corporate Governance Statement (Cont d) B. DIRECTORS REMUNERATION (Cont d) The remuneration package for Non-Executive Directors are determined by the Board as a whole, with the Non- Executive Directors abstaining from discussion on their own remuneration. Non-Executive Directors Executive Directors Total RM 000 RM 000 RM 000 Salary - 1,152 1,152 Bonus Fees Other emoluments Benefit-in-kind Total 90 1,292 1,382 Remuneration paid to Directors during the year analysed into bands of RM50,000, which complies with the disclosure requirements under Bursa Malaysia Listing Requirements is as follows: Non-Executive Directors Executive Directors Up to RM50, From RM600,001 to RM650,000-2 C. SHAREHOLDERS The Board acknowledges the need for shareholders to be kept informed of all material business matters affecting the Group. Shareholders are provided with an overview of the Group s performance and operations through the timely release of financial results on a quarterly basis. Timely announcements are also made to the public on corporate proposals and other required announcements to ensure affective dissemination of information relating to the Company. The Company s AGM remains the principal forum for dialogue and communication with shareholders, in particular private investors. Shareholders are encouraged to ask questions about the resolutions being proposed and the operations of the Group. The company s website, provides a comprehensive avenue for information dissemination. UOA DEVELOPMENT BHD Annual Report

15 Corporate Governance Statement (Cont d) D. ACCOUNTABILITY AND AUDIT Financial Reporting In presenting the annual reports and audited financial statements and quarterly announcement to shareholders, the Board aims to provide and present an accurate, balanced and meaningful assessment of the Group s financial performance and prospects. The Board is assisted by the Audit Committee to oversee the Group s financial reporting processes and the quality of its financial reporting. Directors Responsibility Statement in Respect of the Preparation of the Audit Financial Statements The Directors are responsible for ensuring that the financial statements of the Group give a true and fair view of the state of affairs of the Group and of the Company as at the end of the financial year and the financial performance and cash flows of the Group and of the Company for the financial year then ended. In preparing the financial statements, the Directors have ensured that applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 have been applied. In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policies and made judgements and estimates that are reasonable and prudent. State of Internal Control The statement of Internal Control furnished on page 30 of the Annual Report provides an overview on the state of internal controls within the Group. Relationship with External Auditors Key features underlying the relationship of the Audit Committee with the external auditors are included in the Audit Committee s terms of references as set out in the Audit Committee Report. The Audit Committee has always maintained a transparent relationship with its auditors in seeking professional advice and ensuring compliance with the appropriate accounting standards. Compliance with the Best Practices of the Code The Board of Directors has taken measures to ensure that Group fully complies with all the best practices of corporate governance as identified in the Code throughout the financial year ended 31 December The disclosure of this Statement on Corporate Governance has been approved by the Board during the Board Meeting held on 28 March UOA DEVELOPMENT BHD Annual Report 2011

16 AUDIT COMMITTEE REPORT FORMATION The Audit Committee was formed by the Board pursuant to its meeting on 25 January Its primary responsibility is to provide assistance to the Board of Directors in fulfilling its corporate governance responsibilities in relation to our financial reporting, internal control structure, related party transactions and external and internal audit functions. The Audit Committee may invite any of the key management or employees to participate in its meetings and to appoint any relevant consultants or professionals to assist it to discharge its functions. COMPOSITION The Audit Committee consists of two (2) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director: Tan Chok Kian Alphonsus (Chairman/Independent Non-Executive Director) Tan Sri Dato Alwi bin Jantan (Independent Non-Executive Director) (Resigned on 28 March 2012) Alan Charles Winduss (Non-Independent Non-Executive Director) Tan Sri Dato Alwi bin Jantan has resigned as a member of the Audit Committee on 28 March 2012 and the Company is in the midst of identifying a suitable candidate to be appointed to fill the vacancy and to comply with the requirement on the composition of the Audit Committee in paragraph 15.09(1)(a) and (b) of the Main Market Listing Requirements. SUMMARY OF TERMS OF REFERENCE 1. COMPOSITION The AC shall be appointed by the Board with the following requirements: Comprise at least three (3) members All members must be non-executive Directors All members should be financially literate and at least one member must be a member of MIA or accounting association or body The Chairman shall be an Independent Director 2. FREQUENCY AND ATTENDANCE OF MEETINGS A minimum of four (4) meetings a year shall be planned and any additional meetings will be on a need basis. The AC should meet with the External Auditors without Executive Board members present at least twice a year. The AC should meet regularly, with due notice of issues to be discussed, and should record its conclusions in discharging its duties and responsibilities. The Chairman of the AC should engage on a continuous basis with Senior Management, such as the Chief Operating Officer, the Chief Financial Officer, the Head of Internal Audit and the External Auditors in order to keep abreast of matters affecting the Group. The Chief Financial Officer, Head of Internal Audit and a representative of the External Auditor shall normally attend meetings. UOA DEVELOPMENT BHD Annual Report

17 Audit Committee Report (Cont d) 2. FREQUENCY AND ATTENDANCE OF MEETINGS (Cont d) Other Board members and employees may attend any particular AC meeting only upon the invitation of the AC specific to the relevant meeting. The AC held two (2) meetings during the financial year ended 31 December The details of attendance of the AC are as follows: Name of Director Total Meetings Attended Tan Chok Kian Alphonsus 2/2 Tan Sri Dato Alwi bin Jantan (Resigned on 28 March 2012) 1/2 Alan Charles Winduss 2/2 3. KEY FUNCTIONS & RESPONSIBILITY The key functions and responsibility of the Committee shall be: External Audit i. To recommend to the Board any matter relating to the appointment of external auditors, the fees and any matter in relation to resignation or dismissal of the external auditors; and ii. To review and discuss with the external auditors its scope and upon completion of the audit assessment, to present the audit findings and recommendations of the external auditors to the Board Internal Audit i. To review the internal audit plan, consider the major findings of internal audits and management s responses and ensure coordination between the internal and external auditors ii. To review the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work iii. To review the audit reports; and iv. To direct internal auditors to any specific area or procedure where necessary Financial reporting review To review with our management the quarterly results and year-end financial statements prior to the approval by our Board. Related party transactions To review any related party transactions and conflict of interest situation that may arise in the Group. Internal control systems To keep under review the effectiveness of internal control systems and the internal and/or external auditors evaluation of these systems. 28 UOA DEVELOPMENT BHD Annual Report 2011

18 Audit Committee Report (Cont d) 3. KEY FUNCTIONS & RESPONSIBILITY (Cont d) Other matters i. To discuss problems and reservation arising from the internal audit, interim and final audits, and matters the internal and external auditors may wish to discuss (in the absence of the management where necessary); ii. Where the Audit Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of Bursa Securities Listing Requirements, the Audit Committee must promptly report such matter to Bursa Securities; and iii. Carrying out any other functions that may be mutually agreed upon by the Audit Committee and the Board. 4. SUMMARY OF ACTIVITIES OF THE COMMITTEE DURING THE YEAR The AC met two (2) times during the financial year ended 31 December The activities of the AC for the financial year were as follows: i. Review the quarterly financial results announcements and year end financial statements of the Group, focusing particularly on: the overall performance of the Group the prospects for the Group the implementation of major accounting policies and practices compliance with accounting standards and other legal requirements ii. Discussed significant audit findings in respect of the financial statements of the Group with External Auditors iii. Reviewed and approved the Internal Audit Department resource requirements, programmes and plans for the financial year to ensure adequote coverage over the activities of the respective subsidiaries. iv. Reviewed and discussed with the Internal Auditors on key risks summarised in the Risk Profile on the controls and management action plans are functioning effectively to mitigate the risks. v. Reviewed the related party transactions entered into by the Company and the Group. UOA DEVELOPMENT BHD Annual Report

19 STATEMENT OF INTERNAL CONTROL This Statement on Internal Control is made pursuant to the Listing Requirements of Bursa Malaysia Securities Berhad and in compliance with the Malaysian Code of Corporate Governance. The Board is committed to maintain a sound system of internal control and is pleased to provide this Statement on Internal Control which outlines the nature and scope of internal control of the Group during the year under review. BOARD RESPONSIBILITY The Board is ultimately responsible for the Group s overall system of corporate governance including risk management and internal controls, financial or otherwise which: - Provides reasonable assurance on the achievement of the Group s objectives; and - Ensures the effectiveness and the efficiency of operations, reliability of financial information and compliance with laws and regulations. The Board recognises that reviewing the Group s system of internal controls is a concerted and ongoing process, designed to manage, rather than eliminate the risk of failure to achieve corporate objectives. Accordingly, it can provide only reasonable but not absolute assurance against material misstatement or loss. The system of internal controls include, inter-alia, financial, budgetary, organizational, operational and compliance controls. Internal Audit Function The internal audit function is undertaken by the Internal Audit Department of the ultimate holding company of the Manager, United Overseas Australia Limited ( UOALIA ). The Audit Committee assisted by UOALIA, provides the Board with the assurance it requires on the adequacy and integrity of the system of internal control. The Audit Committee has an oversight function of all activities carried out by UOALIA. The principal role of UOALIA is to independently review the internal controls of the Group are appropriate for its business and operating as intended, a framework of controls are in place to manage risks and management responses to these risks are acceptable. UOALIA engages in regular communication with the management team and various departments within the organisation in relation to its internal audit activities and efforts for continuous improvement in operations and systems. Scheduled internal audits are carried out by the internal auditors based on the audit plan presented to and approved by the Audit Committee. During internal audit assignments, the Internal Audit Department also undertook, wherever relevant, the following: - Assessment of operating efficiencies; - Regular and comprehensive information provided to management, covering financial and operational performance and key business indicators, for effective monitoring and decision making; and - Ensuring compliance with the Group s policies and relevant legislations. On a quarterly basis, the internal auditors report to the Audit Committee on areas for improvement and will subsequently follow up to determine the extent of their recommendations that have been implemented. The Board s Commitment The Board is committed towards maintaining a sound system of internal control and is of the view that the current system of internal control is responsive to the business environment of the Group. In addition, the Board is of the view that the Group could attain its business objective and operational efficiency by continuous commitment towards a sound system of internal control. The Board continues to take measures to enhance the system of internal control. 30 UOA DEVELOPMENT BHD Annual Report 2011

20 ADDITIONAL COMPLIANCE INFORMATION Utilisation of Proceeds from Initial Public Offering (IPO) is as follows: Expected Time Frame Proposed Actual for Utilisation from Date Utilisation Utilisation Purpose of Listing RM 000 RM 000 Repayment of intercompany borrowings Within 12 months 365, ,334 Repayment of bank borrowings Within 12 months 95,059 86,367 Working capital requirements and general corporate purposes Within 12 months 260, ,265 Estimated listing expenses Within 12 months 25,000 22, , ,200 Share Buy Backs The Company did not carry out any share buy back exercises during the financial year ended 31 December Options, Warrants or Convertible Securities There were no options granted and convertible securities issued during the financial year ended 31 December American Depository Receipts (ADR) or Global Depository Receipts (GDR) There were no ADR or GDR sponsored by the Company during the financial year ended 31 December Sanctions and/or Penalties There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors and Management by the relevant regulatory bodies during the financial year ended 31 December Non-Audit Fees Non-audit fees paid/payable to External Auditors of the Company and its subsidiaries for the financial year ended 31 December 2011 amounted to RM180,000 in respect of services for the Initial Public Offering of the Company. The provision of non-audit services by the External Auditors to the Group is both cost effective and efficient due to their knowledge and understanding of the operations of the Group, and did not compromise their independence and objectivity. Variation in Results There were no profit estimations, forecasts and projections made or released by the Company during the financial year ended 31 December UOA DEVELOPMENT BHD Annual Report

21 Additional Compliance Information (Cont d) Profit Guarantee There were no profit guarantees given by the Company and its subsidiaries during the financial year ended 31 December Material Contracts There were no material contracts entered into by the Company and its subsidiaries involving directors and major shareholders interest which were still subsisting as at the end of the financial year under review or which were entered into since the end of the previous financial year except as disclosed in Prospectus dated 18 May 2011 and note 42 of the financial statements. Statement on Employees Share Option Scheme ( ESOS ) The Company did not have any ESOS in place for the year ended 31 December Recurrent Related Party Transactions Bursa Securities had via a letter dated 21 June 2011 granted the Company extension of time from 8 June 2011, being the date of admission of UOA Development to the Official List of Bursa Securities, to the next annual general meeting or extraordinary general meeting of the Company to obtain shareholders ratification and shareholders mandate for Recurrent Related Party Transactions entered and to be entered into by the Company and its subsidiaries pursuant to Paragraph of the Bursa Securities Main Market Listing Requirements. 32 UOA DEVELOPMENT BHD Annual Report 2011

22 FINANCIAL STATEMENTS 34 Corporate Information 35 Directors Report 40 Independent Auditor s Report 42 Statements of Financial Position 44 Statements of Comprehensive Income 45 Statements of Changes in Equity 47 Statements of Cash Flows 50 Notes to the Financial Statements 103 Statement by Directors 104 Statutory Declaration

23 CORPORATE INFORMATION DOMICILE Malaysia LEGAL FORM AND Public company limited by way of shares PLACE OF INCORPORATION incorporated in Malaysia under the Companies Act, 1965 REGISTERED OFFICE No. 9, Jalan Indah 16 Taman Cheras Indah Kuala Lumpur PRINCIPAL PLACE OF BUSINESS Wisma UOA Bangsar South Tower 1, Avenue 3, The Horizon Bangsar South No. 8, Jalan Kerinchi Kuala Lumpur 34 UOA DEVELOPMENT BHD Annual Report 2011

24 DIRECTORS REPORT The directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December PRINCIPAL ACTIVITIES The principal activity of the Company is investment holding. The principal activities of the subsidiary companies are indicated in note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. RESULTS Group RM 000 Company RM 000 Profit attributable to shareholders of the Company 384,806 8,363 DIVIDENDS No dividend was paid by the Company during the financial year. The directors now recommend a first and final single tier dividend in respect of the financial year ended 31 December 2011, of 10 sen per ordinary share, amounting to RM119,586,000 based on the paid-up share capital as at 31 December 2011, for shareholders approval at the forthcoming Annual General Meeting. 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 the statements of changes in equity as an appropriation of retained profits in the financial year ending 31 December RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year except as disclosed on pages 45 and 46 of the financial statements. ISSUE OF SHARES AND DEBENTURES During the financial year, the Company undertook the following: (a) (b) On 26 April 2011, the Company increased its issued and paid-up share capital by the issuance of 1,688,180 new ordinary shares of RM1.00 each at an issue price of RM11.00 per share to satisfy the total purchase consideration of RM18,569,980 payable by the Company for the acquisition of 195,000 ordinary shares of RM1.00 each in Everise Project Sdn Bhd representing 39% of the issued and paid-up share capital of Everise Project Sdn Bhd. On 26 April 2011, the Company cancelled its entire authorised share capital of RM50,000,000 comprising 50,000,000 shares of RM1.00 each. Accordingly, the Company replaced RM50,000,000 comprising 1,000,000,000 shares of RM0.05 each. In addition to the above, the Company created new authorised share capital of RM50,000,000 comprising 1,000,000,000 shares of RM0.05 each. UOA DEVELOPMENT BHD Annual Report

25 Directors Report (Cont d) ISSUE OF SHARES AND DEBENTURES (Cont d) (c) Accordingly, the issued and paid-up share capital of the Company comprising 45,443,000 shares with par value RM1.00 each was cancelled and replaced with 908,860,000 shares with par value RM0.05 each on 26 April (d) In conjunction with the Initial Public Offering (IPO), a public issue of 287,000,000 new ordinary shares of RM0.05 was issued at an issue price of RM2.60. There were no debentures issued during the year. DIRECTORS The directors in office since the date of the last report are: Tan Sri Dato Alwi bin Jantan Kong Chong Chi Suim Kong Pak Lim Tan Chok Kian Alphonsus Alan Charles Winduss DIRECTORS INTERESTS IN SHARES The following directors had an interest in shares in the Company and its related corporations required to be disclosed in accordance with Section 169(6)(g) of the Companies Act, 1965, as follows: Number of ordinary shares At Share RM0.05 RM0.05 At The Company each each Acquired Disposed Direct interest - Tan Sri Dato Alwi bin Jantan , ,000 - Alan Charles Winduss , ,000 - Tan Chok Kian Alphonsus , ,000 Indirect interest - Kong Chong Chi Suim 2,187,740 43,754, ,186, ,941,340 - Kong Pak Lim 2,187,739 43,754, ,091, ,846, UOA DEVELOPMENT BHD Annual Report 2011